Document:

EX-10.2

 

    Exhibit 10.2

 

    FIRST
    AMENDMENT

    TO

    EMPLOYMENT AGREEMENT

 

    This amendment (the “First Amendment”) is made the
    12th day
    of August, 2008, between AXS-One Inc., a Delaware corporation
    (the “Company”) and Joseph P. Dwyer (the
    “Employee”).

 

    WHEREAS, the Company previously entered into an Employment
    Agreement with the Employee dated as of February 15, 2007,
    (the “Employment Agreement”); and

 

    WHEREAS, in light of changes to the law concerning severance and
    deferred compensation, including Internal Revenue Code
    Section 409A and related Treasury Regulations, the Company
    and the Employee wish to amend the Agreement by this First
    Amendment to clarify certain provisions in the event the
    Employee’s employment is involuntarily terminated, and to
    make other minor, clarifying revisions to the Agreement,

 

    NOW THEREFORE, the following Sections of the Agreement are
    hereby amended as follows:

 

    1.  Section 5 of the Agreement is amended by the
    addition of the following at the end thereof.

 

    “Any bonus payable hereunder shall be paid by no later than
    the 15th day of the third month following the end of the
    calendar year in which the right to the bonus is no longer
    subject to a substantial risk of forfeiture (as defined for
    purposes of Code Section 409A, including Treasury
    Regulations
    Section 1.409A-1(d)).”

 

    2.  Section 9(b) of the Agreement is deleted and
    the following substituted therefor:

 

    ‘‘(b) Termination by Employee for Good Reason.
    The Employee may terminate his employment and the Term of
    Employment in the event of “Good Reason.” Termination
    for Good Reason means a resignation of employment and Separation
    from Service (as defined for purposes of Code Section 409A)
    within 180 days following the initial existence of one or
    more of the following conditions arising without the
    Employee’s consent:

 

    (i) a material reduction in the Employee’s base salary
    or benefits, other than an across-the-board reduction affecting
    all members of senior management;

 

    (ii) a material reduction in the Employee’s duties and
    significant responsibilities hereunder (not including reasonable
    changes in title or in corporate structure);

 

    (iii) a material breach of this Agreement by the Company
    (which shall include a failure to make payments due
    hereunder); or

 

    (iv) the Company requires the Employee to change the
    location of the Employee’s principal office, so that the
    Employee will be based at a location more than 40 miles
    from the Company’s current executive offices located at 301
    Route 17 North, Rutherford, New Jersey 07070;

 

    provided, in any such case, that (1) a prior written notice
    specifying the reasons within ninety (90) after the initial
    existence of the condition and an opportunity to cure such
    condition (if curable) shall be afforded the Company, and
    (2) “Good Reason” shall exist only if the Company
    shall fail to cure such condition within 31 days after its
    receipt of such prior written notice. In addition, until the
    actual Separation from Service the Employee must remain willing
    and able to continue to perform services in accordance with the
    terms of this Agreement and the Employee must not be in breach
    of any of the Employee’s obligations hereunder.

 

    For the avoidance of doubt, it shall constitute a “material
    reduction of the Employee’s duties and significant
    responsibilities hereunder” if the Employee is no longer
    the most senior financial executive of the Company (or any
    successor thereto) reporting directly to the Chief Executive
    Officer.”

 

    3.  Section 9(e) of the Agreement is deleted and
    the following substituted therefore:

 

    ‘‘(e) Effect of Termination Without Serious
    Cause or With Good Reason. If the Company terminates the
    Term of Employment and the Employee’s employment herein
    without Serious Cause (including by cancellation or non-renewal
    of this Agreement) or the Employee terminates the Terms of
    Employment and his employment hereunder for Good Reason, and, in
    either case, the Employee’s employment is terminated under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury Regulations
    Section 1.409A-1(n)
    other than within the period beginning on the date that a Change
    in Control is formally proposed to the Company’s Board of
    Directors and ending on the second anniversary of the date on
    which such Change of Control occurs, the Company shall pay the
    Employee a separation pay benefit (the “Severance
    Payments”) equal to nine (9) months of the
    Employee’s annual rate of base salary (as of the
    Employee’s Separation from Service date) and will make
    available a subsidized healthcare benefit, as described below.

 

    (1) Payment of the Severance Payments shall commence as of
    the Employee’s Separation from Service date, and shall
    continue thereafter in equal fixed installments over a nine
    month period in accordance with the Company’s standard
    payroll procedures and normal payroll dates then in effect.
    Notwithstanding the foregoing, no Severance Payments shall be
    paid during the 30 days immediately following the
    Employee’s Separation from Service date; any Severance
    Payments that would have otherwise been paid during such
    30 day period shall be withheld and paid on the
    31st day following the Employee’s Separation from
    Service, without adjustment for the delay in payment.

 

    (2) In the event the value of the Severance Payments shall
    exceed two times the lesser of the Employee’s annualized
    compensation or the maximum amount that may be taken into
    account for qualified plan purposes (in each case, as determined
    in accordance with Treasury Regulation Section
    1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as
    provided in (1), above, but instead shall be withheld and paid
    on the first regularly scheduled payroll date immediately
    following the date that is six months after the Employee’s
    Separation from Service date, without adjustment for the delay
    in payment.

 

    (3) In no event shall Severance Payments be accelerated,
    nor shall the Employee be eligible to defer payment of Severance
    Payments to a later date.

 

    (4) If COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to the Employee for the period of the COBRA
    coverage or nine months, whichever is shorter.

 

    In addition, the Employee will be entitled to prompt payment of
    (A) any accrued but unpaid salary, automobile allowance and
    vacation, (B) any earned but unpaid bonus (subject, if
    applicable, to the terms of any deferred compensation
    arrangements), and (C) reimbursement of business expenses
    incurred prior to the date of termination.”

 

    4.  Section 9(f) of the Agreement is amended by
    deleting the last sentence thereof and substituting the
    following therefor:

 

    “Such amounts are inclusive, and in lieu of, any amounts
    payable under any other salary continuation or severance
    arrangement of the Company.”

    

    2

 

    5.  Section 10(a) of the Agreement is amended by
    deleting the first paragraph thereof and substituting the
    following therefor:

 

    ‘‘(a) Effect of Termination. If the
    employment of the Employee is terminated by the Company (or a
    successor thereto) without Serious Cause (including by
    cancellation or non-renewal of this Agreement) or the Employee
    terminates employment with the Company (or a successor thereto)
    for Good Reason, and, in either case, the Employee’s
    employment is terminated under circumstances constituting an
    Involuntary Separation from Service within the meaning of
    Treasury Regulations
    Section 1.409A-1(n)
    and within the period beginning on the date that a Change of
    Control is formally proposed to the Company’s Board of
    Directors and ending on the second anniversary of the date on
    which such Change of Control occurs, the Company shall pay the
    Employee a separation pay benefit (the “Change of Control
    Severance Payments”) equal to 2 times the Employee’s
    annual rate of base salary (as of the Employee’s Separation
    from Service date). The Change of Control Severance Benefit
    shall be paid on the
    30th day
    following the Employee’s Separation from Service date, in a
    lump sum. In addition, if COBRA continuation coverage under any
    Company healthcare plan is elected, the Company shall provide
    such coverage at no cost to the Employee for the period of the
    COBRA coverage or eighteen months, whichever is shorter.

 

    In addition, the Employee will be entitled to prompt payment of
    (A) any accrued but unpaid salary, automobile allowance and
    vacation, (B) any earned but unpaid bonus (subject, if
    applicable, to the terms of any deferred compensation
    arrangements), and (C) reimbursement of business expenses
    incurred prior to the date of termination.”

 

    6.  Section 10(a) of the Agreement is further
    amended by adding at the end of the second paragraph thereof the
    following:

 

    “In the event a reduction must be in accordance with this
    paragraph, Change in Control Severance Payments shall be reduced
    to the extent necessary.”

 

    7.  New Section 22 is hereby added to the
    Agreement to read as follows:

 

    “Section 22.  Code Section 409A
    Compliance.

 

    (a) The parties hereto recognize that certain provisions of
    this Agreement may be affected by Section 409A of the
    Internal Revenue Code and guidance issued thereunder, and agree
    to amend this Agreement, or take such other action as may be
    necessary or advisable, to comply with Section 409A. The
    parties hereto intend that the Agreement, as amended, be
    consistent with IRS Notice
    2007-78, IRS
    Notice
    2007-86 and
    other Code Section 409A transition relief, and it shall be
    interpreted accordingly.

 

    (b) Notwithstanding anything herein to the contrary, it is
    expressly understood that at any time the Company (or any
    related employer treated with the Company as the service
    recipient for purposes of Code Section 409A) is publicly traded
    on an established securities market (as defined for purposes of
    Code Section 409A), if a payment or provision of an amount
    or benefit constituting a deferral of compensation is to be made
    pursuant to the terms of this Agreement to the Employee on
    account of a Separation from Service at a time when the Employee
    is a Specified Employee (as defined for purposes of Code
    Section 409A(a)(2)(B)(i)), such deferred compensation shall
    not be paid to the Employee prior to the date that is six
    (6) months after the Separation from Service or as
    otherwise permitted under Treasury Regulations
    Section 1.409A-3(i)(2).

 

    (c) For purposes of this Agreement, the following
    definitions shall apply:

 

    (i) Separation from Service means, generally, a termination
    of employment with the Company, and shall have the same meaning
    as such term has for purposes of Internal Revenue Code
    Section 409A (including Treasury
    Regulation Section 1.409A-1(h)).

    

    3

 

    (ii) Involuntary Separation from Service means a Separation
    from Service due to the independent exercise of the unilateral
    authority of the Company to terminate the Employee’s
    employment, other than due to the Employee’s implicit or
    explicit request, where the Employee was willing and able to
    continue to employment with the Company. Notwithstanding the
    foregoing, a termination for Good Reason may constitute an
    Involuntary Separation from Service. Involuntary Separation from
    Service shall have the same meaning as such term has for
    purposes of Internal Revenue Code Section 409A (including
    Treasury
    Regulation Section 1.409A-1(n)).”

 

    All of the other terms and conditions of the Employment
    Agreement shall remain in full force and effect.

 

    AXS-ONE INC.

 

			
	 	    By 
	
    /s/  William
    P. Lyons

    William P. Lyons

    Chief Executive Officer

    AXS-One Inc.

 

			
	 	     
	
    /s/  Joseph
    P. Dwyer

    Joseph P. Dwyer

    

    4EX-10.3

    Exhibit 10.3

 

	 	 	 
	
 
	
 
	
    August 12, 2008

    Mr. Philip L. Rugani

    459 Old Woods Roads East

    Wyckoff, New Jersey 07481

 

 

    RE: Amendment to Offer of Employment Letter

 

    Dear Phil:

 

    You and AXS-One Inc. agree that, in light of changes to the law
    concerning severance and deferred compensation, including
    Internal Revenue Code Section 409A and related Treasury
    Regulations, it is in our mutual best interest to amend your
    offer of employment letter from the Company, dated
    September 4, 2007, (the “Offer Letter”) as
    follows:

 

    1.  The section of the Offer Letter entitled
    “Bonus” is hereby amended by the addition of the
    following at the end thereof:

 

    “Any bonus payable by the Company shall be paid by no later
    than the
    15th day
    of the third month following the end of the calendar year in
    which the right to the bonus is no longer subject to a
    substantial risk of forfeiture (as defined for purposes of Code
    Section 409A, including Treasury Regulations
    Section 1.409A-1(d)).”

 

    2.  The first two sentences of the section of the
    Offer Letter entitled “Severance Package” are deleted
    and the following substituted therefor:

 

    “Severance Package: If the Company terminates your
    employment for any reason other than Cause and under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury
    Regulation Section 1.409A-1(n),
    and such termination is not on or within 12 months
    following a Change of Control, the Company will pay you a
    separation pay benefit (the “Severance Payments”)
    equal to three months of your annual rate of base salary (as of
    your Separation from Service date) and will make available a
    subsidized healthcare benefit, as described below.

 

    (i) Payment of the Severance Payments shall commence as of
    your Separation from Service date, and shall continue thereafter
    in equal fixed installments over a three month period in
    accordance with the Company’s standard payroll procedures
    and normal payroll dates then in effect. Notwithstanding the
    foregoing, no Severance Payments shall be paid during the
    30 days immediately following your Separation from Service
    date; any Severance Payments that would have otherwise been paid
    during such 30 day period shall be withheld and paid on the
    31st day
    following your Separation from Service, without adjustment for
    the delay in payment.

 

    (ii) In the event the value of the Severance Payments shall
    exceed two times the lesser of your annualized compensation or
    the maximum amount that may be taken into account for qualified
    plan purposes (in each case, as determined in accordance with
    Treasury Regulation
    Section 1.409A-1(b)(9)(iii)(A)),
    the excess shall not be paid as provided in (i), above, but
    instead shall be withheld and paid on the first regularly
    scheduled payroll date immediately following the date that is
    six months after your Separation from Service date, without
    adjustment for the delay in payment.

 

    (iii) In no event shall Severance Payments be accelerated,
    nor shall you be eligible to defer payment of Severance Payments
    to a later date.

 

    (iv) If COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to you for the period of the COBRA coverage
    or three months, whichever is shorter.”

 

    3.  The first paragraph of the section of the Offer
    Letter entitled “Change of Control” is deleted and the
    following substituted therefor:

 

    “Change of Control: In the event of a termination of
    your employment hereunder by the Company without Cause or by you
    for Good Reason (as defined below) and, in either case, under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury
    Regulation Section 1.409A-1(n)
    on or within 12 months following a Change of Control, the
    Company will pay you any earned but unpaid salary and any
    unreimbursed business expenses, plus a Change in Control
    Severance Benefit equal to one-half of your annual rate of base
    salary (as of your Separation from Service date). The Change in
    Control Severance Benefit shall be paid on the
    30th day
    following your Separation from Service date, in a lump sum. In
    addition, if COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to you for the period of the COBRA coverage
    or six months, whichever is shorter.”

 

    4.  The third paragraph of the section of the Offer
    Letter entitled “Change of Control” is deleted and the
    following substituted therefor:

 

    “Termination for Good Reason means a resignation of
    employment and Separation from Service (as defined for purposes
    of Code Section 409A) within 180 days following the
    initial existence of one or more of the following conditions
    arising without your consent:

 

    (i) a material reduction in your base salary or benefits,
    other than an across-the-board reduction affecting all members
    of senior management;

 

    (ii) a material reduction in your duties and significant
    responsibilities hereunder (not including reasonable changes in
    title or in corporate structure); or

 

    (iii) the Company requires you to change the location of
    your principal office, so that you will be based at a location
    more than 50 miles from the Company’s current
    executive offices located at 301 Route 17 North,
    Rutherford, New Jersey 07070;

 

    provided, in any such case, that (1) a prior written notice
    specifying the reasons within ninety (90) after the initial
    existence of the condition and an opportunity to cure such
    condition (if curable) shall be afforded the Company, and
    (2) “Good Reason” shall exist only if the Company
    shall fail to cure such condition within 31 days after its
    receipt of such prior written notice. In addition, until the
    actual Separation from Service you must remain willing and able
    to continue to perform services in accordance with the terms of
    this Offer Letter and you must not be in breach of any of your
    obligations to the Company.”

 

    5.  A new section is hereby added to the Offer Letter
    after the section entitled “Benefits” and before the
    section entitled “Covenant Not to Compete” to read as
    follows:

 

    “Code Section 409A Compliance: Certain
    compensation that you may become entitled to in connection with
    your employment with the Company may be affected by
    Section 409A of the Internal Revenue Code and guidance
    issued thereunder. The parties hereto intend that this Offer
    Letter, as amended, be consistent with IRS Notice
    2007-78, IRS
    Notice
    2007-86 and
    other Code Section 409A transition relief, and it shall be
    interpreted accordingly. Notwithstanding anything herein to the
    contrary, it is expressly understood that at any time the
    Company (or any related employer treated with the Company as the
    service recipient for purposes of Code Section 409A) is publicly
    traded on an established securities market (as defined for
    purposes of Code Section 409A), if a payment or provision
    of an amount or benefit constituting a deferral of compensation
    is to be made to you on account of a Separation from Service at
    a time when you are a Specified Employee (as defined for
    purposes of Code Section 409A(a)(2)(B)(i)), such deferred
    compensation shall not be paid to you prior to the date that is
    six (6) months after the Separation from Service or as
    otherwise permitted under Treasury Regulations
    Section 1.409A-3(i)(2).”

 

 

    6.  Exhibit A of the Offer Letter is amended by
    deleting the last sentence of the first paragraph thereof and
    substituting the following therefor:

 

    “In the event that Company Payments must be reduced, Change
    of Control Severance Payments shall be reduced to the extent
    necessary.”

 

    Except as expressly amended herein, all provisions of the Offer
    Letter remain in full force and effect.

 

    If you concur with all of the above, please indicate your
    agreement by signing and dating a copy of this letter in the
    spaces indicated below.

 

    Sincerely,

 

    AXS-One, Inc.

 

			
	 	    By: 
	
    /s/  William
    P. Lyons

    William P. Lyons

    Chief Executive Officer

    AXS-One Inc.

 

    Acknowledged and Accepted:

 

			
	     
	
    /s/  Philip
    L. Rugani

	 

    PHILIP L. RUGANI

 

    Date: August 12, 2008

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