Exhibit 10.5
WIND RIVER SYSTEMS,
INC.
AMENDMENT TO EXECUTIVE EMPLOYMENT
AGREEMENT
This Amendment to the Executive
Employment Agreement (the “Amendment”) is made
effective as of the last date signed below, by and between Wind
River Systems, Inc. (the “Company”), and Kenneth R.
Klein (the “Executive”).
RECITALS
WHEREAS , the Company and Executive entered into that
certain Executive Employment Agreement dated November 5, 2003
(the “Agreement”).
WHEREAS , the Company and Executive desire to amend the
Agreement to comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE
, the Company and Executive agree
that in consideration of the foregoing and the promises and
covenants contained herein, the parties agree as
follows:
AGREEMENT
1. Annual Performance Bonus .
Section 2.2 of the Agreement, entitled “Annual
Performance Bonus,” is hereby amended in its entirety to read
as follows:
2.2 Annual
Performance Bonus . Executive shall be eligible
for an annual performance bonus for each fiscal year Executive is
employed by the Company. The amount of Executive’s annual
performance bonus will be determined by the Board based on certain
measurable goals, including a target for on-plan performance and
performance in excess of plan, established by mutual agreement
between the Board and Executive before or within 90 days after the
commencement of each fiscal year of the Company (the
“Performance Criteria”); provided ,
however , that the annual performance bonuses for on-target
performance shall be no less than fifty percent (50%) of
Executive’s annual base salary for such fiscal year, with
appropriate adjustments for performance that is in excess of or
under target. Executive’s bonus will be paid out in
accordance with the Company’s standard practice, but in no
event later than two and one-half (2 1 / 2 ) months following the end
of the Company’s fiscal year in which the bonus is earned by
Executive. No bonus is guaranteed to Executive, and any bonus is
subject to the approval of the Board.
2. Severance Benefits for
Termination Without Cause . Section 6.3(b) of the
Agreement is hereby amended in its entirety to read as
follows:
(b) reimbursement of the cost of continued health
insurance coverage for Executive and Executive’s eligible
dependents, if Executive elects continued coverage under federal
COBRA or any state equivalent, for a period of 12 months from the
termination date. Such reimbursements shall be made within thirty
(30) days of the premium payment;
3. Severance Benefits for Change
of Control Termination . Section 7.2(a)(ii) of the
Agreement is hereby amended in its entirety to read as
follows:
(ii) reimbursement of the cost of
continued health insurance coverage for Executive and
Executive’s eligible dependents, if Executive elects
continued coverage under federal COBRA or any state law equivalent,
for a period of 24 months from the termination date. Such
reimbursements shall be made within thirty (30) days of the
premium payment; and
4. Parachute Payments .
Section 7.3 of the Agreement, entitled “Parachute
Payments,” is hereby amended in its entirety to read as
follows:
7.3 Parachute Payments
. If any payment or benefit
Executive would receive pursuant to a Change of Control from the
Company or otherwise, but determined without regard to any
additional payment required under this Section 7.3,
(“Payment”) would (i) constitute a
“parachute payment” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), and (ii) be subject to the excise
tax imposed by Section 4999 of the Code or any interest or
penalties payable with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then
Executive shall be entitled to receive from the Company an
additional payment (the “Gross-Up Payment,” and any
iterative payments pursuant to this paragraph also shall be
“Gross-Up Payments”) in an amount that shall fund the
payment by Executive of any Excise Tax on the Payment, as well as
all income and employment taxes on the Gross-Up Payment, any Excise
Tax imposed on the Gross-Up Payment and any interes
