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EXHIBIT 10.42
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
September 25, 2000
Altamont Capital Management
Mr. Joseph A. Wagda
547 Blackhawk Club Drive
Danville, CA 94506
Gentlemen:
This letter will constitute the basis under which Mr. Joseph A. Wagda
will perform services for BrightStar Information Technology Group, Inc. (the
"Company") from and after September 16, 2000. In addition, this letter will
amend the BrightStar Nonqualified Stock Option Agreement (the "Option
Agreement") dated as of June 23, 2000 by and between Mr. Wagda and the Company.
As you know, the Company has a number of serious problems (not of your
making) which need immediate attention, and we are hoping that you will be able
to improve the situation.
SERVICES FROM AND AFTER SEPTEMBER 16, 2000
From and after September 16, 2000, Mr. Wagda will perform executive and
operational management services for the Company and, as of October 2, 2000,
serve as interim President and Chief Executive Officer. These services will be
at the direction of the Board of Directors and will consist of direct and active
participation in the Company's key strategic and operational decisions,
including matters such as evaluation of the Company's strategic alternatives,
negotiations with third parties in connection with significant Company
transactions, assistance in connection with engagement and direction of the
Company's financial advisor, review of the Company's cash flows and operational
decisions affecting cash flows, and assistance with redirection of the Company's
operations to improve operating performance. For each "Monthly Period" (being
the period running from the 16th day of each month through the 15th day of the
next month) while this agreement is in effect, Mr. Wagda is expected to make
available to the Company at least 80 hours of his time. Mr. Wagda will keep
records of his time and send them to the Company on a monthly basis. The time
recorded by Mr. Wagda will not include time spent in meetings of the Company's
Board of Directors or committees thereof. Hours recorded in accordance with the
foregoing are referred to as "Credited Hours."
As compensation for services rendered from and after September 16,
2000, the Company shall pay Altamont Capital Management, Inc., the sum of
$20,000 as promptly as practicable following execution of this agreement, and
thereafter in advance for each Monthly Period, the
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sum of $20,000 per month (each a "Monthly Payment") on the 16th day of every
month (or the next business day thereafter), starting with October 16, 2000. In
addition, for each Monthly Period in which the Credited Hours exceed 80, Mr.
Wagda will be granted options to purchase shares of the Company's common stock
pursuant to the Option Agreement in accordance with the amendment to the Option
Agreement described below.
The Company will also pay Mr. Wagda's reasonable out-of-pocket expenses
incurred in performance of services on behalf of the Company.
This agreement may be terminated by the Company or by Mr. Wagda at any
time upon at least three business days' prior notice. If terminated by the
Company, Mr. Wagda shall have no obligation to refund any part of a Monthly
Payment to the Company for the Monthly Period during which termination occurs.
If terminated by Mr. Wagda and the Credited Hours in the Monthly Period during
which termination occurs are less than 80, Mr. Wagda shall refund a pro rata
amount of the Monthly Payment, such that he retains the sum of $250 per each
Credited Hour during that Monthly Period prior to termination.
AMENDMENT OF OPTION AGREEMENT
Mr. Wagda and the Company agree that the Option Agreement is amended as
follows:
1. For the period from June 21 through September 15, 2000, in lieu of
the options that would have been granted under the Option Agreement, the Company
will pay Altamont Capital Management, Inc., the sum of $101,130. Said amount
will be payable immediately after the closing of the sale of the Company's
operations in Australia or upon a "Change of Control" (as defined below). If
neither of said events occurs by January 2, 2001, the Company and Mr. Wagda
shall promptly agree on a fixed schedule to pay said amount; provided, however,
that in all events the unpaid balance thereof shall become immediately due and
payable immediately after the closing of the sale of the Company's operations in
Australia or upon a Change of Control. As used above, a "Change of Control"
means the closing of the sale for cash of the Company or substantially all of
its assets (whether by merger or by a sale of substantially all of the Company's
assets) or the closing of any other transaction involving the Company whereby
the common shareholders of the Company immediately prior to the closing of such
transaction no longer own, after closing, more than 50% of the common stock of
the Company or its successor.
2. The Company and Mr. Wagda agree that, as of the date hereof, options
to purchase five thousand (5,000) shares of the Company's stock are vested under
the Option Agreement.
3. Exhibit A to the Option Agreement is replaced with Exhibit A
attached to this agreement.
4. In all other respects, the Option Agreement will remain in effect
If the foregoing is agreeable, please sign a copy of this letter and
return it to the undersigned.
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Very truly yours,
BRIGHTSTAR INFORMATION TECHNOLOGY
GROUP, INC.
By /S/ GEORGE SIEGEL
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George Siegel
Chairman of the Board
We agree to the foregoing.
ALTAMONT CAPITAL MANAGEMENT, INC.
By /s/ JOSEPH A. WAGDA
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Joseph A. Wagda
President
/S/ JOSEPH A. WAGDA
---------------------------------
Joseph A. Wagda
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EXHIBIT A
VESTING SCHEDULE
CONDITIONS TO VESTING
Upon the continuous service of Option Holder to the Company:
5,000 options as of June 20, 2000, plus, for services performed from
and after September 16, 2000, 300 options per Credited Hour in excess
of 80 Credited Hours per Monthly Period. "Credited Hour" and "Monthly
Period" are defined in the letter agreement dated September 25, 2000
among the Company, Joseph A. Wagda and Altamont Capital Management,
Inc.
AMOUNT EXERCISABLE
All options are 100% exercisable upon satisfaction of conditions to vesting.
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