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EXHIBIT 10.2
XXXXXXX XXXXXXXXXX
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May 10, 2001
Xxxxxxxx Xxxxxxx
Xxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
EMPLOYMENT TERMS
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Dear Xxxxx:
This letter confirms the terms of your continuing employment
as Chief Financial Officer and your acceptance, to be effective July 1, 2001, of
the position of Chief Operations Officer of OmniSky Corporation (the "Company").
By signing this letter agreement, you also agree that you are willing to commit
yourself to serve the Company, on the terms and conditions herein provided.
You will continue your employment as Chief Financial Officer
and, from and after July 1, 2001, Chief Operations Officer, until such time as
you or the Company terminate your employment in accordance with the terms of
this letter agreement. You will have those authorities, duties and
responsibilities that are customarily assigned to a Chief Operations Officer and
Chief Financial Officer of a public enterprise like the company, and you will
not be assigned any duties or responsibilities that are materially inconsistent
with, or that materially impair your ability to discharge, those duties and
responsibilities. You will report solely and directly to the Chief Executive
Officer. Upon any termination of your employment with the Company, you will also
resign from any positions you may hold at the time on the Board or on the board
of directors of any other company on which you serve at the request of the
Company. You will devote substantially all your working time and efforts to the
business and affairs of the Company.
You will receive a base salary ("Base Salary") during the period of
your employment of TWO HUNDRED SEVENTY FIVE THOUSAND dollars ($275,000) per
annum. Your Base Salary will be reviewed at least annually for increase in the
discretion of the Board. Your Base Salary may not be decreased at any time
during your employment and once increased your base salary may not thereafter be
reduced. You will be entitled to an annual bonus in such amount and based upon
such criteria as the Board may determine in its discretion from time to time,
PROVIDED that, for any calendar year in which you have outstanding loans to the
Company the proceeds of which you used to purchase shares of the Company's
capital stock, you will receive a minimum bonus equal to twice the interest
accrued on such loans during that calendar year (and you will authorize the
Company to retain a portion of that bonus sufficient to pay accrued interest on
your loans for that calendar year, with the remaining amount, net of withholding
taxes, paid to you in cash). You will also participate in all annual executive
compensation plans and programs of the Company that are not equity-based at a
level commensurate with your seniority and position at the Company. You will
receive prompt reimbursement for all reasonable and customary expenses incurred
in performing your services for the Company. You will be based in the Company's
San Francisco, California offices at One Market. Beginning with the 2001
calendar year, you will be entitled to paid vacation at a rate of twenty-five
(25) days per calendar year in accordance with the plans, policies, and programs
as in effect generally with respect to other senior executives of
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the Company, including the limitations, if any, on the carry-over of accrued
but unused vacation time.
Your employment will terminate upon your death. If, as a result of your
incapacity due to physical or mental illness (as determined by a medical doctor
chosen by the Company and reasonably satisfactory to you or your legal
representative), you have been unable substantially to fulfill your duties on a
full-time basis for the entire period of one-hundred eighty (180) consecutive
days, your employment may be terminated for disability. The Company may also
terminate your employment for "Cause". The Company will have "Cause" to
terminate you if you (1) engage in any willful misconduct with respect to the
Company which is materially detrimental to the Company and its subsidiaries in
the aggregate (other than good faith expense account disputes); (2) are
convicted of (or plead nolo contendere to) a felony (other than (A) a traffic
violation that is in most jurisdictions not classified as a felony and (B) a
felony resulting from vicarious (rather than direct) liability arising out of
his position as an officer or director of the Company);(3) fail or refuse to
attempt to follow the written directions of the Board within a reasonable period
after receiving written notice to do so; or (4) engage in gross continuous
nonfeasance with regard to your duties, which materially continue after a
written notice is given to you.
You may terminate your employment, at any time, for "Good Reason." You
will have "Good Reason" to terminate your employment if (i) you suffer any
material reduction of your titles, duties, authorities or responsibilities or
your lines of reporting are materially altered; (ii) you are relocated to a
facility or a location more than thirty (30) miles from the Company's San
Francisco, California offices, without your written consent or (iii) the Company
fails to timely make any payment due to you under this letter agreement, reduces
your Base Salary or other benefits to which you are entitled or otherwise fails
to comply with any of the material provisions of this letter agreement. You may
also terminate your employment without Good Reason, upon giving thirty (30) days
notice to the Company.
During any period that you fail to perform your duties as a result of
incapacity due to physical or mental illness, you will continue to receive your
Base Salary then in effect for such period, and all other compensation and
benefits provided herein, until your employment is terminated for disability,
provided that payments made to you shall be reduced by the sum of the amounts,
if any, payable to you at or prior to the time of any such payment under
disability benefit plans of the Company or under the Social Security disability
insurance program, and which amounts were not previously applied to reduce any
such payment.
If your employment is terminated (i) by your death, (ii) for
disability, (iii) by the Company for Cause or (iv) by you without Good Reason,
then, in each such event, Company will promptly pay you (or your legal
representative), within thirty (30) days of your termination, your (A) Base
Salary through the date of termination at the rate in effect on the date of
termination (plus, in the case of termination due to death, additional Base
Salary at that rate through the one-hundred eightieth (180th) day after your
death); (B) any other amounts due to you through the date of termination in
respect of compensation, expense reimbursement or similar matters and (C) any
other or additional benefits to be provided in accordance with pertinent plans,
programs, or obligations of the Company as in effect at the time of termination.
If (A) the Company terminates your employment (for any reason other
than for death, disability or Cause, as to which the provisions of the prior
paragraph apply) or (B) you terminate your employment for Good Reason, then, in
each of those events,
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(i) the Company will promptly pay you your Base Salary through
the date of termination at the rate in effect at termination, any other
any other amounts due to you through the date of termination in respect
of compensation, expense reimbursement or similar matters and any other
or additional benefits to be provided in accordance with pertinent
plans, programs, or obligations of the Company as in effect at the time
of termination;
(ii) in lieu of any further salary or bonus payments to you
for periods subsequent to the date of termination, the Company will
also pay to you, in a lump sum, as severance an amount equal to one (1)
times your annual Base Salary rate as then in effect (or, if the
termination is for Good Reason based on a reduction in Base Salary,
then the rate shall be the rate in effect immediately prior to such
reduction); and
(iii) the Company shall maintain in full force and effect, for
your continued benefit for one year, each "employee welfare benefit
plan" in which you were entitled to participate immediately prior to
your termination (with no reduction in benefits), provided that your
continued participation is possible under the general terms and
provisions of such plans. In the event that your participation in any
such plan is barred, the Company will arrange to provide you with
benefits substantially similar to those which you would otherwise have
been entitled to receive under the plan from which your continued
participation is barred (with no reduction in benefits).
You are already party to an Executive Change in Control Agreement with
the Company, a copy of which has been attached hereto as Exhibit A. In the event
of your termination within two years after any "Change of Control," as defined
in that Agreement, you will be entitled to the full benefits provided by that
Agreement and to the benefits provided in those circumstances under the terms of
your option and restricted stock purchase agreements, including accelerated
vesting of options and stock.
In connection with your relocation to California, you will receive a
relocation allowance to move and purchase housing in the San Francisco area.
First, the Company will reimburse you for all reasonable moving expenses up to
$20,000, plus the costs of selling your current home on the East Coast (up to a
maximum of 7% of the sale price of that home). Second, you will receive a lump
sum payment of two months salary to cover incidental expenses that you may incur
in connection with your relocation. And third, when you purchase a home in the
San Francisco area, the Company will provide you with mortgage assistance (cash
payments to be used to pay down your mortgage) in an amount equal to 15% of the
purchase price of your home (up to a maximum of $300,000). Your mortgage
assistance will be paid to you in two equal payments, the first payment upon the
closing of your home and the second payment on the first anniversary of your
house closing; provided that if your employment is terminated for Cause or
without Good Reason prior to the first anniversary of the date on which such
payment is made, you will reimburse the Company a pro rata portion of such
mortgage assistance payment based on the number of months remaining in that year
following your termination. Until December 31, 2002 or earlier in the event that
you do not purchase a house and are entitled to receive mortgage assistance, you
will continue to receive reimbursement of up to $10,000 per month for temporary
housing in the San Francisco area. You will also be entitled during the period
referred to in the preceding sentence to receive reimbursement for your round
trip travel (coach, per corporate travel policy) between the San Francisco area
and your primary residence on the East Coast.
As part of the Company's desire to retain your services, the Company
will retire, effective the date of this letter, 73,067 shares of common stock
that you purchased from the
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Company with a loan from the Company. As a result of the transaction, the loan,
which is non-recourse, will be deemed fully satisfied and cancelled. You will
also receive a payment in the amount of $28,166 in respect of the year 2001, of
which $14,083 will be retained by the company, as you requested, in payment of
accrued but unpaid interest through May 10, 2001, and the remaining amount, net
of withholding taxes, will be paid to you in cash.
In the event that the aggregate of any payments or benefits made or
provided to you under this letter agreement (other than any payment pursuant to
this paragraph) and under any other plans, programs or arrangements of the
Company (the "Aggregate Payment") is determined to constitute a Parachute
Payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code, or any successor provision, then, subject to the last sentence of this
paragraph, the Company will pay to you, prior to the time any excise tax imposed
by Section 4999 of the Code, or any successor provision ("Excise Tax"), is
payable with respect to such Aggregate Payment, an additional amount which,
after the imposition of all income and excise taxes thereon, is equal to the
Excise Tax on the Aggregate Payment. The determination of whether an Aggregate
Payment constitutes a Parachute Payment and, if so, the amount to be paid to you
and the time of payment shall be made by an independent Tax Auditor (the "Tax
Auditor") jointly selected by the Company and you and paid by the Company. The
Tax Auditor shall be a nationally recognized United States public accounting
firm that has not, during the two years preceding the date of its selection,
acted in any way on behalf of the Company or any affiliate thereof. If you and
the Company cannot agree on a firm to serve as the Tax Auditor, then you and the
Company shall each select one nationally recognized United States accounting
firm and those two firms shall jointly select the accounting firm to serve as
the Tax Auditor. Notwithstanding the foregoing (but subject to the last sentence
of this paragraph), in the event that the amount of your Excise Tax liability is
subsequently determined to be greater than the Excise Tax liability with respect
to which an initial payment to you under this paragraph has been made, the
Company shall pay to you an additional amount with respect to such additional
Excise Tax (and any interest and penalties thereon) at the time that the amount
of the actual Excise Tax liability is finally determined, such additional amount
to be calculated in the same manner as such initial payment. You and the Company
shall cooperate with each other in connection with any proceeding or claim
relating to the existence or amount of liability for Excise Tax, and all
expenses relating to any such proceeding or claim (including all reasonable
attorney's fees and other expenses incurred by you in connection therewith)
shall be paid by the Company promptly upon your written demand.
You will not, during or after the term of your employment, disclose to
any entity or person any information (i) which is not generally known to the
public; (ii) which relates to the business of the Company or any of its
subsidiaries; (iii) which is treated as confidential by the Company; and (iv) to
which you gain access by reason of your position as an employee or director of
the Company, except as such disclosure (i) is required or appropriate in
connection with your work as an employee of the Company, or (ii) is required by
a court of law, by any governmental agency having supervisory authority over the
business of the Company, or by any other person or body with apparent
jurisdiction to order you to disclose such information.
Any controversy or claim arising out of or relating to this letter
agreement, any amendment of this letter agreement, or any breach of any of the
foregoing, shall, at the election of the Company or you, be settled by
confidential arbitration, to be held in San Francisco, California, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The arbitrators will apply the provisions of this letter agreement strictly as
written, and shall explain the reasons and basis of their award in detail and in
writing. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. All
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costs and expenses relating to any controversy or claim that is arbitrable
(including your reasonable attorney's fees and expenses) will be paid by the
Company promptly on written demand, except that the arbitrators are authorized
to require reimbursement of the Company for moneys paid by it pursuant to this
sentence if the arbitrators determine that your substantive positions in the
arbitration were entirely without merit. Pending final resolution of any
arbitration or court proceeding, the Company will continue prompt payment of
all amounts due to you under this letter agreement or any amendment and prompt
provision of all benefits to which you or your beneficiaries are entitled.
Notwithstanding the foregoing, nothing contained in this paragraph will limit a
party's right to seek equitable relief in any court of competent jurisdiction.
All of your rights under this letter agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
both you and the Company. The validity, interpretation, construction and,
performance and enforcement of this letter agreement shall be governed by the
laws of the State of California without regard to its conflicts of law
principles. To the extent that the rights and obligations under this letter
agreement of the parties hereto and their successors, as such rights and
obligations are described herein, may require performance after the termination
or expiration of this letter agreement, such rights and obligations shall
survive the term of this letter agreement and shall be fully enforceable
thereafter. In the event that any portion or aspect of any provision of this
letter agreement shall be deemed to be invalid or unenforceable for any reason,
in whole or in part, the remainder of this letter agreement shall remain in full
force and effect to the fullest extent permitted by law so as to achieve the
purposes of this letter agreement. This letter agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.
Very truly yours,
OMNISKY CORPORATION
By:__________________________
Name: Xxxxxxx XxXxxxx
Title: Chief Executive Officer
Agreed and Accepted:
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Name: Xxxxxxxx Xxxxxxx
