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Exhibit 10.1
[SUMMIT TECHNOLOGY INC. LETTERHEAD]
October 1, 1998
Mr. Xxxxx Xxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Dear Xxxxx:
Summit Technology, Inc. and Autonomous Technologies Corporation have this
date entered into a merger agreement. The purpose of this letter is to set
forth the terms of your employment by Summit, subject to the merger being
consummated. Commencing as of the consummation of the merger, you will be
employed by Summit on the following terms:
1. Position. You will hold the position of Executive Vice President and
be in charge of the Autonomous Technologies operation in Orlando,
Florida. You will be viewed as the second highest executive officer in
the company. You shall occupy this position at the pleasure of the
Board of Directors. You will be an at-will employee. You will have
such authority and fulfill such obligations as are consistent with
such position. The Board will elect you to serve as a Director of the
company pursuant to its obligations contained in the merger agreement.
You will report to the Chief Executive Officer.
2. Base Salary. Your base annual salary will be $212,000 per year payable
in accordance with the company's customary payroll practices. Your
salary and performance will be subject to annual review by the Board
or Compensation Committee of the Board.
3. Performance Bonus. At each performance review, the Board will consider
your annual bonus for the prior year. The amount of any bonus will be
determined at the discretion of the Board, with an award of 40% of
base salary targeted for achievement of aggressive performance goals
during the year. The performance criteria for determination of your
bonus will be set by the Compensation Committee, after consultation
with you, within 30 days from commencement of your employment. The
granting of any performance bonus is within the discretion of the
Board of Directors.
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4. Stock Option. We will grant you a stock option to purchase 200,000
shares of Summit common stock pursuant to the Summit 1997 Stock
Option Plan or another plan if necessary. The options shall vest as
follows:
100,000 shares shall vest over a three-year period in equal
annual installments of 33,333.33 shares per year, with vesting
to commence as of the date of the merger agreement and only in
the event you are in continuous employment by the company on the
date of such vesting.
33,333 shares shall vest upon the company's stock price closing
at $8 per share.
33,333 shares shall vest upon the company's stock price closing
at $13 per share.
33,334 shares shall vest upon the company's stock price closing
at $20 per share.
In any event, all of the above stock performance shares will
vest in five years provided you are in continuous employment with the
company at the time of vesting. The term of the stock option will be
for 10 years and will be subject to the customary terms of stock
options granted by the company. To the maximum extent possible, that
portion of this stock option capable of being qualified shall be an
incentive stock option and the balance shall be a nonqualified option.
The stock option agreement pertaining to the option shall specify
that portion of the stock option that is to be treated as an incentive
stock option.
The exercise price of the incentive stock option portion shall be the fair
market value of the company's stock on the date of the merger. The exercise
price of the nonqualified stock option portion shall be $5.625 per share.
5. Additional Benefits. You will receive the following additional
benefits:
- Car allowance of up to $667.00 per month, to be allocated among
leasing costs, insurance costs and other related expenses as you
determine, which will be treated as W-2 income.
- Reimbursement for expenses reasonably incurred by you in
connection with the performance of your services, in accordance
with the company's travel and entertainment and reimbursement
policies and procedures.
- Participation in all of the company's medical, dental and
insurance plans and all employee pension, profit sharing and
similar savings plans (as described in the company's employee
benefits handbook).
- Paid vacation and sick/personal days in accordance with the
company's personnel policy.
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6. Severance Provisions. Upon any termination of your employment by the
company without cause, you will, upon execution of the company's standard
termination agreement, receive severance payments equal to one year's base
compensation, with continuing payment for participation in medical, dental
and insurance plans. If termination of your employment occurs within twelve
months of a change in control (to be defined in the severance agreement
between you and the company), severance payments shall be for a two-year
period.
7. Confidentiality and Non-Competition Agreement. Upon commencement of
employment, you will execute the company's standard confidentiality and
non-competition agreement, provided that such agreement is identical to the
terms of the confidentiality and non-competition agreement existing between
the company and Xx. Xxxxxxxxx.
8. Non Conflict. You have represented to us that you are not under any
obligations to another employer or any other person or entity that would
prevent or restrict you from accepting employment with the company and
performing your duties as described herein. We may ask to review any
written agreements that contain confidentiality or non-competition
obligations to confirm these matters.
9. At-Will Employee. You, like everyone else at the company, will be an
at-will employee. Neither this letter, nor the other agreements you will
enter into with the company (option agreements, severance agreements,
confidentiality and non-competition agreement, etc.) will constitute an
employment agreement or a guaranty of continued employment.
Please indicate your acceptance of the terms of your prospective employment by
the company effective upon the merger of Autonomous Technologies Corporation
into a subsidiary of the company on or before February 28, 1999 (or a later
date if extended pursuant to the merger agreement).
Very truly yours,
/s/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
Agreed:
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Date: 4/28/99
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