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EXHIBIT 10.3
XXXXXX.XXX CORPORATION
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
June 1, 2000
Xx. Xxxxxx X. Xxxxx
00 XxXxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxx
X0X 0X0
Re: Employment with Xxxxxx.xxx Corporation
Dear Xxx:
Xxxxxx.xxx Corporation (the "Company") is pleased to offer you a position as
Chief Executive Officer & President of the Company and a position on its Board
of Directors, on the terms set forth in this letter agreement, effective upon
your acceptance by execution of a counterpart copy of this letter where
indicated below.
1. Reporting Duties and Responsibilities. In this position you will report to
the Board of Directors of the Company. This offer is for a full time position,
located at the offices of the Company, except as travel to other locations may
be necessary to fulfill your responsibilities. Upon your acceptance of this
offer to become the Company's Chief Executive Officer & President, the Board of
Directors will elect you to fill a position on the Company's Board of Directors,
and while you remain the Chief Executive Officer & President of the Company, the
Board of Directors will continue to nominate you for a position on the Board of
Directors of the Company; provided, however, if you do not commence employment
with the Company (and assume your duties as Chief Executive Officer and
President) due to a failure to receive the "authorization to work" as described
in paragraphs 9 and 11 below and this offer letter is terminated, you agree to
promptly resign as a member of the Company's Board of Directors.
2. Salary; Bonus; Benefits and Vacation. Your initial base salary will be
$35,420 (in U.S. Dollars) per month, (an annualized rate of $425,000), less
applicable tax withholdings. Your salary is subject to adjustment in good faith
by the Company's Board of Directors, and is payable in accordance with the
Company's customary payroll practice as in effect from time to time. You will
also be eligible to earn an annual bonus in the amount of $300,000, payable
quarterly,
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Xxxxxx Xxxxx 2 Xxxxxx.xxx
based on the achievement of objectives which you and the Company's Board of
Directors will mutually determine in good faith. The objectives for your first
year will be determined promptly after your acceptance of this letter;
objectives for future years will be determined promptly after the beginning of
each fiscal year of the Company. Any additional bonus will be paid immediately
following completion of each quarter of continued employment with the Company.
You will also receive the highest standard benefits accorded the Company's
executives under the Company's employee benefits package, and will be subject
to the Company's vacation policy, as such package and policy is in effect from
time to time.
3. Sign on Bonus. The company will pay you a one time sign on bonus of
$100,000 within fifteen (15) days following your start date of full time
employment.
4. Stock Options. On the date you become an employee of the Company, and
subject to the Board of Directors approval, the Company will grant you an
option to purchase 1,100,000 shares of the Company's Common Stock pursuant to
the Company's stock option plan and standard stock option agreement. All
options will have an exercise price that will be equal to the fair market value
of the Company's Common Stock at the date of grant. The options will become
exercisable over a four-year exercise schedule with 25% of the shares vesting
at the end of your first twelve months of service, and with an additional
2.083% vesting per month thereafter, at the close of each month during which
you remain employed with the Company. In the event that a change of control
(defined to mean the Company is sold or is a party to a merger with another
company resulting in the Company's shareholders immediately prior to such
transaction owning less than 50% of the successor company's voting capital
stock immediately following such transaction) occurs, 50% of the unvested
options held by you will be immediately vested. The balance of the unvested
options held by you will continue to vest under the original vesting schedule.
In the event that such a change of control as described above occurs and
Xxxxxx.xxx stock is valued at or above $10.00 per share, 100% of the unvested
options held by you will be immediately vested.
5. Living/Commute Expenses. The Company will provide reimbursement for
reasonable living expenses in the Greater San Xxxx Area such as a one bedroom
condominium along with reimbursement for commute/travel expenses for four
roundtrips per month incurred between Ontario, Canada and the Greater San Xxxx
area for the duration of your continued full time employment with Xxxxxx.xxx.
6. Confidential Information. As an employee of the Company, you will have
access to certain Company confidential information and you may, during the
course of your employment, develop certain information or inventions, which
will be the property of the Company. To protect the interest of the Company,
you will need to sign the Company's standard "Employee Inventions and
Confidentiality Agreement" as a condition of your employment. We wish to
impress upon you that we do not wish you to bring with you any confidential or
proprietary material of any former employer or to violate any other obligation
to your former employers, and you have advised us that in connection with your
employment by the Company you will not bring with you or otherwise use any such
confidential or proprietary material.
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Xxxxxx Xxxxx 3 Xxxxxx.xxx
7. Severance Payments/Acceleration upon Termination. For purposes of this
Offer Letter and the related agreements governing the Options, any act by you
involving fraud, willful malfeasance or similar wrongful acts, or willful and
continuing neglect of your duties after notice of such, shall be grounds for
you to be "Terminated For Cause". If you are terminated for any other reasons,
you shall be deemed "Terminated Without Cause". If you are Terminated Without
Cause, the Company will pay you as agreed upon severance a lump sum one time
payment amount equal to twelve (12) months of your then base salary and annual
bonus. You agree that the payments set forth in this Offer Letter constitute
all payments that you shall be entitled to, and under any theory, in the event
of any termination of employment. In the event you are terminated with or
without cause at any time prior to your first year anniversary date, 275,000
shares of the Company's Common Stock will immediately vest. In the event you
are terminated with or without cause (except for the reasons set forth in the
first sentence of this paragraph) after your 12 month anniversary date up until
24 months after start of employment, the vesting period of all options held by
you will be accelerated by twelve (12) months.
8. At-Will Employment. While we look forward to a long term relationship,
should you decide to accept our offer, you will be an at-will employee of the
Company, which means the employment relationship can be terminated by either of
us for any reason at any time subject to the provisions of Paragraph 7 hereof.
Any statements or representations to the contrary (and, indeed, any statements
contradicting any provision in this letter) should be regarded by you as
ineffective. Further, your participation in any stock option or benefit program
is not to be regarded as assuring you of continuing employment for any
particular period of time.
9. Authorization to Work. Because of Federal regulations adopted in the
Immigration Reform and Control Act of 1986, you will need to present
documentation demonstrating that you have authorization to work in the United
States. If you have any questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, please contact our human resources
department.
10. Term of Offer. This offer will remain open until June 2, 2000. If you
decide to accept our offer, and I hope that you will, please sign the enclosed
copy of this letter in the space indicated and return it to me. Upon your
signature below, this will become our binding agreement with respect to the
subject matter of this letter, superseding in their entirety all other or prior
agreements by you with the Company as to the specific subjects of this letter.
This agreement will be binding upon and inure to the benefit of our respective
successors and assigns, and your heirs, administrators and executors, will be
governed by California law, and may only be amended in a writing signed by you
and the Company.
11. Start Date. This offer is made with the understanding that you will be
available to start employment with Xxxxxx.xxx within seven (7) calendar days
after receipt of your "authorization to work in the United States" and that the
Company does undertake to reimburse you for legal and administration expenses,
incurred by you for the sole purpose of applying for authorization to work in
the United States.
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Xxxxxx Xxxxx 4 Xxxxxx.xxx
Xxx, we are excited and pleased to have you join the Xxxxxx.xxx team. I am
confident that we will successfully capitalize on our enormous market
opportunity.
Sincerely,
/s/ XXXXXXX X. XXXXXXXXX
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Xxxxxxx X. XxXxxxxxx
Chairman of the Board
Acknowledged, Accepted and Agreed Date:
/s/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
