April 1, 2008
Exhibit 10.17
April 1, 2008
Xxx Xxxxxx
Email: xxxxxx_xxx@xxxxxxx.xxx
Email: xxxxxx_xxx@xxxxxxx.xxx
| Re: Offer Letter |
Dear Xxx:
On behalf of Fusion Multisystems, Inc. (the “Company”), I am pleased to offer you full-time
employment, commencing on April 13, 2009 or such other date as mutually agreed by the Company (the
“Hire Date”), subject to the following terms and conditions contained in this letter (the
“Agreement”):
1. TITLE AND DUTIES: You will commence your employment as Senior Vice President of
Sales reporting directly to the Company’s Chief Executive Officer (“CEO”). You will be in charge
of the Company’s entire sales organization, setting compensation metrics for the sales
organization, and hiring the necessary resources in the sales organization to meet the Company’s
revenue objectives. Subject to the approval of the CEO, you will be responsible for establishing
comprehensive revenue goals revenue goals for the Company (the “Revenue Plan”) and ensuring that
the Revenue Plan is achieved each fiscal year. You also shall perform such other duties and
responsibilities on behalf of the Company, as may reasonably be assigned from time to time by the
CEO consistent with the position of Senior Vice President of Sales, including but not limited to
providing services as Senior Vice President to one or more of the Company’s subsidiaries or
affiliates.
2. BASE COMPENSATION: You will receive an initial base salary at a rate of $225,000
per year, less standard deductions and authorized withholdings (the “Salary”). Your Salary shall
be payable in accordance with the Company’s customary payroll practices, and will be subject to
periodic review and adjustment by the Company’s Board of Directors (the “Board”).
3. INCENTIVE COMPENSATION: You will be eligible to receive an annual performance-based
bonus (“Annual Bonus”) of up to $225,000, based on your achievement of Company and personal
performance objectives that will be established by the Board each fiscal year. Your Annual Bonus
will be directly tied to the overall Revenue Plan for the Company on a fiscal year basis as agreed
upon by the CEO. $50,000.00 of your Annual Bonus will be tied to meeting gross margin objectives as
set forth by the CEO. The remaining $175,000.00 of your
variable compensation will be tied to the attainment of revenue goals based on performance
criteria approved by the Board.
4. BENEFITS: As a full-time employee of the Company, you will be eligible to
participate in the employee benefit plans, including the Company’s health insurance plan and 401(k)
plan that are generally available on a group basis to the Company’s employees, subject to the
eligibility requirements of such plans.
5. STOCK: Subject to the approval of the Company’s Board of Directors, the Company
shall grant you an option to purchase One Million Fifty Thousand (1,050,000) shares of the
Company’s Class B Common Stock (the “Option”). The per share exercise price of the shares
underlying the Option will be equal to the fair market value of the common stock on the date of the
Option grant as determined by the Board in its sole discretion. The Option shares will vest with
respect to 25% of the shares upon your completion of twelve (12) months of active service with the
Company and the remaining 75% of the shares will vest in a series of 36 substantially equal
installments upon your completion of each additional month of active service thereafter. The
Option will be granted under the Company’s stock option plan (the “Plan”) and will be evidenced by
and subject to a standard stock option agreement under the Plan that you will be required to sign
as a condition to receiving the Option; provided that, if the Board determines that it would be in
the best interests of the Company to grant the Option independent of the Plan in order to preserve
the Company’s use of SEC Rule 701 for future option grants, the Option will be granted as a
standalone option with the same terms and conditions as would have applied to the Option had it
been granted under the Plan.
6. FULL-TIME SERVICES TO THE COMPANY. As a full-time employee, you are required to
devote your full business time, attention, skills and efforts to the tasks and duties of your
position as assigned by the CEO. If you wish to request consent to provide services (for any or no
form of compensation) to any other person or business entity while employed by the Company, please
seek written consent from the Board, provided, however, that you may serve on the board of
directors of charitable and civic organization so long as such service does not interfere with your
obligations under this Agreement. You also shall comply with the Company’s policies, procedures
and practices, as they may be in effect from time-to-time during the term of your employment.
7. TERMINATION. Employment with the Company is on an “at-will” basis. This means
that your employment with the Company is not for any specified period of time and can be terminated
by you or by the Company at any time, with or without advance notice, and for any or no particular
reason or cause. Notwithstanding the foregoing, your employment with the Company may be terminated
under the following circumstances:
(a) Death. Your employment with the Company shall terminate upon your death and the
Company shall not be obligated to make any further payments to your estate, except amounts due as
Salary and accrued but unused vacation earned at the time of your termination of employment, and
reimbursement for any documented expenses incurred prior to the termination of your employment in
accordance with the Company’s expense reimbursement policies (collectively, the “Accrued
Obligations”).
(b) Disability. In the event that the Board reasonably determines in good faith that
you are unable to perform the essential functions of your employment with the Company due to any
illness, incapacity or injury, after taking into any account any reasonable accommodation that does
not impose an undue hardship on the Company, for more than twelve (12) weeks in any rolling
one-year period (“Disability”), unless a longer period is required by federal or state law, in
which case that longer period would apply, the Board shall have the right to terminate your
employment, and the Company shall not be obligated to make any further payments to you hereunder,
except for the Accrued Obligations. You expressly agree that the Company shall have the right to
permanently replace you in the event you are terminated due to a Disability.
(c) Termination for Cause. The CEO or the Board may terminate your employment at any
time immediately upon notice to you for “Cause.” For purposes of this Agreement, “Cause” shall
mean any of the following occurring during your employment with the Company (except with respect to
clause (v) below): (i) personal dishonesty by you involving Company business, or breach of your
fiduciary duties to the Company; (ii) conviction of, or a plea of guilty or nolo contendere to, a
felony or other crime involving moral turpitude or dishonesty; (iii)) your willful refusal to
comply with the lawful requests made of you by the CEO or the Board that are reasonably related to
your employment with the Company and the performance of your duties under this Agreement; (iv)
a material violation by you of the Company’s policies, after written notice to you, which (if such
violation is reasonably susceptible of cure) is not fully cured by you within thirty (30) days
after receiving such written notice; and/or (v) a material breach by you of any material provision
of this Agreement or any other agreement between the Company and you, which (if such violation is
reasonably susceptible of cure) is not fully cured by you within thirty (30) days after receiving
such written notice.
In the event that the Board terminates your employment for Cause, the Company shall not be
obligated to make any further payments to you, except for the Accrued Obligations.
(d) Termination Without Cause: Notwithstanding any other provision in this Agreement,
the CEO or the Board (in their sole discretion) shall have the right to terminate your employment
at any time, for any reason or no reason, immediately upon written notice to you. If the CEO or
the Board terminates your employment with the Company without Cause, subject to you signing (and
not revoking) a separation agreement and general release of claims in a form
acceptable to the Company (the “General Release”) within 21 days after the General Release is
provided to you by the Company (or such longer period as may be required under applicable law), you
shall receive a continuation of the payment of your Salary for one (1) year in accordance with the
Company’s standard payroll schedule (the “Severance Payments”). You shall also become immediately
vested in those shares underlying any option grants issued to you by the Company that are unvested
as of the date of termination that would have vested during the twelve (12) month period
immediately following the termination of your employment with the Company. Your right to receive
and retain any of the Severance Payments or stock option grants is contingent upon your compliance
with your continuing obligations to the Company under the terms of this Agreement and the
Proprietary Information and Invention Assignment Agreement (as defined below).
(e) Resignation. You may resign from your employment for Good Reason (as defined
below) upon written notice to the Company. If you resign without Good Reason, the Company shall
have no further obligation to provide you compensation following the termination of your employment
other than the payment of the Accrued Obligations. If you resign for Good Reason, the Company
shall provide you with the same severance benefits (and subject to the same conditions) as
specified above in Section 7(D) in connection with a termination without Cause by the Company.
Resigning with “Good Reason” means your resignation from employment with the Company within 90 days
after any of the following without your prior written consent: (i) the Company’s failure to pay you
any earned Salary or Annual Bonus that has become due and payable; or (ii) a material reduction in
your responsibilities, authority or job title; or (iii) a reduction in your Salary by more than 10%
except in connection with a Company cost-reduction program applied to all executive officers; or
(iv) a change of more than fifty (50) miles in the principal place of your employment that also
results in such principal place of employment being materially farther from your primary residence;
or (v ) any material breach by the Company of a material provision of this Agreement; provided,
however, that in order for you to resign for Good Reason pursuant to subclauses (i), (ii), (iv) or
(v) of this Section 7(E), you must provide the CEO and the Board with advance written notice of the
alleged condition giving rise to a potential resignation for Good Reason, which the Company fails
to cure within thirty (30) days of receiving such written notice from you.
8. CHANGE OF CONTROL TERMINATION. In the event that your employment is terminated by
the Company without Cause or by you for Good Reason within twelve months after a Change in Control
(as defined below), and provided that you sign and do not revoke the General Release within 21 days
after the General Release is provided to you by the Company (or such longer period as may be
required under applicable law), you shall become immediately vested in those shares underlying any
option grants issued to you by the Company that are unvested as of the date of termination that
would have vested during the twelve (12) month period immediately following the termination of your
employment with the Company.
For purposes of this Agreement, a “Change in Control” means either of the following
stockholder-approved transactions to which the Company is a party: (a) a merger or consolidation of
the Company in which securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s then outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such transaction (other
than in connection with a reincorporation transaction in which the holders of the Company’s
securities immediately prior to such transaction hold securities in the ultimate parent or
surviving entity after such transaction in substantially the same proportion to their
pre-transaction holdings), (b) a transaction or series of related transactions in which more than
fifty percent (50%) of the total combined voting power of the Company’s then outstanding securities
are transferred to a person or persons different from the persons holding those securities
immediately prior to such transaction or series of related transactions (other than transfers to
affiliates or the transferring party or parties), or (c) the sale, transfer or other disposition of
all or substantially all of the Company’s assets.
9. SECTION 409A.
(a) It is intended that any amounts payable under this Agreement and the Company’s and your
exercise of authority or discretion hereunder shall comply with and avoid the imputation of any
tax, penalty or interest under Section 409A of the Internal Revenue Code of 1986, as amended
(including the Treasury Regulations and other published guidance related thereto). This Agreement
shall be construed and interpreted consistent with that intent.
(b) To the extent that any reimbursement pursuant to this Agreement is taxable to you, you
shall provide the Company with documentation of the related expenses promptly so as to facilitate
the timing of the reimbursement payment contemplated by this paragraph, and any reimbursement
payment due to you pursuant to such provision shall be paid to you on or before the last day of the
taxable year following the taxable year in which the related expense was incurred. Such
reimbursement obligations pursuant to this Agreement are not subject to liquidation or exchange for
another benefit and the amount of such benefits that you receive in one taxable year shall not
affect the amount of such benefits that you receive in any other taxable year.
(c) For purposes of this Agreement, a termination of employment shall mean a “separation from
service” as defined in Treasury Regulations Section 1.409A-1(h) without regard to any optional
alternative definitions available thereunder.
(d) For purposes of this Agreement, if you are a “specified employee” within the meaning of
the Treasury Regulation Section 1.409A-1(i) as of the date of your separation from service, you
shall not be entitled to any severance payment until the earlier of (i) the date which is six (6)
months after your separation from service for any reason other than death, or (ii)
the date of your death. The provisions of this Section 9.D, shall only apply if, and to the
extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A.
Any amounts otherwise payable to you upon or in the six (6) month period following your separation
from service that are not paid by reason of this paragraph shall be paid (without interest) as soon
as practicable (and in all events within thirty (30) days after the date that is six (6) months
after your separation from service (or, if earlier, as soon as practicable, and in all events
within thirty (30) days, after the date of your death).
10. CONDITIONS. This offer, and any employment pursuant to this offer, is conditioned
upon the following:
| • | Your ability to provide satisfactory documentary proof of your identity and right to work in the United States of America on your first day of employment. | ||
| • | Your signed agreement to, and ongoing compliance with, the terms of the enclosed Employee Proprietary Information and Inventions Assignment Agreement without modification. | ||
| • | Your return of the enclosed copy of this Agreement, after being signed by you without modification, to me by no later than April 1, 2009, after which time this offer will expire. By signing and accepting this offer, you represent and warrant that: (i) you are not subject to any pre-existing contractual or other legal obligation with any person, company or business enterprise that may be an impediment to your employment with, or your providing services to, the Company as its employee; (ii) you have not and shall not bring onto Company premises, or use or disclose in the course of your employment with the Company, any confidential or proprietary information of another person, company or business enterprise to whom you previously provided services; and (iii) you have returned all property and confidential information belonging to any prior employers to whom you owe an obligation to return such property and/or confidential information. |
11. ENTIRE AGREEMENT. If you accept this offer, and the conditions of this offer are
satisfied, this Agreement and the written agreements referenced in this letter will constitute the
complete agreement between you and the Company with respect to the initial terms and conditions of
your employment. Any prior or concurrent negotiations, representations, or promises, whether
written or oral, not contained in this Agreement or contrary to those contained in this Agreement,
that may have been made to you are expressly cancelled and superseded by this offer letter. Except
as otherwise specified in this Agreement, the terms and conditions of
your employment pursuant to this Agreement may not be changed, except by a writing issued by a
duly authorized officer of the Company.
Sincerely,
Xxxxx Xxxxxxxx
Chief Executive Officer
Fusion Multisystems, Inc.
Chief Executive Officer
Fusion Multisystems, Inc.
I, Xxx Xxxxxx, hereby accept the offer of employment by Fusion Multisystems, Inc. based on the
terms and conditions set conditions set forth above in this letter.
/s/ Xxx Xxxxxx
|
4/1/09 | |
Xxx Xxxxxx
|
Date |
