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EXHIBIT 10.29
MEMORANDUM CONCERNING EMPLOYMENT
OF XXXXXX XXXX BY XXXXXXXX.XXX, INC.
This Memorandum describes in summary form the principal terms of the
employment agreement between Xxxxxxxx.xxx, Inc. ("Neoforma") and Xxxxxx Xxxx
("Xxxx") that resulted from negotiations between Xxxx and Xxxxxx X. Xxxxxxx
("Xxxxxxx"), Chairman, President and CEO of Neoforma. A complete employment
agreement between Neoforma and Xxxx will be prepared promptly that will
incorporate these terms, certain details about them, and other customary
provisions.
1. Title, Duties and Authority. Xxxx will be employed immediately as
Executive Vice President of Neoforma, head of strategy, and chief marketing
officer; and as President of Neoforma Information Systems (which may be
renamed), a business unit of Neoforma that is to manage the collection of
marketing and buyer and seller web use data. In the foregoing areas, Xxxx will
have authority to hire and fire personnel. The division of Xxxx's time across
job activities will be approximately as follows: strategy -- 50 percent;
marketing -- 30 percent; other -- 20 percent.
2. Term and Salary.
(a) Four-year term.
(b) Year one base salary -- $150,000. Bonus, if any, at the
discretion of the Neoforma CEO.
(c) Year Two -- $350,000 minimum cash compensation.
(d) Years Three and Four -- $350,000 minimum cash compensation.
3. Stock in Neoforma. Xxxx is granted rights to shares of Neoforma stock
as follows:
(a) 700,000 shares to be purchased immediately, subject to vesting as
described below, at $7 per share, which is the fair market value
established by the Neoforma Board and Neoforma's financial
advisers.
(b) Neoforma will lend Xxxx the purchase price of the above mentioned
700,000 shares pursuant to a promissory note or several
promissory notes as determined by Xxxx. The terms of the notes
shall be as determined by the parties provided, however, that
Xxxx shall have the sole discretion to determine (i) any security
beyond the shares and (ii) the terms of recourse.
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(c) 250,000 of the 700,000 shares vest on the first anniversary of
commencement of employment. The remaining 450,000 shares vest pro
rata over the 36 months between the first anniversary of
commencement of employment and the forth anniversary of
commencement of employment, i.e., at the rate of 12,500 shares
per month. Neoforma --- will use its best efforts (i) to ensure
that such shares are eligible for resale under SEC Rule 701, (ii)
to include such shares in a registration statement on Form S-8,
and (iii) to include them in any other registration statement
filed by the Company relating to a secondary offering, subject,
in the case of clause "iii," to the rights of holders of
outstanding registration rights and the terms of the Company's
existing registration rights agreement.
4. Travel and Moving.
(a) Unless he decides otherwise, Xxxx will reside in Los Angeles and
will perform his duties in Los Angeles and, as necessary, in
Santa Xxxxx or such other location in California where Neoforma
establishes its principal office. Neoforma will pay all
curb-to-curb costs of any necessary business travel including
between Los Angeles and Santa Xxxxx (or such other California
location), including any additional tax liability to Xxxx from
payment of such commuting expenses. Neoforma will provide an
automobile for Xxxx's use in Santa Xxxxx (or such other
California location) as well as a suitable apartment in that
locale for Xxxx's exclusive use.
(b) Should Xxxx, at his sole election, move to Northern California,
(or to the locale of a new corporate headquarters in California),
Neoforma will pay all reallocation expenses.
5. Reporting. Xxxx will report directly to Neoforma's Chairman/CEO.
6. Vesting and Severance. If, absent Xxxx's written approval, there is a
diminution in Xxxx's role, a change in his reporting either explicitly or in
fact, a diminution in his title or responsibilities, such event shall be deemed
a constructive termination of Xxxx by Neoforma without cause and will result in
the full and immediate vesting of all shares of the stock referred to in
paragraphs 3(a) and (c) above that are not then vested. If there is a change of
control of Neoforma, such event shall result in the immediate vesting of fifty
percent (50%) of the shares referred to in paragraphs 3(a) and (c) above that
are not then vested or such more favorable vesting program as is then in place
for senior executives under similar circumstances.
If Xxxx is terminated without cause, he will be entitled to a lump sum
severance payment in the amount of the base salary or minimum cash compensation
as specified hereunder for the six months following such termination (but not
beyond the end of the term of the employment agreement), and he will be entitled
to the full and immediate vesting of all shares of the stock referred to in
paragraphs 3(a) and (c) above that are not then vested. No severance or
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acceleration will occur in the event of termination for cause, which shall only
be for (a) conviction of a felony or, (b) after notice specifying particularly
and in detail the deficiencies at issue and the manner of required cure thereof
and 30 days' opportunity for cure: (i) improper application of company funds or
assets, (ii) a persistent material refusal to obey a lawful order of the Board
of Directors consistent with the terms of this agreement, or (iii) a material
and persistent failure to adequately and competently perform assigned duties.
7. Confidentiality. Xxxx agrees to the Company's standard employee
provisions on confidentiality, concurrent employment, and assignment of
inventions.
8. Legal Expenses. Neoforma will pay all of Xxxx's legal expenses
incurred in negotiation of this employment agreement.
XXXXXXXX.XXX, INC.
by:
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Xxxxxx Xxxx
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