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Exhibit 10.6B
October 27, 1999
Xx. Xxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Dear Xxxxxx:
This letter shall set forth the changes to the terms and conditions of your
employment by Verilink Corporation set forth in the two letters to you from
Verilink, dated March 22, 1999, and September 21, 1999. We have agreed as
follows:
1. The bonus referred to in the attached September 21, 1999 letter in the
amount of $300,000.00 will be paid on or before November 1, 1999, in
recognition of the successful transition of Verilink's operations to
its Huntsville location.
2. Verilink shall grant you an additional option to acquire 400,000 shares
of its common stock on November 1, 1999. That option shall vest as to
25% of the shares on October 1, 2000, and at the rate of 1/48th of the
shares at the end of each month thereafter.
3. The Housing assistance loan referred to in Paragraph 9 of the March 22,
1999 letter shall be modified as follows:
a) You shall receive a housing assistance loan of $300,000, which
shall be interest free. If you purchase a home in Alabama with
the proceeds of that loan and subsequently sell that home for
less, after deduction of all costs of sale, than its purchase
price, the principal amount of the loan, will be
correspondingly reduced. Verilink shall reimburse you for any
tax liability incurred by you by reason of such reduction at
the maximum applicable marginal tax rate. The loan shall be
evidenced by a Promissory Note in the form attached hereto as
Exhibit A.
b) You shall receive an additional loan in the amount of
$300,000. The outstanding principal balance of the loan will
be repaid upon the earlier of (i) your leaving the Company for
any reason, provided however, that, for purposes of this
paragraph 3(b)(i) 25% of the loan will be forgiven for each
full year that you remain employed by Verilink; or (ii) within
one year after the value of your exercisable Verilink stock
options exceeds $2,000,000 (fair market value of stock subject
to exercisable options less total exercise price of such
options). Interest shall be forgiven. Verilink shall reimburse
you for any tax liability resulting from forgiveness of this
loan at the maximum applicable marginal tax rate. This loan
shall be evidenced by a Promissory Note in the form attached
hereto as Exhibit B.
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Xx. Xxxxxx X. Xxxxxxxx
October 27, 1999
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4. Verilink shall reimburse you for any tax liability incurred by you by
reason of any payments made to you pursuant to Paragraph 7 of the March
22, 1999 letter at the maximum applicable tax rate.
5. In addition to the Housing loan described in Paragraph 3 above, for so
long as you own two houses, Verilink shall reimburse you for real
estate taxes, insurance, maintenance and similar costs associated with
your Alabama house. To the extent not deductible by you, Verilink shall
reimburse you for any tax liability associated with such payments at
the maximum applicable marginal tax rate.
6. Paragraph 6 of the March 22, 1999 letter shall be modified to provide
that after one year of employment, any termination of your employment
by Verilink other than for cause shall entitle you to receive the
benefits provided in the Verilink Change of Control Severance Benefits
Agreement as if a change in control had preceded such termination.
7. Paragraph 8 of the March 22, 1999 letter shall be deleted.
8. Except as set forth above, the terms of the letters of March 22, 1999
and September 21, 1999 shall remain in full force and effect.
Very truly yours,
VERILINK CORPORATION
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx, CFO
I accept the foregoing offer:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Date: 10/28/99
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EXHIBIT A
PROMISSORY NOTE
$300,000.00 _________________, 1999
FOR VALUE RECEIVED, the undersigned hereby promises to pay to Verilink
Corporation ("Verilink") at Huntsville, Alabama, the principal amount of Three
Hundred Thousand Dollars ($300,000.00). All principal due under this Note shall
be paid on the earlier of (1) termination of the undersigned's employment by
Verilink for cause, as defined in the undersigned's employment letter dated
March 22, 1999; (2) ninety (90) days after the undersigned voluntarily
terminates his employment by Verilink; (3) one year after the undersigned's
employment by Verilink terminates for any reason not set forth in (1) or (2)
above; or (4) ________________. Principal is payable in lawful money of the
United States.
This Note may be prepaid at any time, in whole or in part, without
premium or penalty.
If action should be instituted on this Note, the undersigned agrees to
pay the holder, in addition to such amounts owed pursuant to this Note, all
costs of collection, including a reasonable sum of attorney's fees.
This Promissory Note is secured by a certain Deed of Trust and
Assignment of Rents of even date herewith, encumbering certain real property
owned by the undersigned in Alabama. The principal balance of this Note shall be
reduced by the amount by which the net proceeds from the sale by the undersigned
of such property after deduction of all costs of sale is less than its purchase
price.
This Promissory Note shall be governed by the laws of the State of
Alabama.
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Xxxxxx X. Xxxxxxxx
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XXXXXXX X
PROMISSORY NOTE
$300,000.00 _________________, 1999
FOR VALUE RECEIVED, the undersigned hereby promises to pay to Verilink
Corporation ("Verilink") at Huntsville, Alabama, the principal amount of Three
Hundred Thousand Dollars ($300,000.00). All principal due under this Note shall
be paid on the earlier of (i) termination of the undersigned's employment by
Verilink for any reason provided, however that for purposes of this paragraph
(i), the principal balance of this Note will be reduced by 25% each full year
that the undersigned remains employed by Verilink; or (ii) within one (1) year
after the value of the undersigned's exercisable Verilink stock options exceed
$2,000,000 (fair market value of stock subject to exercisable options less total
exercise price of such options). Interest shall be forgiven.
This Note may be prepaid at any time, in whole or in part, without
premium or penalty.
If action should be instituted on this Note, the undersigned agrees to
pay the holder, in addition to such amounts owed pursuant to this Note, all
costs of collection, including a reasonable sum of attorney's fees.
This Promissory Note shall be governed by the laws of the State of
Alabama.
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Xxxxxx X. Xxxxxxxx
