November 13, 2007 Mr. Bob Richardson
Exhibit 10.3
November
13, 2007
Mr. Xxx
Xxxxxxxxxx
0000
Xxxxxxxxxxx Xx.
Huntington
Beach, CA 92648
Re: Side
Letter Re: Minimum Value of Stock Options in the event of Change of
Control
Dear
Xxx:
This
letter agreement confirms the agreement between Primal Solutions, Inc.
(“Primal”) and you regarding the minimum value of the stock options
previously granted to you pursuant to those certain Non-Statutory Stock
Option
Agreements dated as of August 18, 2003, May 6, 2005 and August 9, 2006
(collectively, “OptionAgreement”) upon the occurrence of a Change
of Control of Primal.
Option
Vesting on Change of Control
As
discussed and provided in the Option Agreement, to the extent permitted
under
applicable law, upon the occurrence of a Change of Control of Primal, all
outstanding and unvested stock options granted to you pursuant to the Option
Agreement (the “Options”) shall automatically accelerate and vest in
full. The Options may be exercised within thirty (30) days of a
Change of Control (which is called a Liquidity Event therein), as currently
provided in the Option Agreement. Notwithstanding the foregoing, in
no event shall such thirty (30) day period continue after the last day
of the
calendar year in which the Change of Control occurs. The parties
hereby reconfirm and agree that this letter agreement does not in any way
alter,
amend, or modify the provision in the Option Agreement that vesting of
the
Options occurs only upon such a Change of Control.
If,
upon
a Change of Control of Primal during the term of this letter agreement,
the Net
Value (as hereinafter defined) of the Options is less than $289,347.00
(the
“Minimum Value”), as measured upon the Change of Control, then the
Company shall pay to you the amount of such shortfall in a lump sum payment
payable within ten (10) days following the closing of the Change of
Control. Such payment shall be subject to applicable
withholdings. For purposes of this letter agreement, “Net
Value” shall mean the difference between (a) the aggregate consideration
paid or payable to you in connection with the Change of Control, or if
no such
consideration applies, then the fair market value at the time of the Change
of
Control, which relates to the shares of Common Stock of Primal underlying
the
Options less (b) the unpaid aggregate exercise price which is payable to
exercise said Options in full.
“Change
of Control” shall mean in a transaction or series of related transactions, (i)
the sale of all or substantially all of the assets of the Company, (ii)
the
acquisition by any person, entity or group within the meaning of Section
13(d)
or 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”) or any
comparable successor provisions of the beneficial ownership
(within
the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rules) of more than 50% of the outstanding capital stock of Primal,
or
(iii) the merger, consolidation or other reorganization of Primal;
provided, however, that any such merger, consolidation or other
reorganization of Primal whereby security holders of Primal immediately
prior to
such transaction continue to own not less than 50% of the capital stock
in the
surviving company following such transaction shall not be deemed to be
a Change
of Control. Additionally, a Change of Control shall be deemed to have
occurred upon (i) Primal entering into a “going private” transaction,
(ii) the deregistration of Primal’s securities under the Exchange Act, or
(iii) Primal otherwise no longer being subject to the reporting
requirements under the Exchange Act and no longer filing periodic reports
under
such Act.
The
term
of this letter agreement shall commence on the date hereof and expire on
December 31, 2008; provided, however, that upon any earlier
termination of your employment, the term shall automatically terminate,
and you
shall no longer be eligible to receive the Minimum Value. This letter
agreement does not alter the at-will nature of your employment with Primal
in
any way.
If
this
arrangement is acceptable to you, please sign the enclosed copy of this
letter
and return it to me at your earliest convenience.
Very
truly yours,
|
|
Xxxxxx
X.
Xxxxxxx
Chief
Executive Officer
cc: Personnel
File
I
agree
to the terms described above:
| Signature | Date |
