EXHIBIT 10.21
September 24, 2001
Xxxxx Xxxxxxxxx
0000 Xxxxxxxx Xx.
Xxxxxxxxxxx, XX 00000-0000
Dear Xxxxx:
On behalf of Tricord Systems, Inc., I am pleased to extend to you the following
offer of the position of Chief Operating Officer of the Company. This is an
exempt position. This offer letter is not an employment contract, and you will
be deemed an at-will employee of Tricord. This offer letter is subject to your
acceptance and approval by Tricord's Board of Directors. Set forth below are the
terms of your employment:
1. Your job responsibilities will commence on October 1, 2001. You will
report directly to the Chief Executive Officer. You will perform
such duties, consistent with your other business and employment
activities, as may be agreed to by the Chief Executive Officer of
the Company and you.
2. Your base salary in connection with such employment will be $175,000
per year in 2001. Tricord's pay periods are the 15th and the end of
the month. You will be eligible for an annual bonus subject to
performance objectives to be set by the Chief Executive Officer. In
year 2001, your bonus will be up to 30% of your base salary. In
subsequent years, your bonus will be set no later than January 31st
of that year by the Chief Executive Officer. Your bonus will be paid
no later than 45 days after the end of each calendar year.
3. You will be paid a signing bonus of $25,000 as of the date you
commence employment. This bonus must be repaid on a pro rata basis
if you voluntarily leave the Company prior to December 31, 2001.
4. You will be granted, effective as of the date you commence
employment, an incentive stock option (the "Option") to purchase
250,000 shares (the "Option Shares") of the Company's common stock
at an exercise price equal to the closing bid price of the common
stock on the first trading day prior to the date you commence
employment. You should note, however, that the number of shares
subject to the Option that will actually qualify for incentive stock
option tax treatment will be limited by the provisions of the
Internal Revenue Code. The Option will be granted under the terms of
the Company's 1998 Stock Incentive Plan (the "1998 Plan") and the
standard form of option agreement thereunder. The Option will become
exercisable in 37 installments as follows: (i) 25% of the Option
Shares will become exercisable 12 months after the date of grant;
and (ii) 75% of the Option Shares will become exercisable in 36
equal monthly installments thereafter (i.e., approximately 2.083% of
the Option Shares for each full month of continuous service
thereafter).
5. In addition you will be granted, effective as of the date you
commence employment, a non-statutory stock option (the "Non-Plan
Option") to purchase 250,000 shares (the "Non-Plan Option Shares")
of the Company's common stock at an exercise price equal to the
closing bid price of the common stock on the first trading day prior
to the date you commence employment. The Non-Plan Option will be
granted outside of the Company's 1998 Plan.
The Non-Plan Option will become exercisable in 37 installments as
follows: (i) 25% of the Option Shares will become exercisable 12
months after the date of grant; and (ii) 75% of the Option Shares
will become exercisable in 36 equal monthly installments thereafter
(i.e., approximately 2.083% of the Option Shares for each full month
of continuous service thereafter).
6. Pursuant to authority granted under Section 13.3 of the 1998 Plan
and the proviso at the end of Section 13.5 of the 1998 Plan, in the
event that your employment with the Company is terminated within 24
months following a Change in Control of the Company as a result of
death, disability, termination by the Company without "cause" (as
defined in the 1998 Plan) or resignation by you for "good reason"
(which is defined as a significant reduction of your
responsibilities, a reduction in your base salary or requiring you
to be based more than 30 miles from where your office is located
prior to a Change in Control of the Company), (i) your Plan Option
(to the extent held at least six months from the date of grant) and
Non-Plan Option will become immediately exercisable in full as of
such termination and will remain exercisable for the remainder of
its term and (ii) the limitation on such acceleration of
exercisability set forth in Section 13.5 of the 1998 Plan will only
be applied to the extent that the application of such limitation
would result in the receipt by you, on an after-tax basis, of a
greater amount than if such limitation had not been applied.
7. If your employment with the Company is terminated without "cause"
(as such term is defined in the 1998 Plan), you will receive the
following, subject to signing a release from the Company: (i) a lump
sum cash payment equal to twelve months of your then current base
salary; and (ii) a 90-day termination period within which to
exercise options that are exercisable as of your termination.
8. You agree to execute prior to commencing employment the Company's
standard form of nondisclosure/confidentiality agreement and to
abide by the terms of such agreement.
9. You represent that neither commencing employment with the Company
nor performing your duties on behalf of the Company will conflict
with, constitute a breach under, or give any third party rights to
Company intellectual property pursuant to, any agreement, contract
or other arrangement to which you are subject.
10. You agree that at no time will you use any trade secrets or other
intellectual property of your previous employer or any other third
party while performing your duties for the Company.
As an employee, you will have the opportunity to participate in the Tricord
Employee Benefit Package, subject to eligibility requirements of the various
plans.
Please indicate your acceptance of this offer by signing and returning this
letter to me. Your stock options will be effective contingent upon approval by
the Board of Directors.
I am confident that you will make a significant contribution to the success and
growth of Tricord, and we are looking forward to having you on the Tricord
Executive Team.
Very truly yours,
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
President and CEO
ACCEPTANCE:
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
September 24, 2001
DATE OF BOARD APPROVAL: October 1, 2001
