EXHIBIT 10.18
January 27, 2004
Don Detampel
369 Steele Street
Denver, CO 80206
Dear Don:
Raindance
Communications, Inc. (“Company”) is very pleased to
offer you employment as our Chief Executive Officer. This letter
(“Agreement”) states the complete terms and conditions
of your offer. If you agree to these terms and conditions, please
initial the bottom of each page and sign at the end of this letter
in the spaces indicated.
1. Employment. You shall serve
the Company in the capacity of President and Chief Executive
Officer. You will commence employment with the Company on a part
time basis on January 28, 2004 (“Employment Start
Date”). Effective February 2, 2004, you will become a
full time employee of the Company.
2. At-Will Employment. Except as
expressly provided herein , it is understood and agreed by
the Company and you that this Agreement does not contain any
promise or representation concerning the duration of your
employment with the Company. You specifically acknowledge that your
employment with the Company is at-will and may be altered or
terminated by either you or the Company at any time, with or
without cause and/or with or without notice. The nature, terms or
conditions of your employment with the Company cannot be changed by
any oral representation, custom, habit or practice, or any other
writing. In the event of conflict between this disclaimer and any
other statement, oral or written, present or future, concerning
terms and conditions of employment, the at-will relationship
confirmed by this disclaimer shall control. This at-will status
cannot be altered except in writing signed by you and approved by
the Board of Directors of the Company (the “Board of
Directors”).
3. Duties. As of
February 2, 2004, you shall render exclusive, full-time
services to the Company as its Chief Executive Officer. You shall
also continue to be a voting member of the Company’s Board of
Directors and you shall retain such position in accordance with the
provisions of the Company’s charter documents. You understand
and agree that in the event that you are no longer acting as Chief
Executive Officer, regardless of reason, you voluntarily agree to
take all steps necessary to resign your position as a member of the
Board of Directors, unless otherwise requested by the Company to
remain on the Board of Directors. You shall report to the Board of
Directors. You shall perform services under this Agreement
primarily at the Colorado office of the Company, and from time to
time at such other locations as is necessary to perform the duties
of Chief Executive Officer under this Agreement. During your
employment with the Company you shall devote your best efforts and
your full business time, skill and attention to the performance of
your duties on behalf of the Company, except with respect to the
duties you perform as a member of the boards of directors of no
more than two outside companies pre-approved by the Board of
Directors on which boards you may serve provided that your service
on these boards does not adversely affect your ability to fulfill
your responsibilities as Chief Executive Officer of the Company. As
of your Employment Start Date, the Board of Directors has approved
your membership on the Inflow and Masergy boards of
directors.
4. Policies and Procedures. You
agree that you are subject to and will comply with the policies and
procedures of the Company, as such policies and procedures may be
modified, added to or eliminated from time to time at the sole
discretion of the Company, except to the extent any such policy or
procedure specifically conflicts with the express terms of this
Agreement. You further agree and acknowledge that any written or
oral policies and procedures of the Company do not constitute
contracts between the Company and you.
5. Base Salary. For all
services rendered and to be rendered hereunder, the Company agrees
to pay to you, and you agree to accept a salary of $290,000 per
annum (“Base Salary”) which will be paid bi-weekly in
accordance with normal Company payroll practices and shall be
subject to such deductions or withholdings as the Company is
required to make pursuant to law, or by further agreement with you.
Your Base Salary shall be subject to annual review and adjustment
by the Compensation Committee of the Board of Directors.
6. Stock Options. Subject to
approval by the Board of Directors, the Company shall grant you one
or more options (each an “Option,” and collectively the
“Option(s)”) to purchase an aggregate of Two Million
(2,000,000) shares of the Company’s common stock. The shares
subject to the Option(s) shall have an exercise price equal to the
fair market value of the stock at the close of business on the day
prior to your Employment Start Date. The shares subject to the
Option(s) shall vest pursuant to a four-year vesting schedule,
which shall provide that 25% (12/48) of the shares subject to the
Option(s) shall become vested after you have completed
12 months of continuous service with the Company, and one
forty-eighth (1/48 th ) of the shares subject to the
Option(s) shall vest for each month of service thereafter. To the
maximum extent possible, the Option(s) shall be incentive stock
options as such term is defined in Section 422 of the Internal
Revenue Code of 1986, as amended. To the extent that any portions
of the Option(s) do not qualify as incentive stock options under
Section 422 of the Code, those portions of the Option(s) shall
be treated as nonstatutory stock options. The Option(s) shall be
subject to the terms and conditions of the Company’s 2000
Equity Incentive Plan (the “Plan”), the Company’s
form stock option agreement and stock option grant
notice.
7. Restricted Stock Grant .
Subject to approval by the Board of Directors, on your Employment
Start Date, the Company shall grant you a 275,000 share Restricted
Stock Award pursuant to the Company’s Plan. The shares
subject to the Restricted Stock Award shall vest pursuant to the
following schedule: a) 50,000 shares shall vest in full on the
Employment Start Date; b) 100,000 shares shall vest in full after
you have completed 24 months of continuous service with the
Company; and c) 125,000 shares shall vest in full after you have
completed 37 months of continuous service with the Company.
You shall, at your discretion, either elect to pay the Company or
instruct the Company to withhold shares equal to the amount
required to satisfy the Company’s withholding obligations
pursuant to applicable federal and state laws. For purposes of
determining the number of shares to be withheld, if any, the
Company’s common stock shall be valued using the average of
the high and low sales price of the Company’s common stock as
reported on NASDAQ for the last trading day prior to the applicable
vesting date.
8. Variable Incentive Bonus.
You shall be eligible to receive an annual performance bonus of up
to 100% of your Base Salary (“Bonus”), payable 60% in
cash, less standard payroll deductions and withholdings, and 40% in
the Company’s common stock, based upon your achievements of
certain milestones and performance objectives established by you
and the Company (“Variable Incentive Bonus Plan”). The
financial and other objectives shall be determined by mutual
agreement between you and the Board of Directors (or the
Compensation Committee of the Board of Directors) within forty-five
(45) days of your Employment Start Date and within the first
thirty (30) days of each Company fiscal year thereafter. The
Board of Directors (or the Compensation Committee of the Board of
Directors), shall determine, in its sole discretion, the actual
bonus amount payable to you, if any, based upon achievement of such
objectives at the end of each fiscal year. The number of shares of
Company common stock that you shall be entitled to receive, if any,
shall be determined by dividing the cash equivalent of 40% of the
Bonus by the average of the high and low sales price of the
Company’s common stock as reported on NASDAQ on the last
trading day of the Company’s fiscal year in which the Bonus
is being determined. (By way of example only, if you earned a
$100,000 Bonus in FY 2004, 40% of the Bonus or $40,000 would be
paid in Company common stock. If the average of the high and low
sales price for the last trading day of FY 2004 was $4.00 per
share, you would receive 10,000 shares of Company common stock).
You must be employed by the Company at the time of the
determination of the Bonus, if any, in order to be eligible for
receipt of the Bonus. As long as you remain continuously employed
by the Company, you agree to hold all shares of the Company’s
common stock you receive through the Variable Incentive Bonus Plan,
if any, for a period of twenty-four (24) months following the
date of the award of the related shares, provided, however,
the Compensation Committee of the Board of Directors will review
reasonable requests made by you for earlier sale of such shares for
bona fide reasons.
9. Potential Additional Stock
Options . On each anniversary of your Employment Start Date,
the Compensation Committee of the Board of Directors shall review
your performance relative to the specified objectives referred to
in paragraph 8 above as well as other relevant factors and, at its
sole discretion, may recommend to the Board an award to you of
additional option grants. The targeted number of option shares to
be covered by these anticipated further stock option grants shall
be 200,000 options per year for the calendar years 2005 through
2008. Any additional option grants shall be awarded pursuant to the
Plan and be subject to all terms and conditions of the Plan,
including applicable vesting provisions, the Company’s form
stock option agreement and stock option grant notice.
10. Other Benefits. While
employed by the Company as provided herein:
(a) Your Benefits . You shall be entitled to all
benefits to which other executive officers of the Company are
entitled, on terms comparable thereto, including, without
limitation, participation in pension and profit sharing
plans, 401(k) plan, group
insurance policies and plans, medical, health, vision, and
disability insurance policies and plans, and the like, which may be
maintained by the Company for the benefit of its executives. The
Company reserves the right to alter and amend the benefits received
by you from time to time at the Company’s
discretion.
(b) Expense Reimbursement. You shall receive, against
presentation of proper receipts and vouchers, reimbursement for
direct and reasonable out-of-pocket expenses incurred by you in
connection with the performance of your duties hereunder, according
to the policies of the Company.
(c) Personal Time Off. You shall be entitled to four
weeks personal time off per year (including paid vacation and sick
leave) subject to the terms of the Company’s applicable
policy.
(d) Directors and Officers Insurance. You shall be
entitled to coverage and participation in the Company’s
Directors and Officers Insurance policy.
11. Confidential Information,
Rights and Duties.
(a) Proprietary Information. You will be required as a
condition of employment to sign and abide by the Company’s
Proprietary Information and Inventions Agreement (the
“Proprietary Information Agreement”), in the form
attached hereto as Exhibit A.
(b) Exclusive Property . You agree that all
Company-related business procured by you, and all Company-related
business opportunities and plans made known to you while employed
by the Company, are and shall remain the permanent and exclusive
property of the Company.
12. Termination. You and the
Company each acknowledge that either party has the right to
terminate your employment with the Company at any time for any
reason whatsoever, with or with out cause or advance notice
pursuant to the following:
(a) Termination by Death or Disability. Subject to
applicable state or federal law, in the event you shall die during
the period of your employment hereunder or become permanently
disabled, as evidenced by notice to the Company and your inability
to carry out your job responsibilities for a continuous period of
more than three months, your employment and the Company’s
obligation to make payments hereunder shall terminate on the date
of your death, or the date upon which, in the sole determination of
the Board of Directors, you have become permanently disabled,
except the Company shall pay you (or your estate) any salary earned
but unpaid prior to such termination, any benefits accrued prior to
such termination, all accrued but unused personal time, and any
business expenses referred to in paragraph 10(b) that were incurred
but not reimbursed as of the date of such termination. Vesting of
all shares subject to the options granted pursuant to
Paragraph 6 (Stock Options) and Paragraph 9 (Potential
Additional Stock Options) shall cease on the date of such
termination.
(b) Voluntary Resignation. In the event you voluntarily
terminate your employment with the Company without Good Reason (as
defined below), the Company’s obligation to make payments
hereunder shall cease upon such termination, except the Company
shall pay you any salary earned but unpaid prior to such
termination, any benefits accrued prior to such termination, all
accrued but unused personal time, and any business expenses
referred to in paragraph 10(b) that were incurred but not
reimbursed as of the date of such termination. Vesting of all
shares subject to the options granted pursuant to Paragraph 6
(Stock Options) and Paragraph 9 (Potential Additional Stock
Options) shall cease on the date of such termination.
(c) Termination for Cause. In the event you are
terminated by the Company for Cause (as defined below), the
Company’s obligation to make payments hereunder shall cease
upon the date of receipt by you of written notice of such
termination, except the Company shall pay you any salary earned but
unpaid prior to such termination, all accrued but unused personal
time, and any business expenses referred to in paragraph 10(b) that
were incurred but not reimbursed as of the date of such
termination. Vesting of all shares subject to the options granted
pursuant to Paragraph 6 (Stock Options) and Paragraph 9
(Potential Additional Stock Options) shall cease on the date of
termination. For purposes of this Agreement, “Cause”
shall mean any of the following: (i) indictment or conviction of
any felony or any crime involving dishonesty or moral turpitude;
(ii) dishonesty which is not the result of an inadvertent or
innocent mistake by you with respect to the
Company; (iii) your
continued willful violation of your obligations to the Company
after there has been delivered to you a written demand for
performance from the Board of Directors which describes the basis
for the Board of Directors’ belief that you have not
substantially satisfied your obligations to the Company;
(iv) your continued violation or breach of any material
written Company policy, agreement with the Company, or any
statutory or fiduciary duty to the Company, after there has been
delivered to you a written notification of such violation or
breach; or (v) damaging or misappropri
