[LOGO] MEMS
USA
July 1, 2002
Xx. Xxxxxxxx Xxxxxxxx
00000 Xxxxxxxx xx Xxx
Xxxxxx, XX 00000
Re: Offer Letter
Dear Lawrence:
This employment offer letter ("AGREEMENT") dated as of July 1, 2002, confirms
our agreement in connection with your employment as Chairman of the Board of
Directors ("COB"), Chief Executive Officer ("CEO") and Chief Financial Officer
("CFO") of MEMS USA, Inc. ("MEMS"), pursuant to the following terms:
1. You will serve as MEMS' COB, CEO and CFO and MEMS will employ you in
that capacity beginning July 1, 2002 ("HIRE DATE"). In that
capacity, you report to MEMS' Board.
2. Your initial employment term will be for a period of 4 years
("TERM"). You can only be involuntarily terminated by MEMS for
"cause". As used in this Agreement, the term cause shall mean, the
conviction of a felony crime involving dishonesty or resulting in
imprisonment without the option of a fine, or the material
non-observance, or the material breach by you of any of the material
provisions of this Agreement, or your neglect, failure or refusal to
carry out the duties properly assigned to you after due notice by
the Board to you and a period of not less than 60 days to remedy
such neglect, failure or refusal.
In the event of any termination for cause, all obligations of MEMS
USA or in respect of this Agreement will terminate, except the
obligation to pay you any cash compensation, expenses, options or
other which shall have accrued or remain in the balance of the
initial term.
3. During the Term, you will receive cash compensation due and payable
on the first day of each month at the following rates: $20,000
monthly for full time employment ($240,000 per annum), $15,000
monthly for 3/4 time employment, $10,000 per month for 1/2 time
employment and $5,000 per month for 1/4 time employment, from the
date of this agreement until June 30, 2003 ("COMPENSATION"). After
June 30, 2003, your Compensation will remain at the above stated
rates, subject to increases as determined by a simple majority vote
of the MEMS Board of Directors, which review will occur not less
often than semi-annually (i.e., every 6 months) for the remainder of
the Term. It is further understood that MEMS is currently a start-up
company and Compensation and expense reimbursement, to be paid
first, will be accrued with Interest at 1/2% monthly, compounded
monthly, and will be payable on such date as the company is funded.
0000 Xxxxxxx Xxxxxx Xxxx, Xxxx. 0-000, Xxxxxxxx Xxxxxxx, XX 00000
(000) 000-0000, fax (000) 000-0000
4. Should your wages and/or expenses be accrued, MEMS will execute a
promissory note that you will be a 'secured creditor' of MEMS with
first rights to payment of your accrued account and you will be
eligible for such bonuses and other forms of supplemental
compensation as may from time to time be approved by the Board.
5. You have purchased 1,500,000 shares of MEMS Common Stock ("SHARES")
at the price of $0.001 per share, which shall be subject to the
following buyback provisions over the next three (3) years. If your
services hereunder are ended prior to expiration of the Term, then
MEMS shall have the option to immediately repurchase all or none at
the same price per share as the employee option exercise price,
shown in Item 6 below ("REPURCHASE") the following shares and 'such
shares shall be returned to MEMS Treasury Stock:
Until such date that MEMS becomes "profitable" for one quarter
(i.e., pursuant to Generally Accepted Accounting Principles
("GAAP")), MEMS shall have the option to Repurchase 300,000 shares.
In addition to this 300,000 share Repurchase, MEMS shall have
the option to repurchase the following:for the period Immediately
following the date of this agreement until the first year
anniversary of the date of this agreement, MEMS shall have the
option to repurchase 900,000 shares; for the period from the first
year anniversary of this agreement until the second year
anniversary of this agreement, MEMS shall have the option to
repurchase 600,000 shares; for the period from the second year
anniversary of this agreement until the third year anniversary of
this agreement, MEMS shall have the option to repurchase 300,000
shares. Notwithstanding the foregoing, this buyback option
provision shall immediately expire when MEMS enters a merger or
acquisition agreement whereby controlling interest could change
hands or be purchased or otherwise acquired.
6. On the date that you become, and in consideration of your being a
fulltime employee of MEMS, you are granted an employee option to
purchase 750,000 Shares at the exercise price of $1.00 per share,
which shall vest as follows: fully vested upon the posting of a
second consecutive "profitable" quarter (i.e., pursuant to Generally
Accepted Accounting Principles ("GAAP")), or, any unvested option
shall immediately vest if MEMS enters a merger or acquisition
agreement whereby controlling interest could change hands or be
purchased or otherwise acquired.
7. If your services hereunder are ended prior to expiration of the
Term, then: you will have 90 days to exercise your employee stock
options and, following said 90 days, any unexercised options to
Repurchase shall be returned to MEMS Treasury Stock.
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8. Your stock and option ownership shall be collatorizable, assignable
and your heirs shall have same. In addition, at the start of each
year you shall be entitled to four (4) weeks of paid vacation during
each year of the term.
9. You will be paid a 'car allowance' of $850 per month. Such car
allowance shall be for all costs associated with operating a
vehicle, including but not limited to: principal & interest,
gasoline, insurance, registration, maintenance and repairs. MEMS
will pay you for your reasonable cell phone costs. Your other
legitimate business expenses will be reimbursed, on an accountable
basis, within 10 working days of their submission.
10. In addition to the foregoing, you will be eligible for such benefits
including Inventive Incentives and others as are from time to time
made available to other members of senior management, it being
anticipated in good faith that MEMS will soon provide employees'
full health, life, dental and vision insurance, matching 401K,
retirement and savings plans.
11. XXXX agrees to indemnify you and hold you harmless to the full
extent of the law. In the event that you are named as an individual
in any lawsuit related to MEMS, then MEMS shall indemnify you and
hold you harmless for any and all legal costs and any and all awards
against you.
12. In good faith, you intend to sign and be bound by MEMS' reasonable
and customary agreements relating to nondisclosure and
non-solicitation. MEMS will keep your Identity and relationship with
it confidential knowing that unauthorized release of such
Information would cause you irreparable harm.
This Agreement contains the entire agreement of the parties and shall replace
and supersede all prior arrangements and representations, either oral or
written, as to the subject matter hereof. This Agreement may be modified or
amended only by a written Instrument signed by all parties hereto.
If you are in agreement with the foregoing, please sign as indicated below and
return the original to me. Very truly yours,
Xxxxx X. Xxxxx
President
Accepted and agreed:
----------------------, dated
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Xxxxxxxx Xxxxxxxx
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