5
May 13, 2002
PERSONAL AND CONFIDENTIAL
John Lalli
60 White Birch Road
Pound Ridge, New York 10576
Dear John:
This is to confirm our offer to you for the position of Senior Vice
President, Strategic Services, reporting directly to me. Your commencement
date will be May 15, 2002. Your base salary rate will be $3,750
semi-monthly ($90,000 per annum) less applicable withholding taxes and
payroll deductions (collectively referred to as "Payroll Deductions").
In addition to your base salary, you will be eligible to earn commissions
equal to three percent (3%) of Adjusted Revenue from new customers that
are solely introduced by you to the Company on or after your commencement
date. For purposes of this commission arrangement, Adjusted Revenue shall
be the minimum gross fees payable by new customers excluding any amounts
representing deposits; credits or discounts given to the new customers by
the Company; interest or finance charges; any taxes payable by the new
customers; sales of hardware or software; and expense reimbursements,
including any administrative markup thereon. Commissions shall be payable
in the final semi-monthly pay period in the month following the month in
which a new customer was billed, provided you are an active employee of
the Company at the time that payment would be due. Any commission paid to
you will be subject to adjustment for subsequent credits or discounts
given to the new customers in a period following the month in which the
Adjusted Revenue on which the commission had been computed was billed. In
no event will commissions be earned or payable in any period following
your termination of employment irrespective of the reason for such
termination.
Your annual expense account is $30,000. Expenses for local business
entertainment, expenses while traveling outside the local area, typically
while traveling via air transportation, hotels to various locations are
not included in this expense allowance, but are paid separately.
In the final semi-monthly pay period of each of the first twelve (12) full
calendar months following the commencement date (individually a "Draw
Period"), except as noted below, you will receive $10,000 less Payroll
Deductions as a draw against commissions. If you are entitled to receive
any commissions in a Draw Period, the gross amount of the draw will be
reduced by the gross amount of the commission then payable. Any gross
commission otherwise payable in excess of $10,000 will be applied against
any previously unrecovered draw. Notwithstanding the foregoing, you will
receive no less than $10,000 less Payroll Deductions, either as a draw,
commission, or combination thereof, in a Draw Period. In the event that
you do not earn enough commissions prior to the termination of your
employment, irrespective of the reason for such termination, any balance
of unrecovered draws shall not be subject to repayment by you to the
Company.
A recommendation will be presented to the Options and Compensation
Committee of the Board of Directors and/or the Board of Directors itself
to grant you an option to acquire 30,000 shares of common stock in
Infocrossing pursuant to the 2002 Stock Option and Stock Appreciation
Rights upon adoption of such plan at the annual meeting of shareholders
scheduled for June 25, 2002. Management will recommend that the options be
granted as of the date of the adoption of the plan. The strike price per
share will be equal to the fair market value of one share of
Infocrossing's common stock as of the date of grant. The options will vest
as follows: one-third (1/3) after the first anniversary of the grant and
the balance on a pro rata basis over the succeeding twenty-four (24)
months.
Further details of the option plan will be set forth in the plan document
to be delivered to you shortly after your options are granted.
The term of your employment will be one (1) year unless terminated sooner
by the Company for cause, including, but not limited to, violation of
fiduciary duties or duty of loyalty, willful or gross misconduct, or
failure to follow the reasonable directives of the Chief Operating
Officer. After the expiration of one (1) year, your employment will be on
an at-will basis; that is, either the Company or you may terminate the
employment relationship at any time, with or without cause or notice.
In accordance with the Immigration Reform and Control Act, we are required
to verify that you are legally entitled to work in the United States. You
must complete Section 1 on the attached Form I-9 and present it with
original documents establishing identity and employment eligibility.
Please present these documents on your first day of employment to Trish
Digan, Vice President, Human Resources. Failure to present the appropriate
document(s) on your start date will make you ineligible for employment
with the Company. If you anticipate any difficulties in this regard,
please contact me as soon as possible so that alternate arrangements can
be explored.
Please read the enclosed materials carefully and complete all appropriate
documents as instructed below and on the attached checklist. You should
send the completed documents to Trish Digan on your first day of
employment. She may be reached by phone at (201) 840-4731 or by e-mail as
follows: tdigan@infocrossing.com.
I am enclosing two copies each of the Employee Invention and Confidential
Information Agreement that describes your responsibilities with regard to
the integrity of the Company. Kindly sign one copy and return it to Trish
Digan with your other paperwork.
As a new employee, after a brief "waiting period," you will be eligible to
participate in certain voluntary, benefit plans. All benefit plans
commence the first of the calendar month following the completion of one
full calendar month of employment. Employee contributions vary according
to the plan and the amounts of any employee contributions are subject to
change. Moreover, the Company may change its benefit plans by adding,
deleting or otherwise modifying such plans. The current benefit plans are:
o Comprehensive managed care medical plan currently offered through
United Healthcare, www.unitedhealthcare.com and dental coverage
through Aetna, www.aetna.com. Please feel free to explore these
websites to preview doctors/dentists available. The appropriate forms
are enclosed in this package. Please complete the forms and submit
them to Trish Digan, during your first week of employment.
o Life & AD&D Insurance, Long-Term Disability (LTD), Short-Term
Disability (STD).
o A Flexible Spending Account (FSA) which enables you to pay for payroll
deducted healthcare insurance premiums, dependent/child care, and
out-of-pocket health costs on a pre-tax basis for federal income tax
purposes.
o Twelve (12) days vacation, which will begin to accrue after ninety
(90) days following the date on which your employment begins. Vacation
entitlements will be retroactive to your start date and will be
calculated at the rate of one (1) day per completed month of service.
No more than five (5) unused vacation days may be carried forward from
a calendar year to a subsequent calendar year. Unused vacation days
that may not be carried forward will be forfeited. Upon termination of
employment for any reason other than for cause, an employee will be
compensated for unused vacation time determined at such employee's
base salary such time pro rated on a daily basis. For purposes of the
preceding sentence, the maximum number of days of unused vacation will
equal the sum of (a) any unused vacation days accrued through the
termination date for the calendar year in which termination occurs
plus (b) any unused days remaining from the carryover from the
previous calendar year.
o Six (6) sick days which will accrue after ninety (90) days following
the date on which your employment begins. Sick day entitlements will
be retroactive to your start date and will be calculated at the rate
of one-half (1/2) day per completed month of service. Sick day
accruals will continue until an employee has accumulated a maximum of
fifteen (15) days. No further time will accrue until the accumulated
balance falls below fifteen (15) days. Once the accumulated balance is
less than fifteen (15) days, the accrual will begin again until the
accumulated balance reaches fifteen (15) days. Employees will not be
compensated in cash for unused sick days at any time, including
termination of employment for any reason whatsoever.
o Paid holidays in accordance with the Company's holiday schedule
published for each calendar year. The Company's 2002 holiday schedule
is enclosed.
o 401(k) plan.
The foregoing description of the benefits and plan is intended to be a very
cursory overview. Trish Digan will give you details of the foregoing plans
and benefits as well as any related documents to you during your first week
of employment. If there is any inconsistency between the foregoing
description and the documents to be given to you, the documents will
control.
If the terms of the offer are acceptable, please sign this letter and the
duplicate original. Kindly send the letter to me and retain the duplicate
original for your records. Also, please fax a copy of the signed letter to
me at 201-840-7126 as soon as possible.
We look forward to you joining Infocrossing. Please feel free to contact me
with any questions regarding this letter. I can be reached at (201)
840-4701.
Sincerely,
/s/ ROBERT B. WALLACH
Robert B. Wallach
President
cc: P. Digan
Personnel File
/s/ JOHN LALLI May 22, 2002
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John Lalli Date