1
EXHIBIT 10.50
December 6, 2000
Mr. Christopher C. Zorn
32 Planting Field Road
Medfield, MA 02052
Dear Chris:
I am pleased to offer you the position of executive vice president of sales for
Bio-Plexus, Inc. Your employment will begin on a mutually agreed upon date. In
this role, you will report directly to me and will be based at our corporate
office in Vernon, Connecticut. The basic terms and conditions of your employment
are summarized below:
Position Executive Vice President of Sales for Bio-Plexus, Inc
Base Salary $135,000 annually, payable in accordance with the
company's standard payroll practices. You will be eligible
for an annual performance review and a standard merit
increase if recommended and approved by the Compensation
Committee.
Retention Bonuses Retention and stay bonuses will be paid as follows:
- A retention bonus of $16,000 for year 2001 paid
on a monthly basis. This $16,000 bonus will
continue through December 31, 2002, assuming
your performance is at expected levels.
- A $10,000 stay bonus to be paid on July 1, 2001.
Retention and stay bonuses pay will be deducted from any
performance bonus payout below.
Performance Bonus Up to 100% of base salary for achievement of individual
and corporate goals. Your individual performance goals and
objectives will be in place no later than January 15,
2001. A bonus schedule as follows and based on net product
sales to budget as established by the Board for Directors:
88-90% $20,000
91-93% $25,000
94-96% $30,000
2
Mr. Christopher C. Zorn
December 6, 2000
Page 2
97-99% $40,000
100% $67,500
101-103% $72,500
104-107% $80,000
108-110% $90,000
111-115% $105,000
116-119% $120,000
120+% $135,000
- If budgeted profit goals are achieved, you are
eligible for full payment for performance to sales
objectives up to 110% of budgeted net product sales.
Under a circumstance whereby revenue of net product
sales goals are achieved but corporate profitability
to budget is not, you will be guaranteed a bonus
payout of 80% for achievement of sales targets. For
example if sales budget is achieved you would be
eligible for a bonus of $67,500; however, if budget
profitability goals are not achieved, you will
receive 80% or $54,000.
- Payments for net sales above 110% of budget will be
paid according to the following:
- Achievement of budgeted profit goals but less
than targeted profit goals above budget.
o Full payment or 100% of the increment
up to 110% and 80% payment of the
increment above 110%. Example: if sales
are 116% of budget, payment would be
$114,000 (i.e. $90,000 plus $24,000
which is 80% of the increment above
$90,000 payment level).
- Achievement of targeted profit goals above
budget: full payout or 100% at all levels of
performance to budgeted net sales goals.
The performance bonus payment will be made - in a gross
amount less any applicable taxes and will become payable
following the close of the fiscal year on December 31 and
within a reasonable time period after determination by the
Company's Board of Directors as to relevant performance
attainment based on established goals.
3
Mr. Christopher C. Zorn
December 6, 2000
Page 3
Stock Options An option package of 150,000 shares with an exercise price
at the grant date will be made within 10 business days
from date of hire.. Of these 150,000 share, 100,000 shares
will be retention options which will vest over three
years. The remaining 50,000 shares will be performance
options which will vest under one of two occurrences:
1. The end of seven years.
2. When net product sales revenue for a cumulative,
sequential 12-month period totals $15 million.
In the event of a Change of Control, as defined in the
Bio-Plexus, Inc. Non-Statutory Stock Option Agreement to
be signed between you and the Company, and pursuant to
Section 9 of that Agreement, you will become fully vested
in all retention options.. Performance options will become
fully vested and exercisable at the discretion of the
Board of Directors. For clarity, "Change of Control" is
defined below.
Vacation Three weeks annually
Employee Health You will be able to participate in the company's medical
and Other Benefits and dental programs and all other benefit programs that
will be developed over time.
Severance You will be entitled to receive six months of salary,
medical benefits continuation and bonus compensation that
was earned but not paid upon your termination by the
company for any reason other than for cause. If your
employment is terminated by the company for reasons other
than cause or performance your bonus for the current year
will vest on a pro rata basis and will be paid at the end
of the fiscal year as though you were currently employed.<
In addition, any retention stock options not completely
vested will immediately vest on a pro rata basis
(reference Attachment 1). Only the following shall
constitute "cause" for such termination: (i) material
failure to perform a substantial portion of your duties
and responsibilities hereunder, which failure continues
after written notice given to you by the President of the
Company; (ii) conduct by you that is dishonest, fraudulent
or unlawful relative to your employment by the Company;
(iii) conduct that constitutes gross negligence or willful
misconduct by you with respect to the Company; or (iv)
your conviction or admission of guilt of a felony and/or
crime
4
Mr. Christopher C. Zorn
December 6, 2000
Page 4
involving moral turpitude, deceit, dishonesty or fraud.
Contingencies This offer is contingent upon approval by the board
compensation committee for Bio-Plexus, your passing of a
drug test providing documentation that you have the right
to live and work in the United States, execution of other
standard employee documents and agreements, and after
successful completion of references to the satisfaction of
Bio-Plexus.
Indemnity The Company agrees to indemnify you as provided under
Connecticut law and consistent with the terms of the
Certificate of Incorporation.
You should understand that all employees are employed at the will of the Company
for an indefinite period. Employees may resign from the Company at any time, for
any reason and may be terminated by the Company at any time, for any reason,
with or without notice.
Definition:
"Change in Control" means any (i) consolidation or merger involving the
Company, if the shareholders of the Company immediately before such merger or
consolidation do not own, directly or indirectly, immediately following such
merger or consolidation, more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation or other entity
resulting from such merger or consolidation in substantially the same proportion
as their ownership of the shares of Common Stock immediately before such merger
or consolidation; (ii) sale, lease, license, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the business and/or assets of the Company or assets representing over 50% of
the operating revenue of the Company; or any (iii) person (as such term is used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), other than Appaloosa Management, L.P. and its affiliates
and/or related funds, who is not, as of September 28, 2000, a controlling person
(as defined in Rule 405 under the Securities Act of 1933, as amended) (a
"Controlling Person") of the Company becomes (x) the beneficial owner (within
the meaning of Rule 13d-3 under the Exchange Act) of over 50% of the Company's
outstanding Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally or (y) a Controlling
Person of the Company.
Upon acceptance of this offer, please immediately return this signed letter in
the enclosed pre-addressed envelope. A copy will be provided to you upon
request. This offer of employment will be valid for one week from the date of
this letter.
5
Mr. Christopher C. Zorn
December 6, 2000
Page 5
We look forward to you joining us at Bio-Plexus. We believe you will bring
significant contributions to the firm and also be a valuable member of the
executive management team.
Sincerely,
John Metz
Chief Executive Officer
I have read and accepted the above offer:
- ----------------------------- ------------------------
Christopher C. Zorn Date
6
Mr. Christopher C. Zorn
December 6, 2000
Page 6
ATTACHMENT 1
Pro rata Share Example:
Options: 100m
Vesting Year 1 33,333
Year 2 66,667
Year 3 100,000
Termination without cause or for performance reasons after 17 months of complete
employment: pro rata shares that vest will be 17/36 = 47.2% of total,
approximately 47,200 shares, 33,333 of which have already vested. The additional
shares that vest and become exercisable are 13,867.