Exhibit 10.18
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MedSource
Technologies
Mr. William Ellerkamp
68 Wintergreen Lane
Groton, MA 01450
Dear Bill,
It gives me great pleasure to present this Offer of Employment. We
are impressed with your business skills and your desire to be part of
building a significant and successful new entity serving the medical
device industry. The primary terms of your employment with MedSource
Technologies are specified below:
Title: VP Strategic Initiatives, reporting to CEO
Commencement: Your employment will commence on the most
immediate, mutually agreeable date with the
expectation that you will begin full time on
July 1.
Responsibilities: As outlined in Exhibit A.
Office Location: Initially, you will work out of your home in
Massachusetts, with the expectation you will
regularly travel to Minneapolis. Subsequent
to the responsibility transition outlined in
Exhibit A, and taking into account your
children's schoolyear, your principle place
of business will be located in Minneapolis,
Minnesota.
Salary: $178,750 annually to be paid as dictated by
the MedSource payroll schedule.
Bonus: Bonuses are paid at the discretion of the
Board of Directors of MedSource Technologies
and are based on the Company achieving
annual target performance thresholds. Your
annual bonus opportunity will be 50% of your
base salary ($89,375) at target performance.
The bonus is uncapped. No bonus will be due
to you if you are not employed by MedSource
for any reason at year-end.
Common Stock: Subsequent to the responsibility transition
outlined in Exhibit A, and within twelve
months thereafter, you will be expected to
purchase an aggregate of $100,000 of
MedSource stock.The purchase can be
completed in conjunction with any
institutional or public financing round, or
through early exercise of options (with
company repurchase right on unvested shares)
. It is expected that (a) 50% of the after-
tax proceeds of any bonus paid by MedSource
and/or (b) after-tax proceeds from the sale
of your TFX securities, will be
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applied to the purchase of MedSource stock
to the extent $100,000 of MedSource
securities has not been acquired.
Stock Options: You will be eligible to participate in the
MedSource non-qualified Stock Option Plan.
You shall receive options, at signing, to
purchase 52,500 shares of the Company's
Common Stock at an exercise price of $16.25
per share with four year vesting. There will
be an opportunity to earn additional options
to purchase 27,500 shares as mutually agreed
upon performance milestones are achieved
within the next 12 months.
Vacation: You will be granted three weeks (15 working
days) of vacation per year or as specified
by Company policy. You will be entitled to
take paid holidays as determined each year
by the Board of Directors.
Benefits: Subject to the terms and conditions of
eligibility, you will be entitled to the
benefits package provided to all full-time
senior executive employees of MedSource,
which will include a 401k plan, medical,
life, and disability insurance coverage.
Confidentiality: You will be required to enter into a
non-compete and Confidentiality Agreement.
The non-compete will provide six (6) months
severance pay in the event you are
terminated without cause during the term of
the agreement. The non-compete will also
provide the Company with the ability to
extend the non-compete period based on cash
and/or stock consideration.
Expenses: You will be entitled to reimbursement for
business related out-of-pocket expenses
which include: mileage, meals and other
appropriate business related expenses.
Relocation expenses will be reimbursed per
company policy or as otherwise approved by
the VP-Human Resources and Business
Integration.
Bill, the aforementioned outlines the primary terms and conditions of
your employment as we discussed recently. Your employment is
"at-will".
On behalf of those of all of us who have had the pleasure of meeting
with you, welcome to the team. We are excited at the prospect of your
joining our management team and helping us to build a world leading
company in the medical device contract manufacturing market.
Sincerely,
/s/
Rich Effress
Chairman and CEO
MedSource Technologies