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EXHIBIT 10.44
October 25, 1999
Mr. Mike Reiff
1 Abbott Run Road
Cumberland, RI 02864
Dear Mike:
I am pleased to extend to you an offer of employment for the position of
Executive Vice President and Chief Operating Officer ("COO") of Verilink
Corporation. The terms and conditions of your employment will be as follows:
1. Your employment will commence not later than November 29, 1999. You
will report to the CEO, and will be a member of Verilink's Strategy
Committee. At the time of your acceptance, Verilink will establish the
Office of the President, consisting of the Company's CEO and COO. The
Office of the President will be responsible for all business matters
relating to Verilink. The COO will be responsible for the day-to-day
operations of the Company, and may act for the CEO on all business
operations matters. The CEO will be responsible for all Verilink
matters, will focus on strategic issues, and will report to the
Company's Board of Directors.
2. Your base compensation will initially be $9,615.38 paid bi-weekly
(annualized salary of $250,000.00). Executive compensation is reviewed
annually after the end of Verilink's June 30 fiscal year end. Any
increase in salary is at the discretion of the CEO with approval of
Compensation Committee of the Board of Directors.
3. You will receive such benefits as are customarily granted to Verilink
employees. You will receive personal time off (PTO) in accordance with
Verilink's existing policy. PTO initially accrues at the rate of
1 1/2 days per month of employment, and may be used for vacation,
illness, personal business, etc. Verilink confirms that any conditions
covered by your existing health insurance will be covered by
Verilink's health insurance, commencing on the first day of your
employment, provided that you obtain a Certificate of Coverage
evidencing your existing coverage. Attachment 1 sets forth additional
benefits currently available to Verilink executive officers. Please
note that executive officers do not participate
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Mike Reiff
October 25, 1999
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in the profit sharing plan. Executive officer benefits are subject to
review from time-to-time by the Compensation Committee of the Board of
Directors.
4. Contingent upon your acceptance of this offer of employment, and
subject to the Board of Directors' approval, Verilink will grant you a
Non-Qualified Stock Option which gives you the right to purchase,
under terms stated in your Stock Option Agreement, 350,000 shares of
Verilink Common Stock at the fair market value of that stock as
determined by the Board of Directors on the first day of your
employment by Verilink. Vesting will occur over 4 years at the rate of
2.08% (1/48th) at the end of each month, assuming continuous
employment. On each anniversary of your employment, Verilink expects
to grant you an option to purchase an additional 89,500 shares of
Verilink Common Stock at the then existing fair market value of that
Stock, vesting after four years of continuous employment after each
such grant.
5. You will be eligible for participation in Verilink's Management
Incentive Plan for fiscal 2000 (July 1, 1999 - June 30, 2000) and
thereafter. The Plan will provide for a target potential payout to you
of 50% of your base salary upon achievement of your objectives under
the Plan, but in no event less than a guaranteed payment to you for
fiscal 2000 of $50,000, which payment shall be made at the end of
three months of employment by Verilink.
6. If you terminate your employment (i) on or before one (1) year from
the date of your employment, (ii) subsequent to Graham Pattison no
longer being employed by the company; or (iii) if at any time, your
employment is terminated by Verilink other than for cause, or you
terminate your employment for good reason, you will receive one (1)
year's base salary and applicable benefits, including COBRA costs, for
a period of one (1) year. If such termination occurs after a change in
control, you will also receive such additional benefits as are
provided in the Verilink Change of Control Severance Benefits
Agreement (Attachment 2). At Verilink's option, the foregoing
severance may be paid as salary continuation or as a lump sum. For
purposes of this paragraph, "cause" shall be defined as any act or
failure to act involving dishonesty towards Verilink; unethical
business practices; embezzlement or misappropriation of corporate
funds, property or proprietary information; unreasonable and
willful refusal to perform the duties required by Verilink; willful
breach of this Agreement or habitual neglect of duties and
responsibilities, other than due to illness or disability; aiding and
abetting a competitor; or participation in any fraud or any criminal
activities. "Good reason" shall be defined as set forth in section 6.4
(a) of Attachment 2.
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Mike Reiff
October 25, 1999
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7. Verilink understands that you intend to maintain your principal
residence in Rhode Island. Verilink shall reimburse you for your
commuting costs between Rhode Island and Alabama, including the tax
impact of such reimbursement. To the extent possible, you shall
combine such commuting with business trips to reduce the cost to
Verilink. For the earlier of a period of six months or until you
purchase a second residence in Alabama, Verilink shall provide you
with a furnished apartment at no cost to you. In lieu of reimbursement
for relocation costs, Verilink shall also provide you with a payment
of $50,000 for relocation costs, including moving expenses, real
estate taxes, insurance and similar costs. Verilink shall reimburse
you for income taxes on the portion of the cost of the apartment and
the relocation payment, including the amount of the reimbursement you
are unable to deduct for tax purposes.
8. Verilink shall provide you with a housing assistance loan of
$300,000.00 in accordance with Attachment 3. This Note will be secured
by a second deed of trust on the Alabama property you intend to
purchase. The Note will bear no interest. In the event you sell your
property in Alabama for less than you paid for that property, after
deducting costs of sale, the principal balance of the Note shall be
reduced by such amount. Verilink shall reimburse you for any tax
liability resulting from such forgiveness.
9. Verilink shall provide you with an additional loan of $300,000.00 in
accordance with Attachment 4. The outstanding principal balance of
that loan will be repaid by you upon the earlier of (i) your leaving
the Company for any reason, provided, however, that, for the purposes
of this paragraph (i) 50% of the loan will be forgiven for each full
year that you remain employed by Verilink; or (ii) within one (1) year
after the value of your exercisable Verilink stock options exceeds
$2,000,000 (fair market value of stock subject to exercisable options
less total exercise price of such options). Interest shall be
forgiven. Verilink shall reimburse you for any tax liability resulting
from forgiveness of the principal of this loan.
10. Subject to any severance benefits described in this letter, your
employment with Verilink is voluntarily entered into and is for no
specific period. As a result, you are free to resign at any time, for
any reason or for no reason. Similarly, Verilink is free to conclude
its at-will employment relationship with you at any time, with or
without cause.
11. In the event of any dispute or claim relating to or arising out of our
employment relationship, you and Verilink agree that all such disputes
shall be fully and finally
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Mike Reiff
October 25, 1999
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resolved by binding arbitration conducted by the American Arbitration
Association in Huntsville, Alabama. However, we agree that this
arbitration provision shall not apply to any dispute or claims
relating to or arising out of the misuse or misappropriation of the
Company's trade secrets or proprietary or confidential information, or
to enforcement of your rights under the Change of Control Severance
Benefits Agreement.
12. This offer of employment is contingent upon the following:
(a) A completed employment application.
(b) Full compliance with the Immigration Reform and Control Act
of 1986, which requires new employees to provide
documentation/identification to establish both identity and
work authorization within three (3) days of your employment.
(c) On your date of hire, you will be required to sign a Verilink
Confidentiality Agreement (Attachment 5) as part of your
total employment package.
(d) If you will be driving your personal automobile for company
business on a regular basis, you will be required to provide
proof of personal auto insurance.
If you have any questions regarding the nature of any of this
documentation, please contact the Human Resources Department.
13. This letter, together with all attachments hereto, set forth the terms
of your employment with Verilink and supersede any prior
representations or agreements, whether written or oral. This letter
may not be modified or amended except by an instrument in writing,
signed by Verilink and by you.
14. If you accept this offer, Verilink intends to publicly announce that
acceptance at its Annual Meeting of Stockholders on November 16, 1999.
We will be pleased to have you join the Verilink team, and we look forward to
your participation in our continued success.
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Mike Reiff
October 25, 1999
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This offer remains effective until November 9, 1999. Please acknowledge your
acceptance by signing this letter and returning it to me at your earliest
convenience.
Sincerely,
VERILINK CORPORATION
/s/ Graham G. Pattison
Graham G. Pattison
President and CEO
I accept the foregoing offer:
/s/ Mike Reiff
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Mike Reiff
Date: 11/09/99
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