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EXHIBIT 10.47
March 27, 2000
Mr. Ed Etzel
11406 St. Andrews Place
Mukilteo, WA 98275
Dear Ed:
We are pleased to extend to you an offer of employment for the position of Sr.
Vice President of Worldwide Sales. Your employment with Verilink Corporation
will commence no later than April 10, 2000. The final page of this offer letter
provides a place for you to sign accepting our offer of employment. Please
indicate your actual planned start date in the space provided.
Your base compensation will be $8,653.85 paid biweekly (annualized salary of
$225,000). Your variable compensation will be an additional $175,000 per year.
This portion of your compensation will be paid quarterly based on attainment of
corporate revenue objectives identified prior to the beginning of each fiscal
year. These quarterly payments will be based on the percent of targeted revenue
that is achieved as of the close of each quarter. Once you reach the established
revenue target for the year, your variable compensation will be paid at 2 times
your normal percentage. Your normal percentage will be calculated by dividing
the annual variable compensation ($175,000) by the established revenue goal for
the year (to be determined for FY '01). Your variable compensation for the
quarter ending June 30, 2000, will be paid as though you reached 100% of the
target for the quarter prorated for the period of the year you are employed by
Verilink. 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 the Compensation Committee of the Board of
Directors. In this position you will report directly to me.
Contingent upon your acceptance of this offer of employment, and
subject to the Board of Directors' approval, Verilink will grant to you
a Non-Qualified Stock Option which gives you the right to purchase,
under terms stated in your Stock Option Agreement, 250,000 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 occurs over 4 years with 25% of the
shares vesting upon completion of one full year of employment, and the
remaining shares vesting at the rate of 2.08% (1/48th) at the end of
each month thereafter, assuming continuous employment.
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Mr. Edward Etzel
March 27, 2000
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For the twelve month period beginning July 1, 2000, Verilink expects to
grant you an additional 25,000 shares for each quarterly revenue
objective that is met. Attainment of these objectives will be evaluated
at the end of each month, and options earned will be granted as of the
beginning of the month following the month in which the objective is
attained. The strike price for these options will be as of the date
they are granted.
On each anniversary of your employment, Verilink expects to grant you
an option to purchase an additional number of shares equal to
approximately 25% of the total number of shares granted to you through
June 30, 2001.
Verilink understands that you intend to maintain your current principal
residence. Verilink shall reimburse you for your commuting costs between
Washington 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. Until such time as you
have an established residence in Alabama, your location for business and tax
purposes shall be your home in Washington.
Verilink shall provide you with a housing assistance loan of $300,000.00 in
accordance with the attached Promissory Note. 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. Repayment of this
Promissory Note is also triggered if within any one year period 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).
Verilink shall reimburse you for any tax liability resulting from such
forgiveness.
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 your health insurance coverage will commence on the first day of your
employment. Please provide the Certificate of Coverage from your current
provider evidencing your existing coverage. The attached schedule of Officers'
Benefits sets forth additional benefits currently available to
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Mr. Edward Etzel
March 27, 2000
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Verilink executive officers. Please note that executive officers do not
participate 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. In addition, the Company will provide a corporate golf membership for
use at your discretion.
Your employment with Verilink Corporation 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.
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 resolved by binding arbitration conducted by the American
Arbitration Association. 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.
This offer of employment is contingent upon:
A completed employment application.
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.
On your date of hire you will be required to sign a Verilink
Confidentiality Agreement and Change of Control Agreement as a part of
your total employment package.
If you will be driving your personal automobile for company business on
regular basis, you will be required to provide proof of personal auto
insurance policy.
If you have any questions regarding the nature of this documentation, please
contact the Human Resources Department.
This letter, along with any written proprietary rights agreements that you enter
into with Verilink, 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.
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Mr. Edward Etzel
March 27, 2000
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Ed, we are pleased to have you join the Verilink team, and we look forward to
your participation in our continued success.
Sincerely,
/s/ Graham Pattison
Graham Pattison
President and Chief Executive Officer
I accept the foregoing offer:
/s/ Edward Etzel 03/31/00
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Name Date
03/31/00
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Expected Start Date