EXHIBIT 10.1
September 16, 2003
Mr. Abe Reichental
110 Anna's Place
Simpsonville, South Carolina 29681
Dear Abe:
The Board of Directors (the "Board") of 3D Systems Corporation ("3D Systems") is
pleased to offer you a position as President, Chief Executive Officer and Member
of the Board, starting on or before October 15, 2003. When executed by you and
the Chairman of the Board of 3D Systems in the space provided below, this letter
will constitute an agreement between you and 3D Systems, and your employment
will commence on the date when this agreement has been fully executed by both
parties and delivered by each party to the other. This offer of employment is
valid until September 19, 2003.
The compensation package includes an annual base salary of $450,000, paid in
biweekly in increments of $17,307.69. You will receive such annual increases in
salary, as the Compensation Committee of the Board of Directors, in its sole
discretion, shall determine. You will also receive an incentive compensation
plan, based upon performance, with a target bonus of $250,000 per year, subject
to a maximum potential bonus equal to 100% of base salary. This incentive
compensation plan will operate on a fiscal year basis and apply pro rata for any
partial fiscal year; provided that any payment with respect to the company's
2003 fiscal year shall be at the sole discretion of the Compensation Committee.
The performance parameters governing this incentive compensation will be
mutually agreed upon within 90 days of your start date, and thereafter annually
among yourself and the Compensation Committee of the 3D Systems Board of
Directors, with respect to the upcoming fiscal year, not later than 60 days
prior to the end of the fiscal year. In the event such a mutual agreement cannot
be reached, one third (1/3) of the maximum bonus will be determined in the sole
discretion of the Compensation Committee based on its assessment of your overall
performance during such year and such other factors as the Compensation
Committee may deem appropriate, and two thirds (2/3) will be based upon the
Company's achievement of financial performance targets, including for revenue
growth, operating income improvement and return on assets improvement, to be
established by management at the beginning of each year, as approved by the
Board. If agreement is not reached on either performance parameters or the
Company's financial performance targets, a minimum bonus equal to $125,000 will
be paid for every year the company is profitable; which is defined as
profitability calculated in accordance with United States generally accepted
accounting principles ("GAAP"), excluding from such calculation (i) any
"extraordinary items" as defined under GAAP; and (ii) increases or decreases in
income resulting from non-operating transactions or adjustments made in
accordance with GAAP (such as restoration of the company's asset for deferred
taxes or write-offs of capitalized legal fees or other costs associated with
patents). Unless you otherwise agree, any annual bonus paid under the terms of
this agreement shall be paid within 30 days after the Company's receipt of its
audited financial statements for such year.
You will receive a hiring bonus to include $100,000 in cash and a stock grant of
100,000 common shares immediately upon the commencement of your employment at 3D
Systems, your retention of which is subject to satisfactory completion of all
the conditions to obtaining employment with the company which are described
later in this agreement. In addition, the Compensation Committee of the Board of
Directors will grant you stock options of 400,000 common shares, exercisable at
the fair market value on the date of hire. The stock options will vest equally
over a period of four years, with 25% vesting on the first anniversary of the
date of hire and the remainder vesting in equal monthly amounts of 8,333 over
the following three years, with an option term of ten years. Up to 200,000
options (subject to applicable regulatory limitations) will be incentive stock
options granted under 3D Systems' 1996 Stock Incentive Plan (the "Plan"). The
option agreement(s) to be entered into in connection with the grant of these
options shall provide that the entire unvested option amount shall fully vest in
the event of a change of control of 3D Systems (which is defined as an
acquisition by any individual, entity or group [within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")] of beneficial ownership [within the meaning of Rule 13d-3 of
the Rules and Regulations of the Securities and Exchange Commission under the
Exchange Act] of at least 51% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors). These option agreements also provide that, except in the
event of disability or death, vested options must be exercised within 90 days of
termination of employment, and further provide that if employment is terminated
as a result of certain acts of malfeasance (as described in the Plan), the
unvested options not issued under the Plan, and all options issued under the
Plan, will terminate immediately.
3D Systems will cover all reasonable and customary relocation expenses including
but not limited to family house hunting trips, closing expenses and moving
expenses as required.
For the convenience of 3D Systems, 3D Systems will provide you with a furnished
apartment in the Valencia area and will cover expenses relating to this
apartment in an amount up to $5,000 per month, and a lease term to extend until
July of 2004, as required.
During the term of your employment, 3D Systems will provide you with the use of
an adequate American made company car and cover all related insurance,
maintenance, and repair and operating expenses.
The term of this agreement shall be for a period of two years commencing on your
start date. This agreement shall renew automatically for succeeding terms of one
year, unless you or 3D Systems gives written notice of intent not to renew, at
least 90 days before the term otherwise expires. If 3D Systems gives such notice
that it is electing not to renew this agreement, or your employment is
terminated by reason of death or by 3D Systems without cause (which shall be
defined as conduct involving moral turpitude or gross or habitual neglect of
your duties during the term of this agreement), you shall receive as severance
(a) for two years, or until you obtain other employment providing, the same or
comparable health, dental, vision, life, and long term disability insurance, (b)
whether or not you have obtained or could obtain other employment, two years of
your then current base salary, in the total sum of at least $900,000, payable as
a bi-weekly continuation payment at the rate of at least $17,307.69, together
with a bonus with respect to the year of termination equal to a pro-rated amount
of the bonus which you would
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have received for that year pursuant to the performance parameters described
above, based on the annualized performance of the company up to the date of
termination, and (c) all unvested stock options, which shall fully vest upon and
no later than the termination of your employment.
3D Systems will provide or arrange for, subject to the availability of such
insurance and your insurability, both at inception and at any renewal, a
supplementary disability insurance policy providing payment of 75% of your base
salary for a period of two years following termination of your employment as a
result of physical disability (as such term is defined in 3D Systems' current
policy of disability insurance).
Your employment may be terminated at any time by 3D Systems Board of Directors
for cause, as defined above, without the incurring of any obligation by 3D
Systems hereunder. Any other agreement regarding your employment or any other
matter between you and 3D Systems must be in writing and signed by the Chairman
of the Board, and approved by the Compensation Committee.
Among the benefits you will enjoy as a 3D Systems employee is a program of group
insurance, which includes group health, dental, vision, life insurance, and long
term disability insurance. These group benefits will become effective upon the
first of the month following your start date, and 3D Systems will pay any COBRA
or other payments required to avoid any gap in your coverage. Other benefits
include a 401(k) plan, employee stock purchase plan, flexible spending accounts
and pre-tax premium plan, health club membership program, paid sick leave, ten
paid holidays per year, and four weeks vacation per year. You will be eligible
to participate in these benefits according to the terms of each program and plan
document.
3D Systems will reimburse you for all reasonable business expenses incurred by
you which are consistent with the company policies in effect from time to time,
including for travel, entertainment and other business expenses, subject to
requirements with respect to reporting and documentation of such expenses.
3D Systems will indemnify, defend and hold you harmless, to the fullest extent
permissible under California law, from and against any and all claims, lawsuits,
judgments, costs and attorney fees arising out of your employment, including the
advancement of any expenses and attorney fees in connection therewith.
This agreement may be delivered by facsimile or email transmission and executed
in any number of counterparts, each of which shall be deemed to be an original,
but all of which shall constitute one and the same instrument.
As a condition of your employment with 3D Systems, you will be required to
complete all pertinent employment, compliance and benefits forms and sign the
company's standard form Agreement for Mandatory Arbitration (which shall not
include any provision for at-will employment), Confidentiality Agreement, and
Code of Conduct.
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3D Systems maintains a strict drug-free workplace policy. Therefore, you will be
required to undergo a drug screening examination at 3D Systems' expense. Please
contact the Human Resources Department to schedule an appointment.
It is a pleasure to make you this offer to join 3D Systems. If you are in
agreement with the terms of this offer, please sign and return a copy of this
letter to us. We are looking forward to welcoming you on board.
Sincerely,
3D SYSTEMS CORPORATION
By: /s/ G. Walter Loewenbaum II
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G. Walter Loewenbaum II
Chairman of the Board of Directors
I accept the above offer on the stated terms and conditions and will start to
work on:
Signed: /s/ Abe N. Reichental Date: Sept. 19, 2003
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Abe N. Reichental
I hereby represent, warrant and agree that I am free to accept this employment
offer. I represent, warrant, and agree that I am not bound by any restriction or
covenant from any prior employer or other obligation that would interfere with
my ability to perform the job duties of President, Chief Executive Officer and
Member of the Board of Directors at 3D Systems. I also represent, warrant, and
agree that I have returned all documents to my prior employers, and that I will
not utilize any trade secrets or proprietary information of my prior employers
in connection with my employment by 3D Systems.
Signed: /s/ Abe N. Reichental Date: Sept. 19, 2003
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Abe N. Reichental
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