Employment Agreement - Akamai Technologies Inc. and Michael A. Ruffolo
[Akamai Technologies, Inc. Letterhead]
July 24, 2001
Mr. Michael A. Ruffolo
[address]
Dear Mike:
On behalf of Akamai Technologies, Inc. (the "Company"), I am pleased to offer
you the position as Executive Vice President & Chief Marketing Officer for
Akamai, reporting to me in my capacity as Chairman and Chief Executive Officer.
Your base salary will be $15,384.62 bi-weekly ($400,000 on an annualized basis).
You will be eligible to receive a performance-based incentive bonus of $100,000
annually pro-rated during your first year of employment based on your employment
date. The bonus will be earned based on the achievement of performance
objectives to be established after you join Akamai. The bonus is payable in
cash, stock options, restricted stock, stock, or any combination of the
foregoing, at the discretion of the company. Bonuses for the year ending 2001
will be paid in early February 2002. You must be in the employment of the
Company at the time the bonus is paid to be eligible to receive the bonus. Your
salary and incentive shall be subject to review periodically based upon my
recommendation and the approval of the Board of Directors of Akamai.
In addition, you will be eligible to receive a one-time $250,000 cash equivalent
signing bonus in the form of discounted stock options on your date of
employment. The option will be granted on your date of employment at 20% of the
fair market value (closing price) of the company's common stock. Fifty percent
(50%) of the discounted options will vest 90 days after grant; the balance of
the grant will vest 180 days after grant. The options will carry a ten-year
life. As an example, if the closing price of the stock on the date of grant were
$8.00 per share, you would receive 39,063 shares of Akamai stock at 1.60 per
share.
As part of this employment offer, the Company will recommend to the Akamai Board
of Directors that you be granted a stock option under the Company's 1998 Stock
Incentive Plan (the "Plan") for the purchase of an aggregate of 500,000 shares
of Common Stock of the Company (the "Initial Grant"), at an option price equal
to the fair market value of the Common Stock as determined by the Board on the
date the Board of Directors approves your stock option. Your options will be
granted by the Board of Directors on your date of employment. The first 25
percent of the options will vest on the first anniversary of your first grant
date. An additional 6.25% of the original number of shares will vest at the end
of each successive full three-month period following the first anniversary of
the Grant Date until the fourth anniversary of the Grant Date. Subject to Board
approval, your option will be evidenced by a separate option agreement embodying
these terms. You will also be eligible to receive such future stock
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option grants, as the Board of Directors shall from time to time deem
appropriate. In the event of a Change in Control, as defined in the Plan, the
number of Shares as to which your option has vested shall be calculated as
though the Grant Date were the date that is one year prior to the Grant Date.
You will be eligible to participate in the Employee Stock Purchase Program
beginning in the December 2001 offering period. This plan allows you to
contribute between 1% and 10% of your salary through regular payroll deductions.
The Akamai plan provides for a two-year offering period, that includes four,
six-month purchase periods. At the end of each six-month purchase period, the
money that has been deducted will be used to purchase shares of Akamai common
stock at 85% of the closing price of the Common Stock at the beginning of the
offer period or end of the purchase period, whichever is lower.
You will be eligible for health insurance, dental insurance, life insurance, and
short/long term disability coverage and other benefits that are and may become
available generally to employees of the Company. You will also be eligible to
contribute to the Akamai Technologies, Inc. 401(k) Plan immediately upon
employment.
You will be eligible for a maximum of three weeks of vacation per year. The
number of vacation days for which you are eligible in each year shall accrue at
the rate of 1.25 days per month that you are employed during such year. Akamai
also observes ten holidays each year. This year eight of the holidays are
scheduled days, while two holidays are floating days.
Prior to the commencement of your employment, you will be required to execute a
Non-Competition, Non-Solicitation, Proprietary and Confidential Information and
Developments Agreement.
You represent that you are not bound by any employment contract, restrictive
covenant or other restriction preventing you from entering into this agreement
or carrying out your responsibilities for the Company as contemplated hereby, or
which is in any way inconsistent with any of the terms hereof. This letter is
not to be construed as an agreement, either expressed or implied, to employ you
for any stated term. Akamai Technologies is an at will employer.
This employment offer from Akamai Technologies is contingent upon your
submitting an I-9 Employment Eligibility Verification Form acceptable to Akamai
Technologies, Inc. on your date of employment. YOU MUST BE PREPARED TO OFFER
PROOF OF YOUR EMPLOYABILITY IN THE UNITED STATES IN ACCORDANCE WITH THE
REQUIREMENTS LISTED ON THE I-9 FORM ON YOUR FIRST DAY OF EMPLOYMENT. YOU WILL
NOT BE PLACED ON THE AKAMAI PAYROLL AS AN ACTIVE EMPLOYEE UNTIL YOU HAVE
PROVIDED THIS DOCUMENTATION.
Please accept Akamai's offer of employment by signing the enclosed copy of this
letter and the agreements attached and returning all documents to STEVE
HEINRICH, AKAMAI TECHNOLOGIES,
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500 TECHNOLOGY, 5TH FLOOR, CAMBRIDGE, MA, 02139. We would appreciate your
decision by the close of business on Monday, July 30, 2001.
On behalf of the entire management team, I am delighted that you will be joining
Akamai in this critical assignment. We believe you can make a tremendous
contribution to the company at this critical juncture in Akamai's history. Your
recent experiences at EMC, Xerox, and NCR will be a tremendous asset to you in
this new and challenging position. We look forward to your joining Akamai on
Monday, August 13, 2001
Sincerely,
AKAMAI TECHNOLOGIES, INC.
/s/ George H. Conrades
George H. Conrades
Chairman and Chief Executive Officer
I hereby accept employment with Akamai Technologies, Inc.
/s/ Michael A. Ruffolo 7/24/2001
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Michael A. Ruffolo Date
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[Akamai Technologies, Inc. Letterhead]
July 27, 2001
Mr. Michael A. Ruffolo
[address]
Dear Mike:
This letter is an addendum to your Employment Offer Letter dated July 24, 2001.
All of the original terms of the July 24, 2001, remain in effect. This letter
serves as an addition to the terms of that letter.
In the event that Akamai terminates your employment for reasons other than cause
during the first three years of your employment, you would be eligible for
severance on the following terms, provided you sign a separation agreement
acceptable to Akamai that includes, among other things, a full release, a
one-year non-competition clause, a future cooperation clause, and a
non-disparagement clause:
If the company terminates your employment during the first three years of
your employment for reasons other than for cause, Akamai will pay you an
amount equal to one year of your then-base salary. The company will make
an additional one-time lump sum, taxable payment to you equal to one
year's worth of the company's current contribution to the medical and
dental plan. You may use that money to cover the costs of medical and
dental coverage under COBRA. In addition, Akamai will vest your options as
follows:
If the company terminates your employment in year one, Akamai will
vest the first year of the Initial Grant (i.e., any options from the
Initial Grant that would have vested in the first twelve months), so
that you will leave the company with 25% of your Initial Grant
vested plus 100% of the discounted options that you are being
granted as a signing bonus.
If the company terminates your employment in year two, Akamai will
vest the second year of the Initial Grant (i.e., any options from
the Initial Grant that would have vested in the second twelve months
of your employment that were not already vested as of the
termination date). This would mean that you would leave the company
50% of your Initial Grant vested.
If the company terminates your employment in year three, Akamai will
vest the third year of the Initial Grant (i.e., any options that
would have vested in the third year of your employment that were not
already vested as of the termination date), so that you will leave
the company with 75% of your Initial Grant vested.
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If the company terminates your employment for any reason after the
completion of your third year of employment, you will be treated under the
Akamai policy then in effect for other senior executives who leave the
company involuntarily.
In the event that there is a Change in Control, as that term is defined in the
Plan, and within the first ninety (90) days the surviving entity fails to offer
to employ you in a position with responsibilities that are commensurate (but not
necessarily identical) with your responsibilities at Akamai, and as a result
your employment terminates voluntarily or involuntarily, you will receive an
amount equal to one year of your then-base salary. Whether you have been offered
a position with commensurate responsibilities is to be determined without regard
to the title or reporting relationship of the new position.
Sincerely,
AKAMAI TECHNOLOGIES, INC.
/s/ George H. Conrades
George H. Conrades
Chairman and Chief Executive Officer
I hereby accept employment with Akamai Technologies, Inc.
/s/ Michael A. Ruffolo 7/27/2001
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Michael A. Ruffolo Date