Offer Letter - Alloy Designs Inc. and Neil Vogel
Alloy Designs, Inc.
Offer Letter
February 22, 1999
Neil Vogel
5 East 16th Street, #8
New York, NY 10003
Dear Mr. Vogel:
I am very pleased to provide you with the terms and conditions of your
employment by Alloy Designs, Inc. (the "Company"). The following sets forth the
proposed terms and conditions of our offer to employ you. We hope that you
choose to join the Company and look forward to a mutually beneficial
relationship.
1. Position: Your initial position will be Chief Corporate Development Officer,
based out of the Company's main office located in New York City, New York. Your
location is subject to change at the discretion of the Company. As the Company's
employee, we expect you to devote your full time and energies to the business
and affairs of the Company, and to perform any and all duties and
responsibilities associated with this position and as may be reasonably assigned
to you by the Company consistent with your position as Chief Corporate
Development Officer. In addition to your primary duties, you shall perform such
other services for the Company as may be reasonably assigned to you from time to
time by the Company consistent with your position as Chief Corporate Development
Officer. You will report directly to the Chief Executive, Chief Operating and
Chief Financial Officers. Your performance will be reviewed on a periodic basis
as long as you remain employed by the Company.
2. Starting Date/Nature of Relationship: If you accept this offer, your
employment with the Company shall commence on February 22, 1999. Except as
expressly set forth herein, no provision of this letter shall be construed to
create an express or implied employment contract, or a promise of employment for
a specific period of time and you agree that, except as expressly set forth
herein, your employment is at-will and either party may terminate the
relationship with or without cause on five (5) days prior notice.
3. Compensation and Benefits: Your initial base pay shall be $1,634.62 per week
($85,000 on an annualized basis). This level of base pay will be reviewed at
least every six months. In addition, effective upon the date of commencement of
employment, the Company will grant you ten year options to purchase an aggregate
of 270,000 shares of the Common Stock under the Company's 1997 Employee,
Director and Consultant Stock Option Plan, or a successor Plan if established.
To the extent permissible under the Internal Revenue Code, such options will be
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granted as Incentive Stock Options and any options that cannot be granted as
Incentive Stock Options will be granted as Non-Qualified Options. The options
shall have the following vesting and exercise price ("Strike Price") schedules:
25,000 shares shall vest upon the commencement of employment with the Company
with an exercise price per share equal to the price to the public at the closing
of the initial public offering of common stock (the "IPO Price"), par value .01
per share (the "Common Stock"), of the Company (the "IPO") before deducting any
underwriting commissions or expenses of the offering; an aggregate of 25,000
shares shall vest on the first anniversary of your commencement of employment
with the Company with an exercise price per share equal to the IPO Price; 50,000
shares shall vest on the second anniversary of your commencement of employment
with the Company with an exercise price per share equal to 120% of the IPO
Price; an aggregate of 75,000 shares shall vest on the third anniversary of your
commencement of employment with the Company with an exercise price per share
equal to 150% of the IPO Price; and an aggregate of 95,000 shares shall vest on
the fourth anniversary of your commencement of employment with the Company with
an exercise price per share equal to 175% of the IPO Price. If the IPO is not
completed prior to January 1, 2000; or if there is a Change of Control prior to
the completion of the IPO, as defined in 1997 Employee, Director and Consultant
Stock Option Plan, prior to January 1, 2000; or if your employment is terminated
without cause prior to January 1, 2000 without an IPO or Change of Control
having occurred prior to such termination, the Strike Price of the options will
be equal to the following; (i) in the event the Company consummates an equity
offering larger than $3 million (the "Equity Financing") other than an IPO, the
Strike Price will be equal to the price per share paid by the new equity
investor or (ii) if there is no Equity Financing, the Strike Price will be equal
to the per share conversion price to be used in conversion of the Series A
Preferred Stock issued in November 1998 and February 1999 to common stock.
In addition to your compensation, you will be entitled to receive the
various benefits (pension, stock option, bonus, profit sharing, health, dental,
disability, etc.) offered by the Company to its executive officers. These
benefits may be modified or changed from time to time at the discretion of the
Company but only to the extent the other executive officers are similarly
effected. Where a particular benefit is subject to a formal plan, eligibility to
participate in and receive any particular benefit of the plan is governed solely
by the applicable plan document. Should you ever have any questions, you should
ask Sam Gradess, or the Company's Human Resources representative, for a copy of
the applicable plan document.
In the event your employment is terminated by the Company for any reason
other than for "cause" (as defined below), all then outstanding options issued
to you shall immediately (and without further action by you or the Company) be
accelerated and vested in full and be exercisable, and shall remain vested and
exercisable for the duration of the term of such Options.
For purposes hereof, termination for cause shall mean (i) your conviction
of or guilty plea to an act of fraud or a to a felony; (ii) your embezzlement,
misappropriation or commission of a fraudulent act against the Company; (iii)
your material breach, after a reasonable opportunity to cure, of the terms
hereof or the Non-Competition and Confidentiality Agreement, as determined by
the unanimous consent of Matt Diamond (Chief Executive Officer), Sam Gradess
(Chief Financial Officer) and Jim Johnson (Chief Operating Officer); or (iv)
your commission of an act
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causing material harm to the Company as determined by the unanimous consent of
Messrs. Diamond, Johnson and Gradess. In the event that at least two of the
three previously named officers are not employed at the Company at the time of
the termination, termination for cause shall mean your material breach, after
notice from the Board of Directors and a reasonable opportunity to cure, of the
terms hereof or the Non-Competition and Confidentiality Agreement, or your
commission of an act causing material harm to the Company as determined by the
Board of Directors. The foregoing definition of "cause" shall take precedence
over any other definition of "cause" utilized by the Company, including without
limitation the 1997 Employee, Director and Consultant Stock Option Plan.
4. Confidentiality: The Company considers the protection of its confidential
information, proprietary materials and goodwill to be extremely important.
Consequently, as a condition of this offer of employment and your subsequent
employment, you are required to sign the Non-Competition and Confidentiality
Agreement (the "Agreement") enclosed with this letter.
5. Miscellaneous: This letter, together with the Agreement, constitutes our
entire offer regarding the terms and conditions of your employment by the
Company. It supersedes any prior agreements, or other promises or statements
(whether oral or written) regarding the offered terms of employment. The terms
of your employment shall be governed by the law of the State of New York. By
accepting this offer of employment, you agree that any action, demand, claim or
counterclaim concerning any aspect of your employment relationship with the
Company shall be resolved by a judge alone, and you waive and forever renounce
your right to a trial before a civil jury.
You may accept this offer of employment and the terms and conditions hereof by
signing the enclosed additional copy of this letter and the Agreement, which
execution will evidence your agreement with the terms and conditions set forth
herein and therein, and returning it to the Company in the enclosed envelope.
This offer will expire on February 22, 1999 unless accepted by you prior to such
date.
We are delighted to offer you the opportunity to join our Company, and we look
forward to your joining us.
ALLOY DESIGNS, INC.
By:_____________________________________________________
Samuel A. Gradess -- Director and Corporate Secretary
Accepted and Agreed:
By:____________________________
Neil Vogel
Date:__________________________
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