Employment Agreement - BriteSmile Inc. and Kenneth A. Czaja
May 5, 2004
Kenneth A. Czaja
1141 Lund Ranch Road
Pleasanton, CA 94566
CA 94566
email: kenczaja@comcast.net
Dear Ken,
It is my pleasure to send you this letter as a formal offer of employment with
BriteSmile, Inc. (the "Company") for the position of Executive Vice President
and Chief Financial Officer. The following are the specifics of the offer.
Position Executive Vice President - Chief Financial Officer
Location BriteSmile's Corporate Office, Walnut Creek, CA
Reporting President, BriteSmile, Inc.
Start Date May 24, 2004
Your direct reports will include the Financial Controller and the entire
corporate financial staff. You will attend all scheduled Office of the CEO
meetings and Board meetings and be responsible for financial reporting,
governance, planning and analysis.
Responsibilities
o Ensure from a financial perspective the Company's capacity to successfully
operate its on-going and future business model in accordance with the
strategic plan.
o Provide accurate and timely reports, budgets and forecasts and other
financial data, as well as the analysis of financial results, reports,
budgets and forecasts to line management.
o Provide accurate financial reports and forecasts of the Company's direct
costs and allocated costs by operating unit.
o Ensure the appropriateness and maintenance of financial control policies
and procedures.
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o Establish global accounting systems, procedures and governance so that
accounting records provide accurate and timely information in accordance
with Generally Accepted Accounting Principles and in compliance with
federal, state and international tax and legal jurisdictions, SEC
regulations (including Sarbanes-Oxley), and NASDAQ listing requirements.
o Provide the financial format and leadership for business planning,
including the selection of financial measurements or drivers to be used to
evaluate Company performance.
o Develop a financial staff that meets the needs of the organization.
o Develop an annual budgeting procedure including update procedures on at
least a half yearly basis.
o Develop commercial banking relationships and, in conjunction with the
President, investor and investment community relationships to meet the
company's future capital needs and equity market strategy.
o Perform any additional duties and assignments, as deemed necessary by the
President, CEO, or Board of Directors.
Compensation
1. Base Salary
o $200,000 per year paid in 26 equal installments per BriteSmile's
payroll schedule.
2. Stock Options
o 75,000 option shares at the fair market value upon the date of Board
approval of such grant (next Board meeting is scheduled for June 23,
2004, but in any event, Board approval will occur no later than June
30, 2004).
o Vesting Schedule
- 15,000 options vest upon date of Board approval of the grant
- 15,000 options vest on 6/1/05
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- 15,000 options vest on 6/1/06
- 15,000 options vest on 6/1/07
- 15,000 options vest on 6/1/08
- Options expire 90-days after resignation or termination not for
cause or on June 23, 2014 should you be with BriteSmile at that
time. These terms and other terms are described in BriteSmile's
Amended and Restated Employee/Consultant Stock Option Agreement.
3. Bonus
o You will be eligible for the Management Incentive Plan when this plan
has been approved by the Board of Directors (currently under review by
OCEO prior to submission to the Board). Incentives will be distributed
on the first payday after 45 days from the end of a quarter.
o Under this plan, your cash bonus, which will be awarded at the
discretion of the CEO and the President, will have an annual target
amount of 40% of base salary for each bonus period of fully paid
salary.
o As an incentive to join the company, your target amount of 40% will
apply to 2004 on a pro rata basis as if your salary commenced on April
1, 2004 (equal to a target amount for 2004 of $60,000).
o As an additional incentive to join the company, assuming that the
company reports a positive EBITDA (as defined by the company) in its
audited 2004 10K, you will be guaranteed a bonus of at least $15,000
assuming full employment from May 24 to December 31, 2004.
Change of Control
In the event of a change of control transaction, the ability to exercise any
unvested options is determined by the Plan Committee. In such an event, you will
be eligible to receive at least 9 months of base salary (payable monthly) as
severance pay if your employment terminates as a result of the change in
control.
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Termination without Cause
If your employment is terminated without cause, you will be entitled to at least
3 months of base salary as severance pay, payable monthly. You will not be
eligible for this severance consideration if you are terminated with cause. For
purposes of this agreement, "with cause" shall mean termination as a result of
or caused by theft or embezzlement from the company, the unauthorized disclosure
of confidential information of the company, willful misconduct or dishonesty or
conviction of or failure to contest prosecution for a felony or a crime of moral
turpitude, stealing trade secrets or intellectual property owned by the company,
or any act in material competition with the company.
Confidentiality/Sole Endeavor
BriteSmile shall be your sole full-time employment. Any patents, licenses or
business ideas related to BriteSmile's business generated during the term of
your employment will be owned by BriteSmile. You agree to keep confidential all
company documents, technology, business ideas and all other company proprietary
information.
Indemnification
BriteSmile shall indemnify you for any claims and actions that might be brought
against you as an officer of the company to the fullest extent permitted in the
Company's byelaws and D&O policy.
Summary
Enclosed is the employee benefit package. You will be eligible for the corporate
health and benefit plan, including medical, dental and vision insurance. Your
employment will be "at will", as defined by the laws of the State of California.
Although we do not anticipate any disputes between you and BriteSmile, we handle
any controversy arising out of your employment or the termination of your
employment through the Company's Dispute Resolution Policy. The Company's
Dispute Resolution Policy is comprised of a mediation process, and arbitration
when necessary.
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We sincerely look forward to you joining BriteSmile and anticipate that you will
make a significant contribution to the future success of the Company. Please
sign below as your acceptance of this offer of employment.
/s/ Kenneth A. Czaja
Kenneth A Czaja Date
Sincerely,
/s/ Julian Fenely
Julian Feneley
President, BriteSmile Inc.
cc: Bruce Fleming
Chris Butler, Spencer Stuart