Employment Agreement - enCommerce Inc. and Alberto Yepez
May 5, 2000
Alberto Yepez
2901 Patrick Henry Drive
Santa Clara, California
95054
Dear Alberto:
We are pleased to confirm our job offer of President and CEO, enCommerce,
Inc. (the "Company"), a fully owned subsidiary of Entrust Technologies Inc
("Entrust"), and President, Entrust Technologies Emerging Markets Group
reporting to John Ryan, President and CEO of Entrust. This offer is subject to
the closing of the proposed merger between the Company and Entrust (the
"Closing") pursuant to the Agreement and Plan of Merger of dated April 18, 2000
among, inter alia, the Company, and Entrust (the "Merger Agreement"). On
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completion of the merger you will also be appointed to the Board of Directors of
Entrust.
Your responsibilities will include leadership of the authorization and
portal direction of the combined companies, leadership in the new business and
strategy areas of Entrust which include the corporate strategy to achieve
revenue growth of $1 billion by 2003, the proposed Entrust joint venture for
business-to-business exchanges, the proposed new wireless business group and the
proposed venture fund.
Your base salary, on an annualized basis, will be $225,000 US, which will
be paid biweekly. Your salary and performance will be subject to review on an
annual basis, generally conducted in January of each year.
Any stock options granted to you by the Company prior to the Closing will
be converted into stock options for the acquisition of common stock of Entrust
Technologies Inc. in the manner provided for in the Merger Agreement and subject
to the applicable stock option plan.
You will also be eligible to participate in the executive bonus plan
according to its terms, which for 2000 is equivalent to a potential payment of
up to $135,000 on an annualized basis. The first incremental payment will be
reduced by the amount of any quarterly bonus payment previously paid to you in
connection with the Company's 2000 fiscal year. Any bonus awarded will be paid
in two equal increments per calendar year. The bonus award for the first half
of 2000, payable in July, will be based on the six-month performance of the
Company. The bonus award for the second half of 2000, payable in January 2001,
will be based on the second half achievement of objectives of Entrust.
In addition, you will be eligible for additional grants of stock options to
purchase shares of common stock of Entrust Technologies Inc. with an exercise
price equal to the fair market value of the common stock on the date of grant in
accordance with the applicable stock option plan. Any executive bonus payments
and any incentive stock grants are subject to achieving certain performance
factors as set from time to time by management including revenue, earnings,
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customer satisfaction and individual performance criteria. However, these
incentive programs may be amended or discontinued at any time.
With respect to any stock option grants made to you by the Company or
Entrust, either before or after Closing, you shall be entitled to 100% vesting
of the options granted under the Company plan being assumed by Entrust
Technologies upon closing and 50% vesting of the stock options granted under any
Entrust stock option plan (other than the assumed Company plan) if you are
terminated or constructively terminated other than for cause within one year of
the Closing (or such greater amount of accelerated vesting as is provided for
under the relevant option plan and agreement).
You will also be eligible to accrue four weeks of paid vacation per year of
your employment. In addition, Entrust will recognize your vacation accrued
before Closing from the Company. All vacation accrual will be subject to the
limits on accrual set forth in the Company employment plan.
Upon Closing your benefit plan will continue with the Company as disclosed
in the Merger Agreement; however, it is our intention to include you in the
Entrust Technologies Inc. benefit plans as soon as practicable. You will be
credited with your service with the Company for purposes of determining your
benefits eligibility and levels. If you are transferred to Entrust benefit
plans other than at the end of a Company plan year, you will receive a credit
toward all deductible and co-payment limits in the Entrust medical, dental and
vision plans for payments made by you under the Company's similar plans in the
same plan year.
With the exception of the provisions above regarding the conversion of the
stock options granted to you by the Company, Entrust may modify, revoke, suspend
or terminate any of the terms and conditions referenced herein, including the
terms, plans, policies and/or procedures adopted by the Company in respect of
the benefit plan, in whole or part, at any time, with or without notice.
As with most other employees, your employment will be at-will. That means
that your terms and conditions of employment, including but not limited to
termination, demotion, promotion, transfer, compensation, benefits, duties and
location of work may be changed with or without cause, for any or no reason, and
with or without notice. Your status as an at-will employee cannot be changed by
any statement, promise, policy, course of conduct, in writing or manual except
through a written agreement signed by the CEO of Entrust. Notwithstanding the
foregoing, in the event of termination of your at-will employment by the Company
or by Entrust of your employment without cause or a constructive termination
occurring within two years of the Closing) you shall be entitled to a severance
payment equal to six months base salary including bonus (calculated using your
target bonus and the same company performance factor as other executive
employees for the same bonus period). Also, the Company will either provide to
you benefits during the severance period or make payments on your behalf for
benefits pursuant to COBRA during the severance period.
This employment offer is contingent upon you signing and returning with
your offer letter the attached Intellectual Property and Confidentiality
Agreement, (the "IP Agreement"). By accepting this offer of employment at will,
you also agree to any terms and conditions contained in that document as
written. Notwithstanding the foregoing, if you have already entered in an
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agreement or agreements with the Company to substantially the same effect as the
IP Agreement, you need not execute them and the IP Agreement and its content
will not be included in this offer of employment.
With the exception of the agreements covering stock options granted to you
by the Company prior to Closing pursuant to which vesting accelerates upon
termination of employment, this agreement supersedes any and all prior
employment agreements you have with enCommerce.
To accept and confirm your start date, or to decline this offer, please
sign and return the original offer letter along with all other required
documentation to me before your first day of employment, which is expected to be
as of the Closing Date. Any questions you may have should be directed to me.
Sincerely,
/s/ John Ryan
John Ryan
President and CEO
I have read, understood, and therefore,
accept this offer of employment, as set
forth above, and will report on 2000.
/s/ Alberto Yepez
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Alberto Yepez
Attachment:
Intellectual Property and Confidentiality Agreement