Sample Business Contracts

Employment Agreement - VA Research Inc. and Greg E. Zehr

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Employment Contract. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                            [VA RESEARCH LETTERHEAD]


December 11, 1998

Greg E. Zehr
105 Lorain Pl.
Los Gatos, CA 95032

Dear Greg:

At VA Research, we depend on the commitment, enthusiasm and skills of our team
members to lead the company's growth. Each person has both the luxury and the
duty to contribute to the future success of the company in the most meaningful
way he or she can.

With this in mind, we are pleased to offer you a position as Vice President of
Engineering, effective immediately.

We view your appointment as the beginning of a new stage in the VA Research
business plan. We're looking to you to help fulfill the company's goal to
become a recognized leader in Linux systems, in the context of a sincere
understanding of the Open Source culture and an ability to engineer quality
products in the tight margin environment.

As Vice President of Engineering, you will play a senior management role in
directing the company. Your areas of responsibility will include:

     Managing the complete product engineering process, from concept to product
     launch.

     Representing the company in engineering issues to customers, the Linux
     community, suppliers, investors, media representatives and the general
     community.

     Modifying your responsibilities as the company's needs warrant.

Your compensation will consist of:

     A monthly salary of $12,500.00.

     Pending approval by the Board of Directors, participation in the company's
     stock option plan with 219,047 shares (2.0% equity stake on a post venture
     financing basis) granted on your starting date and vesting according to
     the plan schedule (currently 25 percent after one year and 1/48 per month
     thereafter), with one year acceleration in the event of a change of
     control and involuntary termination.

     Health insurance through Lifeguard and dental insurance through the
     Guardian.

     Participation in the company's 401K plan.

     3 weeks paid vacation each year.

     An opportunity for a performance bonus in monthly installments totalling
     $50,000.00 over the course of a year.


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     In the event of involuntary termination for any reason, a severance package
     equal to six months' salary and pro-rated bonus will be paid on a salary
     continuation basis with medical benefits coverage during the severance
     period.

As with all VA Research staff, your employment is "at will," meaning either
you or the company may terminate your employment with two weeks written notice.
If you ever feel it necessary to discuss issues of your employment, please feel
free to raise them frankly with us.

Welcome to our team.

Sincerely,

/s/ LARRY M. AUGUSTIN                        /s/ JOHN T. HALL
-----------------------                      ---------------------
Larry M. Augustin, PhD                       John T. Hall
President                                    Vice President



Accepted by:

/s/ GREG E. ZEHR                             12/11/98
---------------------                        -------------------
Greg E. Zehr                                 Date