<PAGE>
(e)(12)
September 17, 1999
Dave Larson
644 Praderia Circle
Fremont, CA 94539
Dear Dave:
On behalf of OnDisplay, Inc./The Outsource Group, I am pleased to offer you the
position of Chief Financial Officer, reporting to me. Your annual base salary
will be $180,000.00 and will be paid semi-monthly at a rate of $7,500.00 per pay
period.
You will also be eligible to receive an annual bonus that is 40% of your annual
base salary (prorated for 1999), subject to mutually agreed upon performance
objectives.
This offer assumes you will begin full time employment on September 27, 1999.
You will also be eligible for the OnDisplay/The Outsource Group standard
benefits package that includes medical, dental and vision insurance, IRC Section
125, etc. Information about these programs, other company benefits and
guidelines concerning policies and procedures will be made available to you from
the Human Resources department.
As an OnDisplay employee, you will be able to participate in the company 401(k)
Plan upon meeting the eligibility requirements of the Plan. OnDisplay/The
Outsource Group also offers three (3) weeks of vacation per year, accrued at a
rate of five (5) hours per pay period for employment service of 2 weeks to 3
years, and four (4) weeks of vacation per year, accrued at a rate of 6.67 hours
per pay period for employment service of 3+ years, along with twelve (12)
Company designated holidays.
Inclusive with your compensation package, and subject to approval by the Board
of Directors, you will be granted Incentive Stock Options of 200,000 shares of
OnDisplay stock under the OnDisplay, Inc., 1996 Stock Option Plan. Five percent
(5%), which is equal to 10,000 shares, of your Incentive Stock Options will be
fully vested on your hire date, the vesting commencement date. The remaining
Incentive Stock Options (190,000 shares) will vest over a four (4) year period
at a rate of 25% after twelve months, then 1/48/th/ per month thereafter as
outlined in the OnDisplay, Inc., 1996 Stock Option Plan.
<PAGE>
Offer Letter: Dave Larson
September 17, 1999
Page 2
If your employment with the Company terminates at any time within twenty-four
(24) months after a Change of Control, then you shall be entitled to receive
severance benefits as follows:
Involuntary Termination. If your employment terminates as a result of
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Involuntary Termination other than for Cause, you shall be entitled to receive a
continuation of your Base Compensation for a period equal to six months. In
addition, you shall be entitled to a payment of a pro-rata portion of the target
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bonus you would have received for the year in which the termination occurs.
Such payment shall be made in a lump sum within ten (10) business days after the
Termination Date.
Voluntary Resignation; Termination For Cause. If your employment terminates by
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reason of the Employee's voluntary resignation (and is not an Involuntary
Termination), or if you are terminated for Cause, then you shall not be entitled
to receive severance or other benefits except for those (if any) as may then be
established under the Company's then existing severance and benefits plans and
policies at the time of such termination.
Disability; Death. If the Company terminates your employment as a result of the
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your disability, or your employment is terminated due to your death , then you
shall not be entitled to receive severance or other benefits except for those
(if any) as may then be established under the Company's then existing severance
and benefits plans and policies at the time of such disability or death.
For purposes of your severance benefits, the following terms referred to above
shall be defined as follows:
Change of Control. "Change of Control" shall mean the occurrence of any of the
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following events:
(a) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) becoming the "beneficial owner"
(as defined in Rule 13d-3 under said Act), directly or indirectly, of securities
of the Company representing 50% or more of the total voting power represented by
the Company's then outstanding voting securities;
<PAGE>
Offer Letter: Dave Larson
September 17, 1999
Page 3
(b) A change in the composition of the Board of Directors of the Company
occurring within a two-year period, as a result of which fewer than a majority
of the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (A) are directors of the Company as of the date hereof, or
(B) are elected, or nominated for election, to the Board of Directors of the
Company with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual not otherwise an Incumbent Director whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Company); or
(c) The approval by shareholders of the Company of a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the approval by
the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
Involuntary Termination. "Involuntary Termination" shall mean (i) without your
-----------------------
express written consent, a significant reduction of your duties, position or
responsibilities, or your removal from such position and responsibilities,
including, without limitation, any reduction that results in you not serving as
the Chief Financial Officer of the company that survives after the Change of
Control (or, if such surviving company is a member of a group of affiliated
corporations, the Chief Financial Officer of the most senior parent corporation
in such group); (ii) without your express written consent, a substantial
reduction, without good business reasons, of the facilities and perquisites
(including office space and location) available to you immediately prior to such
reduction; (iii) a reduction by the Company in your Base Compensation as in
effect immediately prior to such reduction; (iv) a material reduction by the
Company in the kind or level of employee benefits to which you areas entitled
immediately prior to such reduction with the result that your overall benefits
package is significantly reduced; (v) without your express written consent, the
relocation of the Employee to a facility or a location more than 25 miles from
your present location; (vi) any purported termination of you by the Company
which is not effected for Disability or for Cause, or any purported termination
for which the grounds relied upon are not valid; or (vii) the failure of the
Company to obtain the assumption of this Agreement by any successors in the
event of a change of control.
<PAGE>
Offer Letter: Dave Larson
September 17, 1999
Page 4
Cause. "Cause" shall mean (i) any act of personal dishonesty taken by you in
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connection with your responsibilities as an employee and intended to result in
substantial personal enrichment to you, (ii) the conviction of a felony which
the Board reasonably believes had or will have a material detrimental effect on
the Company's reputation or business, (iii) a willful act by you which
constitutes gross misconduct and which is injurious to the Company, and (iv)
continued violations by you of your obligations which are demonstrably willful
and deliberate on your part which continue after there has been delivered to you
a written demand for performance from the Company which describes the basis for
the Company's belief that you have not substantially performed your duties.
In the event that you are entitled to severance benefits pursuant to this
Agreement, your stock options shall become fully vested and exercisable as to
all of the shares subject thereto.
In the event it is determined by the Board of Directors, upon receipt of a
written opinion of the Company's independent public accountants, that the
enforcement of any Section or subsection of this Agreement, which allows for the
acceleration of vesting of options to purchase shares of the Company's common
stock upon a termination in connection with a Change of Control, would preclude
accounting for any proposed business combination of the Company involving a
Change of Control as a pooling of interests, and the Board otherwise desires to
approve such a proposed business transaction which requires as a condition to
the closing of such transaction that it be accounted for as a pooling of
interests, then any such Section or subsection of this Agreement shall be null
and void. For purposes of this Section, the Board's determination shall require
the unanimous approval of the disinterested Board Members.
Your employment with OnDisplay/The Outsource Group, whether temporary,
probationary, part-time or full-time, is entered into voluntarily, and as a
result, you are free to resign, at any time, upon two weeks notice, with or
without cause for any reason or no reason. Similarly, OnDisplay/The Outsource
Group, is free to conclude its "at will" employment relationship with you at any
time, with or without cause, for any reason or no reason.
<PAGE>
Offer Letter: Dave Larson
September 17, 1999
Page 5
On your start date, you will be asked to review and complete necessary
paperwork. We ask that you bring an original document that verifies your
identity -- likely a picture identification (e.g., a passport, driver's license,
ID card, etc.) and one that verifies that you are eligible to be employed in the
U.S.A (e.g., social security card, U.S. passport, etc.).
Please confirm your acceptance of employment on the terms set forth in this
letter by signing both copies and returning one copy to the attention of Sharon
Santos.
This offer is valid until September 21, 1999. This offer is contingent upon the
results of our standard new hire background check.
It is my pleasure to welcome you to OnDisplay. The team at OnDisplay, along
with me, looks forward to your immediate contribution to our future success.
Best Regards,
Mark Pine
CEO
AGREED AND ACCEPTED:
@ondisplay.com
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Print Name Nickname E-mail account name (First Choice)
@ondisplay.com
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E-mail account name (Second Choice)
-------------------------------- ____________________________________________
Signature Date Print name as you would like it to appear on
your business card
____________________________________________
* Address, City and Zip Code to be listed on
business card
_______________________ _________________
* Business number to be * Fax number to
listed on business card be listed on
*If not located at Corporate business card
Headquarters, San Ramon
