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Exhibit 10.29
September 15, 2000
Mr. Edward Semonite
5 Old Planters Road
Beverly, MA 01915
Dear Ned:
I am pleased to offer you the position of Executive Vice President, Marketing
reporting to me.
The cash compensation in the offered position will be composed of two elements:
an annual base salary, an annual bonus opportunity under PictureTel's Management
Incentive Plan. Effective September 18, 2000, the base salary for the new
position will be paid at the bi-weekly rate of $8,461.54 (this is equivalent to
$220,000.00 annually based on 26 pay periods in the year). At the level of the
offered position a full performance and compensation review is scheduled during
the quarter immediately following the close of the fiscal year. I will assure
you that your base salary will be increased concurrent with any increase made to
my salary.
The payment of a bonus under the Management Incentive Plan is predicated on the
Company's achievement of the annual revenue and profitability objectives
established at the start of the fiscal year and your performance in meeting your
Individual Goals for the year. The bonus opportunity will be 0% - 40% of base
salary for full performance, but may range up to 80% of base salary for
performance in excess of the plan. The bonus, if any, is determined and paid in
the first quarter following the close of the fiscal year.
In addition to the 20,000 shares which was approved on July 10, 2000, I have
recommended to the Compensation Committee of the Board of Directors that you be
granted an additional option to purchase 100,000 shares of the Common Stock of
the Company ("Option"). The Option will vest over a four (4) year period, with
the first twenty-five (25) percent of the Option vesting one (1) year following
the date the option grant is approved and six and one quarter (6.25) percent of
the Option vesting each full three (3) month period thereafter. The purchase
price of the Option will be determined by the Compensation Committee on the day
your option grant is approved and will be no less than the closing price as
quoted on the National Market System of NASDAQ on that date. Vesting shall be
conditional on your continued full-time employment with the company. The full
acceleration of all unvested stock options in the event of a change in control
is specifically covered in the 1999 PictureTel Equity Plan ("Plans"). Certain
other restrictions may apply to your option grant as set forth in the 1999
PictureTel Equity Plan. As an Executive Officer, any additional option grant is
subject to the annual total compensation review discussed above.
In the event that your employment with the Company is involuntarily terminated
for any reason other than for Cause, you will be entitled to receive a
continuation of your then current base salary for a period of Twelve (12)
consecutive months following such termination (the "Severance Period"). For
purposes of this letter, "Cause" shall be defined as and be limited to
conviction of a felony or willful misconduct or gross negligence in the
performance of duties which result in material harm to PictureTel. During the
Severance Period, the Company will maintain your
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eligibility to participate in the Company's group medical and dental plans and
will continue to contribute its share of the costs of such plans at the same
level as active employees. If you wish to continue your medical and dental
insurance coverage beyond the Severance Period, you may do so for up to a total
of eighteen (18) months (inclusive of the Severance Period) pursuant to your
rights under the Consolidated Budget Reconciliation Act ("COBRA"). If you elect
to continue coverage beyond the Severance Period, you will be responsible for
paying the full cost of the coverage.
Further, the Company will enter into a separate Change in Control Agreement
("CIC Agreement") which will provide you with certain benefits in the event of
an involuntary termination due to a change in control. The CIC Agreement will
include certain triggering events and provide, but not be limited to, severance
equal to the sum of (a) your then current base salary, plus (b) the highest
bonus paid in the three years preceding the triggering events, paid over a
consecutive twenty-four (24) month period. The full acceleration of all unvested
stock options in the event of a change in control is to be specifically covered
in the 1999 Equity Plan and will not be included in the CIC Agreement. The CIC
Agreement will be executed concurrently with your acceptance of our employment
offer and the commencement of work with the Company.
If you have any questions regarding this offer, please do not hesitate to call
Ralph Walker or me. We look forward to your being an important member of our
team.
Sincerely,
Lewis Jaffe
President and
Chief Operating Officer Accepted: ________________Date: ____________
