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EXHIBIT 10.3
October 31, 2000
Mr. Michael Simonetto
275 Lochland Circle
Roswell, GA 30075
Dear Mike:
On behalf of Manugistics, Inc., as well as its parent company, Manugistics
Group, Inc. and the Board of Directors of both, we are very pleased to confirm
our verbal offer for the position of Senior Vice President, Strategic Pricing
Solutions, reporting to Greg Cudahy, Executive Vice President of Pricing Revenue
Management (PRM), as of November 30, 2000. This position is exempt.
CASH COMPENSATION. In this position your monthly salary will be $16,666.67. This
position has regular performance reviews; performance reviews at Manugistics are
scheduled for March 1 of each year. In addition, you will also have the
opportunity to receive an annual incentive bonus of up to $100,000 based on
corporate performance and management objectives to be approved by Greg Cudahy,
Executive Vice President of PRM, and in accordance with Manugistic's Incentive
Plan. During the first twelve (12) months of your employment with the Company,
you will earn a minimum of fifty percent (50%) of the bonus, payable to you on a
quarterly basis.
SALES INCENTIVE. In addition to the foregoing, Manugistics will pay you an
additional quarterly bonus (annualized at $150,000 per year) contingent on
significant participation in revenue generation as follows:
Manugistics Quarter 4 $1.5 million in Manugistics' license revenue and/or
$3 million total in either Talus Solutions, Inc. or
Manugistics' license revenue to Manugistics = a bonus
of 37,500
For future quarters, eligibility for the quarterly bonus will be based upon
meeting revenue targets set by Mr. Cudahy at the beginning of each Manugistics'
fiscal year.
STOCK OPTIONS. We are pleased to offer you a Stock Option package as follows:
An option, granted as of your date of hire, to purchase 100,000 shares of common
stock in accordance with an applicable stock option plan (options will be valued
at a price equal to the Fair Market Value of Manugistics stock on the date of
grant). The vesting period for such stock options shall commence on the date of
grant and vest over a four (4) year period, in equal monthly increments. Our
Stock Plan Administrator will provide you with written confirmation of stock
options awarded.
ADDITIONAL STOCK AWARD. In addition, you will receive an option to purchase
additional shares of Manugistics Stock, under the terms of the then-current
Manugistics stock option plan, as follows:
- If the Talus Solutions, Inc. revenue for Manugistics' Fiscal Quarter 1
("Q1") Fiscal Year ("FY") 02 increases by at least 50% over Q1 FY01, you
have the option to purchase a minimum of 20,000 shares of Manugistics
Stock at a price equal to the fair market value of Manugistics Stock on
the last day of Q1 FY02. The vesting period for the stock options under
this option shall commence, if applicable, on the date of grant (the last
day of the Manugistics' Q1 FY02) and vest over the period set forth in
the then-current Manugistics stock option plan, in equal monthly
increments.
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Mr. Michael Simonetto
October 31, 2000
Page Two
- If the Talus Solutions, Inc. license revenue for Manugistics' FY02 is $25
million or greater, you have the option to purchase a minimum of 20,000
shares of Manugistics Stock at a price equal to the fair market value of
Manugistics Stock on the last day of the Manugistics' fiscal year of
FY02. The vesting period for the stock options under this option shall
commence, if applicable, on the date of grant (the last day of the
Manugistics' fiscal year of FY02) and vest over the period set forth in
the then-current Manugistics stock option plan, in equal monthly
increments.
BENEFITS. Effective on your first day of employment and as a key executive in
the Company, you shall receive the comprehensive Manugistics benefits program in
accordance with the Company's written plans and which includes:
- Stock Options - as set forth above
- Employee Stock Purchase Plan
- 401(k) Retirement Plan
- Comprehensive Medical Care
- Dental Care
- Employee Vision Care
- Life/Accidental Death and Dismemberment Insurance
- Long-Term Disability Insurance
Manugistics will obtain a supplemental life insurance policy of $700,000 on your
behalf. With the standard employee benefit and the supplemental policy, your
life insurance amount will be $1,000,000. The supplemental life benefit is
effective within three months of your hire date. Additional information on these
and other valuable benefits is enclosed for your reference.
TERMINATION. If the Company terminates your employment for reasons other than
cause, you will receive your base salary, corresponding management objectives
bonus, and benefits in accordance with the Company's payroll practices for the
equivalent of a six (6) month period commencing on your termination date
("severance period"). The foregoing salary and benefits payments will cease if
you secure alternative employment during the severance period. In addition, if
the Company terminates your employment for reasons other than cause, the Company
will continue the monthly vesting of the options granted to you pursuant to this
letter for a period of six (6) months following your termination date.
CHANGE OF CONTROL. In the event that the Company has a change of control, which
is defined as fifty one percent (51%) of the Company's voting stock having a
change in ownership: (a) if your responsibilities are not affected, fifty
percent (50%) of your outstanding options set out above shall immediately vest;
(b) if your responsibilities are significantly diminished or you are
constructively terminated, i.e., your responsibilities no longer consist of
those reasonably associated with the position of Senior Vice President,
Strategic Pricing Solutions, one hundred percent (100%) of the outstanding
options set out above shall immediately vest.
FINAL DETERMINATION BY BOARD. This offer is subject to approval by the
Compensation Committee of the Board of Directors of Manugistics Group, Inc.
Furthermore, all compensation and benefits included as part of this offer will
conform to the Company's standard policies, practices and plans. In the event of
any question with regard to the compensation and benefits described in this
letter, the Compensation Committee of the Board of Directors will make the final
determination with regard to any interpretation relating to the elements of your
compensation package.
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Mr. Michael Simonetto
October 31, 2000
Page Three
In keeping with Manugistics policy, all offers are contingent upon your
execution of Manugistics, Inc.'s Conditions of Employment.
ARBITRATION. In the event of a dispute concerning the terms and conditions of
employment, the parties agree to binding arbitration by and under the rules of
the American Arbitration Association, and each party shall pay its own fees and
expenses.
As required by the Immigration Reform and Control Act of 1986, on your first day
of employment, you must provide Manugistics with documentation verifying your
eligibility to work in the United States. Acceptable forms of documentation are
described on the enclosed Employment Eligibility Verification form. Please read
this and the enclosed "Manugistics, Inc. Conditions of Employment."
Please signify your acceptance by signing and dating this letter, the two copies
of the "Manugistics, Inc. Conditions of Employment" and the top portion of the
enclosed New Employee Information Sheet and returning these documents to Human
Resources. Please keep one copy of the signed Manugistics, Inc. Conditions of
Employment for your records.
We look forward to your joining Manugistics as Senior Vice President and we are
confident that the association will be mutually rewarding.
Sincerely,
Manugistics, Inc.
Robin A. Hoesch
Director, Human Resources
Manugistics
Enclosures
Accepted by:
/s/ MICHAEL SIMONETTO 11/30/00
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Michael Simonetto Date
