officer’s continuous service through each such vesting date. In the event of a change of control, then the greater of (i) 50% of the number of unvested options and (ii) the number of options that would vest during the 12 months following the change of control will be immediately accelerated and become vested and exercisable.
(3)
| 25% of the shares underlying these options vest on February 1, 2022. Thereafter, the remaining shares vest in equal monthly installments until February 2025, subject to the executive officer’s continuous service through each such vesting date. If named executive officer’s employment is terminated in connection with or within 12 months following a change of control, then 100% of the unvested options will be immediately accelerated and become vested and exercisable. |
(4)
| 25% of the shares underlying these options vest on February 1, 2023. Thereafter, the remaining shares vest in equal monthly installments until February 2026, subject to the executive officer’s continuous service through each such vesting date. If named executive officer’s employment is terminated in connection with or within 12 months following a change of control, then 100% of the unvested options will be immediately accelerated and become vested and exercisable. |
Agreements with Our Named Executive Officers
We entered into confirmatory offer letters with Messrs. Magnuson, Hyman and Kleeger governing their positions as our Chief Executive Officer, Chief Technology Officer and President and Chief Customer Officer, respectively. Each letter has no specific term and provides for at-will employment. Pursuant to these confirmatory offer letters, each of Messrs. Magnuson, Hyman and Kleeger are eligible for discretionary performance-based compensation to be paid in conformity with our bonus practices in place from time to time, equal to $425,000, $198,000 and $340,000 annually, respectively, subject to corporate performance goals and any other performance metrics or factors otherwise determined to be appropriate by our board of directors or the compensation committee.
In addition, each of our named executive officers will be entitled to benefits in accordance with our executive severance plan described below, and has executed our standard employee covenants agreement governing the protection of confidential information, intellectual property and inventions.
Executive Severance Plan
Our board of directors has adopted an executive severance plan in which our named executive officers, and certain other executives and key employees, participate.
The executive severance plan provides that upon (a) a termination of an eligible participant’s employment with us that is effected by us without “cause,” as defined in the executive severance plan, or (b) a resignation by an eligible participant for “good reason,” as defined in the executive severance plan, in each case outside of the change in control period, as defined in the executive severance plan, an eligible participant will be entitled to receive, subject to, among other things, the execution, delivery and effectiveness of a customary release of claims in our favor, (1) a lump sum cash payment equal to such eligible participant’s annual base salary then in effect (or a portion thereof depending on the employee designation of such eligible participant), (2) an additional lump sum cash payment equal to any earned but unpaid annual bonus for any performance years completed as of the date of termination and (3) continued payment of premiums for the eligible participant’s continued coverage under our health insurance plans for a period of time depending on the employee designation of such eligible participant.
The executive severance plan also provides that upon (a) a termination of an eligible participant’s employment with us that is effected by us without “cause” or (b) a resignation by an eligible participant for “good reason,” in each case within the change in control period, the eligible participant will be entitled to receive, subject to, among other things, the execution, delivery and effectiveness of a customary release of claims in our favor, (1) a lump sum cash payment equal to such eligible participant’s annual base salary then in effect (or a portion thereof depending on the employee designation of such eligible participant), (2) an additional lump sum cash payment equal to the sum of (i) any earned but unpaid annual bonus for any performance years completed as of the date of termination and (ii) a lump sum cash payment equal to the eligible participant’s target bonus (or a prorated amount thereof, depending on the employee designation of such eligible participant) for the year of termination, (3) continued payment of premiums for the eligible participant’s continued coverage under our health insurance plans for a period of time depending on the employee designation of such eligible participant and (4) accelerated vesting of certain outstanding and unvested equity awards held by such participant.
The payments and benefits provided under the executive severance plan in connection with a change in control may not be eligible for a federal income tax deduction by us pursuant to Section 280G of the Internal Revenue Code of 1986, as amended, or the Code. These payments and benefits may also subject an eligible participant, including the named executive officers, to an excise tax under Section 4999 of the Code. If the payments or benefits payable in connection with a change in control would be subject to the excise tax imposed under Section 4999 of the Code, then those payments or benefits will be reduced if such reduction would result in a higher net after-tax benefit to the recipient.