Exhibit 10.4.5

John J. Sims

Message [image001.gif]

CEO

724 Solutions Inc.

1221 State Street, Ste 200

Santa Barbara, CA  93101

Direct:  805-884-8302

Fax:  805-884-8311

jsims@724.com

VIA FACSIMILE

October 24, 2002

Elda Rudd
7339 Hill Forest Drive
Dallas, TX 75230

Dear Elda:

On behalf of 724 Solutions Inc. (hereinafter “724 Solutions” or “the Company”),
I am pleased to offer you the position of Vice President of Corporate Marketing
of 724 Solutions.  In making this offer, the team and I are expressing our
enthusiastic support for your leadership skills and abilities. You bring a skill
set to this Company that is essential to achieving our goals, both short and
long term.  In addition, we expect that your base of experiences and contacts
will enable you to significantly impact and influence the strategic direction of
the organization.  The purpose of this letter is to detail the terms of your
employment. 

 

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Job Title:     Vice President of Corporate Marketing.

 

 

 

 

 

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Starting Date:     As soon as possible, but no later than November 15, 2002.

 

 

 

 

 

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Salary:     $175,000 per year (hereinafter referred to as your “base
compensation”).

 

 

 

 

 

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Bonus:     In addition to your base compensation, you will be eligible for two
separate bonus programs. First, you will have a quarterly bonus of $5,000 that
will be earned based upon your performance against a set of mutually agreed key
objectives that will be specific to your areas of responsibility. Second, you
will be eligible to participate in our 2003 Annual Executive Bonus Plan, with an
annual target bonus of $50,000. This executive bonus is tied to Company
performance versus a set of Board-approved targets that cover EBITDA performance
and Mobile Network Operator market penetration.

 

 

 

 

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Stock:     Subject to Board approval, you will be granted the option to purchase
210,000 (two hundred ten thousand) shares of common stock.  The exercise price
for your options will be the fair market value of the shares on the date
granted.

Elda Rudd/Page 2

 

 

These options will vest in accordance with the Company’s standard option
agreement, i.e. 25% per year starting on the first anniversary of the grant

 

 

 

 

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Relocation Expenses:     The Company will reimburse you for all qualified moving
expenses not to exceed $70,000 in conjunction with moving your primary residence
from Dallas, TX to Santa Barbara, CA.  In the event that you voluntarily
terminate your employment with the Company within the first year of employment,
you will be responsible to repay a pro-rated amount of the relocation expenses
paid to you up until that termination date.

 

 

 

 

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Background Reference Check:     This offer is contingent upon a background check
regarding confirmation of your references, employment, education, and (lack of)
criminal history.

 

 

 

 

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Benefits:     You and/or your family will be eligible for the Company’s benefit
plans (i.e. including but not necessarily limited to health and dental
insurance, 401(k) plan) to the extent that you meet the eligibility criteria of
these plans.  Similarly, you will also be eligible for the Company’s standard
vacation and sick leave policies.

 

 

 

 

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Confidential Information and Restrictive Covenants:     As an employee of the
Company, you will have access to confidential information.  Moreover, you may,
during the course of employment, develop certain information or inventions that
will be the property of the Company.  To protect the interests of the Company,
we will require you to sign, as a condition of your employment, the Company’s
Nondisclosure and Developments Agreement and Non-competition Agreement.  The
Company may also require you to sign an Arbitration Agreement.

 

 

 

 

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Not In Violation of Any Non-Competition Agreements:     By acceptance of this
offer of employment, you are assuring us that your employment with 724 Solutions
would not violate any non-competition, confidentiality or other obligations you
may have with any current and/or former employer.  You are also certifying that
you have provided us with copies of any non-competition, confidentiality or
other agreements that you signed in conjunction with any current and/or former
employment.  724 Solutions reserves the right to contact your former employers
if it has any concerns regarding any non-competitive, confidentiality or other
obligations that you may have.  724 Solutions also reserves the right to
withdraw this offer or terminate your employment if 724 Solutions determines, in
its sole discretion, that your employment with us may violate any continuing
obligations to a former employer.

 

 

 

 

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Employment at Will:     Please note that this letter and your response are not
meant to constitute a contract of employment for any specific period of time and
that you will remain, at all times, an employee at-will, which means that you
will not be obligated to remain at the Company for any specific period of time. 
Likewise, the Company is not obligated to employ you for any specific period of
time.

Elda Rudd/Page 3

 

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Termination without Cause:     If during the first two years of your employment
with the Company your employment is terminated without “cause”, as defined
herein, then upon execution of a general release of claims satisfactory to the
Company, the Company will provide you with the following severance benefits: 
six months of salary continuation at your then current rate of base salary, and
twelve months of employer-paid group health benefits on the same basis as active
employees.  If at any time while you are receiving severance benefits from 724
Solutions you commence employment elsewhere (to be determined in the discretion
of the Board of Directors) then your severance benefits as described above will
cease at that time.    Except as may be provided under this Agreement following
termination of your employment (i) any benefits to which you may be entitled
pursuant to the Company plans, policies and arrangements referred to above shall
be determined and paid in accordance with the terms of such plans, policies and
arrangements, and (ii) you shall have no right to receive any other
compensation, or to participate in any other plan, arrangement or benefit, with
respect to future periods after such termination.  For purposes of this document
“Termination without Cause” includes the Company decreasing your base salary to
an amount less than 95% of your starting annual base salary, $175,000, without
your approval, and/or significantly changing your position or the scope of your
responsibilities without your consent and approval.  Should you believe that the
scope of your responsibilities has changed significantly, you must document the
reasons you believe such in a written letter delivered to an Officer of 724
Solutions, and allow 724 Solutions to rectify such within 30 days.

 

 

 

 

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Definition of “Cause:     “Cause” shall mean: (i) the Executive’s death or her
permanent disability, which shall mean the Executive’s inability, as a result of
physical or mental incapacity, substantially to perform her duties hereunder for
a period of three (3) consecutive months; (ii) a material violation by the
Executive of any applicable material law or regulation respecting the business
of the Employer; (iii) the Executive being found guilty of criminal misconduct,
or (iv) the Executive perpetrating an act of dishonesty, , or (v) the
intentional negligent failure of the Executive to perform her duties hereunder
in any material respect.  The Executive shall be entitled to at least ten (10)
days’ prior written notice of the Employer’s intention to terminate her
employment for “Cause” (as defined herein) (except the Executive’s death or
conviction of a felony) specifying the grounds for such termination, and a
reasonable opportunity to cure any conduct or act, if curable, alleged as
grounds for such termination, and a reasonable opportunity to present to a
representative the Board her position regarding any dispute relating to the
existence of such cause.  In the event termination is based upon a claim of
physical or mental incapacity, and a dispute regarding the Executive’s
disability arises between the Executive and the Employer, each party shall
choose a physician who together will choose a third physician to make a final
determination.

Elda Rudd/Page 4

 

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Other:     This letter may not be changed or modified except by agreement in
writing, signed by you and the CEO or other appropriate designee of the Board of
Directors.  This agreement shall be governed, construed and enforced in
accordance with the laws of California without regard to principles of conflicts
of law.  Should any provision of this agreement, or portion thereof, be found
invalid and unenforceable, it shall be construed to be enforceable to the
greatest extent allowable under applicable law, and the remaining provisions
shall continue in force and effect.

 

 

 

 

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Terms of Offer:     This offer will remain open until the end of business on
October 28, 2002.  When you do accept, and all of us sincerely hope you will,
please sign the enclosed copy of this letter and return it via fax to me, with
the original to follow.

Elda, we are excited to have you join us and are enthused at the prospect of
tackling a very promising future together.  We look forward to a long and
mutually rewarding relationship.

Sincerely,

/s/ JOHN J. SIMS

 

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John J. Sims

 

Chief Executive Officer

 

Attachment

Agreed to, accepted and acknowledged:

/s/ ELDA RUDD

 

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Elda Rudd