Document:

FB-9.30.2014-Ex 10.1

Exhibit 10.1

October 6, 2014

Dear Jan:

On behalf of WhatsApp Inc. (the “Company” or “WhatsApp”), which will be a wholly-owned subsidiary of Facebook, Inc. (“Facebook”) following the closing of the Acquisition (as defined below), I am pleased to offer you full-time employment in the position of Chief Executive Officer of WhatsApp reporting to the Chief Executive Officer of Facebook, subject to the closing of the acquisition (the “Acquisition”) contemplated by that certain Agreement and Plan of Merger and Reorganization dated as of February 19, 2014, by and among Facebook, WhatsApp Inc. and the other parties thereto (the “Merger Agreement”).  As Chief Executive Officer of WhatsApp, you will continue to lead WhatsApp and make the strategic and operational decisions customary of a Chief Executive Officer, while consulting with the Chief Executive Officer of Facebook.  You shall be appointed to serve as a director of Facebook on Facebook’s Board of Directors (the “Board”) as of the closing of the Acquisition, and you hereby accept such appointment and agree to serve.  You will be working out of the Company’s Mountain View office.  Where the context requires, references to the “Company” or “WhatsApp” set forth in this letter refer to Rhodium Acquisition Sub II, Inc., which will be renamed “WhatsApp Inc.” following the closing of the Acquisition. 
1.    Compensation.
a.    Base Pay.  In this position, your base pay will be $1.00.
b.    Bonus.  In this position, you will not be eligible for a bonus under Facebook’s bonus plan.
2.    Employee Benefits.
a.    Paid Time Off.  Subject to Facebook’s PTO policy, you will be eligible to accrue up to twenty-one (21) days of PTO per calendar year, pro-rated for the remainder of this calendar year.
b.    Group Plans.  Facebook will provide you with the opportunity to participate in the standard benefits plans currently available to other similarly situated employees, including medical, dental, and vision, subject to any eligibility requirements imposed by such plans.
3.    Restricted Stock Units.
Pursuant to the terms of the Merger Agreement, and as a material inducement to your acceptance of our offer of employment, within two business days following the closing of the Acquisition you will be awarded 24,853,468 restricted stock units ("RSUs") subject to the terms of a non-shareholder approved equity incentive award issued in reliance on the “inducement exception” provided under Rule 5635(c)(4) of the NASDAQ Listing Rules in the form attached to this Offer 

Letter as Attachment C (the “Inducement Award”). Each RSU that is awarded to you will entitle you to receive one share of Facebook Class A common stock (the “Shares”) following vesting. Facebook will cause to be filed an immediately effective Registration Statement on Form S-8 to register the Shares underlying the Inducement Award within two business days following the closing of the Acquisition.
Unlike traditional stock options, you do not need to pay any exercise price for the shares of Facebook's stock subject to the RSUs; they are simply delivered to you as a component of your compensation if and when they vest.  The RSUs are subject to a four-year quarterly vesting schedule with a one-year “cliff.”  If you have been continuously employed by the Company through the one-year anniversary of your RSU start date as specified in your award agreement (your “Cliff Date”), you will be entitled to receive 20% of the Shares on your Cliff Date.  After the Cliff Date, on each subsequent Quarterly Vesting Date, you will vest in (a) with respect to the first eight (8) Quarterly Vesting Dates, 1/20th of the Shares, and (b) with respect to the last four (4) Quarterly Vesting Dates, 1/10th of the Shares, provided that you have been continuously employed by the Company through such date. 
Facebook has four Quarterly Vesting Dates each year: February 15th, May 15th, August 15th and November 15th.  Your RSU start date will be the first Quarterly Vesting Date following the closing date of the Acquisition.  For example, if the Acquisition closes on October 30th, your RSU start date will be November 15th.  Before any Shares are delivered to you following vesting, Facebook must satisfy its tax withholding obligations in a manner satisfactory to Facebook, which may include withholding a number of Shares with a fair market value equal to the amount Facebook is then required to withhold for taxes.  The RSUs shall be subject to the terms and conditions set forth in Schedule 5.12 of the Merger Agreement, the Inducement Award and Facebook’s policies in effect from time to time.  Capitalized terms set forth above will have the meanings set forth in the Inducement Award. 
Notwithstanding the foregoing, in the event that your employment with WhatsApp or Facebook is terminated by WhatsApp or Facebook without “Cause” (as defined in Schedule 5.12 of the Merger Agreement) or by you for “Good Reason” (as defined in Schedule 5.12 of the Merger Agreement) prior to the RSU start date or the vesting of some or all of the RSUs, all unvested RSUs that have been awarded to you will become vested as of the date of your termination of employment (it being understood that, for the avoidance of doubt, this sentence only applies to your grant of RSUs in connection with the transactions contemplated by the Merger Agreement).
4.    Pre-employment Conditions.
a.    Confidentiality Agreement.  By signing and agreeing to this Offer Letter, you also agree to be bound by the terms and conditions of the enclosed Confidential Information and Invention Assignment Agreement (the “Confidentiality Agreement”).  We require that you sign the Confidentiality Agreement and return it to us with this Offer Letter prior to or on your Start Date.
b.    Mutual Arbitration Agreement and Class Action Waiver.  By signing and agreeing to this Offer Letter, you agree to be bound by the terms and conditions of the enclosed Mutual Arbitration Agreement and Class Action Waiver (the “Arbitration Agreement”).  You attest and agree that you have reviewed the Arbitration Agreement and that you have had the opportunity to review the Arbitration Agreement with an attorney of your own choosing.  Your agreement to abide by the terms of the Arbitration Agreement is a condition of your employment with WhatsApp.  We require that you sign the Arbitration Agreement and return it to us with this Offer Letter prior to or on your Start Date.
c.    Right to Work.  For purposes of federal immigration law, you will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States.  Such documentation must be provided to us within three (3) business days of your Start Date, or our employment relationship with you may be terminated.
This offer is also contingent upon receipt of any export license or other approval that may be required under United States export control laws and regulations.  The Company is not obligated to apply for any export license or other approval that may be required, nor can we guarantee that the United States Government will issue an export license or other approval, in the event that we do file an application.

5.    No Conflicting Obligations.  You understand and agree that by accepting this offer of employment, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Company’s policies.  You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer (except WhatsApp) or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise.  The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties.  Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires.
6.    Outside Activities.  While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity without the written consent of the Company, except for civic and charitable business activities.  In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.
7.    General Obligations.  As an employee, you will be expected to adhere to the Company’s standards of professionalism, loyalty, integrity, honesty, reliability and respect for all.  You will also be expected to comply with the Company’s and Facebook’s policies and procedures.  The Company is an equal opportunity employer.
8.    At-Will Employment.  Employment with the Company is for no specific period of time.  Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time, with or without advance notice, and for any reason or no particular reason or cause.  Any contrary representations which may have been made to you are superseded by this offer.  This is the full and complete agreement between you and the Company on this term.  Subject to Section 3, although your compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by an authorized officer of the Company.
9.    Withholdings.  All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.

To indicate your acceptance of the Company’s offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated original copy of the Confidentiality Agreement and Arbitration Agreement.  Employment in this new position begins immediately following the closing of the Acquisition (the “Start Date”).  This letter, and the attachments thereto, supersede and replace any prior understandings or agreements, whether oral, written or implied, between you, the Company or Facebook regarding the matters described in this letter and the attachments thereto, including the Offer Letter between you and Facebook dated as of February 19, 2014.  For the avoidance of doubt, you acknowledge and agree that this letter shall not constitute a rescission that triggers rights to cash payments under Schedule 5.12 to the Merger Agreement.  This letter will be governed by the laws of the state in which you are employed, without regard to its conflict of laws provisions.
Very truly yours,

WhatsApp Inc.

/s/ Mark Zuckerberg
By: Mark Zuckerberg, on behalf of the Board of Directors

 
       

ACCEPTED AND AGREED:

Jan Koum

/s/ Jan Koum
Signature

October 6, 2014
Date

Attachment A:  Confidential Information and Invention Assignment Agreement
Attachment B:  Mutual Arbitration Agreement and Class Action Waiver
Attachment C:  Form of Inducement AwardExhibit 10.1

 

2014 SUPREME CASH AND EQUITY BONUS PLAN

 

SECTION 1.  DEFINITIONS: Terms capitalized in this 2014 Supreme Cash and Equity Bonus Plan (the “2014 Bonus Plan”), but not otherwise defined herein, shall have the meanings ascribed to such terms in the Supreme Industries, Inc. 2012 Long-Term Incentive Plan.

 

Award:  Shall mean after the Plan Year and all Performance Goal achievement is determined, the grant of equity and/or payment of cash pursuant to the terms of this 2014 Bonus Plan.

 

Cash Target Incentive: Shall mean a target dollar amount that a Participant will earn, payable in the form of cash, if all applicable Performance Goals for the Plan Year are achieved at the 100% level.  The target is set for each Participant in accord with their function within the Company.

 

Equity Target Incentive:  Shall mean a target dollar amount that a Participant will earn, payable in the form of equity, if all applicable Performance Goals for the Plan Year are achieved at the 100% level.  The target is set for each Participant in accord with their function within the Company.

 

Leadership Team: Shall mean the following individuals:

 

Mark Weber:                                                                        President and Chief Executive Officer

 

Matt Long:                                                                                  Chief Financial Officer

 

Mike Oium:                                                                               Vice President, Operations

 

John Dorbin:                                                                          Vice President and General Counsel

 

Brad Karch:                                                                            Vice President, Human Resources

 

Roman Jach:                                                                       Vice President, Engineering

 

Kerri Walker:                                                                       Vice President, Marketing

 

Mickey McKee:                                                        Vice President, Sales

 

Participant:  Shall mean the Leadership Team and any other employee of the Company designated as covered by this 2014 Bonus Plan by the CEO with the advice and consent of Supreme Industries, Inc.’s Management Committee.

 

Plan Year: Shall mean January 1, 2014 through December 31, 2014.

 

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Qualitative Performance Goals: Shall mean Performance Goals based on Qualitative Performance Measures.

 

Qualitative Performance Measures: Shall mean those objective and subjective factors which are selected by the Compensation Committee and which the Compensation Committee may, in its discretion, consider in determining each Participant’s Award.

 

Quantitative Performance Goals: Shall mean Performance Goals based on Quantitative Performance Measures.

 

Quantitative Performance Measures:  Shall mean those specific and objectively measurable financial metrics which are selected by the Compensation Committee.

 

Supreme or Company:  Shall mean Supreme Industries, Inc. or any subsidiary of Supreme Industries, Inc.

 

SECTION 2.  SUMMARY:  The 2014 Bonus Plan is intended to provide financial incentives to executive officers and key employees of Supreme Industries, Inc. and its subsidiaries through the use of “at risk” variable pay tied to specific performance incentives which will motivate their actions and behaviors in ways beneficial to the Company and its stockholders.  This 2014 Bonus Plan will offer Participants the opportunity to earn a bonus paid out in the form of cash, as well as a bonus paid out in the form of equity for the attainment of 2014 Bonus Plan incentives.

 

SECTION 3.  PHILOSOPHY: The Board believes that compensation of executive officers and key employees should be partially “at risk” and variable, based on performance against certain pre-established financial objectives and other goals that are important to the Company.  The 2014 Bonus Plan is intended to focus the efforts of the Participants on achieving those objectives in order to help ensure the sustained profitability, long-term growth, and continued wellbeing of the Company.  The Board believes that doing so aligns the interests of management with stockholders.

 

The 2014 Bonus Plan is structured to provide Participants with competitive cash and equity rewards for successful performance, which enables the Company to attract and retain critical management resources.

 

SECTION 4.  ADMINISTRATION:  Administration of this 2014 Bonus Plan shall be vested in the Compensation Committee.  The decisions of the Compensation Committee shall be final as to the interpretation of the 2014 Bonus Plan or any rule, procedure or action related thereto.  All Participants consent to the transfer and use of personal data by the Company and its agents in connection with the administration of this 2014 Bonus Plan.

 

SECTION 5.  ELIGIBILITY: Only Participants as defined above are eligible to participate in the 2014 Bonus Plan.

 

To receive an Award under the 2014 Bonus Plan, a Participant must be an active, full-time employee on the last business day of the Plan Year, except as provided herein.  An employee who is hired or promoted after the date of adoption of this 2014 Bonus Plan may be selected as a 

 

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Participant at such time, provided that any Award earned by such Participant shall be prorated to reflect that Participant’s actual time in service, except as otherwise provided by the Board pursuant to an employment agreement or similar document.

 

If a Participant dies or incurs a Total and Permanent Disability, an Award, prorated on the basis of Participant’s actual time in service with the Company during the Plan Year prior to death or Total and Permanent Disability, will be paid to the Participant or his or her beneficiary at the same time and in the same manner as Awards for the Plan Year are paid to the other Participants.  The Participant’s beneficiary under the 2014 Bonus Plan shall be the beneficiary designated for the Participant’s group life insurance plan.  If no such beneficiary has been designated, the Award will be paid to the Participant’s estate.

 

If a Participant terminates service due to Retirement prior to the last day of the Plan Year, an Award, prorated on the basis of Participant’s actual time in service with the Company during the Plan Year prior to Retirement, shall be paid to the Participant at the same time and in the same manner as Awards for the Plan Year are paid to other Participants.

 

If a Change In Control occurs prior to the last day of the Plan Year, the full value of the Award, payable based on the Cash Target Incentive or Equity Target Incentive, as applicable,  shall be paid to the Participant on or within 30 days of the Change In Control.

 

SECTION 6.  SETTING OF TARGET INCENTIVES, PERFORMANCE GOALS, AND CALCULATION OF AWARDS FOR THE LEADERSHIP TEAM:  Management has submitted recommendations for the 2014 Bonus Plan. The Compensation Committee has reviewed these proposal to determine whether management’s recommendations generally align with the compensation study and the Company’s 2014 budget and other factors.  The Compensation Committee determined that the procedures and goals outlined in this section were proper and suitable to meet the Company’s goals.

 

The determination of the Cash Target Incentive and Equity Target Incentive will be made by the Compensation Committee of the Board for each member of the Leadership Team.  Each member of the Leadership Team will have their Cash Target Incentive, Equity Target Incentive, personal goal(s) and maximum possible Award provided to them in writing separate from this 2014 Bonus Plan. At the time that an OTIP transaction appears more likely, equity grants may take into consideration the prospective value of each Participant’s OTIP percentage participation on a discounted basis. For 2014, it has been determined that the OTIP will not be taken into consideration with regard to any equity related grants.

 

All cash Awards and equity Awards will be based on quantitative and qualitative measures.

 

Quantitative Performance Goals will be weighted to account for 2/3rds of the Award determination and;

 

Qualitative Performance Goals will be weighted to account for 1/3rd of the Award determination.

 

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Quantitative Performance Goals for the Leadership Team in 2014 are as follows:

 

·                  Net sales growth of (Redacted)

·                  Pre-tax income to 2014 plan; and

·                  Primary working capital as a percentage of sales to 2014 plan.

 

As the company is divesting its bus division, net sales growth goal attainment shall be based on increases over the Company’s 2013 net sales growth adjusted to exclude the effects of the bus division.

 

Primary working capital is defined as accounts receivable plus inventory minus accounts payables (excludes prepaid expenses and accrued liabilities).

 

In determining the Quantitative component of the award, weighting of the above goals is 1/3 for each of the goals.

 

Qualitative Performance Goals for the Leadership Team in 2014:

 

·                  Full implementation of standard cost system and use of perpetual inventory accounting;

·                  Bills of Materials completed with standard labor hours assigned;

·                  Truck: July 31, 2014;

·                  SSV: September 30, 2014;

·                  Successful divestiture or liquidation of Supreme’s bus business; and

·                  Successful completion of three (3) personal goals.

 

In determining the qualitative component of the award, each of the above goals is weighted 1/3 each and the personal goal will be further subdivided into 1/3 for attainment of each personal goal.

 

Quantitative Performance Goal achievement will be determined by comparing the relevant 2014 Performance Goal with the Company’s actual performance for that financial metric during the Plan Year.  The threshold for each Quantitative Performance Goal is at least 80% of the goal set for 2014.  For each one percent increment (rounded to the nearest whole percentage) below the goal, achievement for a Performance Goal will decline by five percent (5%) until reaching the threshold, below which there will be no Award achievement attributable to that particular Performance Goal.

 

Participants may earn above target incentive Awards for above goal performance, up to a maximum Award of 125% of the target incentive.  The maximum performance cap is 125% for each Quantitative Performance Goal.  For each one percent increment (rounded to the nearest whole percentage) of above goal performance, achievement for a Performance Goal will increase by two percent (2%), up to the 125% cap.  This results in a maximum possible achievement of 125% of target incentive for Quantitative Performance Goals.

 

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Except with respect to the CEO, which will be determined by all independent members of the Board, Qualitative Performance Goal achievement for the Plan Year will be determined by the Compensation Committee, in its sole discretion. However, the Management Committee will present their recommendations to the Compensation Committee.

 

Once the Compensation Committee determines the level of achievement for each Performance Goal, the Compensation Committee will apply the weighting for each Performance Goal and apply the 2/3 Quantitative Measures and 1/3 Qualitative measures split.  That factor will be multiplied by each member of the Leadership Team’s Cash Target Incentive and Equity Target Incentive to arrive at the Participant’s cash Award and equity Award.

 

The Compensation Committee may, in its discretion, adjust the payout of an Award downward after consideration of other business factors, including overall performance of the Company and the individual’s contribution to Company performance. The Compensation Committee may reduce or entirely eliminate an Award in the event a Participant is on a performance improvement plan or otherwise demonstrates unsatisfactory performance or discipline during the Plan Year.  The Compensation Committee may adjust a payout of an Award in its discretion to prevent the enlargement or dilution of the Award because of extraordinary events or circumstances as determined by the Compensation Committee.

 

SECTION 7.  TARGET INCENTIVES, PERFORMANCE GOALS AND CALCULATION OF AWARDS FOR OTHER PARTICIPANTS:

 

Once the Leadership Team target incentives and goals are set, the CEO will then set target incentives and goals for all other Participants, utilizing the Quantitative Goals specified above, setting Qualitative Goals relating each individual’s job functions, and with weighting to be determined by the CEO.  Prior to advising the Participants of their participation in this 2014 Bonus Plan, the CEO will advise the Compensation Committee of its determinations.  Awards will be calculated in the same manner as specified above.

 

SECTION 8.  APPROVAL AND PAYMENT OF AWARDS:

 

Upon completion of the Plan Year, the Compensation Committee shall certify to what extent the Performance Goals were met and determine the Award payable to each Participant based on information supplied and certified by management.  Certification by the Compensation Committee shall be subject to completion of the annual audit and certification of overall Company results by the Company’s independent auditors and the CEO’s Award shall be subject to ratification by the independent members of the Board of Directors.  Payment of cash Awards shall be made in a lump sum payment in cash except to the extent of Participant’s elective contribution to any qualified deferred compensation plan. Payment of equity Awards shall be made in the form of a grant of restricted stock pursuant to the Supreme Industries, Inc. 2012 Long-Term Incentive Plan, which will vest over three years in equal increments, in accord with a form of agreement to be approved by the Compensation Committee.  To the extent Awards are subject to Section 409A of the Code, payments are intended to qualify as short-term deferrals under the regulations adopted under Section 409A of the Code.  Payment of cash Awards and determination and grant of equity Awards shall be made as soon as reasonably practicable in 2015, but no later than March 15, 2015.   The Company may deduct from any Award such amounts as may be required to be withheld under any federal, state or local tax laws.

 

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SECTION 9.  RECOUPMENT OF AWARDS:

 

If the Board learns of any intentional misconduct by a Participant which directly contributes to the Company having to restate all or a portion of its financial statements, the Board may, in its sole discretion, require the Participant to reimburse the Company for the difference between any Awards paid to the Participant based on achievement of financial results that were subsequently the subject of a restatement and the amount the Participant would have earned as awards under the 2014 Bonus Plan based on the financial results as restated.

 

SECTION 10.  NO CONTRACT:

 

The 2014 Bonus Plan is not and shall not be construed as an employment contract or as a promise or contract to pay Awards to Participants or their beneficiaries.  The 2014 Bonus Plan shall be approved by the Compensation Committee and may be amended from time to time by the Compensation Committee or terminated without notice.  No Participant or beneficiary may sell, assign, transfer, discount or pledge as collateral for a loan, or otherwise anticipate any right to payment of an Award under this 2014 Bonus Plan.

 

SECTION 11.  GOVERNING LAW

 

This 2014 Bonus Plan shall be governed by the laws of the State of Delaware.

 

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