Director Offer Letter between Alien Technology Corporation and Stan Meresman dated May 19, 2005
Alien Technology Corporation offers Stan Meresman a position on its Board of Directors, effective May 20, 2005. Upon acceptance, Mr. Meresman will receive an option to purchase 287,500 shares of company stock, vesting over three years, with accelerated vesting if a change of control occurs. He will also receive additional indemnification rights and reimbursement for reasonable travel expenses related to board meetings. Mr. Meresman is expected to serve as Chairperson of the Audit Committee and maintain confidentiality regarding the company’s proprietary information.
Exhibit 10.18
May 19, 2005
Stan Meresman
101 First Street, #755
Los Altos, CA 94022
Dear Mr. Meresman:
I am pleased to offer you a seat on the Alien Technology Corporation Board of Directors, effective May 20, 2005. With the hope and expectation that you will accept this offer, I have summarized a few related matters below for your reference.
First, should you accept this offer, Alien Technology Corporation (the Company) will, upon the effective date, grant you an option (the Option) to purchase up to 287,500 shares of the Companys Common Stock under the 1997 Stock Plan (the Plan) at an exercise price equal to the fair market value of the shares on the date of grant as determined under the Plan. The fair market value of the Common Stock is currently $1.50 per share. Subject to the terms of the Plan and related option agreement, the Option will vest as to 1/36th of the shares one month from the grant date (Vesting Commencement Date), and as to an additional 1 /36th of the shares each month thereafter until fully vested in three years.
In addition to the time-based vesting described in the preceding paragraph, if you are a Director of the Company on the date of a Change of Control (as defined below) that occurs before the three-year anniversary of the Vesting Commencement Date, then 100% of the Shares subject to the Option shall immediately vest as of the effective date of such Change of Control. Notwithstanding any accelerated vesting contained in this paragraph, your total number of Shares subject to the Option granted herein shall not increase by virtue of a Change of Control.
Change of Control means the occurrence of any of the following events (except in each case as a result of the sale by the Company of its securities for the purpose of raising additional funds):
(a) Any person or group as such terms are defined under Sections 13 and 14 of the Securities Exchange Act of 1934 (the Exchange Act) (other than the Company, a Subsidiary of the Company, or a Company employee benefit plan) which did not previously possess such securities becomes the beneficial owner (as defined in Exchange Act Rule 13d-3), directly or indirectly, of Company securities representing a majority of the combined voting power of the Companys then outstanding securities;
Letter to Stan Meresman
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May 18, 2005
(b) The closing of (i) the sale of all or substantially all of the assets of the Company if the holders of Company securities representing all voting power for the election of directors before the transaction hold less than a majority of the total voting power for the election of directors of all entities which acquire such assets, or (ii) the merger of the Company with or into another corporation if the holders of Company securities representing all voting power for the election of directors before the transaction hold less than a majority of the total voting power for the election of directors of the surviving entity; or
(c) The issuance of securities which would give a person or group beneficial ownership of Company securities representing 50% or more of all voting power for the election of directors; or
(d) Election of individuals representing a majority of the board of directors if those directors were nominated by a person or group and the incumbent board of directors publicly opposed the election of those directors.
Second, in addition to the indemnification rights you, in your capacity as a director of the Company, will be entitled to under the Companys Bylaws and Certificate of Incorporation, we propose to grant you the additional contractual indemnification and related rights provided in the enclosed Indemnification Agreement.
Third, the Company will reimburse you for reasonable travel expenses associated with your attendance at Board of Directors meetings. Activities in connection with your seat on the Board of Directors will include participation as the Chairperson of the Companys Audit Committee.
Finally, as you know, the Companys intellectual property and other proprietary information is one of our most important assets and we must all be vigilant in our protection of it. Although it goes without saying, I feel it is appropriate to remind all new directors of their fiduciary duties of loyalty and care to the Company. These include the duty to maintain the confidentiality of the Companys confidential and proprietary
Letter to Stan Meresman
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May 18, 2005
information and the duty to not use such information other than to promote the Companys best interests. I am sure that you can appreciate the importance of these matters to us.
Again, I am happy to extend this invitation to you. Your participation on our Board would be of great benefit to the Company.
Best Regards, |
/s/ Stavro Prodromou |
Stav Prodromou |
Chief Executive Officer |
Acknowledged and agreed: |
/s/ Stanley J. Meresman |
Stan Meresman |
May 20, 2005 |
Dated |