Letter Agreement Regarding Interest-Free Loan Between Larscom and Joseph A. Pendergast
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This agreement is between Larscom and Joseph A. Pendergast regarding repayment of an interest-free loan originally totaling $80,000. After accounting for partial loan forgiveness based on Pendergast's employment duration, he owes a remaining balance of $51,666.67, which must be repaid within six months of his employment termination, by September 22, 2002. The agreement also states that the prevailing party in any litigation over the loan may recover legal fees. Larscom will report the forgiven loan amounts as income on Pendergast's W-2 forms and handle related tax withholdings.
EX-10.3 5 dex103.htm LETTER AGREEMENT REGARDING INTEREST-FREE LOAN Prepared by R.R. Donnelley Financial -- Letter Agreement Regarding Interest-Free Loan
EXHIBIT 10.3
March 20, 2002
Mr. Joseph A. Pendergast
330 McCloud Place
Danville, California 94526
Re: Interest-Free Loan Obligation
Dear Joe:
I have calculated the obligation that remains between Larscom and you as explained below:
| Original loan amount: | $80,000.00 | |
| Forgiveness (amortization) period: | 48 months | |
| Employment start date: | October 2, 2000 | |
| Employment termination date: | February 22, 2002 | |
| Months of employment: | 17 | |
| Remaining months on loan: | 31 | |
| Loan amount forgiven (17/48x $80,000): | $28,333.33 | |
| Loan balance owed Larscom: | $51,666.67 |
As we agreed, before you left Larscom’s employment, the loan balance owed Larscom ($51,667.67) is to be repaid in full by no later than 6 months from your termination, which would be by September 22, 2002. Also, as we agreed, if there is any litigation about the loan, the prevailing party is entitled to recover its reasonable attorneys fees and costs from the other party, in addition to all other allowable remedies.
Larscom has reported 15 months of “loan forgiveness” on your W-2s for the years 2000 and 2001 and “grossed up” your income accordingly. Larscom will report the remaining 2 months of “loan forgiveness” for completion of your employment during 2002. Larscom will report this amount in your 2002 W-2 and “gross it up” at a 40% rate to help provide for your taxes on this portion of your income; i.e., we will retain the 40% in its entirety for the required withholding amounts for the 2 months of forgiveness and for the gross-up amount itself.
Sincerely,
/s/ Daniel L. Scharre
Daniel L. Scharre
President and Chief Executive Officer
Ag | reed: |
/s/ | Joseph A. Pendergast |
Jos | eph A. Pendergast |
