Offer Letter, dated as of February 8, 2021, by and between Desktop Metal and James Haley
February 8, 2021
This offer letter sets forth the revised terms of your employment with Desktop Metal, Inc. (the “Company”) effective February 12, 2021 (the “Effective Date”), and supersedes the terms of your prior offer letter dated August 3, 2020 (the “Prior Offer Letter”).
As of the Effective Date, you will serve as the Company’s Chief Financial Officer. Your base salary will be $393,000 annually (the “Annual Base Salary”) beginning on the Effective Date which will be paid semi- monthly in accordance with Desktop Metal’s standard payroll procedures. You will be eligible to participate in the Company’s annual bonus program with a target bonus opportunity equal to 50% of your Annual Base Salary. The actual annual bonus that you earn for any year under the Company’s annual bonus program will be determined by the Board of Directors of the Company (or its committee) and will be subject to your continued employment with the Company through the date of payment. You will be granted restricted stock units in connection with your promotion to Chief Financial Officer of 250,000 shares of the Company’s common stock (the “RSUs”) no later than the Effective Date. The RSUs will be in lieu of any other RSUs or other equity that the Company may have otherwise granted to you within eighteen (18) months following the Effective Date. For the purposes of clarity, this equity grant is in addition to the restricted stock units you currently have with the Company. This granting of 250,000 RSUs will vest over four years as to 25% of the RSUs on the first anniversary of the Effective Date and quarterly thereafter over the remaining three years, subject to your continued employment with the Company through the applicable vesting date, except as provided below.
In addition, on the Company’s first regular pay date that occurs within ten (10) days after the Effective Date, You will be paid a transaction bonus in the amount of $150,000 (reduced by such withholdings and deductions as required by law), as a transaction bonus related to the closing of Trine Transaction.
In the event your employment with the Company is terminated by the Company without Cause (as defined below) or you terminate your employment for Good Reason (as defined below) , then, subject to your execution and delivery to the Company of a formal separation agreement in a form provided by the Company (which will contain, among other terms, (i) a general release of claims against the Company, but that will not require you to release claims to vested equity including but not limited to the vested portion of the 250,000 shares stated above, your rights to severance under this offer letter, your vested benefits or your rights to indemnification and defense and (ii) non-competition obligations to last for a period of one year following your termination of employment that are substantially similar to the noncompetition obligations in your current Non-Competition and Non-Solicitation Agreement with the Company (“Separation Agreement”)) that becomes effective and irrevocable within sixty (60) days following such termination of employment and will be provided to you on or shortly following your day of termination, you will receive the following: (A) nine months of severance payments (“Severance Payments”) in the form of Annual Base Salary continuation at your then-current monthly rate after your termination from employment (the “Severance Period”); (B) to the extent such termination occurs on or prior to the eighteen month anniversary of the Effective Date, 50% of your then unvested RSUs and 50% of any other unvested time-based restricted stock units in the Company you hold will vest; and (C) if you are covered under the Company’s group health plan at the time of such termination or resignation and you timely elect to continue such coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will pay the employer's portion of the premium for health, dental and vision coverage for you and your covered dependents through the earlier of the end of the Severance Period and the date you and your covered dependents, if any, become eligible for coverage under another employer’s plan(s) (and you agree to promptly notify the Company of such eligibility). The Severance Payments will be payable in substantially equal installments in accordance with the Company’s standard payroll policies, less applicable withholdings, with such installments to commence on the first payroll date following the date the Separation Agreement becomes effective and irrevocable and with the first installment to include any amount that would have been paid had the Separation Agreement been effective and irrevocable on your termination date. For the avoidance of doubt, in no event will you be entitled to payment under the Non-Competition and Non- Solicitation Agreement with the Company if you receive severance under this offer letter.
Solely for the purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), each Severance Payment or other installment payment pursuant to this offer letter is considered a separate payment. Notwithstanding anything in this offer letter to the contrary, no amount deemed deferred compensation subject to Section 409A of the Code shall be payable pursuant to this letter unless your termination of employment constitutes a “separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”). Notwithstanding anything in this offer letter to the contrary, if at the time of your Separation from Service, you are considered a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that you become entitled to under this offer letter would be considered deferred compensation subject to interest, penalties and additional tax imposed pursuant to Section 409A of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the earlier of (i) six months and one day after the your date of termination, or (ii) your death. In that event, any installments that are required to be delayed for the six month period shall be accumulated during that period and paid in a lump sum on the earlier of the dates set forth in clauses (i) or (ii) of the previous sentence. The parties intend that this offer letter will be administered in accordance with Section 409A of the Code. To the extent that any provision of this offer letter is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this of may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party. To the extent that any reimbursements payable pursuant to this offer letter are subject to the provisions of Section 409A of the Code, any such reimbursements shall be paid to you no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and your right to reimbursement under this offer letter will not be subject to liquidation or exchange for another benefit.
For purposes of this offer letter, “Cause” shall mean your violation of a Company policy or rule; your breach, attempted breach, or violation of any non-competition or non-solicitation agreement you have with the Company; your willful failure to substantially perform your duties with the Company; your willful failure in any material respect to carry out or comply with any lawful and reasonable directive of the Board; your arrest for, conviction of, or plea of guilty, nolo contendere, or no contest to any felony or a misdemeanor involving moral turpitude, material deceit, , or fraud; ; your gross negligence, willful misconduct; or other conduct by you that could be materially harmful to the business, interests or reputation of the Company. For purposes of this offer letter, “Good Reason” shall mean (i) the Company relocates you or requires you to be based, in either case, more than 35 miles from the
Company’s current Burlington, MA location, (ii) your job responsibilities are materially reduced, or (iii) your base salary is materially reduced; provided, that, in the case of any of the foregoing, the condition that constitutes Good Reason continues beyond thirty (30) days after you have provided the Company written notice that you believe in good faith that such condition giving rise to such claim of Good Reason has occurred, so long as such notice is provided within ninety (90) days after the initial existence of such condition and you leave employment within 30 days after you provided the Company written notice of the Good Reason and it failed to cure same.
In addition, if, within six (6) months following the date of any Change of Control (as defined in the Company’s 2020 Incentive Award Plan) you are terminated without Cause, or you resign for Good Reason, your remaining unvested equity incentive awards will vest immediately prior to such termination or resignation, subject to your execution of the Separation Agreement.
Additional Information relevant to the position:
We have a flexible vacation policy. We expect employees to coordinate with their team and manager as to when is the best time to take vacation.
Health, Vision, and Dental insurance / FSA
Short Term and Long Term Disability Insurance, and Life Insurance (100% of annual earnings).
We offer a 401k retirement savings plan through Fidelity Investments.
You are eligible to receive any unpaid portions of the Trine Transaction
$40K bonus previously approved,
The Invention and Non-Disclosure Agreement and a Non-Competition and Non- Solicitation Agreement you previously executed in August of 2020 (“Non-Compete Agreement”) remain in full force and effect. You represent that you are not bound by any employment contract, restrictive covenant or other restriction preventing you from continuing employment with or carrying out your responsibilities for the Company, or which is in any way inconsistent with the terms of this offer letter.
The terms of the Indemnification Agreement between the parties shall remain in full force and effect.
This offer letter, the Invention and Non-Disclosure Agreement you previously executed on August 3, 2020, the Non-Competition and Non- Solicitation Agreement , your RSU agreements and the Company’s equity plans constitute the full and entire understanding and agreement between you and the Company with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof, including the Prior Offer Letter, are expressly canceled. Upon the execution and delivery of this offer letter, the Prior Offer Letter is of no further force and effect. This offer letter is binding on the Company’s successors and assigns.
Desktop Metal reserves the right to conduct background investigations and/or reference checks on all of its potential employees. We look forward to a beneficial and productive relationship. Nevertheless, you should be aware that your employment with the Company is for no specified period and constitutes at will employment. As a result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without Cause, and with or without notice. We request that, in the event of without Good Reason resignation, you give the Company at least two weeks’ notice.
To accept the revised employment terms described in this offer, please sign the enclosed copy of this offer letter and return it to me. We are confident you will be able to make a significant contribution to the success of our company and look forward to working with you to build an industry leading company.
/s/ Ric Fulop
Chief Executive Officer
I accept the offer as outlined above.