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EXHIBIT 10.27
June 19, 2001
Greg Mrva
EVP, Corporate Business Development
HearMe
Dear Greg,
You are among a select group of executives who we believe are crucial to HearMe's transition over the next six months based on your relationships with customers, vendors and employees. The Compensation Committee of the Board of Directors has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of HearMe's executive team, including yourself, to their assigned duties without distraction in the face of potentially disruptive circumstances arising from the possibility of a change in control of the Company and/or the Company's dissolution.
If you remain employed with the Company and devote your full attention and time, during normal business hours, to the business and affairs of the Company, and use your best efforts to perform faithfully and efficiently such responsibilities for the next several months, the Company will do the following. ? Effective July 2, 2001, the Company will forgive $200,000 of the note you issued to HearMe in connection with your purchase of shares of HearMe common stock, and your shares repurchased by HearMe. The Company will pay normal payroll taxes associated with the loan forgiveness.
? In the event there is a change in control of the Company, you will be eligible to have $330,000 of the note you issued to HearMe in connection with your purchase of shares of HearMe common stock forgiven, and your shares repurchased by HearMe. The effective date would be the close of the sale of the Company. The Company will pay normal payroll taxes associated with the loan forgiveness.
? You will be eligible to have the remainder of the note you issued to HearMe in connection with your purchase of shares of HearMe common stock forgiven, and your shares repurchased by HearMe. To be eligible there must be a change in control of the Company and you must 1) remain an employee in good standing through the close date of a sale, 2) sign a non-compete agreement, and 3) provide three months of transition services to the acquiring company. You will be solely responsible for paying any normal payroll taxes associated with this forgiveness of debt.
? You have been granted an option to purchase 700,000 shares of HearMe common stock with an exercise price of $0.56 per share. This option was granted to you on May 30, 2001. All of these options (100%) will vest on the earlier date of the closing date of the sale of the Company, February 28, 2002, or the date Employee is terminated by the Company without Cause.
? You will be eligible for an extension of your exercise period for all vested options from the 90 days provided in your option agreement to one year following your termination of your employment if you remain an employee of HearMe in good standing until the earlier to occur of November 30, 2001, the closing date of the sale of the Company, or the date the Employee is terminated by the Company without cause.
The stock repurchase, options, and extension of your exercise period are based on the premise that you stay with HearMe and perform at or above the expectation level in your position.
This letter does not change the at-will nature of your employment relationship with HearMe. The specifics of the terms and conditions under which the benefits described above are being offered to you are described in more detail in the attached Exhibit A: HearMe, Change of Control/Retention Agreement. Please read and sign this Agreement.
Thank you for your continued support and hard work.
Sincerely,
Rob Csongor
Chief Executive Officer
Acknowledge receipt by signing below and returning original to John Alexander. Signature: Date:
Name:
Greg Mrva
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EXHIBIT A
HEARME
CHANGE OF CONTROL / RETENTION AGREEMENT
This Change of Control / Retention Agreement (the "Agreement") is made and entered into by and between Greg Mrva (the "Employee") and HearMe (the "Company"), effective as of the latest date set forth by the signatures of the parties hereto below (the "Effective Date").
RECITALS
A. It is expected that the Company from time to time will consider the possibility of an acquisition by another company or other change of control. Additionally, a number of activities will be required of the Employee that are outside the normal scope of his or her responsibility in the event that the Company elects to dissolve. The Board of Directors of the Company (the "Board") recognizes that such considerations can be a distraction to the Employee and can cause the Employee to consider alternative employment opportunities. The Board has determined that it is in the best interests of the Company and its stockholders and creditors to assure that the Company will have the continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or occurrence of a Change of Control (as defined below) of the Company and notwithstanding any increased duties required of him or her in the future.
B. The Board believes that it is in the best interests of the Company, its stockholders and its creditors to provide the Employee with an incentive to continue his/her employment and to motivate the Employee to maximize the value of the Company, for the benefit of its stockholders and/or creditors, despite the possibility of a Change of Control and/or dissolution.
C. The Board believes that it is necessary and appropriate to provide the Employee with certain benefits in order to provide the Employee with incentives and encouragement to remain with the Company notwithstanding the possibility of a Change of Control and/or dissolution.
D. Certain capitalized terms used in the Agreement are defined in Section 10 below.
The parties hereto agree as follows:
1. Term of Agreement. This Agreement shall terminate on the date that all obligations of the parties hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the Employee's employment is and shall continue to be at-will, as defined under applicable law. If the Employee's employment terminates for any reason, whether with or without Cause and with or without notice, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided by this Agreement, or as may otherwise be available in accordance with the Company's established employee plans or pursuant to other written agreements with the Company.
4. Stock Repurchase. In order to incent the Employee to remain employed with the Company for the next several months and provide added stockholder and creditor value during this difficult and uncertain business climate, the Company shall, at the request of the Employee, repurchase the shares of Common Stock purchased by the Employee pursuant to the stock option exercise(s) listed on Schedule 1 hereto for a purchase price equal to the fair market value of the Company's Common Stock as of the date of the repurchase. The purchase price for such repurchase will be paid by canceling a corresponding amount of the promissory note(s) dated January 25, 1999, issued by the Employee to the Company in payment of the exercise price for the shares purchased in connection with the option exercise(s) listed on Schedule 1 under (a). The Company also will forgive up to $200,000 of the excess of the outstanding balance of such promissory note(s) over the portion of such promissory note
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canceled in payment for the repurchased shares as provided in the preceding sentence (the "Loan Forgiveness"). As part of the Loan Forgiveness, accrued interest that resulted from the note for the repurchased shar ...
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