Amazon.com Inc plans to create at least US$100 million in stock awards to retain the 900-plus employees of Zoox, the self-driving vehicle start-up it offered to buy last month, and can walk away from the deal if large numbers of them turn down job offers from the technology giant.
Amazon, which is aggressively expanding into self-driving technology, announced on June 26 that it had agreed to acquire the Silicon Valley company, which was founded on an ambitious effort to design a fully autonomous vehicle from scratch rather than retrofitting existing vehicles for self-driving.
Amazon is to pay US$1.3 billion in cash for the takeover, which the parties hope to close by September, according to deal documents seen by Reuters.
Zoox had been valued at US$3.2 billion in 2018, according to data from PitchBook.
The Amazon deal documents show Zoox was burning more than US$30 million a month earlier this year and projected it would run out of cash by this month.
Amazon had the option to lend Zoox US$30 million on signing the agreement last month, with the option for further loans before the deal closes.
Amazon and Zoox did not respond to requests for comment.
Attempts to wrest Zoox or its talent away from Amazon started before the two even reached a definitive agreement.
After Zoox signed an exclusive agreement to negotiate with Amazon, but before they reached a deal, a third party stepped in to offer US$1.05 billion, according to the deal documents.
The offer came from Cruise, the self-driving company backed in part by General Motors Co, Honda Motor Co Ltd and Softbank Group Corp, two people with knowledge of the matter said.
Zoox did not respond to the offer.
Reuters on June 4 reported that the founder of Cruise approached Zoox engineers with job offers.
Technology news publication The Information on Tuesday last week reported that two senior Zoox engineers, James Philbin and Marc Wimmershoff, had joined Waymo, Alphabet Inc’s self-driving unit.
Philbin and Wimmershoff did not immediately respond to requests for comment.
The Amazon-Zoox deal documents describe two lists of “key employees.”
All on the first list must take Amazon jobs for the deal to close, while at least 19 from the second list must also stay. Amazon plans to offer jobs to three schedules of other Zoox employees, requiring that 90 percent of the first two and 88 percent of the third accept jobs to close the deal.
Reuters could not determine which employees were specified.
Zoox cofounder Jesse Levinson is to receive 40 percent of his deal compensation over three years rather than at the closing.
Levinson owns 49 million of the 131.4 million common shares of Zoox, about a 37 percent stake.
Zoox chief executive Aicha Evans got a US$3.4 million cash bonus, according to the documents.
The deal rewards Zoox “company service providers” who had joined by May 18 with a US$125 million cash “transaction bonus pool” paid out in proportion to their stakes.
Amazon provided 30 percent of the funding for the pool, on top of the US$100 million pool of Amazon restricted stock units it is to create for Zoox employees who stay with Amazon after the deal, according to the documents.
The rewards for Zoox employees who stay on — even those who joined recently — far outstrip those of longtime former employees with only common shares or those employees who leave before the deal closes.
The common shares are expected to be valued at US$0.69 to US$0.76 after the deal closes, according to the documents.
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