EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of January 12, 1999, by and between XXXXX
XXXXXXX (the "Executive") and iBEAM BROADCASTING CORPORATION, a Delaware
corporation (the "Company").
1. Duties and Scope of Employment.
(a) Position. For the term of his employment under this Agreement
("Employment"), the Company agrees to employ the Executive in the position of
Chief Executive Officer. The Executive shall report to the Company's Board of
Directors (the "Board").
(b) Obligations to the Company. During the term of his Employment,
the Executive shall devote his full business efforts and time to the Company.
During the term of his Employment, without the prior written approval of the
Company's Board of Directors, the Executive shall not render services in any
capacity to any other person or entity and shall not act as a sole proprietor or
partner of any other person or entity or as a shareholder owning more than five
percent of the stock of any other corporation, except as disclosed in writing to
the Company on the date hereof. However, it is understood that the Executive
will continue to serve in a non-executive capacity as a managing member of
Westwind Communications, LLC. The Executive shall comply with the Company's
policies and rules, as they may be in effect from time to time during the term
of his Employment.
(c) No Conflicting Obligations. The Executive represents and warrants
to the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his obligations under this
Agreement. The Executive represents and warrants that he will not use or
disclose to the Company, in connection with his Employment by the Company, any
trade secrets or other proprietary information or intellectual property in which
the Executive or any other person has any right, title or interest which he is
not authorized to disclose. The Executive represents and warrants that his
Employment by the Company as contemplated by this Agreement will not infringe or
violate the rights of any other person, pursuant to any offer letter, employment
agreement, severance agreement, confidentiality agreement or proprietary
information and inventions agreement or similar contract binding on the
Executive.
(d) Commencement Date. The Executive shall commence part-time
Employment on January 12, 1999 and full-time employment on March 1, 1999.
2. Cash and Incentive Compensation.
(a) Salary. The Company shall pay the Executive as compensation for
his services a base salary at a gross annual rate of not less than $300,000.
Such salary shall be payable in accordance with the Company's standard payroll
procedures. (The annual compensation specified in this Subsection (a), together
with any increases in such compensation that the Company may grant from time to
time, is referred to in this Agreement as "Base Compensation").
(b) Incentive Bonuses. The Executive shall be eligible for an annual
incentive bonus equal to $200,000 ("Bonus"). Such Bonus for 1999 (if any) shall
be awarded based on the Executive's completion of the following milestones: (i)
a bonus of $100,000 shall be paid to the Executive as soon as practicable
following the closing of a capital-raising financing for the Company (subsequent
to the Series C round of financing) in an amount equal to at least $20,000,000;
and (ii) a bonus of $25,000 shall be paid to the Executive at the close of each
of four fiscal quarters, beginning March 31, 1999, upon the achievement of
objective or subjective criteria to be agreed upon in advance with the Board. In
subsequent years, during his Employment, the Bonus shall be payable quarterly,
based on achievement of criteria to be agreed upon in advance with the Board.
The determinations of the Board with respect to such Bonus shall be final and
binding.
(c) Relocation. The Company shall pay for a reasonable number of
round trips for the Executive and the Executive's spouse to travel between
Wisconsin and the Bay Area to facilitate the Executive's search for a home and a
reasonable number of round trips for the Executive to visit his family in
Wisconsin until the Executive's family moves to the Bay Area. The Company shall
pay for temporary housing and living expenses in the Bay Area until the earlier
of September 1, 1999 or the date the Executive occupies a home in the Bay Area.
The Company shall also reimburse the Executive for the closing costs and 50% of
the real estate agent fees incurred in the sale of the Executive's home is
Wisconsin, with such reimbursement to not exceed $100,000. The Company shall
reimburse the reasonable expenses, estimated at $20,000, that the Executive
incurs in moving himself, his family and his household from Wisconsin to the Bay
Area.
(d) Stock Options. Subject to the approval of the Board, the Company
shall grant the Executive an incentive stock option ("Option") covering 480,000
shares of the Company's Common Stock. The exercise price of such Option shall be
equal to the fair market value of such stock on the later of (i) the date of
grant or (ii) the first day of the Executive's Employment. The current fair
market value per share of Common Stock is $0.165. The term of such Option shall
be 10 years, subject to the earlier expiration in the event of the termination
of the Executive's Employment. Such Option shall be immediately exercisable, but
the purchased shares shall be subject to repurchase by the Company at the
exercise price in the event that the Executive's Employment terminates before he
vests in the shares. The Executive shall vest in 25% of the Option shares after
the first 12 months of continuous service and shall vest in the remaining Option
shares in equal monthly installments over the next three years of continuous
service. Subject to Subsections 7(a) and 7(b)(ii) below, the grant of such
Option shall be subject to the other terms and conditions set forth in the
Company's 1998 Stock Plan and in the Company's standard form of stock option
agreement.
(e) Series C Stock. The Executive shall have the right to purchase up
to 80,000 shares of the Company's Series C Preferred Stock at a purchase price
per share equal to the price to be paid by the other Series C investors. These
shares shall be purchased on terms substantially similar to the terms applicable
to the other investors in the Series C financing and these shares shall be fully
vested.
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3. Vacation and Employee Benefits. During the term of his Employment, the
Executive shall be eligible for paid vacation sin accordance with the Company's
standard policy for similarly situated employees, as it may be amended from time
to time. During the term of his Employment, the Executive shall be eligible to
participate in any employee benefit plans maintained by the Company for
similarly situated employees, subject in each case to the generally applicable
terms and conditions of the plan in question and to the determinations of any
person or committee administering such plan.
4. Business Expenses. During the term of his Employment, the Executive
shall be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
shall reimburse the Executive for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.
5. Term of Employment.
(a) Basic Rule. The Company agrees to continue the Executive's
Employment, and the Executive agrees to remain in Employment with the Company,
from the commencement date set forth in Section 1(d) until the date when the
Executive's Employment terminates pursuant to Subsection (b) below. The
Executive's Employment with the Company shall be "at will." Any contrary
representations which may have been made to the Executive shall be superseded by
this Agreement. This Agreement shall constitute the full and complete agreement
between the Executive and the Company on the "at will" nature of the Executive's
Employment. Although the Executive's job duties, title, compensation and
benefits, as well as the Company's personnel policies and procedures, may change
from time to time, the "at will" nature of the Executive's Employment may only
be changed in an express written agreement signed by the Executive and a duly
authorized officer of the Company.
(b) Termination. The Company may terminate the Executive's Employment
and the Executive may terminate his Employment for any reason by giving each
other 14 days' advance notice in writing. The Executive's Employment shall
terminate automatically in the event of his death.
(c) Rights Upon Termination. Except as expressly provided in Section
6 or 7, upon the termination of the Executive's Employment pursuant to this
Section 5, the Executive shall only be entitled to the compensation, benefits
and reimbursements described in Sections 2, 3 and 4 for the period preceding the
effective date of the termination. The payments under this Agreement shall fully
discharge all responsibilities of the Company to the Executive.
(d) Termination of Agreement. This Agreement shall terminate when all
obligations of the parties hereunder have been satisfied. The termination of
this Agreement shall not limit or otherwise affect any of the Executive's
obligations under Section 8.
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6. Termination of Benefits.
(a) General Release. Any other provision of this Agreement
notwithstanding, Subsection (b) below shall not apply unless the Executive (i)
has executed a general release (in a form prescribed by the Company) of all
known and unknown claims that he may then have against the Company or persons
affiliated with the Company and (ii) has agreed not to prosecute any legal
action or other proceeding based upon any of such claims. The general release
shall also provide for a non-defamation provision that precludes the Executive
and the Company from defaming each other.
(b) Severance Benefits. If, during the term of this Agreement, the
Employee experiences an Involuntary Termination (as defined in Subsection 6(c)),
then the Executive shall receive twelve (12) months of Base Compensation that
will be paid in accordance with the Company's standard payroll procedure over a
twelve-month period, and the Company shall pay the Executive's monthly premium
under COBRA (if the Executive elects COBRA) until the earliest of (a) the date
that is twelve (12) months following the Involuntary Termination, (b) the
expiration of the Executive's continuation of coverage under COBRA or (c) the
date when the Executive receives health insurance coverage in connection with
new employment or self-employment; provided that if the Executive receives
severance benefits under Section 7, he shall not b eligible to receive benefits
under this Subsection 6(b).
(c) Definition of "Involuntary Termination." For all purposes under
this Agreement, "Involuntary Termination" shall mean the termination of the
service of the Executive which occurs by reason of:
(i) Such Executive's involuntary dismissal or discharge by the
Company for reasons other than Cause, or
(ii) Such Executive's voluntary resignation following (A) a
change in his position with the Company which materially reduces his level of
responsibility, (B) a reduction in his level of compensation, including base
salary and participation in corporate-performance based bonus or incentive
programs (except for across-the-board reductions in the compensation of
officers) or (C) a relocation of such Executive's place of employment by more
than fifty (50) miles, provided and only if such change, reduction or relocation
is effected by the Company without the Executive's consent.
(d) Definition of "Clause." For all purposes under this Agreement,
"Cause" shall mean:
(i) Unauthorized use or disclosure of the confidential
information or trade secrets of the Company;
(ii) Any material breach of this Agreement, the Proprietary
Information and Inventions Agreement between the Executive and the Company, or
any other agreement between the Executive and the Company;
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(iii) Conviction of, or plea of "guilty" or "no contest" to, a
felony under the laws of the United States or any state thereof;
(iv) Misappropriation of the assets of the Company or other
acts of dishonesty, which have a material adverse effect on the Company or its
assets;
(v) Willful misconduct or gross negligence in the performance
of duties assigned to the Executive under this Agreement;
(vi) Failure to perform reasonable duties assigned to the
Executive under this Agreement for a period of 30 continuous days following the
receipt of written notice of such failure to perform from the Board; or
(vii) Failure to comply with the Company's policies or rules, as
they may be in effect from time to time during the term of the Executive's
Employment for a period of 30 continuous days following the receipt of written
notice of such failure to comply from the Board.
The foregoing shall not be deemed an exclusive list of all acts or omissions
that the Company may consider as grounds for the termination of the Executive's
Employment.
7. Change in Control.
In the event of a Change in Control (as defined in the Company's 1998 Stock
Plan), the Executive shall agree to continue service with the Company and/or its
successor corporation for a period not exceeding six (6) months if such service
is requested by the Company and/or its successor corporation ("Transition
Period"). The Transition Period may be longer than six (6) months, upon the
mutual agreement of the Executive and the Company. During the Transition Period,
the Executive shall be paid his Base Compensation plus an amount equal to a pro
rata portion of his target bonus for the year in which the Change in Control
occurs. In addition, the Executive shall continue to vest in the Option shares
during the Transition Period. Upon the Executive's completion of the Transition
Period or in the event that the Company and/or its successor corporation does
not request the Executive to continue service during a Transition Period, then
the Executive shall receive a lump sum amount equal to six (6) months of Base
Compensation plus an amount equal to a pro rata portion of his target bonus for
the year in which the Change in Control occurs, and the Executive shall become
vested in an additional number of unvested Option shares, as if he performed an
additional six (6) months of service. This vesting acceleration provision shall
become effective six (6) months from the date of Option grant. In the event that
the Executive declines the Company's and/or its successor corporation's request
to continue service with the Company, then the Executive shall not be eligible
to receive any benefits under Subsection 6(b) or this Subsection 7; provided,
however, if the Executive's refusal to continue service constitutes an
Involuntary Termination, then the Executive shall be eligible to receive the
benefits described in Subsection 6(b).
8. Non-Solicitation and Non-Disclosure.
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(a) Non-Solicitation. During the period commencing on the date of
this Agreement and continuing until the first anniversary of the date when the
Executive's Employment terminated for any reason, the Executive shall not
directly or indirectly, personally or through others, solicit or attempt to
solicit (on the Executive's own behalf or on behalf of any other person or
entity) either (i) the employment of any employee of the Company or any of the
Company's affiliates or (ii) the business of any customer of the Company or any
of the Company's affiliates with whom the Executive had contact during his
Employment.
(b) Non-Disclosure. The Executive has entered into a Proprietary
Information and Inventions Agreement with the Company, which is incorporated
herein by reference.
9. Successors.
(a) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) Executive's Successor. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
10. Miscellaneous Provisions.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Executive, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.
(b) Modifications and Waivers. No provision of this Agreement shall
be modified, waived or discharged unless the modification, waiver or discharge
is agreed to in writing and signed by the Executive and by an authorized officer
of the Company (other than the Executive). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.
(c) Whole Agreement. No other agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement and the
Proprietary Information and Inventions Agreement contain the entire
understanding of the parties with respect to the subject matter hereof.
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(d) Withholding Taxes. All payments made under this Agreement shall
be subject to reduction to reflect taxes or other charges required to be
withheld by law.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (except their provisions governing the choice of law).
(f) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
(g) No Assignment. This Agreement and all rights and obligations of
the Executive hereunder are personal to the Executive and may not be transferred
or assigned by the Executive at any time. The Company may assign its rights
under this Agreement to any entity that assumes the Company's obligations
hereunder in connection with any sale or transfer of all or a substantial
portion of the Company's assets to such entity.
(h) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.
/s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
iBEAM BROADCASTING CORPORATION
By: /s/ [illegible]
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Title: President
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