EXHIBIT 99.10
April 11, 1997
Xxxxx Xxxxxxxxxxx
c/o Starwave Corporation
00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxx:
This letter confirms the terms of your employment by STARWAVE CORPORATION
(the "Employer").
1. TERM
Subject to your signing and delivering this letter agreement (the
"Agreement") to Employer and completion of the Disney Enterprises, Inc.
("Disney") investment in Starwave Corporation, the term of your employment
hereunder commences April 1, 1997, and expires on March 31, 1999 unless
earlier terminated as hereinafter provided (the "Employment Period").
2. SALARY
In full consideration for all rights and services provided by you
hereunder, you shall receive an annual salary of $125,000 for the first
twelve month period and $145,000 for the second twelve month period in the
Employment Period. Salary payments shall be made in equal installments in
accordance with Employer's then prevailing payroll policy.
3. BONUS
Bonus compensation, if any, shall be at the discretion of Employer.
4. STOCK OPTIONS
You acknowledge and agree that all stock options granted by Starwave
pursuant to the Revised 1992 Combined Incentive and Nonqualified Stock
Option Plan (the "Plan") shall continue to be governed in accordance with
the Plan, as amended or modified from time to time. You acknowledge
receipt of the Plan. Subject to Starwave Board of Director approval, you
shall be granted a non-qualified option to acquire 30,000 shares of
Employer's Class A Common Stock, exercisable at $9.07. Such shares shall
vest subject to the Plan and the Stock Option Agreement reflecting such
grant.
5. TITLE
You are being employed hereunder in the position of Vice-President,
Technical Operations.
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April 11, 1997
Page 2
6. DUTIES
You shall personally and diligently perform, on a full time and exclusive
basis, such services as Employer or any of its divisions may reasonably
require. You shall observe all reasonable rules and regulations adopted by
Employer in connection with the operation of its business and carry out to
the best of your ability all instructions of Employer. Your principal
place of business shall be in the greater Seattle, Washington area, but you
shall travel as reasonably required in connection with the performance of
your duties hereunder.
7. EXPENSES
To the extent you incur necessary and reasonable business expenses
(including, without limitation, travel and entertainment) in the course of
your employment, you shall be reimbursed for such expenses, subject to
Employer's then current policies regarding reimbursement of such business
expenses.
8. OTHER BENEFITS
You shall be entitled to those benefits that are standard for persons in
similar positions with Employer, consistent in the aggregate with
Employer's current practice subject to changes affecting all executives.
9. VACATIONS
You shall be entitled to three weeks paid vacation during each twelve month
period of this Agreement. Unused vacation time in any twelve month period
shall not be carried over to subsequent periods and you shall not be
entitled to payment in lieu of unused vacation time (except on termination
up to a maximum of three weeks of such unused time).
10. LIQUIDITY PROVISIONS; REPURCHASE RIGHT
In order to provide you with the opportunity to sell shares of Employer's
Class A Common Stock and/or Vested Options prior to the time (if at all)
that Employer makes an initial public offering of its Class A Common Stock
and to provide for the repurchase of your shares of Class A Common Stock
and/or Vested Options by and at the option of Employer or Disney or its
affiliates under certain circumstances, we have mutually agreed to the
following:
(a) INITIAL SALE OPPORTUNITY
Employer shall offer to purchase up to an aggregate of $4 million of
the Class A Common Stock and Vested Options (the "Eligible
Securities")
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April 11, 1997
Page 3
from employees of Employer who are employees on the Election Date
("Eligible Employees"). The Election Date shall be July 1, 1997. The
Closing Date for the sale shall be on or before August 1, 1997. You
shall have the right to sell up to twenty percent (20%) of the
Eligible Securities held by you (excluding any of the options granted
to you hereunder) at a purchase price equal to $8.21 per share minus
the exercise price of any vested option which is purchased pursuant to
such offer.
(b) TERMINATION ON IPO
The rights granted in this Section 10 shall terminate concurrently
with the closing of an initial public offering of Employer's Class A
Common Stock registered under the Securities Act of 1933, as amended.
(c) REPURCHASE BY DISNEY
In the event that either Disney elects to purchase all shares of
Common Stock owned by Xxxxx or his permitted transferees
(collectively, the "Xxxxx Shares") or Xxxxx elects to require Disney
to purchase the Xxxxx Shares (either an "Xxxxx Repurchase Event"),
Disney shall be required to purchase, and you shall be required to
sell, all Class A Common Stock owned by you at the same per share
price as the per share price offered to Xxxxx (less any applicable
option exercise price). If Xxxxx elects to receive shares of Disney
common stock (rather than cash) in an Xxxxx Repurchase Event, you
shall be entitled to elect to receive Disney common stock for your
Class A Common Stock, at the same per share price as the per share
price offered to Xxxxx. In the event an Xxxxx Repurchase Event does
not occur or fails to close, Disney shall be relieved of its
obligation to purchase and you shall be relieved of your obligation to
sell the Class A Common Stock. Disney shall deliver a notice to you
promptly upon the occurrence of an Xxxxx Repurchase Event providing a
ten (10) day period for you to exercise previously vested Options.
Upon the end of the ten (10) day period, your rights to shares of
Class A Common Stock issued upon exercise of options shall terminate
and be null and void, such shares of Class A Common Stock shall be
cancelled on the books and records of the Company and your sole right
with regard to such shares shall be the compensation provided for
below. Upon the end of the ten (10) day period, all remaining vested
and unvested options held by you shall terminate and become null and
void. Any provision in any stock option or other agreement between you
and Employer to the contrary is modified and amended hereby. Disney
shall, as compensation for any unvested Options, at its sole option
(I) make a cash payment to you for the fair market value of the
unvested options (which shall be the same per share price paid to
Xxxxx or his transferees in connection with such a repurchase event),
or (ii) recommend to the
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April 11, 1997
Page 4
Compensation Committee of Disney's Board that you receive options to
purchase Disney common stock (in accordance with the terms and
conditions of the then prevailing Disney stock option plan) in amounts
designed to provide the Optionee with equivalent value, as determined
by Disney in its reasonable discretion and the compensation committee
makes such grants. Any such determinations provided for in this clause
(e) shall be final and binding. Payment for any stock purchased
hereunder shall be made by Disney promptly following the closing of an
Xxxxx Repurchase Event. The Disney election provided above shall be
taken within sixty (60) days of the closing of an Xxxxx Repurchase
Event. If Disney elects to make a cash payment, such payment shall
occur promptly following the Disney election. If Disney elects to
provide options to purchase Disney common stock, such option grants
shall occur in the next regularly scheduled meeting of the
Compensation Committee, if possible, or the following regularly
scheduled meeting.
11. PROTECTION OF EMPLOYER'S INTERESTS
(a) During the term of your employment by Employer you shall not compete
in any manner, directly or indirectly, whether as a principal,
employee, agent or owner, with Employer, The Xxxx Disney Company or
any affiliate thereof, except that the foregoing will not prevent you
from holding at any time less than 5% of the outstanding capital stock
of any company whose stock is publicly traded.
(b) To the extent permitted by law, all rights worldwide with respect to
any and all intellectual or other property of any nature produced,
created or suggested by you during the term of your employment or
resulting from your services shall be deemed to be a work made for
hire and shall be the sole and exclusive property of Employer. You
agree to execute, acknowledge and deliver to employer at Employer's
request, such further documents as Employer finds appropriate to
evidence Employer's rights in such property. Any confidential and/or
proprietary information of Employer, or any affiliate thereof shall
not be used by you or disclosed or made available by you to any person
except as required in the course of your employment, and upon
expiration or earlier termination of the term of your employment, you
shall return to Employer all such information that exists in written
or other physical form (and all copies thereof) under your control.
Without limiting the generality of the foregoing, you acknowledge
signing and delivering to Employer, its standard confidentiality
agreements for employees and you agree that all terms and conditions
contained therein, and all of your obligations and commitments
provided for therein, shall be deemed, and hereby are, incorporated
into this Agreement as if set forth in full herein. The provisions of
this paragraph shall survive the expiration or earlier termination of
this Agreement.
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Xxxxx Xxxxxxxxxxx
April 11, 1997
Page 5
12. SERVICES UNIQUE
As partial consideration for the agreement of Employee contained in Section
17, you recognize that your services hereunder are of a special, unique,
unusual, extraordinary and intellectual character giving them a peculiar
value, the loss of which cannot be reasonably or adequately compensated for
in damages, and in the event of a breach of this Agreement by you
(particularly, but without limitation, with respect to the provisions
hereof relating to the exclusivity of your services and the provisions of
paragraph 10 hereof), Employer shall, in addition to all other remedies
available to it, be entitled to equitable relief by way of injunction and
any other legal or equitable remedies.
13. TERMINATION
(a) Employer may terminate your employment hereunder for negligence,
misconduct or breach of this Agreement or for other good cause. In
any such event, all obligations of Employer hereunder (except pursuant
to paragraph 10(c)) shall immediately terminate.
(b) In the event of your death during the term hereof, this Agreement
shall terminate and Employer shall only be obligated to pay your
estate or legal representative the salary provided for herein to the
extent earned by you prior to such event and to have all unvested
options vest as provided in your stock option agreement. In the event
you are unable to perform the services required of you hereunder as a
result of any disability and such disability continues for a period of
90 or more consecutive days or an aggregate of 120 or more days during
any 12-month period during the term hereof, then at any time
thereafter Employer shall have the right, at its option, to terminate
your employment hereunder. Unless and until so terminated, during any
period of disability during which you are unable to perform the
services required of you hereunder, your salary hereunder shall be
payable to the extent of, and subject to, Employer's policies and
practices then in effect with regard to sick leave and disability
benefits.
(c) You acknowledge that you have been provided by Employer with a copy of
Section 508 of the Federal Communications Act of 1934, as amended,
relating in part to receiving or paying consideration for product
identification in television programs, that you are familiar with the
provisions thereof and that you will fully comply therewith during the
term of this Agreement. Without limiting the foregoing, however, and
whether or not Section 508 is applicable to your activities, you agree
that you will not, without Employer's prior written consent, accept
any compensation or gift from any person, firm or corporation (other
than Employer) where such compensation or gift is, or may appear to
be, in consideration of your
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April 11, 1997
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acting in a particular manner in relation to the business of such
person, firm or corporation. Without limiting the generality of
paragraph 13(a) hereof, it is agreed that any violation of this
paragraph 13(c) shall constitute a violation of this Agreement upon
which Employer may forthwith terminate this Agreement pursuant to
paragraph 13(a) hereof.
14. USE OF EMPLOYEE'S NAME
Employer shall have the right but not the obligation to use your name or
approved likeness for any publicity or advertising purpose. Employer is
under no obligation to accord you credit for any production.
15. ASSIGNMENT
Employer may assign this Agreement or all or any part of its rights
hereunder to any entity that succeeds to a substantially portion of
Employer's assets or business, and this Agreement shall inure to the
benefit of such assignee.
16. NO CONFLICT WITH PRIOR AGREEMENTS
You represent to Employer that neither your commencement of employment
hereunder nor the performance of your duties hereunder conflicts with any
contractual commitment on your part to any third party or violates or
interferes with any rights of any third party.
17. POST-TERMINATION OBLIGATIONS
In consideration of the interim liquidity provided to Employee pursuant to
Section 10:
After the termination of your employment hereunder for any reason
whatsoever, you shall not either alone or jointly, with or on behalf of
others, either directly or indirectly, whether as principal, partner,
agent, shareholder, director, employee, consultant or otherwise, at any
time during a period of two years following such termination, offer
employment to, or solicit the employment or engagement of, or otherwise
entice away from the employment of Employer or any affiliated entity,
either for your own account or for any other person, firm or company, any
person who is employed by Employer or any such affiliated entity, whether
or not such person would commit any breach of his contract of employment by
reason of his leaving the service of Employer or any affiliated entity.
After termination of your employment hereunder for any reason, whatsoever,
you shall not either alone or jointly, with or on behalf of others, either
directly or indirectly, whether as principal, partner, agent, shareholder,
director, employee, consultant or otherwise, at any time during a period of
one year following such
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Xxxxx Xxxxxxxxxxx
April 11, 1997
Page 7
termination, provide services of any nature with respect to any business
that competes with the business of Employer as of the date of termination
in the geographic area in which Employer does business. For purposes of
this paragraph 17, Disney and its affiliates (other than Employer) shall
not be considered to be affiliated entities of Employer.
18. ENTIRE AGREEMENT; AMENDMENTS; WAIVER; ETC.
(a) This Agreement supersedes all prior or contemporaneous agreements and
statements, whether written or oral, concerning the terms of your
employment, and no amendment or modification of this Agreement shall
be binding against Employer unless set forth in a writing signed by
Employer and delivered to you. No waiver by either party of any
breach by the other party of any provision or condition of this
Agreement shall be deemed a waiver of any similar or dissimilar
provision or condition at the same or any prior or subsequent time.
(b) You have given no indication, representation or commitment of any
nature to any broker, finder, agent or other third party to the effect
that any fees or commissions of any nature are, or under any
circumstances might be, payable by Employer or any affiliate thereof
in connection with your employment hereunder.
(c) Nothing herein contained shall be construed so as to require the
commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any present or
future statue, law, ordinance or regulation, the latter shall prevail,
but in such event the provision of the Agreement affected shall be
curtailed and limited only to the extent necessary to bring it within
legal requirements.
(d) This Agreement does not constitute a commitment of Employer with
regard to your employment, express or implied, other than to the
extent expressly provided for herein. Upon termination of this
Agreement, it is the contemplation of both parties that your
employment with Employer shall cease, and that neither Employer nor
you shall have any obligation to the other with respect to continued
employment. In the event that your employment continues for any period
of time following the stated expiration dates of this Agreement,
unless and until agreed to in a new subscribed written document, such
employment or any continuation thereof is "at will," and may be
terminated without obligation at any time by either party's giving
written notice to the other.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington. In accordance with the
Immigration Reform and Control Act of 1986, employment hereunder is
conditioned
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April 11, 1997
Page 8
upon satisfactory proof of your identity and legal ability to work in
the United States.
(f) To the extent permitted by law, you will keep the terms of this
Agreement confidential, and you will not disclose any information
concerning this Agreement to anyone other than your immediate family
and professional representatives (provided they also agree to keep the
terms of this Agreement confidential).
(g) Disney and its affiliates are express beneficiaries of your agreements
and obligations hereunder and may enforce them to the same extent that
Employer may.
20. NOTICES
All notices that either party is required or may desire to give the other
shall be in writing and given either personally or by depositing the same
in the United States mail addressed to the party to be given notice as
follows:
To Employer: 00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxx
Either party may by written notice designate a different address for giving
of notices. The date of mailing of any such notices shall be deemed to be
the date on which such notice is given.
21. HEADINGS
The headings set forth herein are included solely for the purpose of
identification and shall not be used for the purpose of construing the
meaning of the provisions of this Agreement.
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Xxxxx Xxxxxxxxxxx
April 11, 1997
Page 9
If the foregoing accurately reflects our mutual agreement, please sign
where indicated.
STARWAVE CORPORATION
By: /s/ Xxxxxxx Xxxxx
---------------------------
Title: Chairman & CEO
EMPLOYEE
/s/ Xxxxx Xxxxxxxxxxx
--------------------------------
c/o Starwave Corporation
00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
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