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Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into between MetaCreations Corporation, a
Delaware Corporation with its principal office at 0000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, XX 00000 ("MetaCreations"), Metastream Corporation, a Delaware
Corporation with its principal offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (collectively, "the Companies"), and Xxxxxx X. Xxxx ("Executive").
Whereas:
Executive has previously served as an officer of MetaCreations pursuant to an
employment agreement expired on December 30, 1999, and
The Companies desire to retain Executive's services as Chief Executive Officer
and President, and Executive desires to be retained by Company to provide such
services,
Now therefore the parties agree as follows:
1. Employment: Upon the terms and conditions hereof, Meastream and MetaCreations
hereby retain Executive as Chief Executive Officer and President, and Executive
agrees to so serve. Executive shall dedicate his full working time and attention
to his duties hereunder and shall perform such services at the Companies'
headquarters in New York City.
2. Term of Employment: Executive's employment hereunder shall commence on
January 1, 2000 and terminate on December 31, 2001, unless terminated earlier
pursuant to Section 2 hereof (the "Term of Employment").
3. Compensation and other benefits: The Companies shall pay the following
compensation, and provide the following benefits, to Executive during the Term
of Employment:
(a) Base Salary. Executive shall receive a base salary of $275,000 per
annum, payable in approximately equal installments in accordance with
the customary payroll practices of the Companies. If the rate of base
salary per annum paid to Executive is increased during the Term of
Employment, such increased rate shall thereafter constitute the Base
Salary for all purposes of this Agreement.
(b) Options. Executive shall be grated options to acquire 250,000 of
Metastream shares pursuant to the existing Metastream option plan. The
effective date of such grant shall be January 1, 2000 and the exercise
price therefore shall be at $3 per share. Such options shall be in
addition to those previously granted Executive in his capacity as
Founder to acquire 750,000 shares of Metastream stock at $1 per share,
which grant had an effective date of July 1, 1999.
(c) Life Insurance. During the Term of Employment, the Companies shall
reimburse Executive for the cost of acquiring a term life insurance
policy with a death benefit of $1,000,000 payable to members of
Executive's immediate family.
(d) Automobile. The Companies shall provide Executive with the use of a
vehicle, primarily for corporate purposes, throughout the Term of
Employment.
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(e) Benefit Plan; Vacation. Executive shall be entitled to participate in
all benefit plans maintained for employees of the Companies, and shall
be entitled to four weeks of paid vacation per annum.
4. Note, Options, and Special Bonus.
(a) Prior to the date hereof Executive has obtained a non-resource loan
from MetaCreations in a face amount of $1,000,000 secured solely by
options the Executive holds to acquire stock in MetaCreations (the
"Note"). Such Note and accrued interest thereon is due and payable on
December 31, 2002 and bears interest at the Applicable Federal Rate as
determined under the Internal Revenue Code.
(b) The parties hereby agree to amend and restate the Note and the
collateral agreements relating to such Note so that the Note is
further secured by the options he currently holds (including those
granted hereunder) to acquire stock in Metastream and so that:
(i) Executive is entitled to retain all of the proceeds from any sale
of MetaCreations or Metastream stock or options under the total
of such proceeds equal $2,000,000, and
(ii) On any subsequent disposition of MetaCreations or Metastream
stock or options, Executive shall remit 50% of the after tax
proceeds from such sales in repayment of the Note.
(c) If, during the Term of Employment, there occurs
(i) the acquisition of a majority of MetaCreations' stock by a third
party or any group acting in concert;
(ii) the sale of substantially all of MetaCreations' assets to a third
party or any group acting in concert;
(iii) a merger of MetaCreations with any other entity, including
Metastream, or
(iv) a secondary public offering of MetaCreations' stock
then MetaCreations shall cancel and forgive the Note and all accrued interest
thereon, and shall further make such payments to Executive as may be required so
that all of Executive's federal and state tax liabilities arising as a result of
the operation of this paragraph are fully payable from amounts received by
Executive pursuant to this paragraph (the amount of the loan and interest
forgiveness and other amounts due pursuant to this paragraph are collectively
hereinafter referred to as the "Special Bonus Amount").
(d) If, during the Term of Employment, Metastream engages in an initial
public offering of its stock, then Metastream shall make a bonus
payment to the Executive equal to the Special Bonus Amount.
5. Termination:
(a) For Cause. Either of the Companies may terminate Executive's
employment hereunder for Cause and, in such event, shall have no
further obligations to make any payments to Executive hereunder.
"Cause" means the willful and continuing refusal of Executive to
follow directives of the Companies' Boards of Directors, conduct that
is intentional and known by Executive to be harmful to the Companies
best interest, or the conviction of
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any felony or any crime involving dishonesty.
(b) Without Cause or for Good Reason. If the Companies terminate
Executive's employment hereunder without Cause, or Executive
terminates employment for Good Reason, then the Companies shall be
required to make any and all payments that would have been due
hereunder if such termination had not occurred, and all of Executive's
options to acquire stock in the Companies shall be fully and
immediately vested and exercisable. "Good Reason" shall mean any
breach by either of the Companies of their obligations hereunder,
including any effective diminution of Executive's duties.
6. Counterparts and Facsimile Signature. This agreement may be executed in
counterparts and by facsimile, and each counterpart or facsimile copy shall have
the force and effect of an original.
Agreed and Accepted.
Executive:
/s/XXXXXX XXXX
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Metastream:
/s/XXXXXX XXXXXX
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By: Xxxxxx Xxxxxx
Chairman of the Board and the Compensation Committee of Metastream
MetaCreations Corporation:
/s/XXX XXXXX
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By: Xxx Xxxxx
Member of the Board and of the Compensation Committee of MetaCreations
