EXHIBIT 10.03
AMENDMENT TO OFFER LETTER
This Amendment to Offer Letter ("Amendment") is entered into as of May
1, 2001 between Xxxxxxxx.xxx, Inc., a Delaware corporation with its principal
offices located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Company"), and Xxxxxxx X. Xxxxx, a resident of California ("Employee"), and
amends that certain Offer Letter dated February 15, 2000 between the Company and
Employee ("Offer Letter").
RECITALS
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A. Since the date of the Offer Letter, Employee has served as an
officer and key employee of the Company and has been actively involved in the
management of the Company's business.
B. The Company and Employee desire to enter into this Amendment to
provide Employee with appropriate incentives to continue his employment with and
service to the Company.
NOW, THEREFORE, in consideration of the foregoing facts and the mutual
agreements of the parties contained herein, the parties agree as follows:
1. Termination Without Cause or for Good Reason. In the event that
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the Company or any successor to the Company shall at any time terminate
Employee's employment with the Company or any such successor without Cause (as
defined below), or in the event that Employee terminates his employment with the
Company (or any successor) at any time for Good Reason (as defined below),
including, in each case, without limitation, any termination of Employee's
employment without Cause or for Good Reason in connection with and upon or after
the liquidation of substantially all of the Company's assets or the dissolution
of the Company, then, in lieu of any cash payable upon such termination under
the Offer Letter (including the six months cash severance provided for under the
Offer Letter), but in addition to any other compensation and/or benefits payable
to Employee under the Offer Letter or otherwise, the Company shall pay to
Employee a one-time, lump sum equal to six (6) months of Employee's then-current
salary, less applicable withholding taxes. The Company and Employee agree that,
in view of the nature of the issues likely to arise in the event of such a
termination, it would be impracticable or extremely difficult to fix the actual
damages resulting from such termination and proving actual damages, causation
and foreseeability in the case of such termination would be costly, inconvenient
and difficult. In requiring the Company to make the payment set forth herein, it
is the intent of the parties to provide, as of the date of this Amendment, for a
liquidated amount of damages to be paid by the Company to Employee. Such
liquidated amount shall be deemed full and adequate damages for such termination
and is not intended by either party to be a penalty.
2. Definitions.
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a) "Cause" means: (i) gross negligence or willful misconduct in
the performance of Employee's duties to the Company or any successor thereof
(other than as a result of a disability) that has resulted or is likely to
result in substantial and material damage to the Company or any such successor,
after a written demand for substantial performance is delivered to Employee by
the board of directors which specifically identifies the manner in
which the board believes Employee has not substantially performed his duties and
Employee has been provided with a reasonable opportunity to cure any alleged
gross negligence or willful misconduct; (ii) Employee's repeated failure to
perform his duties to the Company or any successor thereof as requested in
writing by the Chief Executive Officer or the board of directors (other than as
a result of a disability); (iii) commission of any act of fraud with respect to
the Company or any successor thereof; or (iv) conviction of a felony or a crime
causing material harm to the business and affairs of the Company or any
successor thereof. No act or failure to act by Employee shall be considered
"willful" if done or omitted in good faith with reasonable belief that such
action or omission was in the best interests of the Company.
b) "Good Reason" means the occurrence of any of the following events
without Employee's prior written consent: (i) a reduction in Employee's base
salary; (ii) a material adverse change in Employee's title; (iii) a material
adverse change in Employee's responsibilities or authority; (iv) a material
reduction in Employee's benefits other than a reduction in employee benefits
which applies to all of the Company's employees of comparable position and
experience; or (v) a relocation of Employee's place of employment outside of the
seven (7) San Francisco Bay area counties; or (vi) the Company's failure to
obtain the assumption of this agreement by any successor to the Company or
substantially all of its business.
3. Effect of Amendment. Except as set forth herein, the Offer Letter
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remains in full force and effect. This Amendment may be amended, modified,
superseded, cancelled, renewed or extended only by an agreement in writing
executed by both parties hereto.
4. Binding Nature. This Amendment shall be binding upon, and inure to the
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benefit of, the successors and personal representatives of the respective
parties hereto.
5. Counterparts. This Amendment may be executed in two or more
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counterparts, each of which shall be deemed to be an original but all of which,
taken together, constitute one and the same agreement.
6. Governing Law. This Amendment and the rights and obligations of the
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parties hereto shall be construed in accordance with the laws of the State of
California, without giving effect to the principles of conflict of laws.
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IN WITNESS WHEREOF, the Company and Employee have executed this Amendment
as of the date first above written.
COMPANY: EMPLOYEE:
XXXXXXXX.XXX, INC. XXXXXXX X. XXXXX
By: /s/ Xxxx X. Xxxx /s/ Xxxxxxx X. Xxxxx
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Name: Xxxx X. Xxxx
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Title: President and CEO
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Xxxxxxxx.xxx
February 15, 2000
Xxxx Xxxxx
00 Xxxxxxx Xxx.
Xxxx, XX 00000-0000
Dear Xxxx:
On behalf of the Board of Directors of Xxxxxxxx.xxx ("Snowball"), we would
like to offer you the position of President of the Networks, reporting directly
to the Chief Executive Officer, subject to the following terms and conditions:
1. Compensation. Your base salary will be $225,000 annually, subject to
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review by the Snowball Board of Directors on January 1, 2001 and then at least
annually thereafter. You will be eligible for an annual target bonus
compensation of $45,000 based upon the achievement of corporate and individual
goals.
2. Benefits; Expenses. You will be eligible to participate in Snowball's
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employee benefit plans of general application, including, without limitation,
those plans covering incentive compensation and medical, disability and life
insurance in accordance with the rules established for individual participation
in any such plan and under applicable law. You will be eligible for vacation and
sick leave in accordance with the policies in effect during the term of this
agreement and you will be eligible to receive such other benefits as Snowball
generally provides to its other employees of comparable position and
experience.
3. Options. You will be granted an option to purchase 450,000 shares of
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the Company's common stock (the "Option") with an exercise price of the fair
market value on the date of the grant. Except as otherwise set forth in this
agreement, the Option will vest on a monthly basis over a 48-month period
beginning on the Commencement Date.
4. At-Will Employment. Your employment with Snowball will be at-will and
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may be terminated by you or by Snowball at any time for any reason as follows:
(a) You may terminate your employment upon written notice to the
Board of Directors at any time in your discretion ("Voluntary Termination");
(b) You may terminate your employment upon written notice to the
Board of Directors at any time for "Good Reason" as defined below ("Involuntary
Termination").
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(c) Snowball may terminate your employment upon written notice
to you any time following a determination by the Board of Directors that there
is "Cause," as defined below, for such termination ("Termination for Cause");
(d) Snowball may terminate your employment upon written notice
to you at any time in the sole discretion of the Board of Directors without a
determination that there is Cause for such termination ("Termination without
Cause");
(e) Your employment will automatically terminate upon your death
or upon your disability as determined by the Board of Directors ("Termination
for Death or Disability"); provided that "disability" shall mean your complete
inability to perform your job responsibilities for a period of 90 consecutive
days or 90 days in the aggregate in any 12-month period.
5. Definition. For purposes of this agreement, the following terms
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will have the following meanings:
(a) "Cause" means (i) gross negligence or willful misconduct in
the performance of your duties to Snowball (other than as a result of a
disability) that has resulted or is likely to result in substantial and material
damage to Snowball, after a demand for substantial performance is delivered to
you by the Board of Directors which specifically identifies the manner in which
the Board believes you have not substantially performed your duties and you have
been provided with a reasonable opportunity to cure any alleged gross negligence
or willful misconduct; (ii) repeated failure to perform your duties to Snowball
as requested by the Chief Executive Officer or the Board of Directors (other
than as a result of a disability); (iii) commission of any act of fraud with
respect to Snowball; or (iv) conviction of a felony or a crime causing material
harm to the business and affairs of Snowball. No act or failure to act by you
shall be considered "willful" if done or omitted by you in good faith with
reasonable belief that your action or omission was in the best interests of
Snowball.
(b) "Change of Control" means (i) any person or entity becoming
the beneficial owner, directly or indirectly, of securities of Snowball
representing fifty (50%) percent of the total voting power of all its then
outstanding voting securities, (ii) a merger or consolidation of Snowball in
which its voting securities immediately prior to the merger or consolidation do
not represent, or are not converted into securities that represent, a majority
of the voting power of all voting securities of the surviving entity immediately
after the merger or consolidation, (iii) a sale of substantially all of the
assets of Snowball or a liquidation or dissolution of Snowball, or (iv)
individuals who, as of the Commencement Date, constitute the Board of Directors
(the "Incumbent Board") cease for any reason to constitute at least a majority
of such Board; provided that any individual who becomes a director of Snowball
subsequent to the Commencement Date, whose election, or nomination for election
by Snowball stockholders, was approved by the vote of at least a majority of the
directors then in office shall be deemed a member of the Incumbent Board.
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(c) "Good Reason" means (i) a material adverse change in your
position with Snowball which materially reduces your responsibility, without
Cause and without your written consent; (ii) a material reduction in your
compensation without your written consent; or (iii) a relocation of your place
of employment outside of the seven (7) Bay Area counties, without your written
consent.
6. Separation Benefits. Upon termination of your employment with
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Snowball for any reason, you will receive payment for all salary and unpaid
vacation accrued to the date of your termination of employment. Your benefits
will be continued under Snowball's then existing benefit plans and policies for
so long as provided under the terms of such plans and policies and as required
by applicable law. Under certain circumstances, you will also be entitled to
receive severance benefits as set forth below, but you will not be entitled to
any other compensation, award or damages with respect to your employment or
termination; provided, however, that if Snowball implements a severance policy,
program or plan that provides different severance benefits than those described
below, you may elect, at your option, to receive the applicable severance
benefits under such policy, program or plan in lieu of the severance benefits
described below:
(a) In the event of your Voluntary Termination, Termination for
Death or Disability or Termination for Cause, you will not be entitled to any
cash severance benefits or additional vesting of shares of options.
(b) In the event of your Termination Without Cause or
Involuntary Termination, you will be entitled to six months continued salary,
and the vesting of your Option will immediately be accelerated by six months.
(c) In the event of your Termination without Cause or your
Involuntary Termination within one year of a Change of Control, you will be
entitled to six months continued salary, and the vesting of your Option will
immediately be accelerated by six months. (Such acceleration shall be in lieu of
any acceleration pursuant to paragraph 6(b) above.)
7. Mediation. The parties agree that any dispute regarding the
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interpretation or enforcement of this agreement shall first be facilitated by
confidential mediation to be conducted by a mutually agreed upon mediator rather
than by litigation in court, trial by jury, administrative proceeding or in any
other forum.
8. Successors. This agreement is binding on and may be enforced by
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Snowball and its successors and assigns and is binding on and may be enforced by
you and your heirs and legal representatives. Any successor to Snowball or
substantially all of its business (whether by purchase, merger, consolidation or
otherwise) will in advance assume in writing and be bound by all of Snowball's
obligations under this agreement.
9. Waiver. Neither party shall, by mere lapse of time, without
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giving notice or taking other action hereunder, be deemed to have waived any
breach by the
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other party of any of the provisions of this agreement. Further, the waiver by
either party of a particular breach of this agreement by the other shall neither
be construed as, nor constitute a, continuing waiver of such breach or of other
breaches by the same or any other provision of this agreement.
10. Entire Agreement. This agreement represents the entire agreement
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between us concerning the subject matter of your employment by Snowball and
supersedes any prior agreements.
11. Governing Law. This agreement will be governed by the laws of the
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state of California without reference to conflict of laws provisions.
12. This offer is contingent on your accepting and starting
employment no later than February 21, 2000.
We look forward to your contributions as part of the Snowball team.
Sincerely yours,
/s/ Xxxx Xxxx
Xxxx Xxxx
President and Chief Executive Officer
By signing this letter, I am agreeing to the above.
Signature: /s/ Xxxxxxx X. Xxxxx Date: 2/18/2000
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Effective/Start Date: 2/18/2000
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