1
EXHIBIT 10.39
METACREATIONS CORPORATION
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
July 16, 1998
Xx. Xxxx X. Xxxxx
00000 Xxx Xxxxxx
Xxx Xxxxx Xxxxx, XX 00000
RE: METACREATIONS CORPORATION
Dear Xxxx:
This letter amends the letter agreement dated February 20, 1998 between
you and MetaCreations Corporation (the "Company"). In consideration of your
continued employment with the Company, you and the Company agree to the
following:
1. The Company will offer you a secured loan of up to $1,000,000 to be
provided only on or before February 19, 1999 to assist you with the purchase of
a home in the Santa Xxxxxxx area (the "Santa Xxxxxxx Residence"). Although the
precise terms of the loan and repayment obligations will be presented to you in
writing, the loan will be due four years from February 20, 1998, at regular
rates (zero interest if the Company is provided with a second mortgage).
2. If, on or before February 19, 1999 and after a "Change of Control"
(as defined in the letter agreement dated February 20, 1998), your employment is
terminated without "cause," your principal duties or authority materially
change, or if you resign because of such "Change of Control," you shall be
entitled to accelerated vesting of 100% of any then unvested portion of any
stock options held by you under the Company's stock option plans. The right to
exercise such additional vested portion of such stock options shall be in
accordance with the terms of the applicable plans.
2
Xx. Xxxx X. Xxxxx
July 16, 1998
Page 2
3. For purposes of this section, the following terms shall have the
following meanings:
"Income" shall mean your income from the sale of the Santa Xxxxxxx
residence, after deducting reasonable selling commissions and any costs of a
third party hired to consummate the sale as contemplated below.
"Purchase Expense" shall mean the purchase price of the Santa Xxxxxxx
Residence, after adding reasonable purchasing commissions.
"Improvement Expense" shall mean the cost of all improvements to the
Santa Xxxxxxx Residence within one year of your date of purchase, not to exceed,
in the aggregate, ten percent (10%) of the Purchase Expense.
"Expense" shall mean the sum of the Purchase Expense and the Improvement
Expense.
"Loss" shall mean your Expense minus your Income, if your Expense is
greater than your Income.
"Gain" shall mean your Income minus your Expense, if your Income is
greater than your Expense.
In the event that, on or before February 19, 2002, you sell the Santa
Xxxxxxx Residence for a Loss, then the Company will reimburse you for the Loss;
provided, however, that in the event that you propose to undertake a sale of the
Santa Xxxxxxx Residence for an amount that would result in a Loss, you and the
Company will transfer control of the sale to an independent third party mutually
agreeable to both you and the Company. In the event that such third party is
able to broker a sale of the Santa Xxxxxxx Residence for a Gain, you shall
reimburse the Company for expenses payable to the third party in an amount not
to exceed your Gain.
You also agree to exercise reasonable care in maintaining the Santa
Xxxxxxx Residence.
To indicate your acceptance of this amendment, please sign and date this
letter in the space provided below and return it to me. A duplicate original is
enclosed for your records. Nothing in this letter alters the at will nature of
your employment. This letter, the letter agreement dated February 20, 1998, the
agreement relating to proprietary rights between you and
3
Xx. Xxxx X. Xxxxx
July 16, 1998
Page 3
the Company, and the Company's stock option documents set forth the terms of
your employment with the Company and supersede any prior representations or
agreements, whether written, oral or implied. The terms of this letter may not
be modified or amended except by a written agreement, signed by an officer of
the Company and by you.
Sincerely,
METACREATIONS CORPORATION
---------------------------------------
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Chairman of the Board
ACCEPTED AND AGREED TO this
16 day of July, 1998
/s/ Xxxx X. Xxxxx
----------------------------------
Xxxx X. Xxxxx
Enclosures:
Duplicate Original Letter
Letter Agreement dated February 20, 1998
