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Employment Agreement - Loudeye Corp. and Bill Fasig

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  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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February 21, 2004

Mr. Bill Fasig

Dear Bill:

On behalf of Loudeye Corp., a Delaware corporation (the "Company"), I am pleased
to offer you the position of Senior Vice President. Speaking for myself, as well
as the other members of the Company's management team, we are very much looking
forward to having you on the Loudeye team in that capacity.

The terms of your new position with the Company are outlined below:

     1.   Position.

          a. You will be the Senior Vice President responsible for Business
             Development and Business Affairs (we can discuss exact and proper
             title that conveys scope of ownership of sales and marketing),
             working out of the Company's headquarters in Seattle, Washington.
             You will report to the CEO.

          b. You agree to the best of your ability and experience that you will
             at all times loyally and conscientiously perform all of the duties
             and obligations required to the reasonable satisfaction of the
             Company. During the term of your employment, you further agree that
             you will devote all of your business time and attention to the
             business of the Company, and the Company will be entitled to all of
             the benefits and profits arising from or incident to all such work
             services and advice. You will not render commercial or professional
             services of any nature to any person organization, whether or not
             for compensation, without the prior written consent of the
             Company's Board of Directors, and you will not directly or
             indirectly engage or participate in any business that is
             competitive in any manner with the business of the Company. Nothing
             in this letter is designed to prevent you from accepting speaking
             or presentation engagements consistent with Loudeye's business plan
             in exchange for honoraria or from serving on boards of charitable
             organizations, or from owning no more than one percent (1%) of the
             outstanding equity securities of a corporation whose stock is
             listed on a national stock exchange. Please seek my approval before
             accepting a speaking or presentation engagement.

     2.   Start Date. Subject to fulfillment of any conditions imposed by the
          accompanying Employment Agreement, you will commence this new position
          with the Company on March 1, 2004.

Bill Fasig
March 16, 2004
Page 2 of 4

3.   Proof of Right to Work.  For purposes of federal immigration law, you are
     required to provide to the Company documentary evidence of your identity
     and eligibility for employment in the United States.

4.   Compensation.

     a.   Base Salary.  You will be paid a monthly salary of $20,833.33 which is
          equivalent to $250,000.00 on an annualized basis. Your salary will be
          payable in two equal payments per month pursuant to the Company's
          regular payroll policy (or in the same manner as other employees of
          the Company). In the event that you are required to spend time
          transitioning from your current employer which takes your time away
          from Loudeye, your salary will be adjusted on a pro-rata basis during
          any such transition period to an amount agreeable to both parties.

     b.   MBO.  We are pleased to offer you a special MBO Bonus target of
          $50,000. This special MBO bonus will be paid to you in a lump sum in
          April when you achieve your target objectives set forth here. These
          targets will be as follows: (i) assessment of our sales, marketing and
          business development organizations and actions to improve skills and
          aptitude, establishing the structure and focus for each organization
          and providing target objectives for each, (ii) identifying our key and
          strategic accounts and building a sales strategy to win these
          accounts. This strategy plan should be completed by mid April, (iii)
          defining a product marketing plan and the actions required to execute
          against the plan. In the unlikely event that you leave the Company of
          your own volition within 12 months of your start date, you will be
          responsible for reimbursement to the Company of this special MBO
          bonus. You hereby authorize the Company to withhold this amount from
          any monies owed to you upon the severance of your employment.

     c.   Personal Objectives Bonus.  You will be eligible to receive a bonus of
          twenty five percent (25%) of your base salary (the "Target Personal
          Objectives Bonus Amount"). The Target Personal Objectives Bonus Amount
          shall be subdivided into two or three separate performance specific
          targeting bonus amounts which shall be jointly determined by the CEO
          and you within the next 30 days.

     d.   Company Objectives Bonus.  You will be eligible to receive a bonus of
          seventy five percent (75%) of your base salary (the "Target Company
          Objectives Bonus Amount"). The Target Company Objectives Bonus Amount
          shall be subdivided into two separate performance specific targeting
          bonus amounts which shall be awarded based upon the following:
Bill Fasig
March 16, 2004
Page 3 of 4

          (i)  Revenue growth and Profitability. The company must achieve its
               revenue growth and profitability targets in order for management
               to be eligible for the Company Objectives Bonus. The metrics on
               revenue growth and profitability are currently before the
               compensation committee and will be finalized by March 1, 2003.

          (ii) Annual Review. Your base salary will be reviewed annually as part
               of the Company's normal salary review process.

     e.   Stock Options. During the employment period, you will be eligible to
          participate in the stock option or other incentive programs available
          to officers or employees of the Company and shall have the opportunity
          to purchase the shares in accordance with its rules at a level
          commensurate with your position, all such grants being subject to the
          approval of the Board of Directors of Loudeye. Subject to board
          approval, you will receive an award effective on the date established
          by the Board of Directors, of 425,000 options to purchase, to the
          extent available, shares of Loudeye with an exercise price based on
          the closing price of Loudeye stock upon the date of board approval of
          the grant of the options.

     f.   Vesting Period. This grant shall vest over forty eight (48) months,
          shall have a ten year term and shall be exercisable after the first
          nine months of vesting. Vesting will accelerate upon the first to
          occur of (i) a Change of Control, or (ii) the adoption by the Board of
          Directors of the Company of a plan of liquidation or dissolution of

5.   Proprietary Information and Inventions Agreement. Your acceptance of this
     offer and commencement of employment with the Company is contingent upon
     the execution, and delivery to an officer of the Company, of the Company's
     Proprietary Information and Inventions Agreement, a copy of which is
     enclosed for your review and execution (the "Confidentiality Agreement"),
     prior to or on your Start Date.

6.   Confidentiality of Terms. The Company maintains your personnel file,
     including information about your salary and benefits, in a private and
     confidential manner. Our policy to protect the privacy of such information
     is enhanced when you keep the information confidential.

7.   At-Will Employment. Your employment with the Company will be on an
     "at-will" basis, meaning that either you or the Company may terminate your
     employment at any time for any reason or no reason, without further
     obligation or liability.

Bill Fasig
March 16, 2004
Page 4 of 4

This letter summarizes the general terms and conditions of your potential
employment with the Company and is provided as a courtesy. The accompanying
Proprietary Information and Inventions Agreement set forth the proposed
contractual terms of your employment with the Company and supersede any prior
representations or agreements, whether written or oral. To indicate your
acceptance of the Company's offer, please sign and date this offer and return it
to me, along with a signed and dated copy of the Proprietary Information and
Inventions Agreement, at your earliest convenience.

Bill, I am delighted to be able to extend you this offer and we all look forward
to working with you.

Very truly yours,


/s/ Jeff Cavins
Jeff Cavins
President & CEO

Enclosures: Proprietary Information and Inventions Agreement

Accepted:                                                                2/22/04
William P. Fasig

/s/ William P. Fasig