Employment Agreement - Encoding.com Inc. and David L. Weld Jr.
December 2, 1999 David L. Weld Jr. 615 Bellevue Ave. E., #301 Seattle, WA 98102 Dear David, On behalf of Encoding.com (the "Company"), I am pleased to offer you the ------- position of Senior Vice President of Product Development of the Company. Speaking for myself, as well as the other members of the Company's management team, we are all very impressed with your credentials and we look forward to your future success in this position. The terms of your new position with the Company are as set forth below: 1. Position. -------- a. You will become the Senior Vice President of Product Development of the Company, working out of the Company's headquarters office in Seattle, Washington. You will report to the Company's President. 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 of and from you pursuant to the express and implicit terms hereof, and 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, 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 or 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 agreement will prevent you from -accepting speaking or presentation engagements 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. <PAGE> 2. Start Date. Subject to fulfillment of any conditions imposed by this ---------- letter agreement, you will commence this new position with the Company on approximately December 15, 1999, determined by the date of close of the Company's purchase of alive.com. 2. Proof of Right to Work. For purposes of federal immigration law, you ---------------------- will be required to provide to the Company documentary evidence of your identity and eligibility for employment in the United States. Such documentation must be provided to us within three (3) business days of your date of hire, or our employment relationship with you may be terminated. 4. Compensation. ------------ a. Base Salary. You will be paid a monthly salary of $12,083.33, ----------- which is equivalent to $145,000 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). This compensation plan will commence on January 1, 2000. b. Bonus. You will also be eligible for a $40,000 end of the year ----- bonus, $24,000.00 of which will be based on the overall revenue achievements of the Company, and $16,000.00 will be based on performance objectives established by you and the President. b. Annual Review. Your base salary will be reviewed in March as ------------- part of the Company's normal salary review process. 5. Stock Options. ------------- Upon formal close of the Company's purchase of alive.com, the Company will assume the stock option plan of alive.com and you will be eligible to participate in any stock option or other incentive programs available to officers or employees of the Company and your official conversion ratio to the Company's stock option plan will be determined. Your alive.com option grant of 169,141 shares on December 10, 1998 will have an approximate conversion ratio of .49, or approximately 82,879 shares. Your price per share for your alive.com grant was .25 cents, which will have an approximate conversions ratio of .49, or approximately .51 cents. Within one month of your start date you will receive the Stock Option Plan and subscription agreement which will enroll you in the program. You will be eligible to participate in any stock option or other incentive programs available to officers or employees of the Company. <PAGE> 6. Benefits. -------- a. Insurance Benefits. The Company will provide you with standard ------------------ medical and optional dental insurance benefits. You will be eligible to purchase coverage for your dependents under The Company's medical and dental insurance program and the Company will pay a to be determined percentage of the medical and dental premiums. In addition, the Company currently indemnifies all officers and directors to the maximum extent permitted by law, and you will be requested to enter into the Company's standard form of Indemnification Agreement giving you such protection. Pursuant to the Indemnification Agreement, the Company will agree to advance any expenses for which indemnification is available to the extent allowed by applicable law. 7. Confidential Information and Invention Assignment 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 Confidential Information and Invention Assignment Agreement, a copy of which is enclosed for your review and execution (the "Confidentiality Agreement"), prior to or on your Start ------------------------- Date. 8. Severance Agreement. If your employment is terminated by the -------------------- Company or its successor for any reason other than cause, as determined by the Company's Board of Directors, you will be entitled to receive continuation of your base salary and insurance benefits for six months following the date of termination of your employment. 9. Confidentiality of Terms. You agree to follow the Company's strict ------------------------ policy that employees must not disclose, either directly or indirectly, any information, including any of the terms of this agreement, regarding salary, bonuses, or stock purchase or option allocations to any person, including other employees of the Company; provided, however, that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists who provide you with individual legal, tax or accounting advice. 10. At-Will Employment. Notwithstanding the Company's obligation ------------------ described in Section 8 above, 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. <PAGE> We are all delighted to be able to extend you this offer and look forward to working with you. To indicate your acceptance of the Company's offer, please sign and date this letter in the space provided below and return it to me, along with a signed and dated copy of the Confidentiality Agreement. This letter, together with the Confidentiality Agreement, set forth the terms of your employment with the Company and supersede any prior representations or agreements, whether written or oral. This letter may not be modified or amended except by a written agreement, signed by the Company and by you. Very truly yours, ENCODING.COM /s/ Martin Tobias Martin Tobias, Minister of Order and Reason ACCEPTED AND AGREED: David Weld Jr. /s/ David Weld Jr. _______________________________ Signature December , 1999 _______________________________ Date Enclosure: Confidential Information and Invention Assignment Agreement