Employment Agreement - Encoding.com Inc. and Larry Culver
August 3, 1999
Larry Culver
16018 224/th/ Ave. NE
Woodinville, WA 98072
Dear Larry,
On behalf of Encoding.com (the "Company"), I am pleased to offer you the
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position of Chief Financial Officer 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.
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a. You will become the Chief Financial Officer of the Company,
working out of the Company's headquarters office in Seattle,
Washington. You will report to the Company's President, Dave Bullis.
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
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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.
2. Start Date. Subject to fulfillment of any conditions imposed by this
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letter agreement, you will commence this new position with the Company
on August 26, 1999.
3. Proof of Right to Work. For purposes of federal immigration law, you
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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.
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a. Base Salary. You will be paid a monthly salary of $11,666.66,
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which is equivalent to $140,000.00 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 officers of the Company).
b. Annual Review. Your base salary will be reviewed in March as
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part of the Company's normal salary review process.
c. Bonus. You will be eligible to receive an incentive bonus of
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$35,000 if the Company achieves the business plan milestones
established by the Board of Directors. You will also be eligible
to earn incentive bonuses in future years, again based on the
achievement of objectives met by Company established by the
management team and the CEO.
5. Stock Options.
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a. You will be eligible to participate in any stock option or other
incentive programs available to officers or employees of the
Company. Your initial grant amount will be 400,000 shares. Within
two weeks of your start date you will receive the Stock Option Plan
and subscription agreement which will enroll you in the program.
a. You will be eligible to vest your grant of incentive stock options
at a rate of 18.75% of the total number of options granted after
nine months of employment
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and 6.25% of the total number of options every quarter thereafter
until fully vested (pro-rated for any periods less than a full
calendar quarter). You may exercise these options prior to their
vesting subject to the Company's right of repurchase which will
lapse in accordance with the above vesting schedule. If the Company
merges or becomes acquired the vesting of your options will be
accelerated as specified in the company's current stock options
agreement. If the merger occurs within your first two years of
employment, the vesting of your options will be accelerated such
that a minimum 50% of the total number of options will be vested
upon consummation of the acquisition.
6. Benefits.
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a. Insurance Benefits. The Company will provide you with standard
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medical and optional dental insurance benefits. The Company will also
purchase coverage for your dependents under The Company's medical and
dental insurance program. 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
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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
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your Start Date.
8. Severance Agreement. If your employment is terminated by the Company
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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 one month
following the date of termination of your employment.
9. Confidentiality of Terms. You agree to follow the Company's strict
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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
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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
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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.
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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:
Larry Culver
/s/ Larry Culver
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Signature
August , 1999
_____________________________
Date
Enclosure: Confidential Information and Invention Assignment Agreement