Employment Agreement - Loudeye Corp. and Bill Fasig
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.
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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:
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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
Loudeye.
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.
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Bill Fasig
March 16, 2004
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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,
LOUDEYE CORP.
/s/ Jeff Cavins
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Jeff Cavins
President & CEO
Enclosures: Proprietary Information and Inventions Agreement
Accepted: 2/22/04
William P. Fasig
/s/ William P. Fasig
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