Employment Agreement - Encoding.com Inc. and James Van Kerkhove
November 5, 1999
James Van Kerkhove
3105 NW Circle A Drive
Portland, OR 97229
Dear Jim,
On behalf of Encoding.com (the "Company"), I am pleased to offer you the
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position of Vice President of Production 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 Vice President of Production 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
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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.
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 November 29, 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
you 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, which
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is equivalent to $140,000 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).
b. Bonus. You will also be eligible to receive up to $40,000 in
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incentive bonuses in your first year employment according to the
achievement of objectives defined by the Board of Directors. You
will also be eligible to earn incentive bonuses in future years.
c. Relocation Bonus. You will be eligible for a relocation bonus of
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up to $15,000.
d. Annual Review. Your base salary will be reviewed in March as part
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of the Company's normal salary review process.
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5. Stock Options. You will be eligible to participate in any stock
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option or other incentive programs available to officers or employees
of the Company. Your initial grant amount will be 250,000 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. 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 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 Option Plan. 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. As an officer, if within twelve months from the
date of acquisition your position is terminated, the vesting of your
options will be accelerated such that 100% of the total number of
options will be vested.
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. You will be
eligible to purchase coverage for your dependents under the
Company's medical and dental insurance program. The Company will
subsidize 50% of these 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 for 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
Inventions Assignment Agreement, a copy of which is enclosed for your
review and execution (the "Confidentiality Agreement"), prior to or
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on your Start Date.
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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 six
months following the date of termination of your employment and will
be allowed to purchase your vested stock options including a prorated
portion of the initial 18.75% of your option grant.
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 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/ Dave Bullis
Dave Bullis
President
ACCEPTED AND AGREED:
James Van Kerkhove
/s/ James Van Kerkhove
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Signature
November , 1999
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Date
Enclosure: Confidential Information and Invention Assignment Agreement