Sample Business Contracts

Employment Agreement - Loudeye Corp. and John Martin

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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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  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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August 13, 2003

Mr. John Martin

Dear John:

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 and board of directors, we
are very much looking forward to having you on the Loudeye team in that

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

         1.       Position.

                  a.       You will be the Senior Vice President, working out of
                           the Company's headquarters in Seattle, Washington. At
                           present, 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 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 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.


John Martin
August 16, 2003
Page 2 of 4

         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 August 18, 2003.

         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
                           $16,666.67 which is equivalent to $200,000.00 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.       Signing Bonus. We are pleased to offer you a signing
                           bonus of $65,000. This bonus will be paid to you in a
                           lump sum on October 1, 2003. Please note that this
                           signing bonus will be considered taxable income and
                           payroll taxes will be withheld. 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 the
                           entire signing 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 up to a maximum of Fifty Percent
                           (50%) 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 up to a maximum of Fifty Percent
                           (50%) 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:

                           (i)      Revenue: Twenty-five Percent (25%) of the
                                    Target Company Objectives Bonus Amount shall
                                    be earned upon the Company


John Martin
August 16, 2003
Page 3 of 4

                                    delivering results in which revenue exceeds
                                    the Board of Directors' approved revenue
                                    plan, by not less than Ten Percent (10%)
                                    over the immediately preceding quarter. The
                                    measurement of this shall commence in the
                                    fourth quarter of 2003.

                           (ii)     Operational Breakeven: Twenty-five Percent
                                    (25%) of the Target Company Objectives Bonus
                                    Amount shall be earned at such time as the
                                    Company achieves breakeven EBIT for the
                                    applicable quarter.

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

                  f.       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 shares in accordance with its
                           rules at a level commensurate with your position, all
                           such grams being subject to the approval of the Board
                           of Directors of Loudeye. Subject to approval, you
                           will receive an award effective on the date
                           established by the Board of Directors, of 350,000
                           options to purchase, to the extent available,
                           incentive stock option (ISO) shares of Loudeye, and
                           to the extent that ISO's are not available,
                           non-qualified options with an exercise price based on
                           the closing price for Loudeye shares on August 16,

                  g.       Vesting Period. This grant shall have a ten year term
                           and shall be exercisable as follows: 125,000 over one
                           year at the rate of 1/12th per month in arrears, and
                           225,000 over three years at the rate of 1/36th per
                           month in arrears. 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.


John Martin
August 16, 2003
Page 4 of 4

         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.

This letter summarizes the general terms and conditions of your potential
employment with the Company and is provided as a courtesy. The accompanying
Employment Agreement and the 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 the
accompanying Employment Agreement and return it to me, along with a signed and
dated copy of the Proprietary Information and Inventions Agreement, at your
earliest convenience.

John, I am delighted to be able to extend you this offer and we all look forward
to working with you in your new capacity.

Very only yours,



Enclosures:    Employment Agreement
               Proprietary Information and Inventions Agreement