Employment Agreement - Encoding.com Inc. and Doug Schulze
August 30, 1999
Doug Schulze
Dear Doug,
On behalf of Encoding.com (the "Company"), I am pleased to offer you the
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position of Vice President of Marketing 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 Marketing 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 boards of charitable organizations, or from owning no more
than one percent (1%)
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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
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this letter agreement, you will commence this new position with the
Company on September 30, 1999.
3. Proof of Right to Work. For purposes of federal immigration law,
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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.
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a. Base Salary. You will be paid a monthly salary of $12,083.33,
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which is equivalent to $145,000.00 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. Signing Bonus. You also be paid a $10,000 signing bonus upon
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commencement of employment. Should you voluntarily leave the
Company or if your employment is terminated for cause within
your first nine months of employment, you will be required to
return the signing bonus to the Company.
b. Bonus. You will also be eligible to receive up to $50,000.00 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.
5. Stock Options.
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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 350,000 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 12.5% 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
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to their vesting subject to the Company's right of repurchase which
will lapse in accordance if the Company merges or becomes acquired.
Upon merger or acquisition, the vesting of your options will be
accelerated as specified in the company's current stock options
agreement if the merger occurs with the above vesting schedule. 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. 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
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to or on your Start Date.
8. Severance Agreement. If your employment is terminated by the
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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
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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.
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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.
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:
Doug Schulze
/s/ Doug Schulze
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Signature
August , 1999
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Date
Enclosure: Confidential Information and Invention Assignment Agreement