Employment Agreement - First Virtual Holdings Inc. and David Ehrenthal
January 14, 1998
Mr. David Ehrenthal
324 West 77th Street, Apt. 4
New York, New York 10024
Dear David:
First Virtual Holdings Incorporated is pleased to offer you employment on the
terms and conditions stated in this letter. First Virtual Holdings Incorporated
("First Virtual") is offering you the position of Vice President, Marketing and
Sales. You will be reporting to Keith Kendrick, President or such other Officer
as the Board of Directors may designate. We would like for you to begin work
with First Virtual on March 1, 1998. You will be working at our office in San
Diego.
SALARY.
The initial annual salary shall be $150,000 payable two times each month, and we
will give you a periodic review of performance and wages on not less than an
annual basis. We have also agreed that you will be paid $30,000 within ten (10)
days of your first day of employment at First Virtual, which payment will be
treated for tax purposes as additional salary and all withholdings shall be
deducted.
BONUS.
We have also agreed that you will be eligible for any bonus plan offered to
Officers of the Company. Any bonus will be at the sole discretion of the
Company's Board of Directors; provided however, that for the first year of your
employment, you will be eligible to receive a target bonus for up to 50% of your
annual salary in accordance with reaching the specified goals and targets, as
established by Keith Kendrick, President and with the First Virtual 1998
Operating Plan, payable no later than April 1, 1999 provided you are still an
employee of the Company on that date. Thus after your first year of employment,
the Board of Directors of the Company shall decide whether you are entitled to
any additional bonuses.
The bonus package will be treated for tax purposes as additional salary and all
withholdings shall be deducted.
OPTION GRANT.
We will also grant you an option to purchase 75,000 shares of the Company's
Common Stock, with a price per share of Common Stock at a price equal to the
fair market value of the Company's Common Stock on February 2, 1998 ("Vesting
Commencement Date") ("Options"); we will also grant you an option to purchase
25,000 shares of the Company's Common Stock, with a price per share of Common
Stock at double the market price as of February 2, 1998, the Vesting
Commencement Date.
All Options shall vest in accordance with the Company's standard form of option
agreement under the 1995 Stock Option Plan, as amended, which provides that 25%
of the shares subject to the option shall vest and become exercisable on the
first anniversary of the vesting commencement date, and an additional 1/48th of
the shares subject to the option at the end of each one-month period thereafter
shall
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Mr. David Ehrenthal
January 14, 1998
Page 2
vest and become exercisable provided in each case that the optionee remains an
employee and/or consultant of the Company.
OTHER BENEFITS.
You will be entitled to three (3) weeks paid vacation during each year of
employment, provided that no more than one (1) week is taken at a time without
the permission of the Company. You shall be eligible to participate in the
existing plans for group life, health and accident insurance plans, and as the
Company may adopt in the future. You may enter the Company 401(k) plan as of
July 1, 1998.
SEVERANCE PACKAGE.
The Company further agrees that in the event the Company terminates your
employment for any reason other than cause it shall pay you severance equal to
four (4) months current salary and medical insurance premiums ("Severance
Package"). This severance package will be in full satisfaction of any claims
that you may have against the Company and the Company may, at its sole
discretion, require your signature on such release.
The Company further agrees that you have the right to terminate your employment
with the Company and will be entitled to the Severance Package if (i) fifty-one
percent (51%) or more, of the outstanding shares of stock of the Company are
sold in any single transaction ("Change of Control"); or, (ii) the marketing
function of the Company is eliminated or absorbed into another organization such
that your duties as being primarily responsible for the marketing of the
Company's products and services is significantly changed; provided however, that
a change in title is not considered a significant change and provided further,
that you must notify the Company in writing within ninety (90) days of (i) the
Change in Control or (ii) the elimination of the marketing function, of your
termination of your employment.
After termination of your employment with the Company for any reason or no
reason, you agree that for a period of two (2) months after your termination,
you shall be available to the Company up to and not to exceed fifteen (15) hours
per week, to perform consulting services for the Company upon its request. You
shall be paid monthly at the rate of $72.11 per hour for any such consulting
services performed by you.
REPRESENTATIONS AND WARRANTIES.
You represent and warrant that no prior contract or agreement to which you are a
party or any prior performance of any such agreement will interfere in any
manner, or conflicts with, the terms of and complete performance of this
agreement.
This offer is subject to your agreement to the terms and conditions found in
Appendices A and B and C. Appendix A includes basic contractual terms and a
customary form of employee Proprietary Information and Confidentiality
Agreement. Appendix B includes the Company's Voice-mail Policy and E-mail
Policy. Appendix C includes an employment application, which you are asked to
complete and return with this Agreement. This letter along with Appendices A and
B and C form your employment agreement with the Company, except that the
Non-Competition provision of Appendix A may be waived by the Company upon the
occurrence of a 51% Change of Control of the Company or the elimination of
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Mr. David Ehrenthal
January 14, 1998
Page 3
the marketing function of the Company. Any such waiver by the Company must be in
writing and may only occur if your departure or termination is not for cause.
You acknowledge that you are not receiving any tax or legal advise from the
Company and that you are consulting your own advisors.
Your execution of this letter will create a binding agreement between you and
the Company. We would want you to provide your present employer with notice of
termination of employment with a copy to us. We would want you to begin work as
soon as possible. We are excited to have you with us and look forward to working
together to ensure the continued success of First Virtual.
Sincerely,
First Virtual Holdings Incorporated
/s/ KEITH S. KENDRICK
Keith S. Kendrick
President
Accepted: /s/ DAVID EHRENTHAL Date: January 15, 1998
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David Ehrenthal