Employment Agreement - Overture Services Inc. and Brian A.C. Steel
May 30, 2003
Brian A.C. Steel
387 Victoria Bay
Alameda, CA 94502
Dear Brian:
I am delighted to confirm our offer to join Overture Services, Inc. (the
"Company") as President, International commencing on or before June 2, 2003.
This position will report to the Chief Executive Officer of the Company.
The following are the specific terms of our offer:
- You will earn a base salary of $12,917 per semi-monthly pay period,
which is equivalent to $310,000 on an annual basis. You will be paid in
accordance with the Company's normal payroll procedures.
- Your annual short-term incentive will be $185,000 at Target with a
maximum payout of 200% ($370,000) of target. Bonuses are reviewed and
earned on an annual basis prorated from the date of hire, and subject
to the Company's eligibility rules, available funding and payout
schedule. For 2003, the Company will pay a minimum of 65% of the
prorated target amount.
- You understand that this position requires extensive travel, including
international travel. Your principal place of work shall be our
corporate headquarters in Pasadena, California. On or before your Start
Date, we will separately review and agree upon the expected travel
associated with this position, and we will review travel expectations
in the future as necessary.
- If the Company and you determine that your relocation to the Pasadena
area is necessary, you shall be provided with a reasonable, customary,
and mutually agreeable allowance to cover related expenses. This
allowance can only be used for IRS allowable expenses and must follow
company policy for the type of allowable expense, the reimbursement
process for submitting receipts, and other reasonable guidelines. We
use a professional third party relocation administrator to provide you
with expert assistance in facilitating your move, and we expect you to
work through the administrator.
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- We will recommend to the Compensation Committee of the Board of
Directors ("the Compensation Committee") that, at its next meeting
following your Start Date, you be granted a stock option to purchase
87,500 shares of common stock (the "Initial Half Grant") at the closing
price for the Company's common stock on the last market trading day
prior to the grant date, as reported in the Wall Street Journal.
Vesting for the Initial Half Grant shall commence on your Start Date.
Subject to your continued employment by the Company, the first meeting
of the Compensation Committee after the three month anniversary of your
Start Date, we will recommend that you be granted a stock option to
purchase 87,500 shares of common stock (the "Subsequent Half Grant") at
the closing price for the Company's common stock on the last market
trading day prior to the grant date, as reported in the Wall Street
Journal. Vesting for the "Subsequent Half Grant" shall commence on the
three-month anniversary of your Start Date. The Initial Half Grant and
the Subsequent Half Grant shall be subject to the terms and conditions
of the Company's Stock Option Plan and Stock Option Agreement.
- We will recommend to the Committee that you receive the change of
control severance benefits that are set forth in the Company's present
Tier 1 Change of Control Severance Agreement, a copy of which has been
provided to you.
- In the future, your annual salary and short and term incentive awards
will be reviewed on a regular basis at the same time and in the same
manner as other peer senior managers.
- You will receive vacation in accordance with company policy, which
currently provides for 10 days of paid vacation per anniversary year
until your years of service make you eligible for a higher accrual. You
will also receive 2 personal days per calendar year; each accrues on a
6-month basis.
- You will be eligible for all benefit programs offered to employees
generally, subject to the eligibility rules of each program, and shall
also receive benefits of at least equivalent value relative to those as
may be offered in the future to your peer senior managers, including
but not limited to health and life insurance, vacation, severance, etc.
- If your employment is terminated by us for reasons other than for Cause
(as that term is defined in this paragraph) within the first 12 months
of your employment, you will become entitled to six (6) months of
severance pay in the aggregate of your total annual target compensation
(computed as base plus short term incentive at Target). Your severance
payments will be made in one lump sum within or before 30 days after
your termination date and will be subject to withholding of all
applicable taxes. This severance obligation, however, is conditioned
upon your signing a general release of claims in a form satisfactory to
the Company. For purposes of this paragraph, "for Cause" shall mean a
termination of your employment for any of the following reasons: (1)
your failure to diligently and satisfactorily perform the material
duties of your position with the Company after written
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notice of the manner in which you have not performed those duties and
which provides a reasonable period for you to cure the identified
deficiencies; (2) a material breach by you of your obligations under
any confidentiality or proprietary information agreements with the
Company or of any of your fiduciary obligations as an officer of the
Company; (3) your failure to follow in a material respect the
reasonable policies or directives established on an employee-wide basis
by the Company; (4) any misconduct by you having a material detrimental
effect on the Company; or (5) any unauthorized activity on your part
which creates a material conflict of interest between you and the
Company after you have been provided with written notice of the
unauthorized activity and a reasonable opportunity to cease such
activity. You shall be entitled to no benefits under this paragraph
should you voluntarily resign your position.
- If your principal reporting relationship changes within the first year
of employment to other than the Chief Executive Officer, then you shall
have the option to resign and receive a lump-sum payment equal to 6
months base salary. This right may be exercised no sooner than 60 days
and no longer than 90 days after the change in your principal reporting
relationship. In order to receive the severance payment, you must
provide continued service, at the Company's option, for up to 3 months
from the date of your resignation, at your then-current compensation
and benefit levels. Such severance payment would be made in one lump
sum within 30 days of your termination date, will be subject to
withholding of all applicable taxes, and will be conditioned upon your
signing a general release of claims in a form satisfactory to the
Company.
Your employment with the Company shall be on an at-will basis. As a result of
your at-will employment, you are free to resign at any time, for any reason or
for no reason. Similarly, the Company is free to conclude its employment
relationship with you at any time, with or without cause, and with or without
notice. The at-will status of your employment may be changed only in a written
agreement signed by you and the Chief Executive Officer of Overture.
As a condition of your employment with Overture Services, Inc., you will be
required to sign and comply with: (1) an Employment, Confidential Information,
and Invention Assignment Agreement attached as Exhibit A and incorporated herein
by reference, (2) a Nondisclosure Agreement attached as Exhibit B and
incorporated herein by reference, (3) and the Tier 1 Change of Control Severance
Agreement. In the event of any dispute or claim relating to or arising out of
our employment relationship, you and the Company agree to an arbitration in
which (i) you are waiving any and all rights to a jury trial but all court
remedies will be available in arbitration, (ii) we agree that all disputes
between you and the Company shall be fully and finally resolved by binding
arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who
shall issue a written opinion, (iv) the arbitration shall provide for adequate
discovery, and (v) the Company shall pay all arbitration fees.
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To indicate your acceptance of the Company's offer, please sign and date this
letter in the space below and return it to me. This letter, along with the
attached agreements relating to proprietary rights and non-disclosure between
you and the Company, set forth the terms of your employment with the Company and
supersede any prior representations or agreements, whether written or oral. This
offer letter may not be modified or amended except by written agreement, signed
by the Chief People Officer and by you.
For purposes of federal immigration law, 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 the Company within
three (3) business days of your date of hire, or our employment relationship
with you may be terminated.
Again, Welcome to Overture!
Sincerely,
/s/ Jackie DeMaria
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Jackie DeMaria
Chief People Officer
Overture Services, Inc.
Accepted and agreed to:
Signature: /s/ Brian A.C. Steel Date: May 30, 2003
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Brian A.C. Steel