Employment Agreement - Roxio Inc. and Thomas J. Shea
October 22, 2002
Thomas J. Shea
Dear Tom:
On behalf of Roxio, Inc. (the “Company” or “Roxio”), I am pleased to confirm your position as Senior Vice President and Chief Operating Officer for the Company.
Your initial base salary will be $270,000.00 annually. You will be eligible to participate in the annual bonus program with targeted payout of 50% of your base salary dependent upon your performance and that of the Company. You will also receive an automobile allowance of $650 per month, a Company-paid annual physical examination, a health subsidy and financial planning assistance up to $2500 (net) per year.
Roxio may terminate your employment and this agreement at any time. You may terminate your employment and this agreement at any time. If Roxio or its successor terminates your employment and this agreement for Cause (as defined below), or if you quit, you will not be entitled to severance benefits. If Roxio or its successor terminates your employment and this agreement without Cause, you will be entitled to the severance benefits described below. In no event will you be entitled to severance benefits if your employment terminates or is terminated due to your death or total disability. The severance benefits referred to above will be composed of the following: (a) Roxio will promptly pay you in cash a lump sum severance payment equal to 100% of your annualized base salary, (b) 25% of your Roxio stock options outstanding immediately prior to the termination of your employment will vest, (c) the exercise period for your Roxio stock options will be extended to one (1) year from the date of termination, and (d) you will be entitled to continued coverage in the Company’s welfare benefit plans for the twelve-month period following your termination (or the Company will provide you with similar coverage). For this purpose, “Cause” means that you have been grossly negligent in the performance of your duties for Roxio, or you have engaged in willful misconduct, or you have been convicted of a felony or any crime involving moral turpitude. Nothing in this paragraph is intended to supercede the automatic acceleration of your options upon a change of control pursuant to Roxio’s stock option plans.
1. |
Refusal or unwillingness to perform material duties in good faith, neglect or failure to substantially perform the duties of the Chief Operating Officer
position, if not remedied to the satisfaction of Roxio’s CEO or his designee, after written notice of such need has been given to you by Roxio’s CEO or his designee; |
2. |
Conviction of a felony or other crime involving moral turpitude, dishonesty, willful misconduct, misappropriation of funds, habitual insobriety or illegal drug
use; |
3. |
Substance abuse or any other action involving willful or deliberate malfeasance or gross negligence in the performance of your duties and responsibilities, or
any conduct or act which brings public disrespect, contempt or ridicule upon Roxio; |
4. |
A deliberate or serious violation of any law, rule, regulation, constitutional provision, or Roxio policy or procedure, or local, state or federal law, which
violation, may, in the sole judgment of Roxio’s CEO or his designee constitute justification for termination; |
5. |
Prolonged absence from duties without the consent and approval of Roxio’s CEO or his designee, including but not limited to your permanent disability which
in the sole discretion of the CEO or his designee, constitutes justification for termination; |
6. |
Your death. |
| Accepted: |
/s/ THOMAS J.
SHEA | |
| Thomas J. Shea | ||