Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT, effective as of January 1, 2003, by and between Sohu.com
Inc., a Delaware corporation, and Victor Koo, an individual (the “Employee”).

 

1.    Definitions.    Capitalized terms used herein and not otherwise defined in
the text below will have the meanings ascribed thereto on Annex 1.

 

2.    Employment; Duties.

 

(a)    The Company agrees to employ the Employee in the capacity and with such
responsibilities as are generally set forth on Annex 2.

 

(b)    The Employee hereby agrees to devote his or her full time and reasonable
efforts in such capacities as are set forth on Annex 2 on the terms and
conditions set forth herein. Notwithstanding the foregoing, the Employee may
engage in other activities, such as activities involving professional,
charitable, educational, religious and similar types of organizations, provided
that that the Employee complies with the Employee Non-competition,
Non-solicitation, Confidential Information and Work Product Agreement attached
hereto as Annex 3 (the “Employee Obligations Agreement”) and such other
activities do not interfere with or prohibit the performance of the Employee’s
duties under this Agreement, or conflict in any material way with the business
of the Company or of its subsidiaries and affiliates.

 

(c)    The Employee will use reasonable efforts during the Term to ensure that
the Company’s business and those of its subsidiaries and affiliates are
conducted in accordance with all applicable laws and regulations of all
jurisdictions in which such businesses are conducted.

 

3.    Compensation.

 

(a)    Base Annual Income.    During the Term, the Company will pay the Employee
an annual base salary as set forth on Annex 2, payable monthly pursuant to the
Company’s normal payroll practices.

 

(b)    Discretionary Bonus.    During the Term, the Company, in its sole
discretion, may award to the Employee an annual bonus based on the Employee’s
performance and other factors deemed relevant by the Company’s Board of
Directors.

 

(c)    Stock Options.    The Employee will be eligible to participate in any
stock option or other incentive programs available to officers or employees of
the Company.

 

(d)    Reimbursement of Expenses.    The Company will reimburse the Employee for
reasonable expenses incurred by the Employee in the course of, and necessary in
connection with, the performance by the Employee of his duties to the Company,
provided that such expenses are substantiated in accordance with the Company’s
policies.

 

4.    Other Employee Benefits.

 

(a)    Vacation; Sick Leave.    The Employee will be entitled to such number of
weeks of paid vacation each year as are set forth on Annex 2, the taking of
which must be coordinated with the Employee’s supervisor in accordance with the
Company’s standard vacation policy. Unless otherwise approved by the Company’s
Board of Directors, vacation that is not used in a particular year may only be
carried forward to subsequent years in accordance with the Company’s policies in
effect from time to time. The Employee will be eligible for sick leave in
accordance with the Company’s policies in effect from time to time.

 

(b)    Healthcare Plan.    The Company will arrange for membership in the
Company’s group healthcare plan for the Employee, the Employee’s spouse and the
Employee’s children under 18 years old, in accordance with the Company’s
standard policies from time to time with respect to health insurance and in
accordance with the rules established for individual participation in such plan
and under applicable law.

 

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(c)    Life and Disability Insurance.    The Company will provide term life and
disability insurance payable to the Employee, in each case in an amount up to a
maximum of one times the Employee’s base salary in effect from time to time,
provided however, that such amount will be reduced by the amount of any life
insurance or death or disability benefit coverage, as applicable, that is
provided to the Employee under any other benefit plans or arrangements of the
Company. Such policies will be in accordance with the Company’s standard
policies from time to time with respect to such insurance and the rules
established for individual participation in such plans and under applicable law.

 

(d)    Other Benefits.    Pursuant to the Company’s policies in effect from time
to time and the applicable plan rules, the Employee will be eligible to
participate in the other employee benefit plans of general application, which
may include, without limitation, housing allowance or reimbursement, tuition
fees for the Employee’s children at an international level school and tax
equalization and which, in any event, shall include the benefits at the levels
set forth on Annex 2.

 

5.    Certain Representations, Warranties and Covenants of the Employee.

 

(a)    Related Company Positions.    The Employee agrees that the Employee and
members of the Employee’s immediate family will not have any financial interest
directly or indirectly (including through any entity in which the Employee or
any member of the Employee’s immediate family has a position or financial
interest) in any transactions with the Company or any subsidiaries or affiliates
thereof unless all such transactions, prior to being entered into, have been
disclosed to the Board of Directors and approved by a majority of the
independent members of the Board of Directors and comply with all other Company
policies and applicable law as may be in effect from time to time. The Employee
also agrees that he or she will inform the Board of Directors of the Company of
any transactions involving the Company or any of its subsidiaries or affiliates
in which senior officers, including but not limited to the Employee, or their
immediate family members have a financial interest.

 

(b)    Discounts, Rebates or Commissions.    Unless expressly permitted by
written policies and procedures of the Company in effect from time to time that
may be applicable to the Employee, neither the Employee nor any immediate family
member will be entitled to receive or obtain directly or indirectly any
discount, rebate or commission in respect of any sale or purchase of goods or
services effected or other business transacted (whether or not by the Employee)
by or on behalf of the Company or any of its subsidiaries or affiliates, and if
the Employee or any immediate family member (or any firm or company in which the
Employee or any immediate family member is interested) obtains any such
discount, rebate or commission, the Employee will pay to the Company an amount
equal to the amount so received (or the proportionate amount received by any
such firm or company to the extent of the Employee’s or family member’s interest
therein).

 

6.    Term; Termination.

 

(a)    Unless sooner terminated pursuant to the provisions of this Section 6,
the term of this Agreement (the “Term”) will commence on the date hereof and end
on December 31, 2005.

 

(b)    Voluntary Termination by the Employee. Notwithstanding anything herein to
the contrary, the Employee may voluntarily Terminate this Agreement by providing
the Company with thirty (30) days’ advance written notice (“Voluntary
Termination”), in which case, the Employee will not be entitled to receive
payment of any severance benefits or other amounts by reason of the Termination
other than accrued salary and vacation through the date of the Termination. The
Employee’s right to all other benefits will terminate as of the date of
Termination, other than any continuation required by applicable law. Without
limiting the foregoing, if, in connection with a Change in Control, the
surviving entity or successor to Sohu’s business offers the Employee employment
on substantially equivalent terms to those set forth in this Agreement and such
offer is not accepted by the Employee, the refusal by the Employee to accept
such offer and the subsequent termination of the Employee’s employment by the
Company shall be deemed to be a voluntary termination of employment by the
Employee and shall not be treated as a termination by the Company without Cause.

 

(c)    Termination by the Company for Cause.    Notwithstanding anything herein
to the contrary, the Company may terminate this Agreement for Cause by written
notice to the Employee, effective immediately upon the delivery of such notice.
In such case, the Employee will not be entitled to receive payment of any
severance benefits or other amounts by reason of the Termination other than
accrued salary and vacation through the date of the Termination. The Employee’s
right to all other benefits will terminate, other than any continuation required
by applicable law.

 

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(d)    Termination by the Employee with Good Reason or Termination by the
Company without Cause. Notwithstanding anything herein to the contrary, the
Employee may Terminate this Agreement for Good Reason, and the Company may
Terminate this Agreement without Cause, in either case upon thirty (30) days’
advance written notice by the party Terminating this Agreement to the other
party and the Termination shall be effective as of the expiration of such thirty
(30) day period. If the Employee Terminates with Good Reason or the Company
Terminates without Cause, the Employee will be entitled to continue to receive
payment of severance benefits equal to the Employee’s monthly base salary in
effect on the date of Termination for the shorter of (i) six (6) months and (ii)
the remainder of the Term of this Agreement (the “Severance Period”), provided
that the Employee complies with the Employee Obligations Agreement during the
Severance Period. Such payments will be made ratably over the Severance Period
according to the Company’s standard payroll schedule. The Employee will also
receive payment of the bonus for the remainder of the year of the Termination,
but only to the extent that the bonus would have been earned had the Employee
continued in employment through the end of such year, as determined in good
faith by the Company’s CEO, Board of Directors or its Compensation Committee
based on the specific corporate and individual performance targets established
for such fiscal year, and only to the extent that bonuses are paid for such
fiscal year to other similarly situated employees. Health insurance benefits
with the same coverage provided to the Employee prior to the Termination (e.g.,
medical, dental, optical, mental health) and in all other material respects
comparable to those in place immediately prior to the Termination will be
provided at the Company’s expense during the Severance Period. The Company will
also continue to carry the Employee on its Directors and Officers insurance
policy for six (6) years following the Date of Termination at the Company’s
expense with respect to insurable events which occurred during the Employee’s
term as a director or officer of the Company, with such coverage being at least
comparable to that in effect immediately prior to the Termination Date;
provided, however, that (i) such terms, conditions and exceptions will not be,
in the aggregate, materially less favorable to the Employee than those in effect
on the Termination Date and (ii) if the aggregate annual premiums for such
insurance at any time during such period exceed two hundred percent (200%) of
the per annum rate of premium currently paid by the Company for such insurance,
then the Company will provide the maximum coverage that will then be available
at an annual premium equal to two hundred percent (200%) of such rate.

 

(e)    Termination by Reason of Death or Disability.    A Termination of the
Employee’s employment by reason of death or Disability shall not be deemed to be
a Termination by the Company (for or without Cause) or by the Employee (for or
without Good Reason). In the event that the Employee’s employment with the
Company Terminates as a result of the Employee’s death or Disability, the
Employee or the Employee’s estate or representative, as applicable, will receive
all accrued salary and accrued vacation as of the date of the Employee’s death
or Disability and any other benefits payable under the Company’s then existing
benefit plans and policies in accordance with such plans and policies in effect
on the date of death or Disability and in accordance with applicable law. In
addition, the Employee or the Employee’s estate or representative, as
applicable, will receive the bonus for the year in which the death or Disability
occurs to the extent that a bonus would have been earned had the Employee
continued in employment through the end of such year, as determined in good
faith by the Company’s CEO, Board of Directors or its Compensation Committee
based on the specific corporate and individual performance targets established
for such fiscal year, and only to the extent that bonuses are paid for such
fiscal year to other similarly situated employees.

 

(f)    Misconduct After Termination of Employment.    Notwithstanding the
foregoing or anything herein the contrary, if the Employee after the termination
of his or her employment materially violates or fails to comply with the
Employee Obligations Agreement, thereafter (1) the Employee shall not be
entitled to any payments from the Company and (2) any insurance or other
benefits that have continued shall terminate immediately.

 

7.    Option-Related Provisions.

 

(a)    Termination by the Company Without Cause after a Change in Control. If
Company Terminates this Agreement without Cause within twelve (12) months
following a Change in Control, the vesting and exercisability of each of the
Employee’s outstanding stock options or other stock-based incentive awards
(“Awards”) will accelerate such that the Award will become fully vested and
exercisable upon the effectiveness of the Termination, and any repurchase right
of the Company with respect to shares of stock issued upon exercise of the Award
will completely lapse, in each case subject to paragraph (c) below (“Forfeiture
of Options for Misconduct”) and provided that, in the event of a liquidation of
the Company where no provision is being made for the Employee’s employment by
the Company’s successor in interest, the vesting and exercisability of

 

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each of the Employee’s outstanding Awards will accelerate such that the Award
will become fully vested and exercisable ten (10) days prior to the
effectiveness of the liquidation.

 

(b)    Termination other than by the Company Without Cause after a Change in
Control.    If the Employee’s employment with the Company Terminates for any
reason, unless the Company Terminates this Agreement without Cause within twelve
(12) months following a Change in Control, the vesting of each of the Employee’s
outstanding Awards shall cease upon the effectiveness of the Termination, such
that any unvested Award shall be cancelled.

 

(c)    Forfeiture of Options for Misconduct.    If the Employee materially fails
to comply with the terms of this Agreement, the Employee Obligations Agreement,
or the written policies and procedures of the Company, as the same may be
amended from time to time, or acts against the specific instructions of the
Board of Directors of the Company or if this Agreement is terminated by the
Company for Cause, the Employee will forfeit any unvested Awards that have been
granted to him or her or to which the Employee may be entitled.

 

8.    Employee Obligations Agreement.    By signing this Agreement, the Employee
hereby agrees to execute and deliver to the Company the Employee Obligations
Agreement, and such execution and delivery shall be a condition to the
Employee’s entitlement to his or her rights under this Agreement.

 

9.    Governing Law.    This Agreement will be governed by and construed and
enforced in accordance with the laws of the State of Delaware if the dispute is
resolved therein, and in accordance with the laws of the People’s Republic of
China (“China”) if the dispute is resolved therein or in any other jurisdiction
other than the State of Delaware, in each case exclusive of such jurisdiction’s
principles of conflicts of law. If, under the applicable law, any portion of
this Agreement is at any time deemed to be in conflict with any applicable
statute, rule, regulation or ordinance, such portion will be deemed to be
modified or altered to conform thereto or, if that is not possible, to be
omitted from this Agreement; the invalidity of any such portion will not affect
the force, effect and validity of the remaining portion hereof.

 

10.    Notices.    All notices, requests and other communications under this
Agreement will be in writing (including facsimile or similar writing and express
mail or courier delivery or in person delivery, but excluding ordinary mail
delivery) and will be given to the address stated below:

 

  (a)   if to the Employee, to the address or facsimile number that is on file
with the Company from time to time, as may be updated by the Employee;

 

  (b)   if to the Company:

 

Sohu.com Inc.

7 Jianguomennei Avenue

Suite 1519, Tower 2

Bright China Chang An Building

Beijing 100005

People’s Republic of China

 

Attention: Charles Zhang

  Chairman and Chief Executive Officer

  Derek Palaschuk

  Chief Financial Officer

 

fax: (86-10) 6510-1388

 

with a copy to:

Goulston & Storrs

400 Atlantic Avenue

Boston, MA 02110

 

Attention: Timothy B. Bancroft

 

fax: (617) 574-4112

 

 

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or to such other address or facsimile number as either party may hereafter
specify for the purpose by written notice to the other party in the manner
provided in this Section 10. All such notices, requests and other communications
will be deemed received: (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section 10 if confirmation
of receipt is received; (ii) if given by express mail or courier delivery, five
(5) days after sent; and (iii) if given in person, when delivered.

 

11.    Miscellaneous.

 

(a)    Entire Agreement.    This Agreement constitutes the entire understanding
between the Company and the Employee relating to the subject matter hereof and
supersedes and cancels all prior and contemporaneous written and oral agreements
and understandings with respect to the subject matter of this Agreement. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement.

 

(b)    Modification; Waiver.    No provision of this Agreement may be modified,
waived or discharged unless modification, waiver or discharge is agreed to in
writing signed by the Employee and such officer of the Company as may be
specifically designated by its Board of Directors. No waiver by either party at
any time of any breach by the other party of, or compliance with, any condition
or provision of this Agreement to be performed by such other party will be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time.

 

(c)    Successors; Binding Agreement.    This Agreement will be binding upon and
will inure to the benefit of the Employee, the Employee’s heirs, executors,
administrators and beneficiaries, and the Company and its successors (whether
direct or indirect, by purchase, merger, consolidation or otherwise), subject to
the terms and conditions set forth herein.

 

(d)    Withholding Taxes.    All amounts payable to the Employee under this
Agreement will be subject to applicable withholding of income, wage and other
taxes to the extent required by applicable law.

 

(e)    Validity.    The invalidity or unenforceability of any provision or
provisions of this Agreement will not affect the validity or enforceability of
any other provision of this Agreement, which will remain in full force and
effect.

 

(f)    Language.    This Agreement is written in the English language only. The
English language also will be the controlling language for all future
communications between the parties hereto concerning this Agreement.

 

(g)    Counterparts.    This Agreement may be signed in any number of
counterparts, each of which will be deemed an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.

 

12.    Dispute Resolution.    Either party may bring a legal action arising out
of, or relating to this Agreement in any court of the State of Delaware in the
United States of America and each party hereby expressly and irrevocably waives
any claim or defense in any action or proceeding brought in said jurisdictions
based on any alleged lack of personal jurisdiction, improper venue, forum non
conveniens, or any similar basis. Except as relates to the enforcement of the
Employee Obligations Agreement (Section 8(b) of which provides that the party
initiating a claim may bring such claim in the courts of either the State of
Delaware or in the courts of China, at such party’s option), any dispute,
controversy or claim arising out of or relating to this Agreement may also be
submitted to arbitration administered by the International Chamber of Commerce
(“ICC”). The award rendered in such an arbitration proceeding will be final and
binding and judgment on the award rendered may be entered in any court having
jurisdiction over the parties. Such arbitration shall be held in Hong Kong and
shall be conducted in accordance with the ICC International Arbitration Rules,
except as may be modified by the following:

 

(a)    The number of arbitrators will be three, one of whom will be appointed by
the party asserting a claim against the other party or parties, one of whom will
be appointed by the party or parties (acting together), as the case may be,
against whom a claim has been asserted, and the third of whom will be selected
by mutual agreement, if possible, within thirty days after the selection of the
second arbitrator.

 

(b)    The language of the arbitration will be conducted in the English language
and any

 

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foreign-language documents presented at such arbitration will be accompanied by
an English translation thereof that shall be prepared at the expense of the
party seeking to present such document.

 

(c)    Any award of the arbitrators (i) will be in writing and (ii) will state
the reasons upon which such award is based.

 

(d)    The arbitrators will have no authority to award punitive damages or any
other damages not measured by the prevailing party’s actual damages, and may
not, in any event, make any ruling, finding or award that does not conform to
the terms and conditions of this Agreement.

 

(e)    Notwithstanding the foregoing, any party may apply to any court having
jurisdiction over the parties to obtain injunctive relief in order to maintain
the status quo until such time as an arbitration award may be rendered or the
dispute, controversy or claim may be otherwise resolved.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on May 9,
2003 as of the year and day first above written.

 

Signature of Employee:

 

Sohu.com Inc.

/s/ Victor Koo

 

By:

 

/s/ Derek Palaschuk

           

Name: Derek Palaschuk

Printed name of employee:

     

Title: Chief Financial Officer

 

Victor Koo

       

 

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Annex 1

 

Certain Definitions

 

“Cause” means:

 

  (i)   willful misconduct or gross negligence by the Employee, or any willful
or grossly negligent omission to perform any act, resulting in injury to the
Company or any subsidiaries or affiliates thereof;

 

  (ii)   misconduct or negligence of the Employee that results in gain or
personal enrichment of the Employee to the detriment of the Company or any
subsidiaries or affiliates thereof;

 

  (iii)   breach of any of this Agreement or the Employee Obligations Agreement
which is not remedied within thirty (30) days of the Company’s providing written
notice thereof to the Employee. For purposes of this clause, “breach” includes,
but is not limited to, the repeated failure of the Employee to perform
substantially his duties to the Company or any subsidiaries or affiliates
thereof, excessive absenteeism or dishonesty;

 

  (iv)   any attempt by the Employee to assign or delegate this Agreement or any
of the rights, duties, responsibilities, privileges or obligations hereunder
without the prior consent of the Company (except (a) in respect of any
delegation by the Employee of his employment duties hereunder to other employees
of the Company in accordance with its usual business practice and (b) the
Employee may assign his right to receive his salary to third parties by giving
notice to the Company);

 

  (v)   the Employee’s indictment or conviction for, or confession of, a felony
or any crime involving moral turpitude under the laws of the United States or
any State thereof, or under the laws of China, or Hong Kong;

 

  (vi)   declaration by a court that the Employee is insane or incompetent to
manage his business affairs;

 

  (vii)   habitual drug or alcohol abuse which materially impairs the Employee’s
ability to perform his duties; or

 

  (viii)   filing by the Employee of, or consent by the Employee to, any
petition or other proceeding in bankruptcy with respect to the Employee, or the
filing by a third party of any petition or other proceeding which is not stayed
within sixty (60) days of such filing seeking to find the Employee bankrupt or
insolvent.

 

“Change in Control” means the occurrence of any of the following events:

 

  (i)   any person (within the meaning of Section 13(d) or Section 14(d)(2) of
the Securities Exchange Act of 1934) other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportion as their ownership of stock of the
Company, becomes the direct or beneficial owner of securities representing fifty
percent (50%) or more of the combined voting power of the Company’s
then-outstanding securities;

 

  (ii)   during any period of two (2) consecutive years after the date of this
Agreement, individuals who at the beginning of such period constitute the Board
of Directors of the Company, and all new directors (other than directors
designated by a person who has entered into an agreement with the Company to
effect a transaction described in (i), (iii), or (iv) of this definition) whose
election or nomination to the Board was approved by a vote of at least
two-thirds of the directors then in office, cease for any reason to constitute
at least a majority of the members of the Board;

 

  (iii)   the effective date of a merger or consolidation of the Company with
any other entity, other than a merger or consolidation which would result in the
voting securities of the Company

 

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       outstanding immediately prior to such merger or consolidation continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting power
of the voting securities of the surviving entity outstanding immediately after
such merger or consolidation and with the power to elect at least a majority of
the board of directors or other governing body of such surviving entity; or

 

  (iv)   the complete liquidation of the Company or the sale or disposition by
the Company of all or substantially all of the Company’s assets.

 

“Company” means Sohu.com Inc and, unless the context suggests to the contrary,
all of its subsidiaries and related companies.

 

“Disability” means the Employee becomes physically or mentally impaired to an
extent which renders him or her unable to perform the essential functions of his
or her job, with or without reasonable accommodation, for a period of six
consecutive months, or an aggregate of nine months in any two year period.

 

“Good Reason” means the occurrence of any of the following events without the
Employee’s express written consent, provided that the Employee has given notice
to the Company of such event and the Company has not remedied the problem within
fifteen (15) days:

 

  (i)   any significant change in the duties and responsibilities of the
Employee inconsistent in any material and adverse respect with the Employee’s
title and position (including status, officer positions and reporting
requirements), authority, duties or responsibilities as contemplated by Annex 2
to this Agreement. For the purposes of this Agreement, because of the evolving
nature of the Employer’s business, the Company’s changing of Employee’s
reporting relationships and department(s) will not be considered a significant
change in duties and responsibilities;

 

  (ii)   any material breach by the Company of this Agreement, including without
limitation any reduction of the Employee’s base salary or the Company’s failure
to pay to the Employee any portion of the Employee’s compensation; or

 

  (iii)   the failure, in the event of a Change in Control in which the Company
is not the surviving entity, of the surviving entity or the successor to the
Company’s business to assume this Agreement pursuant to its terms or to offer
the Employee employment on substantially equivalent terms to those set forth in
this Agreement.

 

“Termination” (and any similar, capitalized use of the term, such as
“Terminate”) means, according to the context, the termination of this Agreement
or the Employee’s ceasing to render employment services.

 

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Annex 2

 

Particular Terms of Employee’s Employment

 

Title(s): Chief Operating Officer

 

Reporting  Requirement:   The Employee will report to the Company’s Board of
Directors and to the Company’s Chief Executive Officer.

Responsibilities:   Such duties and responsibilities as are ordinarily
associated with the Employee’s title(s) in a United States publicly-traded
corporation and such other duties as may be specified by the Board of Directors
from time to time.

 

Base Salary:         One Hundred Fifty Thousand United States Dollars (U.S.
$150,000)

 

The Employee’s base salary may be adjusted (but not below the base salary stated
above) during the term of this contract at the discretion of the Board of
Directors.

 

# of Weeks of Paid Vacation per Year:         Four (4)

 

Other Benefits:

 

Monthly housing allowance or reimbursement after tax of up to a maximum of U.S.
$2,000 per month, tax equalization on salary and bonus to 15%, health, life and
disability insurance and tuition fees for the Employee’s children as per company
policy and bonus as specifically approved each year.

 

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Annex 3

 

FORM OF EMPLOYEE NON-COMPETITION, NON-SOLICITATION, CONFIDENTIAL

INFORMATION AND WORK PRODUCT AGREEMENT

 

In consideration of my employment and the compensation paid to me by Sohu.com
Inc., a Delaware corporation, or a subsidiary or other affiliate or related
company thereof (Sohu.com Inc. or any such subsidiary or related company or
other affiliate referred to herein individually and collectively as “SOHU”), and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, I agree as follows:

 

1.    Non-Competition.    During my employment with SOHU and continuing after
the termination of my employment for the longer of (i) one year after the
termination of my employment with SOHU for any reason and (ii) such period of
time as SOHU is paying to me any severance benefits, (the “Noncompete Period”),
I will not, on my own behalf, or as owner, manager, stockholder (other than as
stockholder of less than 2% of the outstanding stock of a company that is
publicly traded or listed on a stock exchange), consultant, director, officer or
employee of or in any other manner connected with any business entity,
participate or be involved in any Competitor without the prior written
authorization of SOHU. “Competitor” means any business which operates a
horizontal portal or which directly competes with any business in which SOHU
engages during the time of my employment, or during the time of my employment
has made formal plans as documented by senior management or Board of Director
minutes to engage, in the Mainland Chinese market and may include, without
limitation, an individual, company, enterprise, partnership enterprise,
government office, committee, social organization or other organization that, in
any event, produces, distributes or provides the same or substantially similar
kind of product or service as SOHU. On the date of this Employee
Non-competition, Non-solicitation, Confidential Information and Work Product
Agreement (this “Agreement”), “Competitor” includes without limitation:
Sina.com, Yahoo Inc., Tom.com, Netease.com Inc., Linktone, 263.com, AOL Time
Warner Inc., JOYO and Dangdang.

 

2.    Nonsolicitation.    During the Noncompete Period, I will not, either for
my own account or for the account of any other person: (i) solicit, induce,
attempt to hire, or hire any employee of SOHU, (ii) solicit, induce, attempt to
hire, or hire any other person who may have been employed by SOHU during the
term of my employment with SOHU unless that person has not worked with SOHU
within the six months following my last day of employment with SOHU; (iii)
solicit business or relationship in competition with SOHU from any of SOHU’s
customers, suppliers or partners or any other entity with which SOHU does
business; (iv) assist in such hiring or solicitation by any other person or
business entity or encourage any such employee to terminate his or her
employment with SOHU; or (iv) encourage any such customer, supplier or partner
or any other entity to terminate its relationship with SOHU.

 

3.    Confidential Information.

 

(a)    While employed by SOHU and indefinitely thereafter, I will not, directly
or indirectly, use any Confidential Information (as hereinafter defined) other
than pursuant to my employment by and for the benefit of SOHU, or disclose any
such Confidential Information to anyone outside of SOHU or to anyone within SOHU
who has not been authorized to receive such information, except as directed in
writing by an authorized representative of SOHU.

 

(b)    Notwithstanding anything in Section 3(a) to the contrary, the Employee
may disclose Confidential Information pursuant to a duly issued request or order
of any court or governmental agency of competent jurisdiction, provided,
however, that the Employee provides the Company prompt notice of any such
request or order and, prior to releasing such information, provides reasonable
cooperation (at the Company’s expense) in the efforts of the Company to contest
or limit the scope of such request or order.

 

(c)    “Confidential Information” means all trade secrets, proprietary
information, and other data and information, in any form, belonging to SOHU or
any of their respective clients, customers, consultants, licensees or affiliates
that is held in confidence by SOHU. Confidential Information includes, but is
not limited to computer software, the structure of SOHU’s online directories and
search engines, business plans and arrangements, customer lists, marketing
materials, financial information, research, and any other information identified
or treated as confidential by SOHU or any of their respective clients, customer,
consultants, licensees or affiliates. Notwithstanding the foregoing,
Confidential Information does not include information which

 

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SOHU has voluntarily disclosed to the public without restriction, or which is
otherwise known to the public at large.

 

4.    Rights in Work Product.

 

(a)    I agree that all Work Product (as hereinafter defined) will be the sole
property of SOHU. I agree that all Work Product that constitutes original works
of authorship protectable by copyright are “works made for hire,” as that term
is defined in the United States Copyright Act and, therefore, the property of
SOHU. I agree to waive, and hereby waive and irrevocably and exclusively assign
to SOHU, all right, title and interest I may have in or to any other Work
Product and, to the extent that such rights may not be waived or assigned, I
agree not to assert such rights against SOHU or its licensees (and
sublicensees), successors or assigns.

 

(b)    I agree to promptly disclose all Work Product to the appropriate
individuals in SOHU as such Work Product is created in accordance with the
requirements of my job and as directed by SOHU.

 

(c)    “Work Product” means any and all inventions, improvements, developments,
concepts, ideas, expressions, processes, prototypes, plans, drawings, designs,
models, formulations, specifications, methods, techniques, shop-practices,
discoveries, innovations, creations, technologies, formulas, algorithms, data,
computer databases, reports, laboratory notebooks, papers, writings,
photographs, source and object codes, software programs, other works of
authorship, and know-how and show-how, or parts thereof conceived, developed, or
otherwise made by me alone or jointly with others (i) during the period of my
employment with SOHU or (ii) during the six month period next succeeding the
termination of my employment with SOHU if the same in any way relates to the
then present products, programs or services of SOHU or to tasks assigned to me
during the course of my employment, whether or not patentable or subject to
copyright or trademark protection, whether or not reduced to tangible form or
reduced to practice, whether or not made during my regular working hours, and
whether or not made on SOHU premises.

 

5.    Employee’s Prior Obligations.    I hereby certify I have no continuing
obligation to any previous employer or other person or entity which requires me
not to disclose any information to SOHU.

 

6.    Employee’s Obligation to Cooperate.    At any time during my employment
with SOHU and thereafter upon the request or SOHU, I will execute all documents
and perform all lawful acts that SOHU reasonably considers necessary or
advisable to secure its rights hereunder and to carry out the intent of this
Agreement. Without limiting the generality of the foregoing, I agree to render
to SOHU or its nominee all reasonable assistance as may be required:

 

  (a)   In the prosecution or applications for letters patent, foreign and
domestic, or re-issues, extensions and continuations thereof;

 

  (b)   In the prosecution or defense of interferences which may be declared
involving any of said applications or patents;

 

  (c)   In any administrative proceeding or litigation in which SOHU may be
involved relating to any Work Product; and

 

  (d)   In the execution of documents and the taking of all other lawful acts
which SOHU considers necessary or advisable in creating and protecting its
copyright, patent, trademark, trade secret and other proprietary rights in any
Work Product.

 

The reasonable out-of-pocket expenses incurred by me in rendering such
assistance at the request of SOHU will be reimbursed by SOHU. If I am no longer
an employee of SOHU at the time I render such assistance, SOHU will additionally
pay me a reasonable fee for my time.

 

7.    Termination; Return of SOHU Property.    Upon the termination of my
employment with SOHU for any reason, or at any time upon SOHU’s request, I will
return to SOHU all Work Product and Confidential Information and notes,
memoranda, records, customer lists, proposals, business plans and other
documents, computer software, materials, tools, equipment and other property in
my possession or under my control belonging to SOHU. Further, before obtaining
my final paycheck, I agree to sign a certificate stating the following:

 

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“Termination Certificate

 

This is to certify that I do not have in my possession or custody, nor have I
failed to return, any Work Product (as defined in the Employee Non-competition,
Non-solicitation, Confidential Information and Work Product Agreement between me
and Sohu.com Inc. (“SOHU”)) or any notes, memoranda, records, customer lists,
proposals, business plans or other documents or any computer software,
materials, tools, equipment or other property (or copies of any of the
foregoing) belonging to SOHU.”

 

8.    General Provisions.

 

(a)    This Agreement contains the entire agreement between me and SOHU with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings related to the subject matter
hereof, whether written or oral. This Agreement may not be modified except by
written agreement signed by SOHU and me.

 

(b)    This Agreement will be governed by and construed and enforced in
accordance with, the laws of the State of Delaware, U.S.A. if the dispute is
resolved therein, and in accordance with the laws of the People’s Republic of
China (“China”) if the dispute is resolved therein or in any other jurisdiction
other than the State of Delaware, in either case without giving effect to the
conflicts of laws rules of such jurisdiction. I consent to jurisdiction and
venue in any court in the State of Delaware or any other country having
jurisdiction over me for the purposes of any action relating to or arising out
of this Agreement or any breach or alleged breach thereof, and to service of
process in any such action by certified or registered mail, return receipt
requested. Without limiting the foregoing, I specifically consent to
jurisdiction and venue in any court in China for the purposes of any action
relating to or arising out of this Agreement or any breach or alleged breach
thereof that occurs in whole or in part in China.

 

(c)    In the event that any provision of this Agreement will be determined by
any court of competent jurisdiction to be unenforceable by reason of its
extending for too great a period of time, over too large a geographic area, over
too great a range of activities, it will be interpreted to extend only over the
maximum period of time, geographic area or range of activities as to which it
may be enforceable.

 

(d)    If, after application of paragraph (c) above, any provision of this
Agreement will be determined to be invalid, illegal or otherwise unenforceable
by any court of competent jurisdiction, the validity, legality and
enforceability of the other provisions of this Agreement will not be affected
thereby. Any invalid, illegal or unenforceable provision of this Agreement will
be severed, and after any such severance, all other provisions hereof will
remain in full force and effect.

 

(e)    SOHU and I agree that either of us may waive or fail to enforce
violations of any part of this Agreement without waiving the right in the future
to insist on strict compliance with all or parts of this Agreement.

 

(f)    My obligations under this Agreement will survive the termination of my
employment with SOHU regardless of the manner of or reasons for such
termination, and regardless of whether such termination constitutes a breach of
any other agreement I may have with SOHU. My obligations under this Agreement
will be binding upon my heirs, executors and administrators, and the provisions
of this Agreement will inure to the benefit of the successors and assigns of
SOHU.

 

(g)    I agree and acknowledge that the rights and obligations set forth in this
Agreement are of a unique and special nature and necessary to ensure the
preservation, protection and continuity of SOHU’s business, employees,
Confidential Information, and intellectual property rights. Accordingly, SOHU is
without an adequate legal remedy in the event of my violation of any of the
covenants set forth in this Agreement. I agree, therefore, that, in addition to
all other rights and remedies, at law or in equity or otherwise, that may be
available to SOHU, each of the covenants made by me under this Agreement shall
be enforceable by injunction, specific performance or other equitable relief,
without any requirement that SOHU have to post a bond or that SOHU have to prove
any damages.

 

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IN WITNESS WHEREOF, the undersigned employee and SOHU have executed this
Employee Non-competition, Non-solicitation, Confidential Information and Work
Product Agreement.

 

Effective as of January 1, 2003 and dated May 9, 2003

 

Signature of Employee:

 

Sohu.com Inc.

/s/ Victor Koo

 

By:

 

/s/ Derek Palaschuk

           

Name: Derek Palaschuk

Printed name of employee:

     

Title: Chief Financial Officer

 

Victor Koo