Document:

exv10w1

 

Exhibit 10.1

[Ask Jeeves Letterhead]

January 25, 2005

Adrian Cox

[address]

UK

Dear Adrian:

          We are pleased to inform you that Ask Jeeves Internet Ltd. (the “Company”) approved a new
severance benefit for you in the form of a special option acceleration program. The purpose of
this letter agreement is to set forth the terms and conditions of your new program.

          Your new severance benefit set forth in this letter agreement is in addition to your existing
severance package with the Company set forth in the letter agreement between you and the Company
dated October 27, 2003 (your “Prior Agreement”). Your Prior Agreement will continue in effect
except that it will be modified as follows:

	 	•  	You will be entitled to the severance benefits set forth in Section 6.1 of your
Prior Agreement only in the event of an Involuntary Termination (as that term is
defined in this letter agreement).
	 
	 	•  	The Company’s rights under Section 6.3 of your Prior Agreement shall apply only in
the event of a Termination for Cause (as that term is defined in this letter
agreement).

          Under the new program, you will become entitled to certain severance benefits in the event:
(i) your employment is terminated by the Company other than for cause or (ii) your employment
terminates under certain circumstances within a specified time period following a substantial
change in ownership or control of Ask Jeeves, Inc. (“AJ”). The level of your severance benefits
will vary with the circumstances under which your employment terminates. To understand the full
scope of your benefits, you should familiarize yourself with the definitional provisions of Part
One of this letter agreement. The benefits comprising your severance package are detailed in Parts
Two and Three, and the dollar limitations on the overall value of your benefit package and other
applicable restrictions are specified in Parts Four and Five. Certain ancillary matters affecting
your severance arrangement are covered in Part Six.

          You must, as a condition to your entitlement to the new severance benefits set forth in this
letter agreement, execute the Acceptance section at the end of this letter in which you agree that
you have no rights to severance benefits under any agreement other than those provided under this
letter agreement and the Prior Agreement (as modified by this letter agreement).

 

 

PART ONE — DEFINITIONS

          For purposes of this letter agreement, the following definitions will be in effect:

          Base Salary means, for purposes of your salary continuation benefits under Part Two of this
letter agreement, your monthly rate of base salary from the Company in effect immediately prior to
your Involuntary Termination.

          Board means the Board of Directors of AJ.

          Change in Control means the occurrence of a change in the ownership or control of AJ effected
through any of the following transactions:

          (i) the consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving AJ or any of its subsidiaries, a
sale, transfer or other disposition of all or substantially all of the assets of AJ
(including, without limitation, in complete liquidation or dissolution of AJ), or the
acquisition of assets or stock of another entity by AJ or any of its subsidiaries (each, a
“Business Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that were the beneficial owners of the
total shares of Common Stock or the combined voting power of AJ’s securities (determined by
the power to vote with respect to the elections of Board members) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the total
 shares of Common Stock or the combined voting power of AJ’s securities (determined by the
power to vote with respect to the elections of Board members) outstanding immediately after
the consummation of such transaction or series of related transactions, as the case may be,
of the entity resulting from such Business Combination (including, without limitation, an
entity that, as a result of such transaction, owns AJ or all or substantially all of AJ’s
assets directly or through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination of the total
 shares of Common Stock or the combined voting power of AJ’s securities (determined by the
power to vote with respect to the elections of Board members), as the case may be, (2) no
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (excluding any entity resulting from such Business Combination or a Parent or
any employee benefit plan (or related trust) of AJ or such entity resulting from such
Business Combination or Parent) beneficially owns, directly or indirectly, thirty-five
percent (35%) or more of, respectively, the then-outstanding shares of common stock of the
entity resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that the ownership
of thirty-five percent (35%) or more existed prior to the Business Combination, and (3) at
least a majority of the members of the board of directors or trustees of the entity
resulting from such Business Combination or a Parent were members of the Board at the time
of the execution of the initial agreement or of the action of the Board providing for such
Business Combination, or

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          (ii) any transaction or series of related transactions, other than a transaction
covered by clause (i) above that does not constitute a Change in Control pursuant to such
clause, pursuant to which any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(3) of the Exchange Act) (other than AJ, or any employee benefit plan (or
related trust) of AJ or a Corporate Affiliate or a person that, prior to such transaction or
series of related transactions, directly or indirectly controls, is controlled by or is
under common control with, AJ) becomes directly or indirectly the beneficial owner of
securities possessing (or convertible into or exercisable for securities possessing)
thirty-five percent (35%) or more of the total shares of Common Stock or the combined voting
power of AJ’s securities (determined by the power to vote with respect to the elections of
Board members) outstanding immediately after the consummation of such transaction or series
of related transactions, whether such transaction involves a direct issuance from AJ or the
acquisition of outstanding securities held by one or more of AJ’s stockholders; or

          (iii) a change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, by reason of
one or more contested elections for Board membership, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members during such period by at least
a majority of the Board members described in clause (A) who were still in office at the time
the Board approved such election or nomination.

For purposes of this Change in Control definition, beneficial ownership will be determined in
accordance with Section 13(d) of the Exchange Act.

          Code means the United States Internal Revenue Code of 1986, as amended.

          Common Stock means AJ’s common stock.

          Corporate Affiliate means any parent corporation of AJ within the meaning of Code Section
424(e) or any subsidiary corporation of AJ within the meaning of Code Section 424(f).

          Disability means a physical or mental impairment which substantially limits one of your major
life activities and which renders you unable to perform the essential functions of your position,
even with reasonable accommodation which does not impose an undue hardship on the Company, for more
than one hundred eighty (180) days in any consecutive twelve (12) month period. The Company
reserves the right, in good faith, to make the determination of whether or not a Disability exists
for purposes of this letter agreement based upon information supplied by you and/or your medical
personnel, as well as information from medical personnel (or others) selected by the Company or its
insurers.

          Exchange Act means the United States Securities Exchange Act of 1934, as amended.

          Good Reason means the occurrence of any one or more of the following without your express
written consent: (A) a reduction in the aggregate dollar amount of your Base Salary, (B) a
reduction of your Target Bonus by more than fifteen percent (15%), (C) you are informed by the
Company that your principal place of employment will be relocated to a location that is greater
than fifty (50) miles away from your then-current principal place of employment, or (D) a

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material reduction in the nature and status of your authorities, duties, and responsibilities,
(when such authorities, duties, and responsibilities are viewed in the aggregate) from their level
in effect immediately prior to such change, other than an insubstantial and inadvertent act that is
remedied by the Company promptly after the Company receives from you notice thereof. For purposes
of your severance benefits under Part Three of this letter agreement, “Good Reason” shall also
include (in addition to, and not in lieu of) the occurrence of any one or more of the following
without your express written consent: (A) the failure of the Company to obtain a satisfactory
agreement from any successor to the Company to assume and agree to perform the obligations under
this letter agreement, as contemplated in Section 10 of Part Six; or (B) any purported termination
by the Company of your employment that is not effected pursuant to a Notice of Termination
satisfying the requirements of Section 2 of Part Six. In any event, your right to terminate
employment for Good Reason will not be affected by your incapacity due to physical or mental
illness. Your continued employment will not constitute a consent to, or a waiver of rights with
respect to, any circumstances constituting Good Reason.

          Involuntary Termination means (i) the involuntary termination of your employment with the
Company other than a Termination for Cause or (ii) your resignation of your employment with the
Company within sixty (60) days following the occurrence of an event giving rise to Good Reason.
For avoidance of doubt, an Involuntary Termination will not be deemed to occur in the event your
employment terminates for any other reason, including but not limited to, by reason of your death
or Disability, Termination for Cause, or termination by you other than for Good Reason. However,
if immediately prior to the condition or event leading to, or the commencement of, your Disability
or immediately prior to your death, you would have had an Involuntary Termination if you had
terminated at that time, then upon your termination for Disability or death (as applicable) you
will be deemed to have incurred an Involuntary Termination.

          Option means any stock option granted to you under any of the Plans (including stock options
granted after the date of this letter agreement, unless otherwise expressly provided by the Board
or the Compensation Committee of the Board at the time of the applicable grant) which is
outstanding at the time of your Involuntary Termination, whether or not in connection with a Change
in Control.

          Plans mean (i) AJ’s 1999 Equity Incentive Plan, including the 2002 UK Approved Rules for
Grants thereunder, as amended or restated from time to time, (ii) AJ’s 1999 Non-Qualified Equity
Incentive Plan, as amended or restated from time to time, and (iii) any successor stock incentive
plan subsequently implemented by AJ.

          Release means a written release, discharge and covenant not to sue, in a form provided by AJ,
entered into by you on behalf of yourself, your descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, of and in favor of the Company, its
parent (if any, including and without limitation, AJ), each of the Company’s and AJ’s subsidiaries
and affiliates, past and present, and each of them, as well as its and their trustees, directors,
officers, agents, attorneys, insurers, employees, stockholders, members, representatives, assigns,
and successors, past and present, and each of them (the “releasees”), with respect to and from any
and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits,
causes of action, obligations, debts, costs, expenses, attorneys’ fees,

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damages, judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which you may then own or hold or at any time theretofore owned or held or may in the
future hold as against any or all of said releasees, arising out of or in any way connected with
your employment relationship with the Company, AJ and any Corporate Affiliate with which you have
had such a relationship, or the termination of your employment or any other transactions,
occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected
or unsuspected, resulting from any act or omission by or on the part of said releasees, or any of
them, committed or omitted prior to the date of such release including, without limiting the
generality of the foregoing, any claim for severance pay, bonus or incentive pay, sick leave,
holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit,
medical expenses, or disability (except that such release shall not constitute a release of any
Company obligation to you that may be due to you upon the Company’s receipt of such release). The
Release shall also contain your warrant that you have not theretofore assigned or transferred to
any person or entity, other than the Company or a Company affiliate (including, without limitation,
AJ), any released matter or any part or portion thereof and that you will defend, indemnify and
hold harmless the Company and the aforementioned releasees from and against any claim (including
the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced)
that is directly or indirectly based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed. The Release shall also contain your resignation from each
and every board of directors (or similar body, as the case may be) of the Company, AJ and each
Corporate Affiliate on which you may then serve (if any) and each and every office of the Company,
AJ and each Corporate Affiliate that you may then hold, and all positions that you may have
previously held with the Company, AJ and any Corporate Affiliate.

          Target Bonus means the annual incentive bonus to which you would be eligible under the
Company’s or AJ’s, as applicable, Incentive Bonus Plan (or any similar successor plan) for a
particular fiscal year calculated on the following assumptions: (1) that at the conclusion of such
year the Company’s or AJ’s, as applicable, performance is at 100% of its performance milestone
target and (2) that at the conclusion of such year your individual performance is at 100% of your
individual target level.

          Termination for Cause means, until the occurrence of a Change in Control, the Company’s
termination of your employment for any of the following reasons: (i) your commission of any act of
fraud, embezzlement or dishonesty, (ii) your unauthorized use or disclosure of any confidential
information or trade secrets of the Company, AJ or any Corporate Affiliate, (iii) any misconduct by
you, whether by omission or commission, which has a material adverse effect upon the business or
affairs of the Company, AJ or any Corporate Affiliate, (iv) your continued failure to perform the
duties, functions and responsibilities of your position after written notice from the Company or AJ
identifying the deficiencies in your performance and a reasonable cure period of not less than
thirty (30) days, or (v) a breach of your fiduciary duties as an officer of the Company. As to
acts, events, and omissions that occur after the occurrence of a Change in Control, “Termination
for Cause” means the Company’s termination of your employment for any of the following reasons: (i)
your commission of any act of material fraud, material embezzlement or material dishonesty, (ii)
your unauthorized use or disclosure of any material confidential information or trade secrets of
the Company, AJ or any Corporate Affiliate,

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(iii) any misconduct by you, whether by omission or commission, which has a material adverse
effect upon the business or affairs of the Company, AJ or any Corporate Affiliate, (iv) your
continued failure to perform the essential duties, functions and responsibilities of your position
after written notice from the Company identifying the deficiencies in your performance and a
reasonable cure period of not less than thirty (30) days, or (v) a material breach of your
fiduciary duties as an officer of the Company.

PART TWO — NORMAL SEVERANCE BENEFITS

          Except as otherwise provided in Part Three of this letter agreement, should your employment
with the Company terminate by reason of an Involuntary Termination prior to the occurrence of a
Change in Control, then you will become entitled to receive the severance benefits provided under
this Part Two. Notwithstanding the foregoing, you will only be entitled to receive such benefits
if you execute and deliver to the Company, at the time of your Involuntary Termination, a fully
executed, valid and binding Release. Furthermore, and notwithstanding anything else contained
herein to the contrary, the Company and Company affiliates (including, without limitation, AJ)
shall have no obligation to pay you such benefits until after such Release has become irrevocable
by you in accordance with all applicable laws, rules and regulations. In addition, your benefits
under this Part Two will be subject to the limitations of Part Four and your compliance with the
restrictive covenants set forth in Paragraph 1 of Part Five. Except for severance benefits
expressly provided under your Prior Agreement, your benefits under this Part Two shall be in lieu
of any other severance benefits to which you might otherwise, by reason of the termination of your
employment, be entitled under any other severance plan, program or arrangement of the Company, AJ
or any Corporate Affiliate. In no event will you be entitled to benefits under both Part Two and
Part Three of this letter agreement.

          The severance benefits to which you may become entitled under this Part Two shall consist of
the following option acceleration benefit:

          The vesting schedule in effect for the shares of Common Stock subject to your Options,
to the extent outstanding at the time of your Involuntary Termination, will be accelerated
by an additional six (6) months so that each such Option shall immediately become
exercisable for the additional number of shares for which that Option would have otherwise
been exercisable under the normal vesting schedule in effect for that Option had you
actually rendered an additional six (6) months of service with the Company prior to the date
of your Involuntary Termination. You will have until the earlier of (i) the expiration of
the option term, (ii) the termination of the Option in connection with a Change in Control
or similar event as provided in the applicable Plan and/or stock option agreement, or (iii)
the end of the limited post-employment exercise period specified in the applicable stock
option agreement for such Option in which to exercise such Option for any or all of the
 shares of Common Stock for which that Option is vested and exercisable at the time of your
Involuntary Termination, including the shares of Common Stock which vest on an accelerated
basis in accordance with the foregoing provisions of this paragraph. This paragraph shall
control as to each such Option notwithstanding anything in the applicable Plan and/or stock
option agreement to the contrary.

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PART THREE - SPECIAL CHANGE IN CONTROL BENEFITS

          Should your employment with the Company terminate by reason of an Involuntary Termination
within eighteen (18) months after a Change in Control, then you will become entitled to receive the
severance benefits set forth in this Part Three. Notwithstanding the foregoing, you will only be
entitled to receive such benefits if you execute and deliver to the Company, at the time of your
Involuntary Termination, a fully executed, valid and binding Release. Furthermore, and
notwithstanding anything else contained herein to the contrary, the Company and Company affiliates
(including, without limitation, AJ) shall have no obligation to pay you such benefits until after
such Release has become irrevocable by you in accordance with all applicable laws, rules and
regulations. In addition, your benefits under this Part Three will be subject to the limitations
of Part Four and your compliance with the restrictive covenants set forth in Paragraph 1 of Part
Five. Except for severance benefits expressly provided under your Prior Agreement, your benefits
under this Part Three shall be in lieu of any other severance benefits to which you might
otherwise, by reason of the termination of your employment, be entitled under any other severance
plan, program or arrangement of the Company, AJ or any Corporate Affiliate. In no event will you
be entitled to benefits under both Part Two and Part Three of this letter agreement.

          The severance benefits to which you may become entitled pursuant to this Part Three shall
consist of the following option acceleration benefit:

          Your Options, to the extent outstanding at the time of a Change in Control but not
otherwise vested and exercisable for all the shares of Common Stock subject to the Options
will, immediately prior to the effective date of that Change in Control, vest and become
exercisable for all of the shares of Common Stock at the time subject to the Options and may
be exercised for any or all of those shares as fully-vested shares of Common Stock. Your
Options as so accelerated shall remain exercisable until the earlier of (i) the expiration
of the applicable option term, (ii) the termination of the Option in connection with a
Change in Control or similar event as provided in the applicable Plan and/or stock option
agreement, or (iii) the end of the limited post-employment exercise period specified in the
option agreement for each such Option; provided that nothing in this letter agreement shall
limit AJ’s ability to terminate the options in connection with a change in control in
accordance with the terms and conditions of the applicable Plan and stock option agreement.
This paragraph shall control as to each such Option notwithstanding anything in the
applicable Plan and/or stock option agreement to the contrary.

PART FOUR – BENEFIT LIMITATIONS

          Notwithstanding anything contained in this letter agreement to the contrary, to the extent
that any payment or distribution of any type to you or for you by the Company, a Company affiliate
(including, without limitation, AJ), any person who acquires ownership or effective control of the
Company or AJ or ownership of a substantial portion of the Company’s or AJ’s assets (within the
meaning of Section 280G of Code and regulations thereunder), or any affiliate of such person,
whether paid or payable or distributed or distributable pursuant to the terms of this letter
agreement or otherwise (including, without limitation, any accelerated vesting, or

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payment of stock options or other awards) (collectively, the “Total Payments”) is or will be
subject to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), then the Total
Payments will be reduced (but not below zero) so that the maximum amount of the Total Payments
(after reduction) will be one dollar ($1) less than the amount that would cause the Total Payments
to be subject to the Excise Tax; provided that such reduction to the Total Payments will be made
only if the total after-tax benefit to you is greater after giving effect to such reduction than if
no such reduction had been made.

          Unless you give prior written notice specifying a different order to AJ to effectuate the
foregoing, AJ and the Company will reduce or eliminate the Total Payments, by first reducing or
eliminating any cash severance benefits, then by reducing or eliminating any other remaining Total
Payments other than any accelerated vesting of stock options or other awards, then by reducing or
eliminating any accelerated vesting of stock options or other awards. The preceding provisions of
this Part Four take precedence over the provisions of any other plan, arrangement or agreement
governing your rights and entitlements to any benefits or compensation.

          The determination of whether the Total Payments will be reduced as provided in the first
paragraph of this Part Four, and the determination of the amount of such reduction, will be made at
the Company’s or AJ’s expense, as determined by them in their sole discretion, by a nationally
recognized certified independent public accounting firm selected by AJ (the “Accounting Firm”).
The Accounting Firm will provide its determination (the “Determination”), together with detailed
supporting calculations and documentation to you and the Company, within fifteen (15) days of the
date of your termination of employment with the Company.

          It is possible that Total Payments to you will initially be reduced to an extent greater than
that required under the foregoing provisions of this Part Four (an “Underpayment”). It is also
possible that Total Payments will not initially be reduced to the extent required by the foregoing
provisions of this Part Four (an “Overpayment”). The determination of any Underpayment or
Overpayment will be made by the Accounting Firm in accordance with the foregoing paragraph. In the
event of an Underpayment, the amount of any such Underpayment shall be paid to you. In the event
of an Overpayment, you will promptly pay to the Company or AJ, as applicable and without interest,
the amount of such Overpayment.

PART FIVE - SPECIAL RESTRICTIVE COVENANTS

                    1. Non-solicitation. For a period of two (2) years following your Involuntary
Termination, whether or not in connection with a Change in Control, you shall comply with each of
the following restrictive covenants:

          (a) you will not encourage or solicit any employee of the Company (or any affiliate of
the Company) to leave the Company’s (or such affiliate’s) employ for any reason or interfere
in any other manner with employment relationships at the time existing between the Company
(or any affiliate of the Company) and their respective employees; and

          (b) you will not induce any customer, supplier, vendor, distributor, licensor or
licensee of the Company (or any affiliate of the Company) to terminate (or elect not to

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renew) its existing business contractual relationships with the Company (or such
affiliate), as applicable, or interfere in any other manner with any existing business
contractual relationship between any customer, supplier, vendor, distributor, licensor or
licensee and the Company (or any affiliate of the Company).

          2. Effect of Non-Compliance. You acknowledge that monetary damages may not be
sufficient to compensate the Company or affiliate of the Company, as applicable, for any economic
loss which may be incurred by reason of your breach of the restrictive covenants set forth in
Paragraph 1 of this Part Five. Accordingly, in the event of any breach of those covenants, the
Company or one of its affiliates, as applicable, shall be entitled to obtain, in addition to any
remedies available at law, equitable relief in the form of an injunction precluding you from
continuing such breach. In addition, any Option acceleration to which you become entitled under
Part Two or Part Three of this letter agreement shall immediately cease should you fail to comply
with any of the restrictive covenants set forth in Paragraph 1 of this Part Five.

PART SIX — MISCELLANEOUS

          1. Other Terminations of Employment. Should your employment be terminated by the
Company in a Termination for Cause, should you quit, resign or retire other than for Good Reason,
or should your employment terminate due to your death or Disability, the Company (subject to
Section 6.2 of your Prior Agreement) will only be required to pay you (i) any unpaid compensation
earned for services previously rendered through the date of such termination and (ii) any accrued
but unpaid vacation benefits or sick days, and no benefits will be payable to you under Part Two or
Part Three of this letter agreement.

          2. Notice of Termination. Any termination by the Company for Cause or by you for Good
Reason upon or following a Change in Control will be communicated by a Notice of Termination. For
purposes of this letter agreement, a “Notice of Termination” means a written notice that indicates
the specific termination provision in this letter agreement that you or the Company relied upon and
sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.

          3. Re-employment. If, in connection with your termination of employment, all or any
portion of your Options become vested under Part Two or Part Three of this letter agreement, such
accelerated vesting will remain effective if you become re-employed by the Company or a Company
affiliate. If you are so re-employed and your employment is later terminated, you will not be
entitled to any additional vesting of your Options under Part Two of this letter agreement with
respect to Options that have previously been subject to accelerated vesting under Part Two. You
may, however, be entitled to accelerated vesting of such Options in accordance with Part Three of
this letter agreement to the extent such Options have not previously become vested.

          4. Tax Withholding. The Company and AJ each have the right to withhold from any
amount otherwise payable to you under or pursuant to this letter agreement the amount of any taxes
(national, local or otherwise) that the Company or AJ may legally be required to withhold with
respect to such payment. If tax withholding is so required and the Company or AJ cannot satisfy
its tax withholding obligations in the manner described in the preceding sentence, the

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Company or AJ may require you to pay or provide for the payment of such required tax
withholding as a condition to the payment or delivery of such amounts or benefits. You are solely
responsible for all income and employment taxes arising in connection with this letter agreement or
benefits hereunder.

          5. Tax Status of Options. The accelerated vesting of one or more of your Options
pursuant to the provisions of this letter agreement may result in the loss of favorable tax
treatment under Code Section 422 for all or part of those Options which might have otherwise
qualified as an incentive stock option under Code Section 422.

          6. Indemnification. The indemnification provisions for Officers and Directors under
the Company’s Bylaws will (to the maximum extent permitted by law) be extended to you during the
period following your Involuntary Termination, whether or not in connection with a Change in
Control, with respect to all matters, events or transactions occurring or effected during your
period of employment with the Company.

          7. Death. Should you die before you exercise all your outstanding Options then such
Options, to the extent exercisable at the time of your death, may be exercised within twelve (12)
months after your death (or such shorter or longer period as may be provided under the applicable
stock option agreement) by the executors or administrators of your estate or by persons to whom the
Options are transferred pursuant to your will or in accordance with the laws of inheritance. In no
event, however, may any such Option be exercised after the specified expiration date of the option
term or any earlier termination of the Option in connection with a Change in Control or similar
event as provided in the applicable Plan and/or stock option agreement. This Paragraph 7 shall
control as to each such Option notwithstanding anything in the applicable Plan and/or stock option
agreement to the contrary.

          8. Miscellaneous. This letter agreement will be binding upon the Company, AJ and its
or their successors and assigns and is to be construed and interpreted under the laws of the State
of California, notwithstanding any California or other conflict of law provision to the contrary.
Nothing in this letter agreement is intended to provide you with any right to continue in the
employ of the Company (or AJ or any Corporate Affiliate) for any period of specific duration or
interfere with or otherwise restrict in any way your rights or the rights of the Company (or AJ or
any Corporate Affiliate), which rights are hereby expressly reserved by each, to terminate your
employment at any time for any reason or for no reason; provided, however, that nothing in this
letter agreement is intended to supersede any rights to continued employment that you may have as a
matter of law under the laws of the United Kingdom.

          AJ will require the surviving entity or successor in any Change in Control to expressly assume
and agree to perform the Company’s and AJ’s obligations under this letter agreement in the same
manner and to the same extent as Company and AJ would be required to perform them if such Change in
Control had not taken place. If AJ fails to obtain such assumption and agreement in writing before
the effective date of any such Change in Control, then the failure will be deemed to be a breach of
this letter agreement and you will be entitled to the benefits under Part Three.

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          None of your benefits, payments, proceeds or claims will be subject to any claim of any
creditor and, in particular, the same shall not be subject to attachment or garnishment or other
legal process by any creditor, nor do you have any right to alienate, anticipate, commute, pledge,
encumber or assign any of the benefits or payments or proceeds which you may expect to receive,
contingently or otherwise, under this letter agreement. Notwithstanding the foregoing, benefits
which are in pay status may be subject to a court-ordered garnishment or wage assignment, or
similar order, or a tax levy. This letter agreement will inure to the benefit of and be
enforceable by your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees.

          Except as provided below, this letter agreement supersedes all prior agreements between you
and the Company relating to the subject of severance benefits payable upon your termination of
employment, whether or not in connection with a Change in Control or other change in control or
ownership of AJ, and you will not be entitled to any other severance benefits upon your termination
of employment other than those that are provided in this letter agreement and in your Prior
Agreement. Except as provided in the next sentence, there are no representations, warranties, or
agreements, whether express or implied, or oral or written, with respect to the subject matter
hereof, except as expressly set forth herein. Notwithstanding anything to the contrary, nothing in
this letter agreement is meant to, or does, supersede, alter or modify your obligations under the
Confidential Information and Invention Assignment Agreement previously signed by you with the
Company. Further, except as expressly modified herein, each of your Options shall otherwise
continue to be subject to the terms and conditions of the applicable Plan and stock option
agreement and your Prior Agreement shall continue in effect as expressly otherwise provided herein.

          This letter agreement may only be amended or terminated by written instrument signed by you
and an authorized officer of the Company.

          If any provision of this letter agreement as applied to you or the Company (or a Company
affiliate, including AJ) or to any circumstance should be adjudged by a court of competent
jurisdiction to be void or unenforceable for any reason, the invalidity of that provision will in
no way affect (to the maximum extent permissible by law) the application of such provision under
circumstances different from those adjudicated by the court, the application of any other provision
of this letter agreement, or the enforceability or invalidity of this letter agreement as a whole.
Should any provision of this letter agreement become or be deemed invalid, illegal or unenforceable
in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision
will be deemed amended to the extent necessary to conform to applicable law so as to be valid and
enforceable or, if such provision cannot be so amended without materially altering the intention of
the parties, then such provision will be stricken and the remainder of this letter agreement will
continue in full force and effect.

          The section headings of this letter agreement are for the purpose of convenience only, and
they neither form a part of this agreement nor are they to be used in the construction or
interpretation thereof.

          Neither the failure nor any delay on the part of a party to exercise any right, remedy, power
or privilege under this letter agreement shall operate as a waiver thereof, nor shall any

11

 

single or partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be
effective unless it is in writing and is signed by the party asserted to have granted such waiver.

          Each party recognizes that this is a legally binding contract and acknowledges and agrees that
they have had the opportunity to consult with legal counsel of their choice. Each party has
cooperated in the drafting, negotiation and preparation of this letter agreement. Hence, in any
construction to be made of this letter agreement, the same shall not be construed against either
party on the basis of that party being the drafter of such language.

          11. Payment of Obligations Absolute. Except as provided in Part Four and Section 3 of
Part Six, the Company’s obligation to make the payments and the arrangements provided for herein
are absolute and unconditional, and will not be affected by any circumstances, including, without
limitation, any offset, counterclaim, recoupment, defense, or other right which the Company may
have against you or anyone else. You agree that, in the event of the termination of your
employment, the applicable benefits called for by this agreement (whether pursuant to Part Two,
Part Three, or Section 1 of Part Six) and your Prior Agreement shall constitute the exclusive and
sole remedy for any termination of your employment and you covenant not to assert or pursue any
other remedies, at law or in equity, with respect to any termination of employment. AJ will
provide all benefits to which you are entitled under this letter agreement without notice or
demand. Each and every benefit provided hereunder by AJ will be final, and AJ will not seek to
recover from you all or any part of such benefit, for any reasons whatsoever, except as otherwise
provided in Part Four or in the event that the Release is revoked or otherwise rendered
unenforceable by you.

          You will not be obligated to seek other employment in mitigation of the benefits provided
under this letter agreement, and if you obtain any other employment it will in no event effect any
reduction of the Company’s obligations to make the payments and arrangements required to be made
hereunder.

          12. Other Benefit Plans. All benefits provided under this letter agreement are in
addition to and not in substitution for any pension rights under the Company’s tax-qualified
pension plan in which you participate and any disability, life or workers’ compensation
distribution that you may be entitled to under the terms of any such plan at the time your
employment by the Company terminates. Notwithstanding the foregoing, this letter agreement does
not create an inference that any duplicate payments will be required. Any benefits you receive
under this letter agreement will not be deemed a part of your compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or arrangements, if
any, provided by the Company, except where explicitly provided under the terms of such plans or
arrangements.

[The remainder of this page has intentionally been left blank.]

12

 

          Please indicate your acceptance of the foregoing by signing the enclosed copy of this letter
and returning it to the Company.

	 	 	 	 	 
	 	Very truly yours,

ASK JEEVES INTERNET LTD.

 	 
	 	By:  	/s/ Steve Berkowitz
 	 
	 	 	Steve Berkowitz 	 
	 	 	Director 	 
	 

ACCEPTANCE

          I hereby agree to all the terms and provisions of the foregoing letter agreement governing
certain severance benefits to which I may become entitled upon the termination of my employment
under certain prescribed circumstances, including (i) an involuntary termination without cause or
(ii) an involuntary termination without cause or resignation following a substantial change in
control or ownership of the Company. I further agree that, except with respect to benefits
provided under the letter agreement between me and the Company dated October 27, 2003 (as modified
by this letter agreement), the benefits to which I may become entitled under this letter agreement
supersede and replace any other severance benefits to which I might otherwise become entitled under
any other plan, program or arrangement or agreement with the Company, AJ or any Corporate
Affiliate, and I hereby fully release all the rights and entitlements I might otherwise have under
those other plans, programs, arrangements and agreements.

	 	 	 	 	 
	

	 	Signature:
	 	/s/ Adrian Cox

	

	 	Date:
	 	25 January 2005

          Ask Jeeves, Inc. confirms that your Options have been (and any future Options will, by virtue
of this agreement, be) modified to give effect to any accelerated vesting required pursuant to this
letter agreement.

	 	 	 	 	 
	 	ASK JEEVES, INC.

 	 
	 	By:  	/s/ Steve Berkowitz
 	 
	 	 	Steve Berkowitz 	 
	 	 	Chief Executive Officer 	 
	 

13<PAGE>

                                                                    EXHIBIT 10.1

                            INDEMNIFICATION AGREEMENT

      This INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into
as of _____________, 2004 (the "Effective Date") by and between STENTOR, INC., a
Delaware corporation (the "Company"), and [_________] (the "Indemnitee").

      WHEREAS, the Company believes it is essential to retain and attract
qualified directors and officers and ensure their willingness to serve on
committees of the board of directors of the Company (the "Board");

      WHEREAS, the Indemnitee is a director and/or officer of the Company and/or
member of one or more committees of the Board;

      WHEREAS, both the Company and the Indemnitee recognize the increased risk
of litigation and other claims being asserted against or involving directors and
officers and audit committees of companies;

      WHEREAS, the Company's Fourth Amended and Restated Certificate of
Incorporation (the "Certificate of Incorporation") and Bylaws (the "Bylaws")
require the Company to indemnify and advance expenses to its directors and
officers to the fullest extent permitted by the DGCL (as hereinafter defined)
and the CGCL;

      WHEREAS, the Indemnitee has been serving and intends to continue serving
as a director and/or officer and/or member of one or more committees of the
Board in part in reliance on the Certificate of Incorporation and Bylaws; and

      WHEREAS, in recognition of the Indemnitee's need for (i) substantial
protection against personal liability based on the Indemnitee's reliance on the
Certificate of Incorporation and Bylaws, (ii) specific contractual assurance
that the protection promised by the Certificate of Incorporation and Bylaws will
be available to the Indemnitee, regardless of, among other things, any amendment
to or revocation of the Bylaws or any change in the composition of the Board or
acquisition transaction relating to the Company, and (iii) an inducement to
continue to provide effective services to the Company as a director and/or
officer thereof, the Company wishes to provide for the indemnification of the
Indemnitee and to advance expenses to the Indemnitee to the fullest extent
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained by the Company, to provide for the continued coverage of
the Indemnitee under the Company's directors' and officers' liability insurance
policies; and

      NOW, THEREFORE, in consideration of the premises contained herein and of
the Indemnitee continuing to serve the Company directly or, at its request, with
another enterprise, and intending to be legally bound hereby, the parties hereto
agree as follows:

      1. CERTAIN DEFINITIONS.

            (a) "CGCL" shall mean the General Corporation Law of the State of
California, as the same exists or may hereafter be amended or interpreted;
provided, however, that in the case of any such amendment or interpretation,
only to the extent that such amendment or

                                       1
<PAGE>

interpretation permits the Company to provide indemnification rights more
favorable to the indemnified persons than were permitted prior thereto.

            (b) A "Change in Control" shall be deemed to have occurred if:

                  (i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), other than (a) a trustee or other
fiduciary holding securities under an employee benefit plan of the Company; or
(b) a corporation owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company;

                  (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board and any new director
whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the full Board; or

                  (iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the Voting Securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company, in one transaction or a series of
transactions, of all or substantially all of the Company's assets.

            (c) "DGCL" shall mean the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended or interpreted;
provided, however, that in the case of any such amendment or interpretation,
only to the extent that such amendment or interpretation permits the Company to
provide indemnification rights more favorable to the indemnified persons than
were permitted prior thereto.

            (d) "Expense" shall mean attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing for any of the foregoing, any Proceeding relating to any Indemnifiable
Event or enforcing any right under this Agreement or the Certificate of
Incorporation or Bylaws.

            (e) "Indemnifiable Event" shall mean any event or occurrence that
takes place either prior to or after the execution of this Agreement, related to
the fact that the Indemnitee is or was a director or officer of the Company or
member of a committee of the Board, or is or was serving at the request of the
Company as a director, officer, employee, or agent of another corporation,
limited liability company, partnership, joint venture, trust, or other
enterprise, or as a limited liability company member or manager, as a partner of
a partnership or as trustee of a

                                       2
<PAGE>

trust, including service with respect to employee benefit plans, or by reason of
anything done or not done by the Indemnitee in any such capacity.

            (f) "Proceeding" shall mean any threatened, pending or completed
action, suit, investigation or proceeding, and any appeal thereof, whether
civil, criminal, administrative or investigative and/or any inquiry or
investigation, whether conducted by the Company or any other party, that the
Indemnitee in good faith believes might lead to the institution of any such
action.

            (g) "Reviewing Party" shall mean any appropriate person or body
consisting of a member or members of the Company's Board or any other person or
body appointed by the Board (including the special independent counsel referred
to in Section 6) who is not a party to the particular Proceeding with respect to
which the Indemnitee is seeking indemnification.

            (h) "Voting Securities" shall mean any securities of the Company
that vote generally in the election of directors.

      2. INDEMNIFICATION. In the event the Indemnitee was, is, or may become a
party to or was, is, or may become involved (as a party, witness, or otherwise)
in any Proceeding by reason of (or arising in part out of) an Indemnifiable
Event, whether the basis of the Proceeding is the Indemnitee's alleged action in
an official capacity as a director or officer or in any other capacity (or in
any other capacity referred to in the definition of Indemnifiable Event) while
serving as a director or officer or in any other capacity, the Company shall
indemnify the Indemnitee to the fullest extent permitted by the DGCL against any
and all Expenses, liability, and loss (including judgments, fines, ERISA excise
taxes or penalties, and amounts paid or to be paid in settlement, and any
interest, assessments, or other charges imposed thereon, and any federal, state,
local, or foreign taxes imposed on any director or officer as a result of the
actual or deemed receipt of any payments under this Agreement) (collectively,
"Liabilities") reasonably incurred or suffered by such person in connection with
such Proceeding. The Company shall provide indemnification pursuant to this
Section 2 as soon as practicable, but in no event later than 30 days after it
receives written demand from the Indemnitee. Notwithstanding anything in this
Agreement to the contrary and except as provided in Section 5 below, the
Indemnitee shall not be entitled to indemnification pursuant to this Agreement
(i) in connection with any Proceeding initiated by the Indemnitee against the
Company or any director or officer of the Company (other than a Proceeding to
enforce rights under this Agreement or the Certificate of Incorporation or
Bylaws as to which the Indemnitee shall be entitled to indemnification in
accordance with Sections 5 and 7, unless the Company has joined in or consented
to the initiation of such Proceeding or (ii) on account of any suit in which
judgment is rendered against the Indemnitee pursuant to Section 16(b) of the
Exchange Act for an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company.

      3. ADVANCEMENT OF EXPENSES. The Company shall advance Expenses to the
Indemnitee within 30 business days of such request (an "Expense Advance");
provided, however, that if required by applicable corporate laws such Expenses
shall be advanced only upon delivery to the Company of an undertaking by or on
behalf of the Indemnitee to repay such amount if it is ultimately determined
that the Indemnitee is not entitled to be indemnified by the Company; and
provided further, that the Company shall make such advances only to the extent

                                       3
<PAGE>

permitted by law. Expenses incurred by the Indemnitee while not acting in
his/her capacity as a director or officer, including service with respect to
employee benefit plans, may be advanced upon such terms and conditions as the
Board, in its sole discretion, deems appropriate.

      4. REVIEW PROCEDURE FOR INDEMNIFICATION. Notwithstanding the foregoing,
(i) the obligations of the Company under Sections 2 and 3 above shall be subject
to the condition that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the special independent counsel referred
to in Section 6 hereof is involved) that the Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of the Company
to make an Expense Advance pursuant to Section 3 above shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines
that the Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by the Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid;
provided, however, that if the Indemnitee has commenced legal proceedings in a
court of competent jurisdiction pursuant to Section 5 below to secure a
determination that the Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that the Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have lapsed). The
Indemnitee's obligation to reimburse the Company for Expense Advances pursuant
to this Section 4 shall be unsecured and no interest shall be charged thereon.
If there has not been a Change in Control, the Reviewing Party shall be selected
by the Board, and if there has been such a Change in Control, other than a
Change in Control which has been approved by a majority of the Company's Board
who were directors immediately prior to such Change in Control, the Reviewing
Party shall be the special independent counsel referred to in Section 6 hereof.

      5. ENFORCEMENT OF INDEMNIFICATION RIGHTS. If the Reviewing Party
determines that the Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if the Indemnitee has
not otherwise been paid in full pursuant to Sections 2 and 3 above within 30
days after a written demand has been received by the Company, the Indemnitee
shall have the right to commence litigation in any court in the State of
Delaware having subject matter jurisdiction thereof and in which venue is proper
to recover the unpaid amount of the demand (an "Enforcement Proceeding") and, if
successful in whole or in part, the Indemnitee shall be entitled to be paid any
and all Expenses in connection with such Enforcement Proceeding. The Company
hereby consents to service of process for such Enforcement Proceeding and to
appear in any such Enforcement Proceeding. Any determination by the Reviewing
Party otherwise shall be conclusive and binding on the Company and the
Indemnitee. In any Enforcement Proceeding brought by the Indemnitee, the burden
of proving that the Indemnitee is not entitled to indemnification shall be on
the Company.

      6. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company's Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under

                                       4
<PAGE>

applicable law or the Certificate of Incorporation or Bylaws now or hereafter in
effect relating to indemnification for Indemnifiable Events, the Company shall
seek legal advice only from special independent counsel selected by the
Indemnitee and approved by the Company, which approval shall not be unreasonably
withheld. Such special independent counsel shall not have otherwise performed
services for the Company or the Indemnitee, other than in connection with such
matters, within the last five years. Such independent counsel shall not include
any person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee's rights under this
Agreement. Such counsel, among other things, shall render its written opinion to
the Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law. The Company agrees to
pay the reasonable fees of the special independent counsel referred to above and
to indemnify fully such counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or the engagement of special independent counsel pursuant to this
Agreement.

      7. PARTIAL INDEMNITY. If the Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement (including Section 2(ii)), to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any or
all Proceedings relating in whole or in part to an Indemnifiable Event or in
defense of any issue or matter therein, including dismissal without prejudice,
or in the prosecution of any Proceedings for the enforcement of Indemnitee's
rights under this Agreement or the Certificate of Incorporation or Bylaws, the
Indemnitee shall be indemnified against all Expenses incurred in connection
therewith. In connection with any determination by the Reviewing Party or
otherwise as to whether the Indemnitee is entitled to be indemnified hereunder,
the burden of proof shall be on the Company to establish that the Indemnitee is
not so entitled.

      8. NON-EXCLUSIVITY. The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under any statute,
provision of the Certificate of Incorporation or Bylaws, vote of stockholders or
disinterested directors or otherwise, both as to action in an official capacity
and as to action in another capacity while holding such office. To the extent
that a change in the DGCL permits greater indemnification by agreement than
would be afforded currently under the Certificate of Incorporation and Bylaws
and this Agreement, or is otherwise more favorable to the Indemnitee in any
respect than this Agreement, it is the intent of the parties hereto that the
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.

      9. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent of the coverage available for any director
or officer of the Company. Indemnitee shall be given prompt notice of any
change, lapse or cancellation of the Company's directors and officers' liability
insurance.

                                       5
<PAGE>

      10. SETTLEMENT OF CLAIMS. The Company shall not be liable to indemnify the
Indemnitee under this Agreement (a) for any amounts paid in settlement of any
action or claim effected without the Company's written consent, which consent
shall not be unreasonably withheld; or (b) for any judicial award if the Company
was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.

      11. NO PRESUMPTION. For purposes of this Agreement, to the fullest extent
permitted by law, the termination of any Proceeding, action, suit or claim, by
judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.

      12. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any affiliate of
the Company against the Indemnitee, the Indemnitee's spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, or such longer period as may be
required by state law under the circumstances, and any claim or cause of action
of the Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within such period; provided,
however, that if any shorter period of limitations is otherwise applicable to
any such cause of action, such shorter period shall govern.

      13. CONSENT AND WAIVER BY THIRD PARTIES. The Indemnitee hereby represents
and warrants that he or she has obtained all waivers and/or consents from third
parties which are necessary for his or her employment with the Company on the
terms and conditions set forth herein and to execute and perform this Agreement
without being in conflict with any other agreement, obligation or understanding
with any such third party. The Indemnitee represents that he or she is not bound
by any agreement or any other existing or previous business relationship which
conflicts with, or may conflict with, the performance of his or her obligations
hereunder or prevent the full performance of his or her duties and obligations
hereunder.

      14. AMENDMENT OF THIS AGREEMENT. No supplement, modification or amendment
of this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver. Except as
specifically provided herein, no failure to exercise or any delay in exercising
any right or remedy hereunder shall constitute a waiver thereof.

      15. SUBROGATION. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all papers required and shall do
everything that may be necessary to secure such rights, including the execution
of such documents necessary to enable the Company effectively to bring suit to
enforce such rights (other than rights under any personal insurance maintained
by the Indemnitee).

      16. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against
Indemnitee to the

                                       6
<PAGE>

extent the Indemnitee has otherwise actually received payment (under any
insurance policy, Bylaw, vote, agreement or otherwise) of the amounts otherwise
indemnifiable hereunder.

      17. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect
regardless of whether the Indemnitee continues to serve as a director or officer
of the Company or of any other enterprise (or in any other capacity referred to
in the definition of Indemnifiable Event) at the Company's request.

      18. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

      19. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.

      20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      21. NOTICES. All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:

                             Stentor, Inc.
                             5000 Marina Boulevard
                             Brisbane, CA 94005-1811
                             Attention: David J. Kizner, Esq.

                             With a copy to:

                                       7
<PAGE>

                             Cooley Godward LLP
                             One Maritime Plaza
                             20(th) Floor
                             San Francisco, CA 94111
                             Attention: Kenneth L. Guernsey, Esq.

            and to the Indemnitee at:

                               _________________
                               _________________
                               _________________
                               _________________

      Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the date of delivery or on the third business
day after mailing.

                            [SIGNATURE PAGE FOLLOWS]

                                       8
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day first set forth above.

                                        THE COMPANY:

                                        STENTOR, INC.

                                        By:___________________________________

                                        Name: ________________________________

                                        Title: _______________________________

                                        INDEMNITEE:

                                        ______________________________________
                                                       Signature

                                        Print Name: __________________________

                                       9

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