Document:

Exhibit
10.06

 

EMPLOYMENT
AGREEMENT

 

This AGREEMENT (the
“Agreement”) is entered into as of May 2, 2003 by and between GHP Acquisition
Corp., a Delaware corporation with its headquarters located in Brisbane,
California (the “Employer”), and Mark Jung (the “Executive”) and will become
effective (the “Effective Date”) upon the Closing as defined in that certain
Agreement and Plan of Merger dated as of the date hereof by and among the
Employer and IGN Entertainment, Inc., a Delaware corporation (the “Merger Agreement”). 
In consideration of the mutual covenants contained in this Agreement, the
Employer and the Executive agree as follows:

 

1.                                      
Employment.  The Employer
agrees to employ the Executive and the Executive agrees to be employed by the
Employer on the terms and conditions set forth in this Agreement.

 

2.                                      
Capacity.  The Executive
shall initially serve the Employer as Chief Executive Officer, subject to
election by the Board of Directors, of the Employer (the “Board of Directors”)
and as a member of the Board of Directors, subject to election by the
shareholders of the Employer.  The Executive shall also serve the Employer
in such other or additional offices as the Executive may be requested to serve
by the Board of Directors.  In such capacity or capacities, the Executive
shall perform such services and duties in connection with the business, affairs
and operations of the Employer as may be assigned or delegated to the Executive
from time to time by or under the authority of the Board of Directors.

 

3.                                      
Term.  Subject to the
provisions of Section 6, the term of employment pursuant to this Agreement
(the “Term”) shall be three (3) years from the Effective Date and shall be
renewed automatically for periods of one (1) year commencing at the third
anniversary of the Effective Date and on each subsequent anniversary
thereafter, unless either the Executive or the Employer gives written notice to
the other not less than sixty (60) days prior to the date of any such
anniversary of such party’s election not to extend the Term.

 

4.                                      
Compensation
and Benefits.  The regular compensation and benefits payable to
the Executive under this Agreement shall be as follows:

 

(a)                                 
Salary.  For all
services rendered by the Executive under this Agreement, the Employer shall pay
the Executive a salary (the “Salary”) at the annual rate of Three Hundred
Thousand Dollars ($300,000), subject to adjustment from time to time in the
discretion of the Board of Directors or the Compensation Committee of the Board
of Directors (the “Compensation Committee”).  The Salary shall be payable
in periodic installments in accordance with the Employer’s usual practice for
its senior executives.

 

(b)                                
Bonus.  In the event
that an annual incentive program established by the Board of Directors or the
Compensation Committee with such terms as may be established in the sole
discretion of the Board of Directors or Compensation Committee, the Executive
shall be entitled to participate in such program.

 

 

(c)                                 
Regular
Benefits.  The Executive shall also be entitled to participate
in any employee benefit plans, medical insurance plans, life insurance plans,
disability income plans, retirement plans, vacation plans, expense
reimbursement plans and other benefit plans which the Employer may from time to
time have in effect for all or most of its senior executives.  Such
participation shall be subject to the terms of the applicable plan documents,
generally applicable policies of the Employer, applicable law and the
discretion of the Board of Directors, the Compensation Committee or any
administrative or other committee provided for in or contemplated by any such
plan.  Nothing contained in this Agreement shall be construed to create
any obligation on the part of the Employer to establish any such plan or to maintain
the effectiveness of any such plan which may be in effect from time to time.

 

(d)                                
Taxation
of Payments and Benefits.  The Employer shall undertake to make
deductions, withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good faith
believes that it is required to make such deductions, withholdings and tax
reports.  Payments under this Agreement shall be in amounts net of any
such deductions or withholdings.  Nothing in this Agreement shall be
construed to require the Employer to make any payments to compensate the
Executive for any adverse tax effect associated with any payments or benefits
or for any deduction or withholding from any payment or benefit.

 

(e)                                 
Restricted
Stock Agreement.  The Employer shall grant to the Executive the right
to purchase shares of common stock, par value $0.01 per share, of the Employer
in an amount and on terms and conditions set forth in the Restricted Stock
Agreement attached hereto as Exhibit A (the “Restricted Stock
Agreement”).

 

(f)                                   
Life
Insurance Policy.  The Employer shall purchase a life insurance policy
on Executive with proceeds of One Million Dollars ($1,000,000) for the benefit
of Executive’s family (as specified by Executive).  The Employer shall pay
all premiums and other costs required to maintain such policy during
Executive’s employment with Employer.

 

(g)                                
Organization
Fees.  The Company shall pay all fees and normal expenses associated
with Executive’s participation in the Young Presidents’ Organization up to a
maximum of Twenty Thousand Dollars ($20,000) per year.

 

(h)                                
Exclusivity
of Salary and Benefits.  The Executive shall not be entitled to any
payments or benefits other than those provided under this Agreement.

 

5.                                      
Extent
of Service.  During the Executive’s employment under this Agreement,
the Executive shall, subject to the direction and supervision of the Board of
Directors, devote the Executive’s full business time, best efforts and business
judgment, skill and knowledge to the advancement of the Employer’s interests
and to the discharge of the Executive’s duties and responsibilities under this
Agreement.  The Executive shall not engage in any other business activity,
except as may be approved by the Board of Directors;  provided that
nothing in this Agreement shall be construed as preventing the Executive from:

 

2

 

(a)                                 
investing
the Executive’s assets in any company or other entity in a manner not
prohibited by Section 7(d) and in such form or manner as shall not require
any material activities on the Executive’s part in connection with the
operations or affairs of the companies or other entities in which such
investments are made;

 

(b)                                
engaging
in religious, charitable or other community or non-profit activities that do
not impair the Executive’s ability to fulfill the Executive’s duties and
responsibilities under this Agreement;

 

(c)                                 
serving
on the boards of directors of up to three companies (other than the Company)
subject to the Board of Directors’ approval which approval shall not be
unreasonably withheld or delayed; or

 

(d)                                
participating
in the normal activities expected of a member of the Young Presidents’
Organization.

 

6.                                      
Termination
and Termination Benefits.  Notwithstanding the provisions of
Section 3, the Executive’s employment under this Agreement shall terminate
under the following circumstances set forth in this Section 6.

 

(a)                                 
Constructive
Termination of Executive.  The Executive shall have the right to
terminate this Agreement due to a Constructive Termination.  For purposes
of this Agreement, “Constructive Termination” means the occurrence, without the
Executive’s express written consent, of any one or more of the following
events:

 

(i)                                    
(A)
the Executive’s not being the Chief Executive Officer of the Company, except in
connection with the Company’s termination of the Executive’s employment for
Cause pursuant to Section 6(b) or as otherwise expressly contemplated
herein; (B) the assignment of duties to the Executive not consistent with the
office of the Chief Executive Officer of the Company; or (C) the Executive’s
not reporting to the Company’s Board of Directors;

 

(ii)                                 
A
reduction in the Executive’s Salary or a material reduction in the value of the
Executive’s total compensation package (salary, bonus opportunity, equity
incentive awards opportunity and benefits);

 

(iii)                              
The
relocation of the Executive’s principal Company office to a location more than
sixty (60) miles from Brisbane, California or the Company’s requiring the
Executive to be based anywhere other than the Company’s principal executive
offices, except for required travel on the Company’s business to the extent
necessary to fulfill the Executive’s obligations;

 

(iv)                             
A
failure to re-elect the Executive as a member of the Company’s Board of
Directors; or

 

3

 

(v)                                
In
the event of a merger, consolidation, transfer, or sale of all or substantially
all the assets of the Company with or to any other individual or entity, the
failure of the Company’s successor to assume the Company’s obligations under
this Agreement.

 

(b)                                
Termination
by the Employer for Cause.  The Executive’s employment under this
Agreement may be terminated for Cause without further liability on the part of
the Employer effective immediately upon a vote of the Board of Directors and
written notice to the Executive.  Only the following shall constitute “Cause”
for such termination:

 

(i)                                    
dishonest
statements or acts of the Executive with respect to the Employer or any
affiliate of the Employer where such act causes material harm to the Employer;

 

(ii)                                 
the
conviction of the Executive for (A) a felony or (B) any misdemeanor involving
moral turpitude, deceit, dishonesty or fraud ;

 

(iii)                              
gross
negligence, willful misconduct or insubordination of the Executive with respect
to the Employer or any affiliate of the Employer where such act causes material
harm to the Employer; or

 

(iv)                             
material
breach by the Executive of any of the Executive’s obligations under this
Agreement where such breach causes material harm to the Employer.

 

(c)                                 
Termination
by the Executive Other Than Constructive Termination.  The
Executive’s employment under this Agreement may be terminated by the Executive
other than for a Constructive Termination by written notice to the Board of
Directors at least sixty (60) days prior to such termination.

 

(d)                                
Termination
by the Employer Without Cause.  Subject to the payment of
Termination Benefits pursuant to Section 6(e), the Executive’s employment
under this Agreement may be terminated by the Employer without Cause upon
written notice to the Executive by a vote of the Board of Directors.

 

(e)                                 
Certain
Termination Benefits.  Unless otherwise specifically provided in this
Agreement or otherwise required by law, all compensation and benefits payable
to the Executive under this Agreement shall terminate on the date of
termination of the Executive’s employment under this Agreement.  Notwithstanding
the foregoing, in the event of termination of the Executive’s employment with
the Employer pursuant to Sections 6(a) or 6(d) above and subject to the
Executive’s agreement to a release of any and all legal claims in a form
satisfactory to the Employer, the Employer shall provide to the Executive the
following termination benefits (“Termination Benefits”):

 

(i)                                    
continuation
of the Executive’s Salary at the rate then in effect pursuant to
Section 4(a) and payable at the times provided in Section 4(a); and

 

4

 

(ii)                                 
continuation
of group health plan benefits to the extent authorized by and consistent with
29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the
regular premium for such benefits shared in the same relative proportion by the
Employer and the Executive as in effect on the date of termination.

 

The Termination Benefits set forth in (i) and (ii) above
shall continue in effect for twelve (12) months after the date of
termination.  The Employer’s liability for Salary continuation pursuant to
Section 6(d)(i) shall be reduced by the amount of any severance pay due or
otherwise paid to the Executive pursuant to any severance pay plan or stay
bonus plan of the Employer. Notwithstanding the foregoing, nothing in this
Section 6(d) shall be construed to affect the Executive’s right to receive
COBRA continuation entirely at the Executive’s own cost to the extent that the
Executive may continue to be entitled to COBRA continuation after the
Executive’s right to cost sharing under Section 6(d)(ii) ceases.

 

(f)                                   
Disability.  If the
Executive shall be disabled so as to be unable to perform the essential
functions of the Executive’s then existing position or positions under this
Agreement with or without reasonable accommodation, the Board of Directors may
remove the Executive from any responsibilities and/or reassign the Executive to
another position with the Employer for the remainder of the Term or during the
period of such disability.  Notwithstanding any such removal or
reassignment, the Executive shall continue to receive the Executive’s full
Salary (less any disability pay or sick pay benefits to which the Executive may
be entitled under the Employer’s policies) and benefits under Section 4 of
this Agreement (except to the extent that the Executive may be ineligible for
one or more such benefits under applicable plan terms) for a period of time
equal to the lesser of (i) six (6) months; or (ii) the remainder of the
Term.  If any question shall arise as to whether during any period the
Executive is disabled so as to be unable to perform the essential functions of
the Executive’s then existing position or positions with or without reasonable
accommodation, the Executive may, and at the request of the Employer shall,
submit to the Employer a certification in reasonable detail by a physician
selected by the Employer to whom the Executive or the Executive’s guardian has
no reasonable objection as to whether the Executive is so disabled or how long
such disability is expected to continue, and such certification shall for the
purposes of this Agreement be conclusive of the issue.  The Executive
shall cooperate with any reasonable request of the physician in connection with
such certification.  If such question shall arise and the Executive shall
fail to submit such certification, the Employer’s determination of such issue
shall be binding on the Executive.  Nothing in this Section 6(e)
shall be construed to waive the Executive’s rights, if any, under existing law
including, without limitation, the Family and Medical Leave Act of 1993, 29
U.S.C. §2601 et seq. and the
Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

 

(g)                                
Cessation
of Benefits.  Notwithstanding anything contained in this
Section 6 or this Agreement to the contrary, the obligation to make any
payments hereunder or otherwise provide benefits shall cease immediately in the
event of a material breach of Section 7 by the Executive that causes
material harm to Employer.

 

5

 

7.                                      
Confidential
Information, Noncompetition and Cooperation.

 

(a)                                 
Confidential
Information.  As used in this Agreement, “Confidential
Information” means information belonging to the Employer which is of value to
the Employer in the course of conducting its business and the disclosure of
which could result in a competitive or other disadvantage to the
Employer.  Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions, improvements and
other intellectual property; trade secrets; know-how; designs, processes or
formulae; software; market or sales information or plans; customer lists; and
business plans, prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Employer.  Confidential Information
includes information developed by the Executive in the course of the
Executive’s employment by the Employer, as well as other information to which
the Executive may have access in connection with the Executive’s
employment.  Confidential Information also includes the confidential
information of others with which the Employer has a business
relationship.  Notwithstanding the foregoing, Confidential Information
does not include information in the public domain, unless due to breach of the
Executive’s duties under Section 7(b).

 

(b)                                
Confidentiality.  The Executive
understands and agrees that the Executive’s employment creates a relationship
of confidence and trust between the Executive and the Employer with respect to
all Confidential Information.  At all times, both during the Executive’s
employment with the Employer and after its termination, the Executive will keep
in confidence and trust all such Confidential Information, and will not use or
disclose any such Confidential Information without the written consent of the
Employer, except as may be necessary in the ordinary course of performing the
Executive’s duties to the Employer.

 

(c)                                 
Documents,
Records, etc.  All documents, records, data, apparatus, equipment
and other physical property, whether or not pertaining to Confidential
Information, which are furnished to the Executive by the Employer or are
produced by the Executive in connection with the Executive’s employment will be
and remain the sole property of the Employer.  The Executive will return
to the Employer all such materials and property as and when requested by the
Employer.  In any event, the Executive will return all such materials and
property immediately upon termination of the Executive’s employment for any
reason.  The Executive will not retain with the Executive any such
material or property or any copies thereof after such termination.

 

(d)                                
Noncompetition
and Nonsolicitation.  During the Noncompete Term the Executive (i) will
not, directly or indirectly, whether as owner, partner, shareholder,
consultant, agent, employee, co-venturer or otherwise, engage, participate,
assist or invest in any Competing Business (as hereinafter defined or otherwise
engage in any activity that competes with the business of the Employer); (ii)
will refrain from directly or indirectly employing, attempting to employ,
recruiting or otherwise soliciting, inducing or influencing any person to leave
employment with the Employer (other than terminations of employment of
subordinate employees undertaken in the course of the Executive’s employment
with the Employer); and (iii) will refrain from soliciting or encouraging any
customer or supplier to terminate or otherwise modify adversely its business
relationship with the Employer.  The Executive understands that

 

6

 

the
restrictions set forth in this Section 7(d) are intended to protect the
Employer’s interest in its Confidential Information and established employee,
customer and supplier relationships and goodwill, and agrees that such
restrictions are reasonable and appropriate for this purpose.  For
purposes of this Agreement, the term “Competing Business” shall mean any
video-gaming related business which is competitive with any business that the
Employer or any of its affiliates conducts or proposes to conduct at any time during
the employment of the Executive.  Notwithstanding the foregoing, the
Executive may (i) be employed by any entity involved in a Competing Business so
long as the Executive does not participate in the portion of the entity that is
involved in the Competing Business; (ii) be employed by an entity that engages
in a Competing Business so long as such entity receives less than ten percent
(10%) of its revenue from the Competing Business; and (iii) own up to one
percent (1%) of the outstanding stock of a publicly held corporation which
constitutes or is affiliated with a Competing Business.  For purposes of
this Agreement, the “Noncompete Term” means the time during which the Executive
is employed by the Employer and the twelve (12) month period beginning immediately
after the Executive’s employment terminates.

 

(e)                                 
Third-Party
Agreements and Rights.  The Executive hereby confirms that the
Executive is not bound by the terms of any agreement with any previous employer
or other party which restricts in any way the Executive’s use or disclosure of
information or the Executive’s engagement in any business.  The Executive
represents to the Employer that the Executive’s execution of this Agreement,
the Executive’s employment with the Employer and the performance of the
Executive’s proposed duties for the Employer will not violate any obligations
the Executive may have to any such previous employer or other party.  In
the Executive’s work for the Employer, the Executive will not disclose or make
use of any information in violation of any agreements with or rights of any
such previous employer or other party, and the Executive will not bring to the
premises of the Employer any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous employment or other
party.

 

(f)                                   
Litigation
and Regulatory Cooperation.  During and after the
Executive’s employment, the Executive shall cooperate fully with the Employer
in the defense or prosecution of any claims or actions now in existence or
which may be brought in the future against or on behalf of the Employer which
relate to events or occurrences that transpired while the Executive was
employed by the Employer.  The Executive’s full cooperation in connection
with such claims or actions shall include, but not be limited to, being
available to meet with counsel to prepare for discovery or trial and to act as
a witness on behalf of the Employer at mutually convenient times.  During
and after the Executive’s employment, the Executive also shall cooperate fully
with the Employer in connection with any investigation or review of any
federal, state or local regulatory authority as any such investigation or
review relates to events or occurrences that transpired while the Executive was
employed by the Employer.  The Employer shall reimburse the Executive for
any reasonable out-of-pocket expenses incurred in connection with the
Executive’s performance of obligations pursuant to this Section 7(f).

 

7

 

(g)                                
Injunction.  The Executive
agrees that it would be difficult to measure any damages caused to the Employer
which might result from any breach by the Executive of the promises set forth
in this Section 7, and that in any event money damages would be an
inadequate remedy for any such breach.  Accordingly, subject to
Section 8 of this Agreement, the Executive agrees that if the Executive
breaches, or proposes to breach, any portion of this Agreement, the Employer
shall be entitled, in addition to all other remedies that it may have, to an
injunction or other appropriate equitable relief to restrain any such breach
without showing or proving any actual damage to the Employer.

 

8.                                      
Arbitration
of Disputes.   Any controversy or claim arising out of or
relating to this Agreement or the breach thereof or otherwise arising out of
the Executive’s employment or the termination of that employment (including,
without limitation, any claims of unlawful employment discrimination whether
based on age or otherwise) shall, to the fullest extent permitted by law, be
settled by arbitration in any forum and form agreed upon by the parties or, in
the absence of such an agreement, under the auspices of the American
Arbitration Association (“AAA”) in Delaware in accordance with the Employment
Dispute Resolution Rules of the AAA, including, but not limited to, the rules
and procedures applicable to the selection of arbitrators.  In the event
that any person or entity other than the Executive or the Employer may be a
party with regard to any such controversy or claim, such controversy or claim
shall be submitted to arbitration subject to such other person or entity’s
agreement.  Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  This Section 8
shall be specifically enforceable. Notwithstanding the foregoing, this Section 8
shall not preclude either party from pursuing a court action for the sole
purpose of obtaining a temporary restraining order or a preliminary injunction
in circumstances in which such relief is appropriate; provided that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 8.

 

9.                                      
Consent
to Jurisdiction.  To the extent that any court action is permitted
consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the Sate of Delaware and
the United States District Court for the District of Delaware. 
Accordingly, with respect to any such court action, the Executive (a) submits
to the personal jurisdiction of such courts; (b) consents to service of
process; and (c) waives any other requirement (whether imposed by statute, rule
of court, or otherwise) with respect to personal jurisdiction or service of
process.

 

10.                                
Integration.  This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements between the parties
with respect to any related subject matter.

 

11.                                
Assignment;
Successors and Assigns, etc. Neither the Employer nor the
Executive may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall
effect a reorganization, consolidate with or merge into any other corporation,

 

8

 

partnership,
organization or other entity, or transfer all or substantially all of its
properties or assets to any other corporation, partnership, organization or
other entity.  This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.

 

12.                                
Enforceability. If any portion or
provision of this Agreement (including, without limitation, any portion or
provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then
the remainder of this Agreement, or the application of such portion or
provision in circumstances other than those as to which it is so declared illegal
or unenforceable, shall not be affected thereby, and each portion and provision
of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

 

13.                                
Waiver.  No waiver of
any provision hereof shall be effective unless made in writing and signed by
the waiving party.  The failure of any party to require the performance of
any term or obligation of this Agreement, or the waiver by any party of any
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.

 

14.                                
Notices.  Any notices,
requests, demands and other communications provided for by this Agreement shall
be sufficient if in writing and delivered in person or sent by a nationally
recognized overnight courier service or by registered or certified mail,
postage prepaid, return receipt requested, to the Executive at the last address
the Executive has filed in writing with the Employer or, in the case of the
Employer, at its main offices, and shall be effective on the date of delivery
in person or by courier or three (3) days after the date mailed.

 

15.                                
Amendment.  This Agreement
may be amended or modified only by a written instrument signed by the Executive
and by a duly authorized representative of the Employer.

 

16.                                
Governing
Law.  This is a California contract and shall be construed under and
be governed in all respects by the laws of the State of California, without
giving effect to the conflict of laws principles of such State.  With
respect to any disputes concerning federal law, such disputes shall be
determined in accordance with the law as it would be interpreted and applied by
the United States Court of Appeals for the Ninth Circuit.

 

17.                                
Counterparts.  This Agreement
may be executed in any number of counterparts, each of which when so executed
and delivered shall be taken to be an original; but such counterparts shall
together constitute one and the same document.

 

9

 

IN WITNESS WHEREOF, this
Agreement has been executed as a sealed instrument by the Employer, by its duly
authorized officer, and by the Executive, as of the Effective Date.

 

 

	
   

  	
  EMPLOYER:

  
	
   

  	
  GHP ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ MICHAEL
  KUMIN

  	
   

  
	
   

  	
  Name:  Michael
  Kumin

  
	
   

  	
  Title:  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ MARK JUNG

  	
   

  
	
   

  	
  Executive

  

 

10Exhibit 10.07

 

 

April 29, 2004

 

 

Dear Mike:

 

On behalf of IGN
Entertainment, Inc. (the “Company”), I am pleased to offer employment to
you.  The purpose of this letter is to outline the terms for your
employment subject to the terms of Company policies and other agreements.

 

Position:               
Your initial position with the Company will be Executive Vice President and
Chief Financial Officer.

 

Start
Date:           
Unless otherwise agreed, your first day of employment will be May 4, 2004.

 

Salary:                  
The Company will pay you a salary at a twice monthly rate of $10,416.67,
subject to periodic review and adjustment at the discretion of the Company in
accordance with its policies governing salary and compensation for employees
with similar responsibilities to your own.

 

Bonus:                  
You will be eligible to receive an annual performance bonus.  The actual
bonus percentage will be subject to the Company’s assessment of your
performance.  The bonus will also be subject to your employment for the
full period covered by the bonus, approval by and adjustment at the discretion
of the Company’s Compensation Committee of the Board of Directors and the terms
of any applicable bonus plan.  The Company will review your job performance
on an annual basis and will discuss with you the criteria which the Company
will use to assess your performance for bonus purposes.  The Company’s
Compensation Committee of the Board of Directors may also make adjustments in
the targeted amount of your annual performance bonus.  For 2004, your
bonus will (a) be based upon achievement of Company performance above its 2004
EBITDA Plan, (b) have targets consistent with the previously adopted 2004
Management Bonus Plan approved by the Compensation Committee of the Company’s
Board of Directors, (c) be prorated for actual days worked in 2004 (subject,
again, to your being employed at the end of the year), and (d) range from 0% to
60% of your annual salary.

 

Benefits:              
The Company will also cover you under its employee benefits and insurance
programs generally made available to its full-time employees, including
vacation, health, life, disability and dental insurance.  Details of these
benefits programs will be made available to you when you start.

 

 

Mr. Michael Sheridan

April 26, 2004

Page 2

 

 

Stock
Options:    
You will be eligible to participate in the Company’s stock option program,
subject to approval by the Board of Directors.  We will recommend to the
Board of Directors at its next meeting after you join the Company that you be
granted an option to purchase 350,000 shares of the Company’s common stock at
the stock’s then fair market value, which we expect will be $1.75 per
share.  Your eligibility for stock options will be governed by the 2003 Stock
Option and Grant Plan and any associated stock option agreement required to be
entered into by you and the Company.  In addition, your stock options will
(a) allow you to exercise unvested options and convert them into restricted
stock, (b) vest monthly over four years commencing with the date of your
employment, (c) terminate or forfeit as to any unvested options or shares in
the event you are terminated for any reason, and (d) provide for accelerated
vesting in the event both (1) the Company is sold (with 50% of unvested shares
vesting if the Company is sold within one year of your employment and 100% of
unvested shares vesting if the Company is sold after the first anniversary of
your employment), AND (2) you do not terminate your employment within one year
of the sale (not including a termination by you following a reduction in your
responsibilities) OR you are terminated by the acquiring company for any reason
other than for cause (to be narrowly defined).  “Unvested Shares” in this
context is defined as the number of shares that are not vested as of date of
termination.

 

Other
Terms:      
Your employment with the Company shall be on an at-will basis.  In other
words, you or the Company may terminate employment for any reason and at any
time.  Similarly, the terms of employment outlined in this letter are
subject to change at any time.  You will also be required to sign the
Company’s standard Employee Agreement as a condition of your employment. 
A copy of that Agreement is enclosed.

 

We are excited about the
opportunity to work with you.  Please confirm your acceptance of this
offer of employment by signing below, and let me know if you need any further
information prior to your start date.

 

Very truly yours,

 

/s/ Mark Jung

 

Mark Jung

President and Chief
Executive Officer

 

 

	
   /s/ Michael
  Sheridan

  	
   

  	
  4/30/04

  
	
  Signature by Michael
  Sheridan

  	
   

  	
  Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]