June 29, 2000
Mr. Mark McEachen
12 Hillcrest Manor
Rolling Hills Estates, CA 90274
Dear Mark,
As I and my senior team have had the opportunity to get to know you in the past
weeks, we are all very impressed with you, and feel strongly you would be a
great leader within our organization. Therefore, Excite@Home is pleased to
offer you the position of Executive Vice President and Chief Financial Officer.
In this position, you will report to me.
SALARY AND BONUS
Your base salary will be an annual salary of $350,000. You will also be eligible
to participate in the Excite@Home Executive Incentive Plan (EIP). Your annual
target award will be 40% of your base salary. The performance measures for EIP
currently in effect for 2000 are: 90% attainment of company revenue goals (40%
of award), 90% attainment of profit/loss minimum (40% of award), and established
service level agreements (20% of award). EIP performance measures are subject
to modification in 2000 and future years. EIP award payments are made only if
the performance measures are achieved. Your EIP for calendar year 2000
($140,000) will be guaranteed at 100%.
STOCK
Subject to approval by Excite@Home's Board of Directors (or its designee), you
will receive an option to purchase 700,000 shares of Series A Common Stock. The
exercise price of your stock option will equal the Nasdaq closing price for
Excite@Home's Series A Common Stock on the date your stock option is approved by
the Board of Directors (or its designee), which we anticipate will occur within
two to three weeks following your date of hire. Your date of hire is the date
that you actually begin working at Excite@Home and are on Excite@Home's payroll
records. Your right to purchase your option shares will be subject to a vesting
schedule that provides for 25% of your option shares (175,000) to vest on your
date of hire. Commencing one year after your date of hire, the remainder
(525,000) will vest at the rate of 1/36th per month over the next thirty-six
months. Shortly after your stock option is approved you will receive a
confirmation notice in the mail. Our Stock Option Plan and Stock Option Terms
and Conditions will be made available to you on our employee Intranet site or
may be obtained by contacting our Stock Administration department.
BENEFITS
We provide health and welfare benefits, including Medical, Dental, Vision, Life
and Disability Insurance, through our benefits plan. Please refer to the
attached Benefits Summary for more details. Should you have any questions about
the benefit programs offered, please contact Barbara Oshima at (650) 556-6063.
Mark McEachen
Page 2 of 4
RELOCATION
To assist you with your move to the San Francisco Bay Area, Excite@Home will
agree to the following relocation package:
. Several house hunting trips for two
. Airline travel for you and your family, or mileage reimbursement if you
decide to drive your car to the Bay Area
. Movement of household goods and up to two autos
. Storage of household goods and up to two autos for up to 90 days
. Car rental for up to 90 days
. Interim living expenses for up to 90 days
. Customary non-recurring closing costs on the sale of your primary residence
in Los Angeles
. Customary non-recurring closing costs related to the purchase of a home in
the San Francisco Bay Area (your down payment, prepaid interest, and
property taxes will not be considered closing costs)
In addition, Excite@Home will make available to you two loans in the aggregate
amount of $2,000,000 for the purpose of assisting you in purchasing a home in
the San Francisco Bay Area. Each loan will be made pursuant to a full recourse
promissory note. You will be responsible for the payment of any tax liability
you may incur in connection with these loans and their repayment.
The first loan will be for a net amount of $1,500,000 and will have a term of
four years. One fourth of the principal amount will be forgiven by the Company
on each anniversary of the date that the loan is made. Each year the Company
will assist you with the tax liability on the loan and interest forgiveness such
that you will not incur any tax liability for any part of this loan (tax make-
whole). The tax liability assistance will be based on your overall tax rate.
If prior to the fourth anniversary of the loan date you voluntarily terminate
your employment from Excite@Home or your employment is terminated for cause (as
defined below), all remaining principal will become due and payable in full
ninety (90) days following the termination of your employment. The first loan
will be made available to you within 30 days of your date of hire.
The second loan will be for an amount of $500,000 and will have a term of four
years. All principal will be due on the fourth anniversary of the loan in a
single balloon payment. The Company will assist you with the tax liability on
the loan and interest forgiveness such that you will not incur any tax liability
for any part of this loan (tax make-whole). The tax liability assistance will
be based on your overall tax rate. If prior to the fourth anniversary of the
loan date you voluntarily terminate your employment from Excite@Home or your
employment is terminated for cause (as defined below), all remaining principal
will become due and payable in full ninety (90) days following the termination
of your employment. The second loan will be available to you at any time within
one year from your hire date, subject to you having a contract in place on a new
home in the San Francisco Bay Area.
In the event you sell any of the shares subject to your stock option, all
proceeds from the sale of such shares will first be applied against all unpaid
principal under the second loan. Moreover, in the event you sell any of the
shares subject to your stock option grant after you have provided notice that
you plan to voluntary terminate your employment or after you have received
notice that your employment will be terminated for cause (as defined below), all
proceeds from the sale of such shares will be applied against all unpaid
principal under both loans.
You will also be provided with a mortgage assistance payment of $2,000 a month
(gross) for a maximum period of four years. This mortgage assistance will be
provided on a monthly basis to assist you in offsetting the higher mortgage
expenses, and will be initiated once you have purchased a home in the San
Francisco Bay Area.
Mark McEachen
Page 3 of 4
Prior to you and your family actually relocating, you will have up to one year
during which you can commute from Los Angeles. During this period, you will be
reimbursed for weekly airfare, hotel, and rental car expenses via expense
reports.
For purposes of this letter, termination "for cause" will exist at any time
after the occurrence of one or more of the following events: (a) a good faith
determination by the Board of Directors of Excite@Home that you willfully failed
to follow the written directions of the Board. Such determination will not be
made unless a written demand for performance has been delivered to you by the
Board that specifically identifies how you have failed to follow its directions,
and you are given a reasonable period of time in which to correct such
deficiencies. Your conduct will not be considered `willful' if you reasonably
believed that you are acting in the best interest of Excite@Home or if your
failure to follow Board directions was caused by physical or mental illness; (b)
your engagement in gross misconduct which is materially detrimental to the
Company; (c) your willful failure or refusal to comply in any material respect
with your Invention Assignment and Confidentiality Agreement (including your
theft of Excite@Home's proprietary information), the Company's insider trading
policy, or such other reasonable policies of Excite@Home where noncompliance
would be materially detrimental to Excite@Home; or (d) your committing an
unlawful or criminal act (serious in nature) which would reflect badly on
Excite@Home in Excite@Home's reasonable judgment.
CHANGE OF CONTROL
Should there be a change of control of greater than or equal to 50% of the
ownership in Excite@Home, and your position would be eliminated or your
responsibilities materially reduced within 24 months of the change of control,
you would be eligible for a severance payment equal to six months of your base
salary. If a change of control policy in excess of that described above is put
in place for 16(b) company officers at any time during your employment, you will
receive the same change of control provisions as other senior officers.
AUTHORIZATION TO WORK IN USA
In accordance with the Immigration Reform and Control Act of 1986, you are
required to provide verification of your identity and legal rights to work in
the United States. The appropriate documents must be presented for
Excite@Home's review on your first day of employment. If you do not provide the
appropriate documentation, you will not be permitted to work and your date of
hire will be delayed. The appropriate documentation is listed on the I-9 form
included.
PROPRIETARY INFORMATION
We wish to impress upon you that we do not want you to bring with you any
confidential or proprietary material of any former employer, or to violate any
other obligation to your former employers. Within five days of your start date,
you agree to execute the company's Invention Assignment and Confidentiality
Agreement, providing us trade secret protection of the company's proprietary
information.
Mark McEachen
Page 4 of 4
MISCELLANEOUS
As a comprehensive Internet access provider and Internet portal, Excite@Home is
involved in a wide variety of projects involving content from as many different
sources on the Internet as possible. As a result, Excite@Home cannot guarantee
employees that they will not be exposed to some adult material, either through
specific work assignments or due to the presence of such material in the work
environment.
This offer is contingent upon a proof of authorization to work in the United
States, a background investigation, satisfactory reference checks and your
written acceptance.
Please return the signed original offer letter along with the New Hire Form and
Non-Disclosure Agreement in the enclosed envelope to Lori Reeder at 450
Broadway, Redwood City, CA 94063. A duplicate original is enclosed for your
records.
Any representations contrary to those contained in this letter which may have
been made to you are superseded by this offer letter. If you accept this offer,
the terms described in this letter constitute the terms of your employment with
Excite@Home. Mark, we look forward to having you join Excite@Home as part of
the executive management team!
Sincerely,
/s/ George Bell
George Bell
Chairman and Chief Executive Officer
Enclosures: Excite@Home Benefits Summary
New Hire Forms
Accepted and Agreed:
By: /s/ Mark McEachen Start date: July 17, 2000
_____________________
________________________ Date:_____________________, 2000
Print Name: Mark McEachen
Employment Agreement - Excite@Home and Mark McEachen
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