Employment Agreement - MP3.com Inc. and Steven Sheiner
P.O. Box 910091
San Diego, CA 92191
January 29, 1999
c/o MP3.com, Inc.
RE: EMPLOYMENT TERMS
MP3.com, Inc., a Delaware corporation (the "Company"), is pleased that you have
accepted our offer to join the Company as Vice President, Advertising & Marketing. The terms of your employment are set forth below.
You began serving the Company as Vice President, Advertising & Marketing on
January 25, 1999 (your "Commencement Date") and are responsible for such duties
as are normally associated with such position or as otherwise determined by the
President of the Company. You report to Robin Richards, the President of the
Company. You work at our facility located in San Diego. Of course, the Company
may change your position, duties, and work location from time to time as it
Your compensation is $12,500 per month, less payroll deductions and all required
withholdings. You are paid semi-monthly and you are eligible for standard
benefits, such as medical insurance, sick leave, vacations and holidays,
according to standard Company policy as may be adopted by the Company from time
to time. Details about these benefits will be provided in an Employee Handbook
and in Summary Plan Descriptions, which will be prepared by the Company and made
available for your review in due course. The Company may modify your
compensation and benefits from time to time as it deems necessary.
In addition to the salary outlined above, you will be entitled to a 3%
commission on all "Sales" of Web ads that you produce for the Company. For
purposes of this paragraph, "Sale" and "Sales" means all sums actually received
by the Company from sales and licenses of Web ads while you are an employee of
the Company. In no event will you be entitled to receive any commission with
respect to any Sales generated or paid to the Company following any termination
of your employment with the Company. Commissions earned as a result of Sales of
Web ads shall accrue as of the end of each calendar quarter ("Quarter") in which
sums from such Sale(s) are received. Within 45 days of the end of each Quarter,
the Company will deliver to you the amount of the
January 29, 1999
commission payable with respect to Sales occurring in such Quarter together with
a reasonably detailed statement of the basis for the computation of the amount
of such commission.
The Company's Board of Directors has granted you an Incentive Stock Option to
purchase 250,000 shares of the Common Stock of the Company under the Company's
1998 Equity Incentive Plan (the "Plan"). The exercise price per share of your
Incentive Stock is $0.16. The shares of Common Stock subject to your Incentive
Stock Option are subject to vesting over four years so long as you continue to
be employed with the Company, according to the following schedule: (i) 25,000 of
the shares subject to the grant shall be fully vested as of your Commencement
Date; (ii) an additional 15,625 of such shares shall vest as of the first day of
each quarter immediately following the Commencement Date; and (iii) an
additional 4,514 of such shares shall vest as of the end of each monthly period
thereafter, except for the last vesting date, on which 4,510 of such shares
shall vest. Also, upon completion of the Company's initial public offering, in
addition to the number of shares that have vested pursuant to the schedule above
as of the date of such offering, ten percent (10%) of the then unvested shares
will vest as of the date of such offering. Further, all of the unvested shares
subject to your Incentive Stock Option shall vest upon an Acquisition (as
defined in the Plan).
The specific terms and conditions of your Incentive Stock Option will be set
forth in an Incentive Stock Option Agreement between you and the Company. This
agreement is being prepared and will be delivered to you shortly.
As a Company employee, you are expected to abide by Company rules and
regulations, and acknowledge in writing that you have read the Company's
Employee Handbook (once it has been made available to you). As a condition of
employment, you are required to sign and comply with a Proprietary Information
and Inventions Agreement, a copy of which is attached hereto as Exhibit A,
which, among other things, prohibits unauthorized use or disclosure of Company
Normal working hours are from 8:30 a.m. to 5:30 p.m., Monday through Friday. As
an exempt salaried employee, you are expected to work additional hours as
required by the nature of your work assignments.
You may terminate your employment with the Company at any time and for any
reason whatsoever simply by notifying the Company in writing no later than two
weeks prior to the date of such termination. Likewise, the Company may terminate
your employment at any time and for any reason whatsoever, with or without cause
or advance notice. This at-will employment relationship cannot be changed except
in a writing signed by a Company officer.
January 29, 1999
The employment terms in this letter supersede any other agreements or promises
made to you by anyone, whether oral or written, and comprise the final, complete
and exclusive agreement between you and the Company. As required by law, your
employment with the Company is subject to satisfactory proof of your right to
work in the United States.
Please sign and date this letter, and return it to me as soon as possible if the
foregoing accurately sets forth the terms of your employment with the Company.
By: /s/ Robin Richards
/s/ Steven Sheiner
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT