{"id":39558,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-screamingmedia-inc-and-j-terrence-waters.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-screamingmedia-inc-and-j-terrence-waters","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-screamingmedia-inc-and-j-terrence-waters.html","title":{"rendered":"Employment Agreement &#8211; ScreamingMedia Inc. and J. Terrence Waters"},"content":{"rendered":"<pre>\n                               EMPLOYMENT AGREEMENT\n\n\n         AGREEMENT dated as of May 26, 2000, between ScreamingMedia Inc., a\nDelaware corporation (the \"Company\") and J. Terrence Waters (the \"Executive\").\n\n         WHEREAS, the parties desire to enter into an employment agreement, on\nthe terms and conditions hereinafter set forth, providing for the employment of\nthe Executive by the Company for the term herein specified;\n\n         NOW, THEREFORE, in consideration of the mutual agreements hereinafter\nset forth, the parties hereto agree as follows:\n\n         SECTION 1. EMPLOYMENT AND TERM.\n\n         The Company hereby employs the Executive, and the Executive hereby\nagrees to serve, as an executive employee of the Company with the duties set\nforth in Section 2, for a term (hereinafter called the \"Term of Employment\")\nbeginning May 26, 2000 and ending on February 13, 2003, unless sooner terminated\nas provided herein.\n\n           SECTION 2. DUTIES.\n\n                  (a) The Executive agrees that during the Term of Employment,\nhe will hold the office of Chief Operating Officer of the Company reporting to\nthe Company's Board of Directors and its Chief Executive Officer (CEO). The\nExecutive agrees that he will perform faithfully and to the best of his ability\nsuch duties and assignments relating to the business of the Company, as the\nBoard of Directors or the Chief Executive Officer of the Company shall direct\nand consistent with the his office. The Executive acknowledges and agrees that\nhe shall also serve without additional remuneration as a director of\nScreamingMedia.com Ltd., the wholly owned subsidiary of the Company. The Company\nrepresents to the Executive that the Board of Directors has authorized the\nmaking of this Agreement and has approved the appointment of Executive as COO of\nthe Company and a director of Screaming Media.com Ltd.\n\n                  (b) If the Board of Directors of the Company so requests, the\nExecutive shall, in addition to his duties as COO of the Company and director of\nScreamingMedia.com Ltd., serve as an officer of one or more subsidiaries of the\n\n\n   2\nCompany. Part or all of the compensation to which the Executive is entitled\nhereunder may be paid by such subsidiary or subsidiaries. However, such\nemployment or payment of the Executive by a subsidiary or subsidiaries shall be\nguaranteed by the Company and shall not relieve the Company from any of its\nobligations under this Agreement.\n\n                  (c) During the Term of Employment, the Executive shall, except\nduring customary vacation periods and periods of illness, devote all of his\nbusiness time and attention to the performance of his duties hereunder and to\nthe business and affairs of the Company and its subsidiaries and to promoting\nthe best interests of the Company and its subsidiaries and he shall not, either\nduring or outside of normal business hours, engage in any activity inimical to\nsuch best interests. Notwithstanding the foregoing, Executive may serve as a\nDirector on Boards of organizations which do not compete with the Company and\nmay engage in charitable or civic pursuits provided that such service or\npursuits do not interfere with Executive's obligations under the Agreement.\n\n           SECTION 3. COMPENSATION DURING TERM OF EMPLOYMENT.\n\n                  (a) BASE SALARY. During the Term of Employment, the Company\nshall pay to the Executive compensation (in addition to the compensation\nprovided for elsewhere in this Agreement) in equal installments at the rate of\n$200,000 per year (such amount being herein called \"Base Salary\"). Executive's\nbase salary shall be reviewed at least annually during the term of the Agreement\nwith regard to potential increases as authorized by the Board of Directors. The\nBase Salary shall be paid in such periodic installments, as the Company may\ndetermine, but not less often than monthly.\n\n                  (b) MERIT BONUS. During the Term of Employment, the Executive\nshall be paid an annual cash bonus based upon the achievement of such objective\nperformance goals as are mutually agreed between the Company and the Executive\nduring each year of the Term of Employment. The annual cash bonus shall be paid\nno later than March 31 of each year, for the prior year, and shall in no event,\nin any such year, be less than the sum of $100,000. The bonus for the year 2000\nwill be pro rated from February 14, 2000.\n\n                  (c) STOCK OPTIONS (FIRST GRANT). Effective as of February 14,\n2000, the Company shall grant to the Executive a seven-year non-qualified stock\noption (the \"Option\") to purchase 225,000 shares of Common Stock of the Company,\n                                        2\n   3\npar value $.01 per share (\"Common Stock\"), at an exercise price of $3.50 per\nshare. The agreement evidencing the Option shall be in the form attached as\nExhibit A.\n\n                  (d) STOCK OPTIONS (SECOND GRANT). Effective as of May 26,\n2000, the Company shall grant to the Executive a seven-year non-qualified stock\noption (the \"Option\") to purchase 80,000 additional shares of Common Stock of\nthe Company, par value $.01 per share (\"Common Stock\"), at an exercise price of\n$4.588 per share. The agreement evidencing the Option shall be in the form\nattached as Exhibit B.\n\n                  (e) MOST FAVORED PROVISION. During the Term of Employment, the\nExecutive shall be entitled to receive equity awards under the Company's equity\nincentive plans (including, but not limited to the 1999 Stock Option Plan and\nthe 2000 Equity Incentive Plan) at such time or times when grants are made to\nthe Company's highest level executive officers generally as a group, which\ngroup shall exclude the Company's Chief Executive Officer but shall include,\namong other executive officers of the Company, the Company's President and\nChief Financial Officer. Such awards shall be commensurate with the Executive's\nposition and shall have terms similar to the awards granted to said other\nhighest level executive officers of the Company.\n\n                  (f) FRINGE BENEFITS AND PERQUISITES. During the Term of\nEmployment, the Executive shall enjoy the customary perquisites of office,\nincluding but not limited to office space and furnishings, secretarial services,\nexpense reimbursements and any similar emoluments customarily afforded to senior\nexecutive officers of the Company as authorized or approved by the Board of\nDirectors. Not withstanding the generality of the foregoing, during the Term of\nEmployment, the Company shall provide the Executive with a cellular phone and\nservice and a laptop computer compatible with the Company's system. The\nExecutive shall also be entitled to receive or participate in the highest level\nof all \"fringe benefits\" and employee benefit plans, if any, now or hereafter\nprovided or made available by the Company to its executives or management\npersonnel generally, such as, but not limited to, group hospitalization,\nmedical, life and disability insurance, and pension, retirement, profit-sharing\nand medical reimbursement plans, all as the Board of Directors shall deter mine.\nDuring the Term of Employment, the Executive's participation in the Company's\nfringe benefit programs, including without limitation, (a) so-called \"golden\nparachute\" provisions and (b) severance entitlements and the terms of this\nAgreement, shall be modified and\/or added hereto, to the extent any such fringe\nbenefit or any analogous provision of the employment agreements entered into\nbetween the\n\n                                        3\n   4\nCompany and its other highest-level executive officers other than the Chief\nExecutive Officer, but including, among others, the Company's President and\nChief Financial Officer, is modified in a way that is monetarily advantageous\nto such officers and (i) causes such officers' participation in any such program\nto be at a higher level than the Executive's participation or (ii) causes any\nsuch modified provision of such officers' agreements to be monetarily more\nadvantageous to such officers than the analogous term of this Agreement is to\nthe Executive. The Executive will use of a car service for commute to\/from home\nto NYC office and\/or other travel required by the company.\n\n                  (g) VACATIONS. The Executive shall be entitled each year to a\npaid vacation of four weeks. The Company shall not pay the Executive any\nadditional compensation for any vacation time not used by the Executive.\n\n           SECTION 4. TERMINATION OF EMPLOYMENT.\n\n                  (a) DEATH OR TOTAL DISABILITY. The employment of the Executive\nwill terminate upon his death or if, by reason of partial or total disability,\nExecutive is incapable of performing his principal duties hereunder for a period\nof 90 consecutive working days or for more than 120 working days in any 12\nmonth period (\"Disability\"). If, during the Term of Employment, the employment\nof the Executive is terminated due to death or Disability, the Executive or his\nestate shall receive, within 30 days of such termination, any compensation\nearned but not yet paid, including and without limitation, any declared but\nunpaid bonus, any amount of Base Salary or current bonus accrued or earned but\nunpaid, any accrued vacation pay and any unreimbursed business expenses payable,\nwhich amounts shall be promptly paid in a lump sum to Executive's estate with\nall accrued items being paid on a pro-rata basis, determined through the\neffective date of termination of the Executive's employment (\"Date of\nTermination\"). Any other amounts or benefits owing to Executive under the then\napplicable employee benefit plans or policies of the Company shall be paid in\naccordance with such plans or policies. Upon the Date of Termination all\nunvested equity grants relating to Common Stock (including but not limited to\nthe Option) and all other benefits under this Agreement shall lapse, expire and\nbe forfeited (other than the proceeds of any insurance or disability policy or\nmedical cover age provided by the Company which are or become payable by reason\nof the Executive's death or Disability, as the case may be).\n\n                  (b) FOR CAUSE OR FOR LACK OF GOOD REASON. The employment of\nthe Executive may be terminated by the Company at any time for Cause (as defined\n\n                                        4\n   5\nbelow) or by the Executive at any time without Good Reason (as defined below).\nIf, during the Term of Employment, the employment of the Executive is terminated\nby the Company for Cause or by the Executive without Good Reason, the Executive\nshall receive, within 30 days of such termination, Base Salary provided for in\nSection 3 as then in effect, accrued through the Date of Termination. Upon the\nDate of Termination (i) all unvested equity grants relating to Common Stock\n(including but not limited to the Option) and all other benefits under this\nAgreement shall lapse, expire and be forfeited.\n\n                  (c) WITHOUT CAUSE OR WITH GOOD REASON. The employment of the\nExecutive may also be terminated by the Company at any time without Cause or by\nthe Executive at any time with Good Reason. If, during the Term of Employment,\nthe employment of the Executive is terminated by the Company without Cause, or\nby the Executive with Good Reason, the Executive shall continue to receive the\nBase Salary provided for in Section 3 as then in effect and medical and other\ninsurance coverage in effect on the Date of Termination for six months\nimmediately following termination. Further, the Company shall pay to the\nExecutive a pro rata portion of the Merit Bonus provided for in Section 3, in\nrespect of the year in which termination of employment occurs, calculated from\nthe commencement of such year through the Date of Termination. The Company shall\npay to the Executive all vacation in respect of the year in which such\ntermination of employment occurs that is accrued to the Date of Termination but\nunpaid as of the Date of Termination. In the event that the employment of the\nExecutive is terminated by the Company at any time without Cause or by the\nExecutive with Good Reason, the unvested portion of the Executive's option\ngrants dated February 14, 2000 and May 26, 2000 will be accelerated and\nexercisable as to fifty percent (50%) of those options outstanding under the\naforementioned grants at the time of such termination.\n\n                  (d) DEFINITION OF \"CAUSE\" AND \"GOOD REASON.\" For purposes of\nthis Agreement, \"Cause\" means (i) willful failure of the Executive to perform\nhis duties with the Company which have been duly assigned to the Executive, (ii)\nthe engaging by the Executive in willful conduct which is materially injurious\nto the Company, monetarily or otherwise, (iii) the conviction of the Executive\nof, or the Executive's plea of nob contendere to, any crime or offense\nconstituting a felony; or (iv) a failure by the Executive to comply with any\nmaterial provision of this Agreement, which failure is not cured (if capable of\ncure) within 10 business days after receipt of written notice of such\nnon-compliance by the Executive. Termination of the Executive for Cause shall\nmean termination by action of at least a majority of the Company's Board of\nDirectors, at a meeting duly called and held upon at least 10\n\n                                        5\n   6\nbusiness days' written notice to the Executive specifying the particulars of the\naction or inaction alleged to constitute Cause. Action or inaction by the\nExecutive shall not be considered \"willful\" unless done or omitted by him\nintentionally or not in good faith and without reasonable belief that his action\nor inaction was in the best interest of the Company, and shall not include\nfailure to act by reason of total or partial incapacity due to physical or\nmental illness.\n\n                  For purposes of this Agreement, \"Good Reason\" means (i) a\nmaterial adverse alteration in the nature or status of the Executive's position,\nduties or responsibilities from those in effect as of the inception of the Term\nof Employment; (ii) unless otherwise agreed to by the parties the Executive is\nrequired to render services required pursuant to this Agreement at a location\nother than New York City (other than reasonable travel obligations in the\nordinary course of business); (iii) any material breach by the Company of any\nprovision of this Employment Agreement, in any case, which is not cured (if\ncapable of cure) within 10 business days after receipt by the Company of written\nnotice thereof; or (iv) in the event of a \"Change of Control\" which shall be\ndeemed to have occurred if the event set forth in any one of the following\nparagraphs shall have occurred: (1) any Person is or becomes the \"Beneficial\nOwner\" (as defined in Rule 13d-3 under the Exchange Act), directly or\nindirectly, of securities of the Company (not including in the securities\nBeneficially Owned by such Person any securities acquired directly from the\nCompany) representing 25% or more of the voting power of the Company's then\noutstanding securities, excluding any Person who becomes such a Beneficial Owner\nin connection with a transaction described in subclause (A) of clause (3) below;\n(2) the following individuals cease for any reason to constitute a majority of\nthe number of directors then serving individuals who, on the Effective Date,\nconstitute the Board and any new director (other than a director whose initial\nassumption of office is in connection with an actual or threatened election\ncontest, including but not limited to a consent solicitation, relating to the\nelection of directors of the Company) whose appointment or election by the Board\nor nomination for election by the Company's stockholders was approved or\nrecommended by a vote of at least two-thirds (2\/3) of the directors then still\nin office who either were directors on the Effective Date or whose appointment,\nelection or nomination for election was previously so approved or recommended;\n(3) there is consummated a merger or consolidation of the Company with any other\ncorporation other than (A) a merger or consolidation which would result in the\nvoting securities of the Company outstanding immediately prior to such merger or\nconsolidation continuing to represent (either by remaining outstanding or by\nbeing converted into voting securities of the surviving entity or any parent\nthereof) at least 50% of the combined voting power of the voting securities of\nthe Company or such surviving entity\n\n                                        6\n   7\nor any parent thereof outstanding immediately after such merger or\nconsolidation, or (B) a merger or consolidation effected to implement a\nrecapitalization of the Company (or similar transaction) in which no Person is\nor becomes the Beneficial Owner, directly or indirectly, of securities of the\nCompany (not including in the securities Beneficially Owned by such Person any\nsecurities acquired directly from the Company) representing 25% or more of the\ncombined voting power of the Company's then outstanding securities; or (4) the\nstockholders of the Company approve a plan of complete liquidation or\ndissolution of the Company or there is consummated an agreement for the sale or\ndisposition by the Company of all or substantially all of the Company's assets,\nother than a sale or disposition by the Company of all or substantially all of\nthe Company's assets to an entity at least 50% of the combined voting power of\nthe voting securities of which are owned by Persons in substantially the same\nproportions as theft ownership of the Company immediately prior to such sale.\n\n                  SECTION 5. COVENANT NOT TO COMPETE.\n\n                  In the case of termination of the Executive's employment\npursuant to Section 4(b) above, for a period of six months after the Date of\nTermination, the Executive shall not, in The City of New York render services to\nany corporation, individual or other entity engaged in any activity, or himself\nengage directly or indirectly in any activity, which is competitive to any\nmaterial extent with the then business of the Company or any of its\nsubsidiaries. In the case of any termination of Executive's employment under\nthis Agreement, for a period of six months after the end of the Term of\nEmployment, the Executive shall not solicit for the purpose of diverting\nbusiness from the Company, for himself or a business competitive with that of\nthe Company or any of its then subsidiaries, business from any person, firm or\ncorporation which shall, at the time that the Term of Employment ends, be an\nexisting customer of the Company or any such subsidiary or solicit, raid or\nentice or induce any employee of the Company or any of its subsidiaries to\nbecome employed by any other business enterprise. It is understood that general\nand trade advertising is not to be deemed a form of \"solicitation\" for purposes\nof this Agreement. As used herein, \"existing customer\" means any person, firm or\ncorporation which is on the list or lists maintained by the Company or any\nsubsidiary of its customers, as well as any person, firm or corporation which\nhas made a purchase from the Company or a subsidiary within the preceding year.\n\n\n                                        7\n   8\n         SECTION 6. COMPANY'S RIGHT TO INJUNCTIVE RELIEF.\n\n         The Executive acknowledges that his services to the Company are those\nof a senior managerial executive, with an intimate knowledge of and day to day\ndealing with the Company's customers, distributors, suppliers and the key\nemployees of the Company and its subsidiaries, as well as an intimate knowledge\nof the plans and strategies of the Company and its subsidiaries for present and\nfuture businesses and extensions thereof are of a unique character, which gives\nthem a peculiar value to the Company, the loss of which cannot be reasonably or\nadequately compensated in damages in an action at law, and that therefore, in\naddition to any other remedy which the Company may have at law or in equity, the\nCompany and each relevant subsidiary shall be entitled to injunctive relief for\na breach of this Agreement by the Executive.\n\n         SECTION 7. TRADE SECRETS AND CONFIDENTIAL INFORMATION.\n\n         The Executive shall not, either directly or indirectly, except as\nrequired in the course of his employment by the Company disclose or use at any\ntime, whether during or subsequent to the Term of Employment, any information\nof a proprietary nature owned by the Company or any of its subsidiaries\nincluding, but not limited to, (i) lists of customers, clients and contacts,\n(ii) contracts with customers, programmers, developers, suppliers, distributors\nand other dealers, marketing plans, financial condition and results of\noperation, and (iii) records, data, formulae, documents, specifications,\ninventions, processes, methods and intangible rights which are acquired by him\nin the performance of his duties for the Company or any subsidiary thereof and\nwhich are of a confidential information or trade secret nature. All inventions,\nprocesses, methods and intangible rights, lists of customers, clients and\ncontacts, con tracts with customers, suppliers and distributors, records, files,\ndrawings, documents, equipment and the like, relating to the business of the\nCompany or a subsidiary, which the Executive shall invent, develop, conceive,\nproduce, prepare, use, construct or observe, shall be and remain the sole\nproperty of the Company or the relevant subsidiary. Upon the termination of his\nemployment (or earlier upon request of the Company), the Executive shall return\nto the possession of the Company all materials (and all copies thereof)\ninvolving any and all confidential information or trade secrets of, and shall\nnot take any material or copies thereof from the possession of, the Company or\nany subsidiary.\n\n\n                                        8\n   9\n           SECTION 8. MISCELLANEOUS.\n\n                  (a) The captions in this Agreement are not part of the\nprovisions hereof, are merely for the purpose of reference and shall have no\nforce or effect for any purpose whatsoever, including the construction of the\nprovisions of this Agreement, and if any caption is inconsistent with any\nprovisions of this Agreement, such provisions shall govern.\n\n                  (b) This Agreement is made in, and shall be governed by and\nconstrued in accordance with the internal laws of, the State of New York,\nwithout regard to conflicts-of-law principles.\n\n                  (c) This Agreement contains a complete statement of all of the\narrangements between the parties with respect to the subject matter hereof; and\nthere are no representations, agreements, arrangements or understandings, oral\nor written, between the parties relating to the subject matter of this Agreement\nwhich are not fully expressed in this Agreement. This Agreement may not be\nwaived, changed, modified or discharged orally, but only by an agreement in\nwriting signed by the party against whom any waiver, change, modification or\ndischarge is sought.\n\n                  (d) All notices given hereunder shall be in writing and shall\nbe sent by registered or certified mail, return receipt requested, and, if\nintended for the Company, shall be addressed to it at its principal office at\n601 West 26th Street, New York, New York 10021 for the attention of William P.\nKelly, Esq., General Counsel of the Company with a copy to Alan S. Ellman,\nPresident of the Company, or at such other address and for the attention of such\nother person of which the Company shall have given notice to the Executive in\nthe manner herein provided, and, if intended for the Executive, shall be\naddressed to him at his then current residence address as shown by the\nemployment records of the Company, or at such other ad dress or to such designee\nof which the Executive shall have given notice to the Company in the manner\nherein provided. Each such notice shall be deemed to be given on the date\nreceived at the address of the addressee.\n\n                  (e) Dispute Resolution.\n\n                  (i) Except as otherwise provided in this Agreement, any\ncontroversy or dispute arising out of or relating to this Agreement shall be\nsettled solely and exclusively by arbitration. The parties hereto expressly\nwaive theft rights to (x) bring any such controversy or dispute in a court of\n\n                                        9\n   10\n         law and (y) seek, demand or be awarded any punitive or exemplary\n         damages in connection with any such arbitration.\n\n                           (ii) Arbitration shall be conducted by three\n         arbitrators, one to be selected by each of the parties and the third to\n         be designated by the two arbitrators so selected. In the event of their\n         failure to agree on the third arbitrator, selection shall be made by\n         the American Arbitration Association in New York City where, to the\n         fullest extent permitted by law, the arbitration shall take place.\n\n                           (iii) The arbitrators shall, to the fullest extent\n         permitted by law, follow the commercial arbitration rules of the\n         American Arbitration Association, except as otherwise provided herein.\n         The arbitrators shall substantially comply with the federal rules of\n         evidence applicable to a federal district court sitting in New York,\n         New York; shall grant essential but limited discovery; shall provide\n         for the exchange of witness lists and exhibit copies; shall conduct a\n         pre-arbitration hearing and consider dispositive motions. Each party\n         shall have the right to request the arbitrators to make findings of\n         specific factual issues.\n\n                           (iv) The arbitrators shall complete their proceedings\n         and render their written decision (inclusive of findings of fact and\n         findings of law) within 40 days after the submission of the dispute to\n         them, unless both parties agree to an extension. Each party shall\n         cooperate with the arbitrators to comply with procedural and time\n         requirements and the failure of either to do so shall entitle the\n         arbitrators to extend the arbitration proceedings accordingly and to\n         impose sanctions on the party responsible for the delay, payable to the\n         other party.\n\n                           (v) The majority decision of the arbitrators shall\n         contain findings of facts on which the decision is based, including any\n         specific factual findings requested by either party, and shall further\n         contain the reasons for the decision with reference to the legal\n         principles on which the arbitrators relied. Such decision of the\n         arbitrators shall be final and binding upon the parties, and\n         accordingly the parties shall promptly comply with the terms of such\n         decision, and, to the fullest extent permitted by law, a judgment by a\n         court of competent jurisdiction (which shall be deemed to include any\n         state or federal court sitting in New York, New York or the State of\n         New York) may be entered in accordance therewith.\n\n                                       10\n   11\n                  SECTION 9. MERGERS AND CONSOLIDATIONS; ASSIGNABILITY.\n\n                  In the event that the Company or any successor to the Company\nshall at any time be merged or consolidated into or with any other entity or\nentities, or in the event that substantially all of the assets of the Company or\nany such successor shall be sold or otherwise transferred to another entity, the\nprovisions of this Agreement shall be expressly assumed by such succeeding\nentity and shall be binding upon and shall inure to the benefit of such\nsucceeding entity. Except as provided in this Section 9, this Agreement shall\nnot be assignable by the Company or by any such successor referred to in this\nSection 9. This Agreement shall not be assignable by the Executive, but in the\nevent of his death it shall be binding upon and inure to the benefit of his\nlegal representatives to the extent required to effectuate the terms hereof.\n\n                  IN WITNESS WHEREOF, the parties hereto have executed this\nAgreement as of the day and year first above written.\n\n\n                                SCREAMINGMEDIA INC.\n\n\n                                By:: \/s\/ Kevin C. Clark\n                                    _______________________________\n                                Name:   Kevin C. Clark\n                                Title:  Chief Executive Officer\n\n\n                                J. TERRENCE WATERS\n\n\n                                By: \/s\/ J. Terrence Waters\n                                   _______________________________\n                                J. Terrence Waters\n                                Address:\n\n                                       11\n\n\n   12\n\n                               SCREAMINGMEDIA INC.\n                             STOCK OPTION AGREEMENT\n                          UNDER 1999 STOCK OPTION PLAN\n                           NON-QUALIFIED STOCK OPTION\n\n\n         AGREEMENT entered into as of February 14, 2000 (the \"Date of Grant\") by\nand between SCREAMINGMEDIA INC., a Delaware corporation (the \"Company\"), and J.\nTerrence Waters (the \"Employee\"), an employee of the Company (or one of its\nsubsidiaries) (the Company and its subsidiaries herein together referred to as\nthe \"Company\").\n\n         WHEREAS, the Company has concurrently herewith entered into an\nEmployment Agreement with the Employee (the \"Employment Agreement\"); and\n\n         WHEREAS, the Company desires to grant the Employee a non-qualified\nstock option under the Company's 1999 Stock Option Plan (the \"Plan\") to acquire\nshares of the Company's Common Stock, $.01 par value per share (the \"Shares\");\n\n         WHEREAS, Section 6 of the Plan provides that each option is to be\nevidenced by an option agreement, setting forth the terms and conditions of the\noption.\n\n         NOW THEREFORE, in consideration of the premises and of the mutual\ncovenants and agreements contained herein and in the Employment Agreement, the\nCompany and the Employee hereby agree as follows:\n\n         1. Grant of Option. The Company hereby grants to the Employee a\nnon-qualified stock option (the \"Option\") to purchase 225,000 Shares on the\nterms and conditions hereinafter set forth.\n\n         2. Purchase Price. The purchase price (\"Purchase Price\") for the Shares\ncovered by the Option shall be $3.50 per Share.\n\n         3. Time of Exercise of Option. The Option shall become exercisable (i)\nwith respect to 25% of the Shares covered thereby on August 14, 2000; (ii) with\nrespect to an additional 8% of the Shares covered thereby on February 14, 2001;\nand (iii) with respect to the remaining 67% of the Shares covered thereby, an\nadditional 8.375% in equal quarterly installments on each May 14, August 14,\nNovember 14 \n   13\nand February 14 thereafter, with the final vesting date being February 13, 2003;\nprovided, that, the Employee is employed by the Company on each such date.\n\n                      4. Term of Option; Exercisability.\n\n\n                        (1) Term.\n\n                           (1) The Option shall expire on the date that is seven\nyears after the Date of Grant, but shall be subject to earlier termination as\nherein provided.\n\n                           (2) If the Employee at any time hereafter ceases for\nany reason to be an employee of the Company, the Option shall terminate in its\nentirety on the last day of the third month following the Date of Termination\n(as defined in the Employment Agreement), or on the date on which the Option\nexpires by its terms, whichever occurs first.\n\n                        (a) Exercisability.\n\n                           (1) If the Employee ceases to be an employee of the\nCompany, except as the Option granted to the Employee hereunder shall be\nexercisable only to the extent that the right to purchase Shares under such\nOption has accrued and is in effect on the date such Employee ceases to be an\nemployee of the Company. No partial exercise of the Option may be made for less\nthan 25 full Shares.\n\n                           (2) Notwithstanding the foregoing, in the event of a\nChange in Control and absent termination of employment prior to such Change in\nControl, the Option shall become vested and exercisable as to one-half (50%) of\nthe then unvested options.\n\n                           (3) For this Agreement, the term \"Change in Control\"\nmeans (i) any \"person\" or \"group\", as such terms are used in Section 13(d) and\n14(d) of the Exchange Act (other than the Company, any trustee or other\nfiduciary holding securities under an employee benefit program of the Company,\nor any company owned, directly or indirectly, by the shareowners of the Company\nin substantially the same proportion as their ownership of stock of the\nCompany), is or becomes the \"beneficial owner\" (as defined in Rule d-3 under the\nExchange Act) of, or acquires by proxy or otherwise, directly or indirectly,\nsecurities of the Company representing 50% or more of the combined voting power\nof the Company's then outstanding securities without the approval of the Board;\n(ii) during any period of two consecutive\n\n                                        2\n   14\nyears, individuals who at the beginning of such period constitute the Board, and\nany new Director (other than a Director designated by a person who has entered\ninto an agreement with the Company to effect a transaction described in clause\n(i), (iii), or (iv) of this sentence) whose election by the Board or nomination\nfor election by the Company's shareowners was approved by a vote of at least\ntwo-thirds (2\/3) of the Directors then still in office who either were Directors\nat the beginning of the period or whose election or nomination for election was\npreviously so approved cease for any reason to constitute at least a majority\nthereof; (iii) the shareowners of the Company approve a merger or consolidation\nof the Company with any other Company or a compulsory share exchange pursuant to\nwhich the Company's Common Stock is exchanged for stock or securities of another\nCompany, other than (1) a merger or consolidation or share exchange which would\nresult in the voting securities of the Company outstanding immediately prior\nthereto continuing to represent (either by remaining outstanding or by being\nconverted into voting securities of the surviving entity) more than 50% of the\ncombined voting power of the voting securities of the Company or such surviving\nentity outstanding immediately after such merger or consolidation or share\nexchange or (2) a merger or consolidation or share exchange effected to\nimplement a recapitalization of the Company (or similar transaction) in which no\n\"person\" acquires more than 50% of the combined voting power of the Company's\nthen outstanding securities; or (iv) the shareowners of the Company approve a\nprogram of complete liquidation of the Company or an agreement for the sale or\ndisposition by the Company of all or substantially all of the Companies assets\nand properties.\n\n         5. First Refusal Rights. If Employee, at any time, or from time to\ntime, after exercise of this Option, receives a bona fide offer from any person\nor entity to purchase any of the Shares received upon exercise (the \"Third Party\nOffer\"), prior to the acceptance thereof, Employee shall give written notice\nthereof to the Company. Such notice (the \"Offering Notice\") shall contain a copy\nof the Third Party Offer and state the name and address of the offeror and the\nprice at which and terms upon which such Shares (the \"Offered Shares\") are\nproposed to be transferred. The Offering Notice shall be deemed to be an offer\nby the Employee to sell the Offered Shares, and for a period of 30 calendar days\nthereafter the Company shall have a right of first refusal to purchase the\nOffered Shares at the price and upon the other terms stated in the Offering\nNotice. An acceptance of Offered Shares shall be effected by written notice (an\n\"Acceptance Notice\") delivered to the Employee. The closing of the sale of the\nOffered Shares pursuant to the exercise of the first refusal rights granted by\nthis Section 5 shall occur within 30 calendar days after the date of the\nAcceptance Notice. The rights and obligations set forth in this Section 5 shall\nterminate on the\n\n                                        3\n   15\neffective date of a registration statement filed by the Company under the\nSecurities Act of 1933 (the \"1933 Act\") pertaining to a firm commitment\nunderwritten initial public offering of the Company's equity securities.\n\n          6. Manner of Exercise of Option.\n\n                        (1) To the extent that the right to exercise the Option\nhas accrued and is in effect, the Option may be exercised in full or in part by\ngiving writ ten notice to the Company stating the number of Shares exercised and\naccompanied by payment in full for such Shares. Payment shall be wholly in cash.\nUpon such exercise, delivery of a certificate for paid-up, non-assessable Shares\nshall be made at the principal office of the Company to the person exercising\nthe Option, not more than 30 calendar days from the date of receipt of the\nnotice by the Company.\n\n                        (2) The Company shall at all times during the term of\nthe Option reserve and keep available such number of Shares of its common stock\nas will be sufficient to issue the shares granted in the Option. The Employee\nshall not have any of the rights of a stockholder of the Company in respect of\nthe Shares until one or more certificates for such Shares shall be delivered to\nhim or her upon the due exercise of the Option.\n\n         7. Non-Transferability. The right of the Employee to exercise the\nOption shall not be assignable or transferable by the Employee otherwise than by\nwill or the laws of descent and distribution, and the Option may be exercised\nduring the life time of the Employee only by him or her, as the case may be. The\nOption shall be null and void and without effect upon the bankruptcy of the\nEmployee or upon any attempted assignment or transfer, except as herein above\nprovided, including without limitation any purported assignment, whether\nvoluntary or by operation of law, pledge, hypothecation or other disposition\ncontrary to the provisions hereof, or levy of execution, attachment, divorce,\ntrustee process or similar process, whether legal or equitable, upon the Option.\n\n         8. Representation Letter and Investment Legend.\n\n            (1) In the event that for any reason the Shares to be issued upon\nexercise of the Option shall not be registered under the 1933 Act, upon any date\non which the Option is exercised in whole or in part, the person exercising the\nOption shall give a written representation to the Company in the form attached\nhereto as\n\n                                        4\n   16\nExhibit 1 and the Company shall place an investment legend, as described in\nExhibit 1, upon any certificate for the Shares issued by reason of such\nexercise.\n\n            (2) The Company shall be under no obligation to qualify Shares or to\ncause a registration statement or a post-effective amendment to any registration\nstatement to be prepared for the purpose of covering the issue of Shares.\n\n         9. Adjustments on Changes in Capitalization. Adjustments on Changes in\nCapitalization and the like shall be made in accordance with Section 12 of the\nPlan, as in effect on the date of this Agreement.\n\n         10. No Special Employment Rights. Nothing contained in the Plan or this\nAgreement shall be construed or deemed by any person under any circumstances to\nbind the Company to continue the employment of the Employee for the period\nwithin which this Option may be exercised. However, during the period of the\nEmployee's employment, the employee shall render diligently and faithfully the\nservices which are assigned to the Employee from time to time by the Board of\nDirectors or by the executive officers of the Company and shall at no time take\nany action which directly or indirectly would be inconsistent with the best\ninterests of the Company.\n\n         11. Rights as a Shareholder. The Employee shall have no rights as a\nshareholder with respect to any Shares which may be purchased by exercise of\nthis Option unless and until a certificate or certificates representing such\nShares are duly issued and delivered to the Employee. Except as otherwise\nexpressly provided in the Plan, no adjustment shall be made for dividends or\nother rights for which the record date is prior to the date such stock\ncertificate is issued.\n\n         12. Withholding Taxes. Whenever Shares are to be issued upon exercise\nof this Option, the Company shall have the right to require the Employee to\nremit to the Company an amount sufficient to satisfy all federal, state and\nlocal withholding tax requirements prior to the delivery of any certificate or\ncertificates for such Shares.\n\n         13. No Qualification under Section 422. It is understood and intended\nthat the Option granted hereunder shall not qualify as an \"incentive stock\noption\" as defined in Section 422 of the Code. If the Employee intends to\ndispose or does dispose (whether by sale, gift, transfer or otherwise) of any\nShares received upon exercise of this Option, he or she will notify the Company\nwithin 30 calendar days after such disposition.\n\n                                        5\n   17\n         IN WITNESS WHEREOF, the Company has caused this Agreement to be\nexecuted by its officer thereunto duly authorized, and the Employee has hereunto\nset his or her hand, all as of the day and year first above written.\n\n\n                                SCREAMINGMEDIA INC.\n\n\n                                By: \/s\/ Kevin Clark\n                                   ____________________________________\n                                Title: Chief Executive Officer\n\n                                       \/s\/ J. Terrence Waters\n                                _______________________________________\n                                Employee:  J. Terrence Waters\n                                Address:_______________________________\n                                        _______________________________\n\n                                Social Security No.:\n\n                                        6\n   18\n\n\n\n                                    EXHIBIT I\n\n                            TO STOCK OPTION AGREEMENT\n\n\n\nGentlemen:\n\nIn connection with the exercise by me as to _________ shares of common stock,\npar values $.01 per share, of ScreamingMedia Inc., a Delaware corporation (the\n\"Company\"), under the non-qualified stock option dated ____________, granted to\nme under the 1999 Stock Option Plan, I hereby acknowledge that I have been\ninformed as follows:\n\n         14. The shares of common stock of the Company to be issued to me\npursuant to the exercise of said option have not been registered under the\nSecurities Act of 1933, as amended (the \"Act\"), and accordingly, must be held\nindefinitely unless such shares are subsequently registered under the Act, or an\nexemption from such registration is available.\n\n         15. Routine sales of securities made in reliance upon Rule 144 under\nthe Act can be made only after the holding period and in limited amounts in\naccordance with the terms and conditions provided by that Rule, and in any sale\nto which that Rule is not applicable, registration or compliance with some other\nexemption under the Act will be required.\n\n         16. The Company is under no obligation to me to register the shares or\nto comply with any such exemptions under the Act.\n\n         17. The availability of Rule 144 is dependent upon adequate current\npublic information with respect to the Company being available and, at the time\nthat I may desire to make a sale pursuant to the Rule, the Company may neither\nwish nor be able to comply with such requirement.\n\n         In consideration of the issuance of certificates for the shares to me,\nI hereby represent and warrant that I am acquiring such shares for my own\naccount for investment, and that I will not sell, pledge or transfer such\nshares in the absence of an effective registration statement covering the same,\nexcept as permitted by the provisions of Rule 144, if applicable, or some other\napplicable exemption under the Act.\n\n   19\n\nIn view of this representation and warranty, I agree that there may be affixed\nto the certificates for the shares to be issued to me, and to all certificates\nissued hereafter representing such shares (until in the opinion of counsel,\nwhich opinion must be reasonably satisfactory in form and substance to counsel\nfor the Company, it is no longer necessary or required) a legend as follows:\n\n         \"The shares of common stock represented by this certificate have not\n         been registered under the Securities Act of 1933, as amended, and were\n         acquired by the registered holder pursuant to a representation and\n         warranty that such holder was acquiring such shares for his own account\n         and for investment, with no intention to transfer or dispose of the\n         same, in violation of the registration requirements of that Act. These\n         shares may not be sold, pledged or transferred in the absence of an\n         effective registration statement under the Securities Act of 1933, as\n         amended, or an opinion of counsel, which opinion is reasonably\n         satisfactory to counsel to the Company, to the effect that registration\n         is not required under such Act.\"\n\n         I further agree that the Company may place a stop order with its\ntransfer agent, prohibiting the transfer of such shares, so long as the legend\nremains on the certificates representing the shares.\n\n\n                                     Very truly yours,\n\n\n                                     _____________________________\n                                     J. Terrence Waters\n\n\n                                        2\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8789],"corporate_contracts_industries":[],"corporate_contracts_types":[9539,9544],"class_list":["post-39558","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-screaming-mediacom-inc","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39558","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39558"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39558"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39558"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39558"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}