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Exhibit 10.1
July 24, 2000
Peter A. Lund
32 East 64th Street
New York, NY 10021
Dear Mr. Lund:
We are pleased to offer you the position of Chief Executive Officer of
dreamlife, inc. (the "COMPANY") with appropriate responsibilities for such role.
You will report to the Board of Directors of the Company. This letter will set
forth the economic and key employment conditions of our employment offer.
A. SALARY. You will earn a base compensation of $300,000 per annum,
payable semi-monthly, subject to customary tax deductions. Your salary will be
reviewed annually and any upward adjustments will be within the discretion of
the Company's Board of Directors (the "BOARD") consistent with the Company's
policies and based on your performance, contributions and/or changes in
competitive market conditions.
B. DISCRETIONARY BONUS. In addition to your base salary, you will be
eligible to receive discretionary bonus compensation as determined by the Board
in its sole and absolute discretion.
C. DEFERRED BONUS. In addition to your base salary, on the terms and
subject to the conditions set forth below, you will be eligible for a cash bonus
of up to three million dollars ($3,000,000.00) (the "Deferred Bonus Potential")
payable in a lump sum on the third anniversary of your Commencement Date (as
defined below). Your right to receive the Deferred Bonus Potential shall vest in
accordance with the following schedule:
o the lesser of: (i) thirty-three and one third of a percent (33 1/3 %) of
the Deferred Bonus Potential or (ii) the remaining unvested portion of the
Deferred Bonus Potential on the first anniversary of your Commencement
Date; provided that you have been in Service (as such term is defined in
the Option Agreement (as hereinafter defined)) continuously from your
Commencement Date through the first anniversary of your Commencement Date;
o the lesser of: (i) five and fifty-five hundredths of a percent (5.55%) of
the Deferred Bonus Potential or (ii) the remaining unvested portion of the
Deferred Bonus Potential on the last day of each month following the month
in which the one-year anniversary of your Commencement Date occurred;
provided that you have been in Service continuously from your Commencement
Date through the last day of such month;
o the lesser of: (i) twenty five percent (25%) of the Deferred Bonus
Potential or (ii) the remaining unvested portion of the Deferred Bonus
Potential in the event of a Change of Control (as such term is defined in
the Company's 1999 Employee Stock Option Plan (the "Plan")) of the Company
when you have continuously been in Service during the Requisite Service
Period (as such term is defined in the Plan) and continue to be in Service
on the date of such Change of Control;
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o the remaining unvested portion of the Deferred Bonus Potential if you are
terminated by the Company other than for Cause, (as such term is defined in
the Plan) prior to the second anniversary of your Commencement Date.
D. STOCK OPTIONS. Subject to Board approval and to shareholder approval
of Amendment No. 2 to the Plan, which effects an increase in the number of
shares of common stock reserved for issuance upon the exercise of options
granted under the Plan, and to your becoming employed by the Company, you will
be granted an option to purchase 2,400,000 shares of common stock of the Company
(as adjusted for stock splits, stock dividends, stock combinations,
recapitalizations and like events that have an effective date after your
Commencement Date) (the "Option Shares"), which shall vest in the manner set
forth in the Option Agreement. Your exercise price shall be $5.20. In all other
respects, such stock options will be governed by the Plan, a copy of which is
attached hereto as EXHIBIT A and by an Employee Nonstatutory Stock Option
Agreement, in the form attached hereto as EXHIBIT B (the "Option Agreement").
E. BENEFITS. As a full-time employee of the Company, you will be
eligible to participate in the Company's sponsored health and benefits plans and
life and disability insurance plans in accordance with the Company's current
eligibility requirements. The Company reserves the right to change or modify any
or all aspects of the benefits program at anytime. You are also eligible for
vacation consistent with that of other executives at your level, accrued in
accordance with the Company's vacation policy.
F. REGISTRATION RIGHTS. You will be entitled to certain registration
rights in respect of up to 100,000 shares of common stock of the Company
issuable to you upon exercise of options granted to you by CYL Development
Holdings, LLC, on the terms and subject to the conditions to be set forth in a
letter agreement to be entered into between the Company and you in substantially
the form of EXHIBIT C.
G. KEY EMPLOYMENT CONDITIONS.
(i) You will devote substantially all of your working time,
attention and energies to the business of the Company. The Company
hereby acknowledges that you may discharge your duties as Chief
Executive Officer from the Company's headquarters in New York as well
as from your current residence in Florida.
(ii) Your employment at the Company is "at will" and you or
the Company are free to terminate the employment relationship at any
time, with or without "Cause" (as defined in the Plan) of any nature.
(iii) During the course of your employment with the Company,
you will have access to or knowledge of, or work on the development or
creation of confidential information of the Company. You hereby agree
that you will not at any time, whether during or after the termination
of your employment, reveal to any person or entity any confidential or
proprietary information of the Company ("Confidential Information") or
of any third party which the Company is under an obligation to keep
confidential, except as may be required in the ordinary course of
performing your duties as an employee of
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the Company, and you shall keep secret all Confidential Information and
shall not use or attempt to use any such information in any manner,
except as may be required in the ordinary course of performing your
duties as an employee of the Company. Confidential Information shall
not include (a) information that at the time of disclosure is in the
public domain through no fault of you; (b) information received from a
third party outside of the Company that was disclosed without a breach
of any confidentiality obligation; or (c) information approved for
release by written authorization of the Company.
(iv) If at any time or times during your employment you shall
(either alone or with others) make, conceive, discover or reduce to
practice any invention, modification, discovery, design, development,
improvement, process, software program, work-of-authorship,
documentation, formula, data, technique, know-how, secret or
intellectual property right whatsoever or any interest therein (whether
or not patentable or registrable under copyright or similar statutes or
subject to analogous protection) (herein called "Developments") that
(a) relates to the business of the Company or any customer of, supplier
to or content provider to the Company or any of the products or
services being developed, sold or provided by the Company or which may
be used in relation therewith or (b) results from tasks assigned to you
by the Company, such Developments and the benefits thereof shall
immediately become the sole and absolute property of the Company and
its assigns, and you shall promptly disclose to the Company (or any
persons designated by it) each such Development and hereby assign any
rights you may have or acquire in the Developments and benefits and/or
rights resulting therefrom to the Company and its assigns without
further compensation and shall communicate, without cost or delay, and
without publishing the same, all available information relating thereto
(with all necessary documentation, plans and models) to the Company.
(v) While employed at the Company, you agree that you will
not, whether alone or as an individual proprietor, partner, officer,
director, consultant, agent, employee or stockholder of any company or
other commercial enterprise, directly or indirectly, engage in a
Competitive Business (as hereinafter defined). A "Competitive Business"
shall mean any business that engages principally in business activity
that involves consumer learning or personal or professional
self-improvement.
(vi) Nothing contained herein shall be construed to restrict
you from (a) being a passive investor in any business that is not
engaged in a Competitive Business, PROVIDED that you may have a passive
ownership interest in a Competitive Business that is a publicly-traded
company if such equity ownership does not exceed two percent (2%) of
any class of voting securities and (b) serving as a member of the Board
of Directors of another company that is not engaged in a Competitive
Business.
H. COMMENCEMENT DATE. The commencement date (the "Commencement Date")
of your employment shall be your start date, which shall be May 22, 2000.
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I hope you will view this offer as a very significant demonstration of
our desire to have you join our organization and be part of an opportunity to
build a new medium and a great company. If the terms of this letter are
acceptable to you, please execute the enclosed copy of this letter and return it
to me via facsimile.
We look forward to a long and mutually rewarding relationship.
Very truly yours,
DREAMLIFE, INC.
By: /s/ PHILICIA G. LEVINSON
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Name: Philicia G. Levinson
Title: Senior Vice President and
Chief Financial Officer
AGREED TO AND ACCEPTED BY:
/s/ PETER A. LUND
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Peter A. Lund
Date: July 21, 2000
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