9 May 2000
Mr. Douglas Glen
507 Bayview Drive
Manhattan Beach, CA 90266
Dear Doug,
On behalf of Burst.com, Inc. (Burst), I am pleased and delighted to confirm the
terms of our agreement for you to join us as an employee.
You will join Burst initially as President, reporting to the Board of Directors.
It is anticipated, although not guaranteed, that you will become CEO, or co-CEO,
later this year. You will devote your full time to the performance of your job
at Burst, except for (i) services on charitable, civic, and corporate boards,
provided that such services do not significantly interfere with your
responsibilities at Burst; (ii) entitled vacations; and (iii) no more than three
hours per week attending to your responsibilities as a partner in a venture
fund. You will spend four days a week at the Burst office in San Francisco, and
one day a week in Los Angeles.
You will start on May 30, 2000. Your base salary will be $325,000 per annum
($27,083 per month). Your base salary will be reviewed annually by the
Compensation Committee of the Board of Directors. Any increase in your base
salary will not limit or reduce any other obligation to you by Burst, and after
any increase, your base salary will not be reduced.
In addition to your base salary, you and your family will receive all the
benefits accorded to our fill time executive employees, including medical
insurance, dental insurance, and an annual physical. You will be entitled to
four weeks of paid vacation each year. You will receive a monthly company car
allowance of $750. You will be reimbursed for your cellular phone, airline club,
and other reasonable business-related expenses.
Consistent with Burst's travel policy for senior management, you will be
entitled to fly business class on trips exceeding four hours.
Your compensation package will include an employee stock option grant under the
terms of the Company's Stock Option Plan (the "Plan"). This new option grant
will be for 750,000 incentive stock option shares with a 42 month vesting
period. Seventeen percent (17%) of each round of granted options will vest
immediately, and the balance will vest monthly for as long as you remain
employed with Burst. 250,000 options will be granted immediately. These initial
250,000 options will be priced at the fair market value of Burst's common stock
as of the date of the grant. On the following two anniversary dates, additional
grants of 250,000 incentive stock option shares will be priced at the fair
market value of Burst's common stock as of the date of the grant. Your stock
options will be subject to the terms and conditions of the Plan and conditioned
upon your execution of an Employee Stock Option Agreement.
You will meet with the Compensation Committee of Burst's Board of Directors to
agree upon your incentive bonus formula. The formula will include mutually
agreed-upon targets which enable you to earn an additional 100% of your base
salary and annual stock option grants.
Burst recognizes that you have recently purchased a home in Los Angeles, and
that your employment at Burst requires you to acquire an additional residence in
San Francisco. To assist in this matter, Burst agrees to loan you $100,000
immediately, and $5,000 per month for the
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following 36 months, to enable you to make the down payments and monthly
payments on your San Francisco residence (the "Loans"). The Loans will bear
interest at 7% per annum, and will be forgiven if you have not voluntarily
terminated your employment prior to your third anniversary. The total amount
extended to you by Burst as Loans (plus interest) will be credited against any
cash bonuses to which you may otherwise be entitled by virtue of your annual
incentive bonus program, according to the bonus formula which you will develop
in conjunction with Burst's Compensation Committee. At Burst's request and
expense, the Loans together with accrued interest will be collateralized with a
deed of trust on your new San Francisco residence. The Loans together with any
accrued but unpaid interest will be due and payable on the third anniversary
date of your employment if the Loans have not been forgiven or repaid in full.
Your employment with Burst will be "at will," and either party may terminate at
any time for any reason. In the event that your employment is terminated other
than for cause or by your election, Burst will continue to pay you your
then-current salary, plus all benefits, for a period of 12 months. In addition,
you will be entitled to accelerated vesting of your stock options, with the 12
months of otherwise normal vesting becoming vested immediately, and any
then-unpriced, options being priced at the day of termination.
In the event of a dispute between you and Burst arising out of your employment
or the termination of your employment, both parties agree to submit the dispute
to binding arbitration under the labor arbitration rules of the American
Arbitration Association, with both parties afforded a reasonable and adequate
opportunity to conduct discovery.
Doug, we are excited about you joining us. Please sign a copy of this letter and
keep a copy for your records. The terms set forth herein are intended to
supercede all prior agreements, understandings, and representations concerning
your employment with Burst, except as regards your role as a Director of the
company.
Kindest regards,
Richard Lang
Chairman and Chief Executive Officer
Burst.com, Inc.
I understand and agree to the above terms.
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Douglas Glen