EXHIBIT 99.9
March 28, 1997
Xxxx X. Xxxxx
c/o Starwave Corporation
00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxx:
This letter confirms the terms of your employment by STARWAVE CORPORATION
(the "Employer").
1. TERM
Subject to your signing and delivering this letter agreement (the
"Agreement") to Employer and completion of the Disney Enterprises, Inc.
("Disney") investment in Starwave Corporation, the term of your employment
hereunder commences April 1, 1997, and expires on March 31, 2000, unless
earlier terminated as hereinafter provided (the "Employment Period").
2. SALARY
In full consideration for all rights and services provided by you hereunder,
you shall receive an annual salary of $200,000, $220,000 and $240,000 for
each of the successive twelve month periods in the Employment Period.
Salary payments shall be made in equal installments in accordance with
Employer's then prevailing payroll policy.
3. BONUS
Bonus compensation, if any, shall be at the discretion of Employer.
4. STOCK OPTIONS
You acknowledge and agree that all stock options granted by Employer
pursuant to the Revised 1992 Combined Incentive and Nonqualified Stock
Option Plan (the "Plan") shall continue to be governed in accordance with
the Plan, as amended or modified from time to time. You acknowledge receipt
of the Plan. Concurrently herewith you have been granted a non-qualified
option to acquire 100,000 shares of Employer's Class A Common Stock,
exercisable at $9.07 per share. Such shares shall vest in equal monthly
installments of 2,083 shares during each of the forty-seven calendar months
commencing April 1997, and a final installment of 2,099 shares, subject to
continued employment and all of the terms of the Plan and the Stock Option
Agreement reflecting such grant. In the event you are terminated without
cause prior to the expiration of the Employment Period, then all stock
options which would otherwise have vested through the end of the Employment
Period shall vest upon such termination.
Xxxx X. Xxxxx
March 28,1997
Page 2
5. TITLE
You are being employed hereunder in the position of Executive Vice
President. You shall report to the CEO of Employer (or the President, if
there is no longer a CEO during the Employment Term). In the event that
Employer requires you to report to an executive other than the CEO (or the
President, if there is no longer a CEO during the Employment Term), such
event shall be deemed a termination without cause hereunder; provided, that
you shall give Employer's Board of Directors thirty (30) days written notice
of such event, with an opportunity to cure.
6. DUTIES
You shall personally and diligently perform, on a full time and exclusive
basis, such services as Employer or any of its divisions may reasonably
require. You shall observe all reasonable rules and regulations adopted by
Employer in connection with the operation of its business and carry out to
the best of your ability all instructions of Employer. Your principal place
of business shall be in the greater Seattle, Washington, area, but you shall
travel as reasonably required in connection with the performance of your
duties hereunder.
7. EXPENSES
To the extent you incur necessary and reasonable business expenses
(including, without limitation, travel and entertainment) in the course of
your employment, you shall be reimbursed for such expenses, subject to
Employer's then current policies regarding reimbursement of such business
expenses.
8. OTHER BENEFITS
You shall be entitled to those benefits that are standard for persons in
similar positions with Employer, consistent in the aggregate with Employer's
current practice subject to changes affecting all executives.
9. VACATIONS
You shall be entitled to three weeks paid vacation during each twelve month
period of this Agreement. Unused vacation time in any twelve month period
shall not be carried over to subsequent periods and you shall not be
entitled to payment in lieu of unused vacation time (except on termination
up to a maximum of three weeks of such unused time).
10. LIQUIDITY PROVISIONS; REPURCHASE RIGHT
In order to provide you with the opportunity to sell shares of Employer's
Class A Common Stock prior to the time (if at all) that Employer makes an
initial public offering of its Class A Common Stock and to provide for the
repurchase of your
Xxxx X. Xxxxx
March 28,1997
Page 3
shares of Class A Common Stock by and at the option of
Employer or Disney or its affiliates under certain circumstances, we have
mutually agreed to the following:
(a) INITIAL SALE OPPORTUNITY
Employer shall offer to purchase up to an aggregate of $4 million of
the Class A Common Stock from employees of Employer who are employees
on the Election Date ("Eligible Employees"). The Election Date shall
be July 1, 1997. The Closing Date for the sale shall be on or before
August 1, 1997. You shall have the right to sell up to 44,531 shares
of Class A Common Stock held by you at a purchase price equal to $8.21
per share which is purchased pursuant to such offer.
(b) ANNUAL LIQUIDITY OPPORTUNITY
For the calendar years ending December 31, 1998 and December 31, 1999,
subject in each case to your continued employment through the end of
each such calendar year (provided that if you are terminated without
cause, or you die or become permanently and totally disabled, you will
be entitled to a pro rata portion of such liquidity opportunity based
upon the number of calendar months in the particular calendar year
prior to such termination), the Board, after consultation with you,
shall establish both qualitative and quantitative targets to measure
Employer's performance during such year. If the Employer meets EITHER
the qualitative or quantitative targets for such year, you may give
written notice to Employer within three months after the end of the
calendar year asking that Employer at its option purchase or seek to
privately place up to ten per cent (10%) of the Eligible Securities
held by you as of the date hereof (as hereafter defined) at their Fair
Market Value (as defined). If the Employer fails to privately place
such securities within six months, then you may require Disney and Xxxx
Xxxxx ("Xxxxx") (in the following proportions: forty-five percent (45%)
Disney; fifty-five percent (55%) Xxxxx) to purchase such securities in
the subsequent sixty (60) day period at a price equal to eighty percent
(80%) of Fair Market Value. Fair Market Value shall be established by a
nationally recognized investment banking firm selected by Employer and
reasonably acceptable to you. Appraisal cost will be paid by Employer.
For purposes of determining the Eligible Securities you may sell
hereunder, the total number of shares deemed owned by you at any time
shall be the sum of the Eligible Securities owned by you at the date
hereof other than those sold by you under clause (a) above plus all
additional Class A Common Stock and options which become vested between
the date hereof and the end of the relevant period, without deduction
for shares previously sold by you under this clause (b).
(c) RESIDUAL PUT
Xxxx X. Xxxxx
March 28,1997
Page 4
If at the end of six years following the date hereof so long as you
have not been terminated pursuant to paragraph 13(a), Disney has not
exercised its call on your stock under clause (e) below or Xxxx X.
Xxxxx ("Xxxxx") has not exercised his put to Disney (thereby triggering
your tagalong rights), you may require Employer for a sixty (60) day
period to purchase all or any portion of the Eligible Securities then
owned by you at a purchase price equal to eighty percent (80%) of the
Fair Market Value thereof.
(d) TERMINATION ON IPO
The rights granted in this Section 10 shall terminate concurrently with
the closing of an initial public offering of Employer's Class A Common
Stock registered under the Securities Act of 1933, as amended.
(e) REPURCHASE BY DISNEY
In the event that either Disney elects to purchase all shares of Common
Stock owned by Xxxxx or his permitted transferees (collectively, the
"Xxxxx Shares") or Xxxxx elects to require Disney to purchase the Xxxxx
Shares (either an "Xxxxx Repurchase Event"), Disney shall be required
to purchase, and you shall be required to sell, all Class A Common
Stock owned by you at the same per share price as the per share price
offered to Xxxxx (less any applicable option exercise price). If Xxxxx
elects to receive shares of Disney common stock (rather than cash) in
an Xxxxx Repurchase Event, you shall be entitled to elect to receive
Disney common stock for your Class A Common Stock, at the same per
share price as the per share price offered to Xxxxx. In the event an
Xxxxx Repurchase Event does not occur or fails to close, Disney shall
be relieved of its obligation to purchase and you shall be relieved of
your obligation to sell the Class A Common Stock. Disney shall deliver
a notice to you promptly upon the occurrence of an Xxxxx Repurchase
Event providing a ten (10) day period for you to exercise previously
vested Options. Upon the end of the ten (10) day period, your rights
to shares of Class A Common Stock issued upon exercise of options shall
terminate and be null and void, such shares of Class A Common Stock
shall be cancelled on the books and records of the Company and your
sole right with regard to such shares shall be the compensation
provided for below. Upon the end of the ten (10) day period, all
remaining vested and unvested options held by you shall terminate and
become null and void. Any provision in any stock option or other
agreement between you and Employer to the contrary is modified and
amended hereby. Disney shall, as compensation for any unvested
Options, at its sole option (i) make a cash payment to you for the fair
market value of the unvested options (which shall be the same per share
price paid to Xxxxx or his transferees in connection with such a
repurchase event), or (ii) recommend to the Compensation Committee of
Disney's Board that you receive options to purchase Disney common stock
(in accordance with the terms and conditions of the then prevailing
Disney stock option plan) in amounts
Xxxx X. Xxxxx
March 28,1997
Page 5
designed to provide the Optionee with equivalent value, as determined
by Disney in its reasonable discretion and the compensation committee
makes such grants. Any such determinations provided for in this clause
(e) shall be final and binding. Payment for any stock purchased
hereunder shall be made by Disney promptly following the closing of an
Xxxxx Repurchase Event. The Disney election provided above shall be
taken within sixty (60) days of the closing of an Xxxxx Repurchase
Event. If Disney elects to make a cash payment, such payment shall
occur promptly following the Disney election. If Disney elects to
provide options to purchase Disney common stock, such option grants
shall occur in the next regularly scheduled meeting of the Compensation
Committee, if possible, or the following regularly scheduled meeting.
11. PROTECTION OF EMPLOYER'S INTERESTS
(a) During the term of your employment by Employer you shall not compete in
any manner, directly or indirectly, whether as a principal, employee,
agent or owner, with Employer, The Xxxx Disney Company or any affiliate
thereof, except that the foregoing will not prevent you from holding at
any time less than 5% of the outstanding capital stock of any company
whose stock is publicly traded.
(b) To the extent permitted by law, all rights worldwide with respect to
any and all intellectual or other property of any nature produced,
created or suggested by you during the term of your employment or
resulting from your services shall be deemed to be a work made for hire
and shall be the sole and exclusive property of Employer. You agree to
execute, acknowledge and deliver to employer at Employer's request,
such further documents as Employer finds appropriate to evidence
Employer's rights in such property. Any confidential and/or
proprietary information of Employer, or any affiliate thereof shall not
be used by you or disclosed or made available by you to any person
except as required in the course of your employment, and upon
expiration or earlier termination of the term of your employment, you
shall return to Employer all such information that exists in written or
other physical form (and all copies thereof) under your control.
Without limiting the generality of the foregoing, you acknowledge
signing and delivering to Employer, its standard confidentiality
agreements for employees and you agree that all terms and conditions
contained therein, and all of your obligations and commitments provided
for therein, shall be deemed, and hereby are, incorporated into this
Agreement as if set forth in full herein. The provisions of this
paragraph shall survive the expiration or earlier termination of this
Agreement.
12. SERVICES UNIQUE
You recognize that your services hereunder are of a special, unique,
unusual, extraordinary and intellectual character giving them a peculiar
value, the loss of
Xxxx X. Xxxxx
March 28,1997
Page 6
which cannot be reasonably or adequately compensated for in damages, and in
the event of a breach of this Agreement by you (particularly, but without
limitation, with respect to the provisions hereof relating to the
exclusivity of your services and the provisions of paragraph 10 hereof),
Employer shall, in addition to all other remedies available to it, be
entitled to equitable relief by way of injunction and any other legal or
equitable remedies.
13. TERMINATION
(a) Employer may terminate your employment hereunder for gross negligence,
gross misconduct or material breach of this Agreement; provided, that
any breach of paragraph 11 hereof shall be deemed to be a material
breach; provided, further, that you shall have a thirty (30) day cure
period for breaches of paragraph 11, to the extent any such breaches
are capable of being cured, in Employer's reasonable discretion. In
any such event, all obligations of Employer hereunder (except pursuant
to paragraph 10(e)) shall immediately terminate.
(b) In the event of your death during the term hereof, this Agreement
(other than paragraphs 10(b), (c), and (e) shall terminate and Employer
shall only be obligated to pay your estate or legal representative the
salary provided for herein to the extent earned by you prior to such
event and to have all unvested options vest as provided in your stock
option agreement. In the event you are unable to perform the services
required of you hereunder as a result of any disability and such
disability continues for a period of 90 or more consecutive days or an
aggregate of 120 or more days during any 12-month period during the
term hereof, then at any time thereafter Employer shall have the right,
at its option, to terminate your employment hereunder. In such event
all unvested options shall vest as provided in your stock option
agreement. Unless and until so terminated, during any period of
disability during which you are unable to perform the services required
of you hereunder, your salary hereunder shall be payable to the extent
of, and subject to, Employer's policies and practices then in effect
with regard to sick leave and disability benefits.
(c) You acknowledge that you have been provided by Employer with a copy of
Section 508 of the Federal Communications Act of 1934, as amended,
relating in part to receiving or paying consideration for product
identification in television programs, that you are familiar with the
provisions thereof and that you will fully comply therewith during the
term of this Agreement. Without limiting the foregoing, however, and
whether or not Section 508 is applicable to your activities, you agree
that you will not, without Employer's prior written consent, accept any
compensation or gift from any person, firm or corporation (other than
Employer) where such compensation or gift is, or may appear to be, in
consideration of your acting in a particular manner in relation to the
business of such person, firm or corporation. Without limiting the
generality of paragraph 13(a) hereof, it is agreed that any violation
of
Xxxx X. Xxxxx
March 28,1997
Page 7
this paragraph 13(c) shall constitute a violation of this Agreement
upon which Employer may forthwith terminate this Agreement pursuant to
paragraph 13(a) hereof.
14. USE OF EMPLOYEE'S NAME
Employer shall have the right but not the obligation to use your name or
likeness for any publicity or advertising purpose. Employer is under no
obligation to accord you credit for any production.
15. ASSIGNMENT
Employer may assign this Agreement or all or any part of its rights
hereunder to any entity that succeeds to a substantial portion of Employer's
assets or business, and this Agreement shall inure to the benefit of such
assignee.
16. NO CONFLICT WITH PRIOR AGREEMENTS
You represent to Employer that neither your commencement of employment
hereunder nor the performance of your duties hereunder conflicts with any
contractual commitment on your part to any third party or violates or
interferes with any rights of any third party.
17. POST-TERMINATION OBLIGATIONS
In consideration of the interim liquidity provided to Employee pursuant to
Section 10:
After the termination of your employment hereunder for any reason
whatsoever, you shall not either alone or jointly, with or on behalf of
others, either directly or indirectly, whether as principal, partner, agent,
shareholder, director, employee, consultant or otherwise, at any time during
a period of two years following such termination, offer employment to, or
solicit the employment or engagement of, or otherwise entice away from the
employment of Employer or any affiliated entity, either for your own account
or for any other person, firm or company, any person who is employed by
Employer or any such affiliated entity, whether or not such person would
commit any breach of his contract of employment by reason of his leaving the
service of Employer or any affiliated entity.
After termination of your employment hereunder for any reason, whatsoever,
you shall not either alone or jointly, with or on behalf of others, either
directly or indirectly, whether as principal, partner, agent, shareholder,
director, employee, consultant or otherwise, at any time during a period of
one year following such termination, provide services of any nature with
respect to any business that competes with the business of Employer as of
the date of termination in the geographic area in which Employer does
business. For purposes of this
Xxxx X. Xxxxx
March 28,1997
Page 8
paragraph 17, Disney and its affiliates (other than Employer) shall not be
considered to be affiliated entities of Employer.
18. ENTIRE AGREEMENT; AMENDMENTS; WAIVER; ETC.
(a) This Agreement supersedes all prior or contemporaneous agreements and
statements, whether written or oral, concerning the terms of your
employment, and no amendment or modification of this Agreement shall be
binding against Employer unless set forth in a writing signed by
Employer and delivered to you. No waiver by either party of any breach
by the other party of any provision or condition of this Agreement
shall be deemed a waiver of any similar or dissimilar provision or
condition at the same or any prior or subsequent time.
(b) You have given no indication, representation or commitment of any
nature to any broker, finder, agent or other third party to the effect
that any fees or commissions of any nature are, or under any
circumstances might be, payable by Employer or any affiliate thereof in
connection with your employment hereunder.
(c) Nothing herein contained shall be construed so as to require the
commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement and any present or
future statue, law, ordinance or regulation, the latter shall prevail,
but in such event the provision of the Agreement affected shall be
curtailed and limited only to the extent necessary to bring it within
legal requirements.
(d) This Agreement does not constitute a commitment of Employer with regard
to your employment, express or implied, other than to the extent
expressly provided for herein. Upon termination of this Agreement, it
is the contemplation of both parties that your employment with Employer
shall cease, and that neither Employer nor you shall have any
obligation to the other with respect to continued employment. In the
event that your employment continues for any period of time following
the stated expiration dates of this Agreement, unless and until agreed
to in a new subscribed written document, such employment or any
continuation thereof is "at will," and may be terminated without
obligation at any time by either party's giving notice to the other.
(e) This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington. In accordance with the
Immigration Reform and Control Act of 1986, employment hereunder is
conditioned upon satisfactory proof of your identity and legal ability
to work in the United States.
(f) To the extent permitted by law, you will keep the terms of this
Agreement confidential, and you will not disclose any information
concerning this
Xxxx X. Xxxxx
March 28,1997
Page 9
Agreement to anyone other than your immediate family and professional
representatives (provided they also agree to keep the terms of this
Agreement confidential).
(g) Disney and its affiliates are express beneficiaries of your agreements
and obligations hereunder and may enforce them to the same extent that
Employer may.
20. NOTICES
All notices that either party is required or may desire to give the other
shall be in writing and given either personally or by depositing the same in
the United States mail addressed to the party to be given notice as follows:
To Employer: 00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
To Employee: At the address shown for you on the
signature page hereof.
Either party may by written notice designate a different address for giving
of notices. The date of mailing of any such notices shall be deemed to be
the date on which such notice is given.
21. HEADINGS
The headings set forth herein are included solely for the purpose of
identification and shall not be used for the purpose of construing the
meaning of the provisions of this Agreement.
Xxxx X. Xxxxx
March 28,1997
Page 10
If the foregoing accurately reflects our mutual agreement, please sign
where indicated.
STARWAVE CORPORATION
By: /s/ Xxxxxxx Xxxxx
-----------------
Title: CEO
EMPLOYEE
/s/ Xxxx Xxxxx
----------------------
XXXX X. XXXXX
c/o Starwave Corporation
00000 XX Xxxxxxxx Xxx
Xxxxxxxx, Xxxxxxxxxx 00000
