EXHIBIT 10.6
February 13, 2004
Mr. Marc Morgenstern
Dear Mr. Morgenstern
On behalf of Loudeye Corp., a Delaware corporation ("Loudeye"), I am pleased to
offer you the position of Vice President and General Manager of Overpeer (the
"Company"), an entity anticipated to be a wholly owned subsidiary of Loudeye.
Speaking for myself, as well as the other members of the Company's management
team, we are very much looking forward to having you on the team.
The terms of your new position with the Company are as set forth below:
1. Position.
a. You will be Vice President and General Manager of the
Company, working out of the Company's offices in New
York, NY. You will report to the CEO of Loudeye.
b. You agree to the best of your ability and experience
that you will at all times loyally and conscientiously
perform all of the duties and obligations required to
the reasonable satisfaction of the Company. During the
term of your employment, you further agree that you will
devote all of your business time and attention to the
business of the Company, and the Company will be
entitled to all of the benefits and profits arising from
or incident to all such work services and advice. You
will not render commercial or professional services of
any nature to any person or organization, whether or not
for compensation, without the prior written consent of
the Company's Board of Directors, and you will not
directly or indirectly engage or participate in any
business that is competitive in any manner with the
business of the Company. Nothing in this letter is
designed to prevent you from accepting speaking or
presentation engagements consistent with the Company's
business plan in exchange for honoraria or from serving
on boards of charitable organizations, or from owning no
more than one percent (1%) of the outstanding equity
securities of a corporation whose stock is listed on a
national stock exchange.
2. Start Date. This offer is expressly contingent upon Loudeye
completing its acquisition of the Company ("closing") and is void if
said condition does not occur. Subject to fulfillment of any
conditions imposed by this letter agreement, your employment will
commence the first business day following closing.
3. Proof of Right to Work. For purposes of federal immigration law, you
will be required to provide to the Company documentary evidence of
your identity and eligibility for employment in the United States.
Such documentation must be provided to us within three (3) business
days of your Start Date, or our employment relationship with you may
be terminated.
4. Compensation.
a. Base Salary. You will be paid a monthly salary of
$15,833.33, which is equivalent to $190,000.00 on an
annualized basis. Your salary will be payable in two
equal payments per month pursuant to the Company's
regular payroll policy (or in the same manner as other
employees of the Company).
b. Bonus. You will have an opportunity to earn bonuses that
will be aligned to Company and personal objectives. The
bonus amount available will be 100% of your current base
salary. Seventy five percent (75%) of your total
available bonus will be aligned to three business
performance metrics: revenue growth, earnings (EBITDA)
and cash flow. The specifics of these Company objectives
will be determined by the CEO and will be subject to
approval by the Board of Directors. Twenty five percent
(25%) of your total available bonus will be aligned with
personal MBO's that you and I will define together.
c. Annual Review. Your base salary will be reviewed
annually as part of the Company's normal salary review
process.
5. Stock Options.
a. Initial Grant. You will be eligible to participate in
stock option or other incentive programs available to
officers or employees of the Company. Your initial grant
amount will be issued on your Start Date and will total
180,000 Options. The shares shall vest over a four year
period and become exercisable in accordance with the
following schedule: 18.75% of the Shares on the nine
month anniversary from your Start Date and quarterly
thereafter at a rate of 6.25% of the total number of
options every quarter until fully vested (pro-rate for
any periods less than a full calendar quarter).
6. Proprietary Information and Inventions Agreement. Your acceptance of
this offer and commencement of employment with the Company is
contingent upon the execution, and delivery to an officer of the
Company, of the Company's Proprietary Information and Inventions
Agreement, a copy of which is enclosed for your review and execution
(the "Confidentiality Agreement"), prior to or on your Start Date.
7. Benefits. The Company will provide you with standard medical and
optional dental insurance benefits. You will be eligible to purchase
coverage for your dependents under The Company's medical and dental
insurance program. The company pays 50% of the medical and dental
premiums for spouse and dependents.
8. Confidentiality of Terms. You agree to follow the Company's strict
policy that employees must not disclose, either directly or
indirectly, any information, including any of the terms of this
agreement, regarding salary, bonuses, or stock purchase or option
allocations to any person; provided, however, that you may discuss
such terms with members of your immediate family and any legal, tax
or accounting specialists who provide you with individual legal, tax
or accounting advice.
9. At-Will Employment. Notwithstanding the Company's obligation
described in Section 6 above, your employment with the Company will
be on an "at will" basis, meaning that either you or the Company may
terminate your employment at any time for any reason or no reason,
without further obligation or liability.
10. Severance: Notwithstanding Section 6 above, if your employment is
terminated for reasons other than cause, you shall be entitled to
receive three month's base salary and continued benefits coverage,
together with any bonus that has been earned and accrued as of the
termination date.
11. Prior Contractual Commitment: This letter of employment supercedes
and voids any previous employment or related agreements with the
Company.
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Marc, we are all delighted to be able to extend you this offer and look forward
to working with you. To indicate your acceptance of the Company's offer, please
sign and date this letter in the space provided below and return it to me, along
with a signed and dated copy of the Proprietary Information and Inventions
Agreement. This letter, together with the Proprietary Information and Inventions
Agreement, sets forth the terms of your employment with the Company and
supersedes any prior representations or agreements, whether written or oral.
This letter may not be modified or amended except by a written agreement, signed
by the Company and by you.
Very truly yours,
LOUDEYE CORP.
/s/ Jeff Cavins
Jeff Cavins
President and CEO
ACCEPTED AND AGREED:
/s/ Marc Morgenstern
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Signature
2/18/04
Date
Enclosure: Proprietary Information and Inventions Agreement
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