EXHIBIT 10.5
[HOMESTORE LETTERHEAD]
Michael R. Douglas
September 30, 2002
Page 3
[HOMESTORE LETTERHEAD]
September 30, 2002
Michael R. Douglas
17815 St. Lucia Isle Drive
Tampa, FL 33647
Dear Mike:
On behalf of Homestore, Inc., it is with great pleasure that I extend to you our
offer of employment. The specifics of this offer are as follows:
JOB TITLE: Executive Vice President, General Counsel and Secretary
START DATE: October 7, 2002
ANNUAL SALARY: $325,000
MAXIMUM BONUS (TARGET) $325,000
MAXIMUM BONUS (ABOVE $325,000
PLAN ACHIEVEMENT)
STOCK OPTIONS: A stock option grant of 1,200,000 options, with grant
date and vesting schedules as described below
VACATION: Four Weeks (20 days) per anniversary year
EMPLOYMENT STATUS: Exempt, Regular-Full Time Employee
You will be eligible for an annual bonus with a "target" bonus of 100 percent of
your annual base salary, subject to achievement of certain goals and objectives,
with the ability to earn a bonus of up to 200 percent of your annual base
salary, subject to exceeding such goals and objectives. Your "target bonus" is
defined as 100% of your annual base salary as of the date hereof, which is
$325,000.00. With respect to 2002, the amount of any bonus earned will be
prorated based on the portion of the year remaining on your start date.
Upon commencement of your employment and subject to Board of Directors approval,
you will receive a grant of 1,200,000 stock options in Homestore, Inc. The
Board, at their next scheduled meeting following your date of hire, will set the
option price at the then current market price. The options will vest according
to a schedule whereby 200,000 options vest on your start date and 1,000,000
options vest 1/48th of the shares per month on the first day of each month
beginning with October 1, 2002. Options expire 10 years after the grant date or
one year after termination, whichever comes earlier.
You will be reimbursed for your reasonable expenses incurred on behalf of
Homestore upon providing appropriate documentation in accordance with Homestore
policies, which expenses will include air travel
Michael R. Douglas
September 30, 2002
Page 2
and other transportation expenses, hotel accommodations, and telecommunications
expenses (including fixed, mobile and Internet connections).
You will be reimbursed for reasonable expenses associated with your relocation
to Westlake Village according to the Homestore Relocation Policy. The Company is
very interested in facilitating your timely relocation and settling you and your
wife in a permanent residence in Westlake Village. Accordingly, the Company
agrees to reimburse you for a loss on the sale of your Tampa residence up to
$100,000. All taxable benefits and payments to you pursuant to this paragraph
will include federal and state taxes and tax gross-up amounts in an amount
necessary to place you in the same after-tax position as you would have been had
no such taxes been imposed.
In view of exigent business circumstances and in order to allow you to
immediately commence employment with the Company and delay the need for your
immediate, permanent relocation to Westlake Village, the Company will provide
you with an interim living expense allowance of $5000 per month for up to 12
months from the date of this agreement. Such interim living expense payments
will cease 30 days after your permanent relocation to Westlake Village. To the
extent payments pursuant to this paragraph are taxable to you, such payments
shall include federal and state taxes and tax gross-up amounts in an amount
necessary to place you in the same after-tax position as you would have been had
no such taxes been imposed.
If you accept this offer of employment, you will be scheduled for a new employee
orientation session during your first month of employment to introduce you to
Homestore employee benefits and policies.
As a regular, full-time employee, you will be eligible for the group health,
disability and life insurance and other fringe benefits that are made available
by Homestore to other similarly situated employees pursuant to the terms and
conditions set forth in the applicable benefit plans and policies. Further
details will be discussed with and provided to you on your first day of
employment.
On your first day of work, new hire documents will be completed to assure that
there is no delay in the processing of your paycheck. In accordance with federal
law, you will be required to provide documentation to Human Resources within 72
hours of your commencement of employment verifying your employment eligibility.
Additionally, you will be required to sign Homestore's Confidentiality Agreement
(a copy of which is attached to this letter).
We are very pleased to extend this offer to you. I join the rest of the
Homestore team in looking forward to working with you, and know that our success
will be even greater with you aboard.
Accompanying this letter is an Executive Retention and Severance Agreement.
Please indicate your acceptance of this offer by signing and returning the
Executive Retention and Severance Agreement and the original letter to me.
Sincerely,
/s/ W. Michael Long
W. Michael Long
Chief Executive Officer
I HAVE READ AND UNDERSTAND THE TERMS OF THIS OFFER AND CONSENT TO ALL OF THE
TERMS AND PROVISIONS CONTAINED HEREIN.
NAME /S/ MICHAEL DOUGLAS DATE SEPTEMBER 30, 2002
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MICHAEL DOUGLAS