Exhibit 10.11
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
the Effective Date (as defined below), by and between Styleclick, Inc., a
Delaware corporation (the "Company"), and Xxxxxxxx Xxxxxxxxx, an individual
resident in California (the "Employee").
RECITALS
WHEREAS, the Company is a corporation engaged, either directly or through
its subsidiaries, in the development and marketing of internet services and
products and the handling and facilitating of e-commerce;
WHEREAS, the Employee is employed by Xxxxxxxxxx.xxx Inc., a California
corporation ("Styleclick"), as its Co-Chief Executive Officer and President
pursuant to an Employment Agreement, dated January 1, 1998, as amended (the
"Existing Agreement");
WHEREAS, Merger Sub, a California corporation to be formed by the Company,
will merge with and into Styleclick (the "Merger") on a date to be determined
(the "Effective Date");
WHEREAS, the Company desires to secure Employee's employment as an
executive of the Company following the Merger;
WHEREAS, Employee desires to accept such employment; and
WHEREAS, the Company and Employee now desire to enter into this Agreement
for the purpose of superseding the Existing Agreement in its entirety and to
provide for the employment of Employee by the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants set forth herein, and for other valuable consideration,
the adequacy and receipt of which are hereby acknowledged, the parties hereby
agree as follows:
1. Employment; Term.
1.1 Titles; Duties. The Company agrees to employ Employee, and
Employee agrees to be employed by the Company, as the Company's President
and Chief Executive Officer, for a term commencing on the Effective Date
and continuing until the second anniversary of the Effective Date, unless
earlier terminated in accordance with the provisions of Section 4 hereof
(the "Term"). Employee's primary duties and responsibilities hereunder
shall be to manage, administer and direct, subject to the supervision and
direction of the Company's Board of Directors (the "Board"), the business
and operations of the Company as well as such other duties and
responsibilities as may be prescribed from time to time by the Board.
Employee agrees to perform such duties and to satisfy such responsibilities
throughout the Term.
1.2 Location. The services to be rendered by Employee hereunder shall
be furnished at such places as the Company reasonably deems appropriate,
but in no event will Employee be required to relocate his principal
residence outside Los Angeles, California.
2. Compensation.
2.1 Base Salary. The Company agrees to pay Employee, during his
employment hereunder, a salary at the rate of Two Hundred and Fifty
Thousand Dollars ($250,000) per year (the "Base Salary"), payable in
accordance with the Company's regular salary payroll policies and
procedures.
2.2 Annual Bonus. In addition to the Base Salary payable to Employee
under Section 2.1, the Company shall pay to Employee an annual performance
bonus for each fiscal year of the Company during his employment hereunder
in the amount of Fifty Thousand Dollars ($50,000) if the Company attains
ninety percent (90%) of its budgeted sales target for such fiscal year as
mutually agreed between Employee and the Board.
2.3 Expenses. It is recognized that, during his employment hereunder,
Employee will be required to incur ordinary and necessary business expenses
in connection with the performance of his duties, and Employee shall be
entitled to reimbursement for such expenses in accordance with the
Company's general reimbursement policies and procedures as may be
established from time to time by the Board.
2.4 Home Office. Employee shall be entitled to reimbursement for
reasonable expenses incurred in connection with his home office as may be
required in order to perform his duties under this Agreement, upon
presentation of vouchers or other evidence of those expenditures in a form
in accordance with the Company's policies and procedures as may be
established from time to time by the Board. Without limitation of the
immediately preceding sentence, the Company acknowledges that it is a
requirement of Employee's duties that Employee have a separate telephone
line at his home office and the expense incurred by Employee in connection
with the installation and use of such separate telephone facilities shall
be reimbursed to Employee when and as incurred.
2.5 Benefits. During his employment hereunder, Employee shall be
eligible to participate in the Company's benefit programs, including group
medical, dental and medical reimbursement programs, life insurance benefit
programs, retirement plans, and other such benefit programs as may be made
available to the Company's executives generally, upon the same terms and
conditions as such programs are made available to other senior executives
of the Company.
2.6 Vacation. Except to the extent that the Company Policies and
Procedures, as in effect from time to time, permit the carryover of
vacation periods, Employee shall be entitled to three (3) full weeks of
vacation (in advance) during each year of his employment hereunder.
Employee agrees that, without the express prior written consent of the
Company, such vacation periods shall not be accumulated but shall be taken
during each calendar year or forfeited, and Employee agrees to schedule and
take such vacation at a time or times which do not unreasonably impair the
Company's operations.
2.7 Options. The Company shall assume the stock option (the "Option")
to purchase 150,000 shares of Common Stock, no par value, of Styleclick
("Styleclick Common Stock") that was granted to Employee as of January __,
2000 (the "Grant Date"). The Employee acknowledges and agrees that (i) the
Option shall be exercisable at a price per share equal to the fair market
value of a share of Styleclick Common Stock on the Grant Date; (ii)
twenty-five percent (25%) of the Option shall vest and become exercisable
on the first anniversary of the Grant Date and the remainder of the Option
shall vest ratably over the thirty-six month period following the first
anniversary of the Grant Date, provided that the Option shall become 100%
vested and exercisable upon a Change in Control (as such term is defined in
the Company's stock option plan, but not including the Merger); (iii) the
Option shall expire upon the earlier to occur of (A) ten years from the
Grant Date (the "Option Term") or (B) except as otherwise provided in the
agreement pursuant to which the Option was granted, 90 days following the
termination of Employee's employment with the Company for any reason and
(iv) other than acceleration of the Option following a Change in Control,
the Option shall not otherwise become vested and exercisable as a result of
the termination or non-renewal of this Agreement (or the termination of
Employee's employment with the Company) for any reason.
2.8 Indemnification/D&O Insurance. Employee shall be entitled during
the Term, and thereafter in regard to any claim or assertion relating to
actions, circumstances or events occurring during the Term, to the benefit
of the indemnification provisions contained in the Company's Bylaws, as
they may be amended from time to time, to the extent permitted by
applicable law; provided, however, that, notwithstanding such
indemnification provisions, Employee shall not be required to serve as a
director of the Company during any period of time in which Employee is not
covered by a policy of directors' and officers' errors and omissions
insurance policy, having coverage in the amount of $5 million.
3. Sick Leave and Disability.
3.1 During the Term, in the event that Employee shall, by reason of
illness or other physical or mental disability, be unable to perform his
duties hereunder for a period of up to one hundred eighty (180) consecutive
days, said illness or disability shall be deemed for purposes of this
Agreement to be temporary and Employee shall continue to receive all
compensation payable pursuant to Section 2.
3.2 During the Term, in the event that Employee shall, by reason of
illness or other physical or metal disability, be unable to perform his
duties hereunder for more than one hundred eighty (180) consecutive days,
said illness or disability shall be deemed for purposes of this Agreement
to be permanent (a "Permanent Disability"), and Employee's employment
hereunder shall thereupon terminate, and, subject to the provisions of
Section 3.3 hereof, the Company shall have no further obligations
whatsoever to Employee, except pursuant to the Option and to make the
severance payments provided in Sections 2.7 and 4.1 hereof, which payments
shall be paid to Employee immediately upon such termination. It is
understood that, except as provided in Sections 3.1 and 3.3 hereof,
Employee shall not be entitled to receive compensation during any period of
Permanent Disability.
3.3 In the event of Employee's Permanent Disability as provided in
Sections 3.2 hereof, if the Company does not then have a Company-paid
disability insurance plan providing for Employee to receive payments for as
long as Employee remains permanently disabled in amounts equal to at least
seventy percent (70%) of Employee's salary paid as provided in this
Agreement, the Company shall make disability payments monthly to Employee
for so long as Employee remains permanently disabled in an amount equal to
the excess of seventy percent (70%) of Employee's Base Salary over the
percentage of Employee's Base Salary paid under the Company's disability
insurance plan.
4. Termination of Employee's Employment.
4.1 Termination by the Company due to Death, Permanent Disability or
other than for Cause. If Employee's employment is terminated by the Company
due to Employee's death or Permanent Disability or other than for Cause (as
defined below), then (i) the Company shall continue to pay Employee's Base
Salary and to provide Employee with medical, dental and life insurance on
the same basis as provided to active executives of the Company for the
remainder of the Term, subject to the terms of any third party agreement
relating to the provision of such benefits; and (ii) the Company shall pay
Employee the Accrued Obligations (as defined below).
4.2 Termination by the Company for Cause or by Employee. Except for
the payment of any Accrued Obligations, in the event of the termination of
Employee's employment by the Company for Cause or by the Employee for any
reason, the Company shall have no further obligation or liability under
this Agreement. For purposes of this Agreement, "Cause" shall mean: (i) the
plea of guilty or nolo contendere to, or conviction for, the commission of
a felony offense by Employee; provided, however, that after indictment, the
Company may suspend Employee, but without limiting or modifying in any
other way the Company's obligations under this Agreement; (ii) a material
breach by Employee of a fiduciary duty owed to the Company; (iii) a
material breach by Employee of any of the covenants made by Employee
herein; or (iv) the willful or gross neglect by Employee of the material
duties required by this Agreement.
4.3 Mitigation; Offset. In the event of termination of Employee's
employment prior to the end of the Term, Employee shall use reasonable best
efforts to seek other employment and to take other reasonable actions to
mitigate the amounts payable under Section 4.1 hereof. If Employee obtains
other employment during the Term, the amount of any payment or benefit
provided for under Section 4.1 hereof which has been paid to Employee shall
be refunded to the Company by Employee in an amount equal to any
compensation earned by Employee as a result of employment with or services
provided to another employer after the date of Employee's termination of
employment and prior to the otherwise applicable expiration of the Term,
and all future amounts payable by the Company to Employee during the
remainder of the Term shall be offset by the amount earned by Employee from
such other employer. For purposes of this Section 4.3, Employee shall have
an obligation to inform the Company regarding Employee's employment status
following termination and during the period encompassing the Term.
4.4 Accrued Obligations. As used in this Agreement, "Accrued
Obligations" shall mean the sum of (i) any portion of Employee's Base
Salary through the date of death or termination of employment for any
reason, as the case may be, which has not yet been paid; and (ii) any
compensation (excluding the Option) previously earned but deferred by
Employee (together with any interest or earnings thereon) that has not yet
been paid.
5. Confidential Information; Non-Solicitation; Proprietary Rights.
5.1 Confidentiality. Employee acknowledges that, while employed by the
Company, Employee will occupy a position of trust and confidence. Employee
shall not, except as may be required to perform Employee's duties hereunder
or as required by applicable law, without limitation in time or until such
information shall have become public other than by Employee's unauthorized
disclosure, disclose to others or use, whether directly or indirectly, any
Confidential Information regarding the Company or any of its subsidiaries
or affiliates. "Confidential Information" shall mean information about the
Company or any of its subsidiaries or affiliates, or their clients and
customers that is not disclosed by the Company or any of its subsidiaries
or affiliates for financial reporting purposes and that was learned by
Employee in the course of employment with the Company or any of its
subsidiaries of affiliates, including, without limitation, any proprietary
knowledge, trade secrets, data, formulae, information and client and
customer lists and all papers, resumes, and records (including computer
records) of documents containing such Confidential Information. Employee
acknowledges that such Confidential Information is specialized, unique in
nature and of great value to the Company and its subsidiaries or
affiliates, and that such information gives the Company and its
subsidiaries or affiliates a competitive advantage. Employee agrees to
deliver or return to the Company, at the Company's request at any time or
upon termination or expiration of Employee's employment or as soon
thereafter as possible, all documents, computer tapes and disks, records,
lists, data, drawings, prints, notes and written information (and all
copies thereof) furnished by the Company or its subsidiaries or affiliates
or prepared by Employee in the course of Employee's employment by the
Company or its subsidiaries or affiliates. As used in this Agreement,
"subsidiaries" and "affiliates" shall mean any company controlled by,
controlling or under common control with the Company.
5.2 Consulting Services. During the two year period commencing
immediately upon the termination of Employee's employment for any reason
(other than Employee's death) (the "Consulting Period"), Employee shall be
available for consultation with the Company and its subsidiaries and
affiliates concerning their general operations and the industries in which
they engage in business. In addition, during the Consulting Period,
Employee will aid, assist and consult with the Company and its subsidiaries
and affiliates with respect to their dealings with clients and the
enhancement of their recognition and reputation. During the Consulting
Period, Employee shall devote such time and energy to the affairs of the
Company and its subsidiaries and affiliates as may be reasonably required
to carry out his duties hereunder without jeopardizing Employee's then
full-time, non-Company employment opportunities; provided, however, that
Employee shall not be obligated to devote more than 50 hours per year to
the performance of such duties. In consideration of Employee's consulting
services, and in consideration of Employee's covenants contained in this
Section 5, the Company shall pay to Employee $30,000 during each full year
of the Consulting Period, payable in equal monthly installments. The
Company further agrees to reimburse Employee for all reasonable and
necessary business expenses incurred by Employee in the performance of his
consulting services in accordance with the Company's reimbursement policy,
including, without limitation, the submission of supporting evidence as
reasonably required by the Company.
5.3 Non-Competition. (a) During the Term, Employee shall not, without
the prior written consent of the Company, directly or indirectly engage in
or assist any activity which is the same as, similar to or competitive with
the business of the Company (other than on behalf of the Company or any of
its subsidiaries or affiliates) including, without limitation, whether such
engagement or assistance is as an officer, director, proprietor, employee,
partner, investor (other than as a holder of less than 5% of the
outstanding capital stock of a publicly-traded corporation), guarantor,
consultant, advisor, agent, sales representative or other participant,
anywhere in the world that the Company or any of its subsidiaries or
affiliates has been engaged; provided that the Employee may serve as a
director or guarantor or be an investor with respect to such a business to
the extent he holds such status on the Effective Date and to the extent
such positions are set forth on Schedule I hereto.
(b) In the event the Employee's employment hereunder is terminated by
the Employee for any reason or by the Company pursuant to Section 4.2
hereof, the Employee shall not for a period of 24 months thereafter,
without the prior written consent of the Company, directly or indirectly
engage in or assist any activity which provides third party e-commerce
services to clientele of the type serviced by the Company (other than on
behalf of the Company or any of its subsidiaries or affiliates) including,
without limitation, whether such engagement or assistance is as an officer,
director, proprietor, employee, partner, investor (other than as a holder
of less than 5% of the outstanding capital stock of a publicly-traded
corporation), guarantor, consultant, advisor, agent, sales representative
or other participant, anywhere in the world that the Company or any of its
subsidiaries or affiliates has been engaged in such activity; provided that
the Employee may serve as a director or guarantor or be an investor with
respect to such a business to the extent he holds such status on the
Effective Date and to the extent such positions are set forth on Schedule I
hereto (collectively, "Competitive Activities"). Notwithstanding the
foregoing, nothing herein shall limit Employee's ability to own interests
in or manage entities which engage in the business of the Company as an
incidental part of their primary business and which do not hold themselves
out generally as competitors of the Company or any of its subsidiaries or
affiliates.
(c) In the event the Employee's employment hereunder is terminated by
the Company other than for Cause pursuant to Section 4.1 hereof, the
Employee shall not for a period of 15 months thereafter, without the prior
written consent of the Company, directly or indirectly engage in or assist
any Competitive Activities. Notwithstanding the foregoing, nothing herein
shall limit Employee's ability to own interests in or manage entities which
engage in the business of the Company as an incidental part of their
primary business and which do not hold themselves out generally as
competitors of the Company or any of its subsidiaries or affiliates.
(d) In the event the Employee's employment with the Company continues
through the second anniversary of the Effective Date and the Employee's
employment with the Company is thereafter terminated for any reason, the
Employee shall not for a period of 12 months thereafter, without the prior
written consent of the Company, directly or indirectly engage in or assist
any Competitive Activities. Notwithstanding the foregoing, nothing herein
shall limit Employee's ability to own interests in or manage entities which
engage in the business of the Company as an incidental part of their
primary business and which do not hold themselves out generally as
competitors of the Company or any of its subsidiaries or affiliates.
5.4 Non-Solicitation of Employees. Employee recognizes that he will
possess confidential information about other employees of the Company and
its subsidiaries or affiliates relating to their education, experience,
skills, abilities, compensation and benefits, and inter-personal
relationships with suppliers to and customers of the Company and its
subsidiaries or affiliates. Employee recognizes that the information he
will possess about these other employees is not generally known, is of
substantial value to the Company and its subsidiaries or affiliates in
developing their respective businesses and in securing and retaining
customers, and will be acquired by Employee because of Employee's business
position with the Company. Employee agrees that, during the Term, Employee
will not, directly or indirectly, solicit or recruit any employee of the
Company or any of its subsidiaries or affiliates for the purpose of being
employed by Employee or by any business, individual, partnership, firm,
corporation or other entity on whose behalf Employee is acting as an agent,
representative or employee and that Employee will not convey any such
confidential information or trade secrets about other employees of the
Company or any of its subsidiaries or affiliates to any other person except
within the scope of Employee's duties hereunder.
5.5 Non-Solicitation of Customers. During the Term, Employee shall not
solicit any customers of the Company or any of its subsidiaries or
affiliates or encourage (regardless of whom initiates the contact) any such
customers to use the facilities or services of any competitor of the
Company or any of its subsidiaries or affiliates.
5.6 Proprietary Rights; Assignment. All Employee Developments (as
defined below) shall be made for hire by the Employee for the Company or
any of its subsidiaries or affiliates. "Employee Developments" means any
idea, discovery, invention, design, method, technique, improvement,
enhancement, development, computer program, machine, algorithm or other
work or authorship that (i) relates to the business or operations of the
Company or any of its subsidiaries or affiliates, or (ii) results from or
is suggested by any undertaking assigned to the Employee or work performed
by the Employee for or on behalf of the Company or any of its subsidiaries
or affiliates, whether created alone or with others, during or after
working hours. All Confidential Information and all Employee Developments
shall remain the sole property of the Company or its subsidiaries or
affiliates. The Employee shall acquire no proprietary interest in any
Confidential Information or Employee Developments developed or acquired
during the Term or during Employee's employment with the Company's or its
subsidiaries or predecessors. To the extent that Employee may, by operation
of law or otherwise, acquire any right, title or interest in or to any
Confidential Information or Employee Development, the Employee hereby
assigns to the Company all such proprietary rights. The Employee shall,
both during and after the Term, upon the Company's request, promptly
execute and deliver to the Company all such assignments, certificates and
instruments, and shall promptly perform such other acts, as the Company may
from time to time in its discretion deem necessary or desirable to
evidence, establish, maintain, perfect, enforce or defend the Company's
rights in Confidential Information and Employee Developments.
5.7 Compliance with Policies and Procedures. During his employment
hereunder, Employee shall adhere to the policies and standards of
professionalism set forth in the Company's Policies and Procedures as they
may exist from time to time.
5.8 Remedies for Breach. Employee expressly agrees and understands
that the remedy at law for any breach by Employee of this Section 5 will be
inadequate and that damages flowing from such breach are not usually
susceptible to being measured in monetary terms. Accordingly, it is
acknowledged that upon Employee's violation of any provision of this
Section 5 the Company shall be entitled to obtain from any court of
competent jurisdiction immediate injunctive relief and a temporary order
restraining any threatened or further breach as well as an equitable
accounting of all profits or benefits arising out of such violation.
Nothing in this Section 5 shall be deemed to limit the Company's remedies
at law or in equity for any breach by Employee of any of the provisions of
this Section 5, which may be pursued by or available to the Company.
5.9 Survival of Provision. The obligations contained in this Section 5
shall survive the termination or expiration of Employee's employment with
the Company and, as applicable, shall be fully enforceable thereafter in
accordance with the terms of this Agreement. If it is determined by a court
of competent jurisdiction in any state that any restriction in this Section
5 is excessive in duration or scope or is unreasonable or unenforceable
under the laws of such state, it is the intention of the parties that such
restriction may be modified or amended by the court to render it
enforceable to the maximum extent permitted by the laws of such state.
6. Miscellaneous.
6.1 Termination of Prior Agreements. This Agreement constitutes the
entire agreement between the parties and terminates and supersedes any and
all prior agreements and understandings (whether written or oral) between
the parties with respect to the subject matter of this Agreement. Employee
acknowledges and agrees that neither the Company nor anyone acting on its
behalf has made, and is not making, and in executing this Agreement, the
Employee has not relied upon, any representations, promises or inducements
except to the extent that the same are expressly set forth in this
Agreement. Employee hereby represents and warrants that by entering into
this Agreement, Employee will not rescind or otherwise breach an employment
agreement with Employee's current employer prior to the natural expiration
date of such agreement.
6.2 Assignment; Successors. This Agreement is personal in its nature
and none of the parties hereto shall, without the consent of the other
parties, assign or transfer this Agreement or any rights or obligations
hereunder; provided that, in the event of the merger, consolidation,
transfer, or sale of all or substantially all of the assets of the Company
with or to any other individual or entity, this Agreement shall, subject to
the provisions hereof, be binding upon and inure to the benefit of such
successor and such successor shall discharge and perform all the promises,
covenants, duties and obligations of the Company hereunder, and all
references herein to the "Company" shall refer to such successor.
6.3 Withholding. The Company shall make such deductions and withhold
such amounts from each payment and benefit made or provided to Employee
hereunder, as may be required from time to time by applicable law,
governmental regulation or order.
6.4 Heading References. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute
a part of this Agreement for any other purpose.
6.5 Waiver; Modification. Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not be deemed
a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times. This
Agreement shall not be modified in any respect except by writing executed
by each party hereto. Notwithstanding anything to the contrary herein,
neither the assignment of Employee to a different Reporting Officer due to
a reorganization or an internal restructuring of the Company or its
affiliated companies nor a change in the title of the Reporting Officer
shall constitute a modification or a breach of this Agreement.
6.6 Severability. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any law or
public policy, only the portions of this Agreement that violate such law or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and
effect. Further, any court order striking any portion of this Agreement
shall modify the stricken terms as narrowly as possible to give as much
effect as possible to the intentions of the parties under this Agreement.
6.7 Indemnification. The Company shall indemnify and hold Employee
harmless for acts and omissions in Employee's capacity as an officer,
director or employee of the Company to the maximum extent permitted under
applicable law; provided, however, that neither the Company nor any of its
subsidiaries or affiliates shall indemnify Employee for any losses incurred
by Employee as a result of acts described in Section 4.2 of this Agreement.
6.8 Governing Law. This Agreement shall governed and construed in
accordance with the laws of the State of California, without regard to the
rules thereof relating to conflict of laws.
[Signature Page for Xxxxxxxxx Employment Agreement]
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the 27th day of July, 2000.
STYLECLICK, INC.
By:
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Name: Xxxxxxx Xxxxxxx
Title: Vice President
EMPLOYEE
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Xxxxxxxx Xxxxxxxxx
