EXHIBIT 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Employment
Agreement"), dated as of this 5th day of April, 1999 is entered into by and
between Fogdog, Inc. (formerly known as Cedro Group, Inc.) (the "Company"), and
Xxxxx Xxxxxx ("Executive"). This Amended and Restated Employment Agreement
amends and restates the Employment Agreement between the Company and Executive
dated as of June 12, 1998 and is effective as of October 24, 1998 (the
"Effective Date"). In consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. EMPLOYMENT.
----------
1.1 Position. During the Employment Term (as hereinafter
--------
defined) and subject to the terms and conditions set forth herein, the Company
agrees to employ Executive as the president of its international division and
remain as Chairman of the Board (A Company Officer), reporting directly to the
Company's Chief Executive Officer.
1.2 Duties. Executive shall diligently, and to the best of his
------
ability, perform all such duties incident to his position and use his best
efforts to promote the interests of the Company.
1.3 Time to be Devoted to Employment. During the Employment
--------------------------------
Term, Executive shall devote his full time and energy to the business of the
Company. Executive hereby represents that he is not a party to any agreement
which would be an impediment to entering into this Employment Agreement and that
he is permitted to enter into this Employment Agreement and perform the
obligations hereunder.
2. COMPENSATION AND BENEFITS.
-------------------------
2.1 Annual Salary. In consideration of and as compensation for
-------------
the services agreed to be performed by Executive hereunder, the Company agrees
to pay Executive a starting annual base salary of $105,000, payable in
accordance with the Company's regular payroll schedule ("Base Salary"), less
applicable withholdings and deductions. The Base Salary shall be increased to
$120,000, less applicable withholdings and deductions, effective upon
Executive's relocation to the international office. The Base Salary will be
subject to change at the sole discretion of the Company's Board of Directors
(the "Board"). Executive will receive a supplement to Base Salary to be
determined by the Board upon relocation of Executive to the international office
to compensate Executive for the higher cost of living abroad. Such supplement
shall be effective upon relocation of Executive to the international office.
This supplement will be based upon the ORC Survey data annually provided by
Price WaterhouseCoopers.
The Company will also pay for tax and payroll (hypo) submissions.
Employee will continue to pay Hypothetical tax rates (including CA State Income
Tax) to the benefit of the company. The company will account and pay for all US
and UK filings and the actual taxes paid
in those countries. The purpose is to maintain an equitable standard of living
within the US and it is understood that the company may benefit from these
arrangements.
2.2 Bonus Plan. Executive will be eligible to receive an annual
----------
bonus of up to 25% of his base salary in 1998. Effective in 1999, Executive will
be eligible to receive an annual bonus of up to 20% of base salary, upon
achievement of objectives mutually determined by Executive and the Company's
Chief Executive Officer.
2.3 [RESERVED] N/A
2.4 Repurchase Right. Executive and the Company agree that the
----------------
Company shall be permitted to purchase from Executive up to 173,333 shares
(subject to adjustment for stock splits, dividends, recapitalizations and the
like) of the Company's Common Stock owned by Executive on the date hereof (the
"Shares") at the Fair Market Value thereof if at any time during the Employment
Term Executive terminates this Employment Agreement pursuant to Section 4.1(iv)
hereof (voluntary departure without Good Reason) (the "Repurchase Right"). The
Repurchase Right shall lapse with respect to 1/26th of the Shares at the end of
each month of the Employment Term; provided, however, that the Repurchase Right
shall lapse with respect to all of the Shares (a) immediately prior to an
initial public offering of the Company or the acquisition of the Company in a
Corporate Transaction (as defined in Section 11.3.1 of the Plan), or (b) upon
termination of this Employment Agreement pursuant to Sections 4.1(i) (death) or
4.1(ii) (disability) or 4.1(v) (by Executive for Good Reason). The Repurchase
Right shall be exercisable by written notice delivered by the Company within
thirty (30) days after Executive's termination of employment pursuant to Section
4.1(iv). The notice shall indicate the date set for the closing of the
repurchase, which shall not be more than ten (10) business days after the end of
the thirty (30)-day exercise period, and at the closing the Company shall pay
the purchase price of the repurchased shares in cash, and the Executive shall
concurrently deliver the stock certificates for the repurchased shares, each
duly-endorsed by him for transfer. If the Repurchase Right is not exercised
during such thirty (30)-day exercise period, the Repurchase Right shall lapse in
its entirety. The Repurchase Right shall be assignable by the Company.
For purposes of this Employment Agreement, "Fair Market Value" shall
mean the value of the Shares being repurchased hereunder based upon the exercise
price which the Board would then assign to incentive stock options granted under
the Plan.
2.5 Participation in Benefit Plans. During the Employment Term,
------------------------------
Executive shall be entitled to participate in health, life and disability
insurance commensurate with all such benefit plans then offered to United States
employees, as determined by, and from time to time adopted by the Board. The
Company reserves the right to amend, modify or terminate any employee benefits
at any time for any reason. Your portion of the cost will be determined at
enrollment. Coverage for your spouse and/or any dependents is available at
additional cost.
2.6 Reimbursement of Expenses. The Company shall reimburse
-------------------------
Executive for all reasonable management approved expenses including, a)
professional and language development expenses such as classes and seminars, b)
business development expenses, such as travel and entertainment and cellular
telephone, and c) expenses incurred in
2
setting up office operations, such as rent for office space, telephone lines,
office supplies and equipment, printing, furniture, taxes, documentation,
insurance and fees.
2.7 Vacation. During the Employment Term, Executive will be
--------
entitled to 19 days of paid vacation per annum, which may be carried over and
used in any year during the Employment Term (plus four days for overseas time).
2.8 Relocation Expenses. Each year, Executive shall be
-------------------
reimbursed for the cost of two (2) round trip airline tickets, coach or
comparable class, for his immediate family for trips to the United States. The
Executive shall remain in the international office for the remainder of the
Employment Term. Company shall pay for all reasonable expenses for moving goods
overseas comparable with moving expenses of employees posted overseas including
shipping, package, storage, consulting, and insurance. Upon the expiration of
the Employment Term, the Company shall pay all relocation expenses and
transportation fees back to the United States should Executive so desire. The
Company shall pay all housing expenses for up to two (2) months upon arrival at
the international location in an executive apartment or hotel determined by the
Company. The Company shall pay for the cost of storage of Executive's
furnishings in the United States for the duration of the Employment Term. If he
decides to move back before the end of his term, he pays for the relocation.
Additionally, the Company will pay basic housing costs for Executive
while overseas. The housing that is chosen must be comparable (within reason)
to current U.S. standards. Executive agrees to pay the company $2300 per month,
in semi-monthly deductions from payroll after the 2 month temporary housing
allowance is over OR if permanent housing is found sooner. Housing costs may
include local taxes assessed (if any), but not utilities and insurance.
2.9 Automobile. If reasonably required for professional use,
----------
the Company shall reimburse Executive for reasonable expenses of leasing and
insuring an automobile for Executive's use during the Employment Term.
3. EMPLOYMENT TERM.
---------------
3.1 Employment Term. The "Employment Term" means the period
---------------
commencing on the Effective Date and terminating on the earlier of two years and
two months from the Effective Date or as set forth in Section 4.1.
3.2 Notice of Renewal. At least sixty (60) days prior to the
-----------------
natural expiration of the period ending two years and two months from the
Effective Date and sixty (60) days prior to each one year anniversary
thereafter, if applicable, the Company shall give Executive written notice of
whether the Company will be seeking a one-year extension of Executive's services
under this Employment Agreement or subsequent one-year period, if applicable.
Unless such notice indicates that there will be no extension, the terms of this
Employment Agreement (other than Section 2.4) shall be automatically renewed for
successive one-year periods. However, Executive's employment with the Company
will continue unless terminated by Executive or the Company as set forth in
Section 4.1.
3
4. TERMINATION OF EMPLOYMENT.
-------------------------
4.1 Method of Termination. Executive's employment pursuant to
---------------------
this Employment Agreement and the Employment Term provided for herein shall
terminate upon the first of the following to occur:
(i) Executive's death;
(ii) Date that written notice is deemed given or made by
the Company to Executive that as a result of any physical or mental injury or
disability, he is unable to perform the essential functions of his job, with or
without reasonable accommodation. Such notice may be issued when the Board has
reasonably determined that Executive has become unable to perform substantially
his services and duties hereunder with or without reasonable accommodation
because of any physical or mental injury or disability, and that it is
reasonably likely that he will not be able to resume substantially performing
his services and duties on substantially the terms and conditions as set forth
in this Employment Agreement;
(iii) Date that written notice is deemed given or made by
the Company to Executive of termination for "cause." For purposes of this
Employment Agreement, "cause" shall mean any one of the following:
(A) Gross negligence or the repeated failure of
Executive, following the receipt of written notice from the Board of its
dissatisfaction with Executive's performance, to perform his duties and
responsibilities to the reasonable satisfaction of the Board, or any breach by
Executive of his fiduciary duties to the Company or any material term of this
Employment Agreement. For purposes of this Employment Agreement, any act or acts
or omission or omissions by Executive that have a material adverse effect on the
Company's operations, prospects, reputation or business shall be deemed to be a
breach of his duties and responsibilities to the Company; or
(B) The conviction of Executive for a felony.
(iv) Date that written notice is deemed given or made by
Executive of his resignation or voluntary departure from the Company without
Good Reason (as hereinafter defined); or
(v) Date that written notice is deemed given or made by
Executive of his resignation or voluntary departure from the Company for Good
Reason. For purposes of this Employment Agreement, "Good Reason" shall mean
Executive's resignation or departure by reason of:
(A) a change in executive's position with the
Company which materially reduces Executive's level of
responsibilities or title; or
(B) a material reduction in executive's level of
compensation (including base salary, fringe benefits and any
bonus award (unrelated to any executive officer-wide reduction to
save expenses)).
4
(vi) Date that written notice is deemed given or made by
the Company to executive of Executive's termination without "cause."
Nothing herein alters Executive and the Company's separate right to
terminate the employment relationship at any time, for any reason, with or
without cause.
4.2 Effect of Termination for Cause, Executive's Resignation or
-----------------------------------------------------------
Voluntary Departure. Upon (i) the termination of Executive for cause; Executive
-------------------
will not be entitled to any additional compensation or other rights or benefits
from the Company; and, as a result, the Company shall be obligated to pay
Executive only that portion of his Base Salary that Executive has earned prior
to the effective date of the termination of Executive's employment with the
Company. If executive resigns for any reason (ii), Executive will be entitled to
his then existing Base Salary for a period of thirteen (13) weeks from the date
of termination, payable in accordance with the Company's regular payroll
schedule. If it is deemed employee resigns for "Good Reason" (as defined above),
employee is entitled to twenty six (26) weeks from date of termination.
4.3 Effect of Executive's Death or Disability. Other than as
-----------------------------------------
set forth in Section 2.4, upon Executive's departure pursuant to Section 4.1(i)
(death) or 4.1(ii) (disability) of this Employment Agreement, Executive will not
be entitled to any additional compensation or other rights or benefits from the
Company; and, as a result, the Company shall be obligated to pay Executive only
that portion of his Base Salary that Executive has earned prior to the effective
date of the termination of Executive's employment with the Company.
4.4 Effect of Termination Without Cause. In the event the
-----------------------------------
Company terminates Executive's employment with the Company without cause or the
Company's Repurchase Right shall lapse as set forth in Section 2.4, and
Executive will be entitled to his then existing Base Salary for a period of
twenty-six (26) weeks from the date of termination payable in accordance with
the Company's regular payroll schedule and the Company will also reimburse
Executive for his COBRA premiums to continue his medical insurance coverage
pursuant to COBRA for the period of twenty-six (26) weeks from the date of
termination. In addition, in the event the Company terminates Executive's
employment with the Company without cause, the Company will also pay all
reasonable relocation expenses for return of Executive and his family to the
United States
4.5 Resignation as an Officer and Director. In the event
--------------------------------------
Executive's employment with the Company terminates for any reason, Executive
agrees to immediately resign as an officer and/or director of the Company.
5. CONFIDENTIAL INFORMATION AND COVENANT NOT TO COMPETE.
----------------------------------------------------
5.1 Executive understands that the Company and its affiliates
possess Proprietary Information (as defined below) which is important to its
business and that this Employment Agreement creates a relationship of confidence
and trust between Executive and the Company and its affiliates with regard to
Proprietary Information. Nothing in this Section 5
5
shall be deemed modified or terminated in the event of the termination or
expiration of this Employment Agreement.
5.2 For purposes of this Employment Agreement, "Proprietary
Information" is information that was or will be developed, created, or
discovered by or on behalf of the Company and its affiliates and predecessors,
or is developed, created or discovered by Executive while performing services
under this Employment Agreement, or which became or will become known by, or was
or is conveyed to the Company and its affiliates which has commercial value in
the Company's and its affiliates' business. "Proprietary Information" includes,
but is not limited to, trade secrets, ideas, techniques, business, product, or
franchise development plans, customer information, franchisee information and
any other information concerning the Company's and its affiliates' actual or
anticipated business, development, personnel information, or which is received
in confidence by or for the Company and its affiliates from any other person.
5.3 At all times, both during the term of this Employment
Agreement and after its termination, Executive will keep in confidence and
trust, and will not use or disclose, any Proprietary Information without the
prior written consent of the Board.
5.4 Executive understands that the Company and its affiliates
possess or will possess "Company Documents" which are important to its business.
For purposes of this Employment Agreement, "Company Documents" are documents or
other media that contain or embody Proprietary Information or any other
information concerning the business, operations or plans of the Company and its
affiliates, whether such documents have been prepared by Executive or by others.
"Company Documents" include, but are not limited to, blueprints, drawings,
photographs, charts, graphs, notebooks, customer lists, computer disks,
personnel files, tapes or printouts and other printed, typewritten or
handwritten documents. All Company Documents are and shall remain the sole
property of the Company. Executive agrees not to remove any Company Documents
from the business premises of the Company or deliver any Company Documents to
any person or entity outside the Company, except as required to do in connection
with performance of the services under this Employment Agreement. Executive
further agrees that, immediately upon the Company's request and in any event
upon completion of Executive's services, Executive shall deliver to the Company
all Company Documents, apparatus, equipment and other physical property or any
reproduction of such property.
5.5 During the term of this Employment Agreement and for one
year thereafter, Executive will not encourage or solicit any employee of the
Company or any affiliate to leave the Company or any affiliate for any reason.
5.6 Non-Competition. During the Employment Term, Executive
---------------
shall not directly or indirectly:
(i) own, manage, operate, join, control or participate in
the ownership, management, operation or control of, or be employed by or
connected in any manner with, any enterprise which is engaged in any business
competitive with that which the Company is at the time conducting or proposing
to conduct; provided, however, that such restriction shall not apply to any
passive investment representing an interest of less than two percent (2%) of an
6
outstanding class of publicly traded securities of any corporation or other
enterprise which is not, at the time of such investment, engaged in a business
geographically competitive with the Company's business; or
(ii) encourage or solicit any Company employee to leave the
Company's employ for any reason or interfere in any material manner with
employment relationships at the time existing between the Company and its
current employees, except as may be required in any bona fide termination
decision regarding any Company employee.
5.7 Executive acknowledges that the specialized nature of his
knowledge of the Company's Proprietary Information, trade secrets and other
intellectual property are such that a breach of his covenant not to compete or
confidentiality obligations contained in this Section 5 of this Employment
Agreement would necessarily and inevitably result in a disclosure,
misappropriation and misuse of such Proprietary Information, trade secrets and
other intellectual property. Accordingly, Executive acknowledges and agrees that
such a breach would inflict unique and irreparable harm upon the Company and
that the Company shall be entitled, in addition to its other rights and
available remedies, to enforce, by injunction or decree of specific performance,
Executive's obligations set forth herein.
6. RESTRICTIVE COVENANT.
--------------------
During the Employment Term:
6.1 Executive shall devote substantially all of his time and
energy to the performance of Executive's duties described herein, except during
periods of illness or vacation periods.
6.2 Executive shall not directly or indirectly provide services
to or through any person, firm or other entity except the Company, unless
otherwise authorized by the Company in writing.
6.3 Executive shall not render any services of any kind or
character for Executive's own account or for any other person, firm or entity
without first obtaining the Company's written consent.
6.4 Notwithstanding the foregoing, Executive shall have the
right to perform such incidental services as are necessary in connection with
(i) his private passive investments, but only if Executive is not obligated or
required to (and shall not in fact) devote any managerial efforts which
interfere with the services required to be performed by him hereunder, (ii) his
charitable or community activities or (iii) participation in trade or
professional organizations, but only if such incidental services do not
significantly interfere with the performance of Executive's services hereunder.
7. MISCELLANEOUS.
-------------
7.1 Notices. All notices, demands and requests required by this
-------
Employment Agreement should be in writing and shall be deemed to have been given
or made
7
for all purposes (i) upon personal delivery, (ii) one day after being sent, when
sent by professional overnight courier service, (iii) five days after posting
when sent by registered or certified mail, or (iv) on the date of transmission
when sent by telegraph, telegram, telex, or other form of "hard copy"
transmission, to either party hereto at the address set forth below or at such
other address as either party may designate by notice pursuant to this Section
7.
If to the Company, to:
Xxx Xxxxxxxxxx
Fogdog, Inc.
0000 Xxxxx Xxx
000 Xxxxx Xxxx
Xxx Xxxx, XX 00000
And a Copy to:
Xxxxxx Xxxxxxx, Esq.
Xxxxxxx, Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
If to Executive, to:
Xxxxx Xxxxxx
000 Xxxxx Xxxxxx
Xxxx Xxxx, XX 00000
7.2 Assignment. This Employment Agreement shall be binding on,
----------
and shall inure to the benefit of, the parties hereto and their respective
heirs, legal representatives, successors and assigns; provided, however, the
Executive may not assign, transfer or delegate his rights or obligations
hereunder and any attempt to do so shall be void.
7.3 Deductions. All amounts paid to Executive hereunder are
----------
subject to all withholdings and deductions required by law, as authorized under
this Employment Agreement, and as authorized from time to time.
7.4 Entire Agreement. This Employment Agreement contains the
----------------
entire agreement of the parties with respect to the subject matter hereof.
7.5 Amendment. This Employment Agreement may be modified or
---------
amended only by a written agreement signed by the Board and Executive.
7.6 Waivers. No Waiver of any term or provision of this
-------
Employment Agreement will be valid unless such waiver is in writing signed by
the party against whom enforcement of the waiver is sought. The waiver of any
term or provision of this Employment Agreement shall not apply to any subsequent
breach of this Employment Agreement.
8
7.7 Counterparts. This Employment Agreement may be executed in
------------
several counterparts, each of which shall be deemed an original, but together
they shall constitute one and the same instrument.
7.8 Severability. The provisions of the Employment Agreement
------------
shall be deemed severable, and if any part of any provision is held illegal,
void or invalid under applicable law, such provision may be changed to the
extent reasonably necessary to make the provision, as so changed, legal, valid
and binding. If any provision of the Employment Agreement is held illegal, void
or invalid in its entirety, the remaining provisions of this Employment
Agreement shall not in any way be affected or impaired but shall remain binding
in accordance with their terms.
7.9 Governing Law. THIS EMPLOYMENT AGREEMENT AND THE RIGHTS AND
-------------
OBLIGATIONS OF THE COMPANY AND EXECUTIVE HEREUNDER SHALL BE DETERMINED UNDER,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA
AS APPLIED TO AGREEMENTS AMONG CALIFORNIA RESIDENTS ENTERED INTO AND TO BE
PERFORMED ENTIRELY WITHIN CALIFORNIA.
7.10 Arbitration. The Executive understands and agrees that, as
-----------
a condition of his employment with the Company, any and all disputes that the
Executive may have with the Company, or any of its employees, officers,
directors, agents or assigns, which arise out of the Executive's employment or
investment or compensation shall be resolved through final and binding
arbitration, as specified in this Employment Agreement. This shall include,
without limitation, any controversy, claim or dispute of any kind, including
disputes relating to any employment by the Company or the termination thereof,
claims for breach of contract or breach of the covenant of good faith and fair
dealing, infliction of emotional distress, defamation and any claims of
discrimination, harassment or other claims under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans With
Disabilities Act, the Employee Retirement Income Securities Act, or any other
federal, state or local law or regulation now in existence or hereinafter
enacted and as amended from time to time concerning in any way the subject of
the Executive's employment with the Company or its termination. The only claims
not covered by this Employment Agreement are claims for benefits under the
unemployment insurance or workers' compensation laws, and any claims pursuant to
paragraph 5 of this Employment Agreement which will be resolved pursuant to
those laws. Any disputes and/or claims covered by this Employment Agreement
shall be submitted to final and binding arbitration to be conducted in Santa
Xxxxx County, California, in accordance with the rules and regulations of the
American Arbitration Association. The Executive and the Company will split the
cost of the arbitration filing and hearing fees and the cost of the arbitrator,
provided that the arbitrator will have authority to award these fees to the
prevailing party. Each side will bear its own attorneys' fees, provided that the
arbitrator will have authority to award attorneys' fees to the prevailing party
unless a statutory section at issue in the dispute authorizes the award of
attorneys' fees, in which case the arbitrator has authority to make such award
as permitted by the statute in question. The arbitration shall be instead of any
civil litigation; this means that the Executive is waiving any right to a jury
trial, and that the arbitrator's decision shall be final and
9
binding to the fullest extent permitted by law and enforceable by any court
having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
"COMPANY"
Fogdog, Inc.
By: /s/ Xxx Xxxxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxxxx
Title: Chief Executive Officer
"EXECUTIVE"
/s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
10
