Exhibit 10.9
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Employment
Agreement"), effective as of this 17th day of September, 1999 (the "Effective
Date"), is entered into by and between Fogdog, Inc. (the "Company"), and Xxx
Xxxxxxxxxx ("Executive"). In consideration of the mutual covenants and
agreements hereinafter set forth, the parties agree as follows:
1. EMPLOYMENT.
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1.1 Position. During the Employment Term (as hereinafter defined) and
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subject to the terms and conditions set forth herein, the Company agrees to
employ Executive as its Chief Executive Officer, reporting directly to its Board
of Directors (the "Board"). During the Employment Term, and subject to the terms
and conditions as set forth herein, Executive will also be a member of the
Board.
1.2 Duties. Executive will be employed as Chief Executive Officer.
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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,
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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.
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2.1 Annual Salary. In consideration of and as compensation for the
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services agreed to be performed by Executive hereunder, the Company agrees to
pay Executive a starting annual base salary of $170,000, payable in accordance
with the Company's regular payroll schedule ("Base Salary"), less applicable
withholdings and deductions. The Base Salary will be subject to change at the
sole discretion of the Board.
2.2 Bonus Plan. Executive will be eligible to receive an annual bonus
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payment of up to 20% of his current base salary. Payment of the bonus will be at
the sole discretion of the Board and will be based on achievement of mutually
agreeable performance goals to be determined by Executive and the Board.
2.3 Stock Options. Executive has been granted an option under the
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Company's 1996 Stock Option Plan (the "Plan") to purchase 1,200,000 shares of
the Company's Common Stock (the "Initial Option") at an exercise price of $0.055
per share. The option shares vest in 48 equal monthly installments over
Executive's period of service with the Company measured from June 2, 1998. In
addition, in March 1999, Executive was granted an option under the Plan to
purchase 800,000 shares of Common Stock at an exercise price of $0.22 per share
(the "1999 Option"). The option shares subject to the 1999 Option vest in vest
in 48 equal monthly installments over Executive's period of service with the
Company measured from the
grant date of such option. The Initial Option and the 1999 Option are
hereinafter referred to as the "Options".
In the event of an acquisition of the Company, as more particularly
described in Section 11.3.1 of the Plan, (a "Corporate Transaction"), each of
the Initial Option and the 1999 Option, to the extent outstanding at that time
but not otherwise fully exercisable and vested, shall automatically accelerate,
and the Company's repurchase right with respect to any unvested option shares
shall automatically lapse, so such option shall, immediately prior to the
effective date of the Corporate Transaction, become exercisable for all of the
option shares at the time subject to the option as fully-vested shares of the
Company's Common Stock. No such acceleration of the Initial Option or the 1999
Option, however, shall occur if and to the extent: (i) such option is, in
connection with the Corporate Transaction, to be assumed by the successor
corporation (or parent thereof) or to be replaced with a comparable option to
purchase shares of the capital stock of the successor corporation (or parent
thereof) or (ii) such option is to be replaced with a cash incentive program of
the successor corporation which preserves the spread existing on the unvested
option shares at the time of the Corporate Transaction (the excess of the fair
market value of such option shares over the aggregate exercise price payable)
and provides for subsequent pay-out in accordance with the original vesting
schedule established for that option.
Immediately following the Corporate Transaction, the Initial Option
and the 1999 Option shall terminate and cease to be outstanding, except to the
extent assumed by the successor corporation (or parent thereof) in connection
with the Corporate Transaction.
Should there occur an Involuntary Termination of Executive's
employment at the time of a Corporate Transaction or within 12 months following
a Corporate Transaction in which the Initial Option or the 1999 Option is
assumed or replaced and the Company's repurchase rights with respect to the
unvested option shares are assigned, then all the option shares at the time
subject to such option but not otherwise vested shall automatically vest, and
the Company's repurchase rights with respect to those option shares shall lapse,
so that the option shall become exercisable for all of the option shares as
fully-vested shares of Common Stock as of the effective date of such Involuntary
Termination and may be exercised for such option shares in accordance with the
provisions of the Plan and the agreements evidencing the option.
For purposes of the Options, an Involuntary Termination shall be
deemed to occur in the event of (i) Executive's involuntary dismissal or
discharge by the Company or the successor corporation in the Corporate
Transaction for reasons other than cause, as defined in Section 4.1(ii) of this
Employment Agreement, or (ii) Executive's voluntary resignation following (A) a
change in Executive's position which materially reduces Executive's duties and
responsibilities or the level of management to which Executive reports, (B) a
reduction in Executive's then current level of compensation (including base
salary, fringe benefits and target bonuses under any corporate-performance based
incentive programs) by more than five percent (5%) or (C) a relocation of
Executive's place of employment by more than twenty-five (25) miles, provided
and only if such change, reduction or relocation is effected without Executive's
consent.
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2.4 Participation in Benefit Plans. During the Employment Term,
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Executive shall be entitled to participate in the Company's health insurance,
life insurance and disability insurance plans to the extent permitted by law,
that may from time to time be adopted by the Board. The Company reserves the
right to amend, modify or terminate any employee benefits at any time for any
reason.
2.5 Reimbursement of Expenses. The Company shall reimburse Executive
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for all reasonable business expenses incurred by Executive on behalf of the
Company during the Employment Term, provided that: (i) such reasonable expenses
are ordinary and necessary business expenses incurred on behalf of the Company,
and (ii) Executive provides the Company with itemized accounts, receipts and
other documentation for such reasonable expenses as are reasonably required by
the Company.
2.6 Vacation. During the Employment Term, Executive will be entitled
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to 18 days of paid vacation per annum. Executive will accrue vacation on a
prorated basis of 1.5 days each month.
3. EMPLOYMENT TERM.
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3.1 Employment Term. The "Employment Term" means the period
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commencing on the Effective Date and terminating on the earlier of one (1) year
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
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expiration of the period ending one year 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 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.
4. TERMINATION OF EMPLOYMENT.
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4.1 Method of Termination. Executive's employment pursuant to this
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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
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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
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) Executive's resignation or voluntary departure as an
employee of the Company; or
(v) 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 Other
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Events. Upon (i) the termination of Executive for cause; (ii) Executive's
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resignation or voluntary departure; or (iii) 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.
4.3 Effect of Termination without Cause. In the event Executive's
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employment with the Company is terminated by the Company without cause, at any
time other than at the time of, or within 12 months following, a Corporate
Transaction, the following provisions shall apply:
(a) For the period commencing on Executive's date of
termination of employment and continuing for six (6) calendar months
thereafter, Executive shall remain in the Company's service as an
independent contractor unless such consulting relationship is sooner
terminated in accordance with Sections 4.3(c)(i) or (ii) of this Employment
Agreement. This period of continued service is hereby designated the
Consultancy Period, and during such period, Executive shall make himself
available for consultation with the new Chief Executive Officer, other
officers of the Company and the individual members of the Board with
respect to matters within his area of expertise, including matters which
facilitate the transition period for the new Chief Executive
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Officer. However, Executive shall not be required to render more than ten
(10) hours of consulting services per month, and Executive shall have the
right to render services as a consultant, advisor or employee to any other
company or companies during the Consultancy Period, provided Executive will
not accept employment or render services to any company that is in a
business competitive with the Company. A "business competitive with the
Company" would include any business engaged in internet sales or marketing.
This would include, but is not limited to, Venator, REI, Xxxxxxxx (Sports
Superstore on-line), The Sports Authority, FootZone, CBS Sportsline, CNNSI
and ESPN SportsZone. Executive agrees that each of the aforementioned
companies, among others, are competitors of the Company and that it would
breach Executive's fiduciary duties to the Company to be employed by or to
provide services to any competitor of the Company during the Consultancy
Period.
(b) During the Consultancy Period, Executive shall be
entitled to the following compensation for consulting services which may be
requested of him:
(i) Executive shall be paid in a lump-sum upon the commencement
of the Consultancy Period the greater of: (1) $200,000,
less applicable withholdings and deductions; or (2) his
then current Base Salary, less applicable withholdings and
deductions, and the Company will reimburse Executive for
COBRA payments under COBRA for health insurance coverage.
(ii) Executive shall be entitled to reimbursement of all travel
and other out-of-pocket costs reasonably incurred in
connection with his consulting services under this
Employment Agreement ("Travel and Miscellaneous Expenses").
In order to receive reimbursement for such Travel and
Miscellaneous Expenses, Executive must submit documentation
substantiating those expenses, and the Company shall
reimburse all approved Travel and Miscellaneous Expenses
within thirty (30) business days after Executive's
submission of such documentation; and
(iii) As of the date on which the Consultancy Period begins, the
Options shall accelerate such that Executive shall
immediately vest on an accelerated basis in the option
shares subject to each of the Initial Option and the 1999
Option which are otherwise scheduled to vest, in accordance
with the vesting schedule established for such option, over
the twelve (12)-month period following such date, such
number not to exceed 500,000 option shares in the
aggregate. To the extent option shares subject to the
Options remain unvested following such acceleration, such
option shares shall continue to vest during the Consultancy
Period in accordance with the original vesting schedule
established for the Initial Option and the 1999 Option,
provided, however, that the vest date for each installment
of option shares shall be accelerated by twelve (12) months
to reflect the acceleration effected pursuant to this
provision.
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To the extent Executive exercises the Option, or any other
options held by Executive which are designated as incentive stock
options under the federal tax laws, more than three (3) months
after date on which Executive ceases to serve as an employee of
the Company, such options shall be treated as non-qualified stock
options upon exercise and Executive shall be required to satisfy
the applicable tax withholding requirements in connection with
such option exercises.
Upon the termination of the Consultancy Period (including
early termination in accordance with Section 4.3(c)), all
outstanding options held by Executive will terminate, and any
unvested shares held by Executive will be subject to repurchase
by the Company, at the exercise price paid per share, in
accordance with the agreements evidencing such options and
unvested shares.
In the event Executive's termination by the Company without
cause occurs at the time of, or within 12 months following, a
Corporate Transaction, then the provisions of Section 2.3 shall
govern such termination and this Section 4.3 shall have no
effect.
(c) The Consultancy Period may not be terminated prior to six (6)
calendar months after the date on which Executive's employment with the
Company terminates, except in accordance with the following provisions:
(i) The Company may immediately terminate the Consultancy Period in
the event that Executive violates Section 5 of this Employment
Agreement entitled "Confidential Information and Covenant Not to
Compete"; or
(ii) Executive may terminate the Consultancy Period at any time upon
written notice to the Company, and the termination shall become
effective immediately upon Executive's delivery of such notice.
Upon the termination of the Consultancy Period, no further
compensation shall become payable to Executive from and after
that termination date, whether in the form of cash payments or
the additional vesting of option shares.
Should the termination of Executive's employment without cause occur at the
time of, or at any time following, a Corporate Transaction, then the provisions
of this Section 4.3 shall have no effect and 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 as well as any benefits
described in Section 2.3.
4.4 Resignation as an Officer and Director. In the event Executive's
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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.
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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 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 the Consultancy
Period and for six months 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 and the Consultancy
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Period, Executive shall not directly or indirectly:
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(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
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investment representing an interest of less than two percent (2%) of an
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.
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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.
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7. MISCELLANEOUS.
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7.1 Notices. All notices, demands and requests required by this
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Employment Agreement shall be in writing and shall be deemed to have been given
or made 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:
Fogdog, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: President
with a Copy to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000
If to Executive, to:
Xxx Xxxxxxxxxx
c/o Fogdog, Inc.
000 Xxxxxxxx
Xxxxxxx Xxxx, XX 00000
7.2 Assignment. This Employment Agreement shall be binding on, and shall
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inure to the benefit of, the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that 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
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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
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agreement of the parties with respect to the subject matter hereof and
supercedes any and all prior agreements either oral or in writing between the
parties with respect to the subject matter hereof including, but not limited to,
the Employment Agreement dated June 2, 1998 and the amendment dated January 17,
1999.
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7.5 Amendment. This Employment Agreement may be modified or amended only
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by a written agreement signed by the Board and Executive.
7.6 Waivers. No waiver of any term or provision of this Employment
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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.
7.7 Counterparts. This Employment Agreement may be executed in several
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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 this Employment Agreement shall be
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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 this 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
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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. Executive understands and agrees that, as a condition
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of his employment with the Company, any and all disputes that Executive may have
with the Company, or any of its employees, officers, directors, agents or
assigns, which arise out of 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 Executive's employment with the Company or
its termination. The only claims not covered by this Employment Agreement are
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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. Executive and the Company
will split the cost of the arbitration filing and hearing fees and the cost of
the arbitrator. Each side will bear its
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own attorneys' fees, and the arbitrator will not have authority to award
attorneys' fees unless a statutory section at issue in the dispute authorizes
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the award of attorneys' fees to the prevailing party, 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 Executive is waiving any right to a jury trial, and that the arbitrator's
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decision shall be final and binding to the fullest extent permitted by law and
enforceable by any court having jurisdiction thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
"COMPANY"
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By: /s/ Xxxxx Von Lossberg
Name: Xxxxx Von Lossberg
Title: Chief Financial Officer
"EXECUTIVE"
---- /s/ Xxxxxxx Xxxxxxxxxx
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