This Agreement is entered into as
of February 14, 2007 by and between William Bain (the
“Employee”) and PlanetOut Inc. , a Delaware
corporation (the “Company”).
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1)
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Duties and Scope of
Employment.
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a)
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Position. For the term of his
employment under this Agreement (the “Employment”), the
Company agrees to employ the Employee in the position of Chief
Technology Officer or in such other level equal or higher-level
position as the Company subsequently may assign to the Employee
with the Employee’s agreement. The Employee shall report
directly to the Chief Executive Officer (“CEO”),
provided, however, that after a Change of Control (as defined
below), the surviving entity may have Employee report to such other
person as the surviving entity designates (the
“Designee”). The Designee’s position shall at
least have overall responsibility for the Company’s business
post-Change of Control. The Employee’s duties shall include,
but are not limited to, those items set forth in Exhibit A of
this Agreement, as may be updated from time-to-time as mutually
agreed by Employee and Employee’s senior management, provided
however that Employee’s duties following such changes shall
be commensurate with Employee’s Chief Technology
Officer-level or higher-level position with the Company. If the
Company’s Board of Directors (the “Board”)
designates Employee as a Section 16 officer, the Company will
assist Employee and facilitate the Employee’s compliance with
applicable Section 16 reporting requirements.
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b)
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Obligations to the Company. During
his Employment, the Employee shall devote his full business efforts
and time to the Company. During his Employment, the Employee may,
during nonworking hours away from the Company’s premises,
engage in lawful conduct as an employee, consultant or volunteer
for an organization other than the Company (“Other
Work”); provided, however, that such Other Work does not
include, without limitation, conduct that (i) constitutes a
breach of fiduciary duty to the Company, (ii) constitutes a
breach of the duty of loyalty to the Company,
(iii) constitutes a breach of Employee’s Proprietary
Information and Inventions Agreement with the Company,
(iv) constitutes a breach of this Agreement, (v) competes
with the Company’s business, (vi) knowingly assists any
person or entity in competing with the Company, (vii) assists
any person or entity in preparing to compete with the Company, or
(viii) assists any person or entity in hiring away any
employees or consultants of the Company. In the event that the
Employee engages in Other Work, the Employee must, at least five
(5) business days prior to engaging in lawful conduct in
business activities other than the Company’s business, or in
charitable and political activities not directly associated with
the Company during nonworking hours away from the Company’s
premises, notify the Company in writing of the Employee’s
activity and purpose of activity, name of employer (if any) or
organization, position with respect to the activity or the entity
and any potential conflict that may arise from that activity,
including the number of hours spent engaging in such activity that
may or will detract from the business of the Company. The Employee
shall
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comply with the Company’s
written and lawful policies and rules, as they may be in effect
from time to time during his Employment.
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c)
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No
Conflicting Obligations. The Employee represents and warrants to
the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his
obligations under this Agreement. The Employee represents and
warrants that he will not use or disclose, in connection with his
employment by the Company, any trade secrets or other proprietary
information or intellectual property in which the Employee or any
other person other than the Company has any right, title or
interest and that his employment by the Company as contemplated by
this Agreement will not infringe or violate the rights of any other
person. The Employee represents and warrants to the Company that he
has returned all property and confidential information belonging to
any prior employer. The Employee agrees to sign the current version
of the Company’s agreement related to confidentiality,
inventions and related intellectual matters which is attached
hereto as Exhibit B and incorporated herein by reference. The
Employee further agrees to sign any future version of the
Company’s agreement regarding confidentiality, inventions and
related intellectual matters if, as a condition of execution, all
Section 16 officers of the Company contemporaneously execute any
such new agreement.
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d)
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Commencement Date and Location. The
Employee shall officially commence work for the Company on
February 14, 2007 (“Commencement Date”) and
Employee’s primary workplace shall be located in the San
Francisco, California office of the Company.
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2)
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Cash and Incentive
Compensation.
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a)
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Salary. The Company shall pay the
Employee as compensation for his services a base salary at a gross
annual rate, excluding incentive bonuses that may be approved by
the Company’s CEO or Board of at least Two Hundred Fifty
Thousand Dollars ($250,000) from the Commencement Date. Such base
salary shall be payable in accordance with the Company’s
standard payroll procedures (but pro-rata base salary payments to
Employee shall occur not less frequently than once per calendar
month). The annual base salary specified in this Subsection (a),
together with any increases in such compensation that the Company
may grant from time to time, is referred to in this Agreement as
“Base Compensation.” In addition, the Company will
(i) if Employee commences his Employment on or before the
Commencement Date, pay Employee a signing bonus of twenty-five
thousand dollars ($25,000), less applicable taxes and other
withholdings, on the next regularly scheduled Company payroll date
after the Commencement Date (but not later than March 15,
2007), (ii) if Employee is still employed by the Company on
the first anniversary of the Commencement Date, pay Employee an
incentive bonus of seventy-five thousand dollars ($75,000), less
applicable taxes and other withholdings, on the first regularly
scheduled Company payroll date after the first anniversary of the
Commencement Date (but not later than March 15, 2008). The
Employee will be entitled to receive an evaluation of performance
on or about each successive annual anniversary of the
Employee’s commencement. All future changes to compensation
will be based on the results of evaluations of the Employee’s
performance, whether such evaluations are
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performed annually, or more
frequently as may be initiated by the CEO, Board or
Designee.
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b)
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Incentive Bonuses. The Employee
shall be eligible to be considered for an annual incentive bonus in
2007 and thereafter. Such bonus (if any) shall be awarded based on
objective or subjective criteria established in advance by the CEO,
as may be approved by the Board and, after such approval, presented
to Employee. The determinations of the Board with respect to such
bonus shall be final and binding.
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c)
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Performance Bonus Options and Stock.
Subject to the approval of the Board, the Company may grant the
Employee stock options or other equity instruments, from
time-to-time, covering the shares of the Company’s equity
securities. The terms of such options and other equity instruments
shall be as determined by the Board at the time of any such grant.
Such terms shall be provided in writing to the Employee at the time
of any such grant. Subject to the approval of the Board, at its
next regularly scheduled meeting but in any case within thirty
(30) days of the Commencement Date, the Employee will be
granted fifty thousand (50,000) restricted shares of the
Company’s common stock (which are covered by an effective
registration statement on Form S-8 under the Securities Act of
1933) under the PlanetOut Inc. 2004 Equity Incentive Plan, with the
restrictions lapsing on fifty percent (50%) of such shares on each
of the first and second anniversaries of the Commencement Date.
Employee at his election may use share withholding by the Company
to satisfy any applicable tax withholding upon the vesting dates of
these shares. The granted shares also shall be included in, and
receive the benefits of, the Company’s Stockholder Rights
Plan for so long as such plan is in effect. Subject to approval by
the Board, said approval not to be unreasonably withheld, Employee
may at his election implement a Rule 10b5-1 trading plan in
accordance with the Securities Exchange Act of 1934.
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3)
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Vacation and Employee Benefits.
During his Employment, the Employee shall be eligible for paid time
off (“PTO”) in accordance with the Company’s
standard policy for similarly situated employees, as it may be
amended from time to time, with his accrual at the rate of 8.33
hours per pay period (based on 24 pay periods per year resulting in
annual accrual of 200 hours of PTO) with a maximum accrual of 200
hours. During his Employment, the Employee shall be eligible to
participate in any employee benefit plans maintained by the Company
for similarly situated employees, subject in each case to the
generally applicable terms and conditions of the plan in question
and to the determinations of any person or committee administering
such plan based on the terms of the plan and Company policy. In
addition, during his Employment, but only for so long as the
Company, in its reasonable discretion, determines that it is cost
effective, the Company shall pay for a parking space for the
Employee’s sole use in a parking garage close to
Employee’s San Francisco, California work office. The Company
agrees to indemnify the Employee as set forth in the Indemnity
Agreement attached hereto as Exhibit C and incorporated herein
by reference. Employee will be covered by any directors and
officers liability insurance policy maintained by the Company,
solely to the extent of and pursuant to the terms of such
policy.
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4)
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Business Expenses. During his
Employment, the Employee shall be authorized to incur necessary and
reasonable travel, entertainment and other business expenses in
connection
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with his duties hereunder. The
Company shall timely reimburse the Employee for such expenses upon
presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company’s generally
applicable policies.
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a)
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Background Check. The Company
reserves the right to investigate the Employee’s prior
employment history, personal references, educational background,
and other relevant information that is reasonably available to the
Company. The Company may review an applicant’s criminal
background, if any, and consumer credit report for employment
purposes only concerning credit worthiness, credit standing and
credit capacity. If a background check is conducted, the Company
will comply with the federal Fair Credit Reporting Act and
applicable state laws, including providing the Employee with any
required notices or forms. Consistent with these practices, the
Employee may be asked to sign an Authorization and Release
Form.
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b)
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Basic Rule. The Company agrees to
continue the Employee’s Employment, and the Employee agrees
to remain in Employment with the Company, from the Commencement
Date until the date when the Employee’s Employment terminates
pursuant to this Subsection 5(b) or Subsection 5(c) below. The
Employee’s Employment with the Company shall be “at
will,” meaning that either the Employee or the Company shall
be entitled to terminate the Employee’s employment at any
time and for any reason, with or without Cause. Any contrary
representations that may have been made to the Employee shall be
superseded by this Agreement. This Agreement shall constitute the
full and complete agreement between the Employee and the Company on
the “at will” nature of the Employee’s
Employment, which may only be changed in an express written
agreement signed by the Employee and a duly authorized officer of
the Company.
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c)
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Termination of Employment. Subject
to any applicable cure periods referred to in Section 6(d)(i),
(ii) or (ix), below, if any, Company may terminate the
Employee’s Employment at any time and for any reason (or no
reason), and with or without Cause, by giving the Employee notice
in writing. The Employee may terminate his Employment by giving the
Company notice in writing. To help ensure a smooth transition of
Employee’s duties, the Company requests that the Employee
provide any such notice at least thirty (30) days prior to the
Employee’s desired last day of Employment. The
Employee’s Employment shall terminate automatically in the
event of his death.
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d)
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Rights Upon Termination of
Employment. Except as expressly provided in Section 6, upon
the termination of the Employee’s Employment pursuant to this
Section 5, the Employee shall only be entitled to the
compensation, benefits and reimbursements described in
Sections 2, 3 and 4 for the period preceding and ending on the
effective date of the termination, except for benefits that by
their terms are for periods following such effective date. The
payments under this Agreement shall fully discharge all
responsibilities of the Company to the Employee except for
(i) Employee’s vested employee benefits, if any,
(ii) Employee’s rights to indemnification by the Company
as set forth in the Indemnity Agreement attached hereto as
Exhibit C and coverage as a beneficiary under a directors and
officers liability insurance policy as prescribed by
such
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policy, and, in each case, only to
the extent such rights continue beyond Employee’s Employment,
(iii) Employee’s rights to COBRA continuation coverage, and
(iv) the bonuses specified in Sections 2a(i) and 2a(ii)
to the extent they are earned but not paid prior to termination of
Employment.
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e)
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Termination of Agreement. This
Agreement shall terminate when all obligations of the parties
hereunder have been satisfied. The termination of this Agreement
shall not limit or otherwise affect any of the Employee’s
obligations under Section 7.
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a)
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General Release. Any other provision
of this Agreement notwithstanding, Subsections (b) and
(c) below shall not apply unless the Employee (i) has
executed a reasonable general release (in a form prescribed by the
Company) of all known and unknown claims that he may then have
against the Company or persons affiliated with the Company
(provided that the items referenced above in Sections 5(d)(i)
through (iii) shall not be released), (ii) has, as part of the
general release, agreed to a mutual non-disparagement provision
with the Company, and (iii) has agreed not to prosecute any
legal action or other proceeding based upon any of such
claims.
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b)
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Severance Pay.
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i)
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If,
during the term of this Agreement, the Company terminates the
Employee’s Employment (including through Constructive
Termination, as defined below) for any reason other than Cause or
Permanent Disability, then the Company shall (A) pay the
Employee his Base Compensation for a period of six (6) months,
if such termination occurs within Employee’s first nine
(9) months of Employment, or for a period of nine
(9) months, if such termination occurs after the date that is
nine (9) months after the Commencement Date (in either case,
the “Base Continuation Period”), and (B) shall
accelerate the vesting of Employee’s outstanding stock
options, restricted stock or other equity vesting instruments such
that he will become vested in an additional number of shares
subject to such stock options, restricted stock or other equity
vesting instruments as if the Employee had provided another six
(6) months’ service with the Company, if such
termination occurs within Employee’s first nine
(9) months of Employment, or as if the Employee had provided
another nine (9) months’ service with the Company, if
such termination occurs after the date that is nine (9) months
after the Commencement Date. Such Base Compensation shall be paid
at the rate in effect at the time of the termination of Employment
and in accordance with the Company’s standard payroll
procedures (but pro-rata Base Compensation payments to Employee
shall occur not less frequently than once per calendar month).
Notwithstanding anything in this Agreement to the contrary, to the
extent required by Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”) and to avoid the
imposition of excise taxes, if at the time of termination of
Employment, the Company has a class of stock that is publicly
traded on an established securities market or otherwise, and
Employee is a “specified employee” of the Company
within the meaning of section 409A(a)(2)(B)(i) of the code, or any
successor provision thereto, any severance payments contemplated
hereunder that are otherwise due
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during the six month period
beginning on the date of termination shall be paid instead on the
first date of the seventh month following termination or, if
earlier, Employee’s date of death (the “Six Months
Delay Period”).
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ii)
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If,
within sixteen (16) months following a Change of Control (as
defined below) or if in connection with a Change of Control, the
Employee’s Employment is terminated (including through
Constructive Termination, as defined below) for any reason other
than Cause or Permanent Disability, then, subject to the
“Parachute Payment” provisions of Subsection
(e) of this Section 6 and, further, subject to the Six
Months Delay Period, if applicable, the Company shall (A) pay
the Employee his Base Compensation for a period of six
(6) months following the termination of his Employment, if
such termination occurs within the Employee’s first nine
(9) months of Employment, or for a period of twelve
(12) months, if such termination occurs after the date that is
nine (9) months after the Commencement Date (in either case,
the “Change of Control Continuation Period”), and
(B) accelerate the vesting of any outstanding stock options,
restricted stock or other equity instruments such that the Employee
will become vested in an additional number of shares subject to
such stock options, restricted stock or other equity instrument, as
if the Employee had provided another twelve (12) months of
service with the Company, if such termination occurs within the
Employee’s first nine (9) months of Employment, or
accelerate the vesting of any outstanding stock options, restricted
stock or other equity instruments such that all such outstanding
stock options, restricted stock or other equity instruments are
fully vested, if such termination occurs after the date that is
nine (9) months after the Commencement Date, and (C) pay
Employee the incentive bonus referred to in Section 2(a)(ii)
herein within thirty (30) days of the termination of
Employee’s Employment but in no case later than March 15,
2008, if such incentive bonus has not been previously paid. Such
Base Compensation shall be paid at the rate in effect at the time
of the termination of Employment and in accordance with the
Company’s standard payroll procedures (but pro-rata Base
Compensation payments to Employee shall occur not less frequently
than once per calendar month).
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iii)
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Definition of “Constructive
Termination.” For all purposes under this Agreement
“Constructive Termination” shall mean that the
Employee’s resignation within sixty (60) days following
(A) a material reduction or change in title, job duties,
authority, responsibilities or job requirements inconsistent with
Employee’s position with the Company to which the Employee
has not agreed in writing; (B) any reduction of
Employee’s Base Compensation to which the Employee has not
agreed in writing; (C) any elimination of a material health,
dental, insurance or other similar benefit or perquisite provided
to the Employee pursuant to employment with the Company to which
the Employee has not agreed in writing unless such material benefit
or perquisite is being eli
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