Exhibit 10.12
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “ Agreement ”) is made by and
between BIDZ.COM, Inc., a Delaware corporation (the
“Company”), and Claudia Y. Liu (“ Employee ”), and is entered as of
February 21, 2007 (the “ Start Date ”).
WITNESSETH:
WHEREAS,
the Company and Employee wish to ensure that the Company will
receive the benefit of Employee’s loyalty and
service;
WHEREAS,
in order to help ensure that the Company receives the benefit of
Employee’s loyalty and service, the parties desire to enter
into this formal Employment Agreement to provide Employee with
appropriate compensation arrangements;
WHEREAS,
the Company desires by this writing to set forth the employment
relationship of Employee with the Company, and Employee is willing
to enter into such employment relationship on the terms and
conditions set forth herein;
NOW
THEREFORE, for consideration, the value, sufficiency, and receipt
of which are hereby acknowledged, the parties hereto agree as
follows.
1. Employment.
(a)
Position.
The Company hereby employs Employee, and
Employee agrees to be employed by the Company, commencing on the
Start Date and continuing during the term (as defined in
Section 2 below). Employee shall hold the position of Chief
Operating Officer of the Company and such other positions as the
Board of Directors of the Company (the “ Board ”) may designate.
Employee’s duties and responsibilities hereunder shall
include (a) providing senior executive management services as
the Company may designate through its Board consistent with the
position of Chief Operating Officer, and (b) such other duties
and responsibilities as are assigned to Employee from time to time
by the Board and accepted by Employee. Employee shall report to the
Chief Executive Officer of the Company.
(b)
Performance of Duties.
Except as otherwise provided herein or
hereafter agreed upon in writing, Employee shall devote reasonable
attention and time during usual business hours to the performance
of her duties hereunder and shall, except as provided herein,
render his services solely and exclusively for the Company during
the employment term and agrees to serve the Company diligently, in
good faith, and to the best of her abilities. Without limitation of
the foregoing, without the Board’s prior approval, the
Employee will refrain from
serving on other
boards or engaging in other similar activities that the Board
determines will interfere with the performance of the
Employee’s responsibilities hereunder.
2. Term.
The initial term of this Agreement shall be
three years from the Start Date (the “ Initial Term ”); provided,
however, that the term of this Agreement shall be automatically
extended (as extended, the “Employment Term” ) for one
year on the expiration of the Initial Term and on each anniversary
thereof unless either the Company or the Employee shall have given
written notice to the other not less than ninety (90) days
prior thereto that the term of this Agreement shall not be so
extended; and provided, further, that, notwithstanding any such
notice by the Company given after a Change in Control (as defined
below) not to extend the term of this Agreement, the term of this
Agreement shall not expire prior to the expiration of the then
current term of this Agreement.
3. Base
Salary. The Company shall pay
Employee during the term of this Agreement a base salary at the
rate of $200,000 per annum or such larger amount as the Board may
from time to time determine (hereinafter referred to as the “
Base Salary ”). Such
Base Salary shall be payable no less frequently than monthly during
the year in accordance with the Company’s customary payroll
practices applicable to its executives. Employee agrees that the
Company may deduct and withhold from the payments to be made to
Employee hereunder amounts required to be deducted and withheld by
the Company under the provisions of any statute, law, regulation,
or ordinance heretofore or hereafter enacted.
4. Benefits.
Employee shall be eligible to participate
in all stock option, stock bonus, incentive compensation,
retirement, savings, fringe benefit, disability insurance, group
health and group life, vacation, and similar health and benefit
plans maintained by the Company in accordance with the terms and
conditions thereof on a basis which is no less favorable than that
applicable to employees of the Company who are similarly situated
to Employee. No additional compensation provided under any of such
plans shall be deemed to modify or otherwise affect the terms of
this Agreement or any of Employee’s entitlements hereunder,
unless such modification is explicitly required herein or by any of
such plans.
5. Vacation
and Sick Leave. At such reasonable
times as the Board shall in its discretion permit, Employee shall
be entitled, without loss of pay, to absent herself voluntarily
from the performance of his employment under this Agreement,
provided that:
(a) Employee
shall be entitled to annual vacation in accordance with the
policies as periodically established by the Board for similarly
situated executives of the Company.
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(b) The
Board shall be entitled to grant to Employee a leave or leaves of
absence with or without pay at such time or times and upon such
terms and conditions as the Board in its discretion may
determine.
(c) Employee
shall be entitled to sick leave (without loss of pay) in accordance
with the Company’s policies as in effect from time to
time.
6. Expenses.
Employee shall be entitled to reimbursement
for reasonable expenses necessary for the performance of his duties
hereunder or for promoting, pursuing, or otherwise furthering the
business or interests of the Company. All claims for expenses shall
be reasonable and made on the basis of statements thereof (together
with vouchers or other documents evidencing such expenses)
furnished by Employee to the Company at monthly or more frequent
intervals and in accordance with the Company’s expense
reimbursement policy and standard procedures as they exist from
time to time.
7. Termination.
(a) Employee’s
employment hereunder may be terminated under the following
circumstances:
(1)
Death.
Employee’s employment by the Company
shall automatically terminate upon Employee’s
death.
(2)
Disability.
The Company may terminate Employee’s
employment after having established Employee’s Disability.
For purposes of this Agreement, “ Disability ” means a physical or
mental infirmity which impairs Employee’s ability to
substantially perform her duties under this Agreement which
continues for a period of at least one hundred eighty
(180) consecutive days. Employee shall be entitled to the
compensation and benefits provided for under this Agreement for any
period during the term of this Agreement and prior to the
establishment of Employee’s Disability during which
Employee’s ability to substantially perform his duties under
this Agreement is impaired due to a physical or mental infirmity.
Notwithstanding anything contained in this Agreement to the
contrary, until the Termination Date specified in a Notice of
Termination (as each term is hereinafter defined) relating to
Employee’s Disability, Employee shall be entitled to return
to his position with the Company as set forth in this Agreement in
which event no Disability of Employee will be deemed to have
occurred.
(3)
Cause. The
Company may terminate Employee’s employment for Cause. A
termination for “ Cause ” is a termination
evidenced by a resolution adopted in good faith by two-thirds
( 2 /
3 ) of the
Board that Employee—
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(i) has
habitually neglected her duties with the Company (other than a
failure resulting from Employee’s incapacity due to physical
or mental illness), or materially breached any of the provisions of
this Agreement, which failure or breach continued for a period of
at least thirty (30) days after a written notice of demand for
substantial performance or other correction has been delivered to
Employee specifying the manner in which Employee has failed to
substantially perform,
(ii) engaged
in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise, or
(iii) has
been convicted or entered a plea of nolo contendere in the
case of any misdemeanor involving moral turpitude, or has been
indicted or convicted of an act which is defined as a felony under
federal or state law;
provided, however, that
no termination of Employee’s employment shall be for Cause as
set forth in clause (ii) above until (x) there shall have
been delivered to Employee a copy of a written notice setting forth
that Employee was guilty of the conduct set forth in
clause (ii), and specifying the particulars thereof in detail,
and (y) Employee shall have been provided an opportunity to be
heard by the Board (with the assistance of Employee’s counsel
if Employee so desires). No act, nor failure to act, on
Employee’s part, shall be considered “willful”
unless he has acted or failed to act, with an absence of good faith
and without a reasonable belief that his action or failure to act
was in the best interest of the Company. Notwithstanding anything
contained in this Agreement to the contrary, no failure to perform
by Employee after Notice of Termination is given by Employee shall
constitute Cause for purposes of this Agreement.
(4)
Without Cause.
The Company shall have the right and
option, exercisable by giving written notice to Employee, to
terminate Employee’s employment by the Company without Cause
and for any reason or for no reason. This right is not limited or
restricted by, and shall supersede, any policy of the Company
requiring or favoring continued employment of its executives during
satisfactory performance, any seniority system or any procedure
governing the manner in which the Company’s discretion is to
be exercised. No exercise by the Company of this termination right
shall, under any circumstances, be deemed to constitute (i) a
breach by the Company of any term of this Agreement, express or
implied (including without limitation a breach of any implied
covenant of good faith and fair dealing), (ii) a wrongful
discharge of Employee or a wrongful termination of Employee’s
employment by the Company, (iii) a wrongful deprivation by the
Company of Employee’s corporate office (or authority,
opportunities or other benefits relating thereto) or (iv) the
breach by the Company of any other duty or obligation, express or
implied, which the Company may owe to Employee pursuant
to
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any principle or
provision of law (whether contract or tort); provided, however,
that notwithstanding the foregoing, a breach by the Company of its
payment obligations pursuant to Section 8 shall be deemed to
be a breach of this Agreement.
The
failure or refusal of the Company to renew or extend the Initial
Term or Employment Term, as the case may be, shall not constitute a
termination of Employee’s employment by the Company without
Cause under this Agreement.
(5)
Good Reason.
Employee may terminate his employment for
Good Reason. For purposes of this Agreement, “ Good Reason ” shall mean the
occurrence of any of the events or conditions described in
subsections (i) through (vii) below:
(i) a
change in Employee’s status, title, position or
responsibilities (including reporting responsibilities) which does
not represent a promotion from his status, title, position or
responsibilities; the assignment to Employee of any duties or
responsibilities which, in Employee’s reasonable judgment,
are inconsistent with Employee’s then status, title, position
or responsibilities; or any removal of Employee from or failure to
reappoint or reelect him to any of such positions, except in
connection with the termination of his employment for Disability,
Cause, as a result of his death or by Employee other than for Good
Reason;
(ii) a
reduction in Employee’s Base Salary;
(iii) the
Company’s requiring Employee to be based at any place outside
a 30-mile radius from Culver City, California, except for
reasonably required travel on the Company’s business which is
not materially greater than Employee’s then travel
requirements;
(iv) the
failure by the Company to (A) continue in effect any material
compensation or benefit plan in which Employee was participating at
the time of a Change in Control, or (B) provide Employee with
compensation and benefits at least equal (in terms of benefit
levels and/or reward opportunities) to those provided for under
each other employee benefit plan, program and practice as in effect
immediately prior to the Change in Control (or as in effect
following the Change in Control, if greater);
(v) any
material breach by the Company of any material provision of this
Agreement; and
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(vi) any
purported termination of Employee’s employment for Cause by
the Company which does not comply with the terms of
Section 7(a)(3) of this Agreement.
Employee’s
right to terminate her employment pursuant to this
Section 7(a) shall not be affected by her incapacity due to
physical or mental illness. “Good Reason” shall not
include acts not taken in bad faith which are cured by the Company
in all respects not later than thirty (30) days from the date
of receipt by the Company of a Notice of Termination from
Employee.
(6)
Voluntary Termination.
Employee may voluntarily terminate her
employment hereunder at any time.
(b) For
purposes of this Agreement, a “ Change in Control ” shall mean
any of the following:
(1) an
acquisition (other than directly from the Company in the case of
voting securities of the Company) of any voting securities (the
“ Voting Securities
”) of the Company by any “ Person ” (as the term person is
used for purposes of Section 13(d) or 14(d) of the Exchange
Act) immediately after which such Person has “ Beneficial Ownership ” (within
the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than fifty percent (50%) of the then outstanding shares of
common stock (the “ Shares ”) of the Company. For
purposes of this Agreement, in determining whether a Change in
Control has occurred pursuant to this Section 7(b)(1), Shares
or Voting Securities which are acquired in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute an
acquisition which would cause a Change in Control. A “
Non-Control
Acquisition” shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) sponsored
or maintained by (A) the Company or (B) any corporation
or other Person of which a majority of its voting power or its
voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
“ Company Subsidiary
”) or (ii) the Company, any Company Subsidiary, or any
of their affiliates, (iii) any underwriter temporarily holding
securities pursuant to an offering of such securities, or
(iv) any Person in connection with a “Non-Control
Transaction” (as hereinafter defined);
(2) The
consummation of:
(i) a
merger, consolidation or reorganization with or into the Company in
which securities of the Company are issued (a “ Merger ”), unless such Merger is
a “Non-Control Transaction.” A “ Non-Control Transaction ” shall
mean a Merger where:
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(A) the
stockholders of the Company immediately before such Merger own
directly or indirectly immediately following such Merger at least
fifty percent (50%) of the combined voting power of the outstanding
voting securities of (x) the corporation resulting from such
Merger (the “ Surviving
Corporation ”), if the Surviving Corporation has no
Parent immediately following such Merger, or (y) the ultimate
Parent of the Surviving Corporation, if there are one or more
Parents of the Surviving Corporation immediately following such
Merger. For purposes of this Agreement, “ Parent ” shall mean an entity
that owns, directly or indirectly, more than fifty percent (50%) of
the then-outstanding Shares of the Company or the combined voting
power of the then-outstanding Voting Securities of the Company;
and
(B) the
members of the “Incumbent Board” (as defined below)
immediately prior to the execution of the agreement providing for
such Merger, constitute at least a majority of the members of the
board of directors of (x) the Surviving Corporation, if the
Surviving Corporation has no Parent immediately following such
Merger, or (y) the ultimate Parent of the Surviving
Corporation, if there are one or more Parents of the Surviving
Corporation immediately following such Merger;
(ii) a
complete liquidation or dissolution of the Company or a Parent, as
the case may be; or
(iii) the
sale or other disposition of all or substantially all of the assets
of the Company or a Parent, as the case may be, to any Person
(other than a transfer to a Company Subsidiary or Parent Subsidiary
or under conditions that would constitute a Non-Control Transaction
(with the disposition of assets being regarded as a Merger for this
purpose), or any other distribution to the stockholders of the
Company or a Parent of the stock of a Company Subsidiary or a
Parent Subsidiary or any other assets; or
(3) the
individuals who, at the Start Date, are members of the Board (the
“ Incumbent Board
”) cease for any reason to constitute a majority of the
members of the Board or, following a Merger which results in a
Parent, the board of directors of the ultimate Parent; provided,
however, that if the appointment or election, or nomination for
election by the Company’s stockholders, of any new director
was approved by a vote of at least two-thirds ( 2
/ 3 ) of the
Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent
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Board; provided
further, however, that no individual shall be considered a member
of the Incumbent Board if such individual initially assumed office
as a result of either an actual or threatened “ Election Contest ” (as described
in Rule 14a-11 promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “ Proxy Contest ”) including by
reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest.
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “ Subject Person ”) acquired
Beneficial Ownership of more than the permitted amount of the
then-outstanding Shares or Voting Securities of the Company or a
Parent as a result of the acquisition by the Company or by a Parent
of its Shares or Voting Securities which, by reducing the number of
Shares or Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject
Person; provided, however, that, if a Change in Control would occur
(but for the operation of this sentence) as a result of the
acquisition of Shares or Voting Securities
