Exhibit 10.40
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment Agreement
(“Agreement”) is made effective as of
September 12, 2005 (“Effective Date”), by and
between Provide Commerce, Inc. (“Company”) and Eric
Carlborg (“Executive”).
The parties agree as
follows:
1. At-Will Employment .
Company and Executive agree that Executive’s employment is
at-will and not for a specified period, and either party may
terminate the employment relationship at anytime, with or without
cause, subject to section 6 below and its subparts.
2. Duties .
2.1 Position . Executive is
employed as Chief Financial Officer and will report to the Chief
Executive Officer (“CEO”). Executive shall have the
duties and responsibilities as set forth on the attached job
description, as may be amended by Company from time to time.
Executive shall perform faithfully and diligently all duties
assigned to Executive. Company reserves the right to modify
Executive’s position and duties at any time in its sole and
absolute discretion.
2.2 Best Efforts/Full-time .
Executive will expend Executive’s best efforts on behalf of
Company, and will abide by all lawful decisions made by Company.
Executive will also comply with all Company policies, including but
not limited to Company’s Code of Business Conduct and Ethics,
Insider Trading Policy, and Whistleblowing Procedures for
Accounting and Auditing Matters, as well as all applicable federal,
state and local laws, regulations or ordinances. Executive will act
in the best interest of Company at all times. Executive shall
devote Executive’s full business time and efforts to the
performance of Executive’s assigned duties for Company,
unless Executive notifies the CEO in advance of Executive’s
intent to engage in other paid work and receives the CEO’s
written consent to do so. Company agrees that Executive may
continue serving as a director for Blue Nile, Inc., provided
that such position, either on the Effective Date or at any time
during Executive’s employment with Company, does not:
(a) create a direct conflict of interest with Company;
(b) interfere with Executive’s work responsibilities at
Company; (c) violate Company’s Employee Nondisclosure
and Assignment Agreement, which Executive is required to sign as a
condition of employment, as referenced in section 8 below; and/or
(d) impair Executive’s ability to meet all of his legal
and ethical duties to Company.
2.3 Work Location .
Executive’s principal place of work shall be located in San
Diego, California, or such other location as the parties may agree
upon from time to time.
3. Compensation .
3.1 Base Salary . As
compensation for Executive’s performance of Executive’s
duties hereunder, Company shall pay to Executive an initial Base
Salary of Three Hundred Thousand Dollars ($300,000) per year, which
shall be guaranteed during the first year of employment, payable in
accordance with the normal payroll practices of Company, less
required deductions for state and federal withholding tax, social
security and all other employment taxes and payroll deductions.
Notwithstanding the foregoing, in the event Executive’s
employment under this Agreement is terminated by either party at
any time, for any reason whatsoever, Executive will earn the Base
Salary prorated to the date of termination.
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3.2 Sign-On Bonus . Company
will pay Executive a one-time sign-on bonus of One Hundred Fifty
Thousand Dollars ($150,000), less all applicable taxes and
withholdings, payable on the Effective Date of this Agreement
(“Sign-On Bonus”). Executive agrees that if Executive
fails to begin work for Company pursuant to this Agreement, or
voluntarily resigns Executive’s employment with Company
within the first year of service or is terminated for Cause by
Company within the first year of service, Executive will repay
Company a prorated portion of the Sign-On Bonus (based on months of
completed service) within 30 days after Executive’s
termination date.
3.3 Corporate Annual Bonus .
In addition to the Base Salary, Executive will be eligible to earn
an annual bonus of up to fifty percent (50%) of
Executive’s Base Salary based upon fiscal year-end corporate
results, provided Executive remains employed by Company
through and including the last day of the applicable fiscal year.
The bonus, if any, will be paid in the pay period after fiscal
year-end corporate results are audited and approved by the Vice
President of Finance. If Executive’s employment terminates
either voluntary or involuntary for any reason whatsoever prior to
the last day of any fiscal year, Executive will not be eligible to
earn a bonus for that fiscal year or any prorated amount
thereof.
(a) The amount of the corporate
annual bonus, if any, will be determined by Company in its sole and
absolute discretion. Notwithstanding the foregoing, Company agrees
to pay Executive a guaranteed corporate annual bonus of 50% of his
initial Base Salary for the fiscal year ending June 30, 2006,
provided Executive remains employed through and including
the last day of the fiscal year.
(b) Except as expressly set forth in
subsection 3.3(a) above, Company reserves the right to alter or
discontinue the corporate annual bonus on a prospective basis, at
any time, at its discretion, on notice to Executive.
3.4 Stock Options
.
(a) Subject to the Board of
Directors’ approval, Executive will be granted an incentive
stock option to purchase 150,000 shares of Company’s Common
Stock under Company’s 2003 Stock Option/Stock Issuance Plan
(the “Plan”) and related option documents (including
the Addendum to Stock Option Agreement) at an exercise price equal
to the fair market value of that stock on the date of the grant
(the “Option”). The Option will be subject to the terms
and conditions of the Plan and the standard stock option agreement
provided pursuant to the Plan, which Executive will be required to
sign as a condition of receiving the Option.
(b) Executive may be granted
additional incentive stock option(s) to purchase Company’s
Common Stock or other awards or stock available under the Plan, the
amount of which (if any) shall be determined in the sole and
absolute discretion of Company based on Company’s evaluation
of Executive’s performance. Such option grants or other
awards or stock, if any, will be subject to the vesting schedules
and other restrictions on exercise as set forth in the Plan and
related option, award or stock documents.
3.5 Supplemental Executive
Retirement Plan (SERP) and Deferred Compensation . As an
executive level employee, Executive is eligible to participate in
Company’s SERP and Deferred Compensation plans, in accordance
with the terms and conditions of those plans. Further details are
available in the applicable plan documents.
3.6 Performance and Salary
Review . The CEO will periodically review Executive’s
performance on no less than an annual basis. Except as otherwise
provided in this
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Agreement, adjustments to Base
Salary or other compensation, if any, may be made by Company, at
any time, in its sole and absolute discretion.
4. Customary Fringe Benefits
. Executive will be eligible for all customary and usual fringe
benefits generally available to executives of Company subject to
the terms and conditions of Company’s benefit plan documents.
Company reserves the right to change or eliminate the fringe
benefits on a prospective basis, at any time, effective upon notice
to Executive.
5. Business Expenses .
Executive will be reimbursed for all reasonable, out-of-pocket
business expenses incurred in the performance of Executive’s
duties on behalf of Company. To obtain reimbursement, expenses must
be submitted promptly with appropriate supporting documentation in
accordance with Company’s policies.
6. Termination of
Executive’s Employment .
6.1 Termination for Cause by
Company . Although Company anticipates a mutually rewarding
employment relationship with Executive, Company may terminate
Executive’s employment immediately at any time for Cause. For
purposes of this Agreement, “Cause” is defined as:
(a) Executive’s material breach of this Agreement or
Company’s Employee Nondisclosure and Assignment Agreement,
Code of Business Conduct and Ethics, Insider Trading Policy or
Whistleblowing Procedures for Accounting and Auditing Matters;
(b) Executive’s conviction or entry of a plea of nolo
contendere for fraud, misappropriation or embezzlement, or any
felony or crime of moral turpitude; or (c) Executive’s
death. In the event Executive’s employment is terminated in
accordance with this subsection 6.1, Executiv
