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EXHIBIT 10.1
October 14, 2005
Dina Alhadeff
2561 Shoreland Drive South
Seattle, WA 98144
Dear Dina:
This letter memorializes the parties'
agreement, reached on September 8, 2005,
and amended on September 28, 2005, which is
set forth below. Although Celebrate
Express, Inc. ("Company") has no obligation
to provide you with any kind of
severance package, the Company has agreed
to assist you with your transition to
new employment. This letter sets forth the
terms of the Separation Agreement
(the "Agreement") that the parties have
reached.
1.
SEPARATION. Your last day of work with the Company and your
employment
termination date was July 22, 2005 (the
"Separation Date"). You agree to resign
from any officer position(s) you currently
hold.
2. ACCRUED
SALARY, PAID TIME OFF. The Company has paid you all accrued
salary, all accrued and unused vacation
earned through the Separation Date,
subject to standard payroll deductions and
withholdings. You are entitled to
these payments regardless of whether or not
you sign this Agreement.
3. VESTED
STOCK OPTIONS. You were granted on January 22, 2004 an
Incentive
Stock Option under the Company's 2004
Equity Incentive Plan (the "Plan") to
purchase up to 29,802 shares of the
Company's Common Stock (the "Option"). As of
the Separation Date, 9,313 of the shares
subject to the Option were vested and
are exercisable (the "Vested Shares").
Pursuant to the terms of the Option, you
are entitled to exercise the Vested Shares
within three (3) months after the
Separation Date.
4.
SEVERANCE. In consideration for the promises set forth in this
Agreement, including but not limited to
those described in paragraphs 9-11, and
15-16 and 18-19, below, and although the
Company has no policy or procedure for
providing severance benefits, the Company
will pay you One Hundred Fifty
Thousand Dollars ($150,000.00), subject to
standard payroll deductions and
withholdings. This amount will be paid by
wire into the trust account of Ryan
Swanson & Cleveland, upon execution of
this signed Agreement. The funds shall be
released to you on the 8th day after
execution of the Agreement, if no
revocation occurs. In addition, on the 8th
day after execution of the Agreement,
if no revocation occurs, the Company agrees
to pay legal fees incurred from the
Separation Date to the date of execution of
this Agreement in the amount of
$10,016.35. In the event of the failure of
the Company to make such payments
when due you shall have the right to either
declare this Agreement null and void
or sue for specific performance. You agree
to cause your attorneys to provide a
summary of the time expended with all
descriptions of the work performed
deleted.
5.
PROSPECTIVE EMPLOYMENT INQUIRIES. You acknowledge and agree that
you
will direct all prospective employment
inquiries to Kate Terhaar, Director of
Administration & Human
<PAGE>
Dina Alhadeff
Page 2
Resources, 425-250-1008. The Company will
respond to prospective employment
inquiries by only providing your date of
hire, your rate of pay, and the
position(s) that you held.
6. OTHER
COMPENSATION OR BENEFITS. You acknowledge that, except as
expressly provided in this Agreement, you
will not receive any additional
compensation, severance or benefits after
the Separation Date.
7. EXPENSE
REIMBURSEMENTS. You represent and warrant that you have
submitted all documented business expenses
you incurred through the Separation
Date, and that the Company has reimbursed
you for these expenses pursuant to its
regular business practice.
8. RETURN
OF COMPANY PROPERTY. You further represent and warrant that you
have returned to the Company all Company
documents (and all copies thereof) and
other Company property that you have had in
your possession at any time,
including, but not limited to, Company
files, notes, drawings, records, business
plans and forecasts, financial information,
specifications, computer-recorded
information, tangible property, credit
cards, entry cards, identification badges
and keys; and, any materials of any kind
that contain or embody any proprietary
or confidential information of the Company
(and all reproductions thereof).
9.
PROPRIETARY INFORMATION OBLIGATIONS. Both during and after your
employment you acknowledge your continuing
obligations under your Employee
Proprietary Information Agreement not to
use or disclose any confidential or
proprietary information of the Company
without prior written authorization from
a duly authorized representative of the
Company. A copy of your Employee
Proprietary Information Agreement is
attached hereto as Exhibit A.
10.
COVENANT NOT TO COMPETE. You agree that for thirteen (13) months
after
the Separation Date you will not directly
or indirectly, whether as employee,
officer, director, independent contractor,
consultant, financing source, agent,
stockholder, partner, member or otherwise,
engage or assist others to solicit,
assist, advise, or induce any individual or
entity to end their relationship
with Company, except employees whom you,
Lori Liddle or Amy Grealish brought
over from your or their, as the case may
be, former employment. Nor will you
engage in or have any interest in or enter
into any relationship with any
company, business, or business activity
which is a competitor or is in
competition with the products and services,
manufactured or sold by the Company
in any geographic area in which the Company
markets or has marketed its products
or services. A "competitor" means any
company or business that is in the
Children's Birthday Party market. This will
not preclude you from renting
mailing lists except for use in the
children's birthday party market.
11.
NON-DISPARAGEMENT. Both you and the Company agree not to disparage
or
make any statements, reports or claims
concerning the other party, and the other
party's officers, directors, employees,
shareholders and agents, in any manner
likely to be harmful to them or their
business, business reputation or personal
reputation; provided that both you and the
Company will respond accurately and
fully to any question, inquiry or request
for information when required by legal
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