Employment Agreement - PlanetOut Partners Inc. and Mark Elderkin
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement is entered into as of April 26, 2004, by and between MARK
ELDERKIN (the "Employee") and PLANETOUT PARTNERS, INC., a Delaware corporation
(the "Company").
1. DUTIES AND SCOPE OF EMPLOYMENT.
A) POSITION. For the term of his employment under this Agreement (the
"Employment"), the Company agrees to employ the Employee in the
position of President, or in such other level equivalent or higher
level position as the Company subsequently may assign to the
Employee. The Employee shall report to the Company's Chief Executive
Officer or to such other person as the Company subsequently may
determine. The Employee's duties shall include, but are not limited
to:
i) Leadership, management and ultimate P&L responsibility for the
following:
(a) Global Advertising Services business, to include: US and
international sales, client service, trafficking, and
marketing support
(b) The Company's web site presentation and editorial
programming, including branding, Out & About transition
and new business listings
ii) Consistent and accurate planning, forecasting, and budgeting
related to Global Advertising Services revenues and expenses,
and managing to meet or exceed those plans, forecasts and
budgets.
iii) Strategic planning, in concert with the Chief Executive
Officer, and implementation of tasks and projects resulting
from such planning including participation in product
direction and strategy, service enhancement and expansion, and
other strategic activities.
iv) Managing, meeting and exceeding user expectations and
educating direct and indirect reports to do so as well, such
expectations as specified in advance between the Employee and
the Company..
v) As a senior leader, with integrity, wisdom and prudence,
interacting with, communicating to, helping to educate and to
develop upline management, peer management, and non-reporting
staff throughout the Company to the benefit of all Company
individuals and the business as a whole.
vi) Representing the Company and its individuals in formal and
informal communications and presentations, on panels, with the
press as pre-approved, in the
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field, with clients and other business partners, and in all
other business-related circumstances, with the highest
attainable form of professionalism, integrity, honesty, and
sincerity in the desire to serve, provide service, and relate
information, and in all other forms of communication and
presentation.
b) 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 engage in lawful conduct
occurring during nonworking hours away from the Company's premises;
provided however, that lawful conduct does not include without
limitation conduct that constitutes a breach of fiduciary duty to
the Company, breach of the duty of loyalty to the Company, breach of
the Proprietary Information and Inventions Agreement with the
Company, breach of this Agreement, engagement in a competitive
activity or assisting any person or entity in competing with the
Company, in preparing to compete with the Company or in hiring any
employees or consultants of the Company. In the event that the
Employee engages 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, the Employee must in writing
notify the Company 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 comply with the
Company's policies and rules, as they may be in effect from time to
time during his Employment.
c) 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 versions and any
future versions of the Company's various agreements related to
confidentiality, inventions and related intellectual matters.
d) COMMENCEMENT DATE AND LOCATION. The Employee, having already
commenced Employment with the Company on January 25, 1999, which
will serve as Employee's commencement date, and having commenced
substantive employment with Pride.com on June 1996, which will serve
as commencement date for benefits and other tenure related
applications as reasonable and feasible, works in the New York City
office of the Company.
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2. CASH AND INCENTIVE COMPENSATION.
a) SALARY. The Company shall pay the Employee as compensation for his
services a base salary at a gross annual rate of not less than
$203,000. Such salary shall be payable in accordance with the
Company's standard payroll procedures. (The annual compensation
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.") 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 performed annually, or more frequently as may be initiated by
Employee's senior management.
b) INCENTIVE BONUSES. The Employee shall be eligible to be considered
for an annual incentive bonus with a target amount equal to a
maximum of 40% of his Base Compensation. Such bonus (if any) shall
be awarded based on objective or subjective criteria established in
advance by the CEO and Board Compensation Committee, approved by the
Company's Board of Directors (the "Board") and after such approval
presented to Employee. The determinations of the Board with respect
to such bonus shall be final and binding.
c) PERFORMANCE BONUS OPTIONS. Subject to the approval of the Board, the
Company may grant the Employee stock options, from time-to-time,
covering the shares of the Company's equity securities. The terms of
such options 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.
d) VACATION AND EMPLOYEE BENEFITS. During his Employment, the Employee
shall be eligible for paid vacations in accordance with the
Company's standard policy for similarly situated employees, as it
may be amended from time to time. 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. At Employee's option, Employee shall be
eligible to use personal life and disability insurance to cover the
approximate difference between the company plan's maximum and his
Base Compensation up to a cost of $150 per month for disability
insurance and $100 per month for life insurance and to present the
Company receipts for such insurance for reimbursement by the
Company.
e) BUSINESS EXPENSES. During his Employment, the Employee shall be
authorized to incur necessary and reasonable travel, entertainment
and other business expenses in connection with his duties hereunder.
The Company shall reimburse the Employee for such expenses
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upon presentation of an itemized account and appropriate supporting
documentation, all in accordance with the Company's generally
applicable policies.
3. TERM OF EMPLOYMENT.
a) 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 set forth in Section 1(d) until
the date when the Employee's Employment terminates pursuant to
Subsection (b) or (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.
b) TERMINATION. The 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 twenty-one (21) days
advance notice in writing. The Employee's Employment shall terminate
automatically in the event of his death.
c) RIGHTS UPON TERMINATION. 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 the effective date of the termination. The payments
under this Agreement shall fully discharge all responsibilities of
the Company to the Employee.
d) 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.
4. TERMINATION BENEFITS.
a) 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 and (ii) has agreed not to prosecute any
legal action or other proceeding based upon any of such claims.
b) SEVERANCE PAY.
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i) 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 pay the
Employee his Base Compensation for a period of twelve (12)
months following the termination of his Employment (the "Base
Continuation Period") and shall accelerate the vesting of any
outstanding stock options such that the Employee will become
vested in an additional number of shares subject to such stock
options, as if the Employee provided another nine (9) months
of service with the Company. 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.
ii) If, within sixteen (16) months following a Change of Control
(as defined in Part 2(e) of the Planetout Partners, Inc.
Performance and Equity Participation (PEP) Plan as adopted on
January 22, 2002 (the "PEP Plan")) and the Company terminates
the Employee's Employment (including through "Constructive
Termination" as defined below) for any reason other than Cause
or Permanent Disability, then, subject to the "Parachute
Payment" provisions of paragraph 5(d) of the PEP Plan (as if
such provisions were a full part of this agreement, even if
such plan is not in effect at the time of a Change of
Control), the Company shall pay the Employee his Base
Compensation for a period of eighteen (18) months following
the termination of his Employment (the "Change of Control
Continuation Period"), and shall accelerate the vesting of any
outstanding stock options such that the Employee will become
vested in an additional number of shares subject to such stock
options, as if the Employee provided the greater of either (A)
another nine (9) months of service with the Company or (B) 50%
of the remaining unvested shares. 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.
iii) DEFINITION OF "CONSTRUCTIVE TERMINATION." For all purposes
under this Agreement "Constructive Termination" shall mean
that the Employee's resignation within sixty (60) days
following (i) 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 to in writing; (ii) any
reduction of Employee's Base Compensation to which the
Employee has not agreed to in writing; (iii) any elimination
of a material benefit provided to the Employee pursuant to
employment with the Company to which the Employee has not
agreed to in writing unless such material benefit is being
eliminated for all Employees in comparable positions or
Employee's class due to a reasonable business need or
condition; (iv) a relocation of place of employment more than
sixty (60) miles from New York City, NY; (v) the Company's
failure to cure any material breach by it of the terms of this
letter agreement within a reasonable time following written
notice from the Employee to the Company's Board of Directors;
or (vi) the actual occurrence of any "constructive
termination" of the Employee by the Company under New York
law. The provisions of subparts (i) through (iii) of this
subparagraph b(iii) shall not apply
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if any "cause" as defined in subparagraph (d) has occurred,
and, if curable pursuant to subparagraph (d), has not been
cured.
iv) DEFINITION OF "PERMANENT DISABILITY." For all purposes under
this Agreement, "Permanent Disability" shall mean that the
Employee, at the time notice is given, has failed to perform
his duties under this Agreement for a period of not less than
90 consecutive days (or such longer period as may be required
by law) as the result of his incapacity due to physical or
mental injury, disability or illness.
c) HEALTH INSURANCE. If Subsection (b) above applies, and if the
Employee elects to continue his health insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") following
the termination of his Employment, then the Company shall pay the
Employee's monthly premium under COBRA until the earliest of (i) the
close of the Base Continuation Period or Change of Control
Continuation Period, as applicable, (ii) the expiration of the
Employee's continuation coverage under COBRA or (iii) the date when
the Employee receives substantially equivalent health insurance
coverage in connection with new employment or self-employment.
c) DEFINITION OF "CAUSE." For all purposes under this Agreement,
"Cause" shall mean:
i) Any material breach of this Agreement, the Proprietary
Information and Inventions Agreement between the Employee and
the Company, or any other written agreement between the
Employee and the Company, without Employee's satisfactory and
reasonable cure, if curable, within thirty (30) days of
Employee's receipt of written notice of such failure to
comply, such notice by Company to Employee shall specify the
material breach(es) and shall delineate performance
improvements, modifications or action items necessary for
Employee to effect a satisfactory and reasonable cure;
ii) Any material failure to comply with the Company's written
policies or rules, as they may be in effect from time to time
during the Employee's Employment, which adversely impacts any
aspect of the business or personnel of the Company without
Employee's satisfactory and reasonable cure within thirty (30)
days of Employee's receipt of written notice of such failure
to comply, such notice by Company to Employee shall specify
the material failure(s) to comply and delineate performance
improvements, modifications or action items necessary for
Employee to effect a satisfactory and reasonable cure;
iii) Conviction of, or a plea of "guilty" or "no contest" to, a
felony under the laws of the United States or any state
thereof;
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iv) Threats or acts of violence or unlawful harassment directed at
any present, former or prospective employee, independent
contractor, vendor, customer or business partner of the
Company or directed to the Company;
v) The sale, possession or use of illegal drugs on the premises
of the Company or of a customer or business partner of the
Company or when engaged in the business of the Company, at
Company events, Company sponsored events at any other events,
premises and venues at which the Employee is engaged in the
business of the Company;
vi) Misappropriation of the assets of the Company or other acts of
dishonesty;
vii) Illegal or unethical business practices;
viii) Gross misconduct or gross negligence in the performance of
duties assigned to the Employee under this Agreement; or
ix) Failure to perform reasonable duties assigned to the Employee
under this Agreement without Employee's satisfactory and
reasonable cure within sixty (60) days of Employee's receipt
of written notice of such failure to perform, such notice by
Company to Employee shall specify the failure(s) to perform
and delineate performance improvements, modifications or
action items necessary for Employee to effect a satisfactory
and reasonable cure.
5. NON-SOLICITATION AND NON-DISCLOSURE.
a) NON-SOLICITATION. During the period commencing on the date of this
Agreement and continuing until the first anniversary of the date
when the Employee's Employment terminated for any reason, the
Employee shall not directly or indirectly, personally or through
others, solicit or attempt to solicit (on the Employee's own behalf
or on behalf of any other person or entity) either (i) the
employment of any employee of the Company or any of the Company's
affiliates or (ii) the business of any customer of the Company or
any of the Company's affiliates with whom the Employee had contact
during his Employment.
b) NON-DISCLOSURE. The Employee has entered into a Proprietary
Information and Inventions Agreement with the Company, which is
incorporated herein by reference.
6. SUCCESSORS.
a) COMPANY'S SUCCESSORS. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company's business and/or assets. For all
purposes under this Agreement, the term "Company" shall include any
successor to the Company's business and/or assets which becomes
bound by this Agreement.
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b) EMPLOYEE'S SUCCESSORS. This Agreement and all rights of the Employee
hereunder shall inure to the benefit of, and be enforceable by, the
Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees.
7. MISCELLANEOUS PROVISIONS.
a) NOTICE. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the
case of the Employee, mailed notices shall be addressed to him at
the home address which he most recently communicated to the Company
in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.
b) MODIFICATIONS AND WAIVERS. No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by the Employee and by
an authorized officer of the Company (other than the Employee). No
waiver by either party of any breach of, or of compliance with, any
condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the
same condition or provision at another time.
c) WHOLE AGREEMENT. This Agreement supersedes any and all other
previous agreements, whether verbal or written. No other agreements,
representations or understandings (whether oral or written and
whether express or implied) which are not expressly set forth in
this Agreement have been made or entered into by either party with
respect to the subject matter hereof. This Agreement, the
Proprietary Information and Inventions Agreement, the Company's 1997
Stock Plan, the Company's 2001 Equity Incentive Plan, the applicable
Stock Option Agreements evidencing Stock Options granted to you by
the Company, June 28, 2001 Indemnity Agreement, any grants made to
you of the Company's Series B Preferred Stock, and the Company's
Performance and Equity Participation (PEP) Plan and the Merger
Agreement Between Pride.com and Online Partners previously entered
into by Employee contain the entire understanding of the parties
with respect to the subject matter hereof
d) WITHHOLDING TAXES. All payments made under this Agreement shall be
subject to reduction to reflect taxes or other charges required to
be withheld by law.
e) CHOICE OF LAW AND SEVERABILITY. This Agreement is executed by the
parties in the State of California and shall be interpreted in
accordance with the laws of such State (except their provisions
governing the choice of law). If any provision of this Agreement
becomes or is deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its
coverage, then such provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and
enforceable or, if
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such provision cannot be so amended without materially altering the
intention of the parties, then such provision shall be stricken and
the remainder of this Agreement shall continue in full force and
effect. Should there ever occur any conflict between any provision
contained in this Agreement and any present or future statue, law,
ordinance or regulation contrary to which the parties have no legal
right to contract, then the latter shall prevail but the provision
of this Agreement affected thereby shall be curtailed and limited
only to the extent necessary to bring it into compliance with
applicable law. All the other terms and provisions of this Agreement
shall continue in full force and effect without impairment or
limitation.
f) ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof, or the Employee's Employment
or the termination thereof, shall be settled in San Francisco, CA,
by arbitration in accordance with the Employment Arbitration Rules
and Procedures the Judicial Arbitration and Mediation Services. The
decision of the arbitrator shall be final and binding on the
parties, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The parties hereby
agree that the arbitrator shall be empowered to enter an equitable
decree mandating specific enforcement of the terms of this
Agreement. The Company and the Employee shall share equally all fees
and expenses of the arbitrator. The Employee hereby consents to
personal jurisdiction of the state and federal courts located in the
State of California for any action or proceeding arising from or
relating to this Agreement or relating to any arbitration in which
the parties are participants.
g) NO ASSIGNMENT. This Agreement and all rights and obligations of the
Employee hereunder are personal to the Employee and may not be
transferred or assigned by the Employee at any time. The Company may
assign its rights under this Agreement to any entity that assumes
the Company's obligations hereunder in connection with any sale or
transfer of all or a substantial portion of the Company's assets to
such entity.
h) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.
By /s/ MARK ELDERKIN
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Mark Elderkin
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PlanetOut Partners, Inc.
By /s/ LOWELL R. SELVIN
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Lowell R. Selvin
Chief Executive Officer
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