March 29th, 1999
John Patrick McGovern
2533 South Highway 101
Suite 280
Cardiff by the Sea, CA 92007
Dear Pat.
We are pleased to offer you employment with Fogdog, Inc. (hereinafter "Fogdog")
as General Counsel, with a start date of March 30th, 1999 and reporting to the
company CFO.
The terms and commitments of your employment with Fogdog are as follows:
1. You will be employed to work full time and exclusively for the
Company. This will be staged such that you will spend 20% of time during first
two (2) weeks, 40% next two (2) weeks, 60% during the following four (4) weeks
and 100% thereafter .
2. Salary. Base salary of $10,000 per month, which is equal to $120,000
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per year.
3. Bonus. You will have the opportunity to earn a bonus in addition to
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your base salary. Performance targets to earn the bonus are to be determined,
and shall be attached to this agreement as an addendum. The target for the bonus
is 20% of your salary with the opportunity to earn more through performance
accelerators (as attached). You must be employed by Fogdog at the time the bonus
is payable to be eligible to receive the bonus.
4. Stock Options. Subject to approval by the Board of Directors of Fogdog
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at the next scheduled meeting on March 31, 1999, we are pleased to offer you
participation within Fogdog's stock option plan at a level of 135,000 common ISO
shares. Options are vested over four years, with 33,750 options vesting at the
end of the first 12 months and monthly vesting in equal increments thereafter.
The exercise price per share will be the fair market value (current value is
$.22 per share) of the options as determined by the Board of Directors after
your start date.
In the event of an acquisition (Corporate Transaction) of the company during the
1st six months of employment, six months of the first year's options, to the
extent outstanding at that time but not otherwise fully exercisable, shall
automatically accelerate prior to the Corporate Transaction closing. If the
event takes place during the second six months of the 1st year, the remainder of
the 1st year's option shall accelerate (up to a max of 6 months) thus yielding
12 months of vesting in total. No such acceleration shall occur if (i) the
options are assumed by any successor corporation, or (ii) such acceleration
would impact any pooling of interest. In event (ii), the accelerated option
would be replaced with a cash incentive which preserves the spread existing on
the unvested option at the time of the Corporate Transaction (excess of fair
market value of such option over the aggregate exercise price payable).
5. Relocation Package. You are eligible for reimbursement of allowable
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relocation expenses and other benefits, as described in the attached Relocation
Policy. Additionally, we will offer you an additional relocation reimbursement
of $10,000, to be used as you see fit for your moving and living expenses.
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6. Health Benefits. For the duration of employment, you shall be entitled
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to participate in the Company's health insurance, life insurance and disability
insurance plans to the extent permitted by law, that may from time to time be
adopted by the Board. The Company reserves the right to amend, modify or
terminate any employee benefits at any time for any reason. Your portion of the
cost will be determined at enrollment based on plan selected.
7. 401(k). For the duration of employment, you are eligible to
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participate in Fogdog's 401(k) Savings Plan. The Company reserves the right to
amend, modify or terminate this benefit at any time for any reason.
8. Vacation. You will accrue paid vacation days at a rate of one (1) day
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per month of employment.
9. Family & Sick Leave. You will accrue paid family and sick leave at a
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rate of one-half day (1/2) per month of employment.
10. At Will Employment. Your employment with Fogdog is at-will and can be
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terminated or modified at any time, with or without cause, at the option of
either you or Fogdog. Fogdog's right to terminate your employment includes the
right to reduce the scope of your duties and responsibilities and the amount of
your compensation. This provision may be modified only in writing, signed by an
officer of the company. Except as otherwise provided herein, upon the
termination of your employment with Fogdog, you shall immediately cease to
accrue salary, vacation, benefits, vesting of stock options and all other
compensation. If employment is terminated for reasons other than cause,
employee will be entitled to a 3 month severance package (salary and benefits
only). For purposes of this offer letter "cause" is defined as Gross Negligence
or a Felony Conviction.
11. Expense Reimbursement. Corporate travel and other company-related
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expenses incurred by you on your personal accounts shall be reimbursed. Those
expenses plus any travel and company-related expenses incurred on any Fogdog
company account are to be approved by your direct supervisor prior to event.
12. Confidentiality. For the duration of employment and after any
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termination of employment, you will keep all Cedro information confidential and
proprietary, including but not limited to, new product development, business
practices, and corporate initiatives. In any case, Fogdog will, at its sole
discretion, provide written authorization to allow you to reveal such
information. You may be asked to sign additional confidentiality documentation.
If this offer of employment is acceptable to you, please sign a copy of this
letter and return it to me.
Best Regards,
/s/ Tim Harrington
Tim Harrington
Chief Executive Officer
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I accept your offer of employment as outlined in this letter. I acknowledge
receiving a copy of my job duties. I understand that my employment can be
terminated at any time, with or without cause.
Signature Date
/s/ John Patrick McGovern
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John Patrick McGovern
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Employment Agreement - Fogdog Inc. and John Patrick McGovern
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