{"id":39544,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-salon-and-michael-o-donnell.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-salon-and-michael-o-donnell","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-salon-and-michael-o-donnell.html","title":{"rendered":"Employment Agreement &#8211; Salon and Michael O&#8217;Donnell"},"content":{"rendered":"<pre> \nMichael O'Donnell\n235 Pacheco\nSan Francisco, CA  94116\n\n          RE:  EMPLOYMENT AGREEMENT\n\nDear Mike:\n\n          Pursuant to our recent discussions, this letter sets forth the terms\nof your employment with Salon (the 'Company') as well as our understanding with\nrespect to any termination of that employment relationship.  The offer of\nemployment set forth in this letter will expire at 5:00 p.m. on November 7,\n1996, unless it is accepted by you in writing prior to that time.\n\n          1.  POSITIONS AND DUTIES.  You will be employed by the Company as its\n              --------------------                                             \nPublisher and President, reporting to the Company's Board of Directors (the\n'Board').  Upon your employment by the Company, you will become a member of the\nBoard.  You accept employment with the Company on the terms and conditions set\nforth in this Agreement, and you agree to devote your full business time, energy\nand skill to your duties at the Company.  Your duties will include those duties\ndescribed in the Company's by-laws for your position(s), as well as any other\nreasonable duties assigned to you by the Board that are consistent with your\npositions.\n\n          2.  TERM OF EMPLOYMENT.  Your employment with the Company will start\n              ------------------                                              \non December 2, 1996, will be for no specified term, and may be terminated by you\nor the Company at any time, with or without cause, subject to the provisions of\nParagraphs 4 and 5 below.\n\n          3.  COMPENSATION.  You will be compensated by the Company for your\n              ------------                                                  \nservices as follows:\n\n              (a) Salary.  You will be paid at an annual base salary rate of\n                  ------                                                    \n$130,000.00, less applicable withholding, in accordance with the Company's\nnormal payroll procedures.  Your salary will be reviewed by the Board on an\nannual basis, and may be subject to adjustment based upon various factors\nincluding, but not limited to, your performance.  Any adjustment to your salary\nshall be in the sole discretion of the Board.\n\n              (b) MBO Bonus.\n                  --------- \n\n                  (i) You will be entitled to receive an annual (fiscal year)\nbonus of up to $50,000.00 based upon the Company's achievement of various\nfinancial and\/or other goals established by you, David Talbot and the Board. The\ngoals that govern your bonus eligibility will be communicated to you in writing\nby the Board within 60 days following the start of each Company fiscal year. To\nthe extent earned, bonuses will be paid to you within 30 days after the end of\nthe applicable fiscal year. All MBO bonuses will be subject to applicable\nwithholding.\n\n \n                  (ii)   If your employment terminates as a result of your death\nor disability (as defined below), or your employment is terminated by the\nCompany without cause or by you for Good Reason (as defined below), you shall\nreceive a pro rated portion of your MBO bonus for the year in which such\ntermination occurs. That pro rated bonus will be determined by multiplying a\nfraction, the numerator of which is the number of days that you are employed by\nthe Company in that year and the denominator of which is 365, times the bonus\nthat you would have earned under subparagraph (i) above had you been employed\nfor the entire year. Any prorated bonus earned by you under this subparagraph\nwill be paid to you within 30 days after the fiscal year in which your\nemployment terminates, and will be subject to applicable withholding.\n\n                  (iii)  If your employment is terminated by the Company for\ncause (as defined below), or you resign from your employment for any reason\nother than a Good Reason, you shall not be entitled to any MBO bonus, or pro\nrated portion of such bonus, for the year in which your employment terminates.\n\n              (c) Overachievement Bonus. A bonus pool equal to 5% of the\n                  ---------------------\nCompany's gross annual revenues will be made available for distribution to you\nand your staff (in amounts determined by the Board or a Compensation Committee\nof the Board, based upon recommendations by you) based upon the Company's\n'overachievement' of any fiscal year gross revenue goal that is established by\nyou, David Talbot and the Board. The overachievement goal that governs this\npotential bonus will be communicated to you in writing by the Board within 60\ndays following the start of each Company fiscal year. To the extent earned\n(which requires that you be employed by the Company on the last day of the\napplicable fiscal year), this bonus pool will be made available to you (and your\nstaff) within 30 days after the end of the applicable fiscal year. All\noverachievement bonuses will be subject to applicable withholding.\n\n              (d) Benefits.  You will have the right, on the same basis as other\n                  --------                                                      \nemployees of the Company, to participate in and to receive benefits under any\nCompany medical, disability or other group insurance plans, as well as under the\nCompany's vacation, business expense reimbursement, and other policies.  To the\nextent that you are subject to any waiting period before you are eligible to\nparticipate in the Company's group health insurance plan, the Company will,\nduring such period, reimburse you for any COBRA premiums that you must actually\npay to continue the group health insurance coverage provided by your previous\nemployer.\n\n              (e) Stock Options.\n                  ------------- \n\n                  (i)  Subject to the Board's approval, you will be granted an\noption to purchase 8% of the Company's currently outstanding common stock (the\n'Option') under the Company's stock option plan at an exercise price of $.10 per\nshare. The Option will be exercisable and will vest over a four year period in\nequal installments on a quarterly basis during your employment with the Company.\nThe Option will be governed by and subject to the terms and conditions of the\nCompany's standard form of incentive stock option agreement (which you will be\nrequired to sign in connection with the issuance of the Option).\n\n                                       2\n\n \n                  (ii)   In the event that within one year following any Change\nof Control (as defined below), (A) your employment is terminated without cause,\nor (B) you resign from your employment for Good Reason (as defined below), any\nunvested portion of the Option shall become fully vested. In the event that the\npurchaser\/acquirer in any Change of Control transaction fails to assume the\nOption or substitute an equivalent option, any unvested portion of the Option\nshall become fully vested.\n\n                  (iii)  In the event that your employment terminates as a\nresult of your death or disability (defined in paragraph 4) within one year of\nyour start date (set forth in paragraph 2), you shall immediately become vested\n(to the extent that you are not already vested) in one-fourth (25%) of the\nshares that are subject to the Option.\n\n                  (iv)   You shall have the right of first refusal to\nparticipate in any future sales by the Company of its equity securities in\nprivate financing transactions to the extent necessary to maintain your pro rata\ninterest in the outstanding common stock of the Company prior to such offering\n(calculated on an 'as converted' basis). The Company shall give you notice of\nthe terms of such offering and the cost of maintaining your pro rata share.\nUnless you respond in writing to the offer notice within five days asking to\nexercise the option and tender payment at the closing, this option shall lapse.\nThis right of first refusal shall not apply to the issuance by the Company of\nequity securities (i) to employees, officers, directors or consultants of the\nCompany, (ii) in connection with an acquisition by the Company of another\nentity, or an interest in another entity, through a merger, exchange or similar\ntransaction, (iii) pursuant to debt financing, equipment financing or leasing\narrangements or in connection with strategic partnering transactions approved by\nthe Board, or (iv) in connection with a registered public offering of the\nCompany's equity securities. In addition, the right of first refusal shall not\napply if a majority in interest of the proposed investors object in writing to\nyour participation in the financing. This right shall terminate upon an initial\npublic offering of the stock of the Company.\n\n              (v)    You shall have the right to sell up to 10% of the shares of\nyour Company stock in an initial public offering of the Company's stock, subject\nto the approval of the Board and the underwriters, on the terms and in a manner\nconsistent with section 1.3 and sections 1.6-1.12 of the Rights Agreement of\nDecember 22, 1995, between the Company, Adobe Ventures L.P. and H &amp; Q Salon\nInvestors, L.P.\n\n          4.  VOLUNTARY TERMINATION.  In the event that you voluntarily resign\n              ---------------------                                           \nfrom your employment with the Company (except for Good Reason as defined below),\nor in the event that your employment terminates as a result of your death or\ndisability (meaning that you are unable to perform your duties for any 120 days\nin any one year period as a result of a physical and\/or mental impairment), you\nwill be entitled to no compensation or benefits from the Company other than\nthose earned under Paragraph 3 through the date of your termination.  You agree\nthat in the event you voluntarily terminate your employment with the Company for\nany reason, you shall provide the Company with 30 days' written notice of your\nresignation.  The Company may, in its sole discretion, elect to waive all or any\npart of such notice period and accept your resignation at an earlier date.\n\n                                       3\n\n \n          5.  OTHER TERMINATION.  Your employment may be terminated under the\n              -----------------                                              \ncircumstances set forth below.\n\n              (a) Termination for Cause.  If your employment is terminated by\n                  ---------------------\nthe Company for cause as defined below, you shall be entitled to no compensation\nor benefits from the Company other than those earned under Paragraph 3 through\nthe date of your termination for cause.\n\n          For purposes of this Agreement, a termination 'for cause' occurs if\nyou are terminated for any of the following reasons:  (i) theft, dishonesty, or\nintentional falsification of any Company documents or records; (ii) intentional\nand improper disclosure of the Company's confidential or proprietary\ninformation; (iii) any action by you which has a material detrimental effect on\nthe Company's reputation or business; (iv) your material failure or inability to\nperform any assigned duties after written notice from the Company to you of, and\na reasonable opportunity to cure, such failure or inability; or (v) your\nconviction (including any plea of guilty or nolo contendre) for any criminal act\nthat impairs your ability to perform your duties under this Agreement.\n\n              (b) Termination Without Cause. If your employment is terminated by\n                  -------------------------\nthe Company without cause (and not as a result of your death or disability) and\nyou sign a release of known and unknown claims in a form satisfactory to the\nCompany, you shall receive severance payments at your final base salary rate,\nless applicable withholding, until the earlier of (i) nine months after the date\nof your termination without cause, or (ii) the date on which you first commence\nother employment. Severance payments will be made in accordance with the\nCompany's normal payroll procedures.\n\n              (c) Resignation for Good Reason.  If you resign from your\n                  ---------------------------\nemployment with the Company for Good Reason, you shall be entitled to receive\nthe severance payments described in subparagraph 5(b).\n\n          6.  CHANGE OF CONTROL\/GOOD REASON.\n              ----------------------------- \n\n              (a) For purposes of this Agreement, a 'Change of Control' of the\nCompany shall be deemed to have occurred if:\n\n                  (i)    any 'person' (as such term is used in Sections 13(d)\nand 14(d) of the Securities Exchange Act of 1934, as amended (the 'Exchange\nAct')), other than Adobe Ventures, L.P., H &amp; Q Salon Investors, L.P., or a\ntrustee or other fiduciary holding securities of the Company under an employee\nbenefit plan of the Company, becomes the 'beneficial owner' (as defined in Rule\n13d-3 promulgated under the Exchange Act), directly or indirectly, of securities\nof the Company representing 50% more of (A) the outstanding shares of common\nstock of the Company or (B) the combined voting power of the Company's then-\noutstanding securities entitled to vote generally in the election of directors;\nor\n\n                  (ii)   the Company (A) is party to a merger, consolidation or\nexchange of securities which results in the holders of voting securities of the\nCompany outstanding immediately prior thereto failing to continue to hold at\nleast 50% of the combined voting power\n\n                                       4\n\n \nof the voting securities of the Company, the surviving entity or a parent of the\nsurviving entity outstanding immediately after such merger, consolidation or\nexchange, or (B) sells or disposes of all or substantially all of the Company's\nassets (or any transaction having similar effect is consummated), or (C) the\nindividuals constituting the Board immediately prior to such merger,\nconsolidation, exchange, sale or disposition shall cease to constitute at least\n50% of the Board, unless the election of each director who was not a director\nprior to such merger, consolidation, exchange, sale or disposition was approved\nby a vote of at least two-thirds of the directors then in office who were\ndirectors prior to such merger, consolidation, exchange, sale or disposition.\n\n              (b) For purposes of this Agreement, 'Good Reason' means any of the\nfollowing conditions, which are imposed upon you (and not upon the Company's\nsenior management generally) without your written consent, and which\ncondition(s) remain(s) in effect 10 days after written notice to the Board from\nyou of such condition(s):\n\n                  (i)    a decrease in your base salary and\/or a material\ndecrease in any of your then-existing bonus plans or employee benefits;\n\n                  (ii)   a material, adverse change in your title, authority,\nresponsibilities or duties, as measured against your title, authority,\nresponsibilities or duties immediately prior to such change;\n\n                  (iii)  a substantial reduction, without good business reasons,\nof the facilities and perquisites (including office space and location)\navailable to you as measured against those available immediately prior to such\nreduction;\n\n                  (iv)   the relocation of your office at the Company to a\nlocation that is more than 40 miles from its location at the outset of your\nemployment;\n\n                  (v)    any termination of your employment by the Company that\nis not effected for death, disability or cause, or any termination by the\nCompany for which the grounds relied upon are not valid;\n\n                  (vi)   the failure by the Company to obtain the assumption of\nthis Agreement by any successor; or\n\n                  (vii)  any material breach by the Company of any material\nprovision of this Agreement.\n\n          7.  CONFIDENTIAL AND PROPRIETARY INFORMATION.  As a condition of your\n              ----------------------------------------                         \nemployment, you agree to sign the Company's standard form of employee\nconfidentiality and assignment of inventions agreement.\n\n          8.  DISPUTE RESOLUTION.  In the event of any dispute or claim relating\n              ------------------                                                \nto or arising out of your employment relationship with the Company, this\nAgreement, or the termination of your employment with the Company for any reason\n(including, but not limited to, any claims of breach of contract, wrongful\ntermination or age, disability or other discrimination), you and the Company\nagree that all such disputes shall be fully, finally and exclusively resolved\n\n                                       5\n\n \nby binding arbitration conducted by the American Arbitration Association in San\nFrancisco County, California. You and the Company hereby knowingly and willingly\nwaive your respective rights to have any such disputes or claims tried to a\njudge or jury. Provided, however, that this arbitration provision shall not\napply to any disputes or claims relating to or arising out of the actual or\nalleged misuse or misappropriation of the Company's property, including, but not\nlimited to, its trade secrets or proprietary information.\n\n          9.  ASSIGNMENT.  In view of the personal nature of the services to be\n              ----------                                                       \nperformed under this Agreement by you, you cannot assign or transfer any of your\nobligations under this Agreement.\n\n          10. ATTORNEYS' FEES.  The prevailing party shall be entitled to\n              ---------------                                            \nrecover from the losing party its reasonable costs and attorneys' fees in any\narbitration, litigation or other legal proceeding between the parties concerning\nthis Agreement, our employment relationship or the termination of that\nrelationship.\n\n          11. ENTIRE AGREEMENT.  This Agreement and the agreements referred to\n              ----------------                                                \nabove constitute the entire agreement between you and the Company regarding the\nterms and conditions of your employment, and they supersede all prior\nnegotiations, representations or agreements between you and the Company\nregarding your employment, whether written or oral.\n\n          12. MODIFICATION.  This Agreement may only be modified or amended by\n              ------------                                                    \na supplemental written agreement signed by you and an authorized representative\nof the Company.\n\n\n                                                By: \/s\/ David Talbot\n                                                    ----------------------------\n                                                        David Talbot\n\n          I agree to and accept employment with Salon on the terms and\nconditions set forth in this Agreement.\n\n\nDate:  November 7, 1996\n                                                    \/s\/ Michael O'Donnell\n                                                    ----------------------------\n                                                        Michael O'Donnell\n\n                                       6\n\n \n          Mike, we look forward to working with you at Salon. Please sign and\ndate this letter on the spaces provided below to acknowledge your acceptance of\nthe terms of this Agreement.\n\n                                       7\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8749],"corporate_contracts_industries":[9468],"corporate_contracts_types":[9539,9544],"class_list":["post-39544","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-salon-media-group-inc","corporate_contracts_industries-media__other","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39544","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39544"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39544"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39544"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39544"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}