Beth Sommers Offer Letter EXHIBIT 10.1
[BIRTHDAY EXPRESS LETTERHEAD]
REVISED
November 27, 2006
Beth Y. Sommers
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Dear Beth,
I am pleased to extend an offer of employment with Celebrate Express, Inc. on
the following terms and conditions:
Position. You will be employed in the position of Vice President of
Merchandising for Celebrate Express, Inc. In this position, you will be
responsible for providing proactive leadership, vision and strategic direction
as well as the day-to-day management of merchandising efforts supporting the
Birthday Express, First Wishes, Party Destinations, Costume Express and Great
Days Scrolls brands for Celebrate Express, Inc. Additionally, you will oversee
product development, design, sourcing, and inventory control. The VP of
Merchandising is a member of the senior management team that is responsible for
setting the business strategy for the Company. For the foreseeable future, you
will be expected to travel to Greensboro North Carolina about every two months
for a week, and spend at least 2-3 days working in the distribution center. You
will be expected to travel to other locations as needed and will be reimbursed
for travel expenses provided they fall within the Company's expense guidelines.
You will also be expected to participate in other special projects and related
activities. You will report to the Company's CEO.
Compensation. This is a full time exempt position. Your cash compensation will
be $5,769.23 payable every two weeks. There are 26 pay periods each year. We
anticipate this is equal to approximately $150,000. per year. In addition, you
will be eligible for an annual bonus opportunity of up to 20% of your annual
salary based on the achievement of Company and individual objectives. For the
first year, the weight of the bonus opportunity shall be 75% on the Company
achieving its financial objectives and 25% on individual department objectives
payable in FQ1 following the close of the fiscal year, which is May 31. Bonus
objectives shall be documented in writing, and agreed upon by the CEO and you
within 30 days of your employment start date. Future bonus opportunities shall
be aligned with current Company programs made available to all executives and as
approved by the Board of Directors.
Targeted Annual Earnings [TAE]:
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Salary $150,000
Bonus at 100% of plan $ 30,000
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TAE $180,000
Celebrate Express believes employees should be able to participate in the
ownership of the Company through the Company's Equity Incentive Plan. It is the
responsibility of every employee/stockholder to help the Company succeed in the
market. A STOCK OPTION IN EFFECT ENABLES YOU TO BECOME A PART OWNER OF THE
COMPANY. As part of this offer letter we will propose to our Board of Directors
that you receive a stock option for 11,500 shares to be earned over a four-year
period. In accordance with the Plan, vesting will start as of the date set by
the Board of Directors and the exercise price will be the closing price of our
common stock on the date the Board approves the option grant.
Employee Benefits. You will be entitled to the personal leave, holiday and other
benefits for employees. The company currently offers 10 paid holidays each year.
As a Vice President, personal leave hours will begin accruing upon the first
date of your employment, accruing at the rate of 20 days per year. This is equal
to 1.66 personal leave days earned per month (20 days / 12 months = 1.66 days).
Beth Sommers Offer Letter
Page 2 of 3
The Company has a group medical policy, as a Vice President you will become
eligible to participate in that benefit the first day of the month following
your date of employment. At this time, the medical premiums are paid at the rate
of approximately 80%/20% for employees and 50%/50% for dependent coverage. This
means the company will pay approximately 80% of the cost of your medical/dental
insurance and approximately 50% of the cost for eligible dependents. The
premiums are deducted via payroll deductions on a pre-tax basis.
As a Vice President, the company will provide a life insurance policy at 1.5
times annual salary, with a maximum benefit of $300,000.
All other benefits will follow standard company benefits offered to all
employees.
The Company will reimburse reasonable business expenses incurred by you on
behalf of the Company, subject to compliance with the Company's policies
regarding personal expense reports.
Proprietary Information Agreement. You will sign a Proprietary Information
Agreement in the Company's standard form.
At Will Employment. You understand that your employment with the Company is
at-will and may be terminated by you or the Company at any time, without cause.
Arbitration Agreement. You will sign the Arbitration Agreement that is included
with this offer letter.
Covenant Not to Compete. You agree that for twelve months after termination from
employment with the Company, you will not directly or indirectly, whether as
employee, officer, director, independent contractor, consultant, financing
source, agent, partner, member or otherwise, 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 being
developed, 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 derives five percent (5%) or more of its
gross sales from the sale of products/services in the party supply and Halloween
and costume and girls special occasion apparel markets, offered by Celebrate
Express, Inc.
No Solicitation. You agree that for twelve months after termination of
employment from the Company, you will not directly or indirectly solicit,
assist, advise, or induce any individual or entity to end their relationship
with Company or to enter into a relationship with any of Company's competitors.
Governing Law. This agreement will be governed by the laws of the State of
Washington as applied to contracts made and to be performed in Washington. If
any provision of this agreement is held to be unenforceable or invalid, the
remainder of this agreement will nevertheless remain in full force and effect.
Expiration to Offer. This offer of employment is valid through the close of
business on November 30, 2006. To indicate your acceptance, please return a
signed copy of this letter to me by that date. We anticipate your full time
start date to be on February 1, 2007 giving you time to wrap up your consulting
business.
Because your start date is approximately eight weeks out, we would request that
you participate in F08 Marketing/Merchandising Planning meetings prior to your
full time start date, during the last week of January. You would be compensated
for these days at your equivalent daily rate of pay.
Beth Sommers Offer Letter
Page 3 of 3
We are pleased to have you as part of the team. We believe in you and your
abilities to assist us with our expansion plans. Trust, loyalty, a strong focus
on customer satisfaction and a commitment to excellence summarizes our Company
culture and values.
On behalf of the team, welcome to Celebrate Express, Inc.
Best regards,
/s/ Kevin Green
Kevin Green
President and Chief Executive Officer
Acceptance:
I understand and voluntarily accept all the terms above without exception or
reservation.
/s/ Beth Sommers 11/30/06
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Signature Date
To accept, you may email a signed copy to _______________ or fax to ________ - a
confidential fax number.