Exhibit 10.1

 

February 14, 2005

 

This Agreement (“Agreement”), dated as of February 14, 2005, is between Sharper
Image Corporation (“Company”) and Jeffrey Nachbor (“Executive”).

 

1. Employment Period.

 

Basic Term. Company shall employ Executive from the date of this Agreement for a
three year period which may be terminated at-will in accordance with this
Agreement. The term of employment under the terms of this Agreement shall
automatically be extended for successive one-year periods after your third year
anniversary, unless Company or you elect, by written notice delivered to the
other not later than sixty (60) days prior to the start of any such one-year
period, not to renew the term of this Agreement.

 

2. Position and Responsibilities.

 

(a) Position. Executive accepts employment with Company as its Chief Financial
Officer and shall perform all duties and responsibilities appropriate to that
position. The Company may change, add to or delete from the Executive’s duties
at its sole discretion. Excluding any periods of absence due to vacation or
illness to which Executive may be entitled, he shall devote his best efforts and
full-time attention to the performance of his duties.

 

(b) Outside Activity. Except upon the prior written consent of Company,
Executive (during his employment with Company) shall not (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with the Company, create a conflict of
interest with Company, or interfere with the business of Company, or with any of
its affiliates (direct or indirect) or subsidiaries (collectively,
“Affiliates”).

 

(c) Location. The Company anticipates that Executive’s office will be located at
the Company’s headquarters, presently in San Francisco, California.

 

3. Compensation and Benefits.

 

(a) Base Salary. Executive’s base salary during his first 12 months of
employment shall be at the bi-weekly rate of $11,538.46 (which annualized equals
$300,000 per year). This base

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salary may change in the discretion of the Company after the first 12 months of
employment. Salary shall be paid in accordance with the Company’s regular
payroll practices and is subject to applicable withholding taxes.

 

(b) Relocation Allowance. Executive will receive a relocation allowance of
$150,000 (less the applicable withholdings and deductions) which will be paid to
Executive within 30 days of the start date of Executive’s employment. This is
intended to attract Executive to the Company, recognize that Executive’s moving
expenses are not being reimbursed by Company, and (most importantly) induce
Executive to remain with the Company for a minimum of one year. Should Executive
leave the Company’s employ within one year of his start date for any reason
other than termination by the Company without Cause or Executive’s death or
disability, the $150,000 allowance shall be repaid to the Company within 30 days
of his date of termination.

 

(c) Target Bonus. Based upon the fiscal year 2/1/05 – 1/31/06 performance of the
Executive and the Company, Executive will be eligible to receive an annual bonus
so long as the Executive remains continuously employed by Company through the
end of the fiscal year. If the Executive’s employment is terminated for Cause
under Section 4(c) or executive terminates his employment, no bonus shall be
payable. The target bonus for Executive’s first year of employment is forty
percent (40%) of Executive’s base salary, subject to the approval of the Board
of Directors. The Company reserves the right to amend, modify or delete the
Target Bonus in subsequent years in its sole discretion.

 

(d) Share Options. Executive will be eligible for 40,000 options of common
shares of Sharper Image Corporation, subject to the approval of the Compensation
Committee in accordance with standard Company practices (e.g., its stock option
plan), and subject to the Company’s normal vesting schedule of 20% vesting every
January 31, beginning (in this instance) on January 31, 2006. Such options will
have an exercise price equal to the fair market value of a share of Sharper
Image common stock on the grant date.

 

(e) Benefits. Executive shall be entitled to receive benefits pursuant to the
terms of the Company’s applicable benefit plans generally made available to
similarly situated associates (as these policies may be amended by Company in
its sole discretion). The amount and extent of benefits to which Executive is
entitled (e.g., medical and dental coverage) shall be governed by each specific
benefit plan.

 

(f) Expense Allowance. Company shall reimburse Executive for reasonable and
necessary travel and other business expenses incurred by Executive in the
performance of his duties, in accordance with such procedures as may be
established and amended from time to time by Company. Executive agrees to comply
with the procedures established by Company in seeking reimbursement for business
expenses. Company also will reimburse Executive for his reasonable temporary
travel and living expenses through June 30, 2005.

 

(g) Vacation. Executive shall accrue four weeks vacation per the company’s
policy, 150 hours of vacation during each full year of employment. Vacation time
is earned on a pro-rata basis and there is a maximum cap on earned but unused
vacation of eight (8) weeks, 300 hours.

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4. Termination of Employment.

 

(a) By Death. Executive’s employment shall terminate upon his death. In the
event of such termination, Company shall: (i) pay to Executive’s estate the
salary to which Executive was entitled through date of termination; (ii) pay to
Executive’s estate any unpaid but earned bonus awarded Executive under this
Agreement; (iii) reimburse Executive’s estate for any outstanding reasonable
business expenses incurred by Executive prior to his death. Thereafter,
Company’s obligations under this Agreement shall terminate, other than as set
forth in the terms of the stock options. This Section shall not affect
entitlement of Executive’s estate or beneficiaries to death benefits under any
benefit plan or policy provided to Executive by Company.

 

(b) By Disability. This Agreement shall terminate as of the end of the calendar
month in which Executive is and has been during each of the immediately
preceding two (2) or more consecutive whole calendar months unable to perform
his duties under this Agreement because of mental or physical illness or injury.
In the event of such termination, Company shall: (i) pay Executive the salary to
which he is entitled through the date of termination; (ii) pay any unpaid but
earned bonus awarded to Executive under Section 3(c); and (iii) reimburse
Executive for any outstanding reasonable business expenses incurred by Executive
prior to such termination. Thereafter, the obligations of Company shall
terminate, other than as set forth in the terms of the stock options. This
Section shall not in any way diminish Executive’s right to receive disability
insurance proceeds, if any

 

(c) By Company For Cause. Company may terminate Executive’s employment for Cause
without notice and without liability at any time. In the event of such
termination, Company shall: (i) pay Executive the base salary to which he is
entitled through the date of termination; and (ii) pay any outstanding
reasonable business expenses incurred by Executive under this Agreement.
Thereafter, the obligations of Company shall terminate.

 

(d) By Company Other Than For Cause. Company may terminate Executive’s
employment at-will at any time. In the event of such termination, Company shall:
(i) pay Executive the base salary to which he is entitled through the date of
termination; and (ii) pay any outstanding reasonable business expenses incurred
by Executive under this Agreement. In addition, if Executive is terminated
without Cause (and not due to death or disability) during his first 12 months of
employment, Company will pay Executive a lump sum of $300,000 less the usual and
customary withholdings and deductions within 30 days of such termination, or
such period of time required by Section 409(a) of the Internal Revenue Code. If
Executive is terminated without Cause (and not due to death or disability) after
the first 12 months of employment, Company will pay Executive a lump sum equal
to six months base salary at the time of termination, less the applicable
withholdings and deductions, within 30 days of such termination or such period
of time required by Section 409(a) of the Internal Revenue Code. Thereafter, the
obligations of Company shall terminate, other than as set forth in the terms of
the stock options

 

(e) Definition of Cause. For purposes of this section, “Cause” for termination
is defined as (A) misconduct, insubordination or serious negligence in the
performance of duties; (B) a material act of dishonesty or fraud or other act of
moral turpitude; (C) conduct by Executive that adversely affects the Company’s
standing, image or reputation, such as the use of drugs prohibited by law or the
consumption of alcohol at an inappropriate level; (D) serious violation of
Company rules or regulations; or (E) any conviction of any law which impedes
Executive’s performance or which damages the standing, image or reputation of
the Company.

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(f) Termination Obligations.

 

(i) Executive agrees that all property, including, without limitation, all
equipment, tangible proprietary information, confidential information,
documents, records, notes, contracts, and computer-generated materials furnished
to or prepared by Executive incident to his employment belongs to Company and
shall be returned promptly to Company upon termination of Executive’s
employment. Executive’s obligations under this subsection shall survive the
termination of his employment and the expiration of this Agreement.

 

(ii) All benefits to which Executive is otherwise entitled shall cease upon his
termination, unless explicitly continued either under this Agreement or under
any specific written policy or benefit plan of Company.

 

(iii) The representations and warranties contained in this Agreement and
Executive’s obligations under this Section 4(f) and under Section 5 (regarding
Proprietary Information), and the parties’ obligations under Section 6
(regarding Arbitration), shall survive the termination of the employment and the
expiration of this Agreement.

 

5. Confidential Information. As part of this Agreement with the Company,
Executive shall be bound by the Confidentiality Agreement which is attached
hereto. The terms of the Confidentiality Agreement shall survive Executive’s
termination of employment as applicable.

 

6. Arbitration.

 

(a) All Disputes. All disputes between Executive (and his attorneys, successors,
and assigns) and Company (and its affiliates, subsidiaries, shareholders,
directors, officers, associates, agents, successors, attorneys, and assigns)
arising out of or relating in any manner whatsoever to the employment or
termination of Executive, including, without limitation, all disputes arising
under this Agreement, (“All Claims”) shall be resolved by arbitration. All
persons and entities specified in the preceding sentence (other than Company and
Executive) shall be considered third-party beneficiaries of the rights and
obligations created by this provision on Arbitration. All Claims shall include,
but are not limited to, contract (express or implied) and tort claims of all
kinds, as well as all claims based on any federal, state, or local law, statute,
or regulation, excepting only claims under applicable workers’ compensation law
and unemployment insurance claims. By way of example and not in limitation of
the foregoing, All Claims shall include any claims arising under Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Americans with Disabilities Act, the California Fair Employment and Housing Act,
as well as any claims asserting wrongful termination, breach of contract, breach
of the covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, negligent or intentional misrepresentation,
negligent or intentional interference with contract or prospective economic
advantage, defamation, invasion of privacy, and claims related to disability.
The location of the arbitration shall be held at San Francisco, California.
Similarly, if any lawsuit is brought (notwithstanding this arbitration
provision) by either of the parties against the other, such lawsuit shall be
venued in San Francisco, California.

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(b) Procedure. Arbitration of All Claims shall be before JAMS in accordance with
the JAMS Employment Arbitration Rules and Procedures, as amended, and as
augmented in this Agreement. Arbitration shall be final and binding upon the
parties and shall be the exclusive remedy for All Claims. Unless prohibited by
applicable law, the parties shall jointly and equally bear the costs of the
arbitrator. Either party may bring an action in court to compel arbitration
under this Agreement and to enforce an arbitration award. Otherwise, neither
party shall initiate or prosecute any lawsuit or administrative action in any
way related to All Claims. Notwithstanding the foregoing, either party may, at
its option, seek injunctive relief to preserve its rights. THE PARTIES HEREBY
WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY IN REGARD TO ALL CLAIMS,
INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING,
EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.

 

(c) Confidentiality. All proceedings and all documents prepared in connection
with any claims shall be confidential and, unless otherwise required by law, the
subject matter thereof shall not be disclosed to any person other than the
parties to the proceedings, their counsel, witnesses and experts, the
arbitrator, and, if involved, the court and court staff.

 

(d) Continuing Obligations. The rights and obligations of Executive and Company
set forth in this Section on Arbitration shall survive the termination of
Executive’s employment and the expiration of this Agreement.

 

7. Notices. Any notice or other communication under this Agreement must be in
writing and shall be effective upon delivery by hand or three (3) business days
after deposit in the United States mail, postage prepaid, certified or
registered, and addressed to the Chief Executive Officer or the President of
Company at the Company’s principle place of business or to Executive at the last
known address maintained in Executive’s personnel file. Executive shall be
obligated to notify Company in writing of any change in his address. Notice of
change of address shall be effective only when done in accordance with this
Section.

 

8. Action by Company. All actions required or permitted to be taken under this
Agreement by Company, including, without limitation, exercise of discretion,
consents, waivers, and amendments to this Agreement, shall be made and
authorized only by the Chief Executive Officer or the President, or by his or
her representative specifically authorized to fulfill these obligations under
this Agreement.

 

9. Integration. This Agreement is intended to be the final, complete, and
exclusive statement of the terms of Executive’s employment by Company. This
Agreement supersedes all other prior and contemporaneous agreements and
statements, whether written or oral, express or implied, pertaining in any
manner to the employment of Executive, and it may not be contradicted by
evidence of any prior or contemporaneous statements or agreements. To the extent
that the practices, policies, or procedures of Company, now or in the future,
apply to Executive and are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall control.

 

10. Amendments. This Agreement may not be amended except by a writing signed by
each of the parties. Failure to exercise any right under this Agreement shall
not constitute a waiver of such right.

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11. Assignment. Executive shall not assign any rights or obligations under this
Agreement. Company may, upon prior written notice to Executive, assign its
rights and obligations hereunder.

 

12. Severability. If a court or arbitrator holds any provision of this Agreement
to be invalid, unenforceable, or void, the remainder of this Agreement shall
remain in full force and effect.

 

13. Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of California.

 

14. Interpretation. This Agreement shall be construed as a whole, according to
its fair meaning, and not in favor of or against any party. By way of example
and not in limitation, this Agreement shall not be construed in favor of the
party receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.

 

15. Executive Acknowledgment. Executive acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands this Agreement, that he is fully aware of its legal effect,
and that he has entered into it freely and voluntarily and based on his own
judgment and not on any representations or promises other than those contained
in this Agreement.

 

The parties have duly executed this Agreement as of the date first written
above.

 

EXECUTIVE

  Sharper Image Corporation

/s/ Jeffrey Nachbor

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/s/ Tracy Wan

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Jeffrey Nachbor

  By:   Tracy Wan     Its:   President and Chief Operating Officer

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Date

  Date