Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (“Agreement”) is made effective as of the
date signed by the parties below (“Effective Date”), by and between Provide
Commerce Inc. (“Company”) and Blake Bilstad (“Executive”).

 

The parties agree as follows:

 

1. At Will Employment. Company and Executive agree that Executive’s employment
is not for a specified period, and either party may terminate the employment
relationship at any time, with or without cause or notice.

 

2. Duties.

 

2.1 Position. Executive is employed as General Counsel and Sr. Vice President
and shall have the duties and responsibilities as set forth on the attached job
description, as may be amended by company from time to time. Executive shall
perform faithfully and diligently all duties assigned to Executive. Company
reserves the right to modify Executive’s position and duties at any time in its
sole and absolute discretion.

 

2.2 Best Efforts/Full-time. Executive will expend Executive’s best efforts on
behalf of Company, and will abide by all policies and decisions made by Company,
as well as all applicable federal, state and local laws, regulations or
ordinances. Executive will act in the best interest of Company at all times.
Executive shall devote Executive’s full business time and efforts to the
performance of Executive’s assigned duties for Company, unless Executive
notifies the CEO in advance of Executive’s intent to engage in other paid work
and receives the CEO’s written consent to do so. Notwithstanding the foregoing,
the Company acknowledges that Executive has previously entered into a consulting
agreement with Executive’s prior employer, Vivendi Universal Net USA Group, Inc.
(“VUNet USA”), which the Company will permit Executive to maintain; provided,
however, that this relationship does not interfere in any way with Executive’s
work responsibilities at the Company and that Executive shall not violate any
confidences or ethical duties whatsoever with either the Company or VUNet USA by
nature of this relationship and/or the work performed thereunder (which
Executive has represented will be minimal).

 

2.3 Compliance With Company Policies, Rules and Directives. Executive
understands and agrees that familiarity and compliance with Company’s lawful
policies, rules and directives are a condition of employment. In particular,
Executive understands the importance of and agrees to read and comply with the
Insider Trading Policy, the Code of Business Conduct and Ethics, and the
Whistleblowing Procedures for Accounting and Auditing matters. As General
Counsel and Sr. Vice President, Executive agrees to be responsible for advising
the Company on full and proper enforcement of these policies.

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2.4 Work Location. Executive’s principal place of work shall be located in San
Diego, CA, or such other location as the parties may agree upon from time to
time.

 

2.5 Start Date. Executive’s first day of employment with the Company shall be on
April 26, 2004 (“Start Date”).

 

3. Compensation.

 

3.1 Base Salary. As compensation for Executive’s performance of Executive’s
duties hereunder, Company shall pay to Executive, commencing as of the Start
Date, an initial Base Salary of Two Hundred Ten Thousand Dollars ($210,000) per
year, payable in accordance with the normal payroll practices of Company, less
required deductions for state and federal withholding tax, social security and
all other employment taxes and payroll deductions. In the event Executive’s
employment under this Agreement is terminated by either party, for any reason,
Executive will earn the Base Salary prorated to the date of termination.

 

3.2 Corporate Annual Bonus. In addition to the base salary, Executive will be
eligible to earn a corporate annual bonus based upon fiscal year end corporate
results and contingent upon his employment on the last day of the applicable
fiscal year. The bonus will be paid in the pay period after fiscal year end
corporate results are audited and approved by the Vice President of Finance.

 

(a) The amount of the corporate annual bonus will be determined at the sole and
absolute discretion of the Company, based on fiscal year end corporate results.
Bonus target amounts are generally determined as a percentage of base salary.
The target percentage for Executive’s position is currently twenty percent (20%)
of his base salary.

 

(b) The Company reserves the right to alter or discontinue the corporate annual
bonus, at any time, at its discretion, but such change or discontinuation will
be effective on a prospective basis. If the corporate annual bonus is altered or
discontinued before the fiscal year end, Executive shall be paid a bonus in
accordance with the current plan, after the end of the fiscal year, in
proportion to the number of months he worked before the bonus plan was altered
or discontinued.

 

3.3 Stock Options. Subject to the Board of Directors’ approval, Executive will
be granted an incentive stock option to purchase 35,000 shares of Company’s
Common Stock under Company’s 2003 Stock Option/Stock Issuance Plan and related
option documents at an exercise price equal to the fair market value of that
stock on the date of the grant (the “Option”). The Option will be subject to the
terms and conditions of the Plan and the standard stock option agreement
provided pursuant to the Plan, which Executive will be required to sign as a
condition of receiving the Option. These documents will be provided to you under
separate cover.

 

3.4 Supplemental Executive Retirement Plan (SERP) and Deferred Compensation. As
an executive level employee, Executive is eligible to participate in Company’s
SERP and Deferred Compensation plans, in accordance with the terms and
conditions of those plans. Further details are available in the applicable plan
documents.

 

3.5 Performance and Salary Review. The CEO will periodically review Executive’s
performance on no less than an annual basis. Adjustments to salary or other
compensation, if any, may be made by the CEO, at any time, in its sole and
absolute discretion. Executive’s base salary and benefits will not be reduced,
unless the Company determines, for

 

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business reasons, the salaries and/or benefits of all senior executives of the
Company must be reduced.

 

3.6 Customary Fringe Benefits. Executive will be eligible for all customary and
usual fringe benefits generally available to full time employees of Company
subject to the terms and conditions of Company’s benefit plan documents.
Accordingly, Executive will earn 17 days of PTO per year during the first two
years of employment.

 

3.7 Modification of Benefits. Company reserves the right to change or eliminate
any of the fringe benefits on a prospective basis, at any time, effective upon
notice to Executive.

 

4. Business Expenses. Executive will be reimbursed for all reasonable,
out-of-pocket business expenses incurred in the performance of Executive’s
duties on behalf of Company. To obtain reimbursement, expenses must be submitted
promptly with appropriate supporting documentation in accordance with Company’s
policies.

 

5. Termination of Executive’s Employment.

 

5.1 Termination for Cause by Company. Although Company anticipates a mutually
rewarding employment relationship with Executive, Company may terminate
Executive’s employment immediately at any time for Cause. For purposes of this
Agreement, “Cause” is defined as: (a) Executive’s material breach of this
Agreement including, but not limited to, the Insider Trading Policy, the Code of
Business Conduct and Ethics, the Whistleblowing Procedures for Accounting and
Auditing Matters, and the Company’s Employee Innovations and Proprietary Rights
Agreement; (b) Executive’s final, non-appealable conviction or entry of a plea
of nolo contendere for fraud, misappropriation or embezzlement, or any felony;
or (c) Executive’s death. In the event Executive’s employment is terminated in
accordance with this subsection 5.1, Executive shall be entitled to receive only
the Base Salary then in effect, prorated to the date of termination. All other
Company obligations to Executive pursuant to this Agreement, other than vested
retirement and pension benefits, if any, will become automatically terminated
and completely extinguished. Executive will not be entitled to receive the
Severance Payment described in subsection 5.2 below.

 

5.2 Termination Without Cause by Company/Severance. Although Executive’s
employment is terminable at will, and Company may terminate Executive’s
employment under this Agreement without Cause at any time, it shall provide at
least fifteen calendar (15) days’ advance written notice of a termination
without Cause to Executive. In the event of such termination, Executive will
receive the Base Salary then in effect, prorated to the date of termination, and
a “Severance Payment” equivalent to six (6) months of Executive’s Base Salary
then in effect, less all legally required deductions, payable over the six
months in accordance with Company’s regular payroll cycle, provided that
Executive: (a) complies with all surviving provisions of this Agreement as
specified in subsection 11.8 below; and (b) executes a full general release,
releasing all claims, other than vested retirement and pension benefits, if any,
known or unknown, that Executive may have against Company arising out of or any
way related to Executive’s employment or termination of employment with Company.
All other Company obligations to Executive, other than vested retirement and
pension benefits, if any, will be automatically terminated and completely
extinguished. In addition, the Company agrees that should it choose to terminate
this Agreement and/or Executive’s offer of employment hereunder without Cause
prior to the Start Date, the Company shall pay Executive the full amount of the
Severance Payment. In the event, the Executive does not start employment as a
full-time employee as of April 26, 2004, this agreement and all of its
provisions become null and void.

 

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5.3 Voluntary Resignation by Executive. Executive may voluntarily resign
Executive’s position with Company, at any on fifteen (15) calendar days’ advance
written notice. In the event of Executive’s resignation, Executive will be
entitled to receive only the Base Salary for the fifteen-day notice period. All
other Company obligations to Executive pursuant to this Agreement, other than
vested retirement and pension benefits, will become automatically terminated and
completely extinguished. In addition, Executive will not be entitled to receive
the Severance Payment described in subsection 5.2 above.

 

6. No Conflict of Interest. During the term of Executive’s employment with
Company and during any period Executive is receiving payments from Company
pursuant to this Agreement, Executive must not engage in any conduct, paid or
unpaid, that creates a conflict with the essential business-related interests of
the Company that would materially and substantially disrupt Company’s
operations. Such conduct shall include, but is not limited to, directly or
indirectly competing with Company in any way, or acting as an officer, director,
employee, consultant, stockholder, volunteer, lender, or agent of any business
enterprise of the same nature as, or which is in direct competition with, the
business in which Company is now engaged or in which Company becomes engaged
during the term of Executive’s employment with Company, or while Executive is
receiving payments from company pursuant to this Agreement, as may be determined
by the CEO in his sole discretion. If the CEO determines such a conflict exists
during the term of this Agreement, the CEO may take action to eliminate the
conflict, which may include asking Executive to choose to discontinue the other
work or resign employment with Company. If the CEO determines such a conflict
exists during any period in which Executive is receiving severance payments
pursuant to this Agreement, the CEO may take action to eliminate the conflict,
which may include asking Executive to choose to discontinue the other work or
forfeit the remaining severance payments. In addition, Executive agrees not to
refer any client or potential client of Company to competitors of Company,
without obtaining Company’s prior written consent, during the term of
Executive’s employment and during any period in which Executive is receiving
severance payments from Company or is subject to the Nonsolicitation provision,
paragraph 8.1, below. Nothing contained herein or in Paragraph 2.2 shall prevent
Executive from serving on a Board of Directors with a company that is not in
competition with the Company, nor from participating in a volunteer capacity
with a charitable institution.

 

7. Confidentiality and Proprietary Rights. Executive agrees to read, sign and
abide by Company’s Employee Innovations and Proprietary Rights Assignment
Agreement, which is provided with this Agreement and incorporated herein by
reference, and may be amended by Company, from time to time.

 

8. Nonsolicitation. Executive understands and agrees that all information
regarding Company employees and/or customers that is not a matter of public
record is confidential and constitutes trade secrets, and the following
nonsolicitation provisions are intended for the protection of these assets.

 

8.1 Nonsolicitation of Customers or Prospects. Executive agrees that during the
term of this Agreement and for a period of one (1) year after the termination of
this Agreement, Executive will not either directly or indirectly, separately or
in association with others, interfere with, impair, disrupt or damage Company’s
relationship with any of its customers or customer prospects by soliciting or
encouraging others to solicit any of the Company’s customers or encourage others
to solicit any of them for the purpose of diverting or taking away business from
Company.

 

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8.2 Nonsolicitation of Company’s Employees. Executive agrees that during the
term of this Agreement and for a period of one (1) year after the termination of
this Agreement, Executive will not either directly or indirectly, separately or
in association with others, interfere with, impair, disrupt or damage Company’s
business by soliciting, encouraging or attempting to hire any of Company’s
employees or causing others to solicit or encourage any of Company’s employees
to discontinue their employment with Company.

 

8.3 No Violation of Rights of Third Parties. Executive warrants that the
performance of all of the terms of this Agreement and as an employee of Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by Executive prior to his employment
with Company. Executive agrees not to disclose to Company, or induce Company to
use, any confidential or proprietary information or material belonging to any
previous employer or others. Executive warrants that he is not a party to any
other agreement that will interfere with his full compliance with this
Agreement. Executive further agrees not to enter into any agreement, whether
written or oral, in conflict with the provisions of this Agreement.

 

9. Injunctive Relief. Executive acknowledges that Executive’s breach of the
covenants contained in sections 6-8 (collectively “Covenants”) may cause
irreparable injury to Company and agrees that in the event of any such breach,
Company shall be entitled to seek temporary, preliminary and permanent
injunctive relief without the necessity of proving actual damages.

 

10. Agreement to Arbitrate. To the fullest extent permitted by law, Executive
and Company agree to arbitrate any controversy, claim or dispute between them
arising out of or in any way related to this Agreement, the employment
relationship between Company and Executive and any disputes upon termination of
employment, including but not limited to breach of contract, tort,
discrimination, harassment, wrongful termination, demotion, discipline, failure
to accommodate, family and medical leave, compensation or benefits claims,
constitutional claims; and any claims for violation of any local, state or
federal law, statute, regulation or ordinance or common law. Claims for workers’
compensation and unemployment insurance benefits are excluded. For the purpose
of this agreement to arbitrate, references to “Company” include all parent,
subsidiary or related entities and their employees, supervisors, officers,
directors, agents, pension or benefit plans, pension or benefit plan sponsors,
fiduciaries, administrators, affiliates and all successors and assigns of any of
them, and this agreement shall apply to them to the extent Executive’s claims
arise out of or relate to their actions on behalf of Company.

 

10.1 Consideration. The mutual promise by Company and Executive to arbitrate any
and all disputes between them (except for those referenced above) rather than
litigate them before the courts or other bodies, provides the consideration for
this agreement to arbitrate.

 

10.2 Initiation of Arbitration. Either party may exercise the right to arbitrate
by providing the other party with written notice of any and all claims forming
the basis of such right in sufficient detail to inform the other party of the
substance of such claims. In no event shall the request for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claims would be barred by the applicable statute of limitations.

 

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10.3 Arbitration Procedure. The arbitration will be conducted in San Diego,
California by a single neutral arbitrator and in accordance with the California
Arbitration Act, California Code of Civil Procedure 1281 et seq. The parties are
entitled to representation by an attorney or other representative of their
choosing. The arbitrator shall have the power to enter any award that could be
entered by a judge of the trial court of the State of California, or federal
district court for the Southern District of California, as applicable to the
claim(s), and only such power, and shall follow the law. The parties agree to
abide by and perform any award rendered by the arbitrator. The arbitrator shall
issue the award in writing and therein state the essential findings and
conclusions on which the award is based. Judgment on the award may be entered in
any court having jurisdiction thereof.

 

10.4 Costs of Arbitration. Company shall bear the costs of the arbitration
filing and hearing fees and the cost of the arbitrator.

 

11. General Provisions.

 

11.1 Successors and Assigns. The rights and obligations of Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Company. Executive shall not be entitled to assign any of
Executive’s rights or obligations under this Agreement.

 

11.2 Waiver. Either party’s failure to enforce any provision of this Agreement
shall not in any way be construed as a waiver of any such provision, or prevent
that party thereafter from enforcing each and every other provision of this
Agreement.

 

11.3 Attorneys’ Fees. Each side will bear its own attorneys’ fees in any
dispute, unless a statutory section at issue, if any, authorizes the award of
attorneys’ fees to the prevailing party, in which case the arbitrator may award
attorneys fees in accordance with the law.

 

11.4 Severability. In the event any provision of this Agreement is found to be
unenforceable by an arbitrator or court of competent jurisdiction, such
provision shall be deemed modified to the extent necessary to allow
enforceability of the provision as so limited, it being intended that the
parties shall receive the benefit contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment
of such arbitrator or court, the unenforceable provision shall be deemed
deleted, and the validity and enforceability of the remaining provisions shall
not be affected thereby.

 

11.5 Interpretation; Construction. The headings set forth in this Agreement are
for convenience only and shall not be used in interpreting this Agreement. This
Agreement has been drafted by legal counsel representing Company, but Executive
has participated in the negotiation of its terms. Furthermore, Executive
acknowledges that Executive has had an opportunity to review and revise the
Agreement and have it reviewed by legal counsel, if desired, and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.

 

11.6 Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of California. Each
party consents

 

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to the jurisdiction and venue of the state or federal courts in San Diego,
California, if applicable, in any action, suit, or proceeding arising out of or
relating to this Agreement.

 

11.7 Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be delivered as follows with notice deemed given as indicated:
(a) by personal delivery when delivered personally; (b) by overnight courier
upon written verification of receipt; (c) by telecopy or facsimile transmission
upon acknowledgment of receipt of electronic transmission; or (d) by certified
or registered mail, return receipt requested, upon verification of receipt.
Notice shall be sent to the addresses set forth below, or such other address as
either party may specify in writing.

 

11.8 Survival. Sections 5.2 (Termination Without Cause/Severance), 6 (“No
Conflict of Interest”), 7 (“Confidentiality and Proprietary Rights”), 8
(“Nonsolicitation”), 9 (“Injunctive Relief”), 10 (“Agreement to Arbitrate”), 11
(“General Provisions”) and 12 (“Entire Agreement”) of this Agreement shall
survive Executive’s employment with Company.

 

12. Entire Agreement. This Agreement, including the Company Employee Innovations
and Proprietary Rights Assignment Agreement incorporated herein by reference and
Company’s 2003 Stock Option/Stock Issuance Plan, and related option documents
described in subsection 3.3 of this Agreement, constitutes the entire agreement
between the parties relating to this subject matter and supersedes all prior or
simultaneous representations, discussions, negotiations, and agreements, whether
written or oral. This Agreement may be amended or modified only with the written
consent of Executive and the CEO. No oral waiver, amendment or modification will
be effective under any circumstances whatsoever.

 

THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES
HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.

 

Dated:   March 15, 2004            

      By:  

/s/    BLAKE BILSTAD       

             

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BLAKE BILSTAD

 

       

 

Provide Commerce Inc.

 

Dated:  March 15, 2004            

      By:  

/s/    PENNY HANDSCOMB       

             

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Penny Handscomb

VP Human Resources & Training

5005 Wateridge Vista Drive, Suite 200

San Diego, CA 92121

                 

 

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EXHIBIT A

 

Job Description—General Counsel, Sr. VP

 

Reporting to the Chief Executive Officer:

 

Responsibilities

 

General Overview of Duties: The General Counsel, Sr. VP will be responsible for
monitoring and ensuring the Company’s full and proper compliance with all
applicable laws affecting the business, its operations and its personnel. The
General Counsel, SVP will be familiar with and help develop the Company’s
policies and procedures, and will be responsible for advising the Company on
full and proper enforcement of those policies and procedures. To fulfill these
responsibilities, the General Counsel, SVP must be intimately familiar with the
business and how it operates, and will also be responsible for the following:

 

Management of the Corporate Legal Department (1 person department)

 

  • Participate in key meetings and provide legal advice and counsel regarding
significant corporate decisions.

 

  • Establish corporate policies and procedures to ensure timely legal review of
all appropriate matters and to provide prompt response and practical resolutions
to legal issues.

 

  • Assist corporate teams to review and analyze potential business development
opportunities. Anticipate potential legal issues and advise as to desirable,
legally compliant strategy for accomplishing objectives.

 

  • Prepare and maintain proper documentation in connection with General
Counsel, SVP duties. Participate in developing, implementing and monitoring
document retention policies and procedures for the Company.

 

Risk and Crisis Avoidance/Management

 

  • Continuous assessment of potential issues and risks in the operation of the
business; develop plans and strategies for mitigation and contingencies; develop
policies and procedures, and conduct employee training, etc., to ensure proper
implementation and compliance.

 

Legal Services to Internal Clients

 

  • Counseling, negotiating, drafting and reviewing contracts, etc., for
Finance, Human Resources, Operations, Sales, Marketing, IT, Investor Relations,
Executives, Board of Directors, and Committees reporting to the Board as
required.

 

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  • Help monitor and manage the compliance with and enforcement of business
agreements, including financing, credit agreements and debt instruments.

 

  • Review all advertising, marketing and promotional material for legal
compliance, disclosure and potential risk.

 

  • Respond to inquiries from government agencies, business groups and consumers
regarding advertising and marketing practices.

 

  • Work with public relations team. Advise and assist public relations team and
review corporate communications, including press releases, media talking points
and internal communications to ensure legal compliance.

 

SEC Compliance and Corporate Governance

 

  • Monitor and advise Company on compliance with Sarbanes-Oxley and all other
applicable SEC and NASDAQ regulations.

 

Transactional Matters

 

  • Drafting and negotiating template agreements, custom agreements, and
negotiating contracts prepared by other parties; implementation and
administration of contracts; other transactional matters.

 

Intellectual Property Matters

 

  • Develop and oversee a decision-making process for committing resources to
prosecute patents, register copyrights and trademarks, etc.; manage and assist
IP counsel; implement strategic licensing of IP; maintain and defend IP; trade
secret, proprietary information and confidentiality/ non-disclosure protection;
etc.

 

Litigation

 

  • Interview, retain, manage, assist and negotiate/monitor fees for outside
counsel; act as a liaison between outside counsel and internal clients involved
in litigation; report to Executive Committee and Board of Directors as
necessary.

 

  • Work closely with customer facing departments, such as customer relations
and operations, to develop cooperative practice for responding to complaints and
resolve them efficiently.

 

  • And any other duties, which may be assigned from time to time

 

Qualifications

 

  • 10+ years of legal experience with in-house environment experience

 

  • Prior General Counsel experience with a publicly-held company

 

  • A member in good standing of the California Bar Collaborative team player;
adaptability/flexibility; professionalism, integrity and honesty; “can do”
attitude; excellent business judgment and awareness; well organized; attention
to detail; ability to prioritize and multi-task

 

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