Document:

EXHIBIT
10.10

SECOND AMENDMENT TO

EMPLOYMENT AGREEMENT

 

THIS SECOND AMENDMENT TO EMPLOYMENT
AGREEMENT (this “Amendment”) is entered into effective as of May 31,
2006, by and between MD Beauty, Inc., a Delaware corporation (the “Company”),
and Leslie Blodgett (“Executive”).

WHEREAS,
the Company and Executive desire to amend that certain Employment Agreement
dated as of May 3, 2004, between the Company and Executive (as amended August
2, 2005, the “Original Agreement”) on the terms and conditions set forth
herein.

NOW,
THEREFORE, in consideration of the various covenants and agreements hereinafter
set forth, the parties hereto agree as follows:

1.             Amendment to Section 3(a).  The first sentence of Section 3(a) of the
Original Agreement is hereby amended in its entirety to read as follows:

“During the term hereof, the Executive shall serve the Company as its
Chief Executive Officer.”

2.             Amendment to Section 4(a).  Section 4(a) of the Original Agreement is
hereby amended in its entirety to read as follows:

“(a)         Base Salary.  Beginning January 1, 2006 and continuing for
the term hereof, the Company shall pay the Executive a base salary at the rate
of Six Hundred Thousand Dollars ($600,000.00) per annum, payable in accordance
with the payroll practices of the Company for its executives (except for a
lump-sum payment due with respect to the retroactive application of such salary
to January 1, 2006) and subject to annual cost of living increases, as
determined by the Board, in its sole discretion.  Such base salary, as from time to time
adjusted, is hereafter referred to as the ‘Base Salary.’”

3.             Amendment to Section 4(b).  Section 4(b) of the Original Agreement is
hereby amended in its entirety to read as follows:

“(b)         Incentive and
Bonus Compensation.  As additional compensation
for services hereunder, the Executive shall be eligible to participate in the
Company’s annual bonus plan at the 100% target level.  Any bonus payable under this Section 4(b) is
referred to herein as an “Annual Bonus.” 
The Annual Bonus, if any, due to Executive for any Bonus Year shall be
paid to Executive no later than the date which is forty-five (45) days after
the release of the audited financial statements of the Company for such Bonus
Year.”

4.             Amendment to Section 4(c).  Section 4(b) of the Original Agreement is
hereby amended in its entirety to read as follows:

“(c)         Options:  Executive shall receive options to purchase 5% of the
fully-diluted equity of STB Beauty, Inc.(“Parent”) as of the Effective Date,
the parent company of the Company (out of a management equity pool equal to 15%
of the fully-diluted equity of Parent), two-thirds of
which will be time-vested and one-third of which
will be performance-based.  The exercise
price of the options will be equal to the value of shares of Parent issued in
connection with the transactions contemplated by the Merger Agreement dated as
of the date hereof.”

5.             No Other Amendments.  Except as expressly provided for in this
Amendment, no other term or provision of the Original Agreement is amended or
modified in any respect.

 

(Signature
Page Follows)

 

 

IN WITNESS WHEREOF, the
parties have executed this Amendment as of the date first set forth above.

 

	
   

  	
   

  	
  MD BEAUTY, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Myles McCormick

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Myles McCormick

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CFO/COO

  
						

 

 

 

	
   

  	
   

  	
  /s/ Leslie A. Blodgett

  
	
   

  	
   

  	
  Leslie Blodgett

  

 

2Exhibit
10.11

 

	
   

  	
   

  	
  BARE
  ESCENTUALS

  San
  Francisco

  
	
   

  	
   

  	
  71
  Stevenson Street, 22nd Floor

  
	
   

  	
   

  	
  San
  Francisco, CA 94105

  
	
   

  	
   

  	
  TEL
  415) 489.5000 FAX 415) 489.5999

  
	
   

  	
   

  	
  www.BareEscentuals.com

  
	
   

  	
   

  	
   

  

 

 

April 3, 2006

 

 

 

Diane Miles

2776 Union St., Apt. #3

San Francisco, CA  94123

 

 

Dear Diane,

 

On behalf of Bare Escentuals, I am pleased to
extend this revised offer of full-time employment to you as President,
reporting to me.  Your areas of
responsibilities will cover Retail, Sales & Marketing, Direct Response,
Brand Awareness, Human Resources, Creative, Product Development and Strategic
Planning.  This letter supersedes our
letters dated 3/22/06 and 3/31/06.  Our
offer is contingent upon satisfactory completion of background screening and
receipt of satisfactory references.

 

SALARY

 

•                  Your annualized
salary will be $500,000.00 and will be
compensated at the rate of $19,230.77 on a
bi-weekly basis.

 

•                  You will also
receive a one-time sign-on bonus in the amount of $100,000 (less the customary
taxes) to be paid upon the commencement of your employment.

 

BONUS

•                  You will
participate in our bonus plan with an annual target bonus of 70% of your base
salary ($350,000); the actual bonus payment is
based upon Company performance and your individual performance and
accomplishments.  We will guarantee you a
bonus of a minimum of 70% of your
base compensation (less the customary taxes) earned in the current year 2006.

•                  Bonuses are
paid once a year (after the close of the fiscal year).  Eligibility is also dependent on active
employment at the time of payout.

STOCK
OPTIONS

•                  Once you
commence employment with Bare Escentuals, we will receive 400,000 stock options
at the fair market value. All options have a five year vesting schedule.

 

1

 

BENEFITS

•                  Bare Escentuals
offers comprehensive medical, dental and vision coverage. The majority of the
cost of this coverage for employees is borne by the Company. Coverage begins on
the first day of the month following 30 days of employment.

•                  We also provide
Company paid basic life insurance of one times your base salary, and short and
long term disability insurance. In addition, we offer Voluntary Supplemental
Life/AD&D Insurance and a Deferred Compensation Plan.

•                  You will receive
22 days of Paid Time Off (PTO) each year, in addition to the eight (8) observed
federal holidays. PTO days may be used for vacation, personal time, illness or
time of to care of family.

OTHER
TERMS

•                  You will
receive twelve (12) months of base salary severance pay should your employment
end for any reason other than termination by the Company for “cause”. The term “cause”
shall mean that the Board of Directors of the Company has determined, in its
reasonable judgment, that any one or more the following has occurred:

•                  the employee
shall have been convicted of, or shall have pleaded guilty or nolo contendere
to, a felony;

•                  the employee
shall have breached any non-competition agreement between the employee and the
Company or its affiliates; or

•                  employee shall
have openly disregarded his or her responsibilities to the Company and/or its
affiliates and shall have refused to devote substantial time and energy to the
business and affairs of the Company and/or its affiliates (other than due to
permanent disability or temporary disability which, in the reasonable judgment
of the Board of Directors, causes the employee to be incapable of devoting such
time and energy) within 30 days after written notification by the Board of
Directors that, in their good faith judgment, the employee has consistently
failed to do so.

•                  Additionally,
in the event that you are terminated without cause, prior to twelve (12) months
from the date of commencement of your employment, you will receive 20% in vested
stock options from the original grant.

•                  Finally, in the
event that you are terminated without cause, you will be eligible to receive a
pro-rate bonus. The amount will be the product of your actual earnings for the
year multiplied by the bonus percentage you would have earned had you not been
terminated. The bonus will be calculated and payable at the time governed by
the Corporate Bonus Plan.

 

2

 

RESTRICTED ACTIVITIES:

 

•                  You Agree that
some restrictions on your activities during and after your employment are necessary
to protect the goodwill, confidential information and other legitimate
interests of the Company and its affiliates:

 

While you are employed by
the Company and for a twelve-month period commencing on the date your
employment actually terminates (in the aggregate, the “Non-Competition
Period”), you will not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, co-venturer or otherwise, compete with
the Company or any of its affiliates within the United States by engaging in
the cosmetics, skin care, hair care, toiletries or fragrance business or other
business in which the Company is engaged or preparing to become engaged (and in
which you have been involved) within twelve-months prior to your termination of
employment.

 

For the purposes of this
paragraph, the business of the Company and its affiliates shall include all
products planned, researched, developed, tested, manufactured, sold, licensed,
leased or otherwise distributed or put into use by the Company or any of its
affiliates, together with all services provided by the Company or any of its
affiliates, during your employment and shall encompass all items, products and
services that may be used in substitution for these products.  For avoidance of doubt, the Non-Competition
Period shall commence on the date your employment actually terminates (not at
the conclusion of the period during which severance, if any, is being paid to
you).

 

You agree that, during your
employment with the Company, you will not undertake any outside activity,
whether or not competitive with the business of the Company or its affiliates,
that could give rise to a conflict of interest or otherwise with your duties
and obligations to the Company or any of its affiliates.

 

•                  You acknowledge
that you have carefully read and considered all the terms and conditions of
this letter agreement, including the restraints imposed upon you pursuant to
the paragraphs under the heading “Restricted Activities.” You agree that such
restraints are necessary for the reasonable and proper protection of the
Company and its affiliates and that each and every one of the restraints is
reasonable in respect to subject matter, length of time and geographic area.
You further acknowledge that, were you to breach any of these covenants, the
damage to the Company would be irreparable. You therefore agree that the
Company, in addition to any other remedies available to it, shall be entitled
to preliminary and permanent injunctive relief against any breach or threatened
breach by you of any of  such covenants,
without having to post bond. The parties further agree that, in the event that
any provision set forth in the paragraphs under the heading “Restricted
Activities” shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its being extended over too great a time, too large
a 

 

 

3

 

                        geographic area
or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.

 

EMPLOYMENT AT WILL: Your
employment with Bare Escentuals is “at will,” which means that either you or
Bare Escentuals has the right to terminate this employment arrangement at any
time, with or without notice, and with or without cause. This policy of “at
will” employment is the sole and entire agreement between you and Bare
Escentuals as to the duration of employment and the circumstance under which
employment may be terminated.

 

CONDITIONS OF EMPLOYMENT: As part of the
Company’s employment offer process, a completed employment application and
background check is required for all new employees.

 

Federal Immigration laws require that we
verify the right of all new employees to work in the U.S. Therefore, we ask
that you bring documents to verify your eligibility to work in the United
States on your start date (these documents are typically a passport, or your
right to work document/birth certificate along with a picture id (such as a
drivers license). If you will not be able to provide documents by your start
date, please contact me at 415-489-5511 prior to your scheduled start date.

 

EMPLOYMENT TERMS AND CONDITIONS: With the
exception of employment at will, terms and conditions of employment with the
Company may be modified at the sole discretion of the Company with or without
cause or notice at any time. No implied contract concerning any employment-related
decision or term or condition of employment can be established by any other
statement, conduct, policy or practice. Examples of the types of terms and
conditions of employment that are within the sole discretion of the Company
include, but are not limited to, the following: promotions; demotions;
compensation; benefits; work assignments; job duties and responsibilities; work
hours and schedules; or any other terms and conditions as determined by the
Company.

 

ACKNOWLEDGEMENT: This offer of
employment will expire seven days from the date of this letter. If you wish to
accept the offer, please sign in the place provided below and fax the signed
letter to me at 415-358-4189. Two (2) copies of this document are provided;
please return one executed copy to me and retain the second copy for your
personal records.

 

We are committed to hiring you as soon as
possible and understand due to your existing non-compete agreement you may not
be able to commence employment with us for up to six months.

 

 

4

 

Diane, we make this offer of employment with
great enthusiasm and with the firm belief that this will be a mutually
beneficial relationship. We greatly look forward to having you join our Company
and become a member of our team. Should you have any questions about starting
with the Company, Please do not hesitate to contact me.

 

 

	
  Very truly yours,

  	
   

  	
   

  
	
   

   

  	
   

  	
   

  
	
  /s/ Leslie A. Blodgett

  	
   

  	
   

  
	
  Leslie A. Blodgett

  	
   

  	
   

  
	
  President & Chief
  Executive Officer

  	
   

  	
   

  
	
  Bare Escentuals

  	
   

  	
   

  
	
  71 Stevenson Street, 22nd
  Floor

  	
   

  	
   

  
	
  San Francisco, CA 94105

  	
   

  	
   

  
	
  415-489-5511

  	
   

  	
   

  

 

 

ACKNOWLEDGMENT:
I accept the terms and conditions of employment as outlined above:

 

	
  /s/ Diane M. Miles

  	
   

  	
  Date: 

  	
  4/5/06

  	
   

  
	
  Diane Miles

  	
   

  	
   

  	
   

  	
   

  
	
  8th May 2006

  	
   

  	
   

  	
   

  	
   

  
	
  Start Date

  	
   

  	
   

  	
   

  	
   

  

 

5

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