Document:

Exhibit 10.8

 

EMPLOYMENT
AGREEMENT

This Employment Agreement dated as of May 3, 2004 (as
amended and otherwise modified, the “Agreement”) is entered into by and
between MD Beauty, Inc. (the “Company”), a Delaware corporation, and Leslie
Blodgett (the “Executive”).

RECITALS

WHEREAS, the operations of
the Company and its Affiliates are a complex matter requiring direction and
leadership in a variety of arenas, including financial, strategic planning,
regulatory, community relations and others;

WHEREAS, the Executive is
possessed of certain experience and expertise that qualify her to provide the
direction and leadership required by the Company and its Affiliates; and

WHEREAS, subject to the
terms and conditions hereinafter set forth, the Company therefore wishes to
employ the Executive as its President and Chief Executive Officer and the
Executive wishes to accept such employment.

AGREEMENT

NOW, THEREFORE, in
consideration of the foregoing premises and the mutual promises, terms,
provisions and conditions set forth in this Agreement, the parties hereby
agree:

        1.             Employment.  Subject to the terms and conditions set forth
in this Agreement, the Company hereby offers and the Executive hereby
accepts employment; provided that the Executive’s employment under this Agreement
shall not commence until the date on which the transactions contemplated under
the Agreement and Plan of Merger dated as of the date hereof (the “Merger
Agreement”) among STB
Beauty, Inc.(“Parent”), Company and certain other parties shall have been
consummated (the “Effective Date”).

        2.             Term.  Subject to earlier termination as hereafter
provided, the Executive’s employment hereunder shall be for a term commencing
on the Effective Date and ending on December 31, 2006; provide that to the
extent the Agreement shall not have been terminated on or before December 31,
2006 or the end of any extension term, Executive’s employment shall be
automatically extended for successive terms of one year each, unless either
party provides the other with written notice sixty (60) days prior to the end
of the original or any extension term that the Agreement is not to be extended.
 The term of this Agreement, as from time
to time extended or renewed, is hereafter referred to as “the term of this
Agreement” or “the term hereof.”

        3.             Capacity
and Performance.

(a)       During the term hereof, the Executive
shall serve the Company as its President and Chief Executive Officer.  In addition, and without further
compensation, the Executive shall serve as a director and/or officer of one or
more of the Company’s Affiliates if so elected or appointed from time to time.  During the term hereof, the Company shall 

 

 

maintain executive
offices for the Executive in San Francisco, California, and the Executive shall
not be required to relocate outside of the San Francisco area.

(b)       During the term hereof, the Executive
shall be employed by the Company on a full-time basis and shall perform such
duties and responsibilities on behalf of the Company and its Affiliates,
including serving as Chief Executive Officer of the Parent, as may be
designated from time to time by the Board of Directors of the Company (the “Board”)
or by its designees.

(c)       During the term hereof, the Executive
shall devote her full business time and her best efforts, business judgment,
skill and knowledge exclusively to the advancement of the business and
interests of the Company and its Affiliates and to the discharge of her duties
and responsibilities hereunder.  The
Executive shall not engage in any other business activity or serve in any
industry, trade, professional, governmental or academic position during the
term of this Agreement, except as may be expressly approved in advance by the
Board in writing; provided that Executive shall be entitled to (i) continue her
membership and current level of involvement in the Young Presidents
Organization, (ii) join one additional corporate board of an entity that is not
a competitor of the Company and devote a reasonable amount of time to
activities as a member of such board of directors and (iii) continue her
membership and current level of involvement in an advisory capacity with JH
Partners, LLC.

(d)       The Company agrees to propose to the
shareholders of the Company at each appropriate Annual Meeting of such
shareholders during the term hereof the election or reelection of the Executive
as a member of the Board, provided that the Executive is otherwise eligible for
such election; however, the failure of the shareholders to so elect or reelect
the Executive shall not constitute Good Reason for termination by the Executive
hereunder.

        4.             Compensation
and Benefits.  As compensation for
all services performed by the Executive under and during the term hereof and
subject to performance of the Executive’s duties and of the obligations of the
Executive to the Company and its Affiliates, pursuant to this Agreement or
otherwise:

(a)       Base Salary.  During the term hereof, the Company shall pay
the Executive a base salary at the rate of Four Hundred Thousand Dollars
($400,000.00) per annum, payable in accordance with the payroll practices of
the Company for its executives 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.”

(b)       Incentive and Bonus Compensation.  As additional compensation for services
hereunder, the Executive shall be eligible to earn a bonus for each Bonus Year
completed during the Term.  The amount of
any such bonus shall be determined in accordance with Attachment A.  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 

 

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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.

(c)       Options:  Executive shall receive options to purchase 5% of the
fully-diluted equity of STB Beauty, Inc.(“Parent”), 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.

(d)       Vacations and Sick Leave.  During the Term, Executive shall be entitled
to six (6) weeks of vacation per year and ten (10) sick days per year, to be
taken at such times and intervals as shall be determined by the Executive.  Executive shall be entitled to roll three (3)
weeks of vacation over to the next year, to the extent not previously taken. Vacation
and sick leave shall otherwise be governed by the policies of the Company with
respect to senior executives, as in effect from time to time.

(e)       Other Benefits.  During the term hereof and subject to any
contribution therefore generally required of executives of the Company, the
Executive shall be entitled to participate in any and all employee benefit
plans from time to time in effect for executives of the Company generally,
except to the extent such plans are in a category of benefit otherwise provided
to the Executive (e.g., severance pay).  Such participation shall be subject to the
terms of the applicable plan documents and generally applicable Company
policies.  The Company may alter, modify,
add to or delete its employee benefit plans (except for the Severance Amount as
set forth herein in Section 5(d)) at any time as it, in its sole judgment,
determines to be appropriate, without recourse by the Executive.

(f)        Business Expenses.  The Company shall pay or reimburse the
Executive for all reasonable business expenses incurred or paid by the
Executive in the performance of her duties and responsibilities hereunder, including
but not limited to, a car allowance, in an amount to be determined by the
Board, and expenses incurred in respect of wardrobe required for televisions
appearances made by Executive in connection with her duties on behalf of the
Company, subject to such reasonable substantiation and documentation as may be
specified by the Company from time to time.

        5.             Termination
of Employment and Severance Benefits. 
Notwithstanding the provisions of Section 2 hereof, the Executive’s
employment hereunder shall terminate prior to the expiration of the term under
the following circumstances:

(a)       Death.  In the event of the Executive’s death during
the term hereof, the Executive’s employment hereunder shall immediately and
automatically terminate.  In such event,
the Company shall pay to the Executive’s designated beneficiary or, if no
beneficiary has been designated by the Executive, to her estate, (i) the Base
Salary earned but not paid through the date of termination (ii) any bonus
compensation earned or awarded but unpaid on the date of termination, (iii) a
pro-rated portion of any bonus compensation Executive would have earned for the
year in which termination by death takes place, payable when the Company
generally pays bonus to employees, (iv) accrued vacation and 

 

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(v) unreimbursed expenses
(all of the foregoing, “Final Compensation”).  The Company shall have no further obligation
to the Executive hereunder.

(b)       Disability.

            (i)        The Company may terminate the Executive’s
employment hereunder, upon notice to the Executive, in the event that the
Executive becomes disabled during her employment hereunder through any illness,
injury, accident or condition of either a physical or psychological nature and,
as a result, is unable to perform substantially all of her
duties and responsibilities hereunder, with or without reasonable
accommodation, for one hundred and twenty (120) days during any period of three
hundred and sixty-five (365) consecutive calendar days.  In the event of such termination, the Company
shall have no further obligation to the Executive, other than for payment of
Final Compensation.

(ii)       The Board may designate another employee to
act in the Executive’s place during any period of the Executive’s
disability.  Notwithstanding any such
designation, the Executive shall continue to receive the Base Salary in
accordance with Section 4(a) and benefits in accordance with Section 4(e), to
the extent permitted by the then-current terms of the applicable benefit plans,
until the termination of her employment; provided that
such Base Salary shall be reduced by any disability income benefits Executive
receives under the Company’s disability income plan.

(iii)      While receiving disability income payments
under the Company’s disability income plan, the Executive shall continue to
participate in Company benefit plans in accordance with Section 4(e) and the
terms of such plans, until the termination of her employment.

(iv)      If any question shall arise as to whether
during any period the Executive is disabled through any illness, injury,
accident or condition of either a physical or psychological nature so as to be
unable to perform substantially all of her duties and responsibilities
hereunder, the Executive may, and at the request of the Company shall, submit
to a medical examination by a physician selected by the Company to whom the
Executive or her duly appointed guardian, if any, has no reasonable objection
to determine whether the Executive is so disabled.  If the Executive or her duly appointed
guardian reasonably objects to the physician selected by the Company, the
Executive or her duly appointed guardian and the Company shall mutually select
an independent physician.  The
determination by any physician selected under this section shall for the
purposes of this Agreement be conclusive of the issue In any event, if
Executive shall fail to submit to a medical examination under this section, the
Company’s determination of the issue shall be binding on the Executive.

(c)       By
the Company for Cause.  The Company
may terminate Executive’s employment under this Agreement for Cause at any time
upon notice to Executive setting forth in reasonable detail the nature of such
Cause.  The following, as determined by
the Board in its reasonable judgment, shall constitute Cause for termination:

 

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(i) commission of a felony or any crime involving
dishonesty or moral turpitude;

(ii) commission of any fraud, theft, embezzlement,
misappropriation of funds, material breach of fiduciary duty as an officer or
member of the Board or serious act of dishonesty;

(iii) failure to follow the reasonable instructions
of the Board (in its capacity as the Board), which failure does not cease
within 15 days after written notice specifying such failure in reasonable
detail is given to the Executive by the Board;

(iv) engaging in conduct likely to make the Company
or any of its Affiliates subject to criminal liabilities, other than those
arising from the Company’s normal business activities; or

(v) willful engagement in any other conduct that
involves a material breach of fiduciary obligation on the part of the Executive
as an officer or member of the Board, or that could reasonably be expected to
have a material adverse effect upon the business interests or reputation of the
Company or any of its Affiliates.

            Upon
the giving of notice of termination of Executive’s employment under this
Agreement for Cause, the Company shall have no further obligation or liability
to Executive, other than for Base Salary earned, accrued vacation and
unreimbursed expenses unpaid at the date of termination and COBRA.

(d)       By
the Company Other than for Cause. 
The Company may terminate Executive’s employment under this Agreement
other than for Cause at any time upon notice to Executive.  In the event of such termination, the Company
shall pay Executive accrued Base Salary through the date of termination and
severance in an amount equal to (i) 18 months of Executive’s then current base
salary plus (ii) 1.5 multiplied by the bonus Executive received for the most
recently completed Bonus Year of the Company (including, if applicable, a Bonus
Year completed prior to the date hereof) plus (iii) accrued vacation plus (iv)
unreimbursed expenses (all of the foregoing, the “Severance Amount”),
conditioned on compliance with the covenants described in paragraph 8.  Such severance will be paid in 18 equal
monthly installments commencing on the date of such termination.  To the extent permitted by the terms of the
applicable plans, subject to any applicable employee contribution, the Company
shall continue to contribute to the cost of participation by the Executive, her
spouse and her eligible dependents in the Company’s welfare plans for a period
of 18 months after termination and then, to the extent permitted by the
applicable insurer, shall be eligible for COBRA.

(e)       By
the Executive for Good Reason.  The
Executive may terminate Executive’s employment under this Agreement for Good
Reason at any time upon
thirty (30) days’ notice to the Company.  In the
event of such termination, the Company shall pay Executive the Severance Amount,
conditioned on compliance with the covenants described in paragraph 8.  Such severance will be paid in 18 equal
monthly installments 

 

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commencing on the date of such termination.  To the extent permitted by the terms of the
applicable plans, subject to any applicable employee contribution, the Company
shall continue to contribute to the cost of participation by the Executive, her
spouse and her eligible dependents in the Company’s welfare plans for a period
of 18 months after termination and then, to the extent permitted by the
applicable insurer, shall be eligible for COBRA. “Good Reason” defined as:

(i)  a
failure by the Company to continue the Executive as Chief Executive Officer of
the Company and Parent,

(ii) material diminution of nature or scope of the
Executive’s responsibilities, duties or authority,

(iii) material breach of the Agreement by the
Company,

(iv) requiring the
Executive to report to anyone other than the Board of Directors of the Parent,
or

(v) requiring the
executive to relocate outside of the San Francisco, California area.

 

(f)        By Executive.  Executive may terminate Executive’s
employment other than for Good Reason under this Agreement at any time upon
ninety (90) days’ notice to the Company. 
In the event of termination of Executive pursuant to this Section 5(f),
the Board may elect to waive or reduce the period of notice, and, if the Board
so elects, the Company will pay Executive the Base Salary for the notice period
(or for any remaining portion of the period) plus accrued vacation.  In the event of any termination pursuant to
this Section 5(f), Executive shall not be entitled to receive any Annual Bonus
after the provision of notice of such termination.

(g)       Post-Agreement Employment.  In the event the Executive remains in the
employ of the Company or any of its Affiliates following termination of this
Agreement, by the expiration of the term or otherwise, then such employment
shall be at will.

(h)       Mitigation.  The Executive shall not be required to
mitigate damages with respect to the termination of her employment under this
Agreement by seeking other employment or otherwise, and there shall be no
offset against amounts due to Executive under this Agreement on account of subsequent
employment.  Additionally, amounts owed
to the Executive under this Agreement shall not be offset by any claims the
Company may have against Executive, and the Company’s obligation to make the
payments provided for in this Agreement, and otherwise to perform its
obligations hereunder, shall not be affected by any other circumstances,
including, without limitation, any counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others.

        6.             Effect
of Termination.  The provisions of
this Section 6 shall apply to termination due to the expiration of the term
hereof, pursuant to Section 5 or otherwise.

 

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(a)       Payment by the Company of any Base Salary,
earned and pro rated bonuses, and contribution to the cost of participation of
welfare plans, that may be due the Executive under the applicable termination
provision of Section 5 shall constitute the entire obligation of the Company to
the Executive.

(b)       Except for medical and dental insurance
coverage continued pursuant to Section 5(b), 5(d) or 5(e), benefits shall
terminate pursuant to the terms of the applicable benefit plans based on the
date of termination of the Executive’s employment without regard to any
continuation of Base Salary or other payment to the Executive following such
date of termination.

(c)       Provisions of this Agreement shall
survive any termination if so provided herein or if necessary or desirable to
accomplish the purposes of other surviving provisions, including without
limitation the obligations of the Executive under Sections 7 and 8 hereof.  The obligation of the Company to make
payments to or on behalf of the Executive under Section 5(b), 5(d) or 5(e)
hereof is expressly conditioned upon the Executive’s continued full performance
of obligations under Sections 7 and 8 hereof. 
The Executive recognizes that, except as expressly provided in Section 5(a),
5(b), 5(d) or 5(e), no compensation is earned after termination of employment.

        7.             Confidential Information.

(a)       The Executive acknowledges that the
Company and its Affiliates continually develop Confidential Information, that
the Executive may develop Confidential Information for the Company or its
Affiliates and that the Executive may learn of Confidential Information during
the course of employment.  The Executive
will comply with the policies and procedures of the Company and its Affiliates
for protecting Confidential Information and shall not disclose to any Person or
use, other than as required by applicable law or for the proper performance of her
duties and responsibilities to the Company and its Affiliates, any Confidential
Information obtained by the Executive incident to her employment or other
association with the Company or any of its Affiliates.  The Executive understands that this
restriction shall continue to apply after her employment terminates, regardless
of the reason for such termination.

(b)       All documents, records, tapes and other
media of every kind and description relating to the business, present or
otherwise, of the Company or its Affiliates and any copies, in whole or in
part, thereof (the “Documents”), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company and its
Affiliates.  The Executive shall
safeguard all Documents and shall surrender to the Company at the time her
employment terminates, or at such earlier time or times as the Board or its
designee may specify, all Documents then in the Executive’s possession or
control.

(c)       For purposes of this Agreement, “Confidential
Information” means any and all information of the Company and its
Affiliates that is not generally known by others with whom they compete or do
business, or with whom any of them plans to compete or do business and any and
all information, publicly known in whole or in part or not, which, if disclosed
by the Company or its Affiliates would assist in competition against them.  

 

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Confidential Information
includes without limitation such information relating to (i) the development,
research, testing, manufacturing, marketing and financial activities of the
Company and its Affiliates, (ii) the Products, including the compositions and
formulations thereof, (iii) the costs, sources of supply, financial performance
and strategic plans of the Company and its Affiliates, (iv) the identity and
special needs of the customers of the Company and its Affiliates and (v) the
people and organizations with whom the Company and its Affiliates have business
relationships and those relationships. 
Confidential Information also includes any information that the Company
or any of its Affiliates have received, or may receive hereafter, belonging to
customers or others with any understanding, express or implied, that the
information would not be disclosed. 
After the termination of Executive’s employment with the Company, “Confidential
Information” shall not include any information that enters the public domain or
is publicly known or available other than as a result of disclosure by
Executive.

        8.             Restricted
Activities.  The Executive agrees
that some restrictions on her activities during and after her employment are
necessary to protect the goodwill, Confidential Information and other legitimate
interests of the Company and its Affiliates:

(a)       While the Executive is employed by the
Company and for an eighteen-month period commencing on the date her employment
actually terminates (or a twelve-month period if Executive terminates her
employment pursuant to Section 5(f) above within one year after a change in
control of the Company other than a change in control resulting from a public
offering of securities) (in the aggregate, the “Non-Competition Period”),
the Executive shall 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.  Specifically, but without limiting the
foregoing, the Executive agrees not to engage in any manner in any activity
that is directly or indirectly competitive with the business of the Company or
any of its Affiliates as conducted or under consideration at any time during
the Executive’s employment.  Restricted activity includes without
limitation accepting employment or a consulting position with any Person who
is, or at any time within twelve (12) months prior to termination of the
Executive’s employment has been, a customer of the Company or any of its
Affiliates.  For the purposes of this
Section 8, the business of the Company and its Affiliates shall include all
Products and the Executive’s undertaking shall encompass all items, products
and services that may be used in substitution for Products.  For avoidance of doubt, the Non-Competition
Period shall commence on the date Executive’s employment actually terminates
(not at the conclusion of the period during which the Severance Amount, if any,
is being paid to Executive).

(b)       The Executive agrees that, during her
employment with the Company, she 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 interfere with her
duties and obligations to the Company or any of its Affiliates.

(c)       The Executive further agrees that while she
is employed by the Company and during the Non-Competition Period, the Executive
will not hire or attempt to hire any employee of the Company or any of its
Affiliates, assist in such hiring by any Person, 

 

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encourage any such
employee to terminate his or her relationship with the Company or any of its
Affiliates, or solicit or encourage any customer or vendor of the Company or
any of its Affiliates to terminate or diminish its relationship with them, or,
in the case of a customer, to conduct with any Person any business or activity
which such customer conducts or could conduct with the Company or any of its
Affiliates.

        9.             Enforcement
of Covenants.  The Executive
acknowledges that she has carefully read and considered all the terms and
conditions of this Agreement, including the restraints imposed upon her
pursuant to Sections 7 and 8 hereof.  The
Executive agrees that said 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.  The Executive
further acknowledges that, were she to breach any of the covenants contained in
Sections 7 or 8 hereof, the damage to the Company would be irreparable.  The Executive therefore agrees 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 the Executive of any of said covenants, without having to post
bond.  The parties further agree that, in
the event that any provision of Section 7 or 8 hereof 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 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.

        10.          Conflicting
Agreements.  The Executive hereby
represents and warrants that the execution of this Agreement and the
performance of her obligations hereunder will not breach or be in conflict with
any other agreement to which the Executive is a party or is bound and that the
Executive is not now subject to any covenants against competition or similar
covenants or any court order or other legal obligation that would affect the
performance of her obligations hereunder. 
The Executive will not disclose to or use on behalf of the Company any
proprietary information of a third party without such party’s consent.

        11.          Indemnification.  The Company shall indemnify the Executive to
the extent provided in its then current By-Laws.  The Executive agrees to promptly notify the
Company of any actual or threatened claim arising out of or as a result of her
employment with the Company.

        12.          Definitions.  Words or phrases which are initially
capitalized or are within quotation marks shall have the meanings provided in
this Section 12 and as provided elsewhere herein.  For purposes of this Agreement, the following
definitions apply:

“Affiliates”
means all persons and entities directly or indirectly controlling, controlled
by or under common control with the Company, where control may be by either
management authority or equity interest.

“Bonus Year”
shall mean any fiscal year of the Company.

“Person”
means an individual, a corporation, a limited liability company, an
association, a partnership, an estate, a trust and any other entity or
organization, other than the Company or any of its Affiliates.

 

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“Products”
mean 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 the Executive’s employment.

        13.          Withholding.  All payments made by the Company under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by the Company under applicable law.

        14.          Assignment.  Neither the Company nor the Executive may
make any assignment of this Agreement or any interest herein, by operation of
law or otherwise, without the prior written consent of the other.  This Agreement shall inure to the benefit of
and be binding upon the Company and the Executive, their respective successors,
executors, administrators, heirs and permitted assigns.

        15.          Severability.  If any portion or provision of this Agreement
shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as
to which it is so declared illegal or unenforceable, shall not be affected
thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.

        16.          Waiver.  No waiver of any provision hereof shall be
effective unless made in writing and signed by the waiving party.  The failure of either party to require the
performance of any term or obligation of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

        17.          Notices.  Any and all notices, requests, demands and
other communications provided for by this Agreement shall be in writing and
shall be effective when delivered in person or deposited in the United States
mail, postage prepaid, registered or certified, and addressed to the Executive
at her last known address on the books of the Company or, in the case of the
Company, at its principal place of business, attention of the Chair of the
Board, or to such other address as either party may specify by notice to the
other actually received.

        18.          Entire
Agreement.  This Agreement
constitutes the entire agreement between the parties and supersedes all prior
communications, agreements and understandings, written or oral, with respect to
the terms and conditions of the Executive’s employment.

        19.          Amendment.  This Agreement may be amended or modified
only by a written instrument signed by the Executive and by an expressly
authorized representative of the Company.

        20.          Headings.  The headings and captions in this Agreement
are for convenience only and in no way define or describe the scope or content
of any provision of this Agreement.

        21.          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together
shall constitute one and the same instrument.

 

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        22.          Governing
Law.  This Agreement, the rights of
the parties and all claims, actions, causes of action, suits, litigation,
controversies, hearings, charges, complaints or proceedings arising in whole or
in part under or in connection herewith, will be governed by and construed in
accordance with the domestic substantive laws of State of Delaware, without
giving effect to any choice or conflict of law provision or rule that would
cause the application of the laws of any other jurisdiction.

        23.          Arbitration.  Except as otherwise expressly provided
herein, any dispute, controversy or claim between the parties arising under
this Agreement shall be settled by arbitration conducted in San Francisco,
California in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association then in force (the “Rules”)
and the laws of the State of Delaware; provided that,
notwithstanding anything to the contrary herein, this agreement to arbitrate
does not apply to any legal action by the Company seeking injunctive relief or
damages for breach or enforcement of Sections 7, 8 or 9 of this Agreement.  In the event that a party requests
arbitration, it shall serve upon the other party a written demand for arbitration
stating the substance of the controversy, dispute or claim, and the contention
of the party requesting arbitration.  If
possible, the arbitrator will be selected by mutual agreement.  If the parties do not select the arbitrator
by mutual agreement, the arbitrator shall be selected  in accordance with the Rules of the American
Arbitration Association. The decision of the arbitrator shall be in writing and
shall set forth the basis therefor.  The
parties shall abide by all awards rendered in the arbitration proceedings, and
all such awards may be enforced and executed upon in any court having
jurisdiction over the party against whom enforcement of such award is
sought.  The parties shall divide equally
the administrative charges, arbitrator’s fees and related expenses of the
arbitration, but each party shall pay its own legal fees incurred in connection
with such arbitration.

 

 

 

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IN WITNESS WHEREOF, this Agreement has been executed
as a sealed instrument by the Company, by its duly authorized representative,
and by the Executive, as of the date first above written.

	
  THE EXECUTIVE:

  	
   

  	
  THE COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MD BEAUTY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Leslie A. Blodgett

  	
   

  	
  By: 

  	
  /s/ Jaime Hutter

  
	
  Leslie A. Blodgett

  	
   

  	
   

  	
  Name: Jaime Hutter

  
	
   

  	
   

  	
   

  	
  Title: VP and CFO

  

 

 

ATTACHMENT A

 

Computation of Annual
Bonus

 

 

 

 

I.             FY
2004 (which shall include the pre-closing portion of 2004)

 

                Executive will
receive a bonus based upon the EBITDA (prior to all management bonuses) (“Adjusted
EBITDA”) targets of the Company as follows:

 

 

	
  Adjusted EBITDA

  	
   

  	
  Bonus

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  $27,000,000 or less

  	
   

  	
  $0

  
	
   

  	
   

  	
   

  
	
  Greater than
  $27,000,000 and less than or equal to $33,500,000

  	
   

  	
  (1- ((33,500,000 — Adjusted EBITDA)/6,500,000)

  multiplied by

  600,000

  
	
   

  	
   

  	
   

  
	
  Greater than $33,500,000
  and less than $38,000,000

  	
   

  	
  600,000

  plus

  ((1- ((38,000,000 — Adjusted EBITDA)/4,500,000)

  multiplied by

  200,000)

  
	
   

  	
   

  	
   

  
	
  $38,000,000 or more

  	
   

  	
  $800,000

  

 

Notwithstanding the formula above, Executive shall receive an Annual
Bonus equal to at least $200,000 for FY 2004.

 

II.            Subsequent Fiscal Years

                Executive will receive a bonus based on achievement
of EBITDA targets (as set by the Board in the annual budgeting process) in all
subsequent fiscal years, which bonus metric shall equal 150% of base salary for
achievement of budgeted EBITDA target and 200% of base salary for achievement
of stretch EBITDA target.   EBITDA
targets in subsequent fiscal years will be net of all management bonuses.EXHIBIT 10.9

[MD Beauty letterhead]

 

 

August 2, 2005

 

Leslie Blodgett

c/o MD Beauty, Inc.

425 Bush Street

San Francisco, CA 94108

 

Re:  Employment Agreement
dated May 3, 2004

 

Dear Leslie:

 

                Reference is made
to the Employment Agreement (the “Agreement”) dated as of May 3, 2004 between
you and MD Beauty, Inc. (the “Company”). 
This letter hereby confirms that notwithstanding the language at Section
3(c)(ii) of the Agreement, you may join up to two corporate boards (in
addition to the boards of directors of STB Beauty, Inc. and its subsidiaries)
of entities that are not competitors of the Company and you may devote a
reasonable amount of time to activities as a member of each such board of
directors.  Except as specifically set
forth in this letter, the terms and provisions of the Agreement shall remain in
full force and effect.

 

	
   

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MD Beauty, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Acknowledged and agreed:

 

 

	
  /s/ Leslie A. Blodgett

  	
   

  
	
  Leslie A.
  Blodgett

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