Employment Agreement Of Curtis D. Brown

Exhibit 10.2


EMPLOYMENT AGREEMENT


THIS AGREEMENT is made this 14th day of January, 1999, by and between SkyMall, Inc., a Nevada corporation ("Employer"), and Curtis D. Brown ("Employee"):


RECITALS


A. Employer wishes to retain the services of Employee in order to utilize Employee's skills, talents and abilities;


B. Employee wishes to be employed by Employer as Chief Technology Officer of SkyMall.com, a wholly-owned subsidiary of Employer;


C. Employer does not wish to receive or utilize in any manner any trade secrets or other confidential or proprietary information of another company that Employee may have had access to by virtue of his prior employment;


D. Employee understands that he must not provide Employer with any trade secrets or other confidential or proprietary information of another company that Employee may have had access to by virtue of his prior employment; and


E. Employer and Employee wish to memorialize the terms of their agreement.


AGREEMENT


In consideration of Employer's employment of Employee, the compensation to be paid to Employee, and the mutual covenants and promises contained herein, the parties agree as follows:


1. EMPLOYMENT. Employer shall employ Employee as Chief Technology Officer of SkyMall.com, and Employee shall accept such employment and agrees to perform his duties and responsibilities in accordance with the terms and conditions herein.


2. TERM. The term of the employment of Employee by Employer shall be for a period of three years, commencing on February 16, 1999, and ending on February 16, 2002, unless sooner terminated in accordance with paragraph 14 of this Agreement. The employment of Employee may be renewed by a written agreement signed by Employee and Employer specifically renewing Employee's employment and specifying a renewal term. Neither the Employee nor Employer will have any obligation to renew the employment.


3. EMPLOYEE'S OBLIGATIONS AND DUTIES. During the term of his employment, and except during vacation periods and reasonable periods of absence due to sickness, personal injury or other approved leave of absence, Employee shall devote his full time and efforts during normal business hours to the business


affairs of Employer. Employee shall perform and discharge in a diligent and professional manner such duties and responsibilities as may be prescribed from time to time by Employer. Notwithstanding the foregoing, Employee shall report only to the Chief Information Officer of Employer or, in the event the position of President of SkyMall.com is created, to the person appointed to such position. Employee agrees to adhere to all of Employer's rules, policies, and procedures as may be in effect from time to time, including but not limited to Employer's policy requiring pre-employment and routine random drug screening, and any policies contained in Employer's employee guidebooks. Employer may amend, revise, or discontinue any of its rules, policies, and procedures as Employer deems necessary or desirable. The terms of Employer's rules, policies, procedures and employee guidebooks do not create any contractual rights in favor of Employee. Employer has provided to Employee copies of the Employer's employee guidebooks that are in effect as of the date hereof.


4. ANNUAL BASE SALARY. During the term of Employee's employment under this Agreement, Employer shall pay Employee an annual base salary of a minimum of $250,000.00 (said amount, together with any increases thereto as shall be determined at least annually within one week of the performance reviews contemplated by paragraph 13 hereof, being hereinafter referred to as "Salary"). Any Salary paid pursuant to this paragraph shall accrue and be payable in accordance with the payroll practices of Employer as may be in effect from time to time.


5. SIGNING BONUS. In consideration for his employment, Employee shall be paid a one-time signing bonus in the amount of $100,000.00 (absent applicable taxes and withholding), which shall be distributed to Employee as follows: one-quarter of said signing bonus ($25,000.00, absent applicable taxes and withholding) shall be paid to Employee on February 16, 1999; one-half of said signing bonus ($50,000.00, absent applicable taxes and withholding) shall be paid to Employee on July 1, 1999; and one-quarter of said signing bonus ($25,000.00, absent applicable taxes and withholding) shall be paid to Employee on October 1, 1999. In the event Employee is not still employed by Employer through and until July 1, 1999, Employee is obligated and agrees to repay to Employer the one-quarter of the signing bonus ($25,000.00, absent applicable taxes and withholding), that Employee received on February 16, 1999.


6. INCENTIVE BONUS. During the term of Employee's employment under this Agreement, Employee will be eligible to participate in Employer's incentive compensation plan (a current copy of which has been provided to Employee) that will allow Employee to receive, subject to Board approval, (i) a cash bonus of up to seventy-five percent (75%) of his Salary (the "Cash Bonus") based on the financial performance of Employer and other criteria as may be in good faith agreed to and determined by the Board of Directors of Employer and Employee from time to time; and (ii) additional awards of stock options based on the formula provided in the above- referenced incentive compensation plan.


7. STOCK OPTIONS. Subject to approval by the Board of Directors of Employer (which approval Employer expects to receive), Employee shall be eligible to receive, pursuant to Employer's 1994 Stock Option Plan, as amended on April 20, 1998 (a copy of which has been provided to Employee), options to purchase 75,000 shares of common stock par value $.001 per share ("Common Stock") at the market price of such Common Stock on the date of execution of this Agreement. One-third of such options shall be immediately vested, and the


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remaining two-thirds shall vest as follows: one-third on the first anniversary of this agreement and one-third on the second anniversary of this Agreement. The options, shall be covered by a separate written option agreement between Employer and Employee, containing customary terms and provisions, including without limitation, full vesting upon a sale or change of control of Employer or SkyMall.com, which option agreement shall be authorized by the Board of Directors and delivered to Employee for execution by no later than ten days after the date of this Agreement.


8. PERSONAL PAID TIME OFF. Employee shall be entitled to 15 personal paid time off days per year (accrued at the rate of 4.615 hours per pay period). Any unused days shall be forfeited, and no payment shall be made in lieu of taking time off. Employer offers paid holidays to employees on a schedule adopted each year.


9. 401(K). After 90 days of employment, Employee shall be eligible to participate in Employer's 401(k) Plan that is currently offered through Fidelity Investments. Employer shall match fifty percent (50%) of Employee's contribution to the 401(k) Plan (up to 6% of Employee's Salary) in accordance with the terms of the 401(k) Plan documents.


10. EMPLOYEE BENEFITS. During the term of Employee's employment under this Agreement, Employee shall be eligible for medical and dental insurance (beginning on the first day of the month after one full month of employment). In the interim period during which Employee shall not be eligible for such medical and dental insurance, the Employer will compensate Employee for actual COBRA expenses up through the effective date of enrollment under the Employer's programs. Employer shall also provide to Employee short and long-term disability insurance and life insurance, all in accordance with the standard benefits policies and procedures applicable to employees of Employer during the term of this Agreement.


11. EXPENSES. During the term of Employee's employment under this Agreement, Employer shall reimburse Employee for all reasonable travel and other expenses incurred by Employee in connection with the performance by Employee of his duties and responsibilities hereunder, subject to Employee's submission of receipts for the expenses, and in accordance with Employer's standard policies as may be in effect from time to time.


12. WITHHOLDING OF TAXES. Employer may withhold from any compensation or benefits payable to Employee under this Agreement all federal, state and local taxes as may be required to be withheld by law, regulation or ruling.


13. PERFORMANCE REVIEWS. Employer shall provide Employee with annual performance reviews in a manner deemed reasonable by Employer in its sole discretion.


14. TERMINATION. Subject to the express requirements of clauses (a) and (b) below, Employee's employment is at will and may be terminated at any time, by either party, with or without cause, by providing written notice to the other.


A. BY EMPLOYEE. If Employee's employment is terminated by Employee for any reason, or for no reason, Employer shall have no further obligation or liability other than: (i) to provide Employee his pro-rated Salary through the


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last date Employee performs work for Employer; and (ii) to provide Employee continuing benefits as required under COBRA or other applicable law.


B. BY EMPLOYER. If Employee's employment is terminated by Employer for any reason other than Good Cause (as defined below), then Employer shall continue to pay to Employee the Salary each year through February 16, 2002. If Employee's employment is terminated by Employer for Good Cause, then Employer shall have no further obligation or liability other than: (a) to provide Employee his pro-rated Salary through the last date Employee performs work for Employer; and (b) to provide Employee continuing benefits as required under COBRA or other applicable law. Anything in the preceding sentences to the contrary notwithstanding, (i) Employer must first give Employee reasonable notice and an opportunity to meet with the President of Employer to discuss such termination if Employee is to be terminated for any reason other than Good Cause; and (ii) Employer must first give Employee written notice that Employee is being terminated for Good Cause, specifying in writing in reasonable detail the basis for such termination and such basis in fact constituting Good Cause.


"GoodCause" shall mean the occurrence of any of the following circumstances: (i) Employee becomes unable to perform the duties and essential functions of his job due to mental or physical disability for a period of more than 13 weeks; (ii) Employee refuses or neglects to perform duties reasonably assigned to him, provided that Employer first gives Employee written notice and such refusal or neglect by Employee continues for a period of five days after such notice; (iii) Employee fails to devote his full working time to Employer, provided that Employee is first given an opportunity to cure; (iv) Employee commits any act of dishonesty or disloyalty that is detrimental in a material respect to the Employer; (v) Employee dies; or (vi) Employee breaches any of the terms of this Agreement, including but not limited to paragraphs 3, 15, 16 and 17 hereof, and such breach has or is reasonably likely to have a material adverse effect on Employer.


15. CONFIDENTIALITY.


A. CONFIDENTIAL MATERIAL. In the course of Employee's employment by Employer, Employee will be given access to and become acquainted with trade secrets and various other proprietary or confidential technical and commercial information, including, but not limited to, the following: (i) business strategies, pricing, marketing and cost data; (ii) technical information regarding Employer's products and services; (iii) confidential customer information; (iv) customer and supplier lists; (v) contents of contracts and ...