OMNITURE, INC. CHANGE OF CONTROL AGREEMENT
Exhibit 10.12
This Change of Control Agreement (the “Agreement”) is made and entered into by and between
Xxxxxx X. Xxxxx (the “Employee”) and Omniture, Inc. (the “Company”), effective as of June 7, 2006
(the “Effective Date”).
RECITALS
1. It is expected that the Company from time to time will consider the possibility of an
acquisition by another company or other change of control. The Board of Directors of the Company
(the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause
the Employee to consider alternative employment opportunities. The Board has determined that it is
in the best interests of the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined herein) of the Company.
2. The Board believes that it is in the best interests of the Company and its stockholders to
provide the Employee with an incentive to continue his or her employment and to motivate the
Employee to maximize the value of the Company upon a Change of Control for the benefit of its
stockholders.
3. The Board believes that it is imperative to provide the Employee with certain benefits upon
a Change of Control and severance benefits upon the Employee’s termination of employment following
a Change of Control. These benefits will provide the Employee with enhanced financial security and
incentive and encouragement to remain with the Company notwithstanding the possibility of a Change
of Control.
4. Certain capitalized terms used in the Agreement are defined in Section 7 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that all of the
obligations of the parties hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law, except as may
otherwise be specifically provided under the terms of any written formal employment agreement or
offer letter between the Company and the Employee (an “Employment Agreement”). If the Employee’s
employment terminates for any reason, including (without limitation) any termination
prior to a Change of Control, the Employee shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement or under his or her
Employment Agreement, or as may otherwise be available in accordance with the Company’s established
employee plans.
3. Severance Benefits.
(a) Involuntary Termination Other than for Cause, Voluntary Termination for Good Reason or
Death or Disability During the Change of Control Period. If within the period commencing three
months prior to a Change of Control and ending on the later of (A) twelve (12) months following a
Change of Control, or (B) one month following the latest of the originally scheduled one-year,
two-year or four-year cliff vesting date on any of Employee’s Company stock options held by
Employee immediately prior to a Change of Control (the “Change of Control Period”), (i) the
Employee terminates his or her employment with the Company (or any parent or subsidiary of the
Company) for “Good Reason” (as defined herein) or (ii) the Company (or any parent or subsidiary of
the Company) terminates the Employee’s employment for other than “Cause” (as defined herein), or
(iii) the Employee dies or terminates employment due to becoming Disabled (as defined herein) and
the Employee, except in the case of death, signs and does not revoke a standard release of claims
with the Company in a form acceptable to the Company (the “Release”), then the Employee shall
receive the following severance from the Company:
(i) Severance Payment. The Employee shall be entitled to receive a lump-sum severance
payment (less applicable withholding taxes) equal to two hundred percent of the Employee’s annual
base salary (as in effect immediately prior to (A) the Change of Control, or (B) the Employee’s
termination, whichever is greater) plus two hundred percent of the Employee’s target bonus for the
fiscal year in which the Change of Control or the Employee’s termination occurs, whichever is
greater.
(ii) Equity Compensation Acceleration. One hundred percent (100%) of the Employee’s
outstanding stock options, stock appreciation rights, restricted stock units and other Company
equity compensation awards (the “Equity Compensation Awards”) shall immediately vest and became
exercisable. Any Company stock options and stock appreciation rights shall thereafter remain
exercisable following the Employee’s employment termination for the period prescribed in the
respective option and stock appreciation right agreements.
(iii) Continued Employee Benefits. Company-paid health, dental, vision, and life
insurance coverage at the same level of coverage as was provided to such Employee immediately prior
to the Change of Control and at the same ratio of Company premium payment to Employee premium
payment as was in effect immediately prior to the Change of Control (the “Company-Paid Coverage”).
If such coverage included the Employee’s dependents immediately prior to the Change of Control,
such dependents shall also be covered at Company expense. Company-Paid Coverage shall continue
until the earlier of (i) twenty-four months from the date of termination, or (ii) the date upon
which the Employee and his dependents become covered under another employer’s group health, dental,
vision, long-term disability or life insurance plans that provide Employee and his dependents with
comparable benefits and levels of coverage. For purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of
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the “qualifying event” for Employee and his or her dependents shall be the date upon which the
Company-Paid Coverage terminates.
(b) Timing of Severance Payments. The severance payment to which Employee is entitled
shall be paid by the Company to Employee in cash and in full, not later than ten (10) calendar days
after the effective date of the Release. If the Employee should die before all amounts have been
paid, such unpaid amounts shall be paid in a lump-sum payment (less any withholding taxes) to the
Employee’s designated beneficiary, if living, or otherwise to the personal representative of the
Employee’s estate.
(c) Voluntary Resignation; Termination for Cause. If the Employee’s employment with
the Company terminates (i) voluntarily by the Employee other than for Good Reason, or (ii) for
Cause by the Company, then the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under the Company’s then existing
severance and benefits plans and practices or pursuant to other written agreements with the
Company.
(d) Termination Outside of Change of Control Period. In the event the Employee’s
employment is terminated for any reason, either prior to the Change of Control Period or after the
Change of Control Period, then the Employee shall be entitled to receive severance and any other
benefits only as may then be established under the Company’s existing written severance and
benefits plans and practices or pursuant to other written agreements with the Company.
(e) Internal Revenue Code Section 409A. Notwithstanding any other provision of this
Agreement, if the Employee is a “key employee” under Code Section 409A and a delay in making any
payment or providing any benefit under this Plan is required by Code Section 409A, such payments
shall not be made until the end of six (6) months following the date of the Employee’s separation
from service as required by Code Section 409A.
4. Coordination with Existing Agreements.
(a) Equity Compensation. With respect to equity compensation awards granted to
Employee, those shall accelerate vesting 100% upon a “change of control,” as such term is defined
in the employment agreement by and between Employee and the Company, amended and restated as of
even date herewith (the “Employment Agreement”) and shall otherwise remain governed pursuant to the
applicable terms of the Employment Agreement.
(b) Other Benefits. Except as provided in Section 4(a) hereof, in the event of a
termination of Employee’s employment within the Change of Control Period, and with respect to the
280G excise tax gross-up provisions of Section 6 hereof, in the event any such tax is triggered,
including outside of termination of Employee’s employment within the Change of Control Period, the
provisions of this Agreement are intended to enhance, but not be additive, to any pre-existing
written agreements between the Company and Employee. For example, if Employee’s Employment
Agreement provides for a specified cash payment upon a termination without cause, and severance
payments are triggered under both the Employment Agreement and this Agreement, Employee shall be
entitled to the larger cash payment provided in either agreement but shall not be entitled to the
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sum of the two cash payments. The same principle applies to the other individual elements of
severance provided herein (other than equity compensation award vesting), and also applies to the
provisions relating to a gross-up for Code Section 280G excise taxes, including outside of
termination of Executive’s employment within the Change of Control Period. Except as otherwise
provided in Section 4(a) hereof and in this section 4(b), the benefits provided to Employee under
this Agreement are intended to be and are exclusive and in lieu of any other rights or remedies to
which the Employee or the Company may otherwise be entitled, whether at law, tort or contract, in
equity, and including pursuant to the Company’s other severance plans, arrangements or practices.
5. Conditional Nature of Severance Payments and Benefits.
(a) Noncompete. Employee acknowledges that the nature of the Company’s business is
such that if Employee were to become employed by, or substantially involved in, the business of a
competitor of the Company during the twenty-four months following the termination of Employee’s
employment with the Company, it would be very difficult for Employee not to rely on or use the
Company’s trade secrets and confidential information. Thus, to avoid the inevitable disclosure of
the Company’s trade secrets and confidential information, Employee agrees and acknowledges that
Employee’s right to receive the severance payments and benefits set forth in Section 3(a) (to the
extent Employee is otherwise entitled to such payments) shall be conditioned upon Employee not
directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor,
principal, partner, stockholder, corporate officer, director or otherwise), nor having any
ownership interest in or participating in the financing, operation, management or control of, any
person, firm, corporation or business in Competition (as defined herein) with
Company. Notwithstanding the foregoing, Employee may, without violating this Section 5, own, as a
passive investment, shares of capital stock of a corporation or other entity that engages in
Competition where the number of shares of such corporation’s capital stock that are owned by
Employee represent less than three percent of the total number of shares of such entity’s capital
stock outstanding. For purposes of this Agreement, Competition refers to activities that are
competitive to Omniture as of the date of termination of Employee’s employment with the Company,
including, but not limited to, marketing, selling, hosting, delivering, or distributing web
analytics products or other online business optimization software or services, or engaging in
online marketing services similar to or competitive with products or services offered by the
Company as of the date of termination of Employee’s employment with the Company.
(b) Non-Solicitation. Until the date twenty-four months after the termination of
Employee’s employment with the Company for any reason, Employee agrees and acknowledges that
Employee’s right to receive the severance payments and benefits set forth in Section 3(a) (to the
extent Employee is otherwise entitled to such payments) shall be conditioned upon Employee neither
directly nor indirectly soliciting, inducing, recruiting or encouraging an employee to leave his or
her employment either for Employee or for any other entity or person with which or whom Employee
has a business relationship.
(c) Understanding of Covenants. Employee represents that he (i) is familiar with the
foregoing covenants not to compete and not to solicit, and (ii) is fully aware of his obligations
hereunder, including, without limitation, the reasonableness of the length of time, scope and
geographic coverage of these covenants. The Company acknowledges and agrees that Employee’s
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covenants not to compete and not to solicit under Sections 5(a) and 5(b) above are conditioned
upon Employee’s receipt of the severance payments and benefits set forth in Section 3(a) above.
(d) Remedy for Breach. Upon any breach of this section by Employee, all severance
payments and benefits pursuant to this Agreement shall immediately cease and any stock options or
stock appreciation rights then held by Employee shall immediately terminate and be without further
force and effect, Employee shall be required to reimburse the Company any lump-sum severance
payment previously paid under Section 3(a)(i) and the value of any welfare plan reimbursements
previously paid under Section 3(a)(iii) hereunder and that shall be the sole remedy available to
the Company for such breach.
6. Golden Parachute Excise Tax.
(a) Parachute Payments of Less than 3.6 x Base Amount. In the event that the benefits
provided for in this agreement or otherwise payable to Employee, including vesting acceleration
upon a change of control pursuant to Employee’s employment agreement with the Company (a)
constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), (b) would be subject to the excise tax imposed by Section 4999 of
the Code, and (c) the aggregate value of such parachute payments, as determined in accordance with
Section 280G of the Code and the proposed Treasury Regulations thereunder (or the final Treasury
Regulations, if they have then been adopted) is less than the product obtained by multiplying three
and six-tenths by Employee’s “base amount” within the meaning of Code Section 280G(b)(3), then such
benefits shall be reduced to the extent necessary (but only to that extent) so that no portion of
such benefits will be subject to excise tax under Section 4999 of the Code.
(b) Parachute Payments Equal to or Greater than 3.6 x Base Amount. In the event that
the benefits provided for in this agreement or otherwise payable to Employee, including vesting
acceleration upon a change of control pursuant to Employee’s employment agreement with the Company
(a) constitute “parachute payments” within the meaning of Section 280G of the Code, (b) would be
subject to the excise tax imposed by Section 4999 of the Code, and (c) the aggregate value of such
parachute payments, as determined in accordance with Section 280G of the Code and the proposed
Treasury Regulations thereunder (or the final Treasury Regulations, if they have then been adopted)
is equal to or greater than the product obtained by multiplying three and six-tenths by Employee’s
“base amount” within the meaning of Code Section 280G(b)(3), then (A) the benefits shall be
delivered in full, and (B) the Employee shall receive (1) a payment from the Company sufficient to
pay such excise tax, and (2) an additional payment from the Company sufficient to pay the federal
and state income and employment taxes and additional excise taxes arising from the payments made to
the Employee by the Company pursuant to this clause (B).
(c) 280G Determinations. Unless the Company and the Employee otherwise agree in
writing, the determination of Employee’s excise tax liability and the amount required to be paid or
reduced under this Section 6 shall be made in writing by the Company’s independent auditors who are
primarily used by the Company immediately prior to the Change of Control (the “Accountants”). For
purposes of making the calculations required by this Section 6, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
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Code. The Company and the Employee shall furnish to the Accountants such information and
documents as the Accountants may reasonably request in order to make a determination under this
Section. The Company shall bear all costs the Accountants may reasonably incur in connection with
any calculations contemplated by this Section 6.
7. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
(a) Cause. “Cause” shall mean (i) an act of personal dishonesty taken by the Employee
in connection with his responsibilities as an employee and intended to result in substantial
personal enrichment of the Employee, (ii) Employee being convicted of, or pleading nolo
contendere to a felony, (iii) a willful act by the Employee which constitutes gross
misconduct and which is injurious to the Company, (iv) following delivery to the Employee of a
written demand for performance from the Company which describes the basis for the Company’s
reasonable belief that the Employee has not substantially performed his duties, continued
violations by the Employee of the Employee’s obligations to the Company which are demonstrably
willful and deliberate on the Employee’s part.
(b) Change of Control. “Change of Control” means the occurrence of any of the
following:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or more of
the total voting power represented by the Company’s then outstanding voting securities; or
(ii) Any action or event occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who
either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors
at the time of such election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating to the election of
directors to the Company); or
(iii) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) The consummation of the sale, lease or other disposition by the Company of all or
substantially all the Company’s assets.
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(c) Disability. “Disability” shall mean that the Employee has been unable to perform
his or her Company duties as the result of his incapacity due to physical or mental illness, and
such inability, at least twenty-six (26) weeks after its commencement, is determined to be total
and permanent by a physician selected by the Company or its insurers and acceptable to the Employee
or the Employee’s legal representative (such Agreement as to acceptability not to be unreasonably
withheld). Termination resulting from Disability may only be effected after at least thirty (30)
days’ written notice by the Company of its intention to terminate the Employee’s employment. In
the event that the Employee resumes the performance of substantially all of his or her duties
hereunder before the termination of his or her employment becomes effective, the notice of intent
to terminate shall automatically be deemed to have been revoked.
(d) Good Reason. “Good Reason” means without the Employee’s express written consent
(i) a material reduction of the Employee’s duties, title, authority or responsibilities, relative
to the Employee’s duties, title, authority or responsibilities as in effect immediately prior to
such reduction, or the assignment to Employee of such reduced duties, title, authority or
responsibilities, including a reduction in duties, title, authority or responsibilities solely by
virtue of the Company being acquired and made part of a larger entity; (ii) a substantial reduction
of the facilities and perquisites (including office space and location) available to the Employee
immediately prior to such reduction; (iii) a reduction by the Company in the base salary or target
bonus opportunity of the Employee as in effect immediately prior to such reduction; (iv) a material
reduction by the Company in the kind or level of benefits to which the Employee was entitled
immediately prior to such reduction with the result that such Employee’s overall benefits package
is significantly reduced; (v) the relocation of the Employee to a facility or a location more than
thirty-five (35) miles from such Employee ‘s then present location.
8. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 8(a) or which becomes bound by the terms of this Agreement by
operation of law.
(b) The Employee’s Successors. The terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
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9. Notice.
(a) General. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be deemed to be given
upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express
or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential
address and (ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10) days’
advance written notice to the other party pursuant to the provisions above.
(b) Notice of Termination. Any termination by the Company for Cause or by the
Employee for Good Reason or Disability or as a result of a voluntary resignation shall be
communicated by a notice of termination to the other party hereto given in accordance with Section
9(a) of this Agreement. Such notice shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and shall specify the termination
date (which shall be not more than thirty (30) days after the giving of such notice). The failure
by the Employee to include in the notice any fact or circumstance which contributes to a showing of
Good Reason or Disability shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his or her rights hereunder.
10. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings
that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and
by an authorized officer of the Company (other than the Employee). No waiver by either party of
any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(c) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
(d) Entire Agreement. This Agreement, along with other written agreements relating to
the subject matter hereof between Employee and a duly authorized Company officer constitute the
entire agreement of the parties hereto and supersede in their entirety all prior representations,
understandings, undertakings or agreements (whether oral or written and whether expressed or
implied) of the parties with respect to the subject matter hereof.
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(e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Utah. The Utah state courts in Utah
County, Utah and/or the United States District Court for the District of Utah in Salt Lake City
shall have exclusive jurisdiction and venue over all controversies in connection with this
Agreement.
(f) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(g) Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
| COMPANY | OMNITURE, INC. |
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| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Title: | Chief Legal Officer and Senior Vice President | |||
| EMPLOYEE | By: | /s/ Xxxxxx X. Xxxxx | ||
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