WEBSIDESTORY, INC. 10182 Telesis Court, 6th Floor San Diego, California 92121
Exhibit 10.2
WEBSIDESTORY, INC.
00000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
00000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Dear Claire:
WebSideStory, Inc. (the “Company”) considers it essential to the best interests of its
stockholders to xxxxxx the continuous employment of the Company’s key management personnel. In
this regard, the Company’s Board of Directors (the “Board”) recognizes that the possibility
of a change in control of the Company may exist and the uncertainty and questions that it may raise
among management could result in the departure or distraction of management personnel to the
detriment of the Company and its shareholders.
The Board has decided to reinforce and encourage the continued attention and dedication of
members of the Company’s management, including yourself, to their assigned duties without the
distraction arising from the possibility of a change in control of the Company.
In order to induce you to remain in its employ, the Company hereby agrees that after this
letter agreement (this “Agreement”) has been fully executed, you shall receive the benefits
set forth in this Agreement in the event that your employment with the Company is terminated under
the circumstances described below subsequent to a Change in Control (as defined below).
1. Change in Control. You shall receive no benefits under this Agreement
unless there has been a Change in Control. For purposes of this Agreement, a “Change in
Control” shall mean and include each of the following:
(a) A transaction or series of transactions (other than an offering of the Company’s common
stock to the general public through a registration statement filed with the Securities and Exchange
Commission) whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by
the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control with, the Company) directly or
indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities of the Company possessing more than 50% of the total combined voting power of the
Company’s securities outstanding immediately after such acquisition; or
(b) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each
case other than a transaction:
(i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”))
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directly or indirectly, at least a majority of the combined voting power of the Successor
Entity’s outstanding voting securities immediately after the transaction, and
(ii) After which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group will be treated for purposes of this Section 1.1(b)(ii) as beneficially owning 50% or more of
combined voting power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction; or
(c) The Company’s stockholders approve a liquidation or dissolution of the Company.
The Board will have full and final authority, which will be exercised in its discretion, to
determine conclusively whether a Change in Control of the Company has occurred pursuant to the
above definition, and the date of the occurrence of such Change in Control and any incidental
matters relating thereto.
2. Termination Following Change in Control.
(a) If your employment is terminated within the 12-month period immediately
following the date of a Change in Control (i) by the Company other than for Cause or (ii) by you
for Good Reason (as defined below), then, in lieu of any severance benefits to which you may
otherwise be entitled under any severance plan or program of the Company, you shall be entitled to
the benefits provided below:
(i) the Company shall, on the date of termination, pay to you your full earned but
unpaid base salary/bonus, when due, through the date of termination at the rate in effect at the
time notice of termination is given, plus all other amounts to which you are entitled under any
compensation plan or practice of the Company at the time such payments are due; provided, however,
that any accrued but unpaid bonus shall not be paid to you unless you are employed on the date such
bonus would otherwise be paid in accordance with the Company’s standard practices;
(ii) you shall be entitled to receive, at the times specified in Section 2(b),
severance pay equal to your monthly base salary as in effect immediately prior to delivery of the
notice of termination for a period of six (6) months, payable over the 6-month period commencing on
the date of termination; and
(iii) you will immediately become 75% vested with respect to any unvested options to purchase
the Company’s capital stock that you then hold and/or the restrictions with respect to 75% of the
unvested restricted shares of the Company’s capital stock that you then hold shall immediately
lapse.
(b) The payments provided for in Section 2(a)(ii) shall be made periodically in the
same amounts and at the same intervals as your base salary was paid immediately prior to
termination of employment. You shall not be required to mitigate the amount of any payment
provided for in this Section 2 by seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for in this Section 2 be reduced by any compensation earned by you
as the result of employment by another employer or self-employment, by retirement benefits, by
offset against any amounts (other than loans or advances to you by the Company) claimed to be owed
by you to the Company, or otherwise.
(c) For purposes of this Agreement, “Cause” shall mean (i) your gross
negligence, breach of fiduciary duty involving personal profit, personal dishonesty, recklessness
or willful misconduct with respect to your obligations or otherwise relating to the business of the
Company; (ii) the material breach of any agreement between you and the Company, including Company
policies and practices; (iii) your
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conviction or entry of a plea of nolo contendere for fraud or embezzlement, or any felony or
crime of moral turpitude; or (iv) your willful neglect of duties or failure to satisfactorily
perform stated duties, in each case as determined in good faith by the Board.
(d) For purposes of this Agreement, “Good Reason” shall be deemed to exist
following the occurrence of any of the following events without your prior written consent, unless
the Company fully corrects the circumstances constituting Good Reason (provided such circumstances
are capable of correction) prior to the date of termination:
(i) a reduction in your base salary or any failure to pay any compensation or benefits earned
by you, provided that “Good Reason” shall not be deemed for such non-payment unless you provide
written notice to the Company thereof and following a reasonable cure period; or
(ii) the Company’s relocation of your principal place of business to any place outside a fifty
(50) mile radius of your principal place of business as of the date hereof.
Your continued employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(e) Any purported termination of your employment by the Company or by you (other
than termination due to your death, which shall terminate your employment automatically) shall be
communicated by a written notice of termination to the other party hereto in accordance with
Section 4.
3. Successors; Binding Agreement. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required
to perform it if no such succession had taken place. Unless expressly provided otherwise,
“Company” as used herein shall mean the Company as defined in this Agreement and any
successor to its business and/or assets as aforesaid. This Agreement shall inure to the benefit of
and be enforceable by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
4. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Company shall be directed to the attention of its
Secretary, or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon receipt.
5. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by you
and such officer as may be specifically designated by the Board. No waiver by either party hereto
at any time of any breach by the other party hereto of or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with respect to the subject
matter hereof have been made by either party which are not expressly set forth in this Agreement.
The validity, interpretation, construction and performance of this Agreement shall be governed by
the laws of the State of California without regard to its conflicts of law principles. The section
headings contained in this Agreement are for convenience only, and shall not affect the
interpretation of this Agreement. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.
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6. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
7. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together shall constitute one and
the same instrument.
8. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the accelerated vesting of stock options and or restricted stock held
by you and the payment of severance and supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto, and any prior agreement of the parties
hereto in respect of the accelerated vesting of stock options and or restricted stock held by you
and the payment of severance, is hereby terminated and cancelled, including, without limitation,
that certain offer letter dated March 23, 2004, between you and the Company. Any of your rights
hereunder shall be in addition to any rights you may otherwise have under benefit plans or
agreements of the Company (other than severance plans or agreements) to which you are a party or in
which you are a participant, including, but not limited to, any Company sponsored employee benefit
plans and stock options plans. The provisions of this Agreement shall not in any way abrogate your
rights under such other plans and agreements.
9. At-Will Employment. Nothing contained in this Agreement shall (a) confer
upon you any right to continue in the employ of the Company, (b) constitute any contract or
agreement of employment, or (c) interfere in any way with the at-will nature of your employment
with the Company.
10. Arbitration; Dispute Resolution, Etc. Unless otherwise provided herein,
in the event that there shall be a dispute (a “Dispute”) among the parties arising out of
or relating to this Agreement, or the breach thereof, the parties agree that such dispute shall be
resolved by final and binding arbitration before a single arbitrator in San Diego County,
California, administered by the American Arbitration Association (the “AAA”), in accordance
with AAA’s Employment ADR Rules. The arbitrator’s decision shall be final and binding upon the
parties, and may be entered and enforced in any court of competent jurisdiction by either of the
parties. The arbitrator shall have the power to grant temporary, preliminary and permanent relief,
including without limitation, injunctive relief and specific performance. The Company will pay the
direct costs and expenses of the arbitration. You and the Company are responsible for your
respective attorneys’ fees incurred in connection with enforcing this Agreement; however, you and
the Company agree that, except as may be prohibited by law, the arbitrator may, in his or her
discretion, award reasonable attorneys’ fees to the prevailing party.
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If this letter sets forth our agreement on the subject matter hereof, kindly sign and return
to the Company the enclosed copy of this letter, which shall then constitute our agreement on this
subject.
| Sincerely, WEBSIDESTORY, INC. |
||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: Xxxx Xxxxxxxx | ||||
| Its: President and Chief Executive Officer | ||||
Agreed and Accepted,
this 18th day of January, 2006
/s/ Xxxxxx Xxxx
|
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