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EXHIBIT 10.2
EXECUTIVE RETENTION AGREEMENT
THIS EXECUTIVE RETENTION AGREEMENT ("Agreement") by and between Engage, Inc., a
Delaware corporation (the "Company") headquartered at 000 Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx, and Xxxxxxx Xxxxx (the "Executive"), residing at 00
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, is made as of November 7, 2000.
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that Executive will play a critical role in the operations of the
Company; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued employment and dedication of the
Executive;
NOW, THEREFORE, as an inducement for and in consideration of the
Executive remaining in its employ, the Company agrees that the Executive shall
receive the severance benefits set forth in this Agreement in the event the
Executive's employment with the Company is terminated under the circumstances
described below.
1. TERM OF AGREEMENT. The term of this Agreement shall be November 20,
2000 to November 19, 2002 ("Employment Period"). Thereafter, this Agreement may
be renewed by written agreement of the parties.
2. NOT A GUARANTEE OF EMPLOYMENT. The Executive acknowledges that this
Agreement does not constitute a guarantee of employment or impose on the Company
any obligation to retain the Executive as an employee and that this Agreement
does not prevent the Executive from terminating his employment. Executive
understands and acknowledges that he is an employee at will and that either he
or the Company may terminate the employment relationship between them at any
time and for any lawful reason.
3. SEVERANCE PAY OBLIGATIONS
A. IN THE ABSENCE OF A CHANGE IN CONTROL
(i) In the event that no Change in Control (as defined below) has
occurred and the employment of the Executive is terminated by the
Company for a reason other than for Cause (as defined below) or by the
Executive for Good Reason Absent a Change in Control (as defined below)
then the Company shall continue to pay to the Executive (as severance
pay), his regular semi-monthly base salary as in effect on the
Executive's last day of employment (exclusive of bonus or any other
compensation), for the longer of: a) one (1) year; or b) until the end
of the Employment Period. Unless the parties agree otherwise, the
severance pay shall be paid in accordance with the Company's regular
payroll practices. Additionally, with respect to each outstanding
option to purchase shares of common stock of the Company then held by
the Executive, on the Executive's last day of employment, the vesting
of each such stock option shall be accelerated such that the Executive
shall be entitled to exercise such stock options (in accordance with
the exercise terms and conditions set forth in the option agreement
and/or plan pursuant to which such
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options were granted) to the same extent as he would have been entitled
had he been he continuously employed by the Company for the longer of:
a) one (1) year; or until the end of the Employment Period.
B. FOLLOWING A CHANGE IN CONTROL.
(i) PRIOR TO NOVEMBER 7, 2001. In the event a Change in Control (as
defined below) occurs and, thereafter, the employment of the Executive
is terminated by the Company for a reason other than for Cause (as
defined below) or by the Executive for Good Reason Following a Change
in Control (as defined below), but prior to November 7, 2001, then the
Company shall continue to pay to the Executive (as severance pay), his
regular semi-monthly base salary as in effect on the Executive's last
day of employment (exclusive of bonus or any other compensation), until
the end of the Employment Period. Unless the parties agree otherwise,
the severance pay shall be paid in accordance with the Company's
regular payroll practices. Additionally, with respect to each
outstanding option to purchase shares of common stock of the Company
then held by the Executive, on the Executive's last day of employment,
the vesting of each such stock option shall be accelerated such that
the Executive shall be entitled to exercise such stock options (in
accordance with the exercise terms and conditions set forth in the
option agreement and/or plan pursuant to which such options were
granted) to the same extent as he would have been entitled had he been
he continuously employed by the Company until the end of the Employment
Period.
(ii) ON OR AFTER NOVEMBER 7, 2001. In the event a Change in Control (as
defined below) occurs and, thereafter, the employment of the Executive
is terminated by the Company for a reason other than for Cause (as
defined below) or by the Executive for Good Reason Following a Change
in Control (as defined below), on or after November 7, 2001
("Termination Date"), then the Company shall continue to pay to the
Executive (as severance pay), his regular semi-monthly base salary as
in effect on the Executive's last day of employment (exclusive of bonus
or any other compensation), for one (1) year following the Termination
Date. Unless the parties agree otherwise, the severance pay shall be
paid in accordance with the Company's regular payroll practices.
Additionally, with respect to each outstanding option to purchase
shares of common stock of the Company then held by the Executive, on
the Executive's last day of employment, the vesting of each such stock
option shall be accelerated such that the Executive shall be entitled
to exercise such stock options (in accordance with the exercise terms
and conditions set forth in the option agreement and/or plan pursuant
to which such options were granted) to the same extent as he would have
been entitled had he been he continuously employed by the Company for
one (1) year following the Termination Date.
C. SOLE REMEDY. The payment to the Executive of the amounts payable under
this Section 3 (and applicable acceleration of options) along with
payment of any accrued but unused vacation pay shall constitute the
sole remedy of the Executive in the event of a termination of the
Executive's employment by the Company or a resignation by the
Executive. The Company shall have no obligation to pay severance pay
pursuant to this Agreement in the event of a breach by the Executive of
any non-competition or inventions and non-disclosure agreements between
the Executive and the Company.
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4. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
(i) "Cause" shall mean a good faith finding by the Company of: (i) gross
negligence or willful misconduct by the Executive in connection with the
Executive's employment duties, (ii) failure by the Executive to perform his
duties or responsibilities required pursuant to the Executive's employment after
notice and an opportunity to cure, (iii) mis-appropriation by the Executive for
the Executive's personal use of the assets or business opportunities of the
Company, or its affiliates, (iv) embezzlement or other financial fraud committed
by the Executive, (v) the Executive knowingly allowing any third party to commit
any of the acts described in any of the preceding clauses (iii) or (iv), or (vi)
the Executive's indictment for, conviction of, or entry of a plea of no contest
with respect to, any felony.
(ii) "Good Reason Absent a Change in Control" shall mean: (i) the unilateral
relocation by the Company ,without the Executive's consent, of the Executive's
principal work place for the Company to a site more than 40 miles from
Wellesley, Massachusetts, (ii) a reduction in the Executive's annual base salary
as in effect on the Executive's first day of employment or (iii) the mutual
determination by the Executive and the Company's Board of Directors ("Board")
that a material and significant diminution of the Executive's job
responsibilities has occurred. Good Reason Absent a Change in Control shall not
exist under any circumstances unless: (1) the Executive first notifies the
Board, in writing, that he believes that he has suffered a material and
significant diminution in job responsibilities which has remained uncured for a
period of more than 30 days; and (2) the Board, by written resolution, ratifies
that Executive has suffered a material and significant diminution of job
responsibilities which has remained uncured for a period of more than 30 days.
Any ratification by the Board necessary under this paragraph shall solely be at
the discretion of the Board.
(iii) "Good Reason Following a Change in Control" shall mean: (i) the unilateral
relocation by the Company, without the Executive's consent, of the Executive's
principal work place for the Company to a site more than 40 miles from
Wellesley, Massachusetts, (ii) a reduction in the Executive's annual base salary
as in effect on the Executive's first day of employment, or (iii) the assignment
of responsibilities and duties that are not Substantive Functional Equivalent
(as defined below) of the position which the Executive occupied immediately
preceding the Change in Control (as defined below).
(iv) "Substantive Functional Equivalent" means an employment position occupied
after a Change in Control that:(i) is in a substantive area of competence (such
as, accounting; engineering management; executive management; finance; human
resources; marketing, sales and service; operations and manufacturing; etc.)
this is consistent with Executive's experience and; (ii) requires Executive to
serve in a role and perform duties that are functionally equivalent to those
performed by the Executive prior to the Change in Control; and (iii) does not
otherwise constitute a material, adverse change in the Executive's
responsibilities or duties, as measured against Executive's responsibilities or
duties prior to the Change in Control, in each case, causing it to be of
materially lesser rank or responsibility. Notwithstanding the foregoing, any
change in role, responsibilities or duties that is solely attributable to the
change in the Company's status from that of an independent company to that of a
subsidiary shall not constitute a change in role, responsibilities or duties for
purposes of sections 4(c)(ii) or 4(c)(iii) above.
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(v) "Change in Control" shall mean the consummation of any of the following
events during the Employment Period: (i) a sale, lease or disposition of all or
substantially all of the assets of the Company, or (ii) a merger or
consolidation (in a single transaction or a series of related transactions) of
the Company with or into any other corporation or corporations or other entity,
or any other corporate reorganization, where the stockholders of the Company
immediately prior to such event do not retain (in substantially the same
percentages) beneficial ownership, directly or indirectly, of more than fifty
percent (50%) of the voting power of and interest in the successor entity or the
entity that controls the successor entity; PROVIDED, HOWEVER, that a "Change in
Control" shall not include a sale, lease, transfer or other disposition of all
or substantially all of the capital stock, assets, properties or business of the
Company (by way of merger, consolidation, reorganization, recapitalization, sale
of assets, stock purchase, contribution or other similar transaction) that
involves the Company, on the one hand, and CMGI, Inc. or any CMGI Subsidiary (as
defined herein), on the other hand.
(vi) "CMGI Subsidiary" shall mean any corporation or other entity that is
controlled, directly or indirectly, by CMGI, Inc.
5. MISCELLANEOUS.
(a) NOTICES. Any notices delivered under this Agreement shall be deemed duly
delivered four business days after it is sent by registered or certified
mail, return receipt requested, postage prepaid, or one business day after
it is sent for next-business day delivery via a reputable nationwide
overnight courier service, in each case to the address of the recipient set
forth in the introductory paragraph hereto. Either party may change the
address to which notices are to be delivered by giving notice of such
change to the other party. All notices to the Company shall also be
addressed to the Company's General Counsel.
(b) PRONOUNS. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the
plural, and vice versa.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings, whether
written or oral, relating to the subject matter of this Agreement.
(d) AMENDMENT. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.
(e) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts. Any action,
suit or other legal arising under or relating to any provision of this
Agreement shall be commenced only in a court of the Commonwealth of
Massachusetts (or, if appropriate, a federal court located within
Massachusetts), and the Company and the Executive each consents to the
jurisdiction of such a court. The Company and the Executive each hereby
irrevocably waive any right to a trial by jury in any action, suit or other
legal proceeding arising under or relating to any provision of this
Agreement.
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(f) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however,
that the obligations of the Executive are personal and shall not be
assigned by him or her.
(g) WAIVERS. No delay or omission by the Company in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or
waiver of any right on any other occasion.
(h) CAPTIONS. The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the
scope or substance of any section of this Agreement.
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(i) SEVERABILITY. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
THE EXECUTIVE ACKNOWLEDGES THAT HE HAS CAREFULLY READ THIS AGREEMENT
AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
Engage, Inc.
By: /s/ Xxxx Xxxxxxxxxx
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Title:EVP
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EXECUTIVE
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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