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NETGRAVITY, INC.
EMPLOYMENT AGREEMENT
This Agreement is made by and between NetGravity, Inc., a Delaware
corporation (the "Company"), and Xxxxx Xxxxxxxx ("Executive").
1. DUTIES AND SCOPE OF EMPLOYMENT. The Company shall employ the
Executive as the Vice President of North American Sales, reporting to the
President and Chief Executive Officer of the Company, and assuming and
discharging such responsibilities as are commensurate with such position.
Executive shall comply with and be bound by the Company's operating policies,
procedures and practices as in effect from time to time during the term of
Executive's employment hereunder. During the term of Executive's employment
with the Company, Executive shall devote her full business time, skill and
attention to her duties and responsibilities, and shall perform them
faithfully, diligently and competently, and Executive shall use her best
efforts to further the business of the Company and its affiliated entities.
Executive's employment with the Company pursuant to this Agreement shall
commence on [April 22, 1998] (the "Effective Date").
2. AT-WILL EMPLOYMENT. Executive and the Company understand and
acknowledge that Executive's employment with the Company constitutes "at-will"
employment. Executive and the Company acknowledge that this employment
relationship may be terminated at any time, with or without good cause or for
any or no cause, and with or without notice, at the option either of the Company
or Executive.
3. COMPENSATION, FRINGE BENEFITS AND STOCK OPTIONS.
(a) BASE SALARY. While employed by the Company pursuant to this
Agreement, the Company shall pay the Executive as compensation for her
services a base salary at the annualized rate of $150,000 (the "Base
Salary"). Such salary shall be paid periodically in accordance with normal
Company payroll practices and subject to the usual, required withholding.
Executive understands and agrees that neither her job performance nor
promotions, commendations, bonuses or the like from the Company give rise to
or in any way serve as the basis for modification, amendment, or extension,
by implication or otherwise, of this Agreement.
(b) COMMISSION. In addition to the Base Salary, the Company shall
pay the Executive, on account of the first partial year while employed
hereunder ending March 31, 1999, an annual commission with at-plan payment
equal to $125,000, pro-rated for such partial year (the "Commission"), to be
paid quarterly, at the end of each fiscal quarter of the Company, subject to
Executive meeting or exceeding plan sales targets to be mutually agreed upon
by the Company and Executive. Notwithstanding the above, the Company shall
automatically pay Executive a pro-rated share of the at-plan $31,250
commission on account of the quarter ending June 30, 1998, subject to
Executive remaining employed with the Company through the end of such fiscal
quarter (the "Guaranteed Commission"). The amount of the Guaranteed
Commission shall be offset against the Commission that may be earned under
the first sentence of his paragraph. Commissions for future years shall be
mutually agreed upon by the parties hereto, subject to Executive remaining
employed by the Company in such years. Any commission paid to the Executive
pursuant to this Agreement shall be subject to the usual, required
withholding.
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(c) EXECUTIVE BENEFITS. During her employment hereunder, Executive
shall be eligible to participate in the employee benefit plans maintained by
the Company of general applicability to other key executives of the Company.
(d) STOCK OPTION. As of the Effective Date, Executive shall be
granted a stock option, which shall be, to the extent possible under the
$100,000 rule of Section 422(d) of the Internal Revenue Code of 1986, as
amended (the "Code") an "incentive stock option" (as defined in Section 422
of the Code), to purchase a total of 388,965 shares of the Company's Common
Stock at an exercise price of $3.00 per share on the date of grant (the
"Option"). The Option shall have a term of ten years, or shorter upon
termination of Executive's employment or consulting relationship with the
Company. Subject to the accelerated vesting provisions set forth in Section 5
of this Agreement, the Option will vest as to 25% of the shares originally
subject to the Option on the first anniversary of the Effective Date and as
to 1/48th of the shares originally subject to the Option monthly thereafter,
so as to be 100% vested on the fourth anniversary of the Effective Date,
subject to Executive continuing to render services to the Company as an
employee or consultant on such vesting dates. Alternatively, at the election
of the Executive, the option may be exercised in whole or in part at any time
as to shares which have not yet vested, subject to the Executive entering
into a restricted stock purchase agreement in the form supplied by the
Company with respect to such shares (the "Restricted Stock Purchase
Agreement"). This stock option grant is in all respects subject to the terms,
definitions and provisions of the Company's 1995 Stock Option Plan (the
"Option Plan") and the stock option agreement by and between Executive and
the Company (the "Option Agreement"), both of which documents are
incorporated herein by reference.
4. EXPENSES. The Company will pay or reimburse Executive for reasonable
travel, entertainment or other expenses incurred by Executive in the furtherance
of or in connection with the performance of Executive's duties hereunder in
accordance with the Company's established policies.
5. SEVERANCE BENEFITS.
(a) INVOLUNTARY TERMINATION. If Executive's employment with the
Company terminates other than voluntarily or for "Cause" (as defined herein)
within six (6) months of the Effective Date (an "Involuntary Termination"), then
(i) 12.5% of the shares subject to the stock option granted pursuant to Section
3(d) of this Agreement will accelerate and become fully vested.
(b) VOLUNTARY TERMINATION; TERMINATION FOR CAUSE WITHIN SIX
MONTHS, TERMINATION AFTER SIX MONTHS. If Executive's employment with the
Company terminates (i) voluntarily by Executive, (ii) for "Cause" (as defined
herein) by the Company within six months of the Effective Date, or (iii)
involuntarily by the Company at least six months following the Effective Date
(whether or not for Cause) then Executive shall only be eligible for
severance benefits in accordance with the Company's established policies as
then in effect. For this purpose, "Cause" is defined as (i) an act of
dishonesty made by Executive in connection with Executive's responsibilities
as an employee, (ii) Executive's conviction of, or plea of NOLO CONTENDERE
to, a felony, (iii) Executive's serious misconduct, (iv) Executive's continued
violations of her employment duties after Executive has received a written
demand for performance from the Company which specifically sets forth the
factual basis for the Company's belief that Executive has not substantially
performed her duties, (v) Executive's death or permanent and total disability.
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(c) TERMINATION FOLLOWING A CHANGE OF CONTROL.
(i) INVOLUNTARY TERMINATION. If the Executive's employment
with the Company terminates as a result of an Involuntary Termination at any
time within twelve (12) months after a "Change of Control" (as defined
below), then the Executive shall be entitled to receive a lump-sum severance
payment equal to eighteen (18) months of the Executive's base salary (as in
effect immediately prior to the Change of Control). Notwithstanding the
foregoing, if it is determined by the Company's independent auditors that the
Company's hiring of a new Chief Executive Officer, if any, within six (6)
months of the Effective Date would preclude accounting for a Change of
Control subsequent to such hiring as a "pooling of interests" for financial
accounting purposes, then the parties hereto agree to renegotiate this
section 5(c)(i) in its entirety in good faith.
(ii) OTHER TERMINATION. If the Executive's employment with the
Company terminates either other than as a result of an Involuntary Termination
at any time within twelve (12) months after a Change of Control, then the
Executive shall not be entitled to receive severance or other benefits
hereunder, and shall only be eligible for those benefits (if any) as may then be
established under the Company's then existing severance and benefits plans and
policies at the termination date.
(iii) DEFINITION OF CHANGE OF CONTROL. For this purpose,
"Change of Control of the Company is defined as:
(A) Any "person" (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities; or
(B) The date of the consummation of a merger or
consolidation of the Company with any other corporation that has been approved
by the stockholders of the Company, 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 the stockholders of the Company approve a plan of complete
liquidation of the Company; or
(C) The date of the consummation of the sale or
disposition by the Company of all or substantially all the Company's assets (if
Executive transfers employment to the purchaser.)
6. DEATH OF EXECUTIVE. If Executive dies during the term of this
Agreement, this Agreement shall terminate immediately and all payments of
compensation by the Company to the Executive hereunder shall immediately
terminate. Executive shall only be eligible for severance benefits in accordance
with the Company's established policies as then in effect.
7. ENFORCEMENT. In the event of any action to enforce the terms of this
Agreement, the prevailing party in such action shall be entitled to such party's
reasonable costs and expenses of enforcement including, without limitation,
reasonable attorney's fees.
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8. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of (a) the heirs, executors and legal representatives of Executive upon
Executive's death and (b) any successor of the Company. Any such successor of
the Company shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" shall include any
person, firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly, acquires all or
substantially all of the assets or business of the Company. None of the rights
of Executive to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Executive following termination without cause. Any attempted assignment,
transfer, conveyance or other disposition (other than as aforesaid) of any
interest in the rights of Executive to receive any form of compensation
hereunder shall be null and void.
9. NOTICES. All notices, requests, demands and other communications
called for hereunder shall be in writing and shall be deemed given if delivered
personally, one (1) day after mailing via Federal Express overnight or a similar
overnight delivery service, or three (3) days after being mailed by registered
or certified mail, return receipt requested, prepaid and addressed to the
parties or their successors in interest at the following addresses, or at such
other addresses as the parties may designate by written notice in the manner
aforesaid:
If to the Company: NetGravity
0000 X. Xxxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxx, XX 00000
ATTN: Xxxx Xxxxxx
If to Executive: Xxxxx Xxxxxxxx
at the last residential address known by the Company.
10. SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
11. CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT. Executive agrees
to enter into the Company's standard Employment, Confidential Information and
Invention Assignment Agreement (the "Confidential Information Agreement") upon
commencing employment hereunder.
12. ENTIRE AGREEMENT. This Agreement, the Stock Option Plan, the Option
Agreement, the Restricted Stock Agreement (if any) and the Confidential
Information Agreement represent the entire agreement and understanding between
the Company and Executive concerning Executive's employment relationship with
the Company, and supersede and replace any and all prior agreements and
understandings concerning Executive's employment relationship with the Company.
13. ARBITRATION AND EQUITABLE RELIEF.
(a) Except as provided in Section 13(d) below, Executive agrees that
any dispute or controversy arising out of, relating to, or in connection with
this Agreement, or the interpretation, validity, construction, performance,
breach, or termination thereof shall be settled by arbitration to be held in San
Mateo
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County, California, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law and by
the Rules, without reference to state arbitration law. Executive hereby
expressly consents to the personal jurisdiction of the state and federal
courts located in California for any action or proceeding arising from or
relating to this Agreement and/or relating to any arbitration in which the
parties are participants.
(c) The Company and Executive shall each pay one-half of the costs
and expenses of such arbitration, and shall separately pay its counsel fees and
expenses.
(d) Executive understands that nothing in Section 13 modifies
Executive's at-will status. Either the Company or Executive can terminate the
employment relationship at any time, with or without cause.
(e) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 13, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE
RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:
(i) ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT;
BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD
FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL
INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION;
NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC
ADVANTAGE; AND DEFAMATION.
(ii) ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR
MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS
ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR
STANDARDS ACT;
(iii) ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND
REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.
14. NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This Agreement may
only be amended, canceled or discharged in writing signed by Executive and the
Company.
15. GOVERNING LAW. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California.
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16. EFFECTIVE DATE. This Agreement is effective immediately after it has
been signed.
17. ACKNOWLEDGMENT. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from her private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below.
NETGRAVITY, INC.
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: CEO
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XXXXX XXXXXXXX
/s/ Xxxxx Xxxxxxxx
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Signature
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