EXHIBIT 10.10
DOCENT, INC.
OFFICER'S CHANGE IN CONTROL AGREEMENT
This Agreement ("Agreement") is made effective as of the 14th day of
October, 1999, by and between Docent, Inc. (the "Company"), a Delaware
corporation, and Xxxxxxx Xxxxxxxxx (the "Officer").
Whereas, the Company has granted to Officer options for the purchase of the
Company's Common Stock (the "Officer's Option Shares"); and
Whereas, the Company seeks to retain the Officer as an at-will employee.
Now Therefore, in consideration of the covenants and with the intention of
being legally obligated by the provisions set forth herein, the parties hereby
agree as follows:
1. Definitions. Certain terms herein as defined as follows:
(a) "Change in Control" means (i) the sale, lease or other disposition of
all or substantially all of the assets of the Company or (ii) an acquisition of
the Company by another corporation or entity by consolidation, merger or other
reorganization in which the holders of the Company's outstanding voting stock
immediately prior to such transaction own, immediately after such transaction,
securities representing less than fifty percent (50%) of the voting power of the
corporation or other entity surviving such transaction, excluding any
consolidation or merger effected exclusively to change the domicile of the
Company.
(b) "Cause" means misconduct, including but not limited to: (i) conviction
of any felony or any crime involving moral turpitude or dishonesty, (ii)
participation in a fraud or act of dishonesty against the Company, (iii) conduct
that, based upon a good faith and reasonable factual investigation and
determination by the Board, demonstrates gross unfitness to serve, or (iv)
material violation of any contract between the Company and the Officer or any
statutory duty of the Officer to the Company that is not corrected within thirty
(30) days after written notice thereof. Physical disability shall not constitute
"Cause."
(c) "Compensation" means the Officer's current quarter's projected
aggregate cash remuneration based on the Officer's base salary, plus, as
applicable: (i) the Officer's current quarter's management bonus, assuming
performance of all quarterly bonus criteria; and/or (ii) the Officer's current
quarter's sales commissions, assuming performance of the Officer's quarterly
quota.
(d) "Good Reason" means, with respect to the voluntary termination of the
continuous service of the Officer in connection with a Change in Control: (i)
reduction of Officer's current quarter's rate of Compensation as in effect
immediately prior to the Change in Control by greater than ten percent (10%),
except to the extent the compensations of at least a majority of other officers
of the Company that have signed agreements substantially similar to this
Agreement have been similarly reduced; (ii) failure to provide a package of
welfare benefit plans that, taken as a whole, provide substantially similar
benefits to those in which Officer is entitled to participate immediately prior
to the Change in Control (except that Officer's
DOCENT, INC.
OFFICER'S CHANGE IN CONTROL AGREEMENT
Xxxxxxx Xxxxxxxx
14 October, 1999
Page 2
contributions may be raised to the extent of any cost increases imposed by third
parties) or any action by the Company or a successor to the Company that would
adversely affect Officer's participation or reduce Officer's benefits under any
of such plans; (iii) a significant change in Officer's responsibilities,
authority, titles or offices resulting in diminution of position, excluding for
this purpose an isolated action not taken in bad faith that is remedied by the
Company or a successor to the Company promptly after notice thereof is given by
Officer; or (iv) a request that Officer relocate to a worksite that is more than
fifty (50) miles from Officer's prior worksite, unless Officer accepts such
relocation opportunity.
2. Change in Control. If the Officer's employment with the Company is
terminated within six (6) months after any Change in Control either (i) by the
Company or a successor to the Company for any reason other than for Cause or
(ii) by the Officer for Good Reason, the vesting of all the unvested Officer's
Option Shares shall be accelerated one year forward. In the event of a Change in
Control, the references herein to the "Company" shall be deemed to refer to any
successor to the Company.
3. Waiver. Notwithstanding anything to the contrary contained in this
Agreement, if (i) the Company enters into a Change in Control transaction that
is to be accounted for as a pooling of interest, and (ii) the accountant(s) for
either the Company or the acquirer determines that a particular provision
contained in this Agreement, or that this Agreement in its entirety, would cause
the Change in Control transaction to be ineligible as a pooling of interest
transaction, then the particular provision or the entire Agreement, as the case
may be, shall not be applicable with respect to such Change in Control
transaction.
4. Parachute Payments.
(a) In the event it shall be determined that any payment or
distribution by the Company to or for the benefit of Officer (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise) (a "Payment") would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Internal Revenue Code (the
"Code"), then the aggregate present value of such Payment shall be reduced to
the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present
value that maximizes the aggregate present value of such Payment without causing
any Payment to be nondeductible by the Company because of Section 280G of the
Code. Anything to the contrary notwithstanding, if the Reduced Amount is zero
and it is determined further that any Payment would nevertheless be
nondeductible by the Company for federal income tax purposes because of Section
28OG of the Code, then the aggregate present value of such Payment shall also be
reduced (but not below zero) to an amount expressed in present value that
maximizes the aggregate present value of such Payment without causing such
Payment to be nondeductible by the Company because of Section 280G of the Code.
For purposes of this Section 4, present value shall be determined in accordance
with Section 280G(d)(4) of the Code.
(b) All determinations required to be made under this Section 4 shall be
made by the Company's independent auditors. Such auditors shall provide detailed
supporting calculations both to the Company and Officer within fifteen (15)
business days of the date that Officer's employment with the Company terminates
or such earlier time as is requested by the
DOCENT, INC.
OFFICER'S CHANGE IN CONTROL AGREEMENT
Xxxxxxx Xxxxxxxx
14 October, 1999
Page 3
Company. Any such determination by the Company's independent auditors shall be
binding upon the Company and Officer. The Company shall determine which and how
much of the Payment or Payments, as the case may be, shall be eliminated or
reduced consistent with the requirements of this Section 4, within thirty (30)
business days of the receipt of the calculations made by the Company's
independent auditors and shall notify Officer promptly of such election. Within
five (5) business days thereafter, the Company shall pay to or distribute to or
for the benefit of Officer such amounts as are then due to Officer under this
Agreement.
(c) As a result of the uncertainty in the application of Section 280G
of the Code at the time of the initial determination by the Company's
independent auditors hereunder, it is possible that a Payment or Payments, as
the case may be, will have been made by the Company that should not have been
made ("Overpayment") or that an additional Payment or Payments, as the case may
be, which will not have been made by the Company could have been made
("Underpayment"), in each case, consistent with the calculations required to be
made hereunder. In the event that the Company's independent auditors, based upon
the assertion of a deficiency by the Internal Revenue Service against Officer or
the Company that the Company's independent auditors believe has a high
probability of success, determine that an Overpayment has been made, any such
Overpayment paid or distributed by the Company to or for the benefit of Officer
shall be treated for all purposes as a loan ab initio to Officer that Officer
shall repay to the Company together with interest at the applicable federal rate
provided for in Section 7872(f)(2) of the Code; provided however, that no such
loan shall be deemed to have been made and no amount shall be payable by Officer
to the Company if and to the extent such deemed loan and payment would not
either reduce the amount on which Officer is subject to tax under Section 1 and
Section 4999 of the Code or generate a refund of such taxes. In the event that
the Company's independent auditors, based upon controlling precedent or other
substantial authority, determine that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Officer together with interest at the applicable federal rate provided for in
Section 7872(f)(2) of the Code.
5. Return of Materials. At the termination of your relationship with the
Company, Officer will promptly return to the Company, and will not take with or
use, all items of any nature that belong to the Company, and all materials (in
any form, format, or medium) containing or relating to the Company's business.
6. Entire Agreement. This Agreement constitutes the complete, final and
exclusive embodiment of the entire agreement between the Officer and the Company
with respect to the terms and conditions of the Officer's employment specified
herein. Officer enters into this Agreement voluntarily and without reliance upon
any promise, warranty or representation, written or oral, other than those
expressly contained herein. This Agreement supersedes any other such promises,
warranties, representations or agreements. This Agreement does not, however,
supersede or modify the Officer's Proprietary Information and Inventions
Agreement or the terms of the Officer's offer letter. This Agreement may not be
amended or modified except by a written instrument signed by Officer and a duly
authorized officer of the Company.
7. Enforceability. If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this
DOCENT, INC.
OFFICER'S CHANGE IN CONTROL AGREEMENT
Xxxxxxx Xxxxxxxx
14 October, 1999
Page 4
Agreement, and the Agreement, including the invalid or unenforceable provisions,
should be enforced insofar as possible to achieve the intent of the parties.
8. Binding Nature. This Agreement will be binding upon and inure to the
benefit of the personal representatives and successors of the respective parties
hereto.
9. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and performed entirely in California. The
parties hereto hereby (a) expressly consent to the personal jurisdiction and
venue of the state and federal courts located in Santa Xxxxx County, California
for any action brought by either party to interpret or enforce any provision of
this Agreement and (b) agree not to assert (by way of motion, as a defense or
otherwise), in any such action any claim that such legal proceeding has been
brought in an inconvenient forum.
10. Dispute Resolution/Attorneys' Fees. Unless otherwise prohibited by law
or specified below, all disputes, claims, and causes of action (including but
not limited to any claims of statutory discrimination of any type), in law or
equity, arising from or relating to this Agreement or its enforcement,
performance, breach, or interpretation, or to your employment with the Company
or the termination of that employment, shall be resolved solely and exclusively
by final, binding and confidential arbitration through Judicial Arbitration &
Mediation Services/Endispute, Inc. ("JAMS") under the then existing JAMS
arbitration rules. You understand and agree that this provision waives your
right to a jury trial on these claims. This arbitration shall be held in the San
Francisco Bay Area. Nothing in this Section 10 is intended to prevent either
party from obtaining injunctive relief in court to prevent irreparable harm
pending the conclusion of any such arbitration.
11. Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
12. Restricted Activities. Officer agrees that during the period of
Officer's employment by the Company Officer will not, without the Company's
express written consent, engage in any employment or business activity other
than Officer's employment by the Company. Officer agrees further that for the
period of Officer's employment by the Company and for at least one (1) year
after the date of termination of Officer's employment by the Company, Officer
will not, either directly or indirectly, solicit or attempt to solicit any
employee, consultant or independent contractor of the Company to terminate his
or her relationship with the Company to become an employee, consultant or
independent contractor to or for any other person or entity. Officer agrees
further that for the period of Officer's employment by the Company and for at
least one (1) year after the date of termination of Officer's employment by the
Company, Officer will not solicit the business of any client or customer of the
Company (other than on behalf of the Company).
DOCENT, INC.
OFFICER'S CHANGE IN CONTROL AGREEMENT
Xxxxxxx Xxxxxxxx
14 October, 1999
Page 5
In Witness Whereof, the parties have executed this agreement as of the date
first set forth above.
Docent, Inc. Officer
By: /s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxxxxxx
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(Xxxxx X. Xxxxxx) (Xxxxxxx Xxxxxxxxx)
Title: Chief Executive Officer
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