EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT
(the
"Agreement"), dated as of September 22, 2006 between Net Perceptions, Inc.,
a
Delaware corporation, (the “Company") and Xxxxxx
Xxxxxxxx (the
"Employee").
W
I T N E S S E T H :
WHEREAS,
the
Company desires to employ the Employee and to be assured of his services on
the
terms and conditions hereinafter set forth; and
WHEREAS,
the
Employee is willing to accept such employment on such terms and
conditions.
NOW
THEREFORE,
in
consideration of the mutual covenants and agreements set forth in this
Agreement, the Company and the Employee hereby agree as follows:
1. Term.
The
term
of this Agreement shall commence and be effective only upon the closing (the
“Closing”) of the transactions contemplated by that certain Asset Purchase
Agreement (the “Purchase Agreement”), dated as of September 22, 2006, by and
between the Company and CRC Acquisition Co., LLC (the “Commencement Date”) and
shall expire on the third anniversary of Commencement Date (the “Term”), subject
to earlier termination as provided herein. This Agreement shall terminate if
the
Closing does not occur on or prior to October 31, 2006; provided however that
the provisions of Sections 5, 6 and 9 shall survive any such
termination.
2. Duties.
(a)
During the Term of this Agreement, the Employee shall serve as the President
and
Chief Executive Officer of the Company and shall perform all duties commensurate
with his position and as may be assigned to him by the Chairman of the Board
of
Directors of the Company or such other person(s) as may be designated by the
Board of Directors of the Company (the “Board”). The Employee shall devote his
full business time and energies to the business and affairs of the Company
and
shall use his best efforts, skills and abilities to promote the interests of
the
Company, and to diligently and competently perform the duties of his position.
(b)
The
Employee shall report to the Chairman of the Board or such other person(s)
as
may be designated by the Board and shall at all times keep the Chairman of
the
Board (or such other officer as the Chairman of the Board or the Board may
designate from time to time) promptly and fully informed (in writing if so
requested) of his conduct and of the business or affairs of the Company, and
provide such explanations of his conduct as may be required.
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3. Compensation,
Bonus, Stock Options, Benefits, etc.
(a)
Salary.
During
the Term of this Agreement, the Company shall pay to the Employee, and the
Employee shall accept from the Company, as compensation for the performance
of
services under this Agreement and the Employee's observance and performance
of
all of the provisions hereof, an annual salary at the rate of $300,000 (the
"Base Compensation"). The Base Compensation shall be payable in accordance
with
the normal payroll practices of the Company. The Employee’s performance and the
Base Compensation shall be subject to annual review by the Company.
(b)
Bonus.
In
addition to the Base Compensation described above, the Employee shall, in the
sole and absolute discretion of the Compensation Committee of the Board, be
entitled to performance bonuses which may be based upon a variety of factors,
including the Employee’s performance and the achievement of Company goals, all
as determined in the sole and absolute discretion of the Board or Compensation
Committee of the Board. Any bonus paid to the Employee shall be subject to
withholding for applicable taxes and other amounts. In addition, the Employee
may be entitled to participate in such other bonus plans, whether during the
term of this Agreement as the Compensation Committee of the Board may, in its
sole and absolute discretion, determine.
(c)
Stock
Options.
Upon the
Commencement Date, the Company shall issue and grant to Employee options to
purchase 2,491,419 shares of the Company’s common stock, having an exercise
price equal to $0.64 per share, of which (i) 1,245,709 shall vest in three
equal installments commencing on the first anniversary of the date of grant;
and
(ii) 1,245,710 shall vest upon satisfaction of the performance targets set
forth
in and in accordance with Exhibit
A,
attached hereto. The parties understand and agree that such options shall not
be
issued under any stock option plan or stock incentive plan of the Company.
During the Term of this Agreement the Employee agrees not to sell, pledge,
hypothecate or otherwise transfer the Common Stock issuable upon the exercise
of
each tranche of options identified above within a one year period after vesting
of such tranche without the consent of the Board of Directors. The terms and
provisions of such options shall be set forth in a stock option agreement in
a
form satisfactory to the Company. In addition, the Employee may be entitled,
during the term of this Agreement, to receive such additional options, at such
exercise prices and other terms as the Compensation Committee of the Board
may,
in its sole and absolute discretion, determine.
(d)
Restricted
Stock.
Upon
the Commencement Date, the Company agrees to issue and grant to Employee, the
following amounts of restricted Common Stock under
the
Company’s 1999 Equity Stock Incentive Plan (or such successor or other Company
stock incentive plans as the Company may hereafter maintain or
adopt),
as
priced in the manner set forth below (the “Restricted Stock”), upon the
occurrence of the following events during the Term: (i) $1,000,000 of Restricted
Stock shall be granted upon the Company achieving annual earnings before
interest, taxes, depreciation and amortization, as computed by the Company
on or
prior to its filing of its annual report on Form 10-K, on a consistent basis
(“EBITDA”) of at least $25,000,000 in a fiscal year of the Company; (ii)
$1,000,000 of Restricted Stock shall be granted upon the Company achieving
annual EBITDA of at least $50,000,000 in a fiscal year of the Company; and
(iii)
$1,000,000 shall be granted upon the Company achieving annual EBITDA of at
least
$75,000,000 in a fiscal year of the Company. Each of the grants specified in
(i)-(iii) above are one-time grants and shall vest on the date on which the
Company’s Form 10-K is filed in respect of the fiscal year for which the grant
is being made and the xxxxx xxxxx shall be the closing price of the Common
Stock
of the Company on the principal exchange on which it is traded on such date.
During the Term of this Agreement the Employee agrees not to sell, pledge,
hypothecate or otherwise transfer the Restricted Stock identified above within
a
one year period after grant without the consent of the Board of Directors.
The
terms and provisions of such Restricted Stock shall be set forth in a restricted
stock agreement in a form satisfactory to the Company.
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(e)
Benefits.
During
the Term of this Agreement, the Employee shall be entitled to participate in
or
benefit from, in accordance with the eligibility and other provisions thereof,
the Company's medical insurance and other fringe benefit plans or policies
as
the Company may make available to, or have in effect for, its senior executive
officers from time to time. The Company and its affiliates retain the right
to
terminate or alter any such plans or policies from time to time. The Employee
shall also be entitled to four weeks paid vacation each year, sick leave and
other similar benefits in accordance with policies of the Company from time
to
time in effect for its senior executive officers.
(f)
Reimbursement
of Business Expenses.
During
the Term of this Agreement, upon submission of proper invoices, receipts or
other supporting documentation reasonably satisfactory to the Company and in
accordance with and subject to the Company’s expense reimbursement policies, the
Employee shall be reimbursed by the Company for all reasonable business expenses
actually and necessarily incurred by the Employee on behalf of the Company
in
connection with the performance of services under this Agreement.
(g) Taxes.
The
Base
Compensation and any other compensation paid to Employee shall be subject to
withholding for applicable taxes and other amounts.
4. Representations
of Employee.
(a)
The
Employee represents and warrants that he is not party to, or bound by, any
agreement or commitment, or subject to any restriction, including but not
limited to agreements related to previous employment containing confidentiality
or noncompetition covenants, which presently has or may in the future have
a
possibility of adversely affecting the business of the Company or the
performance by the Employee of his duties under this Agreement.
(b)
During the Term and the Severance Period, if any, the Employee agrees that
he
will not offer for sale, sell, pledge, assign, hypothecate or otherwise create
any interest in or dispose of (or enter into any transaction or device that
is
designed to, or could reasonably be expected to, result in any of the foregoing)
any shares of Common Stock owned by him on the Commencement Date or any shares
of Common Stock owned or acquired by him after the Commencement Date upon the
conversion or exercise of options or any securities convertible into or
exercisable or exchangeable for Common Stock, without first notifying the Board
in writing to inquire as to whether there exists any facts or circumstances
that
would make it inadvisable for the Company if the Employee engaged in such
transaction.
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(c)
The
representations, warranties and covenants of this Section 4 shall survive
termination of the Employee’s employment hereunder and the expiration of the
Term hereof.
5. Confidentiality,
Noncompetition, Nonsolicitation and Non-Disparagement.
For
purposes of this Section 5, all references to the Company shall be deemed to
include the Company’s affiliates and subsidiaries and their respective
subsidiaries, whether now existing or hereafter established or acquired. In
consideration for the compensation and benefits provided to the Employee
pursuant to this Agreement, the Employee agrees with the provisions of this
Section 5.
(a)
Confidential
Information.
(i) The
Employee acknowledges that as a result of his retention by the Company, the
Employee has and will continue to have knowledge of, and access to, proprietary
and confidential information of the Company, including, without limitation,
research and development plans and results, software, databases, technology,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, product and service information, product
and service availability, pricing information (including pricing strategies),
financial, business and marketing information and plans, and the identity of
customers, clients and suppliers (collectively, the “Confidential Information”),
and that the Confidential Information, even though it may be contributed,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense which are the exclusive
property of the Company. Accordingly, the Employee shall not, at any time,
either during or subsequent to the Term of this Agreement, use, reveal, report,
publish, transfer or otherwise disclose to any person, corporation or other
entity, any of the Confidential Information without the prior written consent
of
the Company, except to responsible officers and employees of the Company and
other responsible persons who are in a contractual or fiduciary relationship
with the Company and who have a need for such Confidential Information for
purposes in the best interests of the Company, and except for such Confidential
Information which is or becomes of general public knowledge from authorized
sources other than the Employee.
(ii)
The
Employee acknowledges that the Company would not enter into this Agreement
without the assurance that all the Confidential Information will be used for
the
exclusive benefit of the Company.
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(b)
Return
of Confidential Information.
Upon
the termination of this Agreement or upon the request of the Company, the
Employee shall promptly return to the Company all Confidential Information
in
his possession or control, including but not limited to all drawings, manuals,
computer printouts, computer databases, disks, data, files, lists, memoranda,
letters, notes, notebooks, reports and other writings and copies thereof and
all
other materials relating to the Company’s business, including without limitation
any materials incorporating Confidential Information.
(c)
Inventions,
etc.
During
the Term and for a period of one year thereafter, the Employee will promptly
disclose to the Company all designs, processes, inventions, improvements,
developments, discoveries, processes, techniques, and other information related
to the business of the Company conceived, developed, acquired, or reduced to
practice by him alone or with others during the Term of this Agreement, whether
or not conceived during regular working hours, through the use of Company time,
material or facilities or otherwise (“Inventions”).
The
Employee agrees that all copyrights created in conjunction with his service
to
the Company and other Inventions, are “works made for hire” (as that term is
defined under the Copyright Act of 1976, as amended). All such copyrights,
trademarks, and other Inventions shall be the sole and exclusive property of
the
Company, and the Company shall be the sole owner of all patents, copyrights,
trademarks, trade secrets, and other rights and protection in connection
therewith. To the extent any such copyright and other Inventions may not be
works for hire, the Employee hereby assigns to the Corporation any and all
rights he or she now has or may hereafter acquire in such copyrights and any
other Inventions. Upon request the Employee shall deliver to the Company all
drawings, models and other data and records relating to such copyrights,
trademarks and Inventions. The Employee further agrees as to all such
Inventions, to assist the Company in every proper way (but at the Company’s
expense) to obtain, register, and from time to time enforce patents, copyrights,
trademarks, trade secrets, and other rights and protection relating to said
Inventions in and all countries, and to that end the Employee shall execute
all
documents for use in applying for and obtaining such patents, copyrights,
trademarks, trade secrets and other rights and protection on and enforcing
such
Inventions, as the Company may desire, together with any assignments thereof
to
the Company or persons designated by it. Such obligation to assist the Company
shall continue beyond the termination of the Employee’s service to the Company,
but the Company shall compensate the Employee at a reasonable rate after
termination of service for time actually spent by the Employee at the Company’s
request for such assistance. In the event the Company is unable, after
reasonable effort, to secure the Employee’s signature on any document or
documents needed to apply for or prosecute any patent, copyright, trademark,
trade secret, or other right or protection relating to an Invention, whether
because of the Employee’s physical or mental incapacity or for any other reason
whatsoever, the Employee hereby irrevocably designates and appoints the Company
and its duly authorized officers and agents as his agent coupled with an
interest and attorney-in-fact, to act for and in his behalf and stead to execute
and file any such application or applications and to do all other lawfully
permitted acts to further the prosecution and issuance of patents, copyrights,
trademarks, trade secrets, or similar rights or protection thereon with the
same
legal force and effect as if executed by the Employee.
5
(d) Non-competition.
The
Employee will not utilize his special knowledge of the business operations
of
the Company and his relationships with customers, suppliers of the Company
and
others to compete with the Company. During the Term of this Agreement and (A)
for a period of one year after the termination of this Agreement pursuant to
Sections 7(a), 7(b) or 7(e) hereof (subject to extension pursuant to Section
7(f) hereof), as applicable; or (B) in the event of termination pursuant to
Sections 7(c) or 7(d), the duration of the Severance Period (as defined in
Section 7(f)); the Employee shall not engage, directly or indirectly, or have
an
interest, directly or indirectly, anywhere in the United States of America
or
any other geographic area where the Company does business or in which its
products or services are marketed, alone or in association with others, as
principal, officer, agent, Employee, director, partner or stockholder (except
with respect to his employment by the Company), or through the investment of
capital, lending of money or property, rendering of services or otherwise,
in
any business competitive with or substantially similar to that engaged in by
the
Company during the Term of this Agreement (it being understood hereby, that
the
ownership by the Employee of five percent (5%) or less of the stock of any
company listed on a national securities exchange shall not be deemed a violation
of this Section 5).
(e) Non-solicitation.
During
the Term of this Agreement and (A) for a period of one year after the
termination of this Agreement pursuant to Sections 7(a), 7(b) or 7(e) hereof
(subject to extension pursuant to Section 7(f) hereof), as applicable; or (B)
in
the event of termination pursuant to Sections 7(c) or 7(d), the duration of
the
Severance Period (as defined in Section 7(f)); the Employee shall not, and
shall
not permit any of his employees, agents or others under his control to, directly
or indirectly, on behalf of himself or any other person, (i) call upon, accept
competitive business from, or solicit the competitive business of any individual
or entity who is, or who had been at any time during the preceding two years,
a
customer of the Company or any successor to the business of the Company, or
otherwise divert or attempt to divert any business from the Company or any
such
successor, or (ii) directly or indirectly recruit or otherwise solicit or induce
any person who is an Employee of, or otherwise engaged by, the Company or any
successor to the business of the Company to terminate his employment or other
relationship with the Company or such successor, or hire or enter into any
business with any person is employed by or who has left the employ of the
Company or any such successor during the preceding two years. The Employee
shall
not at any time, directly or indirectly, use or purport to authorize any person
to use any name, xxxx, logo, trade dress or other identifying words or images
which are the same as or similar to those used at any time by the Company in
connection with any product or service, whether or not such use would be in
a
business competitive with that of the Company. Any breach or violation by the
Employee of the provisions of this Section 5 shall toll the running of any
time
periods set forth in this Section 5 for the duration of any such breach or
violation.
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(f)
Non-Disparagement.
The
Employee shall not at any time, directly or indirectly, take any action (whether
orally or in writing or otherwise) which has or may be expected to have the
effect of disparaging the Company or any of its subsidiaries or affiliates
or
their directors, officers or executives or their respective reputations,
including, but not limited to, their business models, practices, relationships,
internal workings, financial condition or operations, in any manner whatsoever
at any time.
6. Remedies.
The
restrictions set forth in Section 5 are considered by the parties to be fair
and
reasonable. The Employee acknowledges that the restrictions contained in Section
5 will not prevent him from earning a livelihood. The Employee further
acknowledges that the Company would be irreparably harmed and that monetary
damages would not provide an adequate remedy in the event of a breach of the
provisions of Section 5. Accordingly, the Employee agrees that, in addition
to
any other remedies available to the Company, the Company shall be entitled
to
injunctive and other equitable relief to secure the enforcement of these
provisions, and shall be entitled to receive reimbursement from the Employee
for
all reasonable attorneys' fees and expenses incurred by the Company in enforcing
these provisions. In connection with seeking any such equitable remedy,
including, but not limited to, an injunction or specific performance, the
Company shall not be required to post a bond as a condition to obtaining such
remedy. If any provisions of Sections 5 or 6 relating to the time period, scope
of activities or geographic area of restrictions is declared by a court of
competent jurisdiction to exceed the maximum permissible time period, scope
of
activities or geographic area, the maximum time period, scope of activities
or
geographic area, as the case may be, shall be reduced to the maximum which
such
court deems enforceable. If any provisions of Sections 5 or 6 other than those
described in the preceding sentence are adjudicated to be invalid or
unenforceable, the invalid or unenforceable provisions shall be deemed amended
(with respect only to the jurisdiction in which such adjudication is made)
in
such manner as to render them enforceable and to effectuate as nearly as
possible the original intentions and agreement of the parties. For purposes
of
this Section 6, all references to the Company shall be deemed to include the
Company's affiliates and subsidiaries, whether now existing or hereafter
established or acquired.
7. Termination;
Non-renewal.
This
Agreement may be terminated prior to the expiration of the Term set forth in
Section 1 upon the occurrence of any of the events set forth in, and subject
to
the terms of, this Section 7.
(a)
Death
or Permanent Disability.
If
the
Employee dies or becomes permanently disabled, this Agreement shall terminate
effective at the end of the calendar month during which his death occurs or
when
his disability is deemed to have become permanent. If the Employee is unable
to
perform his normal duties for the Company because of illness or incapacity
(whether physical or mental) for 45 consecutive days during the Term of this
Agreement, or for 60 days (whether or not consecutive) out of any calendar
year
during the Term of this Agreement, his disability shall be deemed to have become
permanent. If this Agreement is terminated on account of the death or permanent
disability of the Employee, then the Employee or its estate shall be entitled
to
receive accrued Base Compensation through the date of such termination and
the
Employee and the Employee’s estate shall have no further entitlement to Base
Compensation, bonus, or benefits, except in the case of the Employee’s death,
the proceeds of any life insurance policies payable to his beneficiaries shall
be paid pursuant to the terms and conditions of such policies following the
effective date of such termination.
7
(b)
Cause.
This
Agreement may be terminated at the Company’s option, immediately upon written
notice to the Employee, upon: (i) the Employee’s commission of a misdemeanor or
felony that, in the Board’s reasonable judgment, adversely affects the Company’s
or any of the Company’s affiliates’ reputation, business or interests, or the
ability of the Employee to perform his duties as an employee of the Company;
(ii) the Employee’s act of fraud or dishonest act upon, or misappropriation of
funds of, the Company or any of the Company’s affiliates; (iii) the Employee’s
gross negligence, willful or intentional act or omission in the performance
of
his duties under this Agreement as determined by the Board; (iv) the Employee’s
disregard of a lawful direction of the Board or the executive officer to whom
the Employee reports; (v) the Employee’s appropriation for himself of a Company
corporate opportunity without the express prior written consent of the Board;
(vi) the Employee’s material breach of any of his obligations under this
Agreement (other than Section 5 of this Agreement) that continues unremedied
for
14 days following the Employee’s receipt of written notice from the Board
thereof; (vii) the Employee’s breach of any of his obligations of any of the
provisions of Section 5 of this Agreement; or (viii) the Employee is convicted
of a felony. If this Agreement is terminated by the Company for cause, then
the
Employee shall be entitled to receive accrued Base Compensation through the
date
of such termination.
(c)
Without
Cause.
This
Agreement may be terminated, at any time by the Company without cause
immediately upon giving written notice to the Employee of such termination.
The
Company shall have the right, at its election if made on or before the time
of
termination, to continue to pay the Employee his Base Compensation for an
additional period of up to 12 months, and if the Company so elects, the Employee
shall be bound by the provisions of Sections 5(d) and 5(e) of this Agreement
for
such additional period.
(d)
Non-renewal.
In the
event the Company fails to renew or extend the Term, the Company shall have
the
right, at its election, to continue to pay the Employee his Base Compensation
for an additional period of up to 12 months after the expiration of the Term,
and if the Company so elects, the Employee shall be bound by the provisions
of
Sections 5(d) and 5(e) of this Agreement for such additional period, provided,
however, Employee’s right to receive any such payment shall be subject to the
Employee complying with the terms of this Agreement. Any such election shall
be
made in writing at least 90 days prior to the expiration of the Term and shall
specify the length of such additional period.
(e)
By
Employee.
The
Employee may terminate the Agreement at anytime upon providing the Company
with
two weeks prior written notice. If this Agreement is terminated by the Employee
pursuant to this Section 7(e), then the Employee shall be entitled to receive
his accrued Base Compensation and benefits through the effective date of such
termination and the Employee shall have no further entitlement to Base
Compensation, bonus, or benefits from the Company following the effective date
of such termination.
8
(f)
Severance
Payment and Period.
The
period of time during which the Company continues to pay (or would continue
to
pay, but for any breach by the Employee of this Agreement) the Employee
following the termination or expiration of this Agreement pursuant to Sections
7(b), (c), (d), (e) or this Section 7(f) shall be referred to as the “Severance
Period”, and the amounts due thereunder shall be referred to as the “Severance
Payment.” Upon termination of this Agreement pursuant to Sections 7(b), (c), (d)
or (e) the Company shall have the election (such election to be exercised within
10 days after the termination of Employee’s employment pursuant to such
provisions), to extend the applicable period that the covenants set forth in
Sections 5(d) and (e) are applicable to the Employee through and including
the
second anniversary of the date of termination (or through and including any
lesser period) provided that the Company agrees to pay the Employee (or would
continue to pay, but for any breach by the Consultant of this Agreement) the
Base Compensation (based on the highest rate of annual base salary paid to
the
Employee during the Term) during such extension period during which the
covenants are extended. The Severance Payment shall be payable, bi-monthly
in
accordance with the normal payroll practices of the Company and shall be subject
to withholding for applicable taxes and other amounts. In lieu of cash, at
the
option of the Company, the Severance Payment may be payable through the issuance
of Common Stock on the effective date of such termination or expiration, based
upon the closing price of the Common Stock on such date.
8. Key
Man Life Insurance. The
Employee acknowledges that the Company will seek to obtain key man life
insurance policy on his life with the Company as the named beneficiary. The
Employee hereby agrees to provide such information and to submit to such medical
examinations and otherwise cooperate as may be required to assist the Company
in
obtaining such policy.
9. Miscellaneous.
(a)
Survival.
The
provisions of Sections 4, 5, 6, 7 and 9 shall survive the termination of this
Agreement.
(b) Entire
Agreement.
This
Agreement sets forth the entire understanding of the parties and, except as
specifically set forth herein, merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification.
This
Agreement may not be modified or terminated orally, and no modification,
termination or attempted waiver of any of the provisions hereof shall be binding
unless in writing and signed by the party against whom the same is sought to
be
enforced.
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(d) Waiver.
Failure
of a party to enforce one or more of the provisions of this Agreement or to
require at any time performance of any of the obligations hereof shall not
be
construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party’s right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to
take.
(e)
Successors
and Assigns.
Neither
party shall have the right to assign this Agreement, or any rights or
obligations hereunder, without the consent of the other party; pro-vided,
however,
that
upon the sale of all or substantially all of the assets, business and good-will
of the Company to another company, or upon the merger or consolidation of the
Company with an-other company, this Agreement shall inure to the benefit of,
and
be binding upon, both Employee and the company purchasing such assets, business
and goodwill, or surviving such merger or con-soli-da-tion, as the case may
be,
in the same manner and to the same extent as though such other com-pany were
the
Company; and provided,
further,
that the
Company shall have the right to assign this Agreement to any affiliate or
subsidiary of the Company. Subject to the fore-going, this Agree-ment shall
inure to the benefit of, and be binding upon, the parties hereto and their
legal
representatives, heirs, successors and assigns.
(f) Communications.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been given at the time per-sonally
delivered or when mailed in any United States post office enclosed in a
registered or cer-ti-fied postage prepaid envelope and addressed to the
addresses set forth below, or to such other ad-dress as any party may specify
by
notice to the other party; provided,
however,
that any
notice of change of address shall be effective only upon receipt.
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If
to the Company:
Net
Perceptions, Inc.
Xxx
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Facsimile:
(000) 000-0000
Attention:
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With
a copy to:
Xxxx
Xxxxxxx, P.C.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
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|
If
to the Employee, to:
|
|
|
Xxxxxx
Xxxxxxxx
00
Xxxxxxx Xxxx
Xxxxxxx,
Xxxxxxxxxxx 00000
Facsimile:
(000) 000-0000
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(g) Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, such invalidity or unenforceability shall not affect
the
validity and enforceability of the other provisions of this Agreement and the
provisions held to be invalid or unenforceable shall be enforced as nearly
as
possible according to its original terms and intent to eliminate such invalidity
or unenforceability.
(h) Jurisdiction;
Venue.
This
Agreement shall be subject to the non-exclusive jurisdiction of the courts
of
New York County, New York. Any breach of any provision of this Agreement shall
be deemed to be a breach occurring in the State of New York by virtue of a
failure to perform an act required to be performed in the State of New York,
and
the parties irrevocably and expressly agree to submit to the non-exclusive
jurisdiction of the courts of New York County, New York for the purpose of
resolving any disputes among them relating to this Agreement or the transactions
contemplated by this Agreement and waive any objections on the grounds of forum
non conveniens or otherwise. The parties hereto agree to service of process
by
certified or registered United States mail, postage prepaid, addressed to the
party in question.
(i) Governing
Law; Indemnification.
This
Agreement is made and executed and shall be governed by the laws of the State
of
New York, without regard to the conflicts of law principles thereof.
Notwithstanding the foregoing, the Employee shall have the right to be
indemnified by the Company in accordance with the provisions of the Company's
certificate of incorporation, bylaws, and the provisions of Delaware
law.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts, but all counterparts
will together constitute but one agreement.
(k)
Third
Party Beneficiaries.
This
Agreement is for the sole and exclusive benefit of the parties hereto and,
except as provided herein, shall not be deemed for the benefit of any other
person or entity.
(l)
IRC
Section 409A.
The
parties to this Agreement intend that the Agreement complies with Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), where applicable,
and this Agreement shall be interpreted in a manner consistent with that
intention. Notwithstanding any provision of this Agreement, no payment or other
distribution required to be made to the Employee hereunder (including any
payment of cash, any transfer of property and any provision of taxable benefits)
as a result of his termination with the Company shall be made prior to the
earliest date that Employee may receive such payments without a penalty,
remedial measure or similar effect being imposed against the Company or the
Employee pursuant to Section 409A of the Code.
[SIGNATURE
PAGE FOLLOWS]
11
IN
WITNESS WHEREOF,
each of
the parties hereto has duly executed this Employment Agreement as of the date
set forth above.
| Net Perceptions, Inc. | Employee | |
| |
|
|
| By: /s/ Xxxxxx X. Xxxxxxx | /s/ Xxxxxx Xxxxxxxx | |
|
Name: Xxxxxx X. Xxxxxxx
|
Xxxxxx
Xxxxxxxx
|
|
|
Title:
Executive Chairman of the Board
|
||
Exhibit
A to Employment Agreement
between
Net
Perceptions, Inc., and Xxxxxx Xxxxxxxx
This
Exhibit A sets forth the vesting provisions of the portion of options which
are
to be awarded to the Employee pursuant to Section 3(c)(ii) of the Employment
Agreement (such portion, the “Performance Options”).
1. 415,237
Performance Options (the “First Performance Options”) shall vest as of
March
31, 2008,
if the
Company’s EBITDA for the year ending December 31, 2007 (“Year 1”) is not
less than $13,800,000 (the “Year 1 Target”); if the Year 1 Target is not
achieved, and if the sum of the Company’s EBITDA for the years ending December
31, 2007 and 2008 is not less than the sum of the Year 1 Target plus the Year
2
Target (as defined below), then the First Performance Options shall vest, as
of
March 31, 2009.
2. 415,237
Performance Options (the “Second Performance Options”) shall vest as of
March
31, 2009,
if the
Company’s EBITDA for the year ending December 31, 2008 (“Year 2”) is not
less than $15,700,000 (the “Year 2 Target”); if the Year 2 Target is not
achieved, and if the sum of the Company’s EBITDA for the years ending December
31, 2008 and 2009 is not less than the sum of the Year 2 Target plus the Year
3
Target (as defined below), then the Second Performance Options shall vest,
as of
March 31, 2010.
3. 415,236
Performance Options (the “Third Performance Options”) shall vest as of
March
31, 2010,
if the
Company’s EBITDA for the year ending December 31, 2009 (“Year 3”) is not
less than $17,200,000 (the “Year 3 Target”); if (i) the Year 3 Target is
not achieved, and (ii) the Company renews the employment agreement of the
Employee for another three-year term, and (iii) the sum of the Company’s
EBITDA for the years ending December 31, 2009 and 2010 is not less than the
sum
of the Year 3 Target plus the Year 4 Target (as defined hereinafter), then
the
Third Performance Options shall vest, as of March 31, 2011. “Year 4 Target”
means an amount of the Company’s EBITDA for the year ending December 31, 2010
that will be agreed upon by the parties in the renewed employment agreement,
if
any.
4. For
purposes hereof, the Company’s EBITDA for any year shall be the amount so
determined by reference to the Company’s audited financial statements for such
year without giving effect to any acquisitions from and after the Commencement
Date.
