EXHIBIT 10.31
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is by and between
NetRatings, Inc. ("Company") and Xxxxxxx Xxxxxxx ("Executive") and is
contingent upon and made effective ("Effective Date") as of the Closing Date as
defined in that certain Agreement and Plan of Merger dated as of October 25,
2001 by and among NetRatings, Inc., Sonoma Acquisition Corp., LLC. and Jupiter
Media Metrix, Inc. ("Merger Agreement"). Capitalized terms that are not
otherwise defined in this Agreement shall have the meaning ascribed to them in
the Merger Agreement.
The parties agree as follows:
1. Employment. Company hereby employs Executive, and Executive hereby
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accepts such employment, upon the terms and conditions set forth herein.
2. Duties.
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2.1 Position. Executive is to be employed as an Executive Vice President and
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shall have the duties and responsibilities assigned by the Company's Chief
Executive Officer, both upon initial hire and as may be reasonably assigned
from time to time. Executive shall perform faithfully and diligently all duties
assigned to Executive. Company reserves the right to modify Executive's
position and duties at any time in its sole and absolute discretion.
2.2 Best Efforts/Full-time. Executive will expend Executive's best efforts
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on behalf of Company, and will abide by all policies and decisions made by
Company, as well as all applicable federal, state and local laws, regulations
or ordinances. Executive will act in the best interest of Company at all times.
Executive shall devote Executive's full business time and efforts to the
performance of Executive's assigned duties for Company, unless Executive
notifies the Board of Directors in advance of Executive's intent to engage in
other paid work and receives the Board of Directors' express written consent to
do so.
3. Term.
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3.1 Initial Term. The employment relationship pursuant to this Agreement
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shall be for an initial term commencing on the Effective Date set forth above
and continuing until two years thereafter ("Initial Term"), unless sooner
terminated in accordance with section 7 below.
3.2 Renewal. Upon completion of the Initial Term specified in subsection 3.1
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above, Executive's employment, should it continue, shall be renewed
automatically for successive periods of one year (a "Renewal Period") as long
as the Executive is employed by the Company, unless either party shall have
given the other party notice of termination not less than forty-five (45) days
prior to and effective on the next following renewal date; provided, however,
that notwithstanding any of the foregoing provisions to the contrary, the
Executive's employment hereunder and this Agreement may be terminated at any
time as provided in Section 7.
4. Compensation.
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4.1 Base Salary. As compensation for Executive's performance of Executive's
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duties hereunder, Company shall pay to Executive an initial Base Salary of
$18,750 per month ($225,000 annualized), payable in accordance with the normal
payroll practices of Company, less required deductions for state and federal
withholding tax, social security and all other employment taxes and payroll
deductions. Executive's base salary shall be subject to increases on an annual
basis on the same basis as other members of the Company's senior management and
as approved by the Board of Directors of Company or its Compensation Committee.
4.2 Incentive Compensation. Executive shall have the opportunity to earn a
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Performance Bonus based upon the achievement of certain fiscal and
performance-based objectives as those objectives and other terms are mutually
determined in good faith by Executive and CEO prior to the applicable bonus
period. The Target Bonus for Calendar Year 2002 shall be 45 percent of
Executive's Base Salary (of which 22.5 percent will be guaranteed) and shall be
assessed on a semi-annual basis. The Target Bonus each calendar year thereafter
shall be 45 percent of the Executive's Base Salary, none of which will be
guaranteed.
4.3 Stock Options. Subject to the Board of Directors' approval, Executive
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will be granted a non-qualified stock option to purchase 150,000 shares of
Company's Common Stock under Company's Stock Option Plan (the "Plan") at an
exercise price equal to the fair market value of that stock on the Effective
Date (the "Option"). The Option shall vest at the rate of 25% on the first
anniversary of the grant date and 1/48 of the shares subject to the Option
shall vest each month thereafter, in each case as long as the Executive is
employed by the Company on such vesting date. The Option will be subject to the
terms and conditions of the Plan and the standard stock option agreement
provided pursuant to the Plan, which Executive will be required to sign as a
condition of receiving the Option.
5. Customary Fringe Benefits. Executive will be eligible for all customary
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and usual fringe benefits generally available to executives of Company subject
to the terms and conditions of Company's benefit plan documents. Company
reserves the right to change or eliminate the fringe benefits on a prospective
basis, at any time, effective upon notice to Executive, provided, however, that
the Company agrees to pay for any employee contributions required for Executive
and his dependants' participation in the Company's medical and dental insurance
benefits. Executive will specifically be eligible for four weeks of vacation
and sick leave to be administered in accordance with the policies of Company in
effect during the term of this Agreement. Should the Company require the
Executive to relocate and the Executive agrees to relocate, the Company will
pay for all reasonably related moving expenses. Any amounts received by
Executive for relocation expense reimbursement will be reported as taxable
income to Executive in the year received as required by applicable tax law.
6. Business Expenses. Executive will be reimbursed for all reasonable,
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out-of-pocket business expenses incurred in the performance of Executive's
duties on behalf of Company. To obtain reimbursement, expenses must be
submitted promptly with appropriate supporting documentation in accordance with
Company's policies.
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7. Termination of Executive's Employment.
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7.1 Termination for Cause by Company. Although Company anticipates a
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mutually rewarding employment relationship with Executive, Company may terminate
Executive's employment immediately at any time for Cause. For purposes of this
Agreement, "Cause" is defined as: (a) any act of personal dishonesty taken by
the Executive in connection with his responsibilities as an employee which is
intended to result in substantial personal enrichment of the Executive; (b) the
Executive's conviction of a felony which the Board reasonably believes has had
or will have a material detrimental effect on the Company's reputation or
business; (c) a willful act by the Executive which constitutes misconduct and is
injurious to the Company; (d) continued willful violations by the Executive of
the Executive's obligations to the Company after there has been delivered to the
Executive a written demand for performance from the Company which describes the
basis for the Company's belief that the Executive has not substantially
performed his duties; (e) Executive's failure to perform the essential functions
of Executive's position, with or without reasonable accommodation, due to a
mental or physical disability; and (f) Executive's death. In the event
Executive's employment is terminated in accordance with this subsection 7.1,
Executive shall be entitled to receive only the Base Salary then in effect,
prorated to the date of termination and, if Executive is terminated in calendar
year 2002, the guaranteed portion of his Target Bonus, prorated to the date of
termination. All other Company obligations to Executive pursuant to this
Agreement will become automatically terminated and completely extinguished.
Executive will not be entitled to receive the Severance Payment described in
subsection 7.2 below.
7.2 Termination Without Cause by Company/Severance. Company may terminate
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Executive's employment under this Agreement without Cause at any time on thirty
(30) days' advance written notice to Executive. In the event of such
termination, Executive shall be entitled to receive the Base Salary then
in effect, prorated to the date of termination and, if Executive is terminated
in calendar year 2002, the guaranteed portion of his Target Bonus, prorated to
the date of termination. Executive will in addition receive (a) continued
payment consistent with the Company's normal payroll procedures of Executive's
salary at his Base Salary rate, less applicable withholding, for 12 months
following his termination ("Severance Period"); (b) continued payment of a
prorata share of Executive's Target Bonus, less applicable withholding, for the
Severance Period; (c) accelerated vesting of the unvested portion of any stock
option(s) held by the Employee that were granted by the Company effective the
day prior to his termination; and (d) payment for the employee portion for the
continuation of health benefits as provided under COBRA, for the Severance
Period, provided that Executive: (i) complies with all surviving provisions of
this Agreement as specified in subsection 12.7 below; (ii) complies with the
provisions of the NonCompetition Agreement that Executive entered into
concurrently with the Merger Agreement; and (iii) executes a full general
release, releasing all claims, known or unknown, that Executive may have
against Company arising out of or any way related to Executive's employment or
termination of employment with Company. All other Company obligations to
Executive will be automatically terminated and completely extinguished.
7.3 Voluntary Resignation by Executive for Good Reason/Severance. Executive
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may voluntarily resign Executive's position with Company for Good Reason, at
any time on sixty (60) days' advance written notice. In the event of
Executive's resignation for Good Reason, Executive will be entitled to receive
the payments and benefits described in 7.2 subsection above, provided Executive
complies with all of the conditions in 7.2 subsection above. All other Company
obligations to Executive pursuant to this Agreement will become
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automatically terminated and completely extinguished. Executive will be deemed
to have resigned for Good Reason in the following circumstances: (a) without the
Executive's express written consent, the reduction of the Executive's duties
which results in a significant diminution of the Executive's position or
responsibilities with the Company, or the removal of the Executive from his
employment position in the Company other than for Cause; (b) without the
Executive's express written consent, a material reduction (defined as more than
a 10 percent reduction) by the Company in the Executive's total cash
compensation as in effect immediately prior to such reduction; (c) without the
Executive's express written consent, a material reduction by the Company in the
kind or level of employee benefits to which the Executive is entitled
immediately prior to such reduction with the result that the Executive's overall
benefits package is significantly reduced; (d) without the Executive's express
written consent, the relocation of the Company to a facility or location more
than 30 miles from the Company's then present location, provided, or (e) any
breach by the Company of any material provision of this Agreement. Executive
recognizes, however, that under no circumstance will his own relocation within
the first year following the Closing Date (even if at the request of the
Company) constitute an event of Good Reason.
7.4 Voluntary Resignation by Executive Without Good Reason. In the event of
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Executive's resignation without Good Reason, Executive will be entitled to
receive payment(s) for all prorated salary, applicable prorated Target Bonus,
and unpaid vacation accrued as of the date of Employee's termination of
employment. All other Company obligations to Executive pursuant to this
Agreement will become automatically terminated and completely extinguished. In
addition, Executive will not be entitled to receive the Severance Payment
described in subsection 7.2 above.
7.5 280G Compliance. In the event the Executive becomes entitled to the
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payments and benefits provided under this Agreement and/or any other payments
or benefits with a Change of Control (as defined in Section 3(b)) of the
Company (collectively, the "Payments"), and such Payments would result in a
"parachute payment" as described in Section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), the amount of such Payments shall be either:
(i) the full amount of the Payments, or
(ii) a reduced amount which would result in no portion of the Payments being
subject to the excise tax imposed pursuant to Section 4999 of the Code (the
"Excise Tax"), whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by the Executive, on an after-tax basis, of the greatest amount of
benefit. Unless the Company or the Executive otherwise agree in writing, any
determination required under this Section shall be made in writing by
independent public accountants appointed by the Company and reasonably
acceptable to the Executive (the "Accountants"), whose determination shall be
conclusive and binding upon the Executive and the Company for all purposes. The
Company shall bear all costs the Accountants may reasonably incur.
7.6 Termination of Employment Upon Nonrenewal. In the event that Executive
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gives notice of his election not to extend the Agreement for a Renewal Period
as proscribe in subsection 3.2, the Agreement will expire, Executive's
employment with Company
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will terminate Executive will only be entitled to the Base Salary and
Target Bonus then in effect, prorated to the date of termination, any accrued
vacation benefits, and the Company releases any fully vested options. All other
Company obligations to Executive pursuant to this Agreement will become
automatically terminated and completely extinguished. Executive will not be
entitled to the Severance Payment described in subsection 7.2 above. In the
event that the Company gives notice of its election not to extent the Agreement
for a Renewal Period as proscribed in section 3.2, such non-renewal shall be
considered an event of Good Reason and Executive will be entitled to receive the
payments and benefits described in subsection 7.2 above, provided Executive
complies with all of the conditions in subsection 7.2 above. All other Company
obligations to Executive pursuant to this Agreement will become automatically
terminated and completely extinguished.
8. No Conflict of Interest. During the term of Executive's employment with
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Company, Executive must not engage in any work, paid or unpaid, that creates an
actual or potential conflict of interest with Company. Such work shall include,
but is not limited to, directly or indirectly competing with Company in any
way, or acting as an officer, director, employee, consultant, stockholder,
volunteer, lender, or agent of any business enterprise of the same nature as,
or which is in direct competition with, the business in which Company is now
engaged or in which Company becomes engaged during the term of Executive's
employment with Company, as may be determined by the Board of Directors in its
sole discretion. If the Board of Directors believes such a conflict exists
during the term of this Agreement, the Board of Directors may ask Executive to
choose to discontinue the other work or resign employment with Company. In
addition, Executive agrees not to refer any client or potential client of
Company to competitors of Company, without obtaining Company's prior written
consent, during the term of Executive's employment.
9. Confidentiality and Proprietary Rights. Executive agrees to read, sign
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and abide by Company's Employee Innovations and Proprietary Rights Assignment
Agreement, which is provided with this Agreement and incorporated herein by
reference.
10. Injunctive Relief. Executive acknowledges that Executive's breach of the
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covenants contained in the Confidentiality and Proprietary Rights Agreement
referenced in paragraph 9 would cause irreparable injury to Company and agrees
that in the event of any such breach, Company shall be entitled to seek
temporary, preliminary and permanent injunctive relief without the necessity of
proving actual damages or posting any bond or other security.
11. Agreement to Arbitrate. To the fullest extent permitted by law,
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Executive and Company agree to arbitrate any controversy, claim or dispute
between them arising out of or in any way related to this Agreement, the
employment relationship between Company and Executive and any disputes upon
termination of employment, including but not limited to breach of contract,
tort, discrimination, harassment, wrongful termination, demotion, discipline,
failure to accommodate, family and medical leave, compensation or benefits
claims, constitutional claims; and any claims for violation of any local, state
or federal law, statute, regulation or ordinance or common law. For the purpose
of this agreement to arbitrate, references to "Company" include all parent,
subsidiary or related entities and their employees, supervisors, officers,
directors, agents, pension or benefit plans, pension or benefit plan sponsors,
fiduciaries, administrators, affiliates and all successors and assigns of any
of them, and this agreement shall apply to them to the extent Executive's
claims arise out of or relate to their actions on behalf of Company.
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11.1 Consideration. The mutual promise by Company and Executive to arbitrate
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any and all disputes between them (except for those referenced above) rather
than litigate them before the courts or other bodies, provides the
consideration for this agreement to arbitrate.
11.2 Initiation of Arbitration. Either party may exercise the right to
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arbitrate by providing the other party with written notice of any and all
claims forming the basis of such right in sufficient detail to inform the other
party of the substance of such claims. In no event shall the request for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claims would be barred by the applicable statute of
limitations.
11.3 Arbitration Procedure. The arbitration will be conducted in Santa Xxxxx
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County, California by a single neutral arbitrator and in accordance with the
then current rules for resolution of employment disputes of the American
Arbitration Association ("AAA"). The parties are entitled to representation by
an attorney or other representative of their choosing. The arbitrator shall
have the power to enter any award that could be entered by a judge of the trial
court of the State of California, and only such power, and shall follow the
law. The parties agree to abide by and perform any award rendered by the
arbitrator. Judgment on the award may be entered in any court having
jurisdiction thereof.
12. General Provisions.
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12.1 Successors and Assigns.
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(a) Company's Successors. Any successor to the Company (whether direct or
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indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company's business and assets
shall assume the Company's obligations under this Agreement.
(b) Executive's Successors. Without the written consent of the Company, the
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Executive shall not assign or transfer this Agreement or any right or
obligation under this Agreement to any other person or entity. Notwithstanding
the foregoing, the terms of this Agreement and all rights of the Executive
hereunder shall inure to the benefit of, and be enforceable by, the Executive's
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
12.2 Waiver. No provision of this Agreement shall be modified, waived or
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discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the party hereto adversely affected thereby. No waiver by either
party of any breach of, or of compliance with, any condition or provision of
this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.
12.3 Severability. The invalidity or unenforceability of any provision or
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provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
12.4 Interpretation; Construction. The headings set forth in this Agreement
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are for convenience only and shall not be used in interpreting this Agreement.
This Agreement has been drafted by legal counsel representing Company, but
Executive has participated in the
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negotiation of its terms. Furthermore, Executive acknowledges that Executive
has had an opportunity to review and revise the Agreement and have it reviewed
by legal counsel, if desired, and, therefore, the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement.
12.5 Governing Law. The validity, interpretation, construction and
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performance of this Agreement shall be governed by the laws of the State of
California.
12.6 Notices. Notices and all other communications contemplated by this
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Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail,
return receipt requested and postage prepaid. In the case of the Executive,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all
notices shall be directed to the attention of its Secretary.
12.7 Survival. Sections 9 ("Confidentiality and Proprietary Rights"), 10
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("Injunctive Relief"), 11 ("Agreement to Arbitrate"), 12 ("General Provisions")
and 13 ("Entire Agreement") of this Agreement shall survive Executive's
employment by Company.
13. Entire Agreement. This Agreement, including the Company Employee
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Innovations and Proprietary Rights Assignment Agreement incorporated herein by
reference and Company's Stock Option Plan and related option documents
described in subsection 4.3 of this Agreement, and the NonCompetition Agreement
executed in connection with the Merger Agreement constitute the entire
agreement between the parties relating to this subject matter and supersedes
all prior or simultaneous representations, discussions, negotiations, and
agreements, whether written or oral, including but not limited to the
AdRelevance, Inc. Amended and Restated Employment Agreement dated October 8,
1999 entered into between AdRelevance, Inc. and Executive and assigned to
Company as a consequence of the Merger. This Agreement may be amended or
modified only with the written consent of Executive and the Board of Directors
of Company. No oral waiver, amendment or modification will be effective under
any circumstances whatsoever.
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14. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, but all of which together will constitute
one and the same instrument.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY
UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN.
WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES SHOWN BELOW.
XXXXXXX XXXXXXX
Dated:_____________________________ _____________________________________
NetRatings, Inc.
Dated: ____________________________ By: _________________________________
Name:
Title:
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