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EXHIBIT 10.13
DIGITAL IMPACT, INC.
000 XXXXX XXXX, XXXXX 000
XXX XXXXX, XX 00000
January 1, 2001
[Executive]
c/o Digital Impact, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
RETENTION AGREEMENT
Dear [Executive]:
Digital Impact, Inc. and its subsidiaries (collectively, the "COMPANY")
considers it essential to the best interests of its stockholders to xxxxxx the
continuous employment of key management personnel. Further, the Board of
Directors of the Company (the "BOARD") recognizes that the possibility of a
change in control exists, and that such possibility, and the uncertainty and
questions that it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
management of the Company, including you, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from any
possible change in control of the Company.
In order to induce you to remain in the employ of the Company, the
Company agrees that you will receive the benefits set forth in this letter
agreement (this "AGREEMENT") in the event your employment with the Company is
terminated following a Change in Control (as defined on Schedule A) under the
circumstances described below.
1. TERMINATION FOLLOWING CHANGE IN CONTROL. If a Change in Control
occurs, you will be entitled to the benefits provided in Section 2 hereof upon
the subsequent termination of your employment by the Company without Cause (as
defined on Schedule A) or by you for Good Reason (as defined on Schedule A)
during the nine-month period following such Change in Control (the "COVERED
Period"). Any purported termination of your employment by the Company or by you
shall be communicated by a Notice of Termination to the other party hereto in
accordance with Section 6(e) hereof. For purposes of this Agreement, a "NOTICE
OF TERMINATION" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
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2. COMPENSATION UPON TERMINATION.
(a) Severance Benefits. If your employment by the Company is terminated
during the Covered Period by the Company without Cause or by you for Good
Reason, then you shall be entitled to the following benefits:
(i) Severance. The Company shall pay you in a cash lump sum within
fifteen (15) days following the effective date of your termination of
employment (the "DATE OF TERMINATION") the full amount of any earned but
unpaid base salary through the Date of Termination, plus a cash payment
for all bonuses and sales commissions earned but unpaid (as reasonably
determined by the Company) and unused vacation time which you may have
accrued as of the Date of Termination. In addition, the Company shall pay
you in a cash lump sum, within fifteen (15) days following the Date of
Termination, an amount (the "SEVERANCE PAYMENT") equal to six (6) months
of your annual base salary on the Termination Date (without giving effect
to any salary reductions which constitute Good Reason). The Severance
Payment shall be in lieu of any other severance payments which you are
entitled to receive under any other severance pay plan or arrangement
sponsored by the Company or any of its subsidiaries.
(ii) Benefit Continuation. You and your eligible dependents may
elect to continue group health, dental and vision coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"). Provided that you and/or your eligible dependents are eligible
for and elect continuation coverage pursuant to COBRA, the Company will
reimburse you and your eligible dependents for COBRA premiums until the
earlier of (i) six (6) months from the termination date; or (ii) the date
you or your dependents, as applicable, are no longer eligible to receive
continuation coverage pursuant to COBRA. You and your dependents shall be
responsible for payment of your COBRA premiums for the remaining COBRA
period.
(b) Equity. If your employment is terminated during the Covered Period by
the Company without Cause or by you for Good Reason, your unvested Company stock
options or shares of Company common stock shall become vested in an amount equal
to the number of such options and shares that would have otherwise vested had
your employment continued for a period of twelve (12) months following your Date
of Termination.
(c) No Mitigation. You shall not be required to mitigate the amount of
any payment or benefit provided for in this Section 2 by seeking other
employment or otherwise.
(d) Withholding. All payments and benefits will be subject to applicable
withholding.
3. CERTAIN LIMITATIONS.
(a) Pooling-of-Interests Accounting. In the event of a merger or
consolidation of the Company with another entity which is intended to qualify
for pooling-of-interests accounting under United States Generally Accepted
Accounting Principles pursuant to Accounting Principles Board Opinion No. 16 or
any successor opinion, and the Company's independent accountants determines, by
written opinion delivered to the Board, that a payment or benefit hereunder
would prohibit the merger or consolidation from qualifying for treatment as a
pooling-of-interests transaction, then such payment or benefit shall be reduced
to the extent necessary, in
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the opinion of the Company's independent accountants, for the transaction to
achieve such accounting treatment.
(b) Golden Parachute Excise Taxes. Notwithstanding anything herein to the
contrary, if any payment or benefit hereunder or otherwise payable to you
constitutes a "parachute payment" (as defined in Section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended (the "CODE")), and the net after-tax
amount of any such parachute payment is less than the net after-tax amount if
the aggregate payments and benefits to be made to you were three times your
"base amount" (as defined in Section 280G(b)(3) of the Code), less $1.00, then
the aggregate of the amounts constituting the parachute payments shall be
reduced to an amount equal to three times your base amount, less $1.00. The
determinations to be made with respect to this Section 3(b) (other than any
determination as to which parachute payments shall be reduced, which shall be
made by you in your sole discretion) shall be made by the Company's independent
accountants, which shall be paid by the Company for the services to be provided
hereunder. For purposes of making the calculations required by this Section, the
accountants may make reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. You and the Company shall
furnish to the accountants such information and documents as the accountants may
reasonably request in order to make a determination under this Section.
4. SUCCESSORS; BINDING AGREEMENT.
(a) Assumption by Successor. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company in the same
amount and on the same terms as you would be entitled hereunder if you had
terminated your employment for Good Reason following a Change in Control, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "the Company" shall mean the Company as hereinbefore defined and
any successor to its business or assets which assumes and agrees to perform this
Agreement by operation of law, by agreement or otherwise.
(b) Enforceability by Beneficiaries. This Agreement shall inure to the
benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or, if there is no such designee, to
your estate.
5. ARBITRATION.
(a) Procedure. 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
binding arbitration to be held in San Mateo 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
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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. The arbitrator(s) shall apply California law to the merits
of any dispute or claim, without reference to conflicts of law rules. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. You hereby consent 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 or relating
to any arbitration in which the parties are participants.
(b) At-Will Employment. You understand that nothing in this Section
modifies your at-will employment status. Either party can terminate the
employment relationship at any time, with or without Cause.
(c) Acknowledgment. You have read and understand this Section, which
discusses arbitration. You understand that submitting any 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, constitutes a waiver of your right to a jury trial and relates to
the resolution of all disputes relating to all aspects of the employer/employee
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, the California Fair Employment and Housing
Act, and Labor Code Section 201, et seq; and
(iii) Any and all claims arising out of any other laws and
regulations relating to employment or employment discrimination.
6. MISCELLANEOUS.
(a) Amendments; Waivers. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
(b) Entire Agreement. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party that are not expressly set forth in this Agreement and
this Agreement shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
with respect to the subject matter hereof.
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(c) Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.
(d) Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
(e) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to Digital
Impact, Inc., 000 Xxxxx Xxxx, Xxxxx 000, Xxx Xxxxx, XX 00000; Attn.: General
Counsel, or to you at your address as set forth in the records of the Company,
or to such other address as either party may furnish to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
(f) Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
(g) No Contract of Employment. Nothing in this Agreement shall be
construed as giving you any right to be retained in the employ of the Company or
any subsidiary.
(h) Headings. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the parties to this
Agreement.
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If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
DIGITAL IMPACT, INC.
By:
---------------------------------
Xxxxxxx X. Park
Chief Executive Officer
AGREED:
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Signature
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Print Name
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Date
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SCHEDULE A
DEFINITIONS
"CAUSE" shall mean the willful engaging by you in criminal or fraudulent
acts or gross misconduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise. No act or failure to act on your part shall be
deemed "willful" unless done or omitted to be done by you not in good faith and
without reasonable belief that your action or omission was in the best interest
of the Company. Notwithstanding the foregoing, you shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
you a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters (3/4) of the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the Board),
finding that in the good faith opinion of the Board you were guilty of conduct
set forth above in the first sentence of this subsection and specifying the
particulars thereof in detail.
"CHANGE IN CONTROL" shall mean the happening of any of the following:
(i) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of the then
outstanding shares of common stock of the Company; provided, however,
that any acquisition by (x) the Company or any of its subsidiaries, (y)
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any of its subsidiaries or (z) Institutional Venture
Partners, Xxxxxx Xxxxxx Jurvetson or any affiliate of either entity shall
not constitute a Change in Control; or
(ii) Individuals who, as of the date of this Agreement, constitute
the Board (the "INCUMBENT BOARD") cease for any reason to constitute at
least a majority of the Board, provided that any individual becoming a
director subsequent to the date hereof whose election or nomination for
election by the Company's shareholders was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the Company
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or
(iii) Completion of a reorganization, merger or consolidation (a
"BUSINESS COMBINATION"), in each case, with respect to which all or
substantially all of the individuals and entities who were the beneficial
owners of the Company's common stock immediately prior to such Business
Combination do not own, directly or indirectly, more than 50% of the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors of the corporation
resulting from such Business Combination; or
(iv) A complete liquidation or dissolution of the Company or a
sale or other disposition of all or substantially all of the assets of
the Company other than to a
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corporation with respect to which, following such sale or disposition,
owns more than 50% of the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of
directors; or
"GOOD REASON" shall mean, without your express written consent, any of
the following:
(i) A material and detrimental alteration in your responsibilities
from those in effect immediately prior to the Change in Control; or
(ii) A reduction by the Company in your annual base salary as in
effect on the date hereof or as the same may be increased from time to
time; a reduction in your annual bonus target (expressed as a percentage
of base salary) below the target in effect for you immediately prior to
the Change in Control; or any adverse change in your long-term incentive
opportunities in comparison to those in effect prior to the Change in
Control; or
(iii) The relocation of the office of the Company where you are
employed at the time of the Change in Control to a location which is more
than 35 miles away from such office or the Company's requiring you to be
based more than 35 miles away from such office (except for required
travel on the Company's business to an extent substantially consistent
with your customary business travel obligations in the ordinary course of
business prior to the Change in Control); or
(iv) The failure by the Company to continue to provide you with
benefits at least as favorable, in the aggregate, as those enjoyed by you
under any of the Company's retirement, life insurance, medical, health
and accident, disability or savings plans in which you were participating
at the time of the Change in Control; or
(v) The failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 4 hereof or, if the business of the Company for
which your services are principally performed is sold at any time after a
Change in Control, the purchaser of such business shall fail to agree to
provide you with the same or a comparable duties, compensation and
benefits as provided to you by the Company immediately prior to the
Change in Control; or
(vi) Any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the requirements
of Section 1 (and, if applicable, the requirements set out in the
definition of "Cause"); for purposes of this Agreement, no such purported
termination shall be effective.
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