Transition Agreement
Exhibit 99.1
Execution Copy
This Transition Agreement made as of this 1st day of December 2009 by and between Constant
Contact, Inc. (“Constant Contact” or the “Company”) and Xxxxxx X. Xxxxxxxxx (“Xx. Xxxxxxxxx”).
WHEREAS, Xx. Xxxxxxxxx has served as Vice President and Chief Financial Officer of the
Company;
WHEREAS, Xx. Xxxxxxxxx will be transitioning from the Company;
WHEREAS, the Company desires to secure Xx. Xxxxxxxxx’x continued service until March 31, 2010
(or such other date as is determined pursuant to Section 1 below) to allow for the timely
completion of his current assignments and to allow for an appropriate transition of duties; and
WHEREAS, the Company and Xx. Xxxxxxxxx are parties to an employment letter agreement dated
December 1, 2005, as amended on December 9, 2008 (hereafter, the “Employment Agreement”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein,
the parties agree as follows.
1. Continued Employment. Xx. Xxxxxxxxx agrees to remain employed in his current
position from the date of this Transition Agreement until his resignation on March 31, 2010 (or
such earlier date as is designated by the Company to Xx. Xxxxxxxxx upon not less than 14 days
prior written notice (but in no event earlier than January 1, 2010), or such later date after
March 31, 2010 as is mutually agreed upon in writing by the Company and Xx. Xxxxxxxxx), at which
time Xx. Xxxxxxxxx agrees he will resign all titles and postings he then holds with the Company
(the “Resignation Date”). During this period, Xx. Xxxxxxxxx will continue to perform those duties
and responsibilities customary and consistent with his position and will continue to report to the
President. Xx. Xxxxxxxxx will continue to receive the same base salary, fringe benefits and stock
option vesting to which he was entitled immediately prior to the execution date of this Transition
Agreement. Xx. Xxxxxxxxx will also receive a quarterly cash incentive bonus, pro rated for the
actual number of days during 2010 for which he was employed up until the Resignation Date, and
payable in accordance with the same timing and payroll policies and procedures as such quarterly
cash incentive bonuses are paid to the Company’s executive management team generally. Such 2010
cash incentive bonus shall be calculated based on (i) 100% of the MBO (individual performance
goals) portion of the bonus and (ii) the Company’s actual results for the AMRG (“average monthly
revenue growth”) and adjusted EBITDA (“adjusted earnings before interest, taxes, depreciation and
amortization”) portions of the bonus. In the event the Compensation Committee of the Board of
Directors determines to modify or
change the structure of the cash incentive bonus, whether such modification or change relates
to the components of the bonus, its calculation or otherwise, then the cash bonus
payments provided for in this Section 1, as well as Section 2 below, shall be correspondingly
changed to reflect such modifications or changes, it being the intent of the parties that Xx.
Xxxxxxxxx’x bonuses hereunder shall continue to be earned and paid in a manner consistent with the
Company’s executive management team generally (e.g., in the event such modification or change
eliminated the MBO portion of the bonus and resulted in the entire target bonus for individuals
being performance based, then the bonus payments pursuant to this Section 1 would be adjusted in
the same fashion).
2. Severance Benefits. Upon the cessation of Xx. Xxxxxxxxx’x employment pursuant to
Section 1 above, Xx. Xxxxxxxxx shall execute the Release of Claims attached hereto as Exhibit A
and, conditioned on the execution and nonrevocation by Xx. Xxxxxxxxx of the Release of Claims, Xx.
Xxxxxxxxx or, in the event of Xx. Xxxxxxxxx’x death, his estate, shall be entitled to the benefits
set forth in subparagraphs 2(i)-(iii) below.
(i) Severance. For a period of six months (the “Initial Severance Period”), the
Company shall pay to Xx. Xxxxxxxxx xxxxxxxxx of $175,000, to be paid in 12 semi-monthly payments of
$14,583.33, in accordance with normal payroll policies and procedures and less all applicable taxes
and withholdings.
(ii) Additional Severance. In the event Xx. Xxxxxxxxx is not employed full-time as
the chief financial officer or similar such position or functional equivalent with another employer
(a “Subsequent Employment”) by the last day of the Initial Severance Period, then he shall receive
additional severance for an additional period of six months at the same rate described in
subparagraph 2(i), to be paid in accordance with normal payroll policies and procedures and less
all applicable taxes and withholdings; provided, however, that any such payments pursuant to this
subparagraph 2(ii) shall terminate upon the commencement of any such Subsequent Employment. For
the purposes hereof, Subsequent Employment shall be deemed to include a consulting or similar
arrangement involving essentially a full-time commitment in a role that is the same as, or
substantially similar to or the functional equivalent of, that of chief financial officer.
Notwithstanding the foregoing, Subsequent Employment shall not include tax return preparation and
related services performed by Xx. Xxxxxxxxx with his brother.
(iii) Health and Dental Insurance. The Resignation Date will serve as the “qualifying
event” under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). If Xx.
Xxxxxxxxx timely elects to continue medical and/or dental insurance coverage after the Resignation
Date in accordance with the provisions of COBRA, the Company will pay the Company portion of his
monthly premium payments for the period of time that he is receiving severance pursuant to
subparagraphs (i) or (ii) above or until he obtains other employment, whichever occurs first (the
“Continuation Period”). Xx. Xxxxxxxxx still will be responsible for the same employee portion of
the premium during the Continuation Period being paid by active employees participating in the same
health program and paid in such manner as the Company provides.
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3. Termination of Benefits. All benefits, including those set forth in the
Employment Agreement, will end upon the Resignation Date, except as expressly set forth in this
Transition Agreement.
4. Stock Options and Restricted Stock. During Xx. Xxxxxxxxx’x continued employment
pursuant to Section 1 and continuing until the Resignation Date, any outstanding, unvested options
or restricted stock awarded under the terms of any option award or restricted stock agreements
previously entered into by Xx. Xxxxxxxxx and the Company will continue to vest in accordance with
the terms of the applicable agreement and related documents. There will be no acceleration of
vesting in connection with this Transition Agreement.
5. Section 409A. It is intended that all payments made under the terms of this
Transition Agreement come within exceptions to Section 409A of the Internal Revenue Code of 1986,
as amended (“Section 409A”). The Transition Agreement and all related documents shall be
interpreted and administered in accordance with that intention. However, if any amount payable
under this Transition Agreement is determined to be subject to Section 409A then such payments
shall be administered in accordance with Section 409A, provided that the Company shall not be
liable for any failures under this Section 5 that result in the payment of any taxes or other
amounts due under the terms of Section 409A. To the extent any amount subject to Section 409A is
to be paid or provided to Xx. Xxxxxxxxx in connection with a separation from service at a time
when he is considered a specified employee within the meaning of Section 409A then such payment
shall not be made until the date that is six months and one day following such separation from
service, or in a lump sum upon his earlier death.
6. Non-Competition, Non-Disclosure and Non-Solicitation Obligations. Xx. Xxxxxxxxx
acknowledges and reaffirms all of his obligations as set forth in the Non-Competition,
Non-Disclosure and Non-Solicitation Agreement he executed on December 12, 2005, which remains in
full force and effect.
7. Return of Company Property. Xx. Xxxxxxxxx confirms that, as of the Resignation
Date, he will return to the Company all keys, files, records (and copies thereof), equipment
(including, but not limited to, software and printers, wireless handheld devices, cellular phones,
pagers, etc.), Company identification, and any other Company-owned property in his possession or
control, and that he will leave intact all electronic Company documents, including, but not
limited to, those which he developed or helped develop during his employment. Xx. Xxxxxxxxx
agrees that in the event that he discovers any other Company or proprietary materials in his
possession after the Resignation Date, he will immediately return such materials to the General
Counsel at the Company. Xx. Xxxxxxxxx further confirms that he will have cancelled all accounts
for his benefit, if any, in the Company’s name, including, but not limited to, credit cards,
telephone charge cards, cellular phone and/or pager accounts and computer accounts.
8. Outplacement. Xx. Xxxxxxxxx will be entitled to receive outplacement services
through Essex Partners of Boston, Massachusetts from the date
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of this Transition Agreement and continuing until up to six months after the Resignation
Date. Such services will be paid for by the Company.
9. Release of Claims. In consideration of the benefits provided for in this
Transition Agreement, which Xx. Xxxxxxxxx acknowledges he would not otherwise be entitled to
receive, Xx. Xxxxxxxxx hereby fully, forever, irrevocably and unconditionally releases, remises
and discharges the Company, its officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents and employees (each in their individual and corporate
capacities) (hereinafter, the “Released Parties”) from any and all claims, charges, complaints,
demands, actions, causes of action, suits, rights, debts, sums of money, costs, accounts,
reckonings, covenants, contracts, agreements, promises, doings, omissions, damages, executions,
obligations, liabilities, and expenses (including attorneys’ fees and costs), of every kind and
nature which he ever had or now has against the Released Parties, including, but not limited to,
any claims arising out of his employment with and/or separation from the Company, including, but
not limited to, all employment discrimination claims under Title VII of the Civil Rights Act of
1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. § 621
et seq., the Americans With Disabilities Act of 1990, 00 X.X.X. §00000 et
seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et seq., the
Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101 et
seq., Section 806 of the Corporate Fraud Accountability Act of 2002, 18 U.S.C. § 1514(A),
the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive Order 11216,
Executive Order 11141, all as amended; all claims arising out of the Fair Credit Reporting Act, 15
U.S.C. §1681 et seq., the Employee Retirement Income Security Act of 0000 (“XXXXX”), 00 X.X.X.
§0000 et seq., the Massachusetts Fair Employment Practices Act., M.G.L. c. 151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act,
M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act, M.G.L. c.
149, § 1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the Massachusetts
Maternity Leave Act , M.G.L. c. 149, § 105(d), all as amended; all common law claims including,
but not limited to, actions in tort, defamation and breach of contract; all claims to any
non-vested ownership interest in the Company, contractual or otherwise, including, but not limited
to, claims to stock or stock options; and any claim or damage arising out of his employment with
or separation from the Company (including any claim for retaliation) under any common law theory
or any federal, state or local statute or ordinance not expressly referenced above; provided,
however, that nothing in this Transition Agreement prevents him from filing, cooperating with, or
participating in any proceeding before the EEOC or a state Fair Employment Practices Agency
(except that he acknowledges that he may not be able to recover any monetary benefits in
connection with any such claim, charge or proceeding); provided, that nothing herein prevents Xx.
Xxxxxxxxx from seeking indemnification pursuant to the Indemnification Agreement with the Company
dated October 9, 2007.
10. Acknowledgment. Xx. Xxxxxxxxx acknowledges that he has been given at least
twenty-one (21) days to consider this Transition Agreement and the Release of Claims at Attachment
A, and that the Company advises him to consult with an attorney of his own choosing prior to
signing this Transition Agreement and
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Attachment A. Xx. Xxxxxxxxx is advised that he may revoke his agreement for a period of
seven (7) days after he signs it, and the release provided above shall not be effective or
enforceable until the expiration of such seven (7) day revocation period. Xx. Xxxxxxxxx is
advised and he understands and agrees that by entering into this agreement and signing it and the
Releases of Claims he is waiving any and all rights or claims he might have under The Age
Discrimination in Employment Act, as amended by The Older Workers Benefit Protection Act, and that
he has received consideration beyond that to which he was previously entitled.
11. Confidentiality. To the extent permitted by law, Xx. Xxxxxxxxx understands and
agrees that, as a condition for payment to him of the severance benefits described in Section 2
above, the terms and contents of this Transition Agreement, including all attachments hereto, and
the contents of the negotiations and discussions resulting in this Transition Agreement, shall be
maintained as confidential by him and his agents and representatives and shall not be disclosed to
any third party except to the extent required by federal or state law or as otherwise agreed to in
writing by the Company; provided, however, that nothing herein shall prevent Xx.
Xxxxxxxxx from making truthful disclosures to any governmental entity or in any litigation or
arbitration.
12. Reference Letter. Concurrently with the execution of this Transition Agreement,
Xx. Xxxxxxxxx has received from the Company a letter of reference, in form and substance
satisfactory to both him and the Company. Any oral references provided by the Company will be
substantially consistent with the letter of reference, although the Company shall not be required
to refer to the letter or to limit any statements solely to those set forth in the letter. In
consideration of the Company having provided that letter, as well as the payments and benefits
provided for in Sections 1 and 2, Xx. Xxxxxxxxx agrees that he shall not make any false,
disparaging or derogatory statements to any media outlet, industry group, financial institution or
current or former employee, consultant or customer of the Company, or to any party that has
contractual relations with the Company, regarding the Company or any of its directors, officers,
employees, stockholders, agents or representatives or about the Company’s business affairs and
financial condition. The Company will instruct its officers who are reporting persons pursuant to
the rules set forth in 17 CFR Section 240.16a-2 under the Securities Exchange Act of 1934 and each
member of its Board of Directors not to, and the Company’s Chief Executive Officer will not, make
any false, disparaging or derogatory statements to any media outlet, industry group, financial
institution or current or former employee, consultant or customer of the Company, or to any party
that has contractual relations with the Company, or to any potential or future employer of Xx.
Xxxxxxxxx, regarding Xx. Xxxxxxxxx, including Xx. Xxxxxxxxx’x employment by the Company and the
cessation of his employment.
13. Amendment. This Transition Agreement shall be binding upon the parties and may
not be modified in any manner, except by an instrument in writing of concurrent or subsequent date
signed by duly authorized representatives of the parties hereto. This Transition Agreement is
binding upon and shall inure to the benefit of the parties and their respective agents, assigns,
heirs, executors, successors and administrators.
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14. No Waiver. No delay or omission by either party in exercising any right under
this Transition Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by a party on any one occasion shall be effective only in that instance and shall
not be construed as a bar or waiver of any right on any other occasion.
15. Validity. Should any provision of this Transition Agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid, the validity of the
remaining parts, terms or provisions shall not be affected thereby and said illegal and/or invalid
part, term or provision shall be deemed not to be a part of this Transition Agreement.
16. Cooperation. Xx. Xxxxxxxxx agrees to cooperate with the Company in the
investigation, defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company. His cooperation in connection with
such claims or actions shall include, but not be limited to, being available to meet with the
Company’s counsel to prepare for discovery or any mediation, arbitration, trial, administrative
hearing or other proceeding or to act as a witness when reasonably requested by the Company at
mutually agreeable times and at locations mutually convenient to Xx. Xxxxxxxxx and the Company.
17. Voluntary Assent. Xx. Xxxxxxxxx affirms that no other promises or agreements of
any kind have been made to or with him by any person or entity whatsoever to cause him to sign
this Transition Agreement, and that he fully understand the meaning and intent of this agreement.
Xx. Xxxxxxxxx states and represents that he has had an opportunity to fully discuss and review the
terms of this Transition Agreement and Attachment A with an attorney. Xx. Xxxxxxxxx further
states and represents that he has carefully read this Transition Agreement, including Attachment A
hereto, understand the contents therein, freely and voluntarily assent to all of the terms and
conditions hereof, and signs his name of his own free act.
18. Applicable Law. This Transition Agreement shall be interpreted and construed by
the laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions. The
parties hereby irrevocably submit to and acknowledge and recognize the jurisdiction of the courts
of the Commonwealth of Massachusetts, or if appropriate, a federal court located in Massachusetts
(which courts, for purposes of this Transition Agreement, are the only courts of competent
jurisdiction), over any suit, action or other proceeding arising out of, under or in connection
with this Transition Agreement or the subject matter hereof.
19. Entire Agreement. This Transition Agreement, together with Attachment A,
contains and constitutes the entire understanding and agreement between the parties hereto and
cancels all previous oral and written negotiations, agreements, commitments and writings in
connection therewith except as expressly provided herein. Nothing in this paragraph, however,
shall modify, cancel or supersede Xx. Xxxxxxxxx’x obligations set forth in Section 6 above.
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| CONSTANT CONTACT, INC. | XXXXXX X. XXXXXXXXX | ||||||||||
By:
|
/s/ Xxxx X. Xxxxxxx | /s/ Xxxxxx X. Xxxxxxxxx | |||||||||
| Name: Title: |
Xxxx X. Xxxxxxx President and Chief Executive Officer |
||||||||||
Date:
|
December 1, 2009 | Date: December 1, 0000 | |||||||||
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XXXXXXXXXX
A
RELEASE OF CLAIMS
This Release of Claims forms a part of that certain Transition Agreement (the “Transition
Agreement”) dated as of December 1, 2009 by and among Xxxxxx X. Xxxxxxxxx (“Xx. Xxxxxxxxx”),
and Constant Contact, Inc. (collectively, the “Company”).
1. Xx. Xxxxxxxxx’x Release of Claims — In consideration of the payment of the
benefits set forth in paragraph 2 of the Transition Agreement, which Xx. Xxxxxxxxx acknowledges he
would not otherwise be entitled to receive, he hereby fully, forever, irrevocably and
unconditionally releases, remises and discharges the Company, its officers, directors,
stockholders, corporate affiliates, subsidiaries, parent companies, agents and employees (each in
their individual and corporate capacities) (hereinafter, the “Released Parties”) from any and all
claims, charges, complaints, demands, actions, causes of action, suits, rights, debts, sums of
money, costs, accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities, and expenses (including attorneys’ fees and costs),
of every kind and nature which he ever had or now has against the Released Parties, including, but
not limited to, any claims arising out of his employment with and/or separation from the Company,
including, but not limited to, all employment discrimination claims under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. §2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. §
621 et seq., the Americans With Disabilities Act of 1990, 00 X.X.X. §00000
et seq., the Family and Medical Leave Act, 29 U.S.C. § 2601 et
seq., the Worker Adjustment and Retraining Notification Act (“WARN”), 29 U.S.C. § 2101
et seq., Section 806 of the Corporate Fraud Accountability Act of 2002, 18 U.S.C. §
1514(A), the Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., Executive Order
11216, Executive Order 11141, all as amended; all claims arising out of the Fair Credit Reporting
Act, 15 U.S.C. §1681 et seq., the Employee Retirement Income Security Act of 0000 (“XXXXX”), 00
X.X.X. §0000 et seq., the Massachusetts Fair
Employment Practices Act., M.G.L. c. 151B, § 1 et
seq., the Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal
Rights Act, M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries
Act, M.G.L. c. 149, § 1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B, and the
Massachusetts Maternity Leave Act , M.G.L. c. 149, § 105(d), all as amended; all common law claims
including, but not limited to, actions in tort, defamation and breach of contract; all claims to
any non-vested ownership interest in the Company, contractual or otherwise, including, but not
limited to, claims to stock or stock options; and any claim or damage arising out of his employment
with or separation from the Company (including any claim for retaliation) under any common law
theory or any federal, state or local statute or ordinance not expressly referenced above;
provided, however, that nothing in this Release of Claims prevents him from filing, cooperating
with, or participating in any proceeding before the EEOC or a state Fair Employment Practices
Agency (except that he acknowledges that he may not be able to recover any monetary benefits in
connection with any such claim, charge or proceeding); provided, that nothing herein prevents Xx.
Xxxxxxxxx from
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seeking indemnification pursuant to the Indemnification Agreement dated October 9, 2007.
2. Acknowledgement — Xx. Xxxxxxxxx hereby acknowledges that he has been given at
least twenty-one (21) days to consider the Transition Agreement, as well as this Attachment A, and
that the Company advises him to consult with any attorney of his own choosing prior to signing the
Transition Agreement and this Attachment A. Xx. Xxxxxxxxx is advised that he may revoke his
acceptance of this Attachment A during the period of seven (7) days after the execution of it, and
this Attachment A shall not become effective or enforceable, and no severance payments will be made
pursuant to Paragraph 2 of the Transition Agreement, until this seven (7) day period has expired.
Xx. Xxxxxxxxx is advised and he understands and agrees that by entering into this agreement and
signing it and the Release of Claims he is waiving any and all rights or claims he might have under
The Age Discrimination in Employment Act, as amended by The Older Workers Benefit Protection Act,
and that he has received consideration beyond that to which he was previously entitled.
3. Applicable Law — This Release of Claims shall be interpreted and construed by the
laws of the Commonwealth of Massachusetts, without regard to conflict of laws provisions. Xx.
Xxxxxxxxx hereby irrevocably submits to and acknowledges and recognizes the jurisdiction of the
courts of the Commonwealth of Massachusetts, or if appropriate, a federal court located in
Massachusetts (which courts, for purposes of this Transition Agreement, are the only courts of
competent jurisdiction), over any suit, action or other proceeding arising out of, under or in
connection with this Release of Claims or the subject matter hereof.
| Xxxxxx X. Xxxxxxxxx |
||||
| Date: | ||||
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