Executive Retention Agreement
Exhibit 10.17
THIS EXECUTIVE RETENTION AGREEMENT between Vistaprint N.V. (the “Company”) and Xxxxx Xxxxxxxxx
(the “Executive”) is made as of March 1, 2011 (the “Effective Date”). Except where the context
otherwise requires, the term “Company” includes each of Vistaprint N.V. and any of its present or
future parent or subsidiary corporations.
WHEREAS, the Company desires to retain the services of the Executive and, in order to do so,
is entering into this Agreement in order to provide compensation to the Executive in the event the
Executive’s employment with the Company is terminated under certain circumstances;
WHEREAS, the Company also recognizes that the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions that it may raise among
key personnel, may deter key potential personnel from joining the Company and may result in the
departure or distraction of key personnel to the detriment of the Company and its shareholders;
WHEREAS, considering the duties of the Executive, it is expressly agreed that his employment
contract is agreed on in consideration of the current capital share structure of the Company and
the current composition of its lead management; and
WHEREAS, the Company’s Supervisory Board (the “Supervisory Board”) has determined that
appropriate steps should be taken to retain the Executive and to reinforce and encourage the
continued employment and dedication of the Company’s key personnel without distraction from the
possibility of a change in control of the Company and related events and circumstances.
NOW, THEREFORE, as an inducement for and in consideration of the Executive remaining in the
Company’s employ, the Company agrees that the Executive shall receive the benefits set forth herein
in the event of a Change in Control and the severance and other benefits set forth in this
Agreement in the event the Executive’s employment with the Company is terminated under the
circumstances described below.
1. Key Definitions.
See Annex A for a list of certain defined terms used herein.
2. Term of Agreement. This Agreement, and all rights and obligations of the parties
hereunder, shall take effect upon the Effective Date and shall terminate upon the fulfillment by
the Company of its obligations under this Agreement following a termination of the Executive’s
employment (the “Term”).
3. Employment Status; Termination of Employment.
3.1 Not an Employment Contract. The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation to retain the
Executive as an employee and that this Agreement does not prevent the Executive from terminating
employment at any time.
3.2 Termination of Employment.
(a) Any termination of the Executive’s employment by the Company or by the Executive (other
than due to the death of the Executive) shall be communicated by a written notice to the other
party hereto (the “Notice of Termination”), given in accordance with Section 7. Any Notice of
Termination shall:
(i) indicate the specific termination provision (if any) of this Agreement relied upon by the
party giving such notice,
(ii) to the extent applicable, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision so
indicated, and
(iii) specify the Date of Termination (as defined below).
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(b) The effective date of an employment termination (the “Date of Termination”) shall be the
close of business on the date specified in the Notice of Termination (which date may not be less
than 15 days or more than 120 days after the date of delivery of such Notice of Termination), in
the case of a termination other than one due to the Executive’s death, or the date of the
Executive’s death, as the case may be; provided, however that if the Executive is resigning the
Executive’s employment for other than Good Reason or if the Executive’s employment is not
terminated Without Cause in accordance with Section 17 of Annex A, the Company may elect to accept
such resignation prior to the date specified in the Executive’s notice and the Date of Termination
shall be the date the Company notifies the Executive of such acceptance. In the event the Company
fails to satisfy the requirements of Section 3.2(a) regarding a Notice of Termination, the
purported termination of the Executive’s employment pursuant to such Notice of Termination shall
not be effective for purposes of this Agreement.
(c) The failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting any such fact or circumstance in enforcing the Executive’s or
the Company’s rights hereunder.
(d) Any Notice of Termination for Cause given by the Company must be given within 30 days of
the occurrence of the event(s) or circumstance(s), which constitute(s) Cause. Prior to any Notice
of Termination for Cause being given (and prior to any termination for Cause being effective), the
Executive shall be entitled to a hearing before the Supervisory Board at which the Executive may,
at the Executive’s election, be represented by counsel and at which the Executive shall have a
reasonable opportunity to be heard. Such hearing shall be held on not less than 30 days prior
written notice to the Executive stating the Supervisory Board’s intention to terminate the
Executive for Cause and stating in detail the particular event(s) or circumstance(s) which the
Supervisory Board believes constitutes Cause for termination. Any such Notice of Termination for
Cause must be approved by an affirmative vote of two-thirds of the members of the Supervisory
Board.
(e) Any Notice of Termination for Good Reason given by the Executive must be given within 90
days of the occurrence of the event(s) or circumstance(s), which constitute(s) Good Reason.
4. Benefits to Executive.
4.1 Acceleration of Awards. If the Change in Control Date occurs prior to the Date of
Termination, then, effective upon the Change in Control Date,
(a) each outstanding option to purchase shares of the Company held by the Executive (to the
extent not then currently exercisable) shall become immediately exercisable in full and shares of
the Company received upon exercise of any options will no longer be subject to any applicable right
of repurchase or first refusal by the Company,
(b) each outstanding restricted stock award held by the Executive shall be deemed to be fully
vested and such vested shares will no longer be subject to any applicable right of repurchase or
first refusal by the Company,
(c) each outstanding restricted share unit award held by the Executive shall be deemed to be
fully vested and such vested shares shall be distributed to the Executive as soon as practicable
thereafter,
(d) notwithstanding any provision in any applicable option agreement to the contrary, each
such option shall continue to be exercisable by the Executive for a period of 12 months following
the Date of Termination if the Executive is terminated Without Cause or resigns for Good Reason
following the Change in Control Date, but in no event may the option be exercised after the
original expiration date of the option,
(e) the performance criteria set forth in any Multi-Year Award shall be deemed satisfied at
the mid-range target level for the Performance Period in which the Change in Control occurs and for
each subsequent Performance Period that is part of the award under such Multi-Year Award, and the
Executive shall be entitled to receive the full mid-range target bonus for each such Performance
Period on the Change in Control Payment Date, and
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(f) the performance criteria set forth in any Annual Award shall be deemed satisfied at 100%
of the target levels, and the Executive shall be entitled to receive, on the Change in Control
Payment Date, the product of (i) 100% of the target bonus for the Performance Period in which the
Change in Control occurs and (ii) the Pro-Rating Fraction.
4.2 Compensation. If the Executive’s employment with the Company terminates during
the Term, the Executive shall be entitled to the following benefits:
(a) Termination Without Cause or Resignation for Good Reason Prior to the Change in
Control Date. If the Executive’s employment with the Company is terminated by the Company
Without Cause (other than for Disability or Death) or the Executive resigns for Good Reason prior
to the Change in Control Date, then the Executive shall be entitled to the following benefits:
(i) the Company shall pay to the Executive the following amounts:
(1) in a lump sum in cash in the next regularly scheduled pay cycle following the Date of
Termination, the sum of:
(A) the Executive’s unpaid base salary through the Date of Termination,
(B) if quarterly bonuses are then being paid, the product of (i) the greater of any
quarterly bonus paid or payable (including any bonus or portion thereof which has been
earned but deferred or which the Executive forewent) for the most recently completed fiscal
quarter or any quarterly bonus payable for the then current fiscal quarter and (ii) a
fraction, the numerator of which is the number of days in the current fiscal quarter through
the Date of Termination, and the denominator of which is 90, and
(C) the amount of any compensation previously deferred by the Executive (together with
any accrued interest or earnings thereon) and any accrued vacation pay,
in each case to the extent not previously paid (the sum of the amounts described in clauses (A),
(B) and (C) shall be hereinafter referred to as the “Accrued Obligations”);
(2) in a lump sum in cash in the next regularly scheduled pay cycle following the Date of
Termination, an amount equal to the sum of :
(A) 100% of the greater of (i) the Executive’s target annual bonus (including the sum
of any target annual bonus under any Annual Award or other agreement or arrangement and any
target quarterly bonuses, if applicable) for the then current fiscal year multiplied by the
average actual annual bonus payout percentage for the three fiscal year period ending prior
to the Date of Termination; provided however that, if the Executive has been employed by the
Company for more than two but less than three full fiscal years prior to the Date of
Termination, the average actual annual bonus payout percentage for the two fiscal year
period ending prior to the Date of Termination will be used for calculating the product in
this clause (i) instead of the average actual annual bonus payout percentage for the three
fiscal year period; and provided further that if the Executive has been employed by the
Company for less than two full fiscal years prior to the Date of Termination, the product in
this clause (i) shall be deemed to equal zero; and (ii) the Executive’s target annual bonus
(including the sum of any target annual bonus under any Annual Award or other agreement or
arrangement and any quarterly bonuses, if applicable) for the then current fiscal year; and
(B) the Executive’s then current annual base salary,
(the sum of the amounts described in clauses (A) and (B) shall be hereinafter referred to as the
“Severance Payment”);
(3) with respect to any Multi-Year Award and Annual Award:
(A) If subsequent to such termination or resignation a Change in Control does
not occur prior to the end of the applicable Performance Period, the Company shall pay
the Executive, in a lump sum in cash
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on the Award Payment Date, any Pro-Rated Multi-Year Award and any Pro-Rated Annual
Award, as applicable. Notwithstanding the foregoing, in no event will any Pro-Rated
Multi-Year Award or any Pro-Rated Annual Award, as applicable, be higher than the bonus the
Executive would have achieved for the applicable Performance Period under the applicable
Multi-Year Award or Annual Award, as the case may be, had the Executive remained employed
with the Company through the end of the applicable Performance Period.
(B) If subsequent to such termination or resignation a Change in Control does
occur prior to the end of the applicable Performance Period, the Company shall pay the
Executive, in a lump sum in cash on the Change in Control Payment Date, any Pro-Rated
Multi-Year Award and any Pro-Rated Annual Award, as applicable.
(C) Upon the occurrence of either of the events described in Section 4.2(a)(i)(3)(A)
or Section 4.2(a)(i)(3)(B), as applicable, each Multi-Year Award shall be terminated with
respect to any remaining Performance Periods under such Agreement that would occur after the
Performance Period in which the Date of Termination occurs and the Executive shall have no
further rights with respect to the terminated portion of such Multi-Year Award.
(ii) for 12 months after the Date of Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, the Company shall continue to
provide benefits to the Executive and the Executive’s family at least equal to those which would
have been provided to them if the Executive’s employment had not been terminated, in accordance
with the applicable Benefit Plans in effect on the Effective Date or, if more favorable to the
Executive and the Executive’s family, in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies; provided, however, that
if the Executive becomes reemployed with another employer and is eligible to receive a particular
type of benefits (e.g., health insurance benefits) from such employer on terms at least as
favorable to the Executive and the Executive’s family as those being provided by the Company, then
the Company shall no longer be required to provide those particular benefits to the Executive and
the Executive’s family (such benefits shall be hereinafter referred to as the “Primary Benefits”);
(iii) to the extent not previously paid or provided, the Company shall timely pay or provide
to the Executive any other amounts or benefits required to be paid or provided or which the
Executive is eligible to receive following the Executive’s termination of employment under any
plan, program, policy, practice, contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”); and
(iv) for purposes of determining eligibility (but not the time of commencement of benefits) of
the Executive for retiree benefits to which the Executive is entitled, the Executive shall be
considered to have remained employed by the Company until 12 months after the Date of Termination.
(b) Termination Without Cause or Resignation for Good Reason within one year after the
Change in Control Date. If the Executive’s employment with the Company is terminated Without
Cause by the Company (other than for Disability or Death) or the Executive resigns for Good Reason
at any time on or before the one year anniversary of the Change in Control Date, then the Executive
shall be entitled to the following benefits:
(i) the Company shall pay to the Executive the following amounts:
(1) in a lump sum in cash in the next regularly scheduled pay cycle following the Date of
Termination, the Accrued Obligations;
(2) in a lump sum in cash in the next regularly scheduled pay cycle following the Date of
Termination, an amount equal to the Severance Payment;
(ii) for 12 months after the Date of Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, the Company shall continue to
provide to the Executive and the Executive’s family the Primary Benefits;
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(iii) to the extent not previously paid or provided, the Company shall timely pay or provide
to the Executive the Other Benefits; and
(iv) for purposes of determining eligibility (but not the time of commencement of benefits) of
the Executive for retiree benefits to which the Executive is entitled, the Executive shall be
considered to have remained employed by the Company until 12 months after the Date of Termination.
(c) Section 409A of the Code. Neither the Company nor the Executive may elect to
defer delivery of any of the payments to be made under Section 4.2(a) or 4.2(b). If any of the
benefits payable under Section 4.2(a) or 4.2(b) (each a “Termination Benefit”) is considered
“nonqualified deferred compensation” within the meaning of Section 409A of the Code (“Section
409A”), and the Executive is considered a “specified employee” within the meaning of Section 409A,
then notwithstanding the provisions of Sections 4.2(a) and (b), no such Termination Benefit shall
be paid to the Executive during the six-month period following the Executive’s termination of
employment, provided, however that that such Termination Benefits may be paid immediately following
the death of the Executive and such Termination Benefits shall be paid in a lump sum immediately
upon the expiration of such 6-month period; and, provided, further, if not prohibited by Section
409A, such Termination Benefits shall, upon the Date of Termination, be paid into an escrow account
with a third party acceptable to the Executive, such escrow account to be subject to the claims of
creditors of the Company and such Termination Benefits to be paid to the Executive immediately upon
the expiration of such six-month period.
(d) Termination for Cause; Resignation without Good Reason; Termination for Death or
Disability. If the Company terminates the Executive’s employment with the Company for Cause at
any time, the Executive voluntarily resigns at any time for other than Good Reason, or if the
Executive’s employment with the Company is terminated by reason of the Executive’s death or
Disability, then the Company shall (i) pay the Executive (or the Executive’s estate, if
applicable), in a lump sum in cash within 30 days after the Date of Termination, the sum of (A) the
Executive’s unpaid base salary through the Date of Termination, and (B) the amount of any
compensation previously deferred by the Executive to the extent not previously paid and (ii) timely
pay or provide to the Executive the Other Benefits.
(e) Currency and Foreign Exchange Rate. For purposes of calculating the benefits
payable to the Executive pursuant to this Section 4, such benefits shall in each case be payable in
the currency in which the Executive would have received such compensation in the ordinary course of
business as of the Date of Termination or Change in Control Date, as applicable (the “Present
Currency”). In the event that the Executive received any compensation in prior fiscal years in any
currency other than the Present Currency (the “Prior Currency”), then for purposes of calculating
the Executive’s Severance Payment, Pro-Rated Annual Award, and Pro-Rated Multi-Year Award, as
applicable, any amounts paid to the Executive in the Prior Currency shall be converted to the
Present Currency at the prevailing exchange rate that was in effect on the date such compensation
was paid.
(f) Exclusions from Base Salary and Bonus. For purposes of this Section 4, base
salary and bonus exclude, without limitation, the following items: permanent or temporary housing
allowances, transportation and moving expenses, tuition, air travel for non-business reasons, tax
equalization payments, and any extraordinary payments that the Executive may be entitled to
pursuant to non-U.S. law.
4.3 Taxes.
(a) In the event that Vistaprint N.V. (or any successor thereto) undergoes a “Change in
Ownership or Control” (as defined in Annex A), the Company shall, within 15 days after each
date on which the Executive becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment (as defined in Annex A) relating to such Change in Ownership or
Control, determine and notify the Executive (with reasonable detail regarding the basis for its
determinations) (i) which of the payments or benefits due to the Executive (under this Agreement or
otherwise) following such Change in Ownership or Control constitute Contingent Compensation
Payments, (ii) the amount, if any, of the excise tax (the “Excise Tax”) payable pursuant to Section
4999 of the Code, by the Executive with respect to such Contingent Compensation Payment and (iii)
the amount of the Gross-Up Payment (as defined in Annex A) due to the Executive with
respect to such Contingent Compensation Payment. Within 30 days after delivery of such notice to
the Executive, the Executive shall deliver a response to the Company (the “Executive Response”)
stating either that the Executive (A) agrees with the Company’s determination pursuant to the
preceding sentence or (B) disagrees with such determination, in which case the Executive shall
indicate which
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payment and/or benefits should be characterized as a Contingent Compensation Payment, the
amount of the Excise Tax with respect to such Contingent Compensation Payment and the amount of the
Gross-Up Payment due to the Executive with respect to such Contingent Compensation Payment. The
amount and characterization of any item in the Executive Response shall be final; provided,
however, that in the event that the Executive fails to deliver an Executive Response on or before
the required date, the Company’s initial determination shall be final. Within 60 days after the
due date of each Contingent Compensation Payment to the Executive, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent Compensation Payment, in
the amount determined pursuant to this Section 4.3(a).
(b) The provisions of this Section 4.3 are intended to apply to any and all payments or
benefits available to the Executive under this Agreement or any other agreement or plan of the
Company under which the Executive receives Contingent Compensation Payments.
(c) Notwithstanding anything to the contrary set forth above in this Section 4.3 or elsewhere
in this Agreement, in the event no Excise Tax would be payable by the Executive pursuant to Section
4999 of the Code following a Change in Ownership or Control of Vistaprint N.V. if the Contingent
Compensation Payment the Executive is otherwise entitled to receive in connection with such Change
in Ownership or Control is reduced by up to $50,000 (such amount up to $50,000 being referred to
herein as the “Excise Tax Avoidance Amount”), the Executive hereby agrees that the Contingent
Compensation Payment will be reduced by such Excise Tax Avoidance Amount such that no Excise Tax
will be payable by the Executive and the Company in turn will not be required to pay the Gross-up
Payment to the Executive. Any reduction in the Contingent Compensation Payment required to be made
pursuant to this subparagraph shall be made first with respect to the portion of the Contingent
Compensation Payment payable in cash before being made with respect to any portion of the
Contingent Compensation Payment to be provided in the form of benefits, and in either case shall be
made in the inverse order of the scheduled dates or times for the payment or provision of such
Contingent Compensation Payments. A determination as to whether any reduction in the Executive’s
Contingent Compensation Payment is required pursuant to the provisions of this subparagraph (c),
and if so, the amount of the reduction so required, shall be included as part of the communications
and procedures described in subparagraph (a) above.
4.4 Mitigation. Except as provided in Section 4.3(c) above, the Executive shall not
be required to mitigate the amount of any payment or benefits provided for in this Section 4 by
seeking other employment or otherwise. Further, except as provided in Sections 4.2(a)(ii) and
(b)(ii) and in Section 8.9, the amount of any payment or benefits provided for in this Section 4
shall not be reduced by any compensation earned by the Executive as a result of employment by
another employer, by retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Company or otherwise.
5. Disputes.
5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefits
under this Agreement shall be directed to and determined by the Supervisory Board and shall be in
writing in accordance with Section 7.1. Any denial by the Supervisory Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing in accordance with
Section 7.1 and shall set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Supervisory Board shall afford a reasonable opportunity to the
Executive for a review of the decision denying a claim. Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by arbitration in Boston,
Massachusetts, in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrator’s award in any court having jurisdiction.
5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted by
law, all legal, accounting and other fees and expenses which the Executive may reasonably incur as
a result of any claim or contest (regardless of the outcome thereof) by the Company, the Executive
or others regarding the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any contest by the
Executive regarding the amount of any payment or benefits pursuant to this Agreement), plus in each
case interest on any delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.
5.3 Compensation During a Dispute. If the right of the Executive to receive benefits
under Section 4 (or the amount or nature of the benefits to which the Executive is entitled to
receive) are the subject of a
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dispute between the Company and the Executive, the Company shall continue (a) to pay to the
Executive’s base salary as of the Effective Date (or as the same was or may be increased thereafter
from time to time) and (b) to provide benefits to the Executive and the Executive’s family at least
equal to those which would have been provided to them, if the Executive’s employment had not been
terminated, in accordance with the applicable Benefit Plans in effect on the Effective Date (or as
subsequently adopted or modified with the Executive’s written consent), until such dispute is
resolved either by mutual written agreement of the parties or by an arbitrator’s award pursuant to
Section 5.1. Following the resolution of such dispute, the sum of the payments (net of tax and
other withholdings) made to the Executive under clause (a) of this Section 5.3 shall be deducted
from any cash payment which the Executive is entitled to receive pursuant to Section 4; and if such
sum exceeds the amount of the cash payment which the Executive is entitled to receive pursuant to
Section 4, the excess of such net sum over the amount of such payment shall be repaid (without
interest) by the Executive to the Company within 60 days of the resolution of such dispute.
6. Successors.
6.1 Successor to the Company. Vistaprint N.V. shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of Vistaprint N.V. to expressly assume and agree to perform this Agreement
to the same extent that Vistaprint N.V. would be required to perform it if no such succession had
taken place. Failure of the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall (a) be a material breach of this Agreement and shall
constitute Good Reason if the Executive elects to terminate employment, except that for purposes of
implementing the foregoing, the date on which any such succession becomes effective shall be deemed
the Date of Termination and (b) shall cause such succession to be deemed a Change in Control for
purposes of Section 4 hereof regardless of the definition of Change in Control set forth in
Annex A. As used in this Agreement, “Company” shall mean the Company as defined above and
any successor to its business or assets as aforesaid which assumes and agrees to perform this
Agreement, by operation of law or otherwise, except where the context otherwise requires.
6.2 Successor to Executive. This Agreement 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. If the Executive should die while any
amount would still be payable to the Executive or the Executive’s family hereunder if the Executive
had continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal representatives or
administrators of the Executive’s estate.
7. Notice.
7.1 All notices, instructions and other communications given hereunder or in connection
herewith shall be in writing. Any such notice, instruction or communication shall be sent either
(i) by registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via
a reputable nationwide overnight courier service, in each case addressed to:
the Company, at:
with a copy to:
Xxxxxx X. Xxxx, Esq.
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
XXX
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
XXX
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and to the Executive at the Executive’s address indicated on the signature page of this Agreement
(or to such other address as either the Company or the Executive may have furnished to the other in
writing in accordance herewith).
7.2 Any such notice, instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide overnight courier service.
Either party may give any notice, instruction or other communication hereunder using any other
means, but no such notice, instruction or other communication shall be deemed to have been duly
delivered unless and until it actually is received by the party for whom it is intended.
8. Miscellaneous.
8.1 Consideration. The Executive acknowledges having received adequate consideration
from the Company for entering into this Agreement.
8.2 Severability. 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.
8.3 Injunctive Relief. The Company and the Executive agree that any breach of this
Agreement by the Company is likely to cause the Executive substantial and irrevocable damage and
therefore, in the event of any such breach, in addition to such other remedies which may be
available, the Executive shall have the right to specific performance and injunctive relief.
8.4 Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles.
8.5 Guarantee. The Company hereby unconditionally guarantees all of the payment
obligations of the Company to the Executive which may arise in connection with the terms and
conditions of this Agreement.
8.6 Waivers. No waiver by the Executive at any time of any breach of, or compliance
with, any provision of this Agreement to be performed by the Company shall be deemed a waiver of
that or any other provision at any subsequent time.
8.7 Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but both of which together shall constitute one and the same
instrument.
8.8 Tax Withholding. Any payments provided for hereunder shall be paid net of any
applicable tax withholding required under federal, state or local law.
8.9 Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in respect of the subject
matter contained herein; and any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled. Except for the provisions of Section
4.1 hereof, nothing in this Agreement shall modify, amend or alter, in any manner, any stock
option, stock restriction or other equity incentive arrangement or any non-disclosure,
non-competition, non-solicitation, assignment of invention, or any similar agreement, to which the
Executive is a party. Executive shall not be entitled to any severance or similar benefits in
excess of the benefits the Executive is owed under this Agreement. To the extent that, at the time
of the Executive’s termination of employment, any laws or regulations provide for the payment of a
severance or similar benefit that is in addition to, or in excess of, the amounts Executive is owed
with respect to any similar element of compensation under this Agreement, the Executive hereby
waives any rights or benefits to which the Executive may be entitled pursuant to any such laws or
regulations; provided that, to the extent the foregoing waiver is ineffective or unenforceable, the
benefits to which the Executive is owed under this Agreement shall be reduced to an amount such
that the sum of such reduced amount and the
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amount the Executive actually receives pursuant to any such laws or regulations is equal to
the amount that would have been payable under this Agreement but for the operation of this proviso.
8.10 Amendments. This Agreement may be amended or modified only by a written
instrument executed by the Company and the Executive. Notwithstanding anything herein to the
contrary, to the extent future guidance is issued regarding Section 409A that the Company or the
Executive reasonably believe will result in adverse tax consequences to the Executive as a result
of this Agreement, then the Company and the Executive will renegotiate the terms of this Agreement
in good faith in order to minimize or eliminate such tax treatment.
8.11 Executive’s Acknowledgements. The Executive acknowledges that the Executive (a)
has read this Agreement; (b) has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of the Executive’s own choice or has voluntarily declined to seek
such counsel; (c) understands the terms and consequences of this Agreement; and (d) understands
that the Company’s outside and in-house counsel are acting as counsel to the Company in connection
with the transactions contemplated by this Agreement, and are not acting as counsel for the
Executive.
8.12 Award Transfers. All references in this Agreement to options, restricted share
units, restricted stock awards, other equity awards or any other awards of the Company
(collectively, “Awards”), and all provisions related to such Awards and the benefits obtained by
the Executive with respect to the treatment of such Awards, shall be deemed to apply equally to:
(i) Awards held directly by the Executive and (ii) Awards transferred by the Executive to permitted
transferees under the terms of such Awards, including, without limitation, Awards transferred by
the Executive to any immediate family member, family trust, family partnership or family limited
liability company established solely for the benefit of the Executive and/or an immediate family
member of the Executive; such that, without limiting the generality of the foregoing, all rights
and benefits of and to the Executive arising from or relating to the treatment of such Awards under
the terms of this Agreement shall be deemed to apply equally to any such Awards transferred to and
held by such permitted transferees, including, without limitation, all rights and benefits relating
to the acceleration of vesting of Awards, the extension of the period for exercising Awards, and
the payment to the Executive of a Gross-Up Payment to compensate the Executive for Excise Taxes
owed by the Executive due to the Executive’s receipt of Contingent Compensation Payments resulting
from a Change in Ownership or Control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and
year first set forth above.
| VISTAPRINT N.V. | ||||||
| /s/Xxxxxx X. Xxxxx | ||||||
| By: | Xxxxxx X. Xxxxx | |||||
| Title: | CEO and Chairman, Management Board | |||||
| EXECUTIVE | ||||||
| /s/Xxxxx X. Xxxxxxxxx | ||||||
| Xxxxx Xxxxxxxxx | ||||||
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Annex A
As used herein, the following terms shall have the following respective meanings:
1. “Annual Award” means any annual award under the Vistaprint N.V. Performance
Incentive Plan or Performance Incentive Plan for Covered Employees, as the case may be
(collectively, the “Performance Incentive Plan”).
2. “Award Payment Date” means the date which shall occur as soon as practicable
following the end of the applicable Performance Period, but no later than the end of the next
succeeding fiscal quarter following the end of the applicable Performance Period.
3. “Cause” means:
(a) the Executive’s willful and continued failure to substantially perform the Executive’s
reasonable assigned duties (other than any such failure resulting from incapacity due to physical
or mental illness or any failure after the Executive gives Notice of Termination for Good Reason),
which failure is not cured within 30 days after a written demand for substantial performance is
received by the Executive from the Supervisory Board which specifically identifies the manner in
which the Supervisory Board believes the Executive has not substantially performed the Executive’s
duties; or
(b) the Executive’s willful engagement in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company.
For purposes of this definition, no act or failure to act by the Executive shall be considered
“willful” unless it is done, or omitted to be done, in bad faith and without reasonable belief that
the Executive’s action or omission was in the best interests of the Company.
4. “Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (d) below:
(a) the acquisition by an 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”)) (a “Person”)
of beneficial ownership of any capital stock of Vistaprint N.V. (or any successor thereto) if,
after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) 50% or more of either (x) the then-outstanding ordinary shares of
Vistaprint N.V. (or any successor thereto) (the “Outstanding Vistaprint N.V. Ordinary Shares”) or
(y) the combined voting power of the then-outstanding securities of Vistaprint N.V. (or any
successor thereto) entitled to vote generally in the election of directors (the “Outstanding
Vistaprint N.V. Voting Securities”); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from Vistaprint N.V. (or any successor thereto) (excluding an acquisition
pursuant to the exercise, conversion or exchange of any security exercisable for, convertible into
or exchangeable for ordinary shares or voting securities of Vistaprint N.V. (or any successor
thereto), unless the Person exercising, converting or exchanging such security acquired such
security directly from Vistaprint N.V. (or any successor thereto) or an underwriter or agent of
Vistaprint N.V. (or any successor thereto)), (ii) any acquisition by Vistaprint N.V. (or any
successor thereto), (iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by Vistaprint N.V. (or any successor thereto) or any corporation controlled by
Vistaprint N.V. (or any successor thereto), or (iv) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i) and (ii) of subsection (c) of this definition; or
(b) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Supervisory Board, where the term “Continuing Director” means at any date a member of the
Supervisory Board (i) who was a member of the Supervisory Board on the date of the execution of
this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority
of the directors who were Continuing Directors at the time of such nomination or election or whose
election to the Supervisory Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such
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nomination or election; provided, however, that there shall be excluded from
this clause (ii) any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents, by or on behalf of a person other than
the Supervisory Board; or
(c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory
share exchange involving Vistaprint N.V. (or any successor thereto) or a sale or other disposition
of all or substantially all of the assets of Vistaprint N.V. (or any successor thereto) in one or a
series of transactions (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (i) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Vistaprint N.V. Ordinary
Shares and Outstanding Vistaprint N.V. Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding
ordinary shares and the combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the resulting or acquiring corporation in
such Business Combination (which shall include, without limitation, a corporation which as a result
of such transaction owns Vistaprint N.V. (or any successor thereto) or substantially all of the
assets of Vistaprint N.V. (or any successor thereto) either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the Outstanding Vistaprint N.V. Ordinary Shares and Outstanding Vistaprint
N.V. Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or
any employee benefit plan (or related trust) maintained or sponsored by Vistaprint N.V. (or any
successor thereto) or by the Acquiring Corporation) beneficially owns, directly or indirectly, 30%
or more of the then outstanding ordinary shares of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed prior to the Business
Combination); or
(d) approval by the Supervisory Board of a complete liquidation or dissolution of Vistaprint
N.V. (or any successor thereto).
5. “Change in Control Date” means the first date during the Term (as defined in
Section 2) on which a Change in Control occurs. Anything in this Agreement to the contrary
notwithstanding, if the Executive’s employment with the Company is terminated (other than a
termination by the Company for Cause or a resignation by the Executive without Good Reason) less
than 180 days prior to the date on which the Change in Control occurs, then for all purposes of
this Agreement the “Change in Control Date” shall mean the date immediately prior to the Date of
Termination.
6. “Change in Control Payment Date” means the date which shall occur as soon as
practicable following the Change in Control, but no later than two and one half months following
the Change in Control.
7. “Code” means the Internal Revenue Code of 1986, as amended.
8. “Compensation Committee” means the Compensation Committee of the Supervisory Board.
9. “Disability” means the Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the Executive’s legal
representative.
10. “Multi-Year Award” means any four-year award or other multi-year award under the
Performance Incentive Plan.
11. “Good Reason” means the occurrence, without the Executive’s written consent, of
any of the events or circumstances set forth in clauses (a) through (d) below. Notwithstanding the
occurrence of any such event or circumstance, such occurrence shall not be deemed to constitute
Good Reason if, within 30 days of the Notice of Termination (as defined in Section 3.2(a)) given by
the Executive in respect thereof, such event or
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circumstance has been fully corrected and the Executive has been reasonably compensated for
any losses or damages resulting therefrom. If the Company does not fully correct such event or
circumstance during this 30-day period, the Notice of Termination for Good Reason given by the
Executive shall become effective.
(a) a material diminution in the Executive’s authority, duties or responsibilities in effect
as of the Effective Date;
(b) a material reduction in the Executive’s base salary as in effect on the Effective Date or
as the same was or may be increased thereafter from time to time except to the extent that such
reduction affects all executive officers of the Company and its subsidiaries to a comparable
extent;
(c) a material change by the Company in the geographic location at which the Executive
performs the principal duties for the Company; or
(d) any action or inaction by the Company that constitutes a material breach of this
Agreement.
For purposes of this Agreement, any reasonable, good faith determination of “Good Reason” made by
the Executive shall be conclusive, binding and final. The Executive’s right to resign for Good
Reason shall not be affected by the Executive’s incapacity due to physical or mental illness.
12. “Performance Period” means the time period for which the Executive’s performance
is measured for purposes of receiving a bonus under the Performance Incentive Plan.
13. “Pro-Rated Annual Award” means, with respect to any Annual Award, the product of
(i) the average actual payout percentage under the Annual Award for the two most recently completed
fiscal years, multiplied by 100% of the Executive’s base amount for the then-current Performance
Period and (ii) the Pro-Rating Fraction; provided, however, that if the Executive did not have an
Annual Award in each of the two most recently completed fiscal years, the Pro-Rated Annual Award
shall be equal to the product of (i) 100% of the base amount for the Performance Period in which
the Date of Termination occurs and (ii) the Pro-Rating Fraction.
14. “Pro-Rated Multi-Year Award” means, with respect to each of the Executive’s
Multi-Year Awards, the product of (i) the average actual payout percentage under the Multi-Year
Award for the two most recently completed fiscal years, multiplied by the Executive’s mid-range
target bonus for the Multi-Year Award that is in effect for the then-current Performance Period and
(ii) the Pro-Rating Fraction; provided, however, that if the Executive did not have a target bonus
under the Multi-Year Award in each of the two most recently completed fiscal years, the Pro-Rated
Multi-Year Award for such Multi-Year Award shall be equal to the product of (i) the mid-range
target bonus for the Performance Period in which the Date of Termination occurs and (ii) the
Pro-Rating Fraction.
15. “Pro-Rating Fraction” means a fraction, the numerator of which is the number of
days in the current fiscal year through the earlier of the Date of Termination and Change in
Control Date, as applicable, and the denominator of which is 365.
16. For purposes of Section 4.3 of the Agreement, the following terms shall have the following
respective meanings:
(i) “Change in Ownership or Control” shall mean a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the Company determined
in accordance with Section 280G(b)(2) of the Code.
(ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of
compensation that is made or made available (under this Agreement or otherwise) to a “disqualified
individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning
of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.
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(iii) “Gross-Up Payment” shall mean an amount equal to the sum of (i) the amount of the Excise
Tax payable with respect to a Contingent Compensation Payment and (ii) the amount necessary to pay
all additional taxes imposed on (or economically borne by) the Executive (including the Excise
Taxes, state and federal income taxes and all applicable employment taxes) attributable to the
receipt of such Gross-Up Payment. For purposes of the preceding sentence, all taxes attributable
to the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum
tax rates provided by law.
17. Termination “Without Cause” means:
(a) Termination of the Executive’s employment for a reason other than a Cause as defined in
Section 3 of this Annex A; and
(b) the Executive is entitled to consider as a unilateral breach of his employment contract by
the Company, any significant change in the management of the Company (i) into which he would not
have participated and (ii) which calls into question the terms and conditions of his mission within
the Vistaprint Group. Upon satisfaction of the conditions (i) and (ii) above, the Executive will be
entitled to regard as constituting a unilateral change in his employment contract the following
changes: (a) a change of Chief Executive Officer of the Vistaprint Group or other person
to whom the Executive reports, if not the Chief Executive Officer, or (b) a Change in Control.
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