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EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment Agreement made as of May 28, 1998 by and between net.
Genesis Corp., a Delaware corporation (the "Company") with its principal place
of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and ▇▇. ▇▇▇▇▇ ▇▇▇▇ of
Arlington, Massachusetts (the "Employee").
WHEREAS, the Company wishes to employ the Employee as the President and
Chief Executive Officer; and
WHEREAS, the Employee desires to serve as the President and Chief Executive
Officer of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Company and the Employee agree as follows:
1. EMPLOYMENT. The Company hereby employs the Employee, and the Employee
accepts employment with the Company as of February 23, 1998. The Employee's
title and duties at the start of this agreement shall be those of President and
Chief Executive Officer of the Company. As such, the Employee shall report
directly to the Company's Board of Directors.
2. TERM AND TERMINATION.
2.1 Term. There shall be no definite term of employment, and Employee
shall be an employee at will, subject to the provisions of Section 2.2.
2.2 Termination. If the Employee's employment hereunder is terminated
(i) by the Company without Good Cause, (ii) upon a Change of Control; (iii) as
the result of a Forced Relocation; or (iv) as the result of a Diminution in
Responsibility, the Company shall make severance payments to Employee in an
amount equal to one year of his Total Annual Compensation (as defined below),
payable over twelve (12) months (the "Severance Payments"); provided, that the
1999 Tax Bonus and the Change of Control Bonus (each as defined below) shall not
be included in the calculation of Total Annual Compensation.
For purposes of this Agreement the following terms shall have the following
meanings:
"Good Cause" shall mean dishonesty or misappropriation of assets of the
Company by the Employee, gross failure by the Employee to perform his duties to
the Company, the commission by the Employee of a crime involving moral turpitude
or constituting a felony, or a breach by the Employee of any of his obligations
under Section 9 of this Agreement and the Confidentiality, Non-Disclosure and
Non-Competition Agreement referred to therein.
"Change of Control" shall mean a change in control of the Company (and not
any person or entity that hereafter becomes a successor to all or substantially
all of the business or
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assets of the Company by reason of a Change of Control) and shall be deemed to
have taken place upon the first to occur of: (i) the closing of a sale or other
disposition (excluding mortgage or pledge) of all or substantially all of the
assets of the Company, or (ii) the closing of a merger or other business
combination of the Company with or into another corporation or entity pursuant
to which the Company will not survive or will survive only as a subsidiary of
another corporation or entity, in either case with the stockholders of the
Company prior to the merger or other business combination holding less than 50%
of the voting shares of the merged or combined companies or entities after such
merger or other business combination. The rights and obligations created by this
Agreement with respect to a Change of Control shall apply only with respect to
the first Change of Control after the date of execution of this Agreement, and
not with respect to any subsequent transaction.
"Diminution in Responsibility" shall mean any action taken by the Company
which has the effect of significantly diminishing the level of responsibility of
the Employee as President and Chief Executive Officer.
"Forced Relocation" shall mean any attempt by the Corporation to
involuntarily relocate the Employee by changing its principal place of business
from its location on the date of this Agreement to any location at least 100
miles away.
"Total Annual Compensation" shall mean the sum of salary and bonuses paid
to Employee during the twelve month period preceding any termination under
Section 2.2 above.
3. COMPENSATION.
3.1 Base Salary. During the term of this Agreement, the Company shall
pay the Employee a base salary, payable in accordance with the Company's
standard schedule for salary payments to its executives (but no less frequently
than monthly) in arrears, in equal installments at an annual rate equal to
$150,000 (the "Base Salary"). At the beginning of each fiscal year, the Board of
Directors shall consider in its discretion increases in the Base Salary.
3.2 Signing Bonus. The Company shall pay Employee a bonus equal to
$51,750 on the date of this Agreement.
3.3 Bonus Plan. In addition to his Base Salary, Employee shall be
eligible to participate in an annual bonus plan to be established by the Company
beginning in calendar year 1999 upon such terms and conditions as shall be
determined by the Board of Directors in its sole and reasonable discretion.
3.4 1999 Tax Bonus. The Company shall pay Employee a bonus equal to
$36,000 on April 1, 1999 provided that Employee is still employed by the
Company, or any successor entity, as of that date.
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3.5 Change of Control Bonus. The Company shall pay Employee a bonus upon
a Change of Control of the Company (the "Change of Control Bonus") provided (a)
that Employee is employed by the Company as President and Chief Executive
Officer continuously from the date of this Agreement until the closing of any
transaction constituting a Change of Control and (b) that the Change of Control
occurs prior to the date of the closing of an underwritten initial public
offering of shares of the Company's Common Stock. The Change of Control Bonus
shall be as set forth on the attached Schedule A.
3.6 Tax Withholdings. All payments of salary and bonuses to the Employee
shall be made after deduction of any taxes which are required to be withheld
with respect thereto under applicable federal and state laws.
4. BENEFITS. The Executive shall be entitled to participate in all plans or
programs sponsored by the Company for employees in general, including without
limitation, participation in any group health, medical reimbursement, or life
insurance plans.
5. STOCK PURCHASE. On the date of this Agreement Employee is purchasing
1,035,000 shares of the Company's Common Stock at a price of $.05 per share (the
"Shares"). The Shares shall be subject to the terms and conditions of, and
Employee agrees to become a party to and be bound by, (a) the Stock Restriction
and Repurchase Agreement, attached hereto as Exhibit A, and (b) the Amended and
Restated Stockholders Agreement, as amended, dated September 12, 1997, attached
hereto as Exhibit B.
6. EXPENSES. The Company shall reimburse the Employee for all reasonable
business expenses incurred by the Employee in connection with his employment by
the Company, including, without limitation, expenses of travel and
entertainment. The Company shall promptly reimburse the Employee for all such
expenses upon presentation of appropriate vouchers, receipts and other
supporting documents as reasonably required by the Company.
7. DUTY TO PERFORM SERVICES. The Employee shall devote his full time
during normal business hours to rendering services to the Company hereunder, and
shall exert all reasonable efforts in the rendering of such services. Nothing in
this Agreement shall prohibit the Employee from:
(a) making and managing passive investments;
(b) serving on the Board of Directors of any company; and
(c) engaging in religious, charitable or other community or nonprofit
activities,
provided none of the foregoing shall interfere with Employee's duties hereunder.
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The Employee agrees that in the rendering of all services to the Company
and in all aspects of his employment as a senior level executive of the Company,
he will comply in all material respects with all directives, policies, standards
and regulations from time to time established by the Board of Directors of the
Company to the extent they are not in conflict with this Agreement.
8. VACATIONS; HOLIDAYS; SICK TIME. The Employee shall be entitled to
vacation time, holiday time and sick leave in accordance with the Company's
policies for senior executive officers, as in effect from time to time.
9. EMPLOYEE CONFIDENTIALITY, NON-COMPETITION AND INTELLECTUAL PROPERTY
ASSIGNMENT AGREEMENT. The Employee agrees to execute an Employee
Confidentiality, Noncompetition and Intellectual Property Assignment Agreement
in the form of the attached Exhibit C simultaneously with the execution of this
Agreement.
10. BOARD OF DIRECTORS.
10.1 Election as a Director. The Company will use its best efforts to
cause the Employee to be elected to the Board of Directors of the Company. If
the Employee's employment is terminated for any reason, then the Employee will
be deemed to have resigned from the Board of Directors and from any and all
other positions with the Company or any of its affiliates.
10.2 Chairman of the Board of Directors. If at any time during your
employment by the Company as the Chief Executive Officer, the Company shall
designate a Chairman of the Board of Directors, any such designation shall be
subject to your approval.
11. NOTICES. All notices, requests, demands and other communications
required by or permitted under this Agreement shall be in writing and shall be
sufficiently delivered if delivered by hand or sent by registered or certified
mail, postage prepaid, to the parties at their respective addresses listed
below:
(a) if to the Employee:
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(b) if to the Company:
net.Genesis Corp.
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Any party may change such party's address by such notice to the other parties.
12. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of The Commonwealth of Massachusetts.
13. BINDING UPON SUCCESSORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and assigns.
14. PRIOR AGREEMENTS. This Agreement states the entire agreement of the
parties concerning the subject matter hereof, and supersedes all prior
agreements, written or oral, between or among them concerning such subject
matter.
15. SEVERABILITY. In the event that any provision of this Agreement shall
be determined by any court of competent jurisdiction to be invalid, illegal or
otherwise unenforceable, the validity, legality and enforceability of the other
provisions of this Agreement shall not be affected thereby. Any invalid, illegal
or unenforceable provision of this Agreement shall be severed, and after any
such severance, all other provisions hereof shall remain in full force and
effect.
16. WAIVERS AND AMENDMENTS. This Agreement may be amended, modified or
supplemented, and any obligation hereunder may be waived, only by a written
instrument executed by the parties hereto. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate as a waiver of any
subsequent breach. No failure on the part of any party to exercise, and no delay
in exercising, any right or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or remedy by such
party preclude any other or further exercise thereof or the exercise of any
other right or remedy. All rights and remedies hereunder are cumulative and are
in addition to all other rights and remedies provided by law, agreement or
otherwise.
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IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement on the date first above written.
COMPANY:
NET.GENESIS CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ River Ventures
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Its: Member, Board of Directors
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EMPLOYEE: /s/ ▇▇▇▇▇ ▇▇▇▇
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SCHEDULE A
In the event of a Change of Control of the Company prior to the Company's
issuance of any additional class or series of preferred stock, the amount of
your Performance Bonus shall be calculated as follows:
An amount equal to the difference between a) the product obtained by multiplying
the total consideration available for distribution to the holders of the
Company's capital stock as a result of the Change of Control transaction by a
fraction with a numerator equal to 1,035,000 and a denominator equal to the
total number of the Company's then outstanding shares of capital stock on a
fully-diluted basis; and b) any consideration owed and payable to you as holder
of the Shares.
In the event of a Change of Control after the Company's issuance of any
additional class or series of preferred stock with a liquidation preference
superior to the Series C Liquidation Amount (as defined in the Second Amended
and Restated Certificate of Incorporation, (the "New Preferred Stock"), the
amount of your Performance Bonus shall be calculated as follows:
An amount equal to the difference between a) the product obtained by multiplying
the total consideration available for distribution to the holders of the
Company's capital stock minus any liquidation preference paid to holders of the
New Preferred Stock by a fraction with a numerator equal to 1,035,000 and a
denominator equal to the total number of the Company's then outstanding shares
of capital stock on a fully-diluted basis less the number of any shares of New
Preferred Stock which received payment of their liquidation preference; and b)
any consideration owed and payable to you as holder of the Shares.