OMNITURE, INC. CHANGE OF CONTROL AGREEMENT
EXHIBIT 10.23
This Change of Control Agreement (the “Agreement”) is made and entered into by and between
(the “Employee”) and Omniture, Inc. (the “Company”), effective as of June 7,
2006 (the “Effective Date”).
RECITALS
1. It is expected that the Company from time to time will consider the possibility of an
acquisition by another company or other change of control. The Board of Directors of the Company
(the “Board”) recognizes that such consideration can be a distraction to the Employee and can cause
the Employee to consider alternative employment opportunities. The Board has determined that it is
in the best interests of the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of the Employee, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined herein) of the Company.
2. The Board believes that it is in the best interests of the Company and its stockholders to
provide the Employee with an incentive to continue his or her employment and to motivate the
Employee to maximize the value of the Company upon a Change of Control for the benefit of its
stockholders.
3. The Board believes that it is imperative to provide the Employee with certain severance
benefits upon the Employee’s termination of employment following a Change of Control. These
benefits will provide the Employee with enhanced financial security and incentive and encouragement
to remain with the Company notwithstanding the possibility of a Change of Control.
4. Certain capitalized terms used in the Agreement are defined in Section 7 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the date that all of the
obligations of the parties hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law, except as may
otherwise be specifically provided under the terms of any written formal employment agreement or
offer letter between the Company and the Employee (an “Employment Agreement”). If the Employee’s
employment terminates for any reason, including (without limitation) any termination prior to a
Change of Control, the Employee shall not be entitled to any payments, benefits, damages,
awards or compensation other than as provided by this Agreement or under his or her Employment
Agreement, or as may otherwise be available in accordance with the Company’s established employee
plans.
3. Severance Benefits.
(a) Involuntary Termination Other than for Cause, Voluntary Termination for Good Reason or
Death or Disability During the Change of Control Period. If within the period commencing three
months prior to a Change of Control and ending on the later of (A) twelve (12) months following a
Change of Control, or (B) one month following the latest of the originally scheduled one-year,
two-year or four-year cliff vesting date on any of Employee’s Company stock options held by
Employee immediately prior to a Change of Control (the “Change of Control Period”), (i) the
Employee terminates his or her employment with the Company (or any parent or subsidiary of the
Company) for “Good Reason” (as defined herein) or (ii) the Company (or any parent or subsidiary of
the Company) terminates the Employee’s employment for other than “Cause” (as defined herein), or
(iii) the Employee dies or terminates employment due to becoming Disabled (as defined herein) and
the Employee, except in the case of death, signs and does not revoke a standard release of claims
with the Company in a form acceptable to the Company (the “Release”), then the Employee shall
receive the following severance from the Company:
(i) Severance Payment. The Employee shall be entitled to receive a lump-sum severance
payment (less applicable withholding taxes) equal to seventy-five percent of the Employee’s annual
base salary (as in effect immediately prior to (A) the Change of Control, or (B) the Employee’s
termination, whichever is greater) plus seventy-five percent of the Employee’s target bonus for the
fiscal year in which the Change of Control or the Employee’s termination occurs, whichever is
greater.
(ii) Equity Compensation Acceleration. One hundred percent (100%) of the then
unvested Employee’s outstanding stock options, stock appreciation rights, restricted stock units
and other Company equity compensation awards (the “Equity Compensation Awards”) shall immediately
vest and became exercisable. Any Company stock options and stock appreciation rights shall
thereafter remain exercisable following the Employee’s employment termination for the period
prescribed in the respective option and stock appreciation right agreements.
(iii) Continued Employee Benefits. Company-paid health, dental, vision, and life
insurance coverage at the same level of coverage as was provided to such Employee immediately prior
to the Change of Control and at the same ratio of Company premium payment to Employee premium
payment as was in effect immediately prior to the Change of Control (the “Company-Paid Coverage”).
If such coverage included the Employee’s dependents immediately prior to the Change of Control,
such dependents shall also be covered at Company expense. Company-Paid Coverage shall continue
until the earlier of (i) nine (9) months from the date of termination, or (ii) the date upon which
the Employee and his dependents become covered under another employer’s group health, dental,
vision, long-term disability or life insurance plans that provide Employee and his dependents with
comparable benefits and levels of coverage. For purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of
-2-
the “qualifying event” for Employee and his or her dependents shall be the date upon which the
Company-Paid Coverage terminates.
(b) Timing of Severance Payments. The severance payment to which Employee is entitled
shall be paid by the Company to Employee in cash and in full, not later than ten (10) calendar days
after the effective date of the Release. If the Employee should die before all amounts have been
paid, such unpaid amounts shall be paid in a lump-sum payment (less any withholding taxes) to the
Employee’s designated beneficiary, if living, or otherwise to the personal representative of the
Employee’s estate.
(c) Voluntary Resignation; Termination for Cause. If the Employee’s employment with
the Company terminates (i) voluntarily by the Employee other than for Good Reason, or (ii) for
Cause by the Company, then the Employee shall not be entitled to receive severance or other
benefits except for those (if any) as may then be established under the Company’s then existing
severance and benefits plans and practices or pursuant to other written agreements with the
Company.
(d) Termination Outside of Change of Control Period. In the event the Employee’s
employment is terminated for any reason, either prior to the Change of Control Period or after the
Change of Control Period, then the Employee shall be entitled to receive severance and any other
benefits only as may then be established under the Company’s existing written severance and
benefits plans and practices or pursuant to other written agreements with the Company.
(e) Internal Revenue Code Section 409A. Notwithstanding any other provision of this
Agreement, if the Employee is a “key employee” under Code Section 409A and a delay in making any
payment or providing any benefit under this Plan is required by Code Section 409A, such payments
shall not be made until the end of six (6) months following the date of the Employee’s separation
from service as required by Code Section 409A.
4. Coordination with Existing Agreements. In the event of a termination of Employee’s
employment within the Change of Control Period, the provisions of this Agreement are intended to
enhance, but not be additive, to any pre-existing written agreements between the Company and
Employee. For example, if Employee’s employment agreement with the Company provides for a
specified cash payment upon a termination without cause, and severance payments are triggered under
both the employment agreement and this Agreement, Employee shall be entitled to the larger cash
payment provided in either agreement but shall not be entitled to the sum of the two cash payments.
The same principle applies to the other individual elements of severance provided herein including
equity compensation award accelerated vesting. Except as otherwise provided in this Section 4, the
benefits provided to Employee under this Agreement are intended to be and are exclusive and in lieu
of any other rights or remedies to which the Employee or the Company may otherwise be entitled,
whether at law, tort or contract, in equity, and including pursuant to the Company’s other
severance plans, arrangements or practices.
5. Conditional Nature of Severance Payments and Benefits.
-3-
(a) Noncompete. Employee acknowledges that the nature of the Company’s business is
such that if Employee were to become employed by, or substantially involved in, the business of a
competitor of the Company during the nine months following the termination of Employee’s employment
with the Company, it would be very difficult for Employee not to rely on or use the Company’s trade
secrets and confidential information. Thus, to avoid the inevitable disclosure of the Company’s
trade secrets and confidential information, Employee agrees and acknowledges that Employee’s right
to receive the severance payments and benefits set forth in Section 3(a) (to the extent Employee is
otherwise entitled to such payments) shall be conditioned upon Employee’s compliance in all
respects with any covenant not to compete in effect between Employee and the Company on the date of
this Agreement during the nine-months following the termination of Employee’s employment with the
Company.
(b) Remedy for Breach. Upon any breach by Employee of the covenant not to compete
referred to in Section 5(a) during the nine months following the termination of Employee’s
employment with the Company, then, in addition to any other remedy that the Company may otherwise
have, all severance payments and benefits pursuant to this Agreement shall immediately cease and
any stock options or stock appreciation rights then held by Employee shall immediately terminate
and be without further force and effect, and Employee shall be required to reimburse the Company
any lump-sum severance payment previously paid under Section 3(a)(i) and the value of any welfare
plan reimbursements previously paid under Section 3(a)(iii).
6. Golden Parachute Excise Tax Best Results. In the event that the severance and
other benefits provided for in this agreement or otherwise payable to Employee (a) constitute
“parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the “Code”) and (b) would be subject to the excise tax imposed by Section 4999 of the
Code, then such benefits shall be either be:
(i) delivered in full, or
(ii) delivered as to such lesser extent which would
result in no portion of such severance benefits being subject to excise
tax under Section 4999 of the Code,
whichever of the foregoing amounts, taking into account the applicable federal, state and local
income and employment taxes and the excise tax imposed by Section 4999, results in the receipt by
Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or
some portion of such benefits may be taxable under Section 4999 of the Code. Unless the Company
and the Employee otherwise agree in writing, the determination of Employee’s excise tax liability
and the amount required to be paid under this Section 6 shall be made in writing by the Company’s
independent auditors who are primarily used by the Company immediately prior to the Change of
Control (the “Accountants”). For purposes of making the calculations required by this Section 6,
the Accountants may make reasonable assumptions and approximations concerning applicable taxes and
may rely on reasonable, good faith interpretations concerning the application of Sections 280G and
4999 of the Code. The Company and the Employee shall furnish to the Accountants such information
and documents as the Accountants may reasonably request in order to make a determination
-4-
under this Section. The Company shall bear all costs the Accountants may reasonably incur in
connection with any calculations contemplated by this Section 6.
7. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:
(a) Cause. “Cause” shall mean (i) an act of personal dishonesty taken by the Employee
in connection with his responsibilities as an employee and intended to result in substantial
personal enrichment of the Employee, (ii) Employee being convicted of, or pleading nolo
contendere to a felony, (iii) a willful act by the Employee which constitutes gross
misconduct and which is injurious to the Company, (iv) following delivery to the Employee of a
written demand for performance from the Company which describes the basis for the Company’s
reasonable belief that the Employee has not substantially performed his duties, continued
violations by the Employee of the Employee’s obligations to the Company which are demonstrably
willful and deliberate on the Employee’s part.
(b) Change of Control. “Change of Control” means the occurrence of any of the
following:
(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or more of
the total voting power represented by the Company’s then outstanding voting securities; or
(ii) Any action or event occurring within a two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who
either (A) are directors of the Company as of the date hereof, or (B) are elected, or nominated for
election, to the Board with the affirmative votes of at least a majority of the Incumbent Directors
at the time of such election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating to the election of
directors to the Company); or
(iii) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) The consummation of the sale, lease or other disposition by the Company of all or
substantially all the Company’s assets.
(c) Disability. “Disability” shall mean that the Employee has been unable to perform
his or her Company duties as the result of his incapacity due to physical or mental illness, and
such inability, at least twenty-six (26) weeks after its commencement, is determined to be total
-5-
and permanent by a physician selected by the Company or its insurers and acceptable to the
Employee or the Employee’s legal representative (such Agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be effected after at least
thirty (30) days’ written notice by the Company of its intention to terminate the Employee’s
employment. In the event that the Employee resumes the performance of substantially all of his or
her duties hereunder before the termination of his or her employment becomes effective, the notice
of intent to terminate shall automatically be deemed to have been revoked.
(d) Good Reason. “Good Reason” means without the Employee’s express written consent
(i) a reduction by the Company in the base salary of the Employee as in effect immediately prior to
such reduction; or (ii) the relocation of the Employee to a facility or a location more than
thirty-five (35) miles from such Employee’s then present location.
8. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this Section 8(a) or which becomes bound by the terms of this Agreement by
operation of law.
(b) The Employee’s Successors. The terms of this Agreement and all rights of the
Employee hereunder shall inure to the benefit of, and be enforceable by, the Employee’s personal or
legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees.
9. Notice.
(a) General. All notices and other communications required or permitted hereunder
shall be in writing, shall be effective when given, and shall in any event be deemed to be given
upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other
applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if
delivered by hand, (c) one (1) business day after the business day of deposit with Federal Express
or similar overnight courier, freight prepaid or (d) one (1) business day after the business day of
facsimile transmission, if delivered by facsimile transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to Employee, at his or her last known residential
address and (ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10) days’
advance written notice to the other party pursuant to the provisions above.
(b) Notice of Termination. Any termination by the Company for Cause or by the
Employee for Good Reason or Disability or as a result of a voluntary resignation shall be
communicated by a notice of termination to the other party hereto given in accordance with Section
9(a) of
-6-
this Agreement. Such notice shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated, and shall specify the termination
date (which shall be not more than thirty (30) days after the giving of such notice). The failure
by the Employee to include in the notice any fact or circumstance which contributes to a showing of
Good Reason or Disability shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his or her rights hereunder.
10. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate the amount of
any payment contemplated by this Agreement, nor shall any such payment be reduced by any earnings
that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed by the Employee and
by an authorized officer of the Company (other than the Employee). No waiver by either party of
any breach of, or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the same condition or
provision at another time.
(c) Headings. All captions and section headings used in this Agreement are for
convenient reference only and do not form a part of this Agreement.
(d) Entire Agreement. This Agreement, along with other written agreements relating to
the subject matter hereof between Employee and a duly authorized Company officer constitute the
entire agreement of the parties hereto and supersede in their entirety all prior representations,
understandings, undertakings or agreements (whether oral or written and whether expressed or
implied) of the parties with respect to the subject matter hereof.
(e) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Utah. The Utah state courts in Utah
County, Utah and/or the United States District Court for the District of Utah in Salt Lake City
shall have exclusive jurisdiction and venue over all controversies in connection with this
Agreement.
(f) Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.
(g) Withholding. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.
-7-
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
| COMPANY | OMNITURE, INC. |
|||
| By: | ||||
| Title: | ||||
| EMPLOYEE | ||||
| By: | ||||
| Title: | ||||
-8-
AMENDMENT TO ________________ CHANGE OF CONTROL AGREEMENT
This amendment (the “Amendment”) is made by and between ___(“Employee”) and Omniture,
Inc. (the “Company”, and together with Employee, the “Parties”) on December ___, 2008.
WHEREAS, the Parties entered into a Change of Control Agreement dated June 7, 2006 (the
“Agreement”);
WHEREAS, the Company and Employee desire to amend certain provisions of the Agreement to come
into documentary compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the final regulations and official guidance promulgated thereunder (together, “Section
409A”).
NOW, THEREFORE, for good and valuable consideration, Employee and the Company agree that the
Agreement is hereby amended as follows.
1. Release of Claims. Section 3(b) of the Agreement is amended and restated as
follows:
“(b) Release of Claims. The receipt of any severance pursuant to Section 3(a)
will be subject to Employee signing and not revoking the Release and
provided the Release becomes effective and irrevocable
no later than sixty (60) days following the termination date (such deadline, the “Release
Deadline”). The company shall provide the Release to
Employee within two (2) business days of termination. If the Release does not become effective by the Release Deadline, Employee will
forfeit any rights to severance payments or benefits under this Agreement. In no event will
severance payments or benefits be paid or provided until the Release becomes effective and
irrevocable.”
2. Section 409A. Section 3(e) of the Agreement is amended and restated as follows:
“(e) Internal Revenue Code Section 409A.
(i) Notwithstanding anything to the contrary in this Agreement, no severance pay or
benefits to be paid or provided to Employee, if any, pursuant to this Agreement, when
considered together with any other severance payments or separation benefits that are
considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the final regulations and any guidance promulgated thereunder
(“Section 409A”) (together, the “Deferred Compensation Separation Benefits”) will be paid or
otherwise provided until Employee has a “separation from service” within the meaning of
Section 409A.
(ii) Any severance payments or benefits under this Agreement that would be considered
Deferred Compensation Severance Benefits will be paid on, or, in the case of installments,
will not commence until, the sixtieth (60th) day following Employee’s separation
from service, or, if later, such time as required by clause (iii) below. Any installment
payments that would have been made to Employee during the sixty (60) day period immediately
following Employee’s separation from service but for the preceding sentence will be paid to
Employee on the sixtieth (60th) day following Employee’s separation from service
and the remaining payments shall be made as provided in this Agreement. If Employee should
die before all amounts have been paid, such unpaid amounts shall be paid in a lump-sum
payment (less any withholding taxes) to Employee’s designated beneficiary, if living, or
otherwise to the personal representative of Employee’s estate.
(iii) Notwithstanding anything to the contrary in this Agreement, if Employee is a
“specified employee” within the meaning of Section 409A at the time of Employee’s
termination (other than due to death), then the Deferred Compensation Separation Benefits
that are payable within the first six (6) months following Employee’s separation from
service, will become payable on the first payroll date that occurs on or after the date six
(6) months and one (1) day following the date of Employee’s separation from service. All
subsequent Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or benefit. Notwithstanding anything
herein to the contrary, if Employee dies following Employee’s separation from service, but
prior to the six (6) month anniversary of the separation from service, then any payments
delayed in accordance with this paragraph will be payable in a lump sum as soon as
administratively practicable after the date of Employee’s death and all other Deferred
Compensation Separation Benefits will be payable in accordance with the payment schedule
applicable to each payment or benefit. Each payment and benefit payable under this
Agreement is intended to constitute separate payments for purposes of Section 1.409A-2(b)(2)
of the Treasury Regulations.
(iv) Any amount paid under this Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations
will not constitute Deferred Compensation Separation Benefits for purposes of clause (i)
above.
(v) Any amount paid under this Agreement that qualifies as a payment made as a result
of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the
Treasury Regulations that does not exceed the Section 409A Limit will not constitute
Deferred Compensation Separation Benefits for purposes of clause (i) above. For purposes of
this Agreement, “Section 409A Limit” will mean the lesser of two (2) times: (i) Employee’s
annualized compensation based upon the annual rate of pay paid to Employee during the
Company’s taxable year preceding the Company’s taxable year of Employee’s termination of
employment as determined under Treasury Regulation 1.409A-1(b)(9)(iii)(A)(1) and any
Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount
that may be taken into account under a
-2-
qualified
plan pursuant to Section 401(a)(17) of the Code for the year in which Employee’s
employment is terminated.
(vi) The foregoing provisions are intended to comply with the requirements of Section
409A so that none of the severance payments and benefits to be provided hereunder will be
subject to the additional tax imposed under Section 409A, and any ambiguities herein will be
interpreted to so comply. The Company and Employee agree to work together in good faith to
consider amendments to this Agreement and to take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Employee under Section 409A.”
3. Golden Parachute Excise Tax Best Results. The following is added to the end of
Section 6 of the Agreement:
“Any reduction in payments and/or benefits required by this Section 6 will occur in the
following order: (i) reduction of cash payments; (ii) reduction of vesting acceleration of
equity awards; and (iii) reduction of other benefits paid or provided to Employee. In the
event that acceleration of vesting of equity awards is to be reduced, such acceleration of
vesting will be cancelled in the reverse order of the date of grant for Employee’s equity
awards. If two or more equity awards are granted on the same date, each award will be
reduced on a pro-rata basis.”
4. Good Reason. Section 7(d) of the Agreement is amended and restated as follows:
“(d) Good Reason. “Good Reason” shall mean Employee’s resignation within ninety
(90) days following the expiration of any Company cure period (discussed below) following
the occurrence of one or more of the following, without Employee’s express written consent:
(i) a material reduction of Employee’s base compensation as in effect immediately
prior to such reduction; or
(ii) a material change in the geographic location at which Employee must perform
services (in other words, Employee’s relocation to a facility or
an office location more than a 35-mile radius from Employee’s
then current location).
-3-
Notwithstanding the foregoing, Employee agrees not to resign for Good Reason without first
providing the Company with written notice of the acts or omissions constituting the grounds
for “Good Reason” within ninety (90) days of the initial existence of the grounds for “Good
Reason” and a reasonable cure period of thirty (30) days following the date of such notice.”
5. Full Force and Effect. To the extent not expressly amended hereby, the Agreement
shall remain in full force and effect.
6. Entire Agreement. This Amendment and the Agreement constitute the full and entire
understanding and agreement between the Parties with regard to the subjects hereof and thereof.
This Amendment may be amended at any time only by mutual written agreement of the Parties.
7. Counterparts. This Amendment may be executed in counterparts, all of which
together shall constitute one instrument, and each of which may be executed by less than all of the
parties to this Amendment.
8. Governing Law. This Amendment will be governed by the laws of the State of Utah
(with the exception of its conflict of laws provisions).
IN WITNESS WHEREOF, each of the Parties has executed this Amendment, in the case of the
Company by its duly authorized officer, as of the date set forth above.
| OMNITURE, INC. | EMPLOYEE | |||||
By:
|
||||||
Title:
|
||||||
-4-