Exhibit 10.1
January 15, 2001
Mr. Xxxxx Xxxx
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Re: Terms of Employment Offer with Mediaplex, Inc.
Dear Xxxxx:
Mediaplex, Inc (the "Company" or "Employer"), is pleased to offer you the
position described below. This letter sets forth the terms and conditions of
your employment with the Company. The Employer hereby employs you and you
hereby accept employment by the Employer, upon the terms and conditions set
forth in this Agreement. Your first day of employment and the employment start
date will be 1 January 2001.
I. Description of Employment Position and Responsibilities. You will serve in
the position of Chief Operating Officer. By executing this agreement, you agree
to assume and discharge such duties and responsibilities as are commensurate
with this position and such other duties and responsibilities that are assigned
to you from time to time by the Company's Board of Directors or Chief Executive
Officer, or their designee. It is agreed that you will be responsible for the
effective operation of the Company's, including its affiliates, internal
processes, both within and across departments. During the term of your
employment, you shall devote your full time, skill and attention to your duties
and responsibilities and shall perform them faithfully, diligently and
competently. In addition, you shall comply with and be bound by the operating
policies, procedures and practices of the Company in effect from time to time
during your employment, except insofar as this Agreement has modified such
operating policies and practices of the Company.
II. Employment Considerations.
2.1 At-Will Employment. You acknowledge that your employment with the Company
is for an unspecified duration that constitutes at-will employment, and that
either you or the Company can terminate this relationship at any time, with or
without cause and without notice subject to the provisions of Section 3.3 as
stated herein.
2.2 Employment Eligibility. Your employment is contingent on your submission
to the Company of satisfactory original documentation to verify your identity
and eligibility for employment in the United States.
III. Compensation.
3.1 Base Salary. In consideration of your services, effective 1 January 2001,
you will be paid an annual base salary of $250,000 (Two Hundred Fifty Thousand
Dollars and no Cents), payable no less frequently than on a monthly basis in
accordance with the Company's standard payroll practices. The Base Salary will
be reviewed by the Board of Directors, the Chief Executive Officer or their
designee not less frequently than annually, and may be adjusted upward but not
downward in the sole discretion of the Board of Directors.
3.2 Incentive Compensation. In addition to your base salary, you are entitled
to earn up to a fifty percent (50%) bonus for your service as Chief Operating
Officer determined as follows:
a. Determining Factors. The bonus will be earned in the amounts set forth
below upon achievement of certain specific Company milestones set out below
which are to be renewed each year:
i. Budget Achievement Target. Twenty percent (20%) for reducing the net
loss before tax for the year ended 31 December 2001 to less than the
net loss before tax for the year ended 31 December 2000.
ii. Exceeding Established Budget Expectations. Five percent (5%), ten
percent (10%), fifteen percent (15%) for reducing the net loss before
tax for the year ended 31 December 2001 to five percent (5%), ten
percent (10%), fifteen percent (15%) than the net loss before tax for
the year ended 31 December 2000.
iii. Stock Performance-Related Achievement. An additional cash bonus of up
to fifteen percent (15%) of your Base Salary will be earned in the
event of the Company's achievement of the following stock-related
milestones in 2001. This cumulative fifteen percent (15%) bonus is to
be divided in three five
percent (5%) increments as follows in the event the Company's ten day
weighted average stock price at December 31, 2001 achieves: $10 (5%
bonus); $15 (5% bonus) and $20 (5% bonus on the end of the year
average weighted price.
b. Payment Schedule. Your bonus pursuant to this Section 3.2 will be
determined following each calendar year of the Company after the Effective
Date, and a good faith estimate, if final determination has not yet been
made, shall be paid on or before the last day of the first month following
such calendar year, with the remainder by no later than 10 days following
receipt by the Company of audited financial statements for the Company for
the preceding year. The annual budget will be finalized and approved by
the Board of Directors on or before the commencement of each fiscal year,
failing which the budget for purposes of calculating the bonus in each year
will be set at the prior year's operating expenses as a percentage of
revenues multiplied by the Company's actual revenues in each year.
3.3 Termination for Other Than Cause. In the event that the Company elects to
terminate you for other than "Cause" (as defined below), or if you are
"Constructively Terminated" (as defined below), you will be you entitled to six
(6) months of paid salary as cash severance. This cash severance shall be paid
by the Company, in one lump sum at the time of termination. You will be
entitled to retain any Company notebook computer (after inspection by the
Company for Company proprietary information), cell phone and related portable
equipment used by you, although you will be fully responsible for any usage and
service charges associated with such equipment effective from the date of your
termination. You will receive the severance payments and benefits stated herein
if the Employer terminates your employment upon your death or for any reason, or
if you terminate your employment due to constructive termination, provided that
you must first execute a full mutual release of any and all claims against the
Employer which mutual release shall be in a form acceptable to the Employer.
(i) Pursuant to this paragraph, the Employer will pay to you: (a) your Base
Salary for six (6) months following the effective date of the
termination, if the termination is effective on or before August 1, 2001;
or (b) your Base Salary for twelve (12) months following the effective
date of the termination, if the termination is effective on or after
August 1, 2001 (collectively, the "Severance Payments").
(ii) In addition, provided that you elect continued coverage under federal
COBRA law as applicable, the Employer shall pay the full premiums for
your group health and any life insurance, disability insurance, and other
Company-provided health and welfare benefits, including coverage for your
eligible dependents, and shall pay to you an amount equivalent to the
standard 401 (k) matching contribution paid by the Employer to its
employees earning the same base salary as your Base Salary in effect on
the termination date for the time period provided in the preceding
paragraph; provided, however, that the Company shall pay premiums for
your eligible dependents only for coverage for which those eligible
dependents were enrolled immediately prior to the termination date. No
premium payments will be made following the effective date of your
coverage by a health insurance plan of a subsequent employer. For the
balance of the period that you are entitled to coverage under federal
COBRA law, you shall be entitled to maintain such coverage at your own
expense.
Termination Not For Cause Or Constructive Termination: Acceleration Of
Option. If the Employer terminates your employment without Cause or if you are
"Constructively Terminated" (as defined below), the vesting of your Option shall
be accelerated as provided herein, provided that you and the Employer execute an
effective mutual release of claims substantially in the form attached hereto as
Exhibit A, the final wording of which shall be determined by the Company (the
"Release"). Pursuant to this paragraph, you shall receive accelerated vesting
as follows:
(a) if the termination of your employment is effective on or before 31 March
2001, you shall receive acceleration of vesting of fifty-percent (50%) of
the unvested shares subject to the Option such that 50% of the Option is
immediately exercisable;
(b) if the termination of your employment is effective after 31 March 2001 and
before 31 August 2001, you shall receive acceleration of vesting of
seventy-five percent (75%) of the unvested shares subject to the Option
such that 75% of the Option is immediately exercisable;
(c) if the termination of your employment is effective on or after 31 August
2001, you shall receive acceleration of vesting of all unvested shares
subject to the Option such that 100% of the Option is immediately
exercisable.
If you have received additional shares of common stock pursuant to the
Additional Grant prior to the termination of your employment, you shall receive
accelerated vesting of the unvested shares subject to the Additional Grant on
the terms set forth in subparts (a), (b), and (c) of this Paragraph.
3.4 Termination for Cause. In the event that the Company terminates your
employment for "Cause" (as defined below), you shall not be entitled to receive
any severance benefits, including, without limitation, those benefits described
in paragraph 3.3 above, or other compensation by the Company, except as to that
portion of any unpaid salary, incentive bonus and other benefits earned by you
up to and including the effective date of such termination and the ability to
exercise the vested portion of your options in accordance with the terms of your
Stock Option Agreement.
3.5 "Cause" Defined. "Cause" shall mean any one of the following: (i) your
conviction (or plea of guilty or nolo contendere to) a felony, or committing an
act of dishonesty or fraud of the misappropriation of Company property, (ii)
your willful engagement in gross misconduct or willful neglect which are
significantly and demonstrably injurious to the Company, (iii) your failure or
refusal to perform duties of your position, such as a directive from the
Company's Board of Directors, the company's Chief Executive Officer or your then
supervisor (consistent with Section I hereof) which failure or refusal is not
cured within sixty (60) days after you are notified in writing of the specific
failure or refusal, (iv) your breach in any material respect the terms of this
Agreement or the Intellectual Property Agreement (as defined below); provided
that (except for those breaches which, by their nature, are incurable) this
provision shall not include a breach substantially cured by you within fifteen
(15) days after written notice by the Company to you of the specific breach, or
(v) your commencement of employment with another employer while you are employed
by the Company.
3.6 "Constructive Termination" Defined. "Constructive Termination" shall mean
your voluntary termination, upon 30 days prior written notice to the Company,
following:
(i) a material (10% or more) reduction in your Base Salary as set forth in
this Agreement (provided that any such reduction shall have no affect on
the calculation of benefits or bonuses related to your termination), or a
material reduction in the benefits afforded you by the Company, unless
those benefits are reduced for other similarly situated employees at the
same time; or
(ii) a material reduction in job duties, responsibilities and requirements
inconsistent with your position as set forth in this Agreement; provided,
however, that (aa) a change in the corporate structure of the company,
the company's reporting functions, or changes in titles which are not
accompanied by a material reduction in day to day responsibilities and
authority shall not be considered a "Constructive Termination"; (bb) a
material reduction or change in duties solely by virtue of the company
being acquired shall not constitute a "Constructive Termination" (e.g.
when a certain employee or officer such as a COO remains as such
following a change in control, with the same essential authority, job
duties, responsibilities, as existed prior to the acquisition, but is not
made the COO of the larger successor company); (cc) the employment of
executive officers (such as a CFO) by the Company who may report directly
to you, as Chief Operating Officer, and who may handle some of your
duties or responsibilities under this Agreement shall not be considered a
"Constructive Termination."
(iii)in the event of; (a) the Employer's requirement that the Executive's
primary business location be moved more than twenty (20) miles from San
Francisco, California; (b) the Employer's absence of financial control or
disclosure that violates statutory or regulatory law; (c) the Employer's
illegal misconduct or other misconduct that violates statutory or
regulatory law.
(iv) Termination Upon Death or Disability. If your employment is terminated
as a result of your Death or Disability (as defined below), the Company
will pay you, (or in the event of your death, your designated
beneficiary), your Base Salary through the remainder of the calendar
month during which such termination is effective and for six consecutive
months thereafter net of any Employer-paid disability insurance benefits
paid to you during such period, provided that you (or in the event of
your death, your designated beneficiary) must first execute a full mutual
release of any and all claims between you and the Company. For the
purposes of this section, disability is defined as follows: you will be
deemed to have a "disability" if, for physical or mental reasons, you are
unable to perform the essential functions of your duties under this
Agreement with or without reasonable accommodation for 120 consecutive
days, or 180 days during any twelve-month period. The disability will be
determined by a mutually agreeable medical doctor. You must submit to a
reasonable number of examinations by the medical doctor making the
determination of disability under this section and you hereby authorize
the disclosure and release to the Company (who shall treat such
information in the strictest confidence) of such determination and all
supporting medical records. If you are not legally competent, your legal
guardian or duly authorized attorney-in-fact will act in your stead for
the purposes of submitting you to the examinations, and providing the
authorization and disclosure, required under this section.
3.7 No Disparagement. During and following Executive's employment with the
Employer, neither the Executive nor the Employer and its directors, officers,
agents and affiliates shall make any disparaging comments (oral or written)
regarding the other. Any comments (oral or written) regarding any termination
shall be approved in advance by the Executive and the Employer. Notwithstanding
the foregoing, the Employer will not be required to obtain advance approval, and
will respond accurately and fully to any question, inquiry or request for
information, when required by law.
3.8 Voluntary Termination. In the event that you terminate your employment
with the Company of your own volition and not as a result of circumstances
described in Section 3.6 above, such termination will have the same consequences
as a termination for Cause under Section 3.4 above. No compensation or other
payments will be paid or provided to you for periods following the date when
such a termination of employment is effective, provided that any rights you may
have under the benefit plans of the Company shall be determined under the
provisions of those plans.
IV. Additional Benefits.
4.1 Health Insurance/Vacation/Benefit Plans. You will be entitled to receive
the standard employee benefits made available by the Company to its employees to
the full extent of your eligibility therefor. You shall be entitled to four (4)
weeks of paid personal time off ("PTO") per year; the terms and conditions of
your benefits shall be in accordance with the Company's PTO policy in effect at
that time. During your employment, you shall be permitted, to the extent
eligible, to participate in any group medical, dental, life insurance and
disability insurance plans, or similar benefit plan of the Company that is
available to employees generally. Participation in any such plan shall be
consistent with your rate of compensation to the extent that compensation is a
determinative factor with respect to coverage under any such plan.
4.2 Reimbursed Expenses. The Company shall reimburse you for all reasonable
and documented expenses incurred by you on behalf of the Company in the
performance of your duties as COO, including reasonable expenses incurred to
attend conventions and sponsorship events, costs for promotional expenses, and
professional dues and subscriptions appropriate for your employment position.
Any necessary air travel shall be coach for flights of two hours duration or
less, and business class for flights of more than two hours duration. The
Company shall additionally pay you an automobile and parking allowance of
$500.00 per month.
4.3 Stock Options. Pursuant to Board approval, and under the terms and
conditions of the Company's Stock Option Plan and Stock Option Agreement,
including the stock vesting provisions contained therein, you will be granted an
option to purchase one percent (1%) of the shares of common stock of the Company
at the Effective Date. In addition, you will be have the opportunity to be
granted up to an additional .5% (one half percent) of the common stock of the
Company (such .5% as calculated on the Effective Date) (the "Additional Grant")
upon the achievement of the certain specific milestones pursuant to the
percentage ratios as determined in Section 3.2). (For example, 20% of the .5%
of the Additional Grant shall be achieved upon the satisfaction of the criteria
established by Section 3.2). Provided however, it is agreed that such potential
Additional Grant, in contrast to the potential cash bonuses provided in Section
3.2, shall not be renewed each year. The Company Stock Option Plan, including
the Stock Option Agreement, will be sent to you separately.
V. Intellectual Property Rights/Confidential Information.
5.1 Valuable Trade Secrets. You agree that the Company is the owner of
valuable trade secrets, client, vendor, customer and contractor lists and other
confidential and proprietary information. As such, you agree that your
employment is contingent upon your execution of, and delivery to, the Company of
a Confidential Information and Invention Assignment Agreement ("Intellectual
Property Agreement") in the standard form utilized by the Company.
5.2 Additional Confidential Information. You agree to maintain the
confidentiality of all elements of this Agreement, agreeing to an absolute
prohibition on any disclosure or use of such information in any fashion, with
the exception of discussions with your supervisor or myself, and the Company's
Legal Department. As you are well aware the maintenance of confidentiality of
this kind of information is critical to our organization.
VI. Prohibition Against Theft of Trade Secrets.
6.1 You are aware of the requirements of the Uniform Trade Secrets Act and
agree to abide by its terms.
VII. Representations of Employee. Employee represents that:
7.1 Execution of this Agreement and the Agreements contemplated herein
(including the Intellectual Property Agreement), and performance of your
obligations hereunder and thereunder, will not conflict with, or result in a
violation of or breach of any other agreement to which you are a party or any
judgment, order or decree to which you are subject.
VIII. Arbitration.
8.1 It is agreed that any dispute or controversy arising out of or relating to
any interpretation, construction, performance or breach of this Agreement or
your employment with Mediaplex shall be exclusively settled by arbitration to be
held in San Francisco County, California, in accordance with the rules then in
effect of the JAMS ENDISPUTE. The arbitrator may grant injunctions or other
relief in such dispute or controversy. The decision of the arbitration shall be
final, conclusive and binding on the parties to the arbitration. Judgment may
be entered on the arbitrator's decision in any court having jurisdiction.
Mediaplex shall pay the full costs and expenses of such arbitration, and each of
you and the Company shall separately pay their respective counsel fees and
expenses.
8.2 At the request of either party hereto, the arbitrator will enter an
appropriate protective order to maintain the confidentiality of information
produced or exchanged in the course of the arbitration proceedings.
8.3 The arbitrator(s) shall apply California law to the merits of any dispute,
without reference to rules of conflicts of law.
8.4 The parties hereto agree that it would be impossible or inadequate to
measure and calculate the Company's damages from any breach of the your
covenants set forth in this Agreement. Accordingly, you agree that if you
breach any provision of this Agreement, the Company will have available, in
addition to any other right or remedy otherwise available, the right to
injunctive relief restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement.
8.5 The arbitration proceeding shall take place pursuant to the provisions of
C.C.P. Section 1280 et seq. In particular, all rights of discovery are
allowable under C.C.P. Sections 1282.6, 1283 and 1283.05.
8.6 I HAVE READ AND UNDERSTAND THIS SECTION 8, WHICH DISCUSSES ARBITRATION. I
UNDERSTAND THAT BY SIGNING THIS AGREEMENT, I AGREE, EXCEPT AS SET FORTH IN
SECTIONS 8.4 AND 8.5 ABOVE, TO SUBMIT ANY CLAIMS ARISING OUT OF ANY DISPUTE TO
BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF MY
RIGHTS TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES ARISING OUT
OF, RELATING TO OR IN CONNECTION WITH THIS AGREEMENT.
IX. General Provisions.
9.1 Governing Law. This Agreement will be governed by the laws of the State of
California.
9.2 Entire Agreement. This Agreement, with the Annexes thereto, sets forth the
entire agreement and understanding between the Company and you relating to your
employment and supersedes all prior verbal discussion and written agreements
between us. Any subsequent change or changes in your duties, salary or other
compensation will not affect the validity or scope of this Agreement. Any
change to the at-will term of this Agreement must be executed in writing and
signed by you and the Chief Executive Officer of the Company.
9.3 Successors/Assigns. This Agreement will be binding upon your heirs,
executors, administrators and other legal representatives and will be for the
benefit of the Company and its respective successors and assigns.
Please acknowledge and confirm your acceptance of this letter by signing and
returning the enclosed copy of this offer letter, and the Confidential
Information and Invention Assignment Agreement as soon as possible.
If you have any questions about this offer letter, please call me directly.
MEDIAPLEX, INC.
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx
Chief Executive Officer, Chairman of the Board
ACCEPTANCE:
I accept the terms of my employment with Mediaplex, Inc. as set forth herein. I
understand that this offer letter does not constitute a contract of employment
for any specified period of time, and that my employment relationship may be
terminated by either party, with or without cause and with or without notice.
Mr. Xxxxx Xxxx
/s/ Xxxxx Xxxx
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1/15/01
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Date
