EXHIBIT 10.1
DIGITAL IMPACT, INC.
000 XXXXX XXXX, XXXXX 000
XXX XXXXX, XX 00000
November 12, 2001
Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxx #000
Xxx Xxxxxxxxx, XX 00000
Re: Offer of Employment
Dear Xxxxx:
Digital Impact, Inc. (the "COMPANY") is pleased to offer you employment
on the terms set forth below (this "AGREEMENT").
Title. You will have the title of Senior Vice President of Services and
you will report to Xxxxxxx X. Park, in his capacity as Chief Executive Officer
of the Company. As a Company employee, you will be expected to abide by all of
the Company's policies and procedures, and acknowledge in writing that you have
received and read the employee handbook, which will be made available to you
following the date you commence employment with the Company (your "COMMENCEMENT
DATE").
Duties. Your duties as Senior Vice President of Services will be to
manage the Company's Services department, overseeing all aspects of the quality
of service delivered to the Company's clients.
Salary and Benefits. Your initial base salary will be two hundred
thousand dollars ($200,000) per year, less applicable payroll deductions and
withholdings. As an exempt employee, you will be paid on a salary, not hourly,
basis. Therefore, you will be "exempt" from overtime pay. You will be paid two
times per month in accordance with the Company's payroll practices for employees
generally. In addition, the Company will provide you with sick leave, ten days
of paid vacation time, and medical, dental, and other benefits coverage
consistent with Company policy. The Company reserves the right to modify
benefits available to employees from time to time, as it deems necessary.
Signing Bonus. The Company will pay you a sixty-two thousand five
hundred dollars ($62,500) signing bonus (the "SIGNING BONUS") due upon your
Commencement Date, less applicable payroll deductions and withholdings. You will
be required to repay the entire Signing Bonus in the event you voluntarily
terminate your employment with the Company prior to the date that is six (6)
months following your Commencement Date.
Stock Options.
Signing Grant. On or following your Commencement Date (but in
any event no later than thirty (30) days following your Commencement Date), in
compliance with all applicable regulatory requirements and subject to applicable
approvals, you will be eligible to receive a stock option to purchase two
hundred twenty-five thousand (225,000) shares of the Company's common stock (the
"SIGNING GRANT"). The exercise price of the Signing Grant will be the fair
market value of the Company's common stock on the date of grant. The Option will
vest in equal monthly installments over four (4) years.
Performance Grant. On or following your Commencement Date (but in
any event no later than thirty (30) days following your Commencement Date), in
compliance with all applicable regulatory requirements and subject to applicable
approvals, you will be eligible to receive a stock option to purchase one
hundred twelve thousand five hundred (112,500) shares of the Company's common
stock (the "PERFORMANCE GRANT"). The exercise price of the Performance Grant
will be the fair market value of the Company's common stock on the date of
grant. The Performance Grant will vest over a one-year period in accordance with
the terms set forth on Schedule A.
Indemnification. You shall be indemnified by the Company to the same
extent as other Company executives. In addition, the Company shall indemnify you
for personal liability you may incur arising from claims against you in
connection with your leaving your current employment and taking a position with
the Company. Both parties acknowledge that your decision to join the Company and
the Company's decision to offer you a position were made independent of the
Company's decision of whether to make a bid for the assets of Post
Communications, Inc. ("POST") in a currently pending bankruptcy proceeding.
Severance. In the event that the Company does not acquire the assets of
Post, and within six (6) months following your Commencement Date the Company
terminates your employment other than for Cause (as defined below), you will be
entitled to receive a severance payment equal to two (2) months' salary, less
applicable payroll deductions and withholdings, subject to your execution of a
release in form and substance satisfactory to the Company.
For purposes of this Agreement, "CAUSE" shall mean any of the following: (i)
conviction of any felony or any crime involving dishonesty; (ii) participation
in a fraud or act of dishonesty against the Company; (iii) willful breach of the
Company's policies; (iv) intentional damage to the Company's property; (v)
material breach of this Agreement or your Proprietary Information and Inventions
Agreement; or (vi) conduct by you which in the good faith and reasonable
determination of the Board demonstrates unacceptable job performance or gross
unfitness to serve provided that you have had fair notice of such cause and do
not substantially cure or mitigate its consequences to the
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reasonable satisfaction of the Company as determined by the Board within thirty
(30) days after the Company notifies you in writing of the cause.
Change in Control Protection. The Company maintains a change in control
program for its senior executives. You will be a participant in this program on
the same terms and conditions offered to executives of the Company generally.
Protection of Company Interests. As a Company employee, you will be
expected to sign and comply with the Company's standard Proprietary Information
and Inventions Agreement which, among other things, prohibits unauthorized use
or disclosure of Company proprietary information and which prohibits, without
the express written consent of a duly authorized officer of the Company,
engagement in any employment or business activity other than for the Company.
At-Will Employment. Your employment with the Company is at-will. This
means that you may resign your employment at any time simply by notifying the
Company. Likewise, the Company may terminate your employment relationship at any
time and for any reason whatsoever, with or without cause or advanced notice,
simply by notifying you. This at-will employment relationship cannot be changed
except in a writing signed by a duly authorized officer of the Company.
Miscellaneous. This Agreement, including the attachments, if any,
constitutes the complete, final and exclusive embodiment of the entire agreement
between you and the Company with respect to the terms and conditions of your
employment. This Agreement is entered into without reliance upon any promise,
warranty or representation, written or oral, other than those expressly
contained herein, and it supersedes any other such promises, warranties,
representations or agreements. It may not be amended or modified except by a
written instrument signed by you and a duly authorized officer of the Company.
If any provision of this Agreement is determined to be invalid or unenforceable,
in whole or in part, this determination will not affect any other provision of
this Agreement, which shall remain in full force and effect. This Agreement
shall be construed and interpreted in accordance with the laws of the State of
California, without reference to the choice of law provisions thereof.
As required by law, this offer of employment is subject to satisfactory
proof of your right to work in the United States.
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To indicate your acceptance of our offer under the terms described
above, please sign below and return this Agreement to the Company. We look
forward to your favorable reply and to a productive and enjoyable work
relationship.
Very truly yours,
DIGITAL IMPACT, INC.
By:
---------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President &
General Counsel
Accepted by:
--------------------------
Print Name: Xxxxx Xxxxxxx
Date:
---------------------------------
Anticipated Start Date: December 3, 2001
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SCHEDULE A
PERFORMANCE GOALS(1)
CLIENT RETENTION(2) REVENUE GROWTH(3)
--------------- ------------------------------------ --------------------------------------
6-MONTH PERIOD 6-MONTH PERIOD
VESTING FROM YOUR COMMENCEMENT DATE TO ENDING ENDING
PERIODS JUNE 30, 2002 AND DECEMBER 31, 2002 JUNE 30, 2002 DECEMBER 31, 2002
--------------- ------------------------------------ ---------------- -----------------
Goal 80% -85% retention 7.5% - 10% 15+% - 20%
Options vested 18,750 options 18,750 options 18,750 options
if goal met
Goal 85+% - 90% retention 10+% - 15% 20+% - 25%
Options vested 20,000 options 25,000 options 25,000 options
if goal met
Goal 90+% - 95% retention 15+% 25+%
Options vested 22,500 options 31,250 options 31,250 options
if goal met
Goal 95+% - 100% retention
Options vested 25,000 options
if goal met
--------
(1) In the event that the Company determines to take actions that are the
primary result of the loss of all or substantially all of the business of
a client on which these performance criteria are based (including, but not
limited to, the possible transition of such clients from Post's platform
to the Company's platform, if applicable), both parties shall in good
faith review and, if justified, revise this performance criterion. The
parties understand that the most important factor underlying the retention
of clients is good service. Thus, whether a failure to provide good
service is the primary result of the loss of a client shall be a
significant factor in the determination of whether any revision is
justified. If the Company does not acquire the assets of Post, the
satisfaction of the performance goals in this table shall be calculated
with reference only to Company clients.
(2) Retention of all or substantially all of the business of at least the
specified percentage of the Company's clients through the end of the
applicable vesting period. Vesting, if any, will occur at the end of the
applicable vesting period.
(3) Measured and vested following the end of the applicable vesting periods
following the Company's Finance Department's certification of recognized
revenue. "Revenue Growth" is determined by comparing the actual recognized
revenue for the applicable six-month period for all Company clients
against two (2) times the actual revenue of the Company's (and Post's
clients, if applicable) for the fiscal quarter ending December 31, 2001.
The parties shall agree in good faith whether any particular client should
be excluded from the revenue growth calculations based on such client
leaving the Company or Post on account of factors beyond for reasons not
involving client service.
