CHANGE OF CONTROL
AGREEMENT
This Change of
Control Agreement (the “Agreement”) is made and entered
into by and between Joshua G. James (the “Employee”)
and Omniture, Inc. (the “Company”), effective as of
June 7, 2006 (the “Effective Date”).
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 benefits upon a Change of Control and 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.
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.
(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 two hundred 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 two hundred 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 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) twenty-four 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
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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 .
(a) Equity Compensation . With
respect to equity compensation awards granted to Employee, those
shall accelerate vesting 100% upon a “change of
control,” as such term is defined in the employment agreement
by and between Employee and the Company, amended and restated as of
even date herewith (the “Employment Agreement”) and
shall otherwise remain governed pursuant to the applicable terms of
the Employment Agreement.
(b) Other Benefits . Except as
provided in Section 4(a) hereof, in the event of a termination of
Employee’s employment within the Change of Control Period,
and with respect to the 280G excise tax gross-up provisions of
Section 6 hereof, in the event any such tax is triggered,
including outside of 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 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
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sum of the two
cash payments. The same principle applies to the other individual
elements of severance provided herein (other than equity
compensation award vesting), and also applies to the provisions
relating to a gross-up for Code Section 280G excise taxes,
including outside of termination of Executive’s employment
within the Change of Control Period. Except as otherwise provided
in Section 4(a) hereof and in this section 4(b), 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
.
(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
twenty-four 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 not directly or
indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, stockholder, corporate officer,
director or otherwise), nor having any ownership interest in or
participating in the financing, operation, management or control
of, any person, firm, corporation or business in Competition (as
defined herein) with Company. Notwithstanding the foregoing,
Employee may, without violating this Section 5, own, as a
passive investment, shares of capital stock of a corporation or
other entity that engages in Competition where the number of shares
of such corporation’s capital stock that are owned by
Employee represent less than three percent of the total number of
shares of such entity’s capital stock outstanding. For
purposes of this Agreement, Competition refers to activities that
are competitive to Omniture as of the date of termination of
Employee’s employment with the Company, including, but not
limited to, marketing, selling, hosting, delivering, or
distributing web analytics products or other online business
optimization software or services, or engaging in online marketing
services similar to or competitive with products or services
offered by the Company as of the date of termination of
Employee’s employment with the Company.
(b)
Non-Solicitation . Until the date twenty-four months after
the termination of Employee’s employment with the Company for
any reason, 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 neither directly nor
indirectly soliciting, inducing, recruiting or encouraging an
employee to leave his or her employment either for Employee or for
any other entity or person with which or whom Employee has a
business relationship.
(c) Understanding of Covenants
. Employee represents that he (i) is familiar with the
foregoing covenants not to compete and not to solicit, and
(ii) is fully aware of his obligations hereunder, including,
without limitation, the reasonableness of the length of time, scope
and geographic coverage of these covenants. The Company
acknowledges and agrees that Employee’s
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covenants not
to compete and not to solicit under Sections 5(a) and 5(b) above
are conditioned upon Employee’s receipt of the severance
payments and benefits set forth in Section 3(a) above.
(d)
Remedy for Breach . Upon any breach of this section by
Employee, 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, 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) hereunder and that shall be the sole remedy
available to the Company for such breach.
6.
Golden Parachute Excise Tax .
(a) Parachute Payments of Less
than 3.6 x Base Amount . In the event that the benefits
provided for in this agreement or otherwise payable to Employee,
including vesting acceleration upon a change of control pursuant to
Employee’s employment agreement with the Company (a)
constitute “parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended
(the “Code”), (b) would be subject to the excise
tax imposed by Section 4999 of the Code, and (c) the
aggregate value of such parachute payments, as determined in
accordance with Section 280G of the Code and the proposed
Treasury Regulations thereunder (or the final Treasury Regulations,
if they have then been adopted) is less than the product obtained
by multiplying three and six-tenths by Employee’s “base
amount” within the meaning of Code Section 280G(b)(3),
then such benefits shall be reduced to the extent necessary (but
only to that extent) so that no portion of such benefits will be
subject to excise tax under Section 4999 of the
Code.
(b) Parachute Payments Equal to or
Greater than 3.6 x Base Amount . In the event that the benefits
provided for in this agreement or otherwise payable to Employee,
including vesting acceleration upon a ch
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