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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Employee Retention Agreement

AMENDED AND RESTATED EMPLOYMENT AGREEMENT | Document Parties: Art Technology Group, Inc You are currently viewing:
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Art Technology Group, Inc

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: Massachusetts     Date: 5/12/2008
Industry: Software and Programming     Sector: Technology

AMENDED AND RESTATED EMPLOYMENT AGREEMENT, Parties: art technology group  inc
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Exhibit 10.3
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT by and between Art Technology Group, Inc., a Delaware corporation (the “Company”), and Robert D. Burke (the “Executive”) is made as of April 14, 2008 (the “Effective Date”).
     WHEREAS, the Company and the Executive entered into a letter agreement of employment dated December 4, 2002, which was amended by a letter agreement dated March 28, 2003 (together, the “Initial Agreement”);
     WHEREAS, the Company and the Executive amended and restated the Executive’s Initial Agreement as of November 8, 2004 (the “Prior Agreement”);
     WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control of the Company exists and that such possibility, and the uncertainty and questions which it may raise among key personnel, may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders;
     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate steps should be taken to reinforce and encourage the continued employment and dedication of the Company’s key personnel without distraction from the possibility of a change in control of the Company and related events and circumstances; and
     WHEREAS, the Company and the Executive desire to amend and restate the Executive’s employment agreement to include, among other provisions, certain additional change in control protections for the Executive.
     NOW, THEREFORE, in consideration of the Executive remaining in the Company’s employ and other good consideration, the receipt and sufficiency of which is acknowledged by both parties, the Company and the Executive agree as follows:
     1. Key Definitions.
As used herein, the following terms shall have the following respective meanings:
          1.1 “Change in Control” means an event or occurrence set forth in any one or more of subsections (a) through (d) below (including an event or occurrence that constitutes a Change in Control under one of such subsections but is specifically exempted from another such subsection):
               (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (i) the then-outstanding shares of

 


 
common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); or
               (b) such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor corporation to the Company), where the term “Continuing Director” means at any date a member of the Board (i) who was a member of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; or
               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company in one or a series of transactions (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of Outstanding Company Common Stock and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 30% or more of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination); or
               (d) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.
          1.2 “Change in Control Date” means the first date during the Employment Term (as defined in Section 3 of the Agreement) on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with the Company is terminated prior to the date on which the Change in Control occurs, and (c) it is reasonably demonstrated by the Executive that such termination of employment (i) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a

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Change in Control, then for all purposes of this Agreement the “Change in Control Date” shall mean the date immediately prior to the date of such termination of employment.
          1.3 “Cause” means:
               (a) the Executive’s willful and continued failure to substantially perform his reasonable assigned duties as an officer of the Company (other than any such failure resulting from incapacity due to physical or mental illness or any failure after the Executive gives notice of termination for Good Reason), which failure is not cured within 30 days after a written demand for substantial performance is received by the Executive from the Board which specifically identifies the manner in which the Board believes the Executive has not substantially performed the Executive’s duties; or
               (b) the Executive’s commission of a felony (other than through vicarious liability or involving vehicular offense) which is materially and demonstrably injurious to the Company or a crime involving fraud or embezzlement against the Company.
     For purposes of this Section 1.3, no act or failure to act by the Executive shall be considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable belief that the Executive’s action or omission was in the best interests of the Company.
          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of any of the events or circumstances set forth in clauses (a) through (j) below.
               (a) a change in the Executive’s titles of President and Chief Executive Officer or the assignment to the Executive of duties inconsistent in any material respect with the Executive’s positions (including status, offices, titles and reporting requirements), authority or responsibilities, or any other action or omission by the Company which results in a material diminution in such positions, authority or responsibilities;
               (b) a reduction in any aspect of the Executive’s compensation as then may be in effect;
               (c) the failure by the Company to (i) continue in effect any material compensation or benefit plan or program consistent with those afforded to other senior executives of the Company (including without limitation any life insurance, medical, health and accident or disability plan and any vacation or automobile program or policy) in which the Executive participates or which is applicable to the Executive, (ii) continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Executive’s participation relative to other participants, than the basis existing immediately prior to the change, or (iii) award cash bonuses to the Executive in amounts and in a manner substantially consistent with past practice in light of the Company’s financial performance;
               (d) any alteration in the Company’s 1996 Amended and Restated Stock Option Plan in any manner that may exert an adverse impact on the Executive for the grant of restricted stock awards, restricted stock units or options to purchase shares of common stock of

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the Company (the “Common Stock”) granted to the Executive (the “Stock Awards”) as of the date of this Agreement;
               (e) a change by the Company in the location at which the Executive performs his principal duties for the Company to a new location that is both (i) outside a radius of 35 miles from the Executive’s principal residence immediately prior to that change and (ii) more than 20 miles from the location at which the Executive performed his principal duties for the Company immediately prior to the change;
               (f) a material breach of this Agreement by the Company;
               (g) a requirement by the Company that the Executive travel on Company business to a substantially greater extent than required immediately prior to a Change in Control;
               (h) the failure of the Company to obtain the agreement from any successor to the Company to assume and agree to perform this Agreement, as required by Section 7.1;
               (i) if, as a result of a Change of Control, the Company no longer has a publicly traded class of equity securities and/or is no longer subject to reporting requirements under the Securities Exchange Act of 1934; or
               (j) any failure of the Company to pay or provide to the Executive any portion of the Executive’s compensation or benefits due under any Company employee benefit plan within seven days of the date such compensation or benefits are due.
     For purposes of this Agreement, any good faith determination of “Good Reason” made by the Executive shall be conclusive, binding and final. The Executive’s right to terminate his employment for Good Reason shall not be affected by his incapacity due to physical or mental illness.
          1.5 “Disability” means the Executive’s absence from the full-time performance of the Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers.
     2. Position and Duties. The Executive will serve as President and Chief Executive Officer of the Company. The Executive will render such business and professional services in the performance of the Executive’s duties consistent with the Executive’s position within the Company and as reasonably assigned to the Executive by the Board. During the Employment Term, the Executive will serve as a member of the Board.
     3. Employment Term. This Agreement, and all rights and obligations of the parties hereunder, shall take effect upon the Effective Date and shall continue in effect until the Date of Termination (as defined below) (the “Employment Term”). The Executive or the Company may terminate Executive’s employment at any time, with or without Cause, subject to the severance obligations described in Section 5.2 of the Agreement, except that the Company or Executive

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shall communicate such termination by a written notice to the other party hereto (the “Notice of Termination”), given in accordance with Section 8 of the Agreement. Any Notice of Termination shall: (a) indicate the specific termination provision (if any) of this Agreement relied upon by the party giving such notice; (b) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated; and (c) specify the Date of Termination. The effective date of an employment termination (the “Date of Termination”) shall be the close of business on the date specified in the Notice of Termination (which date may not be less than 15 days or more than 120 days after the date of delivery of such Notice of Termination), in the case of a termination other than one due to the Executive’s death, or the date of the Executive’s death, as the case may be. In the event the Company fails to satisfy the requirements of this Section 3 regarding a Notice of Termination, the purported termination of the Executive’s employment pursuant to such Notice of Termination shall not be effective for purposes of this Agreement. The failure by the Executive o

 
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