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Exhibit
10.3
EXECUTIVE EMPLOYMENT
AGREEMENT
This Executive Employment
Agreement (“Agreement”), dated August 1, 2007
(“Effective Date”), is between Kintera, Inc., a
Delaware corporation (the “Company”) and Richard
LaBarbera (“Executive”).
WHEREAS, the Company and
Executive have previously executed an Offer Letter dated
January 23, 2006 (the “Offer Letter”) regarding
the terms of Executive’s employment with the
Company.
WHEREAS, the Company and
Executive desire this Agreement to be to be the final, complete,
and exclusive statement of the terms of Executive’s
employment by the Company, superseding the terms of such Offer
Letter.
NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein
contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree
as follows:
| 1. |
POSITION, RESPONSIBILITIES, AND TERM |
a. Position.
Executive is employed by the Company to render services to the
Company in the position of President and Chief Executive Officer.
Executive shall perform such duties and responsibilities as are
normally related to such position in accordance with the standards
of the industry and any additional duties now or hereafter assigned
to Executive by the Company’s Board of Directors
(“Board”) (“Services”). Executive shall
abide by the rules, regulations, and practices as adopted or
modified from time to time in the Company’s sole discretion.
Executive will devote Executive’s full time efforts to the
provision of Services under this Agreement.
b. Other
Activities. Except upon the prior written consent of the
Company, Executive will not, during the term of this Agreement:
(i) be employed elsewhere; (ii) engage, directly or
indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that might interfere with
Executive’s duties and responsibilities hereunder or create a
conflict of interest with the Company; or (iii) acquire any
interest of any type in any other business which is in competition
with the Company, provided, however, that the foregoing shall not
be deemed to prohibit the Executive from acquiring solely as an
investment up to five percent (5%) of the outstanding equity
interests of any publicly-held company.
c. No Conflict.
Executive represents and warrants that Executive’s execution
of this Agreement and performance of Services under this Agreement
will not violate any obligations Executive may have to any other
employer, person or entity, including any obligations to keep in
confidence proprietary information, knowledge, or data acquired by
Executive in confidence or in trust prior to becoming an employee
of the Company.
d. Term of
Employment . Unless earlier terminated in accordance with
Section 3, the term of this Agreement shall be for a period of
three (3) years after the Effective Date of this Agreement
(“Term”). Where the Agreement is terminated on or after
the expiration of the Term, the Company shall pay to Executive all
compensation to which Executive is entitled up through the
effective date of termination according to its normal payroll
practices, and the Company shall not have any further obligations
under this Agreement.
e. Housing
Allowance . Until the earlier of the date on which Executive
ceases to be employed by the Company or December 31,2009, the
Company will continue to reimburse Executive for documented costs
and expenses actually incurred by Executive directly in connection
with his maintenance of a residence in San Diego, provided that
Executive does not sell his primary residence in Pleasonton, CA
(the “Primary Residence”). The maximum yearly amount
for reimbursable expenses covered by this paragraph shall not
exceed $18,000 for calendar year 2007; $20,000 for
calendar year 2008; and $22,000 for calendar year 2009. All
such reimbursements (and limits thereto) shall be increased
(“grossed-up”) to the extent necessary to cover any
personal income taxes Executive incurs by reason of such payments.
Any amounts paid hereunder shall reduce the amounts available under
Section 1(f) below.
f. Relocation .
In the event that Executive (a) sells the Primary Residence in
connection with the relocation of his primary residence to San
Diego County or (b) acquires property in San Diego County to
serve as his new principal residence (the “New
Residence”), the Company will cease making the payments under
1(e) above, but instead shall reimburse Executive for the following
(provided that in no event shall the aggregate of all such
relocation reimbursements exceed $96,000 , after reductions
to the extent paid pursuant to 1(e)), subject to Section 1(g)
as follows: (i) either (x) the real estate commissions on
the sale of the Primary Residence (not to exceed 4% of the sale
price of the Primary Residence) or (y) the portion of the
purchase price of the New Residence attributable to real estate
commissions (not to exceed 4% of the purchase price of the New
Residence); (ii) the shipping cost of household goods through
an approved relocation service; and (iii) hotel and mileage or
one way airfare for Executive and Executive’s family on the
day of move.
g. Refund
Provision. Executive hereby agrees to refund to the Company
100% of all payments that were made to you or on your behalf in
connection with your relocation (but not you housing allowance),
should Executive resign or if Executive’s employment is
terminated for Cause during the twelve month period following the
sale of the Primary Residence.
| 2. |
COMPENSATION AND BENEFITS |
h. Base Salary.
In consideration of the Services to be rendered under this
Agreement, the Company shall pay Executive a gross salary at the
rate of Three Hundred Thirty Thousand Dollars ($330,000) per year,
less applicable withholdings (“Base Salary”). The Base
Salary shall be paid in accordance with the Company’s normal
payroll practices. Executive’s Base Salary will be reviewed
from time to time in accordance with the established procedures of
the Company for adjusting salaries for similarly situated employees
and may be adjusted in the sole discretion of the
Company.
i. Annual
Bonus. In further consideration of the Services to be rendered
under this Agreement, Executive shall be eligible to receive an
annual bonus of up to seventy percent (70%) of
Executive’s Base Salary based on achievement of goals and
objectives established by the Company (“Annual Bonus”).
Executive must remain employed with the Company through the end of
the calendar year at issue in order to be eligible to receive the
Annual Bonus, and the Annual Bonus will be paid to Executive on or
before March 15 of the calendar year following any calendar
year in which Executive earns an Annual Bonus. Executive’s
Annual Bonus will be reviewed from time to time in accordance with
the established procedures of the Company for adjusting bonuses for
similarly situated employees and may be adjusted in the sole
discretion of the Company.
j. Employment
Benefits Plans. In further consideration of the Services to be
rendered under this Agreement, Executive will be entitled to
participate in pension, profit sharing and other retirement plans,
incentive compensation plans, group health, hospitalization and
disability or other insurance plans, and other employee welfare
benefit plans generally made available to other similarly-situated
employees of the Company, in accordance with the benefit plans
established by the Company, and as may be amended from time to time
in the Company’s sole discretion.
k. Vacation .
Executive shall be eligible to receive paid vacation subject to the
policies and procedures in the Company’s Employee Handbook,
as may be amended from time to time in the Company’s sole
discretion.
l. Expenses.
The Company will pay or reimburse Executive for all normal and
reasonable travel and entertainment expenses incurred by Executive
in connection with Executive’s responsibilities to the
Company upon submission of proper vouchers and documentation in
accordance with the Company’s expense reimbursement
policy.
The employment of Executive
shall be “at-will” at all times. The Company or
Executive may terminate Executive’s employment with the
Company at any time, without any advance notice, for any reason or
no reason at all, notwithstanding anything to the contrary
contained in or arising from any statements, policies or practices
of the Company relating to the employment, discipline or
termination of its employees. Following the termination of
Executive’s employment, the Company shall pay to Executive
all compensation to which Executive is entitled up through the date
of termination. Thereafter, all obligations of the Company under
this Agreement shall cease other than those set forth in
Section 4.
| 4. |
COMPANY TERMINATION OBLIGATIONS |
a. Termination by
Company for Cause. Where the Company terminates
Executive’s employment for Cause, all obligations of the
Company under this Agreement shall cease, other than those set
forth in Section 3. For purposes of this Agreement,
“Cause” shall mean: (i) the Executive’s
theft, dishonesty, or falsification of any Company documents or
records; (ii) the Executive’s improper use or disclosure
of the Company’s confidential or proprietary information;
(iii) any action by the Executive which has a detrimental
effect on the Company’s reputation or business; (iv) the
Executive’s failure or inability to perform adequately any
reasonable assigned duties as determined by the Company;
(v) any violation by the Executive of any material agreement
(including this Agreement) between the Executive and the Company,
which breach is not cured to the extent that the applicable
agreement provides for a cure period, or any breach of any material
Company policy or material statutory duty to the Company; or
(vi) the Executive’s conviction (including any plea of
guilty or nolo contendere) of any felony or crime involving moral
turpitude or dishonesty.
b. Termination by
Company without Cause. Where the Company terminates
Executive’s employment without Cause, and Executive’s
employment is not terminated due to death or Disability (as defined
below), Executive will be eligible to receive: (i) continued
payment of Executive’s then-monthly Base Salary for twelve
(12) months according to the Company’s normal payroll
practices, less applicable withholdings and any renumeration
received by Executive because of Executive’s employment or
self-employment during the twelve (12) month period; and
(ii) continued eligibility to participate in medical, life,
dental and disability insurance coverage for Executive and his
eligible dependents to the extent permitted under the applicable
plans of the Company as in effect on the date of such termination,
at the Company’s expense for twelve (12) months,
provided , however , that after such termination
Executive shall continue to pay premiums in respect to such
coverage to the same extent as was the case immediately prior to
such termination. Executive’s eligibility to receive the
severance set forth in this Section 4(b) is conditioned on
Executive having first signed a release agreement in the form
attached as Exhibit A . Upon satisfaction of the
Company’s obligations under this Section 4(b), all other
obligations of the Company under this Agreement shall
cease.
c. Termination
without Cause or Resignation for Good Reason in Connection with
Change in Control. Notwithstanding anything to the contrary in
this Agreement, if within the period two months prior to and two
years following a “Change in Control” Executive
voluntarily resigns for “Good Reason” or
Executive’s employment is terminated by the Company without
Cause, and Executive’s employment is not terminated due to
death or Disability, then in lieu of receiving the amounts set
forth in Section 4(b) hereof, the Executive will be eligible
to receive: (i) in a lump sum in immediately available funds
within fifteen (15) business days after the date of
termination, an amount equal to the sum of
(A) Executive’s annual Base Salary in effect at the time
of termination and (B) the maximum Annual Bonus for which
Executive is eligible at the time of termination, calculated based
upon the bonus period in which the termination occurs;
(ii) continued eligibility to participate in medical, life,
dental and disability insurance coverage for
Executive and his eligible dependents to
the extent permitted under the applicable plans of the Company as
in effect on the date of such termination, at the Company’s
expense for twelve (12) months; and (iii) any unvested
shares of restricted stock, unvested options or other equity-based
compensation awards held by Executive automatically shall become
100% vested. Executive’s eligibility to receive the severance
set forth in this Section 4(c) is conditioned on Executive
having first signed a release agreement in the form attached as
Exhibit A . Upon satisfaction of the Company’s
obligations under this Section 4(c), all other obligations of
the Company under this Agreement shall cease.
1. For purposes of
Section 4(c),”Good Reason” shall mean any one or
more of the following: (i) without the Executive’s
express written consent, the relocation of the principal place of
the Executive’s Service to a location that is more than fifty
(50) miles from the Executive’s principal place of
Service immediately prior to the date of the Change in Control;
(ii) any failure by the Company to pay, or any reduction by
the Company of the Executive’s Base Salary in effect
immediately prior to the date of the Change in Control;
(iii) any failure by the Company to (1) continue to
provide to the Executive a package of welfare benefit plans that,
taken as a whole, provide substantially similar benefits to those
to which the Executive was entitled immediately prior to the Change
in Control (except that the Executive’s contributions may be
increased to the extent of any cost increases imposed by third
parties) or (2) provide the Executive with all other fringe
benefits (or their equivalent) from time to time in effect for the
benefit of any employee of the Company; or (iv) a change in
Executive’s position with the Company which materially
reduces Executive’s level of responsibility.
2. For purposes of
Section 4(c), the term “Change in Control” shall
have the meaning set forth in the Company’s 2003 Equity
Incentive Plan.
d. Termination Due
to Disability. Executive’s employment shall terminate
automatically if Executive becomes Disabled. Executive shall be
deemed Disabled if Executive is unable for medical reasons to
perform Executive’s essential job duties for either ninety
(90) consecutive calendar days or one hundred twenty
(120) business days in a twleve (12) month period and,
within thirty (30) days after a notice of termination is given
to Executive, Executive has not returned to work. If
Executive’s employment is terminated by the Company due to
Executive’s Disability, all obligations of the Company under
this Agreement shall cease, other than those set forth in
Section 3.
e. Termination Due
to Death. Executive’s employment shall terminate
automatically upon Executive’s death. If Executive’s
employment is terminated due to Executive’s death, all
obligations of the Company under this Agreement shall cease, other
than those set forth in Section 3.
f.
Executive’s Resignation . Where Executive resigns
Executive’s employment undercircumstances other than those
governed by Section 4(c), all obligations of the Company under
this Agreement shall cease, other than those set forth in
Section 3.
g. Delayed
Payments . In the event that Section 409A
(“409A”) of the Internal Revenue Code of 1986, as
amended (the “Code”), applies to any compensation with
respect to Executive’s termination, payment of that
compensation shall be delayed if Executive is a “specified
employee,” as defined in 409A(a)(2)(B)(i), and such delayed
payment is required by 409A. Such delay shall last six
(6) months from the date of Executive’s termination. On
the day following the end of such six-month period, the Company
shall make a catch-up payment to Executive equal to the total
amount of such payments that would have been made during the
six-month period but for this Section 4(g).
| 5. |
EXECUTIVE TERMINATION OBLIGATIONS |
a. Return of
Property. Executive agrees that all property (including without
limitation all equipment, tangible proprietary information,
documents, records, notes, contracts and computer-generated
materials) furnished to or created or prepared by Executive
incident to Executive’s employment belongs to the Company and
shall be promptly returned to the Company upon termination of
Executive’s employment.
b. Resignation and
Cooperation. Upon termination of Executive’s employment,
Executive shall be deemed to have resigned from all offices and
directorships then held with the Company, including, without
limitation, his position as a member of the Board. Following any
termination of employment, Executive shall cooperate with the
Company in the winding up of pending work on behalf of the Company
and the orderly transfer of work to other employees. Executive
shall also cooperate with the Company in the defense of any action
brought by any third party against the Company that relates to
Executive’s employment by the Company.
c. Continuing
Obligations. Executive understands and agrees that
Executive’s obligations under Sections 6 and 12 herein
(including Exhibit B ) shall survive the termination of
Executive’s employment for any reason and the termination of
this Agreement.
| 6. |
INVENTIONS AND PROPRIETARY INFORMATION |
Executive has previously
signed and agrees to be bound by the terms of the Employee
Innovations and Proprietary Rights Assignment Agreement, which is
attached as Exhibit B (“Proprietary Information
Agreement”).
| 7. |
AMENDMENTS; WAIVERS; REMEDIES |
This Agreement may not be
amended or waived except by a writing signed by the parties hereto.
Failure to exercise any right under this Agreement shall not
constitute a waiver of such right. Any waiver of any breach of this
Agreement shall not operate as a waiver of any subsequent breaches.
All rights or remedies specified for a party herein shall be
cumulative and in addition to all other rights and remedies of the
party hereunder or under applicable law.
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ASSIGNMENT; BINDING EFFECT |
a. Assignment.
The performance of Executive is personal hereunder, and Executive
agrees that Executive shall have no right to assign and shall not
assign or purport to assign any rights or obligations under this
Agreement. This Agreement may be assigned or transferred by the
Company; and nothing in this Agreement shall prevent the
consolidation, merger or sale of the Company or a sale of any or
all or substantially all of its assets.
b. Binding
Effect. Subject to the foregoing restriction on assignment by
Executive, this Agreement shall inure to the benefit of and be
binding upon each of the parties; the affiliates, officers,
directors, agents, successors and assigns of the Company; and the
heirs, devisees, spouses, legal representatives and successors of
Executive.
All notices or other
communications required or permitted hereunder shall be made in
writing and shall be deemed to have been duly given if delivered:
(a) by hand; (b) by a nationally recognized overnight
courier service; or (c) by United States first class
registered or certified mail, return receipt requested, to the
principal address of the other party, as set forth below. The date
of notice shall be deemed to be the earlier of (i) actual
receipt of notice by any permitted means, or (ii) five
business days following dispatch by overnight delivery service or
the United States Mail. Executive shall be obligated to notify the
Company in writing of any change in Executive’s address.
Notice of change of address shall be effective only when done in
accordance with this paragraph.
Company’s Notice
Address:
Kintera, Inc.
9605 Scranton Road, Suite
200
San Diego, California
92121
Executive’s Notice
Address:
1619 Orvieto Court
Pleasanton, CA
94566
If any provision of this
Agreement shall be held by a court or arbitrator to be invalid,
unenforceable, or void, such provision shall be enforced to the
fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. In the event that
the time period or scope of any provision is declared by a court or
arbitrator of competent
jurisdiction to exceed the maximum time
period or scope that such court or arbitrator deems enforceable,
then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.
All amounts paid under this
Agreement shall be paid less all applicable state and federal tax
withholdings and any other withholdings required by any applicable
jurisdiction.
a. This Agreement
shall be governed by and construed in accordance with the laws of
the State of California , and Executive hereby expressly
consents to the personal jurisdiction of the state and federal
courts located in San Diego, California for any lawsuit arising
from or relating to this Agreement.
b. The parties agree
that any dispute, controversy or claim, whether based on contract,
tort, statute, discrimination, retaliation or otherwise, relating
to, arising from or connected in any manner to this Agreement, or
to the alleged breach of this Agreement, or arising out of or
relating to Executive’s employment or termination of
employment, shall, upon timely written request of either party be
submitted to and resolved by binding arbitration. The arbitration
shall be conducted in San Diego, California. The arbitration shall
proceed in accordance with the National Rules for Resolution of
Employment Disputes of the American Arbitration Association
(“AAA”) in effect at the time the claim or dispute
arose, unless other rules are agreed upon by the parties. Unless
otherwise agreed to by the parties in writing, the arbitration
shall be conducted by one arbitrator who is a member of the AAA and
who is selected pursuant to the methods set out in the National
Rules for Resolution of Employment Disputes of the AAA. Any claims
received after the applicable/relevant statute of limitations
period has passed shall be deemed null and void. The award of the
arbitrator shall be a reasoned award with findings of fact and
conclusions of law. Either party may bring an action in any court
of competent jurisdiction to compel arbitration under this
Agreement, to enforce an arbitration award and to vacate an
arbitration award. However, in actions seeking to vacate an award,
the standard of review to be applied by said court to the
arbitrator’s findings of fact and conclusions of law will be
the same as that applied by an appellate court reviewing a decision
of a trial court sitting without a jury. The Company will pay the
fees of the arbitrator to the extent required by law. Each party
will pay its own attorneys’ fees and other costs incurred by
their respective attorneys.
This Agreement shall be
construed as a whole, according to its fair meaning, and not in
favor of or against any party. Sections and section headings
contained in this Agreement are for
reference purposes only, and shall not
affect in any manner the meaning or interpretation of this
Agreement. Whenever the context requires, references to the
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