Employment Agreement - LivePerson Inc. and Dean Margolis
EMPLOYMENT AGREEMENT
This Agreement made effective as of January 28, 2000 by and between LivePerson,
Inc. (the "Company"), a Delaware corporation, and Dean Margolis, ("Executive").
Whereas the Company wishes to retain the services of the Executive for the
period and upon the terms of this Agreement and the Executive wishes to serve in
the employ of the Company on a full time basis for the period and upon the terms
and conditions provided in this Agreement,
Now therefore, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
SECTION 1
EMPLOYMENT
The company agrees to employ the Executive and the Executive agrees to be
employed by the Company, for the Period of Employment as provided in Paragraph
III A below and upon the terms and conditions provided in the Agreement.
SECTION II
POSITION AND RESPONSIBILITIES
During the Period of Employment the Executive agrees to serve as Chief Operating
Officer of the Company, reporting to either the Chief Executive Officer,
Chairman or President of the Company.
SECTION III
TERMS AND DUTIES
A. PERIOD OF EMPLOYMENT
The period of the Executive's employment under this Agreement will commence as
of the effective date above and shall continue for 3 years unless terminated as
provided in this agreement.
B. DUTIES
During the Period of Employment and except for illness, incapacity or any
reasonable vacation periods in any calendar year, the Executive shall devote his
business time, attention and skill exclusively to the business and affairs of
the Company except for serving on boards, including charities, so long as
Executive's efforts do not interfere with his employment obligations hereunder.
<PAGE>
SECTION IV
A. COMPENSATION
For all services rendered by the Executive in any capacity during the Period of
Employment, the Executive shall be compensated as follows:
i. BASE SALARY
The Company shall pay the Executive a fixed Base Salary at the rate of not less
than $175,000 per year. Base salary shall be payable according to the customary
payroll practices of the Company.
ii. ANNUAL INCENTIVE AWARDS
The Executive will be eligible for discretionary annual incentive compensation
awards or bonuses. The initial bonus target will be $40,000.
iii. LONG TERM INCENTIVE AWARDS
The Executive will be eligible for discretionary stock option awards as may be
awarded by the Board of Directors. The initial option award will be 340,000
options with a)$5.00 exercise price; b) 10 year term; c) 25% annual vesting
beginning on 7/1/00.
B. ADDITIONAL BENEFITS
In addition, the Executive will be entitled to participate in all employee
benefit plans which any salaried employees are eligible to participate in.
Nothing in this Agreement will preclude the Company from amending or terminating
any of the plans applicable to salaried employees as long as such amendment or
termination is applicable to all salaried employees. The Executive will be
entitled to three weeks vacation annually. All accrued vacation may be carried
over for use in subsequent years provided that no more than two weeks may be
carried over into a subsequent year.
SECTION V
BUSINESS EXPENSES
Upon presentation of appropriate documentation, the Company will reimburse the
Executive for all reasonable travel and other expenses incurred by the Executive
in connection with the performance of his duties and obligations under this
Agreement.
SECTION VI
DISABILITY
In the event of disability of the Executive during the Period of Employment the
Company will continue to pay the Executive according to the compensation
provisions of this Agreement during the period of his disability. However, in
the event the Executive is disabled and unable to perform his duties for a
continuous period of 120 days or more, the Company may terminate the employment
of the Executive 120 days after the commencement of the Executive's disability
and all unvested stock options held by the Executive which would have vested
during the 12 months following such termination shall be deemed vested on the
date of such termination and shall remain exercisable until the applicable
expiration dates contained in the applicable stock option agreements pursuant to
which such options were granted. In addition, normal compensation will cease
except for earned but unpaid Base Salary, accrued unused
<PAGE>
vacation pay and pro-rata bonus. The Company will also continue all of the
benefits described in this Agreement or subsequently provided to the Executive
for 12 months subsequent to such termination.
SECTION VII
DEATH
In the event of death of the Executive during the Period of Employment the
Company's obligation to make payments under this Agreement shall cease as of the
date of death, except for earned but unpaid Base Salary, accrued unused vacation
and pro-rata bonus All unvested options held by the executive which would have
vested during the 12 months following the death shall be deemed vested on the
date of death consistent with the Executive's stock option agreement, a copy of
which is attached hereto. The Company will also continue the benefits described
in this Agreement for 12 months subsequent to such termination.
SECTION VIII
EFFECT OF TERMINATION OF EMPLOYMENT
A. Prior to April 27, 2000, in the event the Executive's employment terminates
due to either a Without Cause Termination or a Constructive Discharge, as
defined later in this agreement, the Executive will be entitled to the
immediate vesting of 34,000 options at an exercise price of $5.00.
Additionally, the Executive shall be entitled to all other benefits in this
paragraph A. If, after April 27, 2000, the Executive's employment terminates
due to either a Without Cause Termination or a Constructive Discharge, as
defined later in this Agreement, the Company will continue to pay the
Executive his Base Salary for a period of 4 months following such
Termination or Constructive Discharge. Earned but unpaid Base Salary will be
paid in a lump sum at such time. The benefits described in this Agreement
will continue for 4 months. In the event of any such Without Cause
Termination or Constructive Discharge, any unvested stock options held by
the Executive which would have vested on either 7/1/00 or 7/1/01 shall
continue to vest under their original vesting schedule and shall remain
exercisable for the full ten year term contained in the applicable stock
option agreements pursuant to which such options were granted..
B. If the Executive's employment terminates due to a Termination for Cause, as
defined later in this Agreement, earned but unpaid Base Salary will be paid
on a pro-rated basis for the year in which the termination occurs. Earned
but unpaid incentive awards for any prior years shall be payable in full,
but no other payments will be made or benefits provided by the Company.
C. Upon termination of the Executive's employment other than for reasons due to
death, disability, or pursuant to Paragraph A of this Section and Section
XI, the Period of Employment and the Company's obligation to make payments
under this Agreement will cease as of the date of the termination except as
expressly defined in this Agreement.
D. For this Agreement the following terms have the following meanings:
i. "Termination for Cause" means termination of the Executive's employment
by the Company upon a good faith determination by the Company, by
written notice to the Executive specifying the event relied upon for
such termination, due to the Executive's serious, willful misconduct or
gross negligence with respect to his duties under this Agreement
(including but not limited to conviction for a felony or a common law
fraud)
<PAGE>
which has resulted in economic damage to the Company and which is not
cured (if such is capable of being cured) within 30 days after written
notice thereof to the Executive.
ii. "Without Cause Termination" means termination of the Executive's
employment by the Company other than due to death, disability,
expiration of the Period of Employment or Termination for Cause.
iii. Constructive Discharge" means termination of the Executive's employment
by the Executive due to a failure of the Company to fulfill its
obligations under this agreement in any material respect including any
reduction of the Executive's compensation or other material change by
the Company in the functions, duties or responsibilities of the position
which would materially reduce the responsibility or scope of the
position. The Executive will provide the Company a written notice which
describes the circumstances being relied upon for termination with
respect to the Agreement. The Company will have 30 days to remedy the
situation prior to the Termination for Constructive Discharge
SECTION IX
OTHER DUTIES OF THE EXECUTIVE DURING AND
AFTER THE PERIOD OF EMPLOYMENT
A. The Executive will with reasonable notice during, or after the Period of
Employment furnish information as may be in his possession and cooperate
with the Company as may be reasonably requested in connection with any
claims or legal action in which the Company is or may become a party. In the
event the Executive is requested to participate in assisting the Company
after the termination of the Executive's employment, the Executive shall be
paid a daily rate of $1000 per day plus reasonable expenses and attorney's
fees.
B. The Executive recognizes and acknowledges that all information pertaining to
the software, business, clients, customers or other relationship of the
Company is confidential and is a unique and valuable asset of the Company.
Access to and knowledge of this information are essential to the performance
of the Executive's duties under this Agreement. The Executive will not
during the Period of Employment or after, except to the extent reasonably
necessary in performance of the duties under this Agreement, give to any
person, firm, governmental agency or other entity any information concerning
the affairs, business, clients, or customers of the Company except as
required by law. The Executive will not make use of this type of information
for his own purposes or for the benefit of any person or organization other
than the Company. The Executive will use his best efforts to prevent the
disclosure of this information by others. All records, memoranda, software
or intellectual property whether made by the Executive or otherwise coming
into his possession are confidential and will remain the property of the
Company.
C. During the Period of Employment and for a 12 month period thereafter (the
"Restricted Period") the Executive will not use his status with the Company
to obtain goods or services from another organization on terms that would
not be available to him in the absence of his relationship to the Company.
D. During the Restricted Period, the Executive will not make any statement or
perform any acts intended to or which may have the effect of advancing the
interest of any existing or prospective competitors of the Company or in any
way injuring the interest of the Company.
<PAGE>
E. During the Restricted Period, the Executive, without prior express written
approval by the Chief Executive, will not engage in, or directly or
indirectly own or hold proprietary interest in, manage, operate, or control
or join or participate in the ownership, management, operation or control
of, or furnish any capital to or be connected in any manner with, any party
which directly competes with the business of the Company. For the purposes
of this Agreement, proprietary interest means legal or equitable ownership,
whether through stock holding or otherwise, or an equity interest in a
business, firm or entity or ownership of more than 5% of any class of equity
interest in a publicly-held company and the term "affiliate" shall include
all subsidiaries and licensees of the Company
F. During the Restricted Period, the Executive, without express written
approval from the Chief Executive, will not on behalf of any competitor of
the Company solicit any clients of the Company.
G. During the Restricted Period, the Executive will not solicit or induce any
employee of the Company to terminate their employment with the Company, nor
shall the executive during such period directly or indirectly engage,
employ, compensate or cause or permit any person with which the Executive is
affiliated to engage or employ any employee of the Company.
H. The Company's obligation to make any cash payments after the Period of
Employment shall cease upon any violation of this Section IX. The company
must first provide written notice to the Executive specifying the act which
has violated this Section IX, and if such violation is not cured within 30
days, if capable of being cured, then the Company will inform the Executive
of its termination of its post-employment payments.
I. The period of time during which the provisions of this Section IX shall be
in effect shall be extended by the length of time during which the Executive
is in breach of this section.
J. The Executive agrees that the restrictions contained in this section IX are
an essential element of the compensation the Executive is granted hereunder
and but for the Executive's agreement to comply with such restrictions, the
Company would not have entered into this Agreement.
SECTION X
INDEMNIFICATION, LITIGATION
A. The Company will indemnify the Executive to the fullest extent permitted by
the laws of Delaware in effect at that time, or the certificate of
incorporation and by-laws of the Company, whichever affords the greater
protection to the Executive.
B. In the event of litigation or other proceeding between the Company and the
Executive with respect to the subject matter of this Agreement, the Company
shall reimburse the Executive for all reasonable costs and expenses related
to the litigation or proceeding, including attorney's fees and expenses,
provided that the litigation or proceeding results in either settlement
requiring the Company to make a payment to the Executive or judgement in
favor of the Executive.
SECTION XI
CHANGE IN CONTROL
In the event there is a Change in Control of the ownership of the Company, and
within 24 months of such Change in Control, the Executive's employment
terminates due to either a Without Cause Termination or a Constructive
Discharge, then the Company shall pay to the Executive a lump sum amount equal
to 50% of his Annual Base Salary as in effect at the time of such termination.
In addition, a) any unvested stock
<PAGE>
options granted to the Executive prior to termination will be fully vested upon
termination and shall remain exercisable for the full ten year term contained in
the applicable stock options agreements pursuant to which such stock options
were granted; and b) the benefits described in this Agreement will be continued
for six months from the date of termination.
In the event there is a Change of Control of the ownership of the Company, and
the Executive terminates his employment, then any stock options that would have
vested in the 12 months following such termination shall continue to vest under
the original vesting schedule and and shall remain exercisable for the full ten
year term contained in the applicable stock options agreements pursuant to which
such stock options were granted.
A "Change in Control" shall be deemed to have occurred if (i) a tender offer
shall be made and consummated for 50.1% or more of the outstanding voting
securities of the Company (ii) the Company shall be merged or consolidated with
another company and as a result less than 50% of the outstanding voting
securities of the surviving corporation shall be owned in the aggregate by the
former shareholders of the Company, (iii) the Company shall sell substantially
all of its assets to another company which is not a subsidiary of the Company,
or (iv) a person, within the meaning of Section 3(a)(9) or of Section 13(d)(3)
of the Securities Act of 1934 shall acquire 51% or more of the outstanding
voting securities of the Company.
SECTION XII
WITHHOLDING TAXES
The company may directly or indirectly withhold from any payments under this
Agreement all federal, state, city or other taxes that shall be required
pursuant to any law or governmental regulation.
SECTION XIII
EFFECTIVE PRIOR AGREEMENTS
This Agreement contains the entire understanding between the Company and the
Executive with respect to the subject matter. Where there are different
provision between this Agreement and any stock option agreements made between
the Executive and the Company, the terms of this Agreement shall prevail.
SECTION XIV
CONSOLIDATION, MERGER OR SALE OF ASSETS
Nothing in this Agreement shall preclude the Company from consolidating or
merging into or with, or transferring all or substantially all of its assets to,
another corporation which assumes this Agreement and all obligations of the
Company hereunder. Upon such a consolidation, merger or sale of assets the term
"Company" as used will mean the other corporation and this Agreement shall
continue in full force and effect.
SECTION XV
NO OTHER AGREEMENTS
The Executive represents that he is not bound by any other employment agreement
or other covenants that would restrict him from entering into this agreement.
<PAGE>
SECTION XVI
MODIFICATION
This Agreement may not be modified or amended except in writing signed by the
parties. No term or condition of this Agreement will be deemed to have been
waived except in writing by the party charged with the waiver. A waiver shall
operate only as to the specific term or condition waived and will not constitute
a waiver for the future or act on anything other than that which is specifically
waived.
SECTION XVII
GOVERNING LAW
This Agreement has been executed and delivered in the State of New York and its
validity, interpretation, performance and enforcement shall be governed by the
laws of that state.
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date
just above written.
LivePerson, Inc.
------------------------------------------------------
Tim Bixby, Chief Financial Officer
------------------------------------------------------
Dean Margolis