Key Employee Agreement - ValueClick Inc. and John Schwenk
KEY EMPLOYEE AGREEMENT
This KEY EMPLOYEE AGREEMENT (hereinafter referred to as the
("Agreement") is made and entered into as of the 1st day of April, 1999, by
and between ValueClick, Inc., a Delaware corporation (hereinafter referred to
as the "Company") and John Schwenk(hereinafter referred to as "Executive").
WHEREAS, Company is a global Internet advertising network enabling
advertisers to take advantage of the Internet to sell their products and
increase brand awareness;
WHEREAS, Executive possesses unique technical and operational skills
which are valuable to the business and financial prospects of Company;
WHEREAS, in light of the foregoing, Company desires to employ
Executive as Chief Technical Officer, and Executive desires to accept such
employment;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, Company and Executive agree as follows:
1. DUTIES. Company hereby employs Executive to serve as Chief Technical
Officer, reporting to the Chief Executive Officer with such duties as are
specified in Company's Bylaws and as may be defined from time to time by the
Chief Executive Officer and Board. To the fullest extent permitted by
Delaware law, Company shall indemnify and defend Executive from all costs,
expenses and losses whether direct or indirect, including consequential
damages and attorney's fees, incurred or sustained by Executive in
consequence of the discharge of his duties on Company's behalf.
2. TERM OF EMPLOYMENT. Company hereby agrees to employ Executive and
Executive agrees to accept employment upon the terms and conditions set forth
herein, commencing on April 1, 1999, and shall continue unless and until
terminated by Company or by the Executive pursuant to Paragraph 10 below.
3. SALARY. Executive shall be entitled to receive from Company a starting base
salary of $8,333.34 per month, which if annualized is $100,000. Salary is
calculated from the date of Executive's commencement of employment, pursuant to
Paragraph 2 above. The base salary shall be paid Executive in installments
consistent with the Company's pay periods and shall be reviewed and may be
increased by the Board annually or at such earlier time or times as it
determines.
-1-
<PAGE>
4. STOCK OPTIONS. In addition to Executive's salary described in Paragraph 3,
above, Executive shall receive Incentive Stock Options at a striking price of
50 cents ($0.50)per share as to 100,000 shares of Company Common Stock, which
shall vest over a forty-eight (48) month period, commencing on April 1, 1999.
The aforementioned stock options shall otherwise be subject to the terms and
conditions of the Company's 1999 Stock Incentive Plan. In the event of the
closing of an Initial Public Offering of Company securities or the transfer
of ownership of 50% or more of the Company, for other than passive funding
purposes, at least one-half (1/2) of such options as have been granted to the
Executive shall be fully vested as of the date of such transaction and the
balance shall vest over the succeeding twelve (12) months or such shorter
period as they would have to fully vest under the aforesaid original vesting
schedule.
5. EXTENT OF SERVICES. Executive shall devote his full time, attention and
energies to the business of Company and shall not during such time be engaged
(whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage, but this shall not be construed as
preventing the Executive from (a) investing personal assets in businesses
which do not compete with Company in such form or manner as will not require
any substantial services on the part of the Executive and in which the
Executive's participation is principally that of an investor; (b) purchasing
securities in any corporation whose securities are regularly traded, provided
that such purchase shall not result in the Executive's collectively owning
beneficially at any time five percent (5%) or more of the equity securities
of a corporation engaged in a business competitive to that of Company; and
(c) participating in conferences, preparing or publishing papers or books or
teaching, so long as the Board approves of such activities prior to the
Executive engaging in them.
6. VACATIONS AND LEAVE. Executive shall be entitled to vacation and other leave
in accordance with normal Company policy applicable to management employees,
which at the date hereof is three (3) weeks annual combined vacation and sick
leave. Vacations shall be taken at such time or times as Executive and the Board
shall mutually agree.
7. EXPENSE REIMBURSEMENT. Upon presentation of supporting documentation and
consistent with Company policy, Company will reimburse Executive for any
reasonable and necessary business expenses incurred by Executive in connection
with the business of Company. The parties acknowledge that Executive may incur
certain business-related expenses which Company will not reimburse but
-2-
<PAGE>
which nonetheless further the business interests of Company and Executive's
professional interest.
8. OTHER BENEFITS. In addition to the benefits specifically described herein,
during the term of this Agreement, Executive and his dependents shall be
entitled to receive, on an equivalent basis, all other benefits of employment
generally made available to other members of Company's management and their
families, including, without limitation, benefits as a result of any present
or future medical insurance, disability insurance, life insurance, retirement
or pension plans. It is understood that any 401(k) plan implemented by
Company will be made available to Executive at the time and upon the
equivalent terms as made available to Company's other management employees.
9. TAXES. Company may withhold from any amounts payable under this Agreement
such federal, state, or local taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
10. TERMINATION OF EMPLOYMENT. This Agreement and Executive's employment may
be terminated by either party, for any reason or no reason, immediately upon
ten (10) days written notice given to the other party. Accordingly, Executive
and Company acknowledge and agree that this Agreement and any employments
hereunder are to be considered AT-WILL EMPLOYMENT. Termination pursuant to
this Section shall not prejudice any other remedy to which the terminating
party may be entitled at law, in equity, or under this Agreement. This is the
only Agreement concerning termination between Company and Executive, and the
parties acknowledge that this Agreement supersedes and replaces any other
written or oral agreement, representation or understanding between the
parties concerning termination and that this Agreement can only be modified
in a writing signed by the Board's delegate and Executive.
11. SUCCESSORS TO THE COMPANY. Except as otherwise provided herein, this
Agreement shall be binding upon and inure to the benefit of Company and any
successors of Company, or any corporation which acquires directly or
indirectly all of the assets of Company, whether by merger, consolidation,
sale or otherwise, and shall not be otherwise assignable by Company. This
Agreement is not assignable by Executive.
12. NOTICE. Any notice to be given under the terms of this Agreement shall be
given as follows: Notice to Company shall be addressed to its CEO at
Company's principal office; notices to Executive shall be addressed to
Executive's home as last shown on the records of Company or given by personal
delivery. Notice of a
-3-
<PAGE>
change of address under this section shall have been duly given when
personally delivered or three (3) days after being enclosed in a properly
sealed envelope addressed as aforesaid, and deposited (postage paid) with the
United States Postal Service.
13. WAIVER. Neither party's failure to enforce any provision of this
Agreement shall be deemed or in any way construed as a waiver of any such
provision, nor prevent that party from thereafter enforcing each and every
provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to
assert all other legal remedies available under the circumstances.
14. SEVERABILITY. If one or more of the provisions or paragraphs of this
Agreement shall be held to be illegal or otherwise void or invalid, the
remainder of this Agreement shall not be affected and shall remain in full
force and effect.
15. GOVERNING LAW. This Agreement shall be interpreted under the laws of the
State of California, without regard to or application of choice of law rules
or principles.
16. ARBITRATION. In the event any claim or controversy arises under or
concerning any provision of this Agreement, including the termination
provision (Paragraph 10), Company and Executive hereby agree that such claim
or controversy shall be settled by final, binding arbitration in accordance
with the Employment Dispute Resolution Rules of the American Arbitration
Association, provided, however, that the impartial arbitrator shall be chosen
as follows: if Company and Executive are unable to agree upon an impartial
arbitrator within five (5) days of a request for arbitration, the parties
shall request a panel of five (5) labor and employment arbitrators from the
American Arbitration Association and shall alternatively strike names until a
single arbitrator remains. Arbitration shall occur, if practicable, in Santa
Barbara County, CA. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Depositions may be taken
and other discovery may be obtained during such arbitration proceedings to
the same extent as authorized in civil judicial proceedings, subject to any
limitations placed on discovery by the arbitrator. The parties shall share
equally in the costs of conducting the arbitration and shall each pay their
expenses, but the prevailing party shall be entitled to recover its
reasonable attorneys' fees. Notwithstanding the foregoing, nothing herein
shall preclude or limit Company from seeking injunctive relief from a court
of competent jurisdiction. Executive acknowledges and agrees that, by
agreeing to this provision, he is agreeing to arbitrate any claim relating to
his employment, whether
-4-
<PAGE>
or not it arises under the terms of this Agreement, that may arise under
federal and state laws including, but not limited to, claims arising under
Title VII, the Age Discrimination in Employment Act, the Americans with
Disabilities Act and the Fair Employment and Housing Act. EXECUTIVE FURTHER
UNDERSTANDS THAT BY AGREEING TO ARBITRATE EMPLOYMENT CLAIMS HE IS WAIVING HIS
RIGHT TO BRING AN ACTION AGAINST COMPANY IN A COURT OF LAW, EITHER STATE OR
FEDERAL, AND IS WAIVING HIS RIGHT TO HAVE HIS CLAIMS AND DAMAGES, IF ANY,
DETERMINED BY A JURY.
17. ENTIRE AGREEMENT. This Agreement, any stock option agreements and the
Employee Proprietary Information Agreement signed by the Executive contain
the entire agreement of the parties and supersede and replace any other
Agreement. Except as provided herein, this Agreement may be modified only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought. Only
Company's Board has the authority to make such modifications of this
Agreement on behalf of Company.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
COMPANY:
ValueClick, Inc.
By: /s/ James R. Zarley
-----------------------
Chief Executive Officer
EXECUTIVE: /s/ John Schwenk
-----------------------
John Schwenk
-5-