Sample Business Contracts

Employment Agreement - WebSideStory Inc. and John J. Hentrich

Employment Forms

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                              EMPLOYMENT AGREEMENT

        This Employment Agreement (this "Agreement"), dated February 28, 2000
("Effective Date") is made by and between WebSideStory, Inc. ("the Company"), a
California corporation having its principal offices at 10182 Telesis Court, 6th
Floor, San Diego, CA and John J. Hentrich ("Employee").


        1. Title and Duties. Employee's title and position with the Company will
be President and Chief Executive Officer.

        2. At-will Employment. Employee's employment relationship with the
Company is at-will, terminable at any time and for any reason by either the
Company or Employee. The Company nonetheless reserves the right to discharge
Employee for the reasons defined in Sections 11 and 12 below. While certain
paragraphs of this Agreement describe events that could occur at a particular
time in the future, nothing in this Agreement may be construed as a guarantee of
employment of any length.

        3. Policy Compliance. Employee is required to comply with the Company
policy, practice and procedure in effect during his employment. Employee agrees
to comply with the terms and conditions of the Company's Confidentiality and
Inventions Agreement ("Confidentiality Agreement") that is attached to this
Agreement as Exhibit 1 and is incorporated by reference.

        4. Compensation.

               4.1 Base Salary. Employee's annual Base Salary during his
employment will be Two Hundred Seventy Five Thousand Dollars ($275,000) to be
paid according to the Company's regular payroll practices. Any increase to the
Base Salary is within the sole discretion of the Board of Directors of the
Company (the "Board"). The Base Salary described above is subject to deduction
for applicable federal, state and local income, social security and other
payroll deductions.

               4.2 Bonus Compensation. In addition to the Base Salary, in Fiscal
Year 2000 Employee is eligible for an annualized bonus in an amount and based
upon attainment of objectives to be determined by the Board in its discretion.

               4.3 Additional Compensation. In addition, Employee shall be
entitled to payment of the additional compensation set forth on "Attachment A".
Payment of this additional compensation to Employee shall be accelerated upon
the events described in "Attachment A".

               4.4 Stock Option Exercise and related rights. On the date of this
Agreement, Employee has exercised through "early exercise" all options to
purchase the Company's Common Stock granted to him on December 20, 1999 under
the Company's 2000 Equity Incentive Plan ("Plan"). It is intended that the
repurchase rights of the Company with respect to the shares of Common Stock so
purchased be limited to give Employee the full rights to

<PAGE>   2

accelerated vesting under the conditions described in Employee's original Stock
Option Grant Notice ( the "Grant") and Stock Option Agreement dated December 20,
1999 (the "Stock Option Agreement"), in addition to such other rights as
Employee might enjoy by operation of the the Grant, the Stock Option Agreement
and the Plan. In addition, Employee shall be entitled to the payments referenced
in Section 1(b) of the Stock Option Agreement.

        5. Fringe Benefits and Vacation. During his employment, Employee will
receive fringe benefits ("Benefits") at least equal to those generally available
to executive staff. Employee shall be entitled to four weeks vacation per year.

        6. Reimbursement of Expenses. During his employment and according to
Company policy and practice, and subject to final approval by the Chief
Executive Officer, Employee shall be entitled to reimbursement of reasonable and
actual expenses incurred on behalf of the Company.

        7. Return Of Property. Employee agrees that all documents, records,
apparatus, equipment and other physical property (as more specifically defined
in the Confidentiality Agreement) which is furnished to or obtained by Employee
in the course of his employment with the Company shall be and remain the sole
property of the Company. Employee agrees that upon the termination of his
employment he will return all such property (whether or not it pertains to trade
secret or proprietary information), and will not make or retain copies,
reproductions, or summaries of any such property.

        8. Non Competition. During his employment Employee shall not directly or
indirectly, either as an employee, employer, consultant, corporate officer,
director, or in any other individual or representative capacity, engage or
participate in any business that is in competition with the business of the
Company in any location, unless such participation or interest is fully
disclosed to the Company and approved by the Board.

        9. Agreement with Previous Employers. Employee confirms he does not have
any agreement with a previous employer that prevents or limits him in performing
under this Agreement. In the event the Company is sued by any previous employer
of Employee as a result of any act by Employee, the Company may recover costs or
attorneys' fees expended in defending against such a lawsuit.

        10. Effect of Termination Without Cause or Constructive Termination
following a Change of Control. As set forth in Section 2 above, Employee's
employment with the Company is "at-will". However, in the event of an
involuntary termination of Employee without Cause (as defined in the Stock
Option Agreement) or Constructive Termination of Employee (as defined in the
Stock Option Agreement), Employee shall be entitled to payment of one year's
base salary and an amount equal to the prior year's performance bonus (or
estimated current year bonus), whichever is greater. Employee shall also be
entitled to reimbursement for payment of health insurance premiums during this

        11. Dispute Resolution Procedures. Any dispute or claim arising out of
this agreement shall be subject to final and binding arbitration. The
arbitration will be conducted by one arbitrator who is a member of the American
Arbitration Association (AAA) and will be

<PAGE>   3

governed by the Model Employment Arbitration rules of AAA. The arbitration shall
be held in San Diego, California. The arbitrator shall have an authority to
determine the arbitrability of any claim and enter a final and binding judgment
at the conclusion of any proceedings in respect of the arbitration. Any final
judgment only may be appealed on the grounds of improper bias or improper
conduct of the arbitrator. The arbitrator will apply California substantive law
in all respects. The arbitrator will decide how the costs of arbitration should
be split. In the event of any arbitration arising out of or relating to this
Agreement, its breach or enforcement, including an action for declaratory
relief, the prevailing party in such action or proceedings shall be entitled to
receive his or its damages, court costs and reasonable out-of-pocket expenses
including reasonable attorneys' fees. Such recovery shall include court costs,
reasonable out-of-pocket expenses, and attorneys' fees on appeal, if any. The
arbitrator or court shall determine who is the prevailing party, whether or not
the dispute or controversy proceeds to final judgment.

        12. General Provisions.

               12.1 Governing Law. This Agreement will be governed by and
construed according to California law, without regard to principles of conflict
of laws.

               12.2 Assignment. Employee may not assign, pledge or encumber his
interest in this Agreement or any part of this Agreement.

               12.3 Binding Nature. This Agreement will be binding upon
Employee, his heirs, executors, and administrators and will inure to the benefit
of the Company, its subsidiaries, successors and assigns.

               12.4 No Waiver of Breach. The failure to enforce any provision of
this Agreement will not be construed as a waiver of any such provision, nor
prevent a party thereafter from enforcing the provision or any other provision
of this Agreement. The rights granted the parties are cumulative, and the
election of one will not constitute a waiver of such party's right to assert all
other legal and equitable remedies available under the circumstances.

               12.5 Severability. The provisions of this Agreement are
severable, and if any provision will be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions, or
enforceable parts of this Agreement, will not be affected.

               12.6 Entire Agreement. This Agreement, including the
Confidentiality Agreement and any Option Agreements, constitutes the entire
agreement of the parties with respect to the subject matter of this Agreement,
and supersedes all prior and contemporaneous oral or written negotiations,
agreements or understandings between the parties.

               12.7 Modification/Waiver. No modification, amendment,
supplementation, termination or attempted waiver of this Agreement will be valid
unless in writing, signed by the party against whom modification, amendment
termination or waiver is sought to be enforced.

               12.8 Fees and Expenses. If any proceeding is brought for the
enforcement or interpretation of this Agreement, or because of any alleged
dispute, breach, default or misrepresentation in connection with any provisions
of this Agreement, the successful or prevailing party will be entitled to
recover from the other party reasonable attorneys' fees and

<PAGE>   4

other costs incurred in that proceeding (including, in the case of an
arbitration, arbitration fees and expenses), in addition to any other relief to
which such party may be entitled.

               12.9 Duplicate Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original. Such counterparts
together constitute one instrument.

               12.10 Interpretation. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

               12.11 Drafting Ambiguities. Each party to this Agreement and his
or its counsel have reviewed and revised this Agreement. The rule of
construction that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any of the
amendments to this Agreement.

        WebSideStory, Inc.                                       Employee

By:  /s/ Michael C. Christian                             /s/ John J. Hentrich
    ------------------------------------------------      ----------------------
         Michael C. Christian, Senior Vice President          John J. Hentrich

<PAGE>   5

                       JOHN J. HENTRICH/WEBSIDESTORY INC.

1.  The monthly payment schedule and amounts shall be pursuant to the schedule
    set forth below, commencing on April 1, 2000 (in the amount of $45,139)
    declining gradually through March 1, 2002 (in the amount of $40,051).

2.  Payment of the amounts set forth in the schedule will be accelerated in full
    in the event of (1) a Change of Control or Constructive Termination as
    defined in the Stock Option Agreement, or (2) the Company has cash and cash
    equivalents equal to or exceeding four million dollars ($4,000,000.00),
    provided, however, that if the Company shall have completed an initial
    public offering of its equity securities prior to the occurrence of the
    liquidity condition in (2), above, such payments shall not be accelerated by
    virtue of (2), above. In the event of such acceleration the lump sum payable
    will be reduced by the time value of the payment stream, using a 6.5% simple
    annual interest discount rate.

                               WEBSIDESTORY, INC.
                                 BONUS SCHEDULE

                                             Date           Amount
                                           --------        -------
                                           04/01/00        45,139

                                           05/01/00        44,756

                                           06/01/00        44,700

                                           07/01/00        44,331

                                           08/01/00        44,260

                                           09/01/00        44,039

                                           10/01/00        43,691

                                           11/01/00        43,600

                                           12/01/00        43,266

                                           01/01/01        43,159

                                           02/01/01        42,938

                                           03/01/01        42,442

                                           04/01/01        42,500

                                           05/01/01        42,201

                                           06/01/01        42,059

                                           07/01/01        41,776

                                           08/01/01        41,619

                                           09/01/01        41,399

                                           10/01/01        41,136

                                           11/01/01        40,959

<PAGE>   6

                                           12/01/01        40,711

                                           01/01/02        40,518

                                           02/01/02        40,299

                                           03/01/02        40,051

                     END OF SCHEDULE A TO FEBRUARY 28, 2000