RETENTION AGREEMENT
THIS RETENTION AGREEMENT (this "Agreement"), dated effective August 1,
2003 is by and among MERCATOR SOFTWARE, INC. (the "Current Employer"), Ascential
Software Corporation (the "Company") and ______________________________ (the
"Executive").
WITNESSETH:
WHEREAS, the Company, Greek Acquisition Corp. and the Current Employer
intend to enter into an Agreement and Plan of Merger (the "Merger Agreement");
and
WHEREAS, the Current Employer and the Executive have previously entered
into the agreement described on Appendix A hereto (as amended, the "Existing
Agreement") and the Executive is also a participant in the Mercator Software,
Inc. Change of Control Benefits Plan (the "Change of Control Plan"), each of
which, among other things, provide for certain payments and benefits to the
Executive in the event of a termination of the Executive's employment; and
WHEREAS, the Executive and the Company are entering into a Key Employee
Agreement, of even date herewith (the "Key Employee Agreement"), which sets
forth the terms and conditions of the Executive's employment with the Company
following the Closing (as defined in the Merger Agreement); and
WHEREAS, the Company, the Current Employer and the Executive have
agreed to clarify the impact of the transactions contemplated by the Merger
Agreement upon the Executive's employment arrangements (including the Existing
Agreement and the Change of Control Plan) and to provide additional incentives
for the Executive to continue his employment with the Company following the
Closing.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree to the following:
1. Definitions. The capitalized terms used herein shall have the meanings
ascribed to them below.
(a) "Cause" shall mean (i) that the Executive engaged in a
material act (or acts) of personal dishonesty with respect to his service with
the Company or its affiliates, provided that the Executive shall receive written
notice by the Company of the alleged material act (or acts) of personal
dishonesty and is provided with ten (10) business days to deny, refute and/or
explain said allegations; (ii) the material failure
by the Executive substantially to perform the Executive's duties with the
Company or its affiliates (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or injury) which
failure is not cured within ten (10) business days following written notice
thereof by the Company or (iii) the conviction of the Executive of (or a plea by
the Executive of no contest with respect to) a felony.
(b) "Closing" shall have the meaning set forth in the Merger
Agreement.
(c) "Closing Date" shall have the meaning set forth in the Merger
Agreement.
(d) "Disability" shall mean a physical or mental illness or injury
which results in the Executive becoming eligible for benefits under the long
term disability plan of the Company.
(e) "Effective Time" shall have the meaning set forth in the
Merger Agreement.
(f) "Good Reason" shall mean the occurrence of an adverse change
in the role, responsibilities or compensation of the Executive (as set forth in
the Key Employee Agreement) occurring after the Effective Time without the
express written consent of the Executive, if such event occurs at a point in
time when Cause does not exist with respect to the Executive and is not cured by
the Company within ten (10) business days of the Company's receipt of notice
from the Executive that such event has occurred.
(g) "Retention Amount" shall mean the amount set forth on Appendix
A hereto.
(h) "Retention Payment" shall mean each of the payments described
in Section 2(a) below.
2. Retention Incentive.
(a) The Company shall pay to the Executive an amount equal to (i)
15% of the Retention Amount if the Executive continues to be employed by the
Company or an affiliate on the 6-month anniversary of the Closing Date, (ii) an
additional 25% of the Retention Amount if the Executive continues to be employed
by the Company on the first anniversary of the Closing Date, (iii) an additional
30% of the Retention Amount, if the Executive continues to be employed by the
Company on the eighteen month anniversary of the Closing Date and (iv) the
remaining 30% of the Retention Amount, if the Executive continues to be employed
by the Company on the second
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anniversary of the Closing Date. Each such payment shall be made no later than
ten (10) business days following the respective dates specified in the preceding
sentence and shall be subject to applicable withholding and deductions.
(b) Except as set forth in the last sentence of Section 3(b)
hereof, if, prior to the second anniversary of the Closing Date, either (i) the
Company terminates the Executive's employment other than for death, Disability
or Cause or (ii) the Executive terminates his employment with the Company for
Good Reason, then the Company shall pay to the Executive (less applicable
withholding), no later than ten (10) business days following such termination,
an amount equal to the excess of (1) the Retention Amount over (2) the sum of
the Retention Payments previously paid to the Executive.
3. Other Benefits. In addition to the benefits described in Section 2 and
the Key Employee Agreement, the Executive shall be eligible for the following:
(a) Bonus plan. In accordance with the terms of the Key Employee
Agreement, as of the Effective Time, the Executive shall become a participant in
the Company's bonus plan described on Appendix A hereto (a copy of which has
been provided to the Executive) and shall have the target award described in
such Appendix. The Executive shall be treated as having been a participant in
such plan for the entire performance period ongoing as of the Effective Time for
purposes of calculating the applicable level of achievement and award amounts.
The Executive's participation in the Company's bonus plan shall be in lieu of
any award to which the Executive may otherwise have been eligible pursuant to
any comparable plan of the Current Employer. The Executive shall also
participate in the bonus plan during the 2004 performance period, with the same
target bonus.
(b) Change of Control Severance Program. As of the Effective Time,
the Executive shall become a party to a Change in Control Agreement (the "Change
in Control Agreement") with the Company (a form of which has been provided to
the Executive). Notwithstanding anything in such Change in Control Agreement to
the contrary, however, in the event that the Executive becomes eligible for
severance payments pursuant to the Change in Control Agreement due to a
termination of the Executive's employment which occurs on or prior to the second
anniversary of the Closing Date, the Executive shall receive the greater of (i)
the amount payable pursuant to Section 2(b) hereof (if any) and (ii) the
severance payments which are payable to the Executive pursuant to the Change in
Control Agreement. Any amount payable under the preceding sentence shall be in
lieu of the amount payable pursuant to the arrangement which provides the lesser
payment. The Executive agrees that in the event of a qualifying termination of
the Executive's employment during the period that ends on the second anniversary
of the Effective Time, the Executive shall
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only be eligible for the severance benefits pursuant to Section 2(b) hereof or
the Change in Control Agreement, as (and if) applicable.
4. Waiver of Existing Agreement and Change of Control Plan Rights. As a
condition to the payments and benefits described in Sections 3 and 4, the
Executive hereby agrees that as of immediately prior to the Closing, the
Executive's entitlement to or eligibility for severance benefits pursuant to the
Existing Agreement and the Change of Control Plan shall cease and that the
Executive shall not be eligible for any payments or benefits whatsoever under
the Existing Agreement or Change of Control Plan in connection with a
termination of the Executive's employment or the transactions contemplated by
the Merger Agreement. The Executive is not currently party to any plan,
agreement or arrangement other than the Existing Agreement and the Change of
Control Plan that would provide severance or similar benefits in connection with
a termination of the Executive's employment.
5. Effectiveness of this Agreement. This Agreement is effective as of the
date hereof, provided that, in the event that the Closing does not occur, this
Agreement shall be null and void and of no force or effect.
6. Notice. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed given when so delivered in
person, by overnight courier, by facsimile transmission (with receipt confirmed
by telephone or by automatic transmission report) or two business days after
being sent by registered or certified mail (postage prepaid, return receipt
requested), as follows:
(i) if to the Current Employer or the Company,
to:
Ascential Software Corporation
50 Washington Street
Westborough, MA 01581
Attention: General Counsel
Telephone: 508-366-3888
Facsimile: 508-366-3669
with a copy to:
Skadden, Arps, Slate Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, MA 02108-3190
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Attention: Louis A. Goodman
Telephone: 617-573-4800
Facsimile: 617-573-4822
(ii) if to the Executive:
To the address for notice set forth below such Executive's signature.
Any party may, by notice given in accordance with this Section 6 to the
other parties, designate another address or person for receipt of notices
thereunder.
7. Binding Effect. This Agreement may not be assigned by the Executive.
This Agreement shall be binding upon, and inure to the benefit of and be
enforceable by the parties hereto and their respective legal representatives,
successors and assigns.
8. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
9. Entire Agreement; Amendments and Waivers; Enforceability. This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and supersedes all previous oral or written agreements
with respect thereto. This Agreement may not be amended or modified except by a
written agreement signed by the party against whom enforcement of such amendment
or modification is sought. Any waiver of any term or condition of this
Agreement, or any breach of any covenant, representation or warranty contained
herein, in any one instance shall not operate as or be deemed to be or construed
as a further or continuing waiver of any other breach of such term, condition,
covenant, representation or warranty or any other term, condition, covenant,
representation or warranty, nor shall any failure at any time or times to
enforce or require performance of any provision hereof operate as a waiver or
affect in any manner such parties' right at any later time to enforce or require
performance of such provision or any other provisions hereof.
10. Governing Laws. This Agreement shall be governed by and construed and
interpreted for all purposes according to the laws of the Commonwealth of
Massachusetts (without regard to conflict of laws principles) in any action,
litigation, claim, dispute or proceeding relating in any way, either directly or
indirectly, to this Agreement or the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day
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and year first above written.
EXECUTIVE:
______________________________
Name:
Address:
Telephone:
Facsimile:
ASCENTIAL SOFTWARE CORPORATION
By:___________________________
Name:
Title:
COMPANY:
Mercator Software, Inc.
By:___________________________
Name:
Title:
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APPENDIX A
Existing Agreement: [INSERT NAME OF AGREEMENT/LETTER AGREEMENT WITH THE
EXECUTIVE], as amended
Retention Amount: [insert amount equal to Change of Control severance payment
under the Existing Agreement/Plan]