EXHIBIT 10.13**AMENDED AND RESTATED EMPLOYMENT AGREEMENT**     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into this 1stday of February, 2006, between **VISUAL SCIENCES, LLC**, a Delaware limited liability company (the“Company”) and **DAVID R. SCHERER**(“Employee”).Recitals:     WHEREAS, the Company and the Employee are parties to that certain Employment Agreement datedas of January 29, 2006 (the “Original Agreement”); and     WHEREAS, the Employee and Company desire to amend and restate the Original Agreement as setforth herein.     NOW, THEREFORE, in consideration of the mutual covenants and undertakings set out herein andother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the Company and the Employee hereby agree as follows:     **1. DEFINITIONS**     The following words and terms shall have the meanings set forth below for the purposes of thisAgreement:          1.1. Affiliates. “Affiliates” of the Company, or a person “affiliated” with theCompany, including WebSideStory, Inc., and any persons or entities which, directly or indirectly,through one or more intermediaries, controls or are controlled by or are under common control with,the persons or entities specified.          1.2. Base Compensation. “Base Compensation” shall mean the compensation payable tothe Employee in accordance with Section 3.1 hereof.          1.3. Cause. “Cause” shall mean:(a) any action by the Employee involving willful misconduct which causes materialharm to the Company; or(b) the Employee’s conviction of a felony for conduct in connection with theperformance of his duties and responsibilities for the Company or which is otherwisematerially injurious to the Company.     Any determination of Cause for purposes of this Section 1.3 shall be made by the Board ofDirectors of the Managing Member at a duly-constituted meeting thereof at which the Employee shallhave the right to be heard, to submit evidence, and to be represented by counsel. Prior to suchmeeting, the Employee shall be entitled to receive not less than ten (10) business days’ notice(the “Notice Period”) of the conduct purporting to constitute Cause. During the Notice Period, theEmployee shall have the right to conform his conduct so that Cause does notVISUAL SCIENCES, LLC CONFIDENTIAL
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exist, in which case any Notice of Termination for such Cause shall be withdrawn and of no effect.No determination of Cause hereunder, whether or not in compliance with the process describedherein, shall prevent or be deemed to prevent judicial review of that determination.          1.4. Change in Control. For purposes of this Agreement, a “Change in Control” shalloccur on the date that: (i) any one person, entity or group acquires Beneficial Ownership of theequity securities of the Company or its direct or indirect parent entity that, together with theequity securities of such entity already held by such person, entity or group, constitutes morethan 50% of the total fair market value or total voting power of the equity securities of suchentity; provided, however, if any one person, entity or group is considered to own more than 50% ofthe total fair market value or total voting power of the equity securities of such entity, theacquisition of additional equity securities by the same person, entity or group shall not be deemedto be a Change in Control; (ii) any one person, entity or group acquires (or has acquired duringthe 12-month period ending on the date of the most recent acquisition by such person, entity orgroup) ownership of equity securities of the Company or its direct or indirect parent entitypossessing 35% or more of the total voting power of the equity securities of such entity; or (iii)any one person, entity or group acquires (or has acquired during the 12-month period ending on thedate of the most recent acquisition by such person, entity or group) assets from the Company or itsdirect or indirect parent entity that have a total gross fair market value at least equal to 40% ofthe total gross fair market value of all of the assets of such entity immediately prior to suchacquisition or acquisitions; provided, however, a transfer of assets by the Company shall notdeemed to be a Change in Control if the assets are transferred to (A) a member of the Company(immediately before the asset transfer) in exchange for or with respect to its membership units inthe Company, (B) an entity, 50% or more of the total value or voting power of which is owned,directly or indirectly, by the Company, (C) a person, entity or group that owns, directly orindirectly, 50% or more of the total value or voting power of all the outstanding membership unitsof the Company, or (D) an entity, at least 50% of the total value or voting power of which isowned, directly or indirectly, by a person, entity or group described in subparagraph (C) above.In all respects, the definition of “Change in Control” shall be interpreted to comply with Section409A of the Code, and the provisions of Treasury Notice 2005-1, Proposed Treasury RegulationSection 1.409A and any successor statute, regulation and guidance thereto. Notwithstanding theforegoing, the transactions contemplated by that certain Agreement and Plan of Merger dated as ofFebruary 1, 2006, among the Company, WebSideStory, Inc., VS Acquisition, LLC and Ned Scherer, asMember Representative, shall not constitute a “Change in Control” for purposes of this Agreement.For purposes of this Agreement, “Beneficial Ownership” shall have the meaning set forth in Rule13d-3 under the Securities Exchange Act of 1934, as amended.          1.5. Confidential Information. “Confidential Information” shall mean all data andinformation, in whatever form, whether or not originated by the Employee, relating to the Company’sBusiness and its actual or any actively considered business product, or service, provided that (i)such data and information is not generally known by the public or by others with no duty tomaintain the confidentiality of such information (except where such disclosure occurs as a resultof a breach of this Agreement or other act or omission of the Employee which the Employee, as theChief Technology Officer of the Company, does not have authority to make such disclosure), (ii) theCompany takes reasonable steps, in the exercise of its good faith judgment, to secure and maintainthe confidentiality of such data and information, and (iii) such data and information derivesindependent economic value, actual or potential, from not beingVISUAL SCIENCES, LLC CONFIDENTIAL
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generally known to, and not being readily ascertainable through proper means by, other personswho could obtain economic value from its disclosure.          1.6. Code. “Code” shall mean the Internal Revenue Code of 1986, as amended and ineffect from time to time, and the Treasury regulations and other guidance issued thereunder.          1.7. Company’s Business. “Company’s Business” shall mean and be limited to thebusiness of developing and providing software or enabling services for use by businesses to conductweb site and interactive telephone system usage analytics.          1.8. Copyrights. “Copyrights” shall mean materials used in Company’s Business forwhich copyright protection may be obtained including, but not limited to: literary works (includingall written material), computer programs, artistic and graphic works (including designs, graphs,drawings, blueprints and other works), recordings, models, photographs, slides, motion pictures andaudio-visual works, regardless of the form or manner in which documented or recorded; and anydomestic or foreign copyright registrations and/or applications for such registrations, includingall or any portion of such materials or other subject matter identified by any such registration orapplication, along with any rights of renewal or extension.          1.9. Date of Termination. “Date of Termination” shall mean (i) if the Employee’sperformance of services is terminated for Cause or Disability, the date specified in the Notice ofTermination, or (ii) in the case of death, on the date of death, or (iii) if the Employee’sperformance of services is terminated for any other reason, the date specified in such Notice.          1.10. Disability. “Disability” shall mean the Employee’s inability to perform theessential functions of his position with or without accommodation by reason of any medicallydeterminable physical or mental impairment which has lasted or can reasonably be expected to lastwithout material interruption for a period of not less than 180 or more consecutive days, asdetermined by the Employee’s Physician; provided, however that in the event such determination ischallenged by the Company, such challenge will be resolved by a panel of three licensed medicalphysicians (“Physicians”), whose decision shall be final and binding on both parties. For thispurpose, the Employee and the Company shall each choose a Physician and the Physicians so chosenshall select a third. Notwithstanding the foregoing, to the extent that any payment under thisAgreement that is subject to Code Section 409A may be triggered due to a Disability, “Disability”shall mean the Employee (A) is unable to engage in any substantial gainful activity by reason ofany medically determinable physical or mental impairment which can be expected to result in deathor can be expected to last for a continuous period of not less than twelve (12) months, or (B) is,by reason of any medically determinable physical or mental impairment which can be expected toresult in death or can be expected to last for a continuous period of not less than twelve (12)months, receiving income replacement benefits for a period of not less than six (6) months under aCompany-sponsored group disability plan.          1.11. Effective Date. “Effective Date” shall mean the date first written above, onwhich this Agreement is entered into by and between the Employee and the Company.VISUAL SCIENCES, LLC CONFIDENTIAL
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          1.12. Good Reason. “Good Reason” shall mean any of the following reasons unlessEmployee has provided specific written consent to such occurrence in respect to this Agreement:          (a) The failure to elect or to re-elect or to appoint or to re-appoint the Employee to theoffice of Chief Technology Officer of the Company or its successor; or          (b) A material diminution by the Company in the Employee’s authority, functions, duties orresponsibilities with the Company; or          (c) Any reduction in the Employee’s Base Compensation as the same may be increased from timeto time or, except to the extent permitted by Section 3.5 hereof, any material adverse change inthe benefits provided to the Employee, taken as a whole; or          (d) Relocation of the Company’s offices such that the Employee is required to work in anoffice which is more than fifty (50) miles from the location of the Company’s principal office onthe Effective Date; or          (e) The failure of the Company to obtain the agreement from any successor to the Company toassume and agree to perform this Agreement pursuant to Section 10.1 hereof; or          (f) A failure by the Company to pay any material amount due to the Employee pursuant to theterms of this Agreement within a reasonable time after it becomes due, except for an inadvertenterror to make such payment; or          (g) Any purported termination of the Employee’s employment by the Company which is noteffected pursuant to a Notice of Termination satisfying the requirements of this Agreement; or          (h) Any change in the Employee’s reporting relationships, such that the Employee no longerreports directly to the Chief Executive Officer of the Company; or          (i) A material breach of this Agreement by the Company;provided, that the Employee shall (A) provide to the Company in writing, in reasonabledetail, notice of any events or circumstances constituting Good Reason and (B) afford the Company areasonable opportunity to remedy any such events or circumstances, if such events or circumstancesare capable of being remedied, in which event the Employee shall determine in good faith whether ornot such events or circumstances have been remedied.          1.13. Intellectual Property. “Intellectual Property” shall mean, collectively, theTrademarks, Patents, Copyrights, and Trade Secrets.          1.14. Notice of Termination. For purposes of this Agreement, a “Notice ofTermination” shall mean a dated notice in writing which (i) indicates the specific terminationprovision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of the Employee’s employment under theprovision so indicated, (iii) specifies a Date of Termination, which shall (except in the case ofVISUAL SCIENCES, LLC CONFIDENTIAL
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a termination for Cause) be not more than thirty (30) days after the date of the Notice ofTermination, and (iv) is delivered in accordance with the provisions of Section 10.2 hereof.          1.15. Patents. “Patents” shall mean any domestic or foreign patents used in Company’sBusiness, including any inventions, discoveries, improvements, designs and ideas or other subjectmatter described or protected by such patents, and any patents that are or may be granted from anydomestic or foreign application to obtain a patent, including any inventions, discoveries,improvements, designs and ideas, or other subject matter described or protected by suchapplication, including, without limitation, any continuations, continuations-in-part, divisions,reissuances, reexaminations, renewals, revisions and extensions thereof.          1.16. Person. “Person” shall mean any natural person or any legal, commercial orgovernmental entity such as, but not limited to, any general or limited partnership, firm,corporation, limited liability company, association, joint venture, trust, unincorporatedorganization or person acting in a representative capacity, as well as any syndicate or group thatwould be deemed to be a person under Section 13(d)(3) of the Exchange Act, any successor statutesthereto, and the rules and regulations promulgated thereunder          1.17. Qualifying Termination. A “Qualifying Termination” shall mean termination ofthe Employee’s employment which occurs within twelve (12) full calendar months following theeffective date of a Change in Control of the Company or within six (6) full calendar months priorto a Change in Control if it is reasonably demonstrated by the Employee that such termination ofemployment was at the request of a third party who has taken steps reasonably calculated to effecta Change in Control.          1.18. Residuals. “Residuals” means information in non-tangible form, which may beretained in human memory by persons who have had access to the Confidential Information andIntellectual Property, including ideas, concepts, know-how or techniques contained therein.          1.19. Subsidiary. “Subsidiary” shall mean any subsidiary of the Company.          1.20. Term. Reference herein to the “Term” of this Agreement shall refer to theInitial Term and any Renewal Term.          1.21. Trademarks. “Trademarks” means any trademarks, service marks, trade names,domain names, logos, trade dress, or other material used by the Company in its Business for whichtrademark protection may be obtained including, but not limited to, marks, designs, logos, slogans,terms, words, phrases, and like subject matter, together with all translations, adaptations,derivations and combinations thereof, and any common law rights therein and goodwill associatedtherewith, and any domestic or foreign trademark or service mark registrations and/or applicationsfor such registrations, including all or any portion of a trademark, service mark or other subjectmatter identified by any such registration or application.          1.22. Trade Secrets. “Trade Secrets” shall mean Confidential Information used inCompany’s Business for which the Company has not sought patent protection, explicitly excludingResiduals, that the Company has reasonably determined: (1) derives independent economic value,actual or potential, from not being generally known to the public or to otherVISUAL SCIENCES, LLC CONFIDENTIAL
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Persons who can obtain economic value from its disclosure or use; (2) is the subject of effortsthat are reasonable under the circumstances to maintain its secrecy.     **2. PERFORMANCE OF SERVICES**          2.1. Agreement and Term. The Company agrees to continue the employment of theEmployee as the Chief Technology Officer of the Company, and the Employee agrees to continue toserve as Chief Technology Officer, on the terms and conditions set forth in this Agreement. TheEmployee’s employment hereunder shall commence on the Effective Date and continue for a term of two(2) years from the Effective Date (the “Initial Term”) and shall automatically renew forsuccessive terms of one (1) year on the second anniversary of the Effective Date and on eachanniversary thereafter (each a “Renewal Term”) until such time as a party gives written notice tothe other at least sixty (60) days prior to the end of the Initial Term or any Renewal Term thatthe Term shall not be extended (“Notice of Non-Renewal”). In addition, the Employee’s employmentmay be terminated during a Term by a Notice of Termination provided in accordance with thisAgreement.          2.2. Duties. During the Term, the Employee will perform the duties, undertake theresponsibilities and exercise the authority customarily performed, undertaken and exercised bypersons employed in a similar executive capacity or as reasonably directed by the Chief ExecutiveOfficer of the Company or the Managing Member of the Company (the “Managing Member”). The Employeeshall report directly to the Chief Executive Officer of the Company, and the Employee shall use hisbest efforts to further the interests of the Company and to perform such services for the Companyas is consistent with his title of Chief Technology Officer of the Company. Employee’s dutiesshall involve the management of all the Company’s research and development activities, as well asparticipation in the general management of the Company and all of its business activities.Employee shall devote substantially all of his business time and efforts to the performance of suchduties. Subject to the terms of the Non-Competition Agreement dated as of the Effective Datebetween Employee and the Company, a copy of which is attached hereto as Exhibit A (the“Non-Competition Agreement”), this shall not preclude the Employee from participating in any“Permitted Outside Activities” (as defined below). The Employee expressly acknowledges and agreesthat during the Term he shall disclose to the Company in advance the identity and general nature ofeach prospective Permitted Outside Activity, provided that, the Company shall enter into anappropriate nondisclosure agreement upon request of the Employee in connection with suchdisclosure. The following are “Permitted Outside Activities”: (1) participation in venture capitaland other investment companies and partnerships; (2) participation in various holding and realestate development companies and partnerships; (3) general and ongoing research and developmentoutside the Company’s Business and not, during the Term of this Agreement, involving materialcommercial transactions; (4) devotion of time to personal and family investments; (5) developmentof the open source “VPython” library and related educational initiatives; or (6) service oncommunity and civic boards, or participation in industry associations; in each case provided suchactivities do not interfere with his duties to the Company, as determined in good faith by theManaging Member.VISUAL SCIENCES, LLC CONFIDENTIAL
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     **3. COMPENSATION AND BENEFITS**          3.1 Base Compensation. The Company will pay to the Employee for his serviceshereunder an annual salary (“Base Compensation”). As of the Effective Date, the Employee’s BaseCompensation shall be $300,000 per annum. This Base Compensation will be reviewed annually and maybe increased from time to time in such amounts as may be determined by the Company, but may not bedecreased without the Employee’s consent. The Base Compensation shall be payable in conformancewith the Company’s customary payroll practices as established and in effect from time to time.          3.2. Bonus. In addition to the Base Compensation as set forth in Section 3.1, theEmployee shall be entitled to participate in any bonus program the Company establishes for otherexecutive employees of the Company and shall be eligible to be paid a bonus at least annually basedon his attainment of objectives established by the Managing Member or its designee at the beginningof each year. Any such bonus shall be paid to Employee within two (2) months of the end of thecalendar year in which it is earned.          3.3. Equity Compensation. The Employee will be eligible to participate in and to beconsidered for grants or awards under, any option, restricted unit, or other similar equityincentive plan or program for which other Company employees are eligible, including any such plansestablished by any Affiliates of the Company, in accordance with the terms of such plans orprograms as in effect from time to time.          3.4 Vacation, holidays and sick days. During the Term, the Employee shall be entitledto three (3) weeks paid vacation in each calendar year to be taken and determined in accordancewith the vacation policies and procedures as established from time to time by the Company. Unusedvacation may be carried over from year to year, provided however, that in no event shall more thansix (6) weeks of vacation be carried over. The Employee shall also be entitled to all paidholidays observed by the Company generally.          3.5. Benefits.                (a) Participation in Benefit Plans. During the Term, the Employee shall be entitled toparticipate in and receive the benefits of any health, pension or other retirement benefit plan,401(k) plan, profit sharing, or other plans, benefits and privileges provided generally toemployees of the Company, including, without limitation, the Company’s standard sick leave policy.                (b) Disability Insurance. Throughout the Term, the Company shall provide the Employeewith short and long term disability insurance providing him not less than 75% of the Employee’saverage annual compensation until the age of 65.**4. EXPENSES AND EQUIPMENT**          The Company shall reimburse the Employee or otherwise provide for or pay all reasonableexpenses incurred by the Employee in furtherance of or in connection with the business of theCompany, including, but not by way of limitation, telecommunications monthly fees and expenses,installation and monthly fees for a high speed Internet connection at theVISUAL SCIENCES, LLC CONFIDENTIAL
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Employee’s home and traveling expenses. The Company will provide Employee with computer andother equipment and software as required by the Employee for use at any location at the solediscretion of Employee. Upon the Date of Termination of this Agreement, or as soon as practicablethereafter, Employee will be provided with written notice of the depreciated value of suchequipment and software and allowed to purchase such equipment and software at its fully depreciatedvalue, at Employee’s sole option, by paying such depreciated value to the Company within thirty(30) days of such written notice of the depreciated equipment and software value.**5. TERMINATION OF EMPLOYMENT**     5.1. Termination Due to Death**.**The Employee’s employment shall terminate immediatelyin the event of his death, and in such event the Company shall pay the Employee’s beneficiaries orheirs his Base Compensation and the value of any accrued vacation through the Date of Terminationplus any bonus earned by the Employee but not paid to him as of the Date of Termination(collectively “Accrued Compensation”).     5.2. Termination Due to Disability. The Employee’s employment may be terminated dueto Disability, in which event the Company shall pay the Employee his Accrued Compensation, shallcontinue to provide Employee health, dental and disability insurance at the Company’s cost for aperiod of one (1) year following the Date of Termination, and shall transfer to the Employee anydisability insurance policy in place for the benefit of Employee, which thereafter will bemaintained by the Employee at his cost.     5.3. Termination by the Employee Other Than for Good Reason. In the event theEmployee terminates his employment other than for Good Reason, the Company shall pay the Employeehis Accrued Compensation through the Date of Termination. In addition, at Employee’s option, theCompany shall transfer to the Employee any disability insurance policy in place for the benefit ofEmployee, which thereafter will be maintained by the Employee at his cost.     5.4. Termination by the Employee For Good Reason. The Employee may terminate hisemployment for Good Reason, in which event the Employee shall be entitled to receive (a) hisAccrued Compensation, plus (b) the payments, benefits and other consideration specified in Section5.5 of this Agreement; provided however, that if the Employee’s Termination for Good Reason is alsoa Qualifying Termination, the Employee shall be entitled to receive the payments, benefits andother consideration set forth in Section 5.8 hereof in lieu of those set forth in Section 5.5.     5.5. Termination by the Company Other Than for Death, Disability or Cause. TheCompany may terminate the Employee’s employment without Cause. In the event the Company terminatesthe Employee’s employment other than for Disability or Cause, the Company shall pay the Employee’sAccrued Compensation through the Date of Termination, and, in addition:          (a) the Company shall continue to pay the Employee’s Base Compensation for a period of one (1)year following the Date of Termination, which payments shall be made on the Company’s normalpayroll dates; and          (b) the Company shall continue to provide the Employee health, dental andVISUAL SCIENCES, LLC CONFIDENTIAL
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disability insurance at the Company’s cost for a period of one (1) year following the Date ofTermination. After such one (1) year period the Company shall, at Employee’s option, transfer tothe Employee any disability insurance policy in place for the benefit of Employee, which thereafterwill be maintained by the Employee at his cost; and          (c) all restrictions on restricted stock, or similar awards shall lapse and any options orother equity awards which were not otherwise vested as of the Date of Termination shall becomeimmediately vested and may be exercised in accordance with their terms.Notwithstanding anything to the contrary in this Section 5.5, if the Company’s termination of theEmployee’s employment for reasons other than death, Disability, or Cause is also deemed aQualifying Termination, the Employee shall be entitled to receive the payments, benefits and otherconsideration set forth in Section 5.8 hereof in lieu of those set forth in this Section 5.5.     5.6. Termination for Cause. In the event the Company terminates this Agreement forCause, the Company shall pay the Employee his Accrued Compensation through the Date of Termination,and the Employee’s entitlement to benefits under any benefit plan shall be determined in accordancewith the provisions of such plan.     5.7. Termination by Mutual Consent. Notwithstanding any of the foregoing provisionsof this Section 5, if at any time during the Term the parties by mutual consent decide to terminatethis Agreement, they shall do so by separate agreement setting forth the terms and conditions ofsuch termination.     5.8. Qualifying Termination on Change in Control. In the event of a QualifyingTermination of the Employee’s employment, the Company shall pay the Employee’s Accrued Compensationthrough the Date of Termination, and, in addition:          (a) pay to the Employee, in a lump sum within ten (10) business days following the Date ofTermination, cash severance equal to Employee’s annual Base Compensation immediately preceding thedate of the Notice of Termination resulting in the Qualifying Termination; and          (b) the Company shall continue to provide Employee health, dental and disability insurance atthe Company’s cost for a period of one (1) year following the Date of Termination. After such one(1) year period the Company shall, at Employee’s option, transfer to the Employee any disabilityinsurance policy in place for the benefit of Employee, which thereafter will be maintained by theEmployee at his cost; and          (c) all restrictions on any restricted units or similar awards shall lapse and any options orother equity awards which were not otherwise vested as of the Date of Termination shall becomeimmediately vested and may be exercised by the Employee for the remaining term of such awards as ifthe Employee’s employment had not been terminated.          5.9 Timing of Payments.                (a) All Accrued Compensation required to be paid to Employee (or his beneficiaries or heirs)shall be paid by Employer within thirty (30) days following the Date ofVISUAL SCIENCES, LLC CONFIDENTIAL
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Termination or by such earlier date as may be required by applicable law.               (b) Notwithstanding any other provision with respect to the timing of payments under thisSection 5, if, at the Date of Termination, the Employee is deemed to be a “specified employee”(within the meaning of Section 409A of the Code, and any successor statute, regulation and guidancethereto) of the Company, then only to the extent necessary to comply with the requirements ofSection 409A of the Code, any payments to which the Employee may become entitled under this Section5 which are subject to Section 409A of the Code (and not otherwise exempt from its application)will be withheld until the first business day of the seventh month following the termination of theEmployee’s employment, at which time the Employee shall be paid an aggregate amount equal to sixmonths of payments otherwise due to the Employee under the terms of this Section 5, as applicable.After the first business day of the seventh month following the termination of the Employee’semployment and continuing each month thereafter, the Employee shall be paid the regular paymentsotherwise due to the Employee in accordance with the terms of this Section 5, as applicable.          5.10. Effect of Code Section 280G. To the extent Code Section 280G is applicable topayments made by the Company to the Employee, if it is determined that the amounts payable to theEmployee under the Agreement, when considered together with any amounts payable to the Employee inconnection with a Change in Control, cause such payments to be treated as excess parachute paymentswithin the meaning of Section 280G of the Code, then the Company will make an additional “gross up”payment to the Employee in order to pay for any additional tax imposed on the Employee pursuant toSection 4999 of the Code.          5.11. Release. As a condition to the Employee’s receipt of any post-terminationbenefits described in this Agreement, the Employee shall execute a Release (the “Release”)in a form reasonably acceptable to the Managing Member and the Company. Such Release shallspecifically relate solely to the Employee’s rights and claims in existence at the time of suchexecution which arise out of the Employee’s employment by the Company and his termination ofemployment, and shall exclude (1) any rights and claims the Employee may have other than as anemployee, such as in his capacity as a shareholder, and (2) any continuing obligations the Companymay have to the Employee following the Date of Termination under this Agreement or any otheragreement providing for obligations to survive the Employee’s termination of employment.     **6**. **PROTECTED INFORMATION.**     Throughout the Term and thereafter, the Employee shall maintain in confidence and will not,without the prior written consent of the Company, except in the course of performance of his dutiesfor the Company or as required by subpoena or court order, use, disclose or give to others anyConfidential Information. As the Chief Technology Officer of the Company, Employee has theauthority to make such use and/or disclosure, in his sole discretion, without the prior writtenconsent of the Company as long as such use and/or disclosure is in the course of performance of hisduties for the Company. Upon the termination of the Employee’s employment, he will return to theCompany all tangible Confidential Information and copies thereof (regardless how such ConfidentialInformation or copies are maintained), except that the Employee shall be allowed to keep a fullcopy of any and all electronic mail sent or received by the Employee as provided in Section 7.3below. Anything herein to the contrary notwithstanding, both during and after theVISUAL SCIENCES, LLC CONFIDENTIAL
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Term, the Employee shall be free to use, and nothing in this Agreement shall be deemed to limithis use, for any purpose, Residuals, whether or not obtained from access to or work withConfidential Information.     **7. INTELLECTUAL PROPERTY RIGHTS.**          7.1 Assignment of Intellectual Property. Employee agrees, during the Term of thisAgreement, to assign and transfer to the Company all of his right, title and interest in allIntellectual Property prepared, made or conceived by the Employee (whether solely or jointly withothers) during the Term of this Agreement.          7.2 Exclusions. Nothing in this Agreement shall be deemed to give the Company anyproprietary or other rights to any Patents, Trademarks, Copyrights, and Trade Secrets that theEmployee has prepared, made or conceived, or hereafter prepares, makes or conceives which (i) wasnot actually put in use or designed into products or planned products of the Company prior to theEffective Date or during the Term of this Agreement, or (ii) was not prepared, made or conceivedby the Employee in the course of performing services for the Company relating to the Company’sBusiness, or (iii) was developed by the Employee in the course of his Permitted Outside Activities;and any all proprietary and other rights to any such invention, discovery, improvement, idea, work,or design shall belong solely to the Employee. Furthermore, nothing in this Agreement shall bedeemed to give the Company any right to, nor to limit or in any way restrict the Employee’s abilityto use, Residuals during or after the Term.          7.3 Electronic Mail. Notwithstanding anything to the contrary contained herein, butsubject to Section 6, Employee shall have the right to keep, during or after the Term of thisAgreement, a full copy of any and all electronic mail sent or received by Employee.     **8. ARBITRATION**          8.1. Remedy. The parties recognize that litigation in federal or state courts orbefore federal or state administrative agencies of disputes arising out of the Employee’sperformance of services for the Company or out of this Agreement, with the exception of any disputerelating to the Intellectual Property, may not be in the best interests of either the Employee orthe Company, and may result in unnecessary costs, delays, complexities, and uncertainty. Theparties agree that any dispute between the parties arising out of or relating to the Employee’sperformance of services, or to the negotiation, execution, performance or termination of thisAgreement or the Employee’s performance of services, including, but not limited to, any claimarising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended,the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans withDisabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the FamilyMedical Leave Act, and any similar federal, state or local law, statute, regulation to the extentthat arbitration is permitted under such law, statute, regulation or any common law doctrine,whether that dispute arises during or after the Term, with the exception of any dispute relating tothe Intellectual Property, shall be resolved by arbitration in the Washington, DC metropolitanarea, in accordance with the National Employment Arbitration Rules of the American ArbitrationAssociation, as modified by the provisions of this Section 8. The parties each further agree thatthe arbitration provisions of this Agreement shall provide each party with its exclusive remedy,with the exception of any dispute relating to the IntellectualVISUAL SCIENCES, LLC CONFIDENTIAL
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Property, and each party expressly waives any right it might have to seek redress in any otherforum, except as otherwise expressly provided in this Agreement. By election of arbitration as themeans for final settlement of all claims, with the exception of any dispute relating to theIntellectual Property, the parties hereby waive their respective rights to, and agree not to, sueeach other in any action in a federal, state or local court with respect to such claims, but mayseek to enforce in court an arbitration award rendered pursuant to this Agreement.          8.2. Notice and Selection of Arbitrator. Within thirty (30) days after the occurrenceof an event giving rise to a dispute subject to this Section 8, the aggrieved party shall providethe other party with a detailed written statement of all facts pertaining to the dispute and shallpermit the other party thirty (30) days within which to investigate and consider the facts and toresolve the matter informally. Thereafter, an aggrieved party who wishes to proceed to arbitrationshall have an additional ninety (90) days within which to so notify the other party in writing.This notice shall include a clear, concise statement of the facts, the issues to be resolved by thearbitrator and the desired remedy. Within ten (10) days after delivery of a written noticerequesting arbitration, the Company will contact the Employee, or his designated representative, toselect an arbitrator. If the parties cannot agree on an arbitrator, they shall select anarbitrator from a list provided by the American Arbitration Association in accordance with itsrules.          8.3. Arbitration Procedure. In the arbitration proceeding, each party shall beentitled to retain its own counsel, to present evidence and cross-examine witnesses, to purchase astenographic record of the proceedings, and to submit post-hearing briefs. The opinion and awardof the arbitrator shall be requested by the parties within forty-five (45) days of the submissionof the post-hearing briefs, which shall be due thirty (30) days from the close of the arbitration.          8.4. The Employee’s Remedies. If the arbitrator finds that the Employee wasterminated in violation of law or this Agreement, the parties agree that the arbitrator actinghereunder shall be empowered to provide the Employee with equitable and/or legal remedies,including compensatory damages and back pay. “Back pay” shall include all forms of compensationpayable to the Employee by the Company, the cost of all fringe benefits, and prejudgment interestat the rate of ten percent (10%) per annum on such claims.          8.5. Arbitrator’s Authority. In reaching his decision, the arbitrator shall have noauthority to add to, detract from, or otherwise modify any provision of this Agreement. Thearbitrator shall submit with the award a written opinion which shall include findings of fact andconclusions of law. Judgment upon the award rendered by the arbitrator may be entered in any courthaving competent jurisdiction.          8.6. Effect of Arbitrator’s Decision; Arbitrator’s Fees. The decision of thearbitrator shall be final and binding between the parties as to all claims which were or could havebeen raised in connection with the dispute, to the full extent permitted by law. In all cases inwhich applicable federal law precludes a waiver of judicial remedies, the parties agree that thedecision of the arbitrator shall be a condition precedent to the institution or maintenance of anylegal, equitable, administrative, or other formal proceeding by the Employee in connection with thedispute, and that the decision and opinion of the arbitrator may be presented in any other forum onthe merits of the dispute. In addition to the other relief provided, the prevailing party shall beentitled to recover his reasonable attorney’s fees and costs, including the administrativeVISUAL SCIENCES, LLC CONFIDENTIAL
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fees and expenses associated with the arbitration, all of which shall be included in any awardby the arbitrator.          8.7. Indemnification for Costs of Litigation. In the event that a party to thisAgreement attempts to resolve in court claims subject to arbitration under this Agreement, thatparty shall pay to the other party such other party’s attorney’s fees and costs incurred todefending the action filed in court and any action seeking to enforce the provisions of thisSection 8.          8.8. Continuing Nature of Agreement to Arbitrate. The parties acknowledge and agreethat their obligations under this arbitration agreement survive the termination of this Agreementand continue after the termination of the relationship between the Employee and the Company.     **9. INDEMNIFICATION.**          9.1 General. The Company agrees that if the Employee is made a party or isthreatened to be made a party to any action, suit or proceeding, whether civil, criminal,administrative or investigative (a “Proceeding”), by reason of the fact that the Employee is or wasa director, officer, member, employee or agent of the Company or any predecessor to the Company orany of their Affiliates, whether or not the basis of such Proceeding is alleged action in anofficial capacity as a director, officer, member, employee or agent, the Employee shall beindemnified and held harmless by the Company to the fullest extent authorized by Delaware law, asthe same exists or may hereafter be amended, against all Expenses incurred or suffered by theEmployee in connection therewith, and such indemnification shall continue as to the Employee evenif the Employee has ceased to be director, officer, member, employee or agent of the Company andshall inure to the benefit of his heirs, executors and administrators.          9.2 Expenses. As used in this Section, the term “Expenses” shallinclude, without limitation, damages, losses, judgments, liabilities, fines, penalties, excisetaxes, settlements, and costs, attorneys’ fees, accountants’ fees, and disbursements and costs ofattachment or similar bonds, investigations, and any expenses of establishing a right toindemnification under this Agreement.          9.3 Enforcement. If a claim or request under this Section 9 is not paid by the Companyor on its behalf, within thirty (30) days after a written claim or request has been received by theCompany, the Employee may at any time thereafter bring suit against the Company to recover theunpaid amount of the claim or request and if successful in whole or in part, the Employee shall beentitled to be paid also the expenses of prosecuting such suit. All obligations for indemnificationhereunder shall be subject to, and paid in accordance with, applicable Delaware law.          9.4 Partial Indemnification. If the Employee is entitled under any provision of thisAgreement to indemnification by the Company for some or a portion of any Expenses, but not,however, for the total amount thereof, the Company shall nevertheless indemnify the Employee forthe portion of such Expenses to which the Employee is entitled.VISUAL SCIENCES, LLC CONFIDENTIAL
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          9.5 Advances of Expenses. Expenses incurred by the Employee in connection with anyProceeding shall be paid by the Company in advance upon request of the Employee that the Companypay such Expenses to the fullest extent authorized by Delaware law, as the same exists or mayhereafter be amended, but only in the event that the Employee shall have delivered in writing tothe Company (i) an undertaking to reimburse the Company for Expenses with respect to which theEmployee is not entitled to indemnification and (ii) a statement of his good faith belief that thestandard of conduct necessary for indemnification by the Company has been met.          9.6 Notice of Claim. The Employee shall give to the Company notice of any claim madeagainst him for which indemnification will or could be sought under this Agreement. In addition,the Employee shall give the Company such information and cooperation as it may reasonably requireand as shall be within the Employee’s power and at such times and places as are convenient for theEmployee.          9.7 Defense of Claim. With respect to any Proceeding as to which the Employee notifiesthe Company of the commencement thereof:                (a) The Company will be entitled to participate therein at its own expense;                (b) Except as otherwise provided below, to the extent that it may wish, the Company will beentitled to assume the defense thereof, with counsel reasonably satisfactory to the Employee, whichin the Company’s sole discretion may be regular counsel to the Company and may be counsel to otherofficers and directors of the Company or any subsidiary. The Employee also shall have the right toemploy his own counsel in such action, suit or proceeding, and under such circumstances, the feesand expenses of such counsel shall be at the expense of the Company.                (c) The Company shall not be liable to indemnify the Employee under this Agreement for anyamounts paid in settlement of any action or claim effected without its written consent. The Companyshall not settle any action or claim in any manner which would impose any penalty thatwould not be paid directly or indirectly by the Company or limitation on the Employee without theEmployee’s written consent. Neither the Company nor the Employee will unreasonably withhold ordelay their consent to any proposed settlement.          9.8 Non-exclusivity. The right to indemnification and the payment of expenses incurredin defending a Proceeding in advance of its final disposition conferred in this Section shall notbe exclusive of any other right which the Employee may have or hereafter may acquire under anystatute, operating agreement, articles of organization, or by-laws of the Company or any affiliatedentity, or any agreement, vote of shareholders, members, or otherwise.     **10. GENERAL PROVISIONS**          10.1. Assignment. The Company shall assign this Agreement and its rights andobligations hereunder in whole, but not in part, to any company or other entity with or into whichthe Company may hereafter merge or consolidate or to which the Company may transfer all orsubstantially all of its assets, if in any such case said company or other entity shall byoperation of law or expressly in writing assume all obligations of the Company hereunder as fullyas if itVISUAL SCIENCES, LLC CONFIDENTIAL
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had been originally made a party hereto, but may not otherwise assign this Agreement or itsrights and obligations hereunder. The Employee may not assign or transfer this Agreement or anyrights or obligations hereunder.          10.2. Notice. For the purposes of this Agreement, notices and all othercommunications provided for in this Agreement shall be in writing and shall be sent by handdelivery, by prepaid registered or certified mail, return receipt requested, or by facsimiletransmission, addressed to the other party at the address shown below or at such other address forwhich such party gives notice hereunder. Such notice shall be deemed to have been given upondelivery, if sent by hand delivery, three (3) days after deposit in the mail, or upon delivery by anationally recognized overnight courier.   To the Company: Visual Sciences, LLC  1616 Anderson Road  McLean, VA 22102   To the Employee: David R. Scherer  [INTENTIONALLY OMITTED]  [INTENTIONALLY OMITTED]          10.3. Amendment and Waiver. No provision of this Agreement may be amended or waivedunless such amendment or waiver is in writing and signed by each of the parties hereto. The Companyand the Employee agree that they will negotiate in good faith and jointly execute an amendment tomodify this Agreement to the extent necessary to comply with the requirements of Code Section 409A,or any successor statute, regulation and guidance thereto.          10.4. Non-Waiver of Breach. No failure by either party to declare a default due toany breach of any obligation under this Agreement by the other, nor failure by either party to actquickly with regard thereto, shall be considered to be a waiver of any such obligation, or of anyfuture breach.          10.5. Severability. In the event that any provision or portion of this Agreement,with the exception of Sections 2 and 3, shall be determined to be invalid or unenforceable for anyreason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain infull force and effect.          10.6. Governing Law. To the extent not preempted by federal law, the validity andeffect of this Agreement and the rights and obligations of the parties hereto shall be construedand determined in accordance with the law of the Commonwealth of Virginia, and the parties agreethat any dispute not subject to arbitration pursuant to Section 8 will be litigated in the federal,state or local courts in the Commonwealth of Virginia, which shall have exclusive jurisdiction andvenue over the parties with respect to any such dispute.          10.7. Entire Agreement. This Agreement contains all of the terms agreed upon by theCompany and the Employee with respect to the subject matter hereof and supersedes allVISUAL SCIENCES, LLC CONFIDENTIAL
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prior agreements, arrangements and communications between the parties dealing with suchsubject matter, whether oral or written, including, without limitation, the Original Agreement;provided, however, that nothing in this Agreement shall be deemed to supersede the Non-CompetitionAgreement.          10.8. Binding Effect. This Agreement shall be binding upon and shall inure to thebenefit of the transferees, successors and assigns of the Company, including any company with whichthe Company may merge or consolidate.          10.9. Headings. Numbers and titles to Sections hereof are for information purposesonly and, where inconsistent with the text, are to be disregarded.          10.10. Counterparts. This Agreement may be executed in any number of counterparts,each of which shall be deemed an original, but all of which when taken together, shall be andconstitute one and the same instrument.          10.11. Survival. Except as otherwise expressly provided in this Agreement, allcovenants, representations and warranties, express or implied, shall survive the execution of thisAgreement.          10.12. Section 409A of the Code. This Agreement shall be interpreted, construed andadministered in a manner that satisfies the requirements of Section 409A of the Code.VISUAL SCIENCES, LLC CONFIDENTIAL
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the dateand year first written above.     **The Company:** **Visual Sciences, LLC**               /s/ JAMES W. MACINTYRE, IV     By: James W. MacIntyre, IV    Title: Managing Member       **The Employee:**            /s/ DAVID SCHERER         David Scherer  [SIGNATURE PAGE TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT]
 

 
**EXHIBIT A****NON-COMPETITION AGREEMENT****[INTENTIONALLY OMITTED]**