exv10w9



 





Exhibit 10.9




February 5, 2004




Mr. James
Dai




Dear James:




     DemandTec, Inc. (the “Company”) is pleased to offer you employment on the following terms:



     1. Position. The Company will employ you in a full-time position. Your initial title will
be Vice President, Engineering and you will report to the Chief Executive Officer of the Company.
By signing this letter agreement, you confirm to the Company that you have no contractual
commitments or other legal obligations that would prohibit you from performing your duties for the
Company.



     2. Cash Compensation. The Company will pay you a starting salary at the rate of $200,000 per
year, payable in accordance with the Company’s standard payroll schedule. In addition to your
base salary, you will be eligible to earn $50,000 in annual targeted variable compensation at 100%
achievement of goals outlined in the Executive Management Team (XMT) Compensation Plan as approved
by the Company’s Board of Directors. The foregoing notwithstanding, the Company guarantees that
your variable compensation for your first full year of employment will be at least $50,000. To
this end, during each of your first twelve months of employment, the Company will pay to you an
additional $4,166 per month, less all withholdings, which payments will represent non-refundable
advances against the first year’s variable compensation. In addition, on the six-month
anniversary of your hire date, the Company will pay you a $20,000 signing bonus.



     3. Employee Benefits. As a regular employee of the Company, you will be eligible to
participate in a number of Company-sponsored benefits. These benefits are described in the
employee benefit summary that will be presented to you upon your first day of employment. In
addition, you will be entitled to paid vacation in accordance with the Company’s vacation policy,
as in effect from time to time.



     4. Stock Options. So that you may participate in the Company’s success, you will
be granted a First Option to purchase 430,000 shares of the Company’s Common Stock (the “First
Option”), subject to the approval of the Company’s Board of Directors. The exercise price of such
shares will be equal to the fair market value per share on the date the First Option is granted,
as determined by the Company’s Board of Directors. The First Option will be subject to the terms
and conditions applicable to options granted under the Company’s 1999 Equity Incentive Plan (the
“Plan”), as described in the Plan and the applicable Stock Option Agreement. The First Option
will be immediately exercisable, but the unvested purchased shares will be subject to repurchase
by the Company at the exercise price in the event that your service terminates for any reason
before you vest in the shares. You will vest in 1/8th of the option shares after six
months of continuous service, and the balance will vest in equal monthly installments of
1/48th over the next 42 months of continuous service, as described in the applicable
Stock Option Agreement.



     In addition, in the event that in the six months from your date of hire, the Company closes a
financing event (“Financing Event” as defined below), subject to the approval of the Board and
provided you are employed by the Company at the time of grant, you will be granted a Second Option
covering
that number of shares of Common Stock that when added to the First Option will equal one
percent (1%) of



 









 




the fully-diluted capital stock of the Company as of the close of the Financing
Event. The exercise price per share will be equal to the fair market value per share on the date
the Second Option is granted. The Second Option will be subject to the terms and conditions
applicable to options granted under the Plan, as described in the Plan and the applicable Stock
Option Agreement. The Second Option will be immediately exercisable, but the unvested purchased
shares will be subject to repurchase by the Company at the exercise price in the event that your
service terminates for any reason before you vest in the shares. You will vest in 1/8
thof the option shares after six months of continuous service, and the balance will vest in
equal monthly installments of 1/48th over the next 42 months of continuous service, as
described in the applicable Stock Option Agreement.




     A Financing Event means the sale by the Company of its preferred stock to investors resulting
in more than 15% dilution to the Common Shareholders of the Company.



     If the Company is subject to a Change of Control (as defined in the Plan) and you are subject
to a Constructive Termination within 12 months of that Change in Control, then you will be vested
in an additional 50% of your unvested option shares as of the date of your termination of
employment.



     “Constructive Termination” means either (a) that your service is terminated by the Company
without Cause, or (b) that you resign because (i) you have been assigned to duties which reflect a
material adverse change in your authority or responsibility with the Company or any successor,
(ii) the annual rate of your base salary was reduced by the Company, or (iii) the Company has
relocated your principal place of work by a distance of 35 miles or more. “Cause” means (a) any
breach of the Proprietary Information and Inventions Agreement between you and the Company; (b)
conviction of, or a plea of “guilty” or “no contest” to a felony under the laws of the United
States or any State or any crime involving moral turpitude; (c) your participation in any fraud
against the Company; or (d) your intentional damage to any material property of the Company or
other gross misconduct. The foregoing, however, is not an exclusive list of all acts or omissions
that the Company may consider as grounds for discharging any person in its service.



     5. Severance Pay. If, during the first four years of your employment, the Company terminates
your employment for any reason other than Cause or permanent disability, then the Company will
continue to pay your base salary for a period of 3 months following the termination of your
employment. Your base salary will be paid at the rate in effect at the time of the termination of
your employment and in accordance with the Company’s standard payroll procedures. If you elect to
continue your health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) following the termination of your employment, then the Company will pay your monthly
premium under COBRA until the earliest of (a) the close of the 3 month period following the
termination of your employment, (b) the expiration of your health insurance coverage under COBRA
or (c) the date when you receive substantially equivalent health insurance coverage in connection
with new employment or self-employment. However, this Paragraph 5 will not apply unless you (a)
have executed a general release (in a form prescribed by the Company) of all known and unknown
claims that you may then have against the Company or persons affiliated with the Company and (b)
have agreed not to prosecute any legal action or other proceeding based on those claims.



     6. Proprietary Information and Inventions Agreement. Like all Company employees, you will be
required, as a condition to your employment with the Company, to sign the Company’s standard
Employee Proprietary Information and Inventions Agreement, a copy of which is attached hereto as
Exhibit A.



     7. Employment Relationship. Employment with the Company is for no specific period of time.
Your employment with the Company will be “at will,” meaning that either you or the Company may
terminate your employment at any time and for any reason, with or without cause. Any contrary
representations that may have been made to you are superseded by this offer. This is the full and
complete agreement between you and the Company on this term. Although your job duties,
title, compensation and benefits, as well as the Company’s personnel policies and procedures, may
change



 









 





from time to time, the “at will” nature of your employment may only be changed in an
express written agreement signed by you and the CEO of the Company.




     8. Outside Activities. While you render services to the Company, you agree that you will not
engage in any other employment, consulting or other business activity without the written consent
of the Company. While you render services to the Company, you will not assist any person or
entity in competing with the Company, in preparing to compete with the Company or in hiring any
employees or consultants of the Company.



     9. Withholding Taxes. All forms of compensation referred to in this letter agreement are
subject to reduction to reflect applicable withholding and payroll taxes and other deductions
required by law.



     10. Entire Agreement. This letter agreement supersedes and replaces any prior understandings
or agreements, whether oral or written, between you and the Company regarding the subject matter
described in this letter agreement.



     We hope that you find the foregoing terms acceptable. You may indicate your agreement with
these terms and accept this offer by signing and dating both the enclosed duplicate original of
this letter agreement and the enclosed Employee Proprietary Information and Inventions Agreement
and returning them to me. This offer, if not accepted, will expire at the close of business on
February 6, 2004. As required by law, your employment with the Company is contingent upon your
providing legal proof of your identity and authorization to work in the United States. Your
employment is also contingent upon your starting work with the Company on or before March 15,
2004.



     If you have any questions, please call me at 650-226-4700.



	 	 	 	 	 
	 	Very truly yours,




DemandTec, Inc.

 	 
	 	/s/ Mark Culhane
 	 
	 	Mark Culhane 	 
	 	Chief Financial Officer 	 
	 



I have read and accept this employment offer




/s/ James Dai                              

Signature of James Dai




Dated: 2/6/04