Document:

exv10w3

Exhibit 10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT by and between Art Technology Group, Inc., a
Delaware corporation (the “Company”), and Robert D. Burke (the “Executive”) is made as of April
14, 2008 (the “Effective Date”).

     WHEREAS, the Company and the Executive entered into a letter agreement of employment dated
December 4, 2002, which was amended by a letter agreement dated March 28, 2003 (together, the
“Initial Agreement”);

     WHEREAS, the Company and the Executive amended and restated the Executive’s Initial Agreement
as of November 8, 2004 (the “Prior Agreement”);

     WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the
possibility of a change in control of the Company exists and that such possibility, and the
uncertainty and questions which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its stockholders;

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate
steps should be taken to reinforce and encourage the continued employment and dedication of the
Company’s key personnel without distraction from the possibility of a change in control of the
Company and related events and circumstances; and

     WHEREAS, the Company and the Executive desire to amend and restate the Executive’s employment
agreement to include, among other provisions, certain additional change in control protections for
the Executive.

     NOW, THEREFORE, in consideration of the Executive remaining in the Company’s employ and other
good consideration, the receipt and sufficiency of which is acknowledged by both parties, the
Company and the Executive agree as follows:

     1. Key Definitions.

As used herein, the following terms shall have the following respective meanings:

          1.1 “Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (d) below (including an event or occurrence that constitutes a Change in
Control under one of such subsections but is specifically exempted from another such subsection):

               (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (i) the then-outstanding shares of

 

 

common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined
voting power of the then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); or

               (b) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Board (or, if applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board (i) who was a member
of the Board on the date of the execution of this Agreement or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were Continuing Directors at
the time of such nomination or election or whose election to the Board was recommended or endorsed
by at least a majority of the directors who were Continuing Directors at the time of such
nomination or election; or

               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory
share exchange involving the Company or a sale or other disposition of all or substantially all of
the assets of the Company in one or a series of transactions (a “Business Combination”), unless,
immediately following such Business Combination, each of the following two conditions is satisfied:
(i) all or substantially all of the individuals and entities who were the beneficial owners of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50% of Outstanding
Company Common Stock and the combined voting power of the then-outstanding securities entitled to
vote generally in the election of directors, respectively, of the resulting or acquiring
corporation in such Business Combination (which shall include, without limitation, a corporation
which as a result of such transaction owns the Company or substantially all of the Company’s assets
either directly or through one or more subsidiaries) (such resulting or acquiring corporation is
referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, respectively; and (ii) no Person (excluding the
Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by
the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 30% or more
of the then outstanding shares of common stock of the Acquiring Corporation, or of the combined
voting power of the then-outstanding securities of such corporation entitled to vote generally in
the election of directors (except to the extent that such ownership existed prior to the Business
Combination); or

               (d) the approval by the stockholders of the Company of a complete liquidation or dissolution
of the Company.

          1.2 “Change in Control Date” means the first date during the Employment Term (as defined in
Section 3 of the Agreement) on which a Change in Control occurs. Anything in this Agreement to the
contrary notwithstanding, if (a) a Change in Control occurs, (b) the Executive’s employment with
the Company is terminated prior to the date on which the Change in Control occurs, and (c) it is
reasonably demonstrated by the Executive that such termination of employment (i) was at the request
of a third party who has taken steps reasonably calculated to effect a Change in Control or (ii)
otherwise arose in connection with or in anticipation of a

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Change in Control, then for all purposes of this Agreement the “Change in Control Date” shall
mean the date immediately prior to the date of such termination of employment.

          1.3 “Cause” means:

               (a) the Executive’s willful and continued failure to substantially perform his reasonable
assigned duties as an officer of the Company (other than any such failure resulting from incapacity
due to physical or mental illness or any failure after the Executive gives notice of termination
for Good Reason), which failure is not cured within 30 days after a written demand for substantial
performance is received by the Executive from the Board which specifically identifies the manner in
which the Board believes the Executive has not substantially performed the Executive’s duties; or

               (b) the Executive’s commission of a felony (other than through vicarious liability or
involving vehicular offense) which is materially and demonstrably injurious to the Company or a
crime involving fraud or embezzlement against the Company.

     For purposes of this Section 1.3, no act or failure to act by the Executive shall be
considered “willful” unless it is done, or omitted to be done, in bad faith and without reasonable
belief that the Executive’s action or omission was in the best interests of the Company.

          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, of any of the
events or circumstances set forth in clauses (a) through (j) below.

               (a) a change in the Executive’s titles of President and Chief Executive Officer or the
assignment to the Executive of duties inconsistent in any material respect with the Executive’s
positions (including status, offices, titles and reporting requirements), authority or
responsibilities, or any other action or omission by the Company which results in a material
diminution in such positions, authority or responsibilities;

               (b) a reduction in any aspect of the Executive’s compensation as then may be in effect;

               (c) the failure by the Company to (i) continue in effect any material compensation or benefit
plan or program consistent with those afforded to other senior executives of the Company (including
without limitation any life insurance, medical, health and accident or disability plan and any
vacation or automobile program or policy) in which the Executive participates or which is
applicable to the Executive, (ii) continue the Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of the Executive’s participation relative to other
participants, than the basis existing immediately prior to the change, or (iii) award cash bonuses
to the Executive in amounts and in a manner substantially consistent with past practice in light of
the Company’s financial performance;

               (d) any alteration in the Company’s 1996 Amended and Restated Stock Option Plan in any manner
that may exert an adverse impact on the Executive for the grant of restricted stock awards,
restricted stock units or options to purchase shares of common stock of

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the Company (the “Common Stock”) granted to the Executive (the “Stock Awards”) as of the
date of this Agreement;

               (e) a change by the Company in the location at which the Executive performs his principal
duties for the Company to a new location that is both (i) outside a radius of 35 miles from the
Executive’s principal residence immediately prior to that change and (ii) more than 20 miles from
the location at which the Executive performed his principal duties for the Company immediately
prior to the change;

               (f) a material breach of this Agreement by the Company;

               (g) a requirement by the Company that the Executive travel on Company business to a
substantially greater extent than required immediately prior to a Change in Control;

               (h) the failure of the Company to obtain the agreement from any successor to the Company to
assume and agree to perform this Agreement, as required by Section 7.1;

               (i) if, as a result of a Change of Control, the Company no longer has a publicly traded class
of equity securities and/or is no longer subject to reporting requirements under the Securities
Exchange Act of 1934; or

               (j) any failure of the Company to pay or provide to the Executive any portion of the
Executive’s compensation or benefits due under any Company employee benefit plan within seven days
of the date such compensation or benefits are due.

     For purposes of this Agreement, any good faith determination of “Good Reason” made by the
Executive shall be conclusive, binding and final. The Executive’s right to terminate his employment
for Good Reason shall not be affected by his incapacity due to physical or mental illness.

          1.5 “Disability” means the Executive’s absence from the full-time performance of the
Executive’s duties with the Company for 180 consecutive calendar days as a result of incapacity due
to mental or physical illness which is determined to be total and permanent by a physician selected
by the Company or its insurers.

     2. Position and Duties. The Executive will serve as President and Chief Executive Officer of
the Company. The Executive will render such business and professional services in the performance
of the Executive’s duties consistent with the Executive’s position within the Company and as
reasonably assigned to the Executive by the Board. During the Employment Term, the Executive will
serve as a member of the Board.

     3. Employment Term. This Agreement, and all rights and obligations of the parties hereunder,
shall take effect upon the Effective Date and shall continue in effect until the Date of
Termination (as defined below) (the “Employment Term”). The Executive or the Company may terminate
Executive’s employment at any time, with or without Cause, subject to the severance obligations
described in Section 5.2 of the Agreement, except that the Company or Executive

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shall communicate such termination by a written notice to the other party hereto (the “Notice
of Termination”), given in accordance with Section 8 of the Agreement. Any Notice of Termination
shall: (a) indicate the specific termination provision (if any) of this Agreement relied upon by
the party giving such notice; (b) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the Executive’s employment
under the provision so indicated; and (c) specify the Date of Termination. The effective date of an
employment termination (the “Date of Termination”) shall be the close of business on the date
specified in the Notice of Termination (which date may not be less than 15 days or more than 120
days after the date of delivery of such Notice of Termination), in the case of a termination other
than one due to the Executive’s death, or the date of the Executive’s death, as the case may be. In
the event the Company fails to satisfy the requirements of this Section 3 regarding a Notice of
Termination, the purported termination of the Executive’s employment pursuant to such Notice of
Termination shall not be effective for purposes of this Agreement. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively, from asserting any
such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

     4. Compensation.

          4.1 Base Salary. The Company will pay the Executive as compensation for the Executive’s
services hereunder a base salary at the annualized rate of $400,000 (less customary deductions)
through December 31, 2008, such amount to be reviewed annually during the Employment Term by the
Compensation Committee of the Board and approved by the Board upon the recommendation of the
Compensation Committee (the “Base Salary”). The Base Salary will be paid in accordance with the
Company’s normal payroll practices.

          4.2 Annual Bonus. For each fiscal year of the Company (“Fiscal Year”) during the Employment
Term, the Executive will be eligible to receive an annual target bonus that will be no less than
the higher of $300,000 or 50% of the Executive’s then current Base Salary (less customary
deductions) (the “Annual Bonus”). The establishment of the plan that outlines the Executive’s
Annual Bonus (the “Bonus Plan”) and the evaluation of the Executive’s performance under the Bonus
Plan will be approved by the Board upon the recommendation of the Compensation Committee.

          4.3 Equity Compensation. Each year during the Employment Term, the Board, upon recommendation
from the Compensation Committee, shall determine the extent to which the Executive will be granted
additional Stock Awards by the Company from time to time.

          4.4 Employee Benefits. During the Employment Term, the Executive will be entitled to
participate in the employee benefit plans currently and/or hereafter maintained by the Company that
are generally applicable to other senior executives of the Company. Examples of such benefits might
include life, disability, medical, dental and other insurance, as well as a 401(k) plan, tax
benefit and planning services, retirement, cell phone and computer services and the like. For each
calendar year during the Employment Term, Executive will be entitled to 20 days paid vacation in
accordance with Company’s standard vacation policy.

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     5. Additional Benefits.

          5.1 Stock Acceleration. If the Change in Control Date occurs during the Employment Term, then,
effective upon the Change in Control Date, each outstanding Stock Award will be deemed to be fully
vested and will no longer be subject to a right of repurchase by the Company. This Section 5.1
shall supercede any provision of the Stock Award agreements to the contrary, including, but not
limited to, the second paragraph of Section 1(e) of each of the agreements granting an option to
purchase shares of Common Stock (the “Option Agreements”).

          5.2 Severance Prior to Change in Control. When the Employment Term is terminated, the
Executive shall be entitled to the following benefits:

               (a) Termination Without Cause or for Good Reason. If the Executive’s employment with the
Company is terminated by the Company other than for Cause, Disability or death, or by the Executive
for Good Reason, then the Executive shall be entitled to the following benefits:

                    (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the Date
of Termination the sum of (A) the Executive’s Base Salary through the Date of Termination as well
as any Annual Bonus or portion thereof which has been earned for the most recently completed Fiscal
Year, (B) the amount of any compensation previously deferred by the Executive (together with any
accrued interest or earnings thereon) and (C) any accrued vacation pay, in each case to the extent
not previously paid (the sum of the amounts described in clauses (A), (B) and (C) shall be
hereinafter referred to as the “Accrued Obligations”);

                    (ii) for 12 months after the Date of Termination, the Company shall continue to pay to the
Executive his Base Salary distributed at regular pay period intervals, or at the option of the
Company and only if such payment of salary is not deemed to be deferred compensation subject to
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in a lump sum;

                    (iii) for 12 months after the Date of Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, the Company shall continue to
provide health benefits to the Executive and the Executive’s family at least equal to those which
would have been provided to them if the Executive’s employment had not been terminated, in
accordance with the applicable Company employee benefit plans in effect on the Date of Termination;

                    (iv) outplacement services through one or more outside firms of the Company’s choosing, with
such services to extend until the earlier of (A) 12 months following the Date of Termination, or
(ii) the date the Executive secures full time employment; and

                    (v) to the extent not previously paid or provided, the Company shall timely pay or provide to
the Executive any other amounts or benefits required to be paid or provided or which the Executive
is eligible to receive following the Executive’s termination of employment under any plan, program,
policy, practice, contract or agreement of the Company

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and its affiliated companies (such other amounts and benefits shall be hereinafter referred to
as the “Other Benefits”).

Notwithstanding any provision in the Agreement to the contrary, if the Executive becomes employed
by any Competitor within the 12 month period following the Executive’s termination by the Company
other than for Cause or Disability, or by the Executive for Good Reason, the Company shall be
entitled to cease paying the Executive any compensation or benefits under Section 5.2(a)(ii), (iii)
and (iv) above. For purposes of this Agreement, “Competitor” includes, but is not limited to, the
following entities: Broadvision, Demandware, Digital River, Escalate, GSI Commerce, the IBM
Websphere business unit and other companies that the Company may add to this list from time to
time.

               (b) Resignation without Good Reason; Termination for Death or Disability. If the Executive
voluntarily terminates his employment with the Company without Good Reason, or if the Executive’s
employment with the Company is terminated by reason of the Executive’s death or Disability, then
the Company shall (i) pay the Executive (or his estate, if applicable), in a lump sum in cash
within 30 days after the Date of Termination, the Accrued Obligations, and (ii) timely pay or
provide to the Executive the Other Benefits.

               (c) Termination for Cause. If the Company terminates the Executive’s employment with the
Company for Cause, then the Company shall (i) pay the Executive, in a lump sum in cash within 30
days after the Date of Termination, the sum of (A) the Executive’s Base Salary through the Date of
Termination and (B) the amount of any compensation previously deferred by the Executive, in each
case to the extent not previously paid, and (ii) timely pay or provide to the Executive the Other
Benefits.

          5.3 Severance After Change in Control. If, within 18 months following the Change in Control
Date, the employment of the Executive is terminated by the Company other than for Cause, Disability
or death, or by the Executive for Good Reason the Executive shall be entitled to the following
benefits:

               (a) for 18 months after the Date of Termination, the Company shall continue to pay to the
Executive his Base Salary distributed at regular pay period intervals, or at the option of the
Company and only if such payment of salary is not deemed to be deferred compensation subject to
Section 409A of the Code, in a lump sum;

               (b) the Company shall pay a pro rated Annual Bonus in the year the Date of Termination occurs;

               (c) for 18 months after the Date of Termination, or such longer period as may be provided by
the terms of the appropriate plan, program, practice or policy, the Company shall continue to
provide health benefits to the Executive and the Executive’s family at least equal to those which
would have been provided to them if the Executive’s employment had not been terminated, in
accordance with the applicable Company employee benefit plans in effect on the Date of Termination;

               (d) the Company shall pay one and a half times the Executive’s current Annual Bonus, ratably
over an 18 month period; and

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               (e) outplacement services through one or more outside firms of the Company’s choosing, with
such services to extend until the earlier of (A) 18 months following the Date of Termination, or
(ii) the date the Executive secures full time employment;

Notwithstanding any provision in the Agreement to the contrary, if the Executive becomes employed
by any Competitor within an 18 month period following the Executive’s termination by the Company
other than for Cause or Disability, or by the Executive for Good Reason, the Company shall be
entitled to cease paying the Executive any compensation or benefits under Section 5.3(a), (c), (d)
and (e) above.

          5.4 Taxes.

               (a) In the event that the Company undergoes a “Change in Ownership or Control” (as defined
below), the Company shall, within 30 days after each date on which the Executive becomes entitled
to receive (whether or not then due) a Contingent Compensation Payment (as defined below) relating
to such Change in Ownership or Control, determine and notify the Executive (with reasonable detail
regarding the basis for its determinations) (i) which of the payments or benefits due to the
Executive (under this Agreement or otherwise) following such Change in Ownership or Control
constitute Contingent Compensation Payments, (ii) the amount, if any, of the excise tax (the
“Excise Tax”) payable pursuant to Section 4999 of the Code, by the Executive with respect to such
Contingent Compensation Payment and (iii) the amount of the Gross-Up Payment (as defined below) due
to the Executive with respect to such Contingent Compensation Payment. Within 90 days after the due
date of each Contingent Compensation Payment to the Executive, the Company shall pay to the
Executive, in cash, the Gross-Up Payment with respect to such Contingent Compensation Payment.

               (b) For purposes of this Section 5.4, the following terms shall have the following respective
meanings:

                    (i) “Change in Ownership or Control” shall mean a change in the ownership or effective control
of the Company or in the ownership of a substantial portion of the assets of the Company determined
in accordance with Section 280G(b)(2) of the Code.

                    (ii) “Contingent Compensation Payment” shall mean any payment (or benefit) in the nature of
compensation that is made or made available (under this Agreement or otherwise) to a “disqualified
individual” (as defined in Section 280G(c) of the Code) and that is contingent (within the meaning
of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or Control of the Company.

                    (iii) “Gross-Up Payment” shall mean an amount equal to the sum of (i) the amount of the Excise
Tax payable with respect to a Contingent Compensation Payment and (ii) the amount necessary to pay
all additional taxes imposed on (or economically borne by) the Executive (including the Excise
Taxes, state and federal income taxes and all applicable withholding taxes) attributable to the
receipt of such Gross-Up Payment. For purposes of the preceding sentence, all taxes attributable to
the receipt of the Gross-Up Payment shall be computed assuming the application of the maximum tax
rates provided by law.

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               (c) The provisions of this Section 5.4 are intended to apply to any and all payments or
benefits available to the Executive under this Agreement or any other agreement or plan of the
Company under which the Executive receives Contingent Compensation Payments.

               (d) The provisions of this Section 5.4 shall supercede any provision of the Stock Award
agreements to the contrary, including, but not limited to, Section 12(a) of each of the Option
Agreements.

          5.5 Mitigation. The Executive shall not be required to mitigate the amount of any payment or
benefits provided for in this Section 5 by seeking other employment or otherwise. Further, except
as provided in Section 5.2(a), the amount of any payment or benefits provided for in this Section 5
shall not be reduced by any compensation earned by the Executive as a result of employment by
another employer, by retirement benefits, by offset against any amount claimed to be owed by the
Executive to the Company or otherwise.

     6. Section 409A. In the event that the Company determines in good faith that any benefit
payable under this Agreement upon termination of the Executive’s employment is “deferred
compensation” subject to Section 409A of the Code: (i) payment of such benefit shall only be made
in the event that the termination of employment constitutes a “Separation from Service” as defined
below; and (ii) if required by Section 409A, payment of such benefit shall be made 6 months and 1
day after the date of Separation from Service. For purposes of this Section, Separation from
Service shall mean any termination of employment with the Company and any affiliate of the Company
pursuant to which the aggregate level of services provided by the Executive to the Company and any
such affiliate of the Company (whether as an employee or consultant) is permanently reduced to a
level of services that is 49% or less than the level of services provided in the immediately
preceding 12 months. To the extent that payment of any benefit that is required to be delayed
under the provisions of this Section was to have been paid over a period of time, the following
provisions shall apply. All amounts originally scheduled to have been paid during the 6 month and
1 day delay period shall be accrued and, at the conclusion of such delay period, shall be paid in a
single lump sum on the date that is 6 months and 1 day after the Separation from Service. At the
end of such delay period, the originally-scheduled, regular periodic payments shall be paid.

     7. Restrictive Covenants; Non-Competition. The Executive agrees that, for a period of 18
months after the termination of the Executive’s employment with the Company for any reason
whatsoever, the Executive will not own, manage, operate, advise, consult or otherwise render
services to, or be employed by, or be connected with, any business that directly competes with the
Company, including but not limited to, those businesses identified in the Company’s annual report
on Form 10-K filed with the Securities and Exchange Commission.

     8. Settlement of Disputes; Arbitration. All claims by the Executive for benefits under this
Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by
the Board of a claim for benefits under this Agreement shall be delivered to the Executive in
writing and shall set forth the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim. Any disputes shall be resolved by final

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and binding arbitration to be conducted in the Greater Boston, Massachusetts area pursuant to
American Arbitration Association’s rules for the resolution of employment disputes.

     9. Successors.

          9.1 Successor to Company. The Company shall require any person or entity that purchases all or
substantially all of the assets of the Company expressly to assume and agree to perform this
Agreement to the same extent that the Company would be required to perform it if no such purchase
had taken place. As used in this Agreement, “Company” shall mean the Company as defined above and
any successor to its business or assets as aforesaid which assumes and agrees to perform this
Agreement, by operation of law or otherwise.

Successor to Executive. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive should die while any amount would still be
payable to the Executive or his family hereunder if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the Executive’s estate.

     10. Notice. All notices, instructions and other communications given hereunder or in
connection herewith shall be in writing. Any such notice, instruction or communication shall be
sent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case addressed to the
Company, at One Main Street, Cambridge, Massachusetts 02142, and to the Executive at his home (or
to such other address as either the Company or the Executive may have furnished to the other in
writing in accordance herewith). Any such notice, instruction or communication shall be deemed to
have been delivered five business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give any notice, instruction or other communication
hereunder using any other means, but no such notice, instruction or other communication shall be
deemed to have been duly delivered unless and until it actually is received by the party for whom
it is intended.

     11. Miscellaneous.

          11.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’s employment with
the Company shall not be deemed to have terminated solely as a result of the Executive continuing
to be employed by a wholly-owned subsidiary of the Company.

          11.2 Severability. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.

          11.3 Injunctive Relief. The Company and the Executive agree that any breach of this Agreement
by the Company is likely to cause the Executive substantial and irrevocable damage and therefore,
in the event of any such breach, in addition to such other remedies which may be available, the
Executive shall have the right to specific performance and injunctive relief.

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          11.4 Governing Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without
regard to conflicts of law principles.

          11.5 Waivers. No waiver by the Executive at any time of any breach of, or compliance with, any
provision of this Agreement to be performed by the Company shall be deemed a waiver of that or any
other provision at any subsequent time.

          11.6 Counterparts. This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but both of which together shall constitute one and the same instrument.

          11.7 Tax Withholding. Any payments provided for hereunder shall be paid net of any applicable
tax withholding required under federal, state or local law.

          11.8 Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and supersedes and replaces the Prior Agreement,
other than the Option Agreements set forth in Exhibits A and B of the Initial Agreement and the
Stock Award agreements which shall remain in full force and effect (except as specifically modified
by this Agreement), and all other prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or
representative of any party hereto in respect of the subject matter contained herein; and any prior
agreement of the parties hereto in respect of the subject matter contained herein (other than the
Option Agreements and the Stock Award agreements) is hereby terminated and cancelled.

          11.9 Amendments. This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Executive.

[Remainder of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the
Effective Date.

	 	 	 	 	 
	 	ART TECHNOLOGY GROUP, INC. 	 
	 
	 	By:  	     /s/ Patricia O’Neill
 	 
	 	 	Name:  	Patricia O’Neill 	 
	 	 	Title:  	Senior VP, Human Resources 	 
	 
	 	 	 
	 	     /s/ Robert D. Burke
 	 
	 	Robert D. Burkeexv10w4

Exhibit 10.4

CHANGE IN CONTROL AGREEMENT

     This agreement by and between Art Technology Group, Inc., a Delaware corporation (the
“Company”) and [insert name] (the “Executive”) is made as of April 14, 2008 (the “Effective Date”).

     WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the
possibility of a change in control of the Company exists and that such possibility, and the
uncertainty and questions which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its stockholders;

     WHEREAS, the Board of Directors of the Company (the “Board”) has determined that appropriate
steps should be taken to reinforce and encourage the continued employment and dedication of the
Company’s key personnel without distraction from the possibility of a change in control of the
Company and related events and circumstances; and

     WHEREAS, the Executive remains employed by the Company on the first date on which a Change in
Control occurs.

     NOW THEREFORE, in consideration of the Executive remaining in the Company’s employ and other
good consideration, the receipt and sufficiency of which is acknowledged by both parties, the
Company and the Executive agree as follows:

     1. Key Definitions.

As used herein, the following terms shall have the following respective meanings:

     “Accrued Obligations” means, with respect to an Executive, the sum of (a) such Executive’s
base salary earned through the date of termination of such Executive’s employment by the Company,
(b) the amount of any bonus that relates to a period completed prior to such termination date and
that was fully earned by such Executive as of such termination date and (c) the amount of any
compensation previously earned but deferred by such Executive (together with any accrued interest
or earnings thereon) and any accrued but unused vacation pay, in each case to the extent not
previously paid.

     “Cause” means:

	 	a)	 	an Executive’s willful and continued failure to substantially perform
his or her reasonable assigned duties as an employee of the Company (other than any
such failures resulting from incapacity due to physical or mental illness); or
	 
	 	b)	 	an Executive’s willful engagement in illegal conduct or gross
misconduct that is materially injurious to the Company. For purposes of this
definition, no act or

 

 

	 	 	 	failure to act by an Executive shall be considered “willful” unless it is done, or
omitted to be done, in bad faith and without reasonable belief that such Executive’s
action or omission was in the best interests of the Company.

     “Change in Control” means an event or occurrence set forth in any one or more of subsections
(a) through (d) below (including an event or occurrence that constitutes a Change in Control under
one of such subsections but is specifically exempted from another such subsection):

	 	a)	 	the acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
(a “Person”) of beneficial ownership of any capital stock of the Company if, after
such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3
promulgated under such Act) fifty percent (50%) or more of either (1) the
then-outstanding shares of Common Stock (the “Outstanding Common Stock”) or (ii)
the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Voting
Securities”); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control:

	 	(i)	 	any acquisition directly from the Company (excluding an
acquisition pursuant to the exercise, conversion or exchange of any
security exercisable for, convertible into or exchangeable for Common Stock
or voting securities of the Company, unless the Person exercising,
converting or exchanging such security acquired such security directly from
the Company or an underwriter or agent of the Company),
	 
	 	(ii)	 	any acquisition by the Company,
	 
	 	(iii)	 	any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or
	 
	 	(iv)	 	any acquisition by any corporation pursuant to a
transaction that complies with clauses (i) and (ii) of subsection (c)
below;

	 	b)	 	the occurrence of a change in the composition of the Board such that
the Continuing Directors do not constitute a majority of the Board (or, if
applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board:

	 	(i)	 	who was a member of the Board on the effective date of
this Agreement or
	 
	 	(ii)	 	who was nominated or elected subsequent to such date by
at least a majority of the directors who were Continuing Directors at the
time of such nomination or election or whose election to the Board was
recommended or endorsed by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election; provided,

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	 	 	 	however, that there shall be excluded from this clause (ii) any individual
whose initial assumption of office occurred as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents,
by or on behalf of a person other than the Board;

	 	c)	 	the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in one
or a series of transactions (a “Business Combination”), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied:

	 	(i)	 	all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding Common Stock and
Outstanding Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than fifty
percent (50%) of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote
generally in the election of directors, respectively, of the resulting or
acquiring corporation in such Business Combination (which shall include a
corporation that as a result of such transaction owns the Company or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) (such resulting or acquiring corporation is referred to
herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Outstanding Common Stock and Outstanding Voting
Securities, respectively, and
	 
	 	(ii)	 	no Person (excluding the Acquiring Corporation or any
employee benefit plan (or related trust) maintained or sponsored by the
Company or by the Acquiring Corporation) beneficially owns, directly or
indirectly, thirty percent (30%) or more of the then outstanding shares of
common stock of the Acquiring Corporation, or of the combined voting power
of the then-outstanding securities of such corporation entitled to vote
generally in the election of directors (except to the extent that such
ownership existed prior to the Business Combination); or

	 	d)	 	approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.

     “Change in Control Date” means the first date on which a Change in Control occurs. Anything
in this Agreement to the contrary notwithstanding, if (a) a Change in Control occurs, (b) an
Executive’s employment with the Company is terminated prior to the date on which the Change of
Control occurs, and (c) it is reasonably demonstrated by such Executive that such termination of
employment (i) was at the request of a third party who has taken steps reasonably calculated to
effect a Change in Control or (ii) otherwise arose in connection with or in anticipation of a
Change of Control, then for all purposes of this Agreement the “Change in

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Control Date” shall mean, with respect to such Executive, the day immediately preceding such
termination date.

     “Common Stock” means the common stock, $0.01 par value per share, of the Company.

     “General Release” means a release of any and all claims against the Company and related
persons and entities in a form identical to or substantially the same as the release attached as
Appendix A hereto, provided, however, that the Company reserves the right to change any
provision concerning the notice and revocation to conform to legal requirements.

     “Good Reason” means the occurrence, without the Executive’s written consent, of any of the
following: (a) a material reduction in the Executive’s base salary or target bonus, (b) the
relocation of the Executive’s principal place of work to a location more than fifty (50) miles from
the location immediately prior to the Change in Control or (c) a material dimunition in the
Executive’s responsibilities. The Executive’s right to terminate his or her employment for Good
Reason shall not be affected by his incapacity due to physical or mental illness.

     2. Stock Acceleration.

	 	a)	 	Effective on the Change in Control Date (if any): Fifty percent (50%)
of the number of previously unvested shares of Common Stock subject to each
outstanding option, restricted stock unit or restricted stock award held by an
Executive shall become immediately exercisable, subject to the other terms and
conditions on which such interest in such shares was originally granted; and
	 
	 	b)	 	Effective upon the termination of the Executive by the Company without
Cause or termination by the Executive for Good Reason on a date within twelve (12)
months following a Change in Control Date: the Executive will receive an
acceleration of the remaining unvested shares of Common Stock subject to each
outstanding option, restricted stock unit or restricted stock award held by the
Executive so that the shares become immediately exercisable, subject to the other
terms and conditions on which such interest in such shares was originally granted.

     3. Severance.

If, within twelve (12) months following the Change in Control Date, the employment of an Executive
is terminated (A) by the Company without Cause or (B) by the Executive for Good Reason, such
Executive shall be entitled to the following benefits:

	 	a)	 	the Company shall pay all Accrued Obligations as well as a pro-rated
bonus for the year in which the termination occurs to such Executive in a lump sum
in cash within thirty (30) days after such termination date (unless and to the
extent that the Company is required by law to provide any portion thereof earlier);
	 
	 	b)	 	the Company shall continue to pay to such Executive at his or her
annual base salary rate for a twelve (12) month period distributed at regular pay
intervals or, at the option of the Company and only if such payment of salary is
not deemed to be

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	 	 	 	deferred compensation subject to Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), in a lump sum;

	 	c)	 	for twelve (12) months after such termination date, or such longer
period as may be provided by the terms of the plan, the Company shall continue to
provide health care coverage (including any dental and vision coverage) to such
Executive and his or her family, on the same terms as such coverage was provided by
the Company immediately prior to a Change in Control Date, upon receipt of required
forms from the Executive. Any continuation of paid health insurance would be
initiated in accordance with the Comprehensive Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”); and
	 
	 	d)	 	the Company shall pay a bonus equal to the Executive’s target bonus
established for the year in which the termination occurs, ratably over such twelve
(12) month period.

     Notwithstanding any provision in the Agreement to the contrary, if the Executive becomes
employed by any Competitor within the twelve (12) month period following the Executive’s
termination by the Company without Cause or by the Executive for Good Reason, the Company shall be
entitled to cease paying the Executive any compensation or benefits under this Section. For
purposes of this Agreement, “Competitor” includes, but is not limited to, the following entities:
Broadvision, Demandware, Digital River, Escalate, GSI Commerce, the IBM Websphere business unit and
other companies that the Company may add to this list from time to time.

     4. General Release Agreement.

Notwithstanding anything herein to the contrary, the Executive’s entitlement to benefits pursuant
to Sections 2.b) and 3 is conditioned on the Executive’s execution of and the effectiveness of a
General Release on or within thirty (30) days following the Executive’s final day of employment
(after giving effect to any applicable revocation periods in the General Release Agreement).

     5. Section 409A.

In the event that the Company determines in good faith that any benefit payable under this
Agreement upon termination of the Executive’s employment is “deferred compensation” subject to
Section 409A of the Code: (i) payment of such benefit shall only be made in the event that the
termination of employment constitutes a “Separation from Service” as defined below; and (ii) if
required by Section 409A, payment of such benefit shall be made six (6) months and one (1) day
after the date of Separation from Service. For purposes of this Section, Separation from Service
shall mean any termination of employment with the Company and any affiliate of the Company pursuant
to which the aggregate level of services provided by the Executive to the Company and any such
affiliate of the Company (whether as an employee or a consultant) is permanently reduced to a level
of services that is forty-nine percent (49%) or less than the level of services provided in the
immediately preceding twelve (12) months. To the extent that payment of any benefit that is
required to be delayed under the provisions of this Section was to have been paid over a period of
time, the following provisions shall apply. All amounts originally scheduled to

-5-

 

have been paid during the six-month and one day delay period shall be accrued and, at the
conclusions of such delay period, shall be paid in a single lump sum on the date that is six months
and one day after the Separation from Service. At the end of such delay period, the
originally-scheduled, regular periodic payments shall be paid.

     6. At-Will Employment.

This Agreement is not an agreement for the employment of the Executive and shall confer no rights
on the Executive except as herein expressly provided.

     7. Term.

This Agreement shall take effect as of the Effective Date and shall terminate upon the earlier of
(a) the resignation or termination of the Executive for any reason prior to the Change in Control
Date, or (b) the resignation or termination of the Executive after the Change in Control Date for
any reason other than the termination of the Executive, within twelve (12) months following the
Change in Control Date, either (A) by the Company without Cause or (B) by the Executive for Good
Reason.

     8. Withholding.

All payments made by the Company under this Agreement shall be net of any tax or other amounts
required to be withheld by the Company under applicable law. The Executive further agrees that, if
the Company does not withhold an amount sufficient in all respects to satisfy the withholding
obligations of the Company, the Executive will make prompt reimbursement on demand, in cash, for
the amount underwithheld.

     9. Code Section 4999.

Notwithstanding anything in this Agreement to the contrary, in the event that any payment by the
Company to or for the Executive’s benefit, whether paid or payable pursuant to the terms of this
Agreement or otherwise (the “Severance Payments”), would be subject to the excise tax imposed by
Section 4999 of the Code, the following provisions shall apply:

	 	a)	 	If the Severance Payments, reduced by the sum of (i) the Excise Tax
(defined below) and (ii) the total of the federal, state and local income and
employment taxes payable by the Executive on the amount of the Severance Payments
which are in excess of the Threshold Amount (defined below), are greater than or
equal to the Threshold Amount, the Executive shall be entitled to the full benefits
payable under this Agreement.
	 
	 	b)	 	If the Threshold Amount is less than (i) the Severance Payments, but
greater than (ii) the Severance Payments reduced by the sum of (1) the Excise Tax
and (2) the total of the federal, state and local income and employment taxes on
the amount of the Severance Payments which are in excess of the Threshold Amount,
then the benefits payable under this Agreement shall be reduced (but not below
zero) to the extent necessary so that the maximum Severance Payments shall not
exceed the Threshold Amount. To the extent that there is more than one method of

-6-

 

	 	 	 	reducing the payments to bring them within the Threshold Amount, the Executive shall
determine which method shall be followed; provided, however, that if the Executive
fails to make such determination within forty-five (45) days after the delivery by
the Company to the Executive of written notice of the need for such reduction, the
Company may determine the amount of such reduction in its sole discretion.

     For the purposes of this Section, “Threshold Amount” shall mean three (3) times the
Executive’s “base amount” within the meaning of Section 280G(b)(3) of the Code and the regulations
promulgated thereunder less one dollar ($1.00), and “Excise Tax” shall mean the excise tax imposed
by Section 4999 of the Code, or any interest or penalties incurred by the Executive with respect to
such excise tax.

     10. Restrictive Covenant; Non-Competition.

The Executive agrees that, for a period of twelve (12) months after the termination of the
Executive’s employment with the Company for any reason whatsoever, the Executive will not own,
manage, operate, advise, consult or otherwise render services to, or be employed by, or be
connected with, any business that directly competes with the Company, including but not limited to,
those business identified in the Company’s annual report on Form 10-K filed with the Securities and
Exchange Commission.

     11. Settlements of Disputes; Arbitration.

All claims by the Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this
Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a
reasonable opportunity to the Executive for a review of the decision denying a claim. Any disputes
shall be resolved by final and binding arbitration to be conducted in the Greater Boston,
Massachusetts area pursuant to the American Arbitration Association’s rules for the resolution of
employment disputes.

     12. Successors.

	 	a)	 	The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company expressly to assume and agree to perform this
Agreement to the same extent that the Company would be required to perform it if no
such succession had taken place. For purposes of this subsection, “Company” shall
mean the Company as defined above and any successor to its business or assets as
aforesaid which assumes and agrees to perform this Agreement, by operation of law
or otherwise.
	 
	 	b)	 	This Agreement shall inure to the benefit of and be enforceable by the
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If an Executive should die
while any amount would still be payable to the Executive or his or her family

-7-

 

	 	 	 	hereunder if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the Executive’s estate.

     13. Notice.

All notices, instructions and other communications given hereunder or in connection herewith shall
be in writing. Any such notice, instruction or communication shall be sent either (i) by
registered or certified mail, return receipt requested, postage prepaid, or (ii) prepaid via a
reputable nationwide overnight courier service, in each case addressed to the Company, at One Main
Street, Cambridge, Massachusetts 02142, and to the Executive at his or her home (or to such other
address as either the Company or the Executive may have furnished to the other in writing in
accordance herewith). Any such notice, instruction or communication shall be deemed to have been
delivered five business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give notice, instruction or other communication
hereunder using any other means, but no such notice, instruction or other communication shall be
deemed to have been duly delivered unless and until it actually is received by the party for whom
it is intended.

     14. Miscellaneous.

	 	a)	 	Employment by Subsidiary. For purposes of this Agreement, the
Executive’s employment with the Company shall not be deemed to have terminated
solely as a result of the Executive continuing to be employed by a wholly-owned
subsidiary of the Company.
	 
	 	b)	 	Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
	 
	 	c)	 	Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of The
Commonwealth of Massachusetts, without regard to conflicts of laws principles.
	 
	 	d)	 	Waivers. No waiver by the Executive at any time of any breach of, or
compliance with, any provision of this Agreement to be performed by the Company
shall be deemed a waiver of that or any other provision at any subsequent time.
	 
	 	e)	 	Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original but both of which together shall constitute
one and the same instrument.
	 
	 	f)	 	Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein.

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	 	g)	 	Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.

[Remainder of page intentionally left blank]

-9-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal as of the
Effective Date.

	 	 	 	 	 
	 	ART TECHNOLOGY GROUP, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 
	 	 

[Insert Name]

 	 
	 

[Signature Page to Change in Control Agreement]

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