Document:

carg-ex102_54.htm

Exhibit 10.2

CARGURUS, INC.

Two Canal Park

Cambridge, MA 02141

December 29, 2015

Sarah Amory Welch

[ADDRESS]

Dear Sarah,

We are pleased to extend you this offer of full-time employment to become the Senior Vice President-Marketing (“SVPM”) at CarGurus, Inc., a Delaware corporation (the “Company”). This offer is contingent upon your successful completion of the Company’s background screening process, which will require you to sign the Electronic Disclosure and Authorization Form with our provider: Talentwise. This offer, which will remain in effect until the date that is seven (7) days from the date listed above, can be accepted by countersigned copy to me. The purpose of this letter (this “Agreement”) is to summarize the key terms of your employment with the Company, should you accept our offer.

Start Date

We are excited about the contributions that we expect you will make to the success of the Company, and would like your employment to begin as soon as possible. Accordingly, we and you mutually agree to a start date of February 22, 2016 (“Start Date”).

Duties and Extent of Service

As a SVPM you will be a member of the Executive Team. You will have responsibility for performing those duties as are customary for, and are consistent with, such position, as well as those duties as the Chief Executive Officer (“CEO”) may from time to time designate. Except for vacations and absences due to temporary illness, you will be expected to devote your full time and effort to the business and affairs of the Company.

Compensation

	
 
	
(a)
	
Base Salary

In consideration of your employment with the Company, the Company will pay you a base salary of Two Hundred Fifty Thousand Dollars ($250,000) per year, such payments to be a made as customarily disbursed reviewed for adjustment on an annual basis.

 

 

	
 
	
(b)
	
Sign-on Bonus

In consideration of your employment with the Company, the Company will pay you a one-time cash sign-on bonus equal to Thirty-Seven Thousand Five Hundred Dollars ($37,500) (“Sign-On Bonus”). The Sign-On Bonus will paid to you within two weeks following the Start Date, provided that you are employed on the date of payment. This Sign-On Bonus will be subject to recoupment in whole if your employment does not continue uninterrupted through three months following your Start Date and will be subject to partial, pro rata recoupment based on the number of months of service through nine months following such three-month period; provided however, that: (i) there shall be no such recoupment during either period if your employment does not continue during such periods solely because you are terminated by the Company without Cause (as defined below); and (ii) there shall be full recoupment also during the nine-month period described above if your employment does not continue during that period because you are terminated for Cause.

	
 
	
(c)
	
Annual Discretionary Bonus

You will also be eligible for an annual discretionary bonus. Your target discretionary bonus will be Seventy-Five Thousand Dollars ($75,000), but the actual amount will be subject to the achievement of the Company and individual performance metrics, as determined by the CEO each year and communicated to you prior to the end of the first quarter of the fiscal year with respect to which such bonus pertains (“Annual Discretionary Bonus”). Notwithstanding the foregoing, any Annual Discretionary Bonus for fiscal year 2016 will be multiplied by a fraction, the numerator of which is the number of days during which you were employed by the Company during fiscal year 2016 and the denominator of which is 365.

	
 
	
(d)
	
Employee Benefits

You will be eligible to participate from time to time in all employee benefits made available to employees of the Company, subject to the terms of such benefit plans or policies. No representation is made, however, that any specific employee benefits now available will continue or that any other employee benefits will be made available. Notwithstanding the foregoing, the following benefits will in any event, be available to you, effective as of the Start Date.

	
 
	
(i)
	
Health Insurance.  If elected by you, you may participate in the Company’s health insurance program, and the Company will pay that portion of the premium for you, on a basis and pursuant to a program, substantially the same as that offered to other employees of the Company.

	
 
	
(ii)
	
Vacations.  You will be entitled to three week’s paid vacation annually at such reasonable times as you and the Company may determine, subject to the Company’s vacation and paid time off policies.

	
 
	
(iii)
	
Expense Reimbursement.  The Company will reimburse you for all ordinary and necessary expenses incurred on behalf of the Company and in accordance with its reimbursement policy.

 

 

	
 
	
(e)
	
RSU Grant

	
 
	
(i)
	
General.  As the SVPM, the Company is prepared to offer to you the opportunity to acquire an equity interest in the Company upon the terms and conditions set forth below. Subject to the approval of the Company’s Board of Directors, the Company will grant you 44,000 restricted stock units (the “RSU”), subject in all respects to the terms and conditions of the Company’s Amended and Restated 2015 Equity Incentive Plan (the “Plan”) and the RSU grant agreement evidencing the terms and conditions of the grant.

	
 
	
(ii)
	
Vesting Conditions.  The RSU will have a seven year term and will be subject to service-based vesting and liquidity event-based vesting. The RSU will not vest (in whole or in part) if only one (or id neither) of the vesting requirements is satisfied on or before the seventh anniversary of the date of grant. If both the service-based requirement and the event-based requirement are satisfied on a before the seventh anniversary of the date of grant, the vesting is a follows: four year vesting during your employment with the Company, with the first 25% vesting on the first anniversary of the Start Date and an additional 6.25% vesting at the end of each three month period thereafter until the fourth anniversary of the Start Date. If a Transaction (as defined in the Plan) occurs during your employment and before the fourth anniversary of the Start Date, 50% of the portion of the RSU that is not vested as to the service-based vesting condition will accelerate and become fully vested. The liquidity event-based vesting is as follows: the first to occur of a Public Offering (as defined in the Plan) or the consummation of a Transaction. The liquidity event must occur within seven years following the grant date. If the first to occur during the seven-year term is a public Offering, the RSU will be settled on the 180th day following a Public Offering.

	
 
	
(iii)
	
Termination of Employment. If your employment is terminated by the Company without Cause (as defined below) or by you for any reason during the seven-year term of the RSU and before the liquidity event occurs, you will retain any portion of the RSU that has vested as to the service -based vesting condition and any portion of the RSU that has not vested as to the service-based vesting condition, will be forfeited upon termination of employment. The vested RSU may vest as to the liquidity event-based vesting condition following termination of employment other than for Cause to the extent the liquidity event occurs before the end of the seven-year term. If your employment is terminated by the Company for Cause during the seven-year term, any portion of the RSU, whether vested, or unvested, will be forfeited.

	
 
	
(iv)
	
Definition of Cause.  For purposes of this Agreement and the RSU, “Cause” means a finding by the Board of Directors that you have (A) materially breached this Agreement, which breach has not been remedied by you within 30 days after written notice has been provided to you of such breach, (B) engaged in disloyalty to the Company, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (C) disclosed trade secrets or confidential information of the Company to persons not entitled to receive such information, (D) breached the Nondisclosure, Developments and Non-Competition Agreement, or (E) engaged in such other behavior detrimental to the interests of the Company as the Board of Directors reasonably determines.

 

 

Proprietary Information and Inventions

Prior to commencing your employment with the Company, you agree to sign a copy of the Company’s standard Nondisclosure, Development and Non-Competition Agreement, a copy of which is attached as Exhibit A hereto. By signing below, you represent that you are free to enter into this Agreement and the Nondisclosure, Developments and Non-Competition Agreement and carry out the obligations hereunder and thereunder without any conflict with any prior agreements to which you are a party.

Termination of Employment

You acknowledge that the employment relationship between the Company and you is at-will, meaning that the employment relationship may be terminated by the Company or you for any reason or for no reason. However, the Company and you agree to make reasonable efforts to provide the other party at least 30 days’ written notice prior to termination of the employment relationship. You acknowledge that, in connection with any termination of your employment with the Company, you will assist the company in its efforts to find a new SVPM and will provide such transitional assistance as the Company may reasonably require. In connection with the foregoing, the Company agrees that should your employment be terminated, you will receive as your sole and only payments on account of such termination (and subject to execution of appropriate documentation to this effect) accrued compensation and benefits through the date of termination. For the avoidance of doubt, if you terminate your employment for any reason during the seven-year term of the RSU, you will retain the portion of the RSU that vested as to the service-based vesting conditions as of your termination of employment, as described in subsection (e) (iii) in the “Compensation” section above. If you are a participant in the Company’s health plans at the time of termination of employment, COBRA rights will be available to you.

Section 409 A

This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, and its corresponding regulations (“Section 409A”), or an exemption, and payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A, to the extent applicable. Severance benefits under the Agreement are intended to be exempt from Section 409A under the “short-term deferral” exception. For purposed of Section 409A of the Code, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” within the meaning of such term under section 409A and each payment made under this Agreement shall be treated as a separate payment. In no event shall you, directly or indirectly, designate the calendar year of payment. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A. To the extent you are a “specified employee” for purposes of Section 409A and it is necessary to postpone the commencement of any severance payments otherwise payable pursuant to this Agreement as a result of such separation from service to prevent any accelerated or additional tax under Section 409A, then the Company will postpone the commencement of the payment of any such payments hereunder (without any reduction in such payments ultimately paid or provided to you) that are not otherwise exempt from Section 409A, until the first payroll date that occurs after the date that is six months following the your separation from service with the Company. If you die during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A shall be paid to the personal representative of your estate within 60 days after the date of your death.

 

 

Governing Law and Jurisdiction

This Agreement shall be governed by and construed in accordance with the internal substantive laws of the Commonwealth of Massachusetts. The Company and you hereby expressly consent and agree that any dispute, controversy, legal action or other proceeding that arises from, concerns or touches this Agreements shall be brought in either the Superior Court Of Massachusetts or the United States District Court for the District of Massachusetts. The Company and you herby acknowledge that said courts have sole and exclusive jurisdiction over any such dispute or controversy, and that the Company and you hereby waive any objection to personal jurisdiction or venue in these courts, and waive any right to jury trial.

Entire Agreement; Amendment

This Agreement (together with the Nondisclosure, Developments and Non-Competition Agreement), the RSU grant agreement and the Plan set forth the sole and entire agreement and understanding between the Company and you with respect to the specific matters contemplated and addressed hereby and thereby. No prior agreements, whether written or oral, shall be construed to change or affect the operation of this Agreement or the other agreements contemplated hereby in accordance with their terms, and any provisions of any such prior agreements which conflicts with or contradicts any provisions of this Agreement or the other agreements contemplated hereby is hereby revoked and superseded.

This Agreement may be amended or terminated only by a written instrument executed both by you and the Company, acting through its Board of Directors.

We are excited to have you on board as the SVPM. Please acknowledge your acceptance of this offer and the terms of this Agreement by signing below and returning a copy to me.

 

	
	
Sincerely,

	

 

	
	
I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this Agreement prior to signing hereunder.

	
Agreed to and Accepted:

	
/s/ Sarah Welch 

 

		
	
Date:
	
1/7/16carg-ex103_51.htm

 

Exhibit 10.3

FIRST AMENDMENT TO LEASE

This FIRST AMENDMENT TO LEASE (“Amendment”), is made as of the 12th day of June, 2020 (“Effective Date”) by and between S&A P-12 PROPERTY LLC, a Delaware limited liability company (“Landlord”) and CARGURUS, INC., a Delaware corporation (“Tenant”).

WITNESSETH:

Reference is hereby made to the following facts:

A.Landlord and Tenant are parties to that certain Lease dated December 19, 2019 (the “Existing Lease”) for 273,595 square feet on the tenth (10th) through twentieth (20th) floors of that certain building to be located at 1001 Boylston Street, Boston, Massachusetts (as more particularly described in the Existing Lease).  All capitalized words and phrases not otherwise defined herein shall have the meanings ascribed to them in the Existing Lease. The Existing Lease, as modified and amended by this Amendment, is referred to herein as the “Lease”.

B.In accordance with the provisions of Article 18 of the Existing Lease, Tenant has delivered an Adjustment Notice and exercised the Initial Premises Adjustment to contract the Premises by removing the tenth (10th) and eleventh (11th) floors of the Building from the Prime Premises (as defined in Section 18.1 of the Existing Lease, the “Adjustment Premises”).  Accordingly, Landlord and Tenant have agreed to enter into this Amendment to confirm the exercise of the Initial Premises Adjustment and to otherwise modify and amend the Existing Lease, all in the manner hereinafter set forth.

NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt, sufficiency and delivery of which are hereby acknowledged, the parties agree that the Lease is hereby amended as follows:

	
1.
	
Premises.  The definition of “Premises” in Section 1.2 of the Existing Lease is hereby amended by deleting the reference to the number “10” and replacing said reference with the number “12”.

	
2.
	
Rentable Floor Area of the Premises.   The definition of “Rentable Floor Area of the Premises in Section 1.2 of the Existing Lease is hereby deleted in its entirety and replaced with “Agreed to be 225,428 square feet.”

1

 

	
3.
	
Annual Fixed Rent.  The rent table set forth in clause (a) of the definition of “Annual Fixed Rent” in Section 1.2 of the Existing Lease is hereby deleted in its entirety and replaced with the following:

 

	
Period of Time
	
Annual Fixed Rent
	
Monthly Fixed Rent

	
Commencement Date through the day immediately preceding the Fixed Rent Commencement Date
	
$0
	
$0

	
Fixed Rent Commencement Date though the end of Rent Year 1
	
$14,641,548.60* 
	
$1,220,129.05 

	
Rent Year 2
	
$14,934,605.00 
	
$1,244,550.42 

	
Rent Year 3
	
$15,227,661.40 
	
$1,268,971.78 

	
Rent Year 4
	
$15,520,717.80 
	
$1,293,393.15 

	
Rent Year 5
	
$15,813,774.20 
	
$1,317,814.52 

	
Rent Year 6
	
$16,106,830.60 
	
$1,342,235.88 

	
Rent Year 7
	
$16,399,887.00 
	
$1,366,657.25 

	
Rent Year 8
	
$16,692,943.40 
	
$1,391,078.62 

	
Rent Year 9
	
$16,985,999.80 
	
$1,415,499.98 

	
Rent Year 10
	
$17,279,056.20 
	
$1,439,921.35 

	
Rent Year 11
	
$17,572,112.60 
	
$1,464,342.72 

	
Rent Year 12
	
$17,865,169.00 
	
$1,488,764.08 

	
Rent Year 13
	
$18,158,225.40 
	
$1,513,185.45 

	
Rent Year 14
	
$18,451,281.80 
	
$1,537,606.82 

	
Rent Year 15 
	
$18,744,338.20 
	
$1,562,028.18 

*Annualized

 

	
4.
	
Maximum Amount of Landlord’s Allowance.  The definition of “Maximum Amount of Landlord’s Allowance” in Section 1.2 of the Existing Lease is hereby amended by deleting the reference to “$35,567,350.00” and replacing said reference with “$36,305,640.00.”

	
5.
	
Parking.  Sections 10.1(a) and 10.1(c) of the Existing Lease are hereby amended by deleting all references to the number “ninety-one (91)” and replacing said references with the number “seventy-five (75)” in each instance.

	
6.
	
Outside Construction Commencement Date.  Paragraph (ii) of Section II.C. of the Work Letter attached as Exhibit 2.1 of the Lease is hereby deleted in its entirely and replaced with the following:

“Notwithstanding the foregoing, if for any reason the Construction Commencement Date shall not have occurred on or before July 13, 2020 (the “Outside Construction Commencement Date”), then, as Tenant’s sole and exclusive remedy on account thereof, the Lease shall terminate effective on the date immediately following the Outside Construction Commencement Date.  If this Lease so terminates as set forth in this paragraph, the Lease shall be null and void and of no further force and effect, and except as expressly and specifically set forth herein, the parties shall have no further liabilities, responsibilities or obligations hereunder.”

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4852-5482-1308, v. 3

 

	
7.
	
Scheduled Delivery Date.  Section II.D(i) of the Work Letter attached as Exhibit 2.1 of the Lease is hereby amended by deleting the reference to “March 15, 2022” and replacing said reference with “June 15, 2022”.

	
8.
	
Third Outside Delivery Date.  Paragraph (iii) of Section II.D. of the Work Letter attached as Exhibit 2.1 of the Lease is hereby deleted in its entirely and replaced with the following:

“The “Third Outside Delivery Date” shall mean the Initial Third Outside Delivery Date, the First Extended Third Outside Delivery Date, or the Second Extended Outside Delivery Date, as applicable, in each case as the same shall be extended for delays arising out of or resulting from Force Majeure, such Force Majeure not to exceed ninety (90) days in the aggregate.  The “Initial Third Outside Delivery Date” shall mean the date one hundred eighty (180) days after the Scheduled Delivery Date.  The “First Extended Third Outside Delivery Date” shall mean the date which occurs thirty (30) days after the Initial Third Outside Delivery Date.  The “Second Extended Third Outside Delivery Date” shall mean the date which occurs thirty (30) days after the First Extended Third Outside Delivery Date.  Notwithstanding the foregoing, if for any reason the Delivery Date shall not have occurred on or before the Third Outside Delivery Date, then Tenant may elect, as its sole and exclusive remedy on account thereof, to terminate the Lease by giving Landlord a Termination Notice, which Termination Notice may be given not earlier than the Third Outside Delivery Date and not later than thirty (30) days following the Third Outside Delivery Date, with such termination to be effective on the date which is thirty (30) days after the delivery of such Termination Notice; provided however, Landlord shall have the right to vitiate Tenant’s said termination of the Lease if, by the thirtieth (30th) day immediately following delivery of Tenant’s Termination Notice, Landlord notifies Tenant that the Delivery Date has occurred.  If Tenant validly terminates the Lease in accordance with the foregoing provisions, the Lease shall be null and void and of no further force and effect, and except as expressly and specifically set forth herein, the parties shall have no further liabilities, responsibilities or obligations hereunder.    

Without limiting the foregoing, Landlord may elect, in Landlord’s sole and absolute discretion, upon written notice delivered to Tenant not later than ten (10) days prior to the Initial Third Outside Delivery Date (the “First Outside Delivery Date Extension Notice”), to extend the Initial Third Outside Delivery Date to the First Extended Third Outside Delivery Date.  In addition, Landlord may elect, in Landlord’s sole and absolute discretion, upon written notice delivered to Tenant not later than ten (10) days prior to the First Extended Third Outside Delivery Date (the “Second Outside Delivery Date Extension Notice”), to extend the First Extended Third Outside Delivery Date to the Second Extended Third Outside Delivery Date.  In the event that Landlord delivers a First Outside Delivery Date Extension Notice, Landlord shall be obligated to pay to Tenant an additional 

3

 

4852-5482-1308, v. 3

 

tenant improvement allowance (the “Delivery Date Extension Allowance”) of Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00). In the event that Landlord delivers a Second Outside Delivery Date Extension Notice, the amount of the Delivery Date Extension Allowance shall be increased by an additional Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00).  The Delivery Date Extension Allowance shall be payable to Tenant for Permitted Costs of Tenant’s Work in accordance with the terms and conditions of Section III below, after completion of Tenant’s Work and delivery to Landlord for the items required under Section III(E) in connection with the final Requisition.”   

	
9.
	
Holdover Compensation.  Section VI.B of the Work Letter attached as Exhibit 2.1 of the Lease is hereby amended by deleting the reference to “the Scheduled Delivery Date” and replacing said reference with “March 15, 2022”.

	
10.
	
Additional Allowance.  Section II.F of the Work Letter attached as Exhibit 2.1 of the Lease is hereby deleted in its entirety and shall be of no further force or effect.  All references in the Lease to Additional Allowance and Section II.F of the Work Letter attached as Exhibit 2.1 of the Lease are hereby deleted in their entirety and shall be of no further force or effect.

	
11.
	
Deleted and Inapplicable Lease Provisions.  The following sections and provisions of the Existing Lease are hereby deleted in the entirety, and shall be null and void, and of no further force or effect: Article XVIII of the Existing Lease and Pages 1 and 2 of Exhibit 1.2-1 attached to the Existing Lease.

	
12.
	
Miscellaneous.  Tenant hereby represents and warrants to Landlord that the execution and delivery of this Amendment by Tenant has been duly authorized by all requisite corporate action, and Landlord hereby represents and warrants to Tenant that the execution and delivery of this Amendment by Landlord has been duly authorized by all requisite limited liability company action.  This Amendment shall not be binding upon Landlord or Tenant unless and until Landlord and Tenant each shall have executed and delivered a fully executed copy of this Amendment to the other.  Except as expressly and specifically set forth in this Amendment, the Existing Lease is hereby ratified and confirmed, and all of the terms, covenants, agreements and provisions of the Existing Lease shall remain unaltered and unmodified and in full force and effect.  

	
13.
	
Counterparts. This Amendment may be executed in any number of counterparts and by each of the undersigned on separate counterparts, which counterparts taken together shall constitute one and the same instrument.  This Amendment may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature.  Without limitation, in addition to electronically produced signatures, “electronic signature” shall include faxed versions of an original signature or electronically scanned and transmitted versions (e.g., via pdf) of an original signature.

[Signature Page Follows]

4

 

4852-5482-1308, v. 3

 

EXECUTED as an instrument under seal as of the date first above-written.

 

	
LANDLORD:

	
 

	
S&A P-12 PROPERTY LLC, a Delaware

	
limited liability company

	
 

	
By: P-12 Vertical Investment LLC, a

	
Delaware limited liability company, its

	
Manager

	
 

	
By: J-S P-12 MANAGING MEMBER LLC,

	
a Delaware limited liability company, its

	
Managing Member

	
 

	
By: S&A P-12 HOLDINGS LLC, a

	
Delaware limited liability company, its

	
Managing Member

	
 

	
By: S&A GP LLC, a Massachusetts limited

	
liability company, its Manager

	
 

	
By:
	
/s/ Steven B. Samuels

	
Name:
	
Steven B. Samuels

	
Title:
	
Manager

	
Hereunto duly authorized

	
 

	
TENANT:

	
 

	
CARGURUS, INC.,

	
a Delaware corporation

	
 

	
By:
	
/s/ Jason Trevisan

	
 
	
Name:
	
Jason Trevisan

	
 
	
Title:
	
CFO

	
 
	
 
	
Hereunto duly authorized

 

5

 

4852-5482-1308, v. 3

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