Amended and Restated Promissory Note between Clark Kokich and Avenue A, Inc.

Summary

This agreement is a promissory note in which Clark Kokich promises to repay Avenue A, Inc. $54,959 plus interest, unless certain employment conditions are met. If Mr. Kokich remains employed with the company on specified dates, portions of the debt and interest will be forgiven, and the company will cover related federal taxes. If he resigns or is terminated for cause, the full amount becomes immediately due. If he is terminated without cause, becomes disabled, or the company is sold or closes, the debt is forgiven. The agreement is governed by Washington law.

EX-10.2 4 dex102.txt AMENDED AND RESTATED PROMISSORY NOTE-C. KOKICH EXHIBIT 10.2 AMENDED AND RESTATED PROMISSORY NOTE $54,959.00 (U.S.) Seattle, Washington Original Issuance Date: October 8, 1999 Amended and Restated: July 16, 2001 For value received, the undersigned, Clark Kokich, promises to pay on demand to the order of Avenue A, Inc., a Washington corporation (the "Company"), the principal sum of Fifty Four Thousand Nine Hundred Fifty Nine Dollars ($54,959.00) with interest compounded annually from the original issuance date (the "Original Issuance Date") at a rate equal to the greater of (i) the applicable federal funds rate as determined on the Original Issuance Date and redetermined each year on the anniversary date of the Original Issuance Date, or (ii) the lowest rate necessary to avoid the imputation of interest under the Internal Revenue Code of 1986, as amended, from the Issuance Date on the unpaid balance until this Amended and Restated Promissory Note (this "Note"), including the interest thereon, is paid in full or forgiven in accordance with the terms hereof, such interest to be paid annually on each anniversary date of this Note. If payment of any sum is not made within ten days after demand, then this Note shall be in default, and, at the option of the holder hereof, without prior notice, the principal sum and interest shall bear interest from such default until paid at the rate of twelve percent (12%), compounded quarterly, or the maximum rate permitted by law, whichever is less. Principal and interest are payable in lawful money of the United States of America at such place as the holder may designate. All payments of principal and interest hereunder shall be applied first against accrued interest and then against principal. The undersigned shall have the right, upon payment of all accrued interest to the date of payment, to pre-pay at any time in advance of maturity, without premium or penalty, all or any part of the outstanding principal amount of this Note. One-third of the principal balance outstanding on January 1, 2002 and all accrued interest as of such date shall be forgiven on such date if the undersigned continues to be employed by the Company as of January 1, 2002, one-half of the principal balance outstanding on January 1, 2003 and all accrued interest as of such date shall be forgiven on such date if the undersigned continues to be employed by the Company as of January 1, 2003, and any remaining principal amount and accrued interest shall be forgiven on January 1, 2004 if the undersigned continues to be employed by the Company as of January 1, 2004. Promptly after each date on which an amount hereunder is forgiven in accordance with the preceding sentence, the Company shall provide to the undersigned, on a "grossed up" basis, an amount equal to the amount of applicable federal taxes that the undersigned shall owe in respect of any amounts forgiven on such date (including any taxes on "gross up" payments). Such amounts shall be deposited into an appropriate withholding account on behalf of the undersigned. If the undersigned voluntarily resigns or is terminated for "Cause" (as that term is defined in Exhibit A hereto ("Cause")), the outstanding principal amount and accrued interest shall become immediately due and payable without notice. If (a) the undersigned is terminated without "Cause," (b) the undersigned is subject to a "Total Disability" (as that term is defined in Exhibit A hereto), (c) a "Corporate Transaction" (as that term is defined in Exhibit A hereto) occurs, or (d) the Company winds up its operations and ceases doing business, then in any such case any outstanding principal amount plus accrued interest shall be forgiven and the Company shall promptly thereafter provide to the undersigned, on a "grossed up" basis, an amount equal to the amount of applicable federal taxes that the undersigned shall owe in respect of any amounts so forgiven (including any taxes on "gross up" payments). Such amounts shall be deposited into an appropriate withholding account on behalf of the undersigned. If suit is brought on this Note, or if it is placed in the hands of an attorney for collection, after any default in any payment, the undersigned promises and agrees to pay all costs of collection, including attorneys' fees, incurred thereby. Such costs of collection include, without limitation, any attorneys' fees and costs incurred by the holder in a bankruptcy case or proceeding in which the undersigned is a debtor. This Note is with full recourse against the undersigned. This Note is to be construed in all respects and enforced according to the laws of the State of Washington, without regard for any choice of law rules that might be asserted to subject this Note to the laws of any other jurisdiction. Presentment, notice of dishonor and protest are waived by the undersigned. -2- This Note shall be fully binding on and inure to the benefit of the successors, heirs, legal representatives and assigns of the parties hereto. This Note supercedes and replaces in its entirety the promissory note issued by the Company to the undersigned on October 8, 1999. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. Signature: /s/ Clark Kokich ------------------------ Clark Kokich Agreed to and accepted this 8/th/ day of August, 2001: AVENUE A, INC. /s/ Jeffrey J. Miller - ------------------------------------------------- By: Jeffrey J. Miller Its: Sr. Vice President, Legal & Privacy Affairs -3- Exhibit A 1. The definition of "Cause" shall include, without limitation, the occurrence of one or more of the following events: (a) willful misconduct, insubordination, or dishonesty in the performance of the undersigned's duties or other knowing and material violation of the Company's or a Successor Company's policies and procedures in effect from time to time which results in a material adverse effect on the Company or a Successor Company (as defined below); (b) willful actions (or intentional failures to act) in bad faith with respect to the Company or a Successor Company that materially impair the Company's or a Successor Company's business, goodwill or reputation; (c) conviction of a felony involving an act of dishonesty, moral turpitude, deceit or fraud, or the commission of acts that could reasonably be expected to result in such a conviction; (d) current use by the undersigned of illegal substances; or (e) any material willful violation of a confidentiality agreement with the Company. "Successor Company" means any of (i) any corporation that acquires all or substantially all of the assets of the Company in a "Change of Control" described in clause (a) of the definition of "Change of Control" below or (ii) a successor corporation to the Company (or parent corporation thereof) resulting from a "Change in Control" of the Company described in clause (b) of the definition of "Change of Control" below. "Change of Control" means: (a) the sale or other disposition of all or substantially all of the Company's assets, other than to a corporation with respect to which immediately following such sale or disposition (i) securities representing more than sixty percent (60%) of the combined voting power the capital stock of such corporation are then beneficially owned, directly or indirectly, by all or substantially all of the beneficial owners of securities representing the combined voting power of the capital stock of the Company (the "Company Voting Securities") immediately prior to such sale or disposition in substantially the same proportion as their ownership, immediately prior to such sale or other disposition, of Company Voting Securities, (ii) no Person (as defined below) (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, securities representing 33% or more of Company Voting Securities) beneficially owns, directly or indirectly, securities representing 33% or more of the combined voting power of the capital stock of such corporation; and (iii) at least a majority of the members of the board of directors of such corporation were approved by a majority of the Incumbent Directors (as defined below) at the time such transaction was initially approved by the Company; or (b) the reorganization, merger or consolidation of the Company with any other corporation or entity, in each case unless immediately following such reorganization, merger or consolidation (i) securities representing more than 60% of the combined voting power of the capital stock of the corporation resulting from such reorganization, merger or consolidation are then beneficially owned, directly, or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of Company Voting Securities immediately prior to such reorganization, merger or consolidation in substantially the same proportion as their ownership, immediately prior to such reorganization, merger or consolidation, of Company Voting Securities, (B) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, securities representing 33% or more of Company Voting Securities) beneficially owns, directly or indirectly, securities representing 33% or more of the combined voting power of the corporation resulting from such reorganization, merger or consolidation, and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were Incumbent Directors at the time that the agreement for such reorganization, merger or consolidation was initially executed. An "Incumbent Director" is a member of the Company's Board of Directors (the "Board") who has been either (i) nominated by a majority of the directors of the Company then in office or (ii) appointed by directors so nominated, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board. A "Person" includes any person (including any individual, entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act). 2. The definition of "Total Disability" means the undersigned's inability to perform his or her duties at the Company for a period or periods aggregating ninety (90) calendar days in any 12-month period as a result of physical or mental illness, loss of legal capacity or any other cause beyond the undersigned's control, unless the undersigned is -2- granted a leave of absence by the Company's Board of Directors. Total Disability shall be deemed to occur (a) at the end of the calendar month in which the undersigned's death occurs or (b) provided that an independent physician appointed by the Company and reasonably acceptable to the undersigned or his personal representative (the "Independent Physician") has determined in a written report made available to the undersigned or his personal representative that the undersigned is unable to perform his or her duties at the Company as a result of physical or mental illness, loss of legal capacity or any other cause beyond the undersigned's control, and such disability has been in effect for a period or periods aggregating ninety (90) calendar days in a 12-month period, immediately upon notice to the undersigned or his or her personal representative. Notwithstanding the foregoing, Total Disability shall not include any temporary illness or condition that prevents the undersigned from performing his or her duties for a period of no more than 180 days if, in the opinion of the Independent Physician, the undersigned is reasonably likely to recover within 180 days or less from the onset of the illness or condition, such that he or she can permanently resume performance of his or her duties. 3. The definition of "Corporate Transaction" means either of the following events: (a) Consummation of any merger or consolidation of the Company in which the Company is not the continuing or surviving corporation, or pursuant to which shares of the Company's common stock are converted into cash, securities or other property, if following such merger or consolidation the holders of the Company's outstanding voting securities immediately prior to such merger or consolidation do not own at least 50% of the outstanding voting securities of the surviving corporation (or its parent); or (b) Consummation of any sale, lease, exchange or other transfer in one transaction or a series of related transactions of all or substantially all the Company's outstanding securities or all or substantially all the Company's assets other than a transfer of the Company's securities or assets to a majority-owned "subsidiary corporation" (as that term is defined in Section 422 of the Internal Revenue Code) of the Company. -3-