Bankrate, Inc.
477 Madison Avenue, Suite 430
New York, New York 10022

September 14, 2014

Steven D. Barnhart
1 West Onwentsia Road
Lake Forest,  Illinois 60045

 

Dear Steven:

This letter confirms and memorializes our recent discussions regarding the terms
of your appointment as interim Chief Financial Officer of Bankrate, Inc.
(“Bankrate”), effective as of September 14, 2014 (the “Effective Date”).  Please
indicate your agreement to the terms set forth herein by your signature below.

1. Title; Initial Period.   From the Effective Date through the six-month
anniversary thereof (the “Initial Period”), you shall serve as interim Chief
Financial Officer of Bankrate.   In that capacity, you shall report directly to
the Chief Executive Officer of Bankrate.

2. Compensation and Benefits.

(a) Base Salary.   During the Initial Period, you shall receive a base salary at
a rate of $62,500 per month, payable in accordance with Bankrate’s regular
payroll practices.

(b) Annual Bonus.   During the Initial Period, you shall not be eligible for any
bonus under Bankrate’s annual bonus plans.

(c) Restricted Stock Awards.   As soon as practicable following the Effective
Date, Bankrate shall grant you two restricted stock awards pursuant to its
2011 Equity Compensation Plan (the “Plan”) (capitalized terms in this
Section 2(c) that are not defined herein shall have the meanings ascribed to
them in the Plan):

(i) Interim Period Grant.  The first grant (the “Interim Period Stock Grant”)
will be made on the first trading day of the month following the Effective Date
and will be for a number of restricted shares of Bankrate common stock equal to
the quotient of (A) $500,000 divided by (B) the Fair Market Value as of the
grant date (rounded to the nearest whole share).  Such restricted shares shall
(1) subject to your continued employment, vest in twelve equal monthly
installments on each of the first twelve monthly anniversaries of the Effective
Date, (2) to the extent unvested, be forfeited upon your termination of
employment with Bankrate for any reason other than (x) a termination due to your
death or Disability (under which circumstances the tranche scheduled to vest on
the first monthly vesting date immediately following such termination for death
or Disability shall vest as of such termination, and the

 

--------------------------------------------------------------------------------

 

remaining unvested portion of the award shall be forfeited as of such
termination), (y) a termination under the circumstances resulting in
acceleration of vesting pursuant to Section 4, or (z) following a Covered
Transaction, a termination by the Company other than for conduct constituting
Cause for Termination (under which circumstances the award shall vest in full as
of such termination),  and (3) otherwise be subject to the terms and conditions
customary for Bankrate time-vesting restricted stock awards.

(ii) Long-Term Grant.  The second grant (the “Long-Term Stock Grant”) will be
made on the first trading day of the month following the Effective Date and will
be for a number of restricted shares of Bankrate common stock equal to the
quotient of (A) $750,000 divided by (B) the Fair Market Value as of the grant
date (rounded to the nearest whole share).  Such restricted shares shall
 (1) subject to your continued employment, vest in five equal annual
installments on each of the first five anniversaries of the date, if any, that
you are appointed Chief Financial Officer of Bankrate (on a non-interim basis),
such vesting to be accelerated in full in the event that there occurs a Covered
Transaction while you are serving as Chief Financial Officer of Bankrate on a
non-interim basis, (2) be forfeited as of the first anniversary of the Effective
Date if you have not been appointed Chief Financial Officer of Bankrate (on a
non-interim basis) prior thereto, (3) to the extent unvested, be forfeited upon
your termination of employment with Bankrate for any reason other than a
termination after you have been appointed Chief Financial Officer on a
non-interim basis that is (x) due to your death or Disability (in which case the
tranche scheduled to vest on the first vesting date immediately following such
termination shall vest on a prorated basis, based on the portion of the year
preceding such next vesting date that had elapsed prior to such termination, and
the remaining unvested portion of the award shall be forfeited as of such
termination) or (y) by you for Good Reason (as defined in Section 7(E) of
Exhibit A hereto) or by the Company other than for conduct constituting Cause
for Termination  (in which cases the tranche scheduled to vest on the first
vesting date immediately following such termination shall vest in full, and the
remaining unvested portion of the award shall be forfeited as of such
termination),  and (4) otherwise be subject to the terms and conditions
customary for Bankrate time-vesting restricted stock awards.

(d) Employee Benefits.  During the Initial Period, you will participate in the
employee benefit plans made available to Bankrate’s named executive officers
generally.

3. End of Initial Period.  No later than 30 days prior to the end of the Initial
Period, Bankrate shall notify you as to whether it wishes to offer you the
position of Chief Financial Officer of Bankrate following the conclusion of the
Initial Period.  Any such offer shall be at an annual base salary of
$425,000 per annum, with a target annual bonus equal to 75% of base salary.  If
Bankrate extends such an offer, you shall respond to Bankrate within two weeks
of receipt of such offer as to whether you wish to accept the position.

(a) If Bankrate offers you the position of Chief Financial Officer and you
accept such position, you and Bankrate shall enter into an employment agreement
in the form attached hereto as Exhibit A, which shall take effect immediately
following the conclusion of the Initial Period.

(b) If Bankrate notifies you that it does not wish for you to continue as Chief
Financial Officer (on a non-interim basis), or if Bankrate offers you the
position of Chief Financial Officer but you decline such offer, you shall
continue employment with Bankrate for a

-2-

--------------------------------------------------------------------------------

 

six-month period commencing immediately following termination of the Initial
Period (the “Transition Period”).  During the Transition Period, you shall
continue to receive a base salary at a rate of $62,500 per month, payable in
accordance with Bankrate’s regular payroll practices.  During the Transition
Period, you shall, at Bankrate’s election, continue to serve as interim Chief
Financial Officer or shall serve in such transitional role as is designated by
Bankrate.

4. Severance.   If, during the Initial Period or Transition Period, Bankrate
(a) terminates your employment other than for conduct constituting Cause (as
defined in Section 7(C) of Exhibit A hereto, but treating references therein to
“this agreement” as referring to this letter) and other than following your
rejection of an offer by Bankrate pursuant to Section 3 of its Chief Financial
Officer position, or  (b) notifies you pursuant to Section 3 that it does not
wish for you to serve as Chief Financial Officer (on a non-interim basis) and
your employment terminates upon the expiration of the Transition Period,
Bankrate shall, subject to your execution within 50 days of the date of such
termination (and non-revocation) of a release of claims in a form satisfactory
to Bankrate, (i) pay you $375,000 of severance, payable no later than 60 days
following the date of such termination, and (ii) cause any portion of the
Interim Period Stock Grant that is unvested as of such termination to vest in
full as of such termination.  For clarity, no benefits shall be due under this
Section 4 if you have been extended an offer of the Chief Financial Officer
position pursuant to Section 3 and declined such offer.

5. Relocation.   From the Effective Date through the earlier of your termination
of employment with Bankrate or the second anniversary of the Effective Date,
Bankrate will reimburse you for reasonable hotel or temporary housing expenses
in the New York City metropolitan area and for reasonable travel expenses
between Chicago and the New York City metropolitan areas.  In addition, if you
and your family relocate from the Chicago metropolitan area to the New York City
metropolitan area prior to the earlier of your termination of employment with
Bankrate or the third anniversary of the Effective Date, Bankrate shall
reimburse you for reasonable relocation expenses (as determined by the Company
in consultation with you) for such relocation, and the temporary housing and
travel benefits set forth in the immediately preceding sentence shall cease as
of such relocation.  To the extent any reimbursements under this Section 5 are
taxable to you, Bankrate shall pay to you an additional amount such that the net
after-tax proceeds to you of such reimbursements and such additional amount are
equal to such reimbursements.

6. Restrictive Covenants.

(a) Work Product.  All Work Product (defined below) shall be work made for hire
by you and owned by Bankrate.   If any of the Work Product may not, by operation
of law or otherwise, be considered work made for hire by you for Bankrate, or if
ownership of all right, title, and interest to the legal rights therein shall
not otherwise vest exclusively in Bankrate,  you hereby assign to Bankrate, and
upon the future creation thereof automatically assign to Bankrate, without
further consideration, the ownership of all Work Product.  Bankrate shall have
the right to obtain and hold in its own name copyrights, patents, registrations,
and any other protection available in the Work Product.  You agree to perform,
during or after termination of your employment by Bankrate, such further acts as
may be necessary or desirable to transfer, perfect, and defend Bankrate’s
ownership of the Work Product as requested by Bankrate.   For purposes of this
letter, “Work Product” means the data, materials, formulas, research,
documentation,

-3-

--------------------------------------------------------------------------------

 

computer programs, communication systems, audio systems, system designs,
inventions (whether or not patentable), and all works of authorship, including
all worldwide rights therein under patent, copyright, trade secret, confidential
information, moral rights and other property rights, created or developed in
whole or in part by you, while employed by Bankrate and its affiliates, within
the scope of your employment or that otherwise relates in any manner to the
business or projected business of Bankrate and its affiliates.

(b) Trade Secrets and Confidential Information.  During the course of your
employment with Bankrate,  Bankrate and its affiliates may disclose to you Trade
Secrets and Confidential Information (each as defined below).  The Trade Secrets
and the Confidential Information of Bankrate and its affiliates are the sole and
exclusive property of Bankrate and its affiliates (or a third party providing
such information to Bankrate or its applicable affiliate).  The disclosure of
the Trade Secrets and the Confidential Information of Bankrate and its
affiliates to you does not give you any license, interest, or rights of any kind
in the Trade Secrets or Confidential Information.  You may use the Trade Secrets
and Confidential Information solely for the benefit of Bankrate and its
affiliates while you are an employee of Bankrate.  You shall hold in confidence
the Trade Secrets and Confidential Information of Bankrate.  Except in the
performance of services for Bankrate and its affiliates, you shall not
reproduce, distribute, transmit, reverse engineer, decompile, disassemble, or
transfer the Trade Secrets or the Confidential Information of Bankrate and its
affiliates or any portion thereof.  The obligations under this letter with
regard to the Trade Secrets of Bankrate and its affiliates remain in effect as
long as the information constitutes a trade secret under applicable law.  The
obligations with regard to the Confidential Information of Bankrate shall remain
in effect while you are employed by Bankrate and its affiliates and
thereafter.  You agree to return to Bankrate, upon your resignation,
termination, or upon request by Bankrate, the Trade Secrets and Confidential
Information of Bankrate and all materials relating thereto.  As used herein,
“Trade Secrets” means information of Bankrate and its affiliates, and their
respective licensors, suppliers, clients, and customers, including, but not
limited to, technical or non-technical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product plans, or a list of actual or potential customers or
suppliers, which is not commonly known or available to the public and which
information (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can obtain economic value from its disclosure or use, and
(ii) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.  As used herein, “Confidential Information” means
information, other than Trade Secrets, that is treated as confidential, and that
would potentially damage or interfere with, in any manner, the business of
Bankrate and its affiliates if disclosed.  Confidential Information includes,
but is not limited to, information concerning Bankrate’s (and its affiliates’)
financial structure, pricing, revenue sharing, partner agreements, customer
agreements, marketing plans, methods of operation, and internal operating
procedures.  Notwithstanding the foregoing, the provisions of this Section 6(b)
do not apply to (A) information that is general knowledge in Bankrate’s
industry, (B) information that has been disclosed to you by third parties who
are unrelated to Bankrate and who are not bound by agreements of confidentiality
with respect thereto, and (C) information you may be required to disclose by law
but only to the extent required by law.

(c)  Nonsolicitation.  You agree that for so long as you are employed by
Bankrate or any of its affiliates and for a period thereafter equal to one month
for every full month of service

-4-

--------------------------------------------------------------------------------

 

with Bankrate, up to a  maximum of 12 months, from the date you cease to be
employed by Bankrate and its affiliates for any reason, neither you nor any
company or other entity controlled by you (whether currently existing or
hereafter acquired or formed) shall, directly or indirectly, in any capacity,
(i) solicit or induce, or attempt to solicit or induce, any person who accepts
employment with Bankrate and its affiliates to leave the employ of Bankrate or
any of its affiliates for any reason whatsoever, or (ii) hire or employ any
person who accepts employment with Bankrate and its affiliates.

(d) Nondisparagement.  You agree not to disparage Bankrate or its affiliates in
any way, other than as part of the judicial, arbitration, or other dispute
resolution process in connection with any litigation, mediation, arbitration, or
other judicial proceeding arising under any claim brought in connection with
this letter, or other than when compelled to testify under oath by subpoena,
regulation or court order.  Bankrate agrees to instruct the members of its Board
of Directors and its officers who are subject to the requirements of Section 16
of the Securities Exchange Act of 1934, as amended, not to disparage you in any
way, other than as part of the judicial, arbitration or other dispute resolution
process in connection with any litigation, mediation, arbitration or other
judicial proceeding arising under any claim brought in connection with this
letter, or other than when compelled to testify under oath by subpoena,
regulation or court order.

(e) Remedies.  You acknowledge that breach of the provisions of this Section 6
would result in irreparable injury and permanent damage to Bankrate and its
affiliates, which prohibitions or restrictions you acknowledge are both
reasonable and necessary under the circumstances, singularly and in the
aggregate, to protect the interests of Bankrate and its affiliates.  You
recognize and agree that the ascertainment of damages in the event of a breach
of this Section 6 would be difficult, and that money damages alone would be an
inadequate remedy for the injuries and damages that would be suffered by
Bankrate and its affiliates from breach by you.  You therefore agree: (i) that,
in the event of a breach of this Section 6,  Bankrate, in addition to and
without limiting any of the remedies or rights that it may have at law or in
equity or pursuant to this letter, shall have the right to injunctive relief or
other similar remedy to specifically enforce the provisions hereof; and (ii) to
waive and not to (A) assert any defense to the effect that Bankrate has an
adequate remedy at law with respect to any such breach, (B) require that
Bankrate submit proof of the economic value of any Trade Secret, or (C) require
that Bankrate post a bond or any other security.  Nothing contained herein shall
preclude Bankrate from seeking monetary damages of any kind, including
reasonable fees and expenses of counsel and other expenses, in a court of law.

7. Governing Law.  This letter shall be governed in all aspects by the laws of
the State of Florida, without regard to its rules governing conflicts of law.

8. Miscellaneous.  All payments hereunder shall be subject to applicable tax
withholding.      This letter may not be amended or modified other than by a
written agreement executed by the parties hereto or their respective successors
or legal representatives.  This letter represents the entire understanding of
the parties concerning the subject matter hereof and supersedes all prior
communications, agreements, and understandings, whether oral or written,
relating to the subject matter hereof.  This letter may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.    Bankrate shall

-5-

--------------------------------------------------------------------------------

 

pay up to $10,000 of your reasonable legal fees incurred in connection with
reviewing and negotiating this letter, provided that you shall provide
documentation regarding such fees and costs in the manner generally required by
Bankrate under its policies and procedures.

[Signature Page Follows]

 

 

-6-

--------------------------------------------------------------------------------

 

 

We look forward to your joining the Bankrate team.

Sincerely,

 

BANKRATE, INC. 

 

 

By: /s/ Kenneth S. Esterow
      Name:  Kenneth S. Esterow
      Title:   President & Chief Executive Officer

 

Agreed and Acknowledged:

/s/ Steven D. Barnhart
Steven D. Barnhart

 

Exhibit A
Form of Employment Agreement

(attached)

-7-

--------------------------------------------------------------------------------

 

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of
the [●] day of [●], [●] (the “Effective Date”) by and between Steven D. Barnhart
(“Executive”) and Bankrate, Inc., a Delaware corporation (the “Company”).

RECITALS:

A.  The Company desires to employ Executive to perform certain services for the
Company, and Executive desires to accept said engagement from the Company.

B.  The Company and Executive have agreed upon the terms and conditions of
Executive’s employment by the Company and the parties desire to express the
terms and conditions in this Agreement.

C.  The Company and Executive intend for this Agreement to supersede all
agreements between Executive and the Company as it relates to Executive’s
employment.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted, the parties hereby
agree as follows:

1. Employment of Executive; Term.  The Company hereby employs Executive as the
Chief Financial Officer of the Company, and Executive hereby accepts such
employment by the Company, under the terms of this Agreement.  The term of
employment hereunder (the “Term”) shall commence as of the Effective Date and
shall terminate pursuant to Section 7 of this Agreement.

2. Duties and Location.

A. Executive’s duties will consist of duties normally associated with the
position identified in Section 1.  Executive shall report to the Chief Executive
Officer of the Company.  Executive shall devote his full business time to the
Company’s business and shall not render to others any service of any kind for
compensation or engage in any activity which conflicts or interferes with the
performance of his obligations under this Agreement as determined in the
discretion of the Compensation Committee (the “Committee”) of the Board of
Directors (the “Board”) without the express written consent of the Committee;
provided,  however, that Executive may engage in non-profit or charitable
activities and may serve on one for-profit board of directors, so long as such
activities do not involve substantial time, do not materially interfere with his
employment under this Agreement, and are not in competition with the Company and
its affiliates as determined in the discretion of the Committee.

B. Executive agrees that he shall at all times faithfully and to the best of his
ability and experience perform all of the duties that may be required of him
pursuant to the terms of this Agreement.

C. Executive will perform his services from the Company’s office in New York,
NY, provided that from the date hereof through the earlier of Executive’s
termination of

-8-

--------------------------------------------------------------------------------

 

employment with the Company or September 14, 2016, Executive may reside, and
work for one business day a week, in Chicago, Illinois, and the Company will
reimburse Executive for reasonable hotel or temporary housing expenses in the
New York City metropolitan area and for reasonable travel expenses between
Chicago and the New York City metropolitan areas.  If Executive and his family
relocate from the Chicago metropolitan area to the New York City metropolitan
area prior to the earlier of Executive’s termination of employment with the
Company or September 14, 2017, the Company shall reimburse Executive for
reasonable relocation expenses (as determined by the Company in consultation
with Executive) for such relocation, and the temporary housing and travel
benefits set forth in the immediately preceding sentence shall cease as of such
relocation.  To the extent any reimbursements under this Section 2(C) are
taxable to Executive, the Company shall pay Executive an additional amount such
that the net after-tax proceeds to Executive of such reimbursements and such
additional amount are equal to such reimbursements.

3. Base Salary.  Executive shall receive a base salary during the Term of
$425,000.00 per annum (the “Base Salary”), which amount may be increased
annually at the discretion of the Committee.  The Base Salary shall be paid to
Executive by the Company in accordance with the Company’s regular payroll
practice as in effect from time to time.

4. Annual Bonus.  Executive will be eligible to participate in an annual bonus
program generally available to executive officers of the Company as approved at
the discretion of the Committee, with a target bonus equal to 75% of Base
Salary.  For the year in which the Effective Date occurs, Executive’s bonus will
be prorated to reflect the portion of the year following his commencement of
service hereunder. For the 2015 bonus year, Executive shall, subject (except as
set forth in the next sentence) to his continued employment through the payment
date of bonuses for such year, be guaranteed an annual bonus for such year that
is no less than the sum of (i) the product of (x) $318,750 multiplied by (y) a
fraction, the numerator of which is 365 minus the number of days Executive
served as Interim Chief Financial Officer of the Company prior to commencing
services on a non-interim basis hereunder, and the denominator of which is 365
plus (ii) the product of (x) the bonus Executive would have earned for 2015
under the Company’s bonus program determined without regard to this sentence
(and without regard to the proration provided for by the preceding sentence)
multiplied by (y) a fraction, the numerator of which is 109, and the denominator
of which is 365.  If Executive’s employment is terminated prior to the payment
date of 2015 bonuses by the Company pursuant to subsection D of Section 7 of
this Agreement or by Executive pursuant to subsection E of Section 7 of this
Agreement, he shall, so long as he satisfies the requirements of Section 8(C),
still receive the bonus guaranteed by the preceding sentence, provided that in
such case the numerator in clause (ii)(y) thereof shall equal the number of
days, if any, served by Executive as Chief Financial Officer from September 14,
2015 through December 31, 2015.

-9-

--------------------------------------------------------------------------------

 

5. Executive Benefits.

A. Executive shall be entitled to participate in the employee benefit plans as
shall be in effect for similarly situated employees of the Company generally
from time to time, subject to the terms and conditions of each such
plan.  Executive shall be entitled to paid vacation each year in accordance with
Company policy.  All vacation times shall be subject to the approval of the
Chief Executive Officer of the Company.

B. Executive shall be eligible to participate in the Company’s stock option,
stock purchase, or other stock incentive plans which are generally available to
executive officers of the Company and shall be eligible for the grant of stock
options, restricted stock or other awards there under in accordance with the
terms and provisions of such plans.  For 2015, Executive shall be granted equity
incentive awards having an aggregate grant date value (as determined by the
Company in accordance with its general methodology for valuing equity
compensation awards) equal to $2.25 million, which awards shall (1) be granted
at the time that annual grants for executives of the Company generally are made,
(2) consist of the same types and allocations of awards as applicable to
executives of the Company generally, and (3) be subject to the terms and
conditions applicable to awards made to executives of the Company generally.

6. Expenses.

A. Executive shall be reimbursed by the Company monthly for the ordinary and
necessary reasonable business expenses incurred by him in the performance of his
duties for the Company, including travel and lodging expenses, meals, client
entertainment, and cell phone expense, all in accordance with Company policy;
provided that Executive shall first document said business expenses in the
manner generally required by the Company under its policies and procedures, and
in any event, in the manner required to meet applicable regulations of the
Internal Revenue Service relating to the deductibility of such expenses.

B. With respect to any amount of expenses eligible for reimbursement that is
required to be included in Executive’s gross income for federal income tax
purposes, such expenses shall be reimbursed to Executive no later than
December 31 of the year following the year in which Executive incurs the related
expenses.  In no event shall the amount of expenses (or in-kind benefits)
eligible for reimbursement in one taxable year affect the amount of expenses (or
in-kind benefits) eligible for reimbursement in any other taxable year (except
for those medical reimbursements referred to in Section 105(b) of the Internal
Revenue Code of 1986, as amended), nor shall Executive’s right to reimbursement
or in-kind benefits be subject to liquidation or exchange for another benefit.

7. Termination.

Executive’s employment may be terminated upon the occurrence of any of the
following events (the Term shall automatically conclude upon a termination of
employment for any reason):

A. Death of Executive;

-10-

--------------------------------------------------------------------------------

 

B. Mental or physical disability of Executive which prevents him from performing
substantially all of his duties hereunder for a period of ninety (90)
consecutive days or one hundred twenty (120) days during any one year
(“Disability”).

C. By the Company For Cause, as defined below:

1. Executive’s material breach of this Agreement which is not cured within ten
(10) days of receipt of written notice to Executive specifying the nature of
such breach in reasonable detail;

2. Executive’s dishonesty, fraud, malfeasance, gross negligence or misconduct
which, in the reasonable judgment of the Board, is, or is likely to, cause
material injury to the Company or the business reputation of the Company;

3. Executive’s willful failure to (a) follow the lawful direction (consistent
with Executive’s duties) of the Board or (b) comply in all material respects
with the lawful policies, procedures, and rules of the Company, as the same have
been communicated to Executive in writing which, in the case of either (a) or
(b), is not cured within ten (10) days of receipt of written notice to Executive
specifying the nature of such failure in reasonable detail; or

4. Executive’s conviction of, or Executive’s entry of a plea of guilty or no
contest to, a felony or crime involving moral turpitude.

D. By either party, upon two (2) weeks’ written notice in their sole discretion
other than pursuant to sub-section A, B or C above or E below; however, the
Company may elect upon such notice to require Executive to immediately cease
coming to work and return any and all Company property.

E. By Executive for Good Reason (as defined in this paragraph).  For purposes of
this Agreement “Good Reason” shall mean (1) the failure by the Company to pay to
Executive the compensation or perform any other obligation due to him under this
Agreement or any agreements evidencing the grant of restricted stock
contemplated by the letter agreement (the “Letter Agreement”) by and between the
Company and Executive, dated as of September 14, 2014; (2) a material reduction
by the Company in Executive’s base salary or target annual bonus; (3) a material
reduction in Executive’s long-term incentive opportunity to a level that is
materially less favorable to Executive than that applicable to the Company’s
named executive officers (other than its Chief Executive Officer) as a group
generally (it being understood that the fact that the opportunity of a
particular such officer is greater than Executive’s opportunity shall not by
itself constitute Good Reason); (4) the failure by the Company to allow
Executive to participate in the Company’s employee benefit plans generally
available from time to time to executives of the Company; (5) the failure of any
successor to all or substantially all of the business and/or assets of the
Company to assume this Agreement; (6) relocation of Executive to an office
greater than thirty (30) miles from New York, NY without Executive’s consent; or
(7) reduction of Executive’s title, or material reduction of Executive’s duties
or responsibilities with the Company; provided,  however,  that Good Reason
shall not exist hereunder unless Executive provides written notice to the
Company of the existence of one or more of the conditions described in clauses
(1) through (7) within thirty (30) days following Executive’s knowledge of

-11-

--------------------------------------------------------------------------------

 

the initial existence of such condition or conditions, specifying in reasonable
detail the conditions constituting Good Reason, and the Company shall have
thirty (30) days following receipt of such written notice (the “Cure Period”)
during which it may remedy the condition if such condition is reasonably subject
to cure.  In the event that the Company fails to remedy the condition
constituting Good Reason during the applicable Cure Period, Executive must
terminate his employment, if at all, within thirty (30) days following such Cure
Period in order for such termination as a result of such condition to constitute
a termination for Good Reason.

8. Post Termination Payment Obligations.

A. If Executive’s employment is terminated for any of the reasons stated in
sub-sections A, B or C of Section 7 of this Agreement or is terminated by
Executive pursuant to sub-section D of Section 7 of this Agreement, then
Executive shall be entitled to receive his Base Salary at the then current rate
and any accrued bonus through the effective date of the termination, payable
within fifteen (15) days of the effective termination date, and thereafter the
Company shall have no further payment obligations under this Agreement, but
Executive shall continue to be bound by Sections 11,  12, and 13 and all other
post-termination obligations contained in this Agreement and provisions of this
Agreement that specifically survive termination of the Term.

B. If Executive’s employment is terminated by the Company pursuant to subsection
D of Section 7 of this Agreement or is terminated by Executive pursuant to
subsection E of Section 7 of this Agreement, then Company shall pay Executive
(i) his Base Salary at the then current rate and any accrued bonus through the
effective date of the termination, payable within fifteen (15) days of the
termination date and (ii) a separation payment in the amount of his Base Salary
at the then current rate for twelve (12) months (the “Separation
Payment”).  Subject to Executive’s compliance with Section 8(C) hereof, the
Separation Payment shall be paid in three installments as follows:

1. One-Third of the Separation Payment shall be payable on the four (4) month
anniversary of the effective date of the termination;

2. One-Third of the Separation Payment shall be payable on the six (6) month
anniversary of the effective date of the termination; and

3. One-Third of the Separation Payment shall be payable on the twelve (12) month
anniversary of the effective date of the termination.

Thereafter, the Company shall have no further payment obligations under this
Agreement, but Executive shall continue to be bound by Sections 11,  12, and 13
and all other post-termination obligations contained in this Agreement and
provisions of this Agreement that specifically survive termination of this
Agreement.

The post-termination obligations under this sub-section B shall be binding upon
the Company regardless of Executive’s subsequent employment with any other
person, firm, partnership, association, business organization, corporation, or
other entity which is not affiliated with the Company.

-12-

--------------------------------------------------------------------------------

 

C. As a condition to the Company’s obligation to pay the Separation Payment,
Executive shall:

1. Within 60 days following Executive’s termination of employment, execute (and
not revoke) a Separation and Release Agreement in a form prepared by and
acceptable to the Company whereby Executive releases the Company and its
affiliates and their respective officers, directors, and employees from any and
all liability and settles all claims of any kind.  Benefits shall be deemed
forfeited if the release is not executed and delivered to the Company within the
time specified herein; and

2. Comply with the restrictive covenants (Sections 11 and 12 of this Agreement)
and all other post-termination obligations contained in this Agreement.

The parties agree that regardless of whether Executive complies with the
provisions of Section 8(C)(1) and whether the Company pays Executive the
Separation Payment, Executive shall continue to be bound by Sections 11,  12,
and 13 and all other post-termination obligations contained in this Agreement
and provisions of this Agreement that survive termination of the Term and
Executive’s employment.

9. Work Product.  All Work Product (defined below) shall be work made for hire
by Executive and owned by the Company.  If any of the Work Product may not, by
operation of law or otherwise, be considered work made for hire by Executive for
the Company, or if ownership of all right, title, and interest to the legal
rights therein shall not otherwise vest exclusively in the Company, Executive
hereby assigns to the Company, and upon the future creation thereof
automatically assigns to the Company, without further consideration, the
ownership of all Work Product.  The Company shall have the right to obtain and
hold in its own name copyrights, patents, registrations, and any other
protection available in the Work Product.  Executive agrees to perform, during
or after termination of Executive’s employment by the Company, such further acts
as may be necessary or desirable to transfer, perfect, and defend the Company’s
ownership of the Work Product as requested by the Company.  “Work Product” means
the data, materials, formulas, research, documentation, computer programs,
communication systems, audio systems, system designs, inventions (whether or not
patentable), and all works of authorship, including all worldwide rights therein
under patent, copyright, trade secret, confidential information, moral rights,
and other property rights, created or developed in whole or in part by
Executive, while employed by the Company and its affiliates, within the scope of
Executive’s employment or which otherwise relates in any manner to the business
or projected business of the Company and its affiliates.

10. Set-Off.  If at the time of termination of Executive’s employment for any
reason, Executive has any outstanding obligations to the Company, Executive
acknowledges that the Company is authorized to deduct from Executive’s final
paycheck and any Separation Payment any then documented amounts owed to the
Company.

11. Trade Secrets and Confidential Information.

A. During the course of Executive’s employment with the Company, the Company and
its affiliates may disclose to Executive Trade Secrets and Confidential
Information

-13-

--------------------------------------------------------------------------------

 

(each as defined below).  The Trade Secrets and the Confidential Information of
the Company and its affiliates are the sole and exclusive property of the
Company and its affiliates (or a third party providing such information to the
Company or its applicable affiliate).  The disclosure of the Trade Secrets and
the Confidential Information of the Company and its affiliates to Executive does
not give Executive any license, interest, or rights of any kind in the Trade
Secrets or Confidential Information.

B. Executive may use the Trade Secrets and Confidential Information solely for
the benefit of the Company and its affiliates while Executive is an employee of
the Company.  Executive shall hold in confidence the Trade Secrets and
Confidential Information of the Company.  Except in the performance of services
for the Company and its affiliates, Executive shall not reproduce, distribute,
transmit, reverse engineer, decompile, disassemble, or transfer the Trade
Secrets or the Confidential Information of the Company and its affiliates or any
portion thereof.

C. The obligations under this Agreement with regard to the Trade Secrets of the
Company and its affiliates shall remain in effect as long as the information
constitutes a trade secret under applicable law.  The obligations with regard to
the Confidential Information of the Company shall remain in effect while
Executive is employed by the Company and its affiliates and thereafter.

D. Executive agrees to return to the Company, upon Executive’s resignation,
termination, or upon request by the Company, the Trade Secrets and Confidential
Information of the Company and all materials relating thereto.

E. As used herein, “Trade Secrets” means information of the Company and its
affiliates, and their respective licensors, suppliers, clients, and customers,
including, but not limited to, technical or non-technical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or a list of actual
or potential customers or suppliers, which is not commonly known or available to
the public and which information (i) derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

F. As used herein, “Confidential Information” means information, other than
Trade Secrets, that is treated as confidential, and that would potentially
damage or interfere with, in any manner, the business of the Company and its
affiliates if disclosed.  Confidential Information includes, but is not limited
to, information concerning the Company’s (and its affiliates’) financial
structure, pricing, revenue sharing, partner agreements, customer agreements,
marketing plans, methods of operation, and internal operating procedures.

Notwithstanding the foregoing, the provisions of this Section 11 do not apply to
(i) information which is general knowledge in the Company’s industry,
(ii) information that has been disclosed to Executive by third parties who are
unrelated to the Company and who are not bound by agreements of confidentiality
with respect thereto, and (iii) as Executive may be required to disclose by law
but only to the extent required by law.

-14-

--------------------------------------------------------------------------------

 

12. Restrictive Covenants.

A. Non-Competition.  Executive agrees that for so long as Executive is employed
by the Company or any of its affiliates and for a period of one (1) year
thereafter, Executive will not, individually or on behalf of any person, firm,
partnership, association, business organization, corporation, or other entity
engaged in the Business of the Company or its affiliates, engage in or perform,
anywhere within the United States, Canada, and any other such region in which
the Company or its affiliates operates, which shall constitute the territory,
any activities which are competitive with the Business of the Company or its
affiliates.  Nothing herein shall be construed to prohibit Executive from
acquiring shares of capital stock of any public corporation, provided that such
investment does not exceed 5% of the stock of such public corporation.

B. Non-Solicitation; Non-Disparagement.  Executive agrees that for so long as
Executive is employed by the Company or any of its affiliates and for a period
thereafter equal to twelve (12) months from the date Executive ceases to be
employed by the Company and its affiliates for any reason, neither Executive nor
any company or other entity controlled by Executive (whether currently existing
or hereafter acquired or formed) shall, directly or indirectly, in any capacity,
(i) solicit or induce, or attempt to solicit or induce, any person who accepts
employment with the Company and its affiliates to leave the employ of the
Company or any of its affiliates for any reason whatsoever, (ii) hire or employ
any person who accepts employment with the Company and its affiliates,
(iii) solicit or induce, or attempt to solicit or induce, any customer of the
Company and its affiliates not to purchase any goods or products with respect to
the Company and its affiliates, or (iv) otherwise impede or interfere in any way
with any customer relationship of the Company or any of its affiliates with
respect to the Company and its affiliates.  Executive agrees not to disparage
the Company or its affiliates in any way, other than as part of the judicial,
arbitration, or other dispute resolution process in connection with any
litigation, mediation, arbitration, or other judicial proceeding arising under
any claim brought in connection with this Agreement, or other than when
compelled to testify under oath by subpoena, regulation or court order.

C. The Company agrees to instruct the members of the Board and officers of the
Company who are subject to the requirements of Section 16 of the Securities
Exchange Act of 1934, as amended, not to disparage the Executive in any way,
other than as part of the judicial, arbitration or other dispute resolution
process in connection with any litigation, mediation, arbitration or other
judicial proceeding arising under any claim brought in connection with this
Agreement, or other than when compelled to testify under oath by subpoena,
regulation or court order

D. For purposes of this Section 12, the term “Business” shall mean the business
of the delivery of editorial content and product research related to consumer
financial services delivered in print or over the Internet.

13. Injunctive Relief.

A. Executive acknowledges that breach of the provisions of Sections 11 and/or 12
of this Agreement would result in irreparable injury and permanent damage to the

-15-

--------------------------------------------------------------------------------

 

Company and its affiliates, which prohibitions or restrictions Executive
acknowledges are both reasonable and necessary under the circumstances,
singularly and in the aggregate, to protect the interests of the Company and its
affiliates.  Executive recognizes and agrees that the ascertainment of damages
in the event of a breach of Sections 11 and/or 12 of this Agreement would be
difficult, and that money damages alone would be an inadequate remedy for the
injuries and damages which would be suffered by the Company and its affiliates
from breach by Executive.

B. Executive therefore agrees:  (i) that, in the event of a breach of
Sections 11 and/or 12 of this Agreement, the Company, in addition to and without
limiting any of the remedies or rights which it may have at law or in equity or
pursuant to this Agreement, shall have the right to injunctive relief or other
similar remedy in order to specifically enforce the provisions hereof; and
(ii) to waive and not to (A) assert any defense to the effect that the Company
has an adequate remedy at law with respect to any such breach, (B) require that
the Company submit proof of the economic value of any Trade Secret, or
(C) require that the Company post a bond or any other security.  Nothing
contained herein shall preclude the Company from seeking monetary damages of any
kind, including reasonable fees and expenses of counsel and other expenses, in a
court of law.

14. Survival.  The provisions of Sections 8 through 31 shall survive termination
of the Term and of Executive’s employment.

15. Invalidity of Any Provision.  It is the intention of the parties hereto that
Sections 11 through 13 of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies of each state and jurisdiction in
which such enforcement is sought, but that the unenforceability (or the
modification to conform with such laws or public policies) of any provision
hereof shall not render unenforceable or impair the remainder of this Agreement,
which shall be deemed amended to delete or modify, as necessary, the invalid or
unenforceable provisions.  The parties further agree to alter the balance of
this Agreement in order to render the same valid and enforceable.

16. Waiver of Breach.  The waiver by either party of a breach of any provision
of this Agreement by the other shall not operate or be construed as a waiver of
any subsequent breach.

17. Successors and Assigns.  This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and assigns, and the Company
shall require any successors and assigns to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place.  Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution.

18. License.  To the extent that any pre-existing materials are contained in the
materials Executive delivers to the Company or the Company’s customers, and such
preexisting materials are not Work Product, Executive grants to the Company an
irrevocable, nonexclusive, worldwide, royalty-free license to:  (i) use and
distribute (internally or externally) copies of, and prepare derivative works
based upon, such pre-existing materials and derivative works thereof

-16-

--------------------------------------------------------------------------------

 

and (ii) authorize others to do any of the foregoing.  Executive shall notify
Company in writing of any and all pre-existing materials delivered to the
Company by Executive.

19. Release.  Executive acknowledges that Executive may provide the image,
likeness, voice, or other characteristics of Executive in the services,
materials, computer programs, and other deliverables that Executive provides as
a part of this Agreement.  Executive hereby consents to the use of such
characteristics of Executive by the Company in the products or services of the
Company and its affiliates and releases the Company and its affiliates and their
respective agents, contractors, licensees, and assigns from any claims which
Executive has or may have for invasion of privacy, right of publicity, copyright
infringement, or any other causes of action arising out of the use, adaptation,
reproduction, distribution, broadcast, or exhibition of such characteristics.

20. Severability.  If any provision or part of a provision of this Agreement
shall be determined to be void and unenforceable by a court of competent
jurisdiction, the remainder of this Agreement shall remain valid and
enforceable.

21. Costs of Enforcement.  In the event either party breaches this Agreement,
the breaching party shall be liable to the non-breaching party for all costs of
enforcement, including reasonable attorneys’ fees and court costs, in addition
to all other damages and redress available in equity or at law.

22. No Prior Agreements.  Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and Executive’s
employment by the Company and the performance of Executive’s duties hereunder
shall not violate or be a breach of any agreement with a former employer,
client, or any other person or entity.

23. Modification.  This Agreement may be modified only by agreement in writing
signed by both the Company and Executive.

24. Governing Law.  This Agreement shall be governed in all aspects by the laws
of the State of Florida without regard to its rules governing conflicts of law.

25. Section Headings.  The section headings are included for convenience and are
not intended to limit or affect the interpretation of this Agreement.

26. Notice.  Whenever any notice is required, it shall be given in writing
addressed as follows:

To Company:

Bankrate, Inc.
477 Madison Avenue, Suite 430
New York, NY  10022
Attention:  General Counsel
Telecopy:  917-368-8611

-17-

--------------------------------------------------------------------------------

 

To Executive:

Steven D. Barnhart

At the address on file with the Company

Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received.  Either party
may change the address for notice by notifying the other party of such change in
accordance with this Section 26.

27. “Key Employee” Insurance.  The Company shall have the option, but not the
obligation, to obtain on the life of Executive, pay all premium amounts related
to, and maintain, “key employee” insurance naming the Company as
beneficiary.  Selection of such insurance policy shall be in the sole and
absolute discretion of the Board.  Executive shall cooperate fully with the
Company, the Board, and the insurer in applying for, obtaining, and maintaining
such life insurance, by executing and delivering such further and other
documents as the Company, the Board, and/or the insurer may request from time to
time, and doing all matters and things which may be convenient or necessary to
obtain such insurance, including, without limitation, submitting to any physical
examinations and providing any medical information required by the insurer.

28. Indemnification.

The Company agrees, to the extent permitted by applicable law and the Company’s
Certificate of Incorporation, to defend, indemnify, and hold harmless Executive
against any and all loss, damage, liability, and expense, including, without
limitation, reasonable attorneys’ fees, disbursements court costs, and any
amounts paid in settlement and the costs and expenses of enforcing this section
of the Agreement, which may be suffered or incurred by Executive in connection
with the provision of his services hereunder, including, without limitation, any
claims, litigations, disputes, actions, investigations, or other matters,
provided that such loss, damage, liability, and expense (i) arises out of or in
connection with the performance by Executive of his obligations under this
Agreement and (ii) is not the result of any material breach by Executive of his
obligations hereunder, and provided,  further, that Company shall be under no
obligation to defend, indemnify, or hold harmless Executive if Executive has
acted with gross negligence or willful misconduct.

A. In addition to the foregoing, Company agrees to provide Executive with
coverage under a Directors & Officers insurance policy to the same extent as the
Company currently provides its executive officers.

29. Jurisdiction and Venue.  Any civil action or legal proceeding arising out of
or relating to this Agreement shall be brought in the courts of record of the
State of Florida in Palm Beach County or the United States District Court for
the Southern District of Florida located in Palm Beach County.  Each party
consents to the jurisdiction of such Florida court in any such civil action or
legal proceeding and waives any objection to the laying of venue of any such
civil action or legal proceeding in such Florida court.  Service of any court
paper may be effected on

-18-

--------------------------------------------------------------------------------

 

such party by mail, as provided in this Agreement, or in such other manner as
may be provided under applicable laws, rules of procedure or local rules.

30. Specified Employee.  Notwithstanding anything herein to the contrary, if an
obligation under this Agreement arises on account of Executive’s separation from
service while Executive is a specified employee, within the meaning of
Section 409A of the Code that is a payment of “deferred compensation” (as
defined under Treasury Regulation § 1.409A-1(b)(1), after giving effect to the
exemptions in Treasury Regulation §§ 1.409A-1(b)(3) through (b)(12)) and is
scheduled to be paid within six (6) months after such separation from service,
the applicable amount be accumulated and deferred without interest, and shall be
paid on the first day of the seventh month following the date of such separation
from service or, if earlier, within 15 days after the appointment of the
personal representative or executor of the Executive’s estate following his
death.

31. Entire Agreement.

A. This Agreement represents the entire understanding of the parties concerning
the subject matter hereof and supersedes all prior communications, agreements,
and understandings, whether oral or written, relating to the subject matter
hereof, including without limitation, the Letter Agreement, provided that the
Company’s ability to enforce the restrictive covenants set forth in the Letter
Agreement with respect to events occurring during the Interim Period (as defined
in the Letter Agreement) shall remain in effect.

B. The language contained herein shall be deemed to be that negotiated and
approved by both parties and no rule of strict construction shall be applied.

[Remainder of Page Intentionally Left Blank]

 

-19-

--------------------------------------------------------------------------------

 

 

JURY WAIVER.  IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW
OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, ANY
AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS
AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN
CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF
COMPETENT JURISDICTION AND NOT TO A JURY.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY.  ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.  NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS
TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION.  EACH
PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION.  EACH
PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO
THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE
TERMS OF THIS SECTION.

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

EXECUTIVE:COMPANY:

BANKRATE, INC.

_________________________By:_________________________
Steven D. BarnhartName:  Kenneth S. Esterow
Title:    President and CEO

 

 

 

-20-

--------------------------------------------------------------------------------