EXHIBIT 10.34
 

 
TheStreet.com
 
Term Sheet for Tom Etergino
 

·
Title and Reporting Relationship: Executive Vice President, Chief Financial
Officer. Mr. Etergino shall report directly to the Chief Executive Officer
(“CEO”) of TheStreet.com, Inc. (“TSCM”).

 
·
Full-Time Duties:  Tom shall devote his full-time work efforts and duties to
TSCM throughout his employment with TSCM.

 
·
Base Salary: $325,000 annualized rate, with potential annual increases at the
discretion of the Compensation Committee.

 
·
Target Bonus: 75% of Mr. Etergino’s annualized rate of base pay at the beginning
of each calendar year, contingent on achieving performance goals established by
TSCM’s Compensation Committee and CEO for each performance year (with input from
Tom), with potential annual increases to the targeted amount at the discretion
of TSCM’s Compensation Committee and CEO. For the avoidance of doubt, Tom’s
target bonus for 2010 shall be prorated for the period of 2010 served as an
employee of TSCM (e.g., if Tom serves as a TSCM employee from September 7, 2010
through December 31, 2010, the 2010 target bonus would be:  (116/365) x $325,000
x 75% = $77,465.75.

 

 
The specific performance objectives applying to Tom’s 2010 bonus opportunity
shall established by TSCM’s Compensation Committee and CEO within 30 days after
his first day of employment with TSCM.
 

 
·
Long-Term Incentive Opportunity:  One-time grant of 200,000 restricted stock
units (RSUs), awarded under TSCM’s 2007 Performance Incentive Plan (with RSUs
being payable in full-value shares of TSCM Common Stock (“Shares”) in accordance
with the terms of the annual vesting schedule described below, unless the
payment date is accelerated or the RSUs are forfeited, as provided below). Tom
will have the option to elect to have his tax withholding obligation in
connection with the RSUs satisfied through the withholding of Shares underlying
the RSU award.

 

 
 
o
Grant of RSUs: Granted as soon as practicable after Tom’s first day of
employment with TSCM.

 
 
o
Vesting of RSUs:

 
 
§
Annual Vesting: Unless vesting is accelerated pursuant to an event described
herein, or the RSUs are forfeited prior to vesting, RSUs shall vest according to
the following schedule:

 

 
 
·
20,000 RSUs shall vest on the 1st anniversary of the RSU grant date;

 
 
·
An additional 20,000 RSUs shall vest on the 2nd anniversary of the RSU grant
date;

 
 
·
An additional 20,000 RSUs shall vest on the 3rd anniversary of the RSU grant
date;

 
 
·
An additional 20,000 RSUs shall vest on the 4th anniversary of the RSU grant
date;

 
 
·
The remaining 120,000 RSUs shall vest on the 5th anniversary of the RSU grant
date.

 

 
Shares underlying RSUs that vest according to the above schedule shall be
distributed to Tom free and clear of all vesting restrictions (net of Shares
withheld to pay taxes, if so elected by Tom) within 30 days following the
applicable vesting date of such RSUs.
 

 
1

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

 

 
§
Accelerated Vesting on Certain Events: In the event of the first to occur of any
one of the three events described immediately below in (A), (B), or (C) below,
some or all unvested RSUs that have not been forfeited prior to such event shall
have their vesting accelerated (such RSUs, the “Accelerated RSUs”) upon the
following terms:

 

 
 
·
(A) A change-in-control (CIC) event (for purposes of this Term Sheet, having the
same definition as provided in the 2007 Performance Incentive Plan) shall result
in immediate 100% vesting of all RSUs that are unvested on the effective date of
consummation of the CIC.

 
 
·
(B) An involuntary termination of Tom’s employment without Cause (“Cause”
generally defined as egregious acts such as fraud, commission of a felony, etc.,
determined in the good faith judgment of TSCM’s Compensation Committee) shall
result in partial vesting on the effective date of termination of the following
number of RSUs:

 

 
 
o
100,000 RSUs, PLUS;

 
 
o
The number of RSUs represented by the product of (i) 100,000 MULTIPLIED by (ii)
a fraction, the numerator of which is the lesser of: (a) 730; or (b) the number
of calendar days from and including Tom’s 366th calendar day of employment with
TSCM, to and including the effective date of Tom’s employment termination under
this provision, and the denominator of which is 730 (for the avoidance of doubt,
if Tom’s employment termination under this provision occurs prior to the 366th
calendar day of Tom’s employment with TSCM, this fraction shall equal zero);
MINUS

 
 
o
The number of RSUs that had vested prior to the effective date of Tom’s
employment termination under this provision.

 

 
Notwithstanding any other provision of this Term Sheet, accelerated vesting of
RSUs under this provision shall be contingent on Tom executing a release of
legal claims against TSCM, in such format as is provided in the good faith
judgment of the Compensation Committee and the CEO. In the absence of a properly
executed release of legal claims, all unvested RSUs shall be forfeited without
payment following an involuntary termination without Cause.
 

 
 
·
(C) A voluntary termination by Tom for Good Reason (with “Good Reason” having
the definition ascribed to such term under the “Good Reason” safe harbor
provisions of Section 409A of the Internal Revenue Code and the Treasury
Regulations promulgated thereunder (“Section 409A”), all as determined in good
faith by TSCM’s Compensation Committee) shall result in partial vesting on the
effective date of termination of the following number of RSUs:

 

 
 
o
100,000 RSUs, PLUS;

 
 
o
The number of RSUs represented by the product of (i) 100,000 MULTIPLIED by (ii)
a fraction, the numerator of which is the lesser of: (a) 730; or (b) the number
of calendar days from and including Tom’s 366th calendar day of employment with
TSCM, to and including the effective date of Tom’s employment termination under
this provision, and the denominator of which is 730 (for the avoidance of doubt,
if Tom’s employment termination under this provision occurs prior to the 366th
calendar day of Tom’s employment with TSCM, this fraction shall equal zero);
MINUS

 
 
o
The number of RSUs that had vested prior to the effective date of Tom’s
employment termination under this provision.

 

 
Notwithstanding any other provision of this Term Sheet, accelerated vesting of
RSUs under this provision shall be contingent on Tom executing a release of
legal claims against TSCM, in such format as is provided in the good faith
judgment of the Compensation Committee and the CEO. In the absence of a properly
executed release of legal claims, all unvested RSUs shall be forfeited without
payment following a voluntary termination for Good Reason.
 

 
2

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

 

 
§
Death or Disability: In the event of Tom’s death or disability (generally
defined as a physical or mental condition incapacitating Tom from the ability to
effectively execute his role with TSCM, as determined in good faith by TSCM’s
Compensation Committee) before the occurrence of any one of the “Accelerated
Vesting” events described above, Tom shall vest in a prorated number of the
RSUs, with the proration determined as a function of the length of time served
by Tom with TSCM prior to death or disability in relation to the two-year period
following grant of the RSUs (e.g., a disability at the 1st anniversary of the
RSU grant date would result in vesting and accelerated delivery of 50% of the
RSU award, net of any RSUs that have already vested prior to death or
disability). As an example, and for the avoidance of doubt, if a death or
disability happens immediately after the 1st anniversary of the RSU grant date,
the net number of RSUs that would vest under this provision would equal
[(200,000/2) – 20,000 (the RSUs that vested according to their normal annual
schedule)] = 80,000).

 

 
 
o
Payment Acceleration Events: Unless sooner forfeited due to a “Forfeiture Event”
described below, and other than the distribution of Shares underlying RSUs that
have vested according to their regular vesting schedule (i.e., the 10%, 10%,
10%, 10%, 60% schedule described above in this Term Sheet), all outstanding and
previously undistributed RSUs shall be paid to Tom on an accelerated basis
following any of the employment termination events described below, with
delivery of the RSU value occurring at the times described below:

 

 
 
§
Consummation of a CIC, with delivery of RSU value occurring within 30 days after
the effective date of the CIC; or

 
 
§
An involuntary termination of Tom’s employment without Cause, in which case,
delivery of RSU value will occur within 30 days after the effective date of
termination, contingent on proper execution of a release of legal claims against
TSCM, as provided in this Term Sheet; or

 
 
§
A voluntary termination by Tom for Good Reason in which case, delivery of RSU
value will occur within 30 days after the effective date of termination,
contingent on proper execution of a release of legal claims against TSCM, as
provided in this Term Sheet; or

 
 
§
Disability (as defined in Section 409A), in which case, delivery of RSU value
will occur within 30 days after the effective date of Disability; or

 
 
§
Death, in which case, delivery of RSU value will occur within 30 days after
death.

 

 
 
o
Forfeiture Events: All RSUs that have not been paid to Tom by delivery of the
underlying Shares (except in the case of voluntary termination without Good
Reason, in which case the prior clause shall be deemed to refer to RSUs that
have not vested) prior to the 5th anniversary of the date of grant of the RSUs
shall be forfeited without payment (regardless of the vested status of the RSUs)
if any one of the following occurs prior to delivery (vesting, in the case of
voluntary termination without Good Reason) of the Shares underlying the RSU
awards:

 

 
 
§
TSCM involuntarily terminates Tom’s employment for “Cause”; or

 
 
§
Tom voluntarily terminates his employment as without Good Reason prior to the
fifth anniversary of his first day of employment with TSCM; or

 
 
§
Tom engages in competitive activity (to be defined in the RSU award agreement)
with TSCM within two years after his last day of employment with TSCM; or

 
 
§
Tom breaches the provisions to be included within the RSU award agreement
pertaining to non-solicitation of employees and clients of TSCM (within the
two-year period following employment termination), confidentiality of
information, or disparagement of TSCM.

 

 
In addition, TSCM reserves the right to claw back RSU value delivered if within
two years after delivery of the RSU value Tom engages in competitive activities
that violate the terms of the non-compete/non-solicit covenants to be included
in the RSU award agreement, or if he violates the non-disparagement or
confidentiality provisions of the RSU award agreement.
 

 
3

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

 

·
General Severance: In the event that, prior to the effective date of a CIC,
Tom’s employment is involuntarily terminated by TSCM without Cause, then subject
to the caveat prohibiting payment of both general severance and CIC severance
(as described below), TSCM shall pay Tom a general severance amount equal to the
greater of (i) the Minimum Payment (as defined below) and (ii) the amount
determined according to the following formula, but in no event greater than 52
weeks of Tom’s base pay (at the annualized rate in effect immediately prior to
termination):

 

 
 
o
Four weeks of Tom’s base pay (at the annualized rate in effect immediately prior
to termination); PLUS

 
 
o
An amount of severance represented by the product of: (i) an amount of money
equal to four weeks of Tom’s base pay (determined by reference to the annualized
rate of base pay in effect immediately prior to termination); MULTIPLIED by (ii)
a fraction, the numerator of which is the number of calendar days from and
including Tom’s 366th calendar day of employment with TSCM, to and including the
effective date of Tom’s employment termination under this provision, and the
denominator of which is 365 (for the avoidance of doubt, if Tom’s employment
termination under this provision occurs prior to the 366th calendar day of Tom’s
employment with TSCM, this fraction shall equal zero).

 

 
The “Minimum Payment” is the amount, if any, by which 52 weeks of Tom’s base pay
(at the annualized rate in effect immediately prior to termination) exceeds the
sum of (i) the Accelerated RSU Value (as defined below) plus (ii) the amount of
dividend equivalents to be delivered to Tom in connection with TSCM’s delivery
of Shares underlying the Accelerated RSUs.  The “Accelerated RSU Value” is the
product of (x) the number of the Accelerated RSUs, multiplied by (y) the fair
market value of TSCM’s Common Stock on the date of Tom’s termination, as
determined by TSCM pursuant to the provisions of the 2007 Performance Incentive
Plan.
 

 
Notwithstanding any other provision of this Term Sheet, payment of general
severance under this provision shall be contingent on Tom executing a release of
legal claims against TSCM, in such format as is provided in the good faith
judgment of the Compensation Committee and the CEO. In the absence of a properly
executed release of legal claims, no general severance shall be paid.
 

 
Subject to the CIC caveat prohibiting payment of both general severance and CIC
severance (as described below), and further subject to execution of a release of
legal claims against TSCM as provided above, TSCM shall pay Tom the general
severance within 30 days following the effective date of termination. In the
event that Tom qualifies to receive CIC severance, and if prior to the payment
of CIC severance TSCM has already paid Tom general severance amounts, the full
value of such general severance amounts paid shall be offset against any CIC
severance payable to Tom.
 

 
·
Change-in-Control Severance: Subject to the caveat prohibiting payment of both
general severance and CIC severance (as described above), if a CIC is
consummated prior to November 15, 2011, and if Tom’s employment is terminated
within two years after the effective date of consummation of the CIC (i) by TSCM
without Cause or (ii) by Tom for Good Reason, Tom would be paid 12 months of
base salary at the annualized rate in effect on the date of employment
termination.

 

 
 
o
For all purposes of this Term Sheet, Tom shall receive the described benefits
associated with a CIC (i.e., CIC severance and RSU vesting) if Tom is employed
at the time events or efforts are initiated that directly lead to consummation
of a CIC, provided that such a CIC will only so qualify for this provision if
the consummation of the CIC occurs within six months of Tom’s last day of
employment.

 
 
o
Payment shall be made within 30 days after the effective date of the CIC, unless
a delay is necessary to avoid imposition of additional taxes under Section 409A
(in which case, the delay shall be for the minimum time frame necessary to avoid
additional 409A taxes).

 

 
·
Perks and Health and Welfare Benefits:  Tom will be eligible to receive
perquisites and general health and welfare benefit coverage at a level at least
equal to those provided to other comparably situated full-time executives of
TSCM.

 
·
Internal Revenue Code Section 409A Saving Clause: TSCM will make all reasonable
efforts to deliver the value in connection with RSUs and CIC severance in a
manner that avoids imposition of additional taxes under Internal Revenue Code
Section 409A.

 
·
Start Date; Sign-On Bonus:  Tom will commence work at TSCM on September 7,
2010.  Promptly (an in any event within 30 days) after Tom commences employment
with TSCM, TSCM will pay him a one-time sign-on bonus in the amount of $15,000;
provided, however, that this amount shall be offset by the amount of any bonus
with respect to 2010 that Tom may receive from his current employer (a “Prior
Employer 2010 Bonus”); if Tom receives a Prior Employer 2010 Bonus payment after
TSCM pays his sign-on bonus, he shall refund to TSCM the amount of the Prior
Employer 2010 Bonus (but in no event more than $15,000).  Tom will notify TSCM
promptly upon receipt of a Prior Employer 2010 Bonus.

 

 
Signed, this __ day of July, 2010
 

 
/s/ Daryl Otte
 
/s/ Thomas Etergino
Daryl Otte, CEO
 
Tom Etergino
7/28/10