Exhibit 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of August 31, 2010, is
entered into by and between Demand Media, Inc., a Delaware corporation (the
“Company”) and Taryn Naidu (the “Executive”).
WHEREAS, the Company desires to continue to employ the Executive and to enter
into an agreement embodying the terms of such employment; and
WHEREAS, the Executive desires to accept such continuation of employment with
the Company, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.    Employment Period. Subject to the provisions for earlier termination
hereinafter provided, the Executive’s employment hereunder shall be for a term
commencing on the Effective Date and ending on the fourth (4th) anniversary of
the Effective Date (the “Employment Period”). For purposes of this Agreement,
“Effective Date” shall mean the date of the closing of the Company’s initial
public offering of shares of its common stock. The Executive’s employment
hereunder is terminable at will by the Company or by the Executive at any time
(for any reason or for no reason), subject to the provisions of Section 4
hereof. This Agreement shall become effective on the Effective Date and, in the
event the Effective Date does not occur on or prior to March 31, 2011 (or such
later date as the Company and Executive agree in writing), then this Agreement
shall terminate on such date and shall be of no force or effect.
2.    Terms of Employment.
(a)    Position and Duties.
(i)    During the Employment Period, the Executive shall serve as the Company’s
Senior Vice President, Registrar Services, reporting to the Chief Executive
Officer or his or her designee, and shall perform such duties as are usual and
customary for such position. At the Company’s request, the Executive shall serve
the Company and/or its subsidiaries and affiliates in other capacities in
addition to the foregoing consistent with the Executive’s role as Senior Vice
President, Registrar Services of the Company. In the event that the Executive,
during the Employment Period, serves in any one or more of such additional
capacities, the Executive’s compensation shall not be increased beyond that
specified in Section 2(b) hereof. In addition, in the event the Executive’s
service in one or more of such additional capacities is terminated, the
Executive’s compensation, as specified in Section 2(b) hereof, shall not be
diminished or reduced in any manner as a result of such termination provided
that the Executive otherwise remains employed under the terms of this Agreement.

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

(ii)    During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive may be entitled, the Executive agrees to
devote the Executive’s full business time and attention to the business and
affairs of the Company. Notwithstanding the foregoing, during the Employment
Period, it shall not be a violation of this Agreement for the Executive to
engage in any of the following activities: (A) serve on boards, committees or
similar bodies of charitable or nonprofit organizations, (B) fulfill limited
teaching, speaking and writing engagements on a volunteer basis, and/or (C)
holding economic interests in companies in which the Executive does not take an
operating role (not to exceed a 5% interest in any company), in each case, so
long as such activities do not, individually or in the aggregate, materially
interfere or conflict with the performance of the Executive’s duties and
responsibilities under this Agreement.
(iii)    During the Employment Period, the Executive shall perform the services
required by this Agreement at the Company’s principal offices located in
Bellevue, Washington (the “Principal Location”), except for travel to other
locations as may be necessary to fulfill the Executive’s duties and
responsibilities hereunder.
(b)    Compensation, Benefits, Etc.
(i)    Base Salary. During the Employment Period, the Executive shall receive a
base salary initially set at the rate in effect as of the Effective Date, and
increased on January 1, 2011 to a rate of $235,000 per annum (the “Base
Salary”). The Base Salary shall be reviewed annually by the Compensation
Committee (the “Compensation Committee”) of the Board (the “Board”) and may be
increased from time to time by the Compensation Committee in its sole
discretion. The Base Salary shall be paid in installments in accordance with the
Company’s applicable payroll practices, as in effect from time to time, but no
less often than monthly.
(ii)    Annual Bonus. In addition to the Base Salary, the Executive shall be
eligible to earn, for each fiscal year of the Company ending during the
Employment Period, a discretionary cash performance bonus (an “Annual Bonus”)
under the Company’s bonus plan or program applicable to senior executives. The
Executive’s target Annual Bonus for 2010 shall be set at the level in effect as
of the Effective Date and shall, for fiscal years 2011 and later during the
Employment Period, be set at fifty percent (50%) of the Base Salary actually
paid for such year, but the actual amount of the Annual Bonus shall be
determined on the basis of the attainment of Company performance metrics and/or
individual performance objectives, in each case, as established and approved by
the Board or the Compensation Committee (or their designee) in its sole
discretion. Payment of any Annual Bonus(es), to the extent any Annual Bonus(es)
become payable, will be contingent upon the Executive’s continued employment
through the applicable payment date, which shall occur on the date on which
annual bonuses are paid generally to the Company’s similarly situated
executives.
(iii)    Stock Option Award. Subject to adoption by the Board and approval by
the Company’s stockholders of the 2010 Incentive Award Plan (the “Plan”),

2

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

the Company shall grant to the Executive, as soon as practicable after the
execution of this Agreement (which grant date, for the avoidance of doubt, may
precede the Effective Date) (the “Grant Date”), a nonqualified option to
purchase one hundred twenty-five thousand (125,000) shares of the Company’s
common stock (the “Stock Option”) with an exercise price equal $9.00 per share.
Subject to Section 4(a) hereof, the Stock Option shall vest and become
exercisable in substantially equal installments (rounded up to the nearest whole
share) on each monthly anniversary of the Effective Date occurring over the four
(4)-year period immediately following the Effective Date, subject to the
Executive’s continued employment with the Company through such date. If the
Effective Date does not occur on or prior to March 31, 2011 for any reason,
then, notwithstanding anything to the contrary, the Stock Option shall terminate
and be forfeited, and the Company shall have no further obligations with respect
thereto. The terms and conditions of the Stock Option shall, in a manner
consistent with this Section 2(b)(iii), be set forth in a separate award
agreement in a form prescribed by the Company (the “Stock Option Agreement”), to
be entered into by the Company and the Executive, which shall evidence the grant
of the Stock Option. The Stock Option shall be governed in all respects by the
terms and conditions of the Plan.
(iv)    Incentive, Savings and Retirement Plans. During the Employment Period,
the Executive shall be eligible to participate in all other incentive plans,
practices, policies and programs, and all savings and retirement plans,
practices, policies and programs, in each case that are available generally to
similarly situated executives of the Company.
(v)    Welfare Benefit Plans. During the Employment Period, the Executive and
the Executive’s dependents shall be eligible to participate in the welfare
benefit plans, practices, policies and programs (including, as applicable,
medical, dental, disability, employee life, group life and accidental death
insurance plans and programs) maintained by the Company for its similarly
situated executives.
(vi)    Expenses. During the Employment Period, the Executive shall be entitled
to receive prompt reimbursement for all reasonable business expenses incurred by
the Executive in accordance with the policies, practices and procedures of the
Company provided to similarly situated executives of the Company.
(vii)    Fringe Benefits. During the Employment Period, the Executive shall be
entitled to such fringe benefits and perquisites as are provided by the Company
to its similarly situated executives from time to time, in accordance with the
policies, practices and procedures of the Company, and shall receive such
additional fringe benefits and perquisites as the Company may, in its
discretion, from time-to-time provide. Nothing contained in Sections
2(b)(iv)-(v) hereof or this Section 2(b)(vii) shall, or shall be construed to,
obligate the Company to adopt or maintain any incentive, savings, retirement,
welfare, fringe benefit or other plan(s) or program(s) at any time.
(viii)    Vacation. During the Employment Period, the Executive shall not be
entitled to a fixed number of paid vacation, personal or sick days per year. As
a

3

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

salaried employee, the Company expects the Executive to use the Executive’s
judgment to take time off from work for vacation or other personal time in a
manner consistent with getting the Executive’s work done in a timely fashion,
providing excellent service to the Company’s customers and partners and avoiding
inconveniencing the Executive’s co-workers. To the extent the Executive has an
existing balance of accrued, unused vacation as of the Effective Date, that time
will be applied to the Executive’s absences until it is exhausted.
3.    Termination of Employment.
(a)    Death or Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. Either
the Company or the Executive may terminate the Executive’s employment in the
event of the Executive’s Disability during the Employment Period. For purposes
of this Agreement, “Disability” shall mean a disability as determined under the
Company’s applicable long-term disability plan that prevents the Executive from
performing the Executive’s duties under this Agreement (even with a reasonable
accommodation by the Company) for a period of six (6) months or more or, if no
such plan applies, as determined in the reasonable discretion of the Company.
(a)        Cause. The Company may terminate the Executive’s employment during
the Employment Period for Cause or without Cause. For purposes of this
Agreement, “Cause” shall have the meaning set forth in the Plan.
(b)        Termination by the Executive. The Executive’s employment may be
terminated by the Executive for any reason, including with Good Reason in
connection with a Change in Control (as defined in the Plan). For purposes of
this Agreement, “Good Reason” shall mean the occurrence of any one or more of
the following events in connection with a Change in Control, in any case,
without the Executive’s prior written consent, unless the Company fully corrects
the circumstances constituting Good Reason (provided such circumstances are
capable of correction) as provided below:
(i)         a demotion or material diminution of the Executive’s position,
authority, duties or responsibilities (other than any insubstantial action not
taken in bad faith and which is promptly remedied by the Company upon notice by
the Executive); provided that “Good Reason” does not include a change in title,
authority, duties and/or responsibilities following a Change in Control if (A)
the Executive’s new title is that of a senior officer of the entity surviving
such Change in Control (or, if applicable, its parent company if such entity has
a parent company) reporting directly to an executive officer of the entity
surviving such Change in Control (or, if applicable, its parent company, if such
entity has a parent company), and the Executive’s authority, duties and
responsibilities are commensurate with such title or (B) (1) the entity
surviving such Change in Control (or, if applicable, its parent company if such
entity has a parent company) continues to operate the Company’s principal
businesses as a separate unit, division or subsidiary or combines the Company’s
principal businesses with one of its existing units, divisions or
subsidiaries and (2) the Executive’s new title is that of a senior officer of
such unit, division or subsidiary reporting directly to an executive officer of

4

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

such unit, division or subsidiary (or to an executive officer of the entity
surviving the Change in Control or parent company thereof) and (in either case),
the Executive’s authority, duties and responsibilities are commensurate with
such title and similar in scope (with respect to such unit, division or
subsidiary) to the authority, duties and responsibilities of the Executive prior
to the Change in Control
(ii)         a requirement that the Executive report to work more than twenty
(20) miles from the Company’s Principal Location (not including normal business
travel required of the Executive’s position) or, to the extent such requirement
would not constitute a material change in the geographic location at which the
Executive must perform services under this Agreement within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), such
higher number of miles from the Company’s Principal Location as would constitute
a material change in the geographic location at which the Executive must perform
services under this Agreement within the meaning of Section 409A of the Code;
(iii)         a material reduction in the Executive’s base salary; or
(iv)        a material breach by the Company of its obligations hereunder.
Notwithstanding the foregoing, the Executive will not be deemed to have resigned
for Good Reason unless (1) the Executive provides the Company with written
notice setting forth in reasonable detail the facts and circumstances claimed by
the Executive to constitute Good Reason within sixty (60) days after the date of
the occurrence of any event that the Executive knows or should reasonably have
known to constitute Good Reason, (2) the Company fails to cure such acts or
omissions within thirty (30) days following its receipt of such notice, and (3)
the effective date of the Executive’s termination for Good Reason occurs no
later than sixty (60) days after the expiration of the Company’s cure period.
(c)        Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by a Notice of
Termination to the other parties hereto given in accordance with Section 10(b)
hereof. For purposes of this Agreement, a “Notice of Termination” means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than sixty
(60) days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive’s or the Company’s rights hereunder.

5

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

(d)        Termination of Offices and Directorships. Upon termination of the
Executive’s employment for any reason, unless otherwise specified in a written
agreement between the Executive and the Company, the Executive shall be deemed
to have resigned from all offices, directorships, and other employment positions
if any, then held with the Company, and shall take all actions reasonably
requested by the Company to effectuate the foregoing.
4.        Obligations of the Company upon Termination.
(a)        Without Cause, For Good Reason, Death or Disability. Subject to
Section 4(d) hereof, if the Executive incurs a “separation from service” from
the Company (within the meaning of Section 409A(a)(2)(A)(i) of the Code, and
Treasury Regulation Section 1.409A-1(h)) (a “Separation from Service”) during
the Employment Period (such date, the “Date of Termination”) by reason of (1) a
termination of the Executive’s employment by the Company without Cause; (2) a
termination of the Executive’s employment by the Executive for Good Reason; or
(3) a termination of the Executive’s employment by reason of the Executive’s
death or Disability (each of (1), (2) and (3), a “Qualifying Termination”):
(v)        The Executive (or the Executive’s estate or beneficiaries, if
applicable) shall be paid, in a single lump-sum payment on the date of the
Executive’s termination of employment, the aggregate amount of the Executive’s
earned but unpaid Base Salary and accrued but unpaid vacation pay (if any)
through the date of such termination (the “Accrued Obligations”), in each case,
to the extent not previously paid.
(vi)        In addition, subject to Section 4(d) hereof and the Executive’s (or
the Executive’s estate’s or beneficiaries’, if applicable) timely execution and
non-revocation of a Release (as described below), the Executive (or the
Executive’s estate or beneficiaries, if applicable) shall be paid:
(A)    an amount equal to six (6) months’ of the Base Salary in effect on the
Date of Termination (the “Continuation Amount”), payable in substantially equal
installments (the “Installments”) in accordance with the Company’s normal
payroll procedures during the period commencing on the Date of Termination and
ending on the six (6)-month anniversary of the Date of Termination; provided,
however, that no payments under this Section 4(a)(ii)(A) shall be made prior to
the first payroll date occurring on or after the thirtieth (30th) day following
the Date of Termination (such payroll date, the “First Payroll Date”) (with
amounts otherwise payable prior to the First Payroll Date paid on the First
Payroll Date without interest thereon); provided, further, that in no event
shall any of the Installments be paid later than March 15th of the year
following that in which the Date of Termination occurs, and any of Installments
that would otherwise be paid after such March 15th shall instead be paid on such
March 15th; and
(B)    any unpaid Annual Bonus to which the Executive would have become entitled
for any fiscal year of the Company that ends on or before

6

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

the Date of Termination had the Executive remained employed through the payment
date, payable in a single lump-sum payment on the date on which annual bonuses
are paid to the Company’s senior executives generally for such calendar year,
but in no event later than March 15th of the calendar year immediately following
the calendar year in which the Date of Termination occurs, with the actual date
within such period determined by the Company in its sole discretion.
(vii)          In addition, subject to Section 4(d) hereof and conditioned upon
the Executive’s timely execution and non-revocation of a Release, during the
period commencing on the Date of Termination and ending on the six (6)-month
anniversary of the Date of Termination or, if earlier, the date on which the
Executive becomes eligible for coverage under the group health plan of a
subsequent employer (of which eligibility the Executive hereby agrees to give
prompt notice to the Company) (in any case, the “COBRA Period”), subject to the
Executive’s valid election to continue healthcare coverage under Section 4980B
of the Code and the regulations thereunder, the Company shall continue to
provide the Executive and the Executive’s eligible dependants with coverage
under its group health plans at the same levels and the same cost to the
Executive as would have applied if the Executive’s employment had not been
terminated based on the Executive’s elections in effect on the Date of
Termination), provided, however, that (1) if any plan pursuant to which such
benefits are provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section 409A of the
Code under Treasury Regulation Section 1.409A-1(a)(5), or (2) the Company is
otherwise unable to continue to cover the Executive under its group health
plans, then, in either case, an amount equal to each remaining Company subsidy
shall thereafter be paid to the Executive as currently taxable compensation in
substantially equal monthly installments over the continuation coverage period
(or the remaining portion thereof).
The payments and benefits described in the preceding Sections 4(a)(ii) and (iii)
are referred to herein as the “Severance.” Notwithstanding the foregoing, it
shall be a condition to the Executive’s (or the Executive’s estate’s or
beneficiaries’, if applicable) right to receive the Severance that the Executive
(or the Executive’s estate or beneficiaries, if applicable) execute and deliver
to the Company an effective release of claims in substantially the form attached
hereto as Exhibit A (the “Release”) within twenty-one (21) days (or, to the
extent required by law, forty-five (45) days) following the Date of Termination
and that the Executive (or the Executive’s estate or beneficiaries, if
applicable) not revoke such Release during any applicable revocation period.
(b)        For Cause, Without Good Reason or Other Terminations. If the Company
terminates the Executive’s employment for Cause, the Executive terminates the
Executive’s employment without Good Reason, or the Executive’s employment
terminates for any other reason not enumerated in this Section 4, in any case,
during the Employment Period, the Company shall pay to the Executive the Accrued
Obligations in cash within thirty (30) days after the Date of Termination (or by
such earlier date as may be required by applicable law).

7

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

(c)        Equity Vesting in Connection with a Change in Control. In addition to
any payments or benefits due to the Executive under Section 4(a) above (if any),
subject to and conditioned upon the Executive’s timely execution and
non-revocation of a Release, if the Executive’s employment is terminated by
reason of a Qualifying Termination and a Change in Control (A) occurs on or
within ninety (90) days after the Date of Termination or (B) has occurred within
one (1) year before the Date of Termination, all outstanding compensatory equity
awards that have not yet vested shall conditionally vest and, as applicable,
become exercisable on the later of the Date of Termination and the date of such
Change in Control (and such vesting shall become unconditional upon such
execution and non-revocation of a Release); provided, however, that if the
Executive fails to timely execute or revokes the Release, all such conditionally
vested awards (and any shares received in respect of such awards) shall be
forfeited upon such failure or revocation (subject to repayment by the Company
to the Executive of any amounts (if any) paid by the Executive with respect to
shares underlying such conditionally vested awards. For the avoidance of doubt,
if a Qualifying Termination occurs prior to a Change in Control, all
outstanding, unvested compensatory equity awards that would otherwise terminate
on the Date of Termination shall remain outstanding and eligible to vest solely
upon a Change in Control occurring within ninety (90) days after the Date of
Termination (but shall not otherwise vest following the Date of Termination) and
shall terminate on the ninetieth (90th) day following the Date of Termination if
a Change in Control has not occurred on or prior to such ninetieth (90th) day
(or such earlier expiration date applicable to the award (other than due to a
termination of employment)).
(d)        Six-Month Delay. Notwithstanding anything to the contrary in this
Agreement, no compensation or benefits, including without limitation any
severance payments or benefits payable under Section 4 hereof, shall be paid to
the Executive during the six (6)-month period following the Executive’s
“separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the
Code) if the Company determines that paying such amounts at the time or times
indicated in this Agreement would be a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a
result of the previous sentence, then on the first business day following the
end of such six (6)-month period (or such earlier date upon which such amount
can be paid under Section 409A of the Code without resulting in a prohibited
distribution, including as a result of the Executive’s death), the Company shall
pay the Executive a lump-sum amount equal to the cumulative amount that would
have otherwise been payable to the Executive during such period.
(e)        Exclusive Benefits. Except as expressly provided in this Section 4
and subject to Section 5 hereof, the Executive shall not be entitled to any
additional payments or benefits upon or in connection with the Executive’s
termination of employment.
(f)        Equity Award Agreements. For the avoidance of doubt, nothing
contained in this Agreement is intended to result in any vesting terms that are
less favorable to the Executive than those contained in any applicable equity
award agreement and, to the extent that the vesting terms contained in any such
award agreement are more favorable to the Executive than those provided herein,
including, without limitation, this Section 4, the terms of such award agreement
shall control.

8

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

5.        Non-Exclusivity of Rights. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan, policy, practice
or program of or any contract or agreement with the Company at or subsequent to
the Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by
this Agreement.
6.        Excess Parachute Payments, Limitations on Payments.
(a)        Best Pay Cap. Notwithstanding any other provision of this Agreement,
in the event that any payment or benefit received or to be received by the
Executive (including any payment or benefit received in connection with a
termination of the Executive’s employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement) (all such payments and
benefits, including the payments and benefits under Section 4 hereof, being
hereinafter referred to as the “Total Payments”) would be subject (in whole or
part), to excise tax imposed under Section 4999 of the Code (the “Excise Tax”),
then, after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or agreement,
the cash severance payments under this Agreement shall first be reduced, and the
noncash severance payments hereunder shall thereafter be reduced, to the extent
necessary so that no portion of the Total Payments is subject to the Excise Tax
but only if (A) the net amount of such Total Payments, as so reduced (and after
subtracting the net amount of federal, state and local income taxes on such
reduced Total Payments and after taking into account the phase out of itemized
deductions and personal exemptions attributable to such reduced Total Payments)
is greater than or equal to (B) the net amount of such Total Payments without
such reduction (but after subtracting the net amount of federal, state and local
income taxes on such Total Payments and the amount of Excise Tax to which the
Executive would be subject in respect of such unreduced Total Payments and after
taking into account the phase out of itemized deductions and personal exemptions
attributable to such unreduced Total Payments). The Total Payments shall be
reduced in the following order: (A) reduction of any cash severance payments
otherwise payable to the Executive that are exempt from Section 409A of the
Code; (B) reduction of any other cash payments or benefits otherwise payable to
the Executive that are exempt from Section 409A of the Code, but excluding any
payments attributable to any acceleration of vesting or payments with respect to
any equity award that are exempt from Section 409A of the Code; (C) reduction of
any other payments or benefits otherwise payable to the Executive on a pro-rata
basis or such other manner that complies with Section 409A of the Code, but
excluding any payments attributable to any acceleration of vesting and payments
with respect to any equity award that are exempt from Section 409A of the Code;
and (D) reduction of any payments attributable to any acceleration of vesting or
payments with respect to any equity award that are exempt from Section 409A of
the Code, in each case beginning with payments that would otherwise be made last
in time.
(b)        Certain Exclusions. For purposes of determining whether and the
extent to which the Total Payments will be subject to the Excise Tax, (A) no
portion of the Total Payments the receipt or enjoyment of which the Executive
shall have waived at such time and in such manner as not to constitute a
“payment” within the meaning of Section 280G(b) of the Code shall be taken into
account; (B) no portion of the Total Payments shall be taken into account which,
in the written opinion of an independent, nationally recognized accounting firm
(the

9

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

“Accounting Firm”), does not constitute a “parachute payment” within the meaning
of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A)
of the Code) and, in calculating the Excise Tax, no portion of such Total
Payments shall be taken into account which, in the opinion of the Accounting
Firm, constitutes reasonable compensation for services actually rendered, within
the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount
(as defined in Section 280G(b)(3) of the Code) allocable to such reasonable
compensation; and (iii) the value of any non cash benefit or any deferred
payment or benefit included in the Total Payments shall be determined by the
Accounting Firm in accordance with the principles of Sections 280G(d)(3) and (4)
of the Code.
7.        Confidential Information and Non-Solicitation. The Executive hereby
acknowledges that the Executive has previously entered into an agreement with
the Company containing confidentiality and other protective covenants (the
“Confidentiality Agreement”) and that the Executive remains bound by the terms
and conditions of the Confidentiality Agreement.
8.        Representations. The Executive hereby represents and warrants to the
Company that (a) the Executive is entering into this Agreement voluntarily and
that the performance of the Executive’s obligations hereunder will not violate
any agreement between the Executive and any other person, firm, organization or
other entity, and (b) the Executive is not bound by the terms of any agreement
with any previous employer or other party to refrain from competing, directly or
indirectly, with the business of such previous employer or other party that
would be violated by the Executive’s entering into this Agreement and/or
providing services to the Company pursuant to the terms of this Agreement.    
9.        Successors.
(a)    This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.
(a)        This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(b)        The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to 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 had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
10.        Miscellaneous.
(a)        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington, without reference to
principles

10

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

of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(b)        Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: at the Executive’s most recent address on the records of
the Company.
If to the Company:
Demand Media, Inc.
1333 Second Street, Ste. 100
Santa Monica, CA 90401
Attn: General Counsel

with a copy to:
Latham & Watkins LLP
355 South Grand Ave.
Los Angeles, CA 90071-1560
Attn: Alex Voxman
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c)        Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the
contrary, if the Company determines, in its good faith judgment, that any
transfer or deemed transfer of funds hereunder is likely to be construed as a
personal loan prohibited by Section 13(k) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”) and the rules and regulations promulgated
thereunder, then such transfer or deemed transfer shall not be made to the
extent necessary or appropriate so as not to violate the Exchange Act and the
rules and regulations promulgated thereunder.
(d)        Section 409A of the Code.
(i)     To the extent applicable, this Agreement shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations
and other interpretive guidance issued thereunder. Notwithstanding any provision
of this Agreement to the contrary, if the Company determines that any
compensation or benefits payable under this Agreement may be subject to Section
409A of the Code and related Department of Treasury guidance, the Company shall
work in good faith with the Executive to adopt such amendments to this Agreement
or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, that the Company
determines are necessary or appropriate to avoid the imposition of taxes under
Section 409A of the Code,

11

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

including without limitation, actions intended to (i) exempt the compensation
and benefits payable under this Agreement from Section 409A of the Code, and/or
(ii) comply with the requirements of Section 409A of the Code and related
Department of Treasury guidance; provided, however, that this Section 10(d)
shall not create an obligation on the part of the Company to adopt any such
amendment, policy or procedure or take any such other action, nor shall the
Company have any liability for failing to do so.
(ii)     Any right to a series of installment payments pursuant to this
Agreement is to be treated as a right to a series of separate payments. To the
extent permitted under Section 409A of the Code, any separate payment or benefit
under this Agreement or otherwise shall not be deemed “nonqualified deferred
compensation” subject to Section 409A of the Code and Section 4(d) hereof to the
extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4),
Section 1.409A-1(b)(9) or any other applicable exception or provision of Section
409A of the Code.
(iii)     To the extent that any payments or reimbursements provided to the
Executive under this Agreement, including, without limitation, pursuant to
Section 2(b)(vii) hereof, are deemed to constitute compensation to the Executive
to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such
amounts shall be paid or reimbursed reasonably promptly, but not later than
December 31 of the year following the year in which the expense was incurred.
The amount of any such payments eligible for reimbursement in one year shall not
affect the payments or expenses that are eligible for payment or reimbursement
in any other taxable year, and the Executive’s right to such payments or
reimbursement of any such expenses shall not be subject to liquidation or
exchange for any other benefit.
(e)        Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f)        Withholding. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
(g)        No Waiver. The Executive’s or the Company’s failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 3(c) hereof, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
(h)        Entire Agreement. As of the Effective Date, this Agreement, together
with the Confidentiality Agreement, any prior equity award agreements, and the
Stock Option Agreement, constitutes the final, complete and exclusive agreement
between the Executive and the Company with respect to the subject matter hereof
and replaces and supersedes any and all other agreements, offers or promises,
whether oral or written, by any member of the Company and its subsidiaries and
affiliates, or representative thereof. The

12

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

Executive agrees that the Employment Agreement dated as of October 1, 2006 shall
be terminated and will be of no further force or effect from and after the
Effective Date. In the event that the Effective Date does not occur prior to
March 31, 2011 (or such later date as Executive and the Company agree in
writing), this Agreement (including, without limitation, the immediately
preceding sentence) shall have no force or effect.
(i)        Amendment. No amendment or other modification of this Agreement shall
be effective unless made in writing and signed by the parties hereto.
(j)        Counterparts. This Agreement and any agreement referenced herein may
be executed simultaneously in two or more counterparts, each of which shall be
deemed an original but which together shall constitute one and the same
instrument.

[SIGNATURE PAGE FOLLOWS]

13

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

IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
 
DEMAND MEDIA, INC.,
 
a Delaware corporation
 
 
 
By: /s/ Richard Rosenblatt
 
Name: Richard Rosenblatt
 
Title: Chairman & CEO
 
 
 
"EXECUTIVE"
 
 
 
/s/ Taryn Naidu
 
Taryn Naidu

14

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

EXHIBIT A

GENERAL RELEASE
    
For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned does hereby release and forever discharge the
“Releasees” hereunder, consisting of Demand Media, Inc., a Delaware corporation
(the “Company”) and each of its partners, subsidiaries, associates, affiliates,
successors, heirs, assigns, agents, directors, officers, employees,
representatives, lawyers, insurers, and all persons acting by, through, under or
in concert with them, or any of them, of and from any and all manner of action
or actions, cause or causes of action, in law or in equity, suits, debts, liens,
contracts, agreements, promises, liability, claims, demands, damages, losses,
costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown,
fixed or contingent (hereinafter called “Claims”), which the undersigned now has
or may hereafter have against the Releasees, or any of them, by reason of any
matter, cause, or thing whatsoever from the beginning of time to the date
hereof.  The Claims released herein include, without limiting the generality of
the foregoing, any Claims in any way arising out of, based upon, or related to
the employment or termination of employment of the undersigned by the Releasees,
or any of them; any alleged breach of any express or implied contract of
employment; any alleged torts or other alleged legal restrictions on Releasees’
right to terminate the employment of the undersigned; and any alleged violation
of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination In
Employment Act, the Americans With Disabilities Act, the Washington State Law
Against Discrimination, Revised Code of Washington, Title 49, Chapter 49.60 and
the California Fair Employment and Housing Act. Notwithstanding the foregoing,
this general release (the “Release”) shall not operate to release any rights or
claims of the undersigned (i) to payments or benefits under Section 4(a) of that
certain Employment Agreement, dated as of _________, 2010, between Demand Media,
Inc. and the undersigned (the “Employment Agreement”), whichever is applicable
to the payments and benefits provided in exchange for this Release, (ii) to
payments or benefits under any equity award agreement between the undersigned
and the Company, (iii) with respect to Section 2(b)(vi) of the Employment
Agreement, (iv) to accrued or vested benefits the undersigned may have, if any,
as of the date hereof under any applicable plan, policy, practice, program,
contract or agreement with the Company, or (v) to any Claims, including claims
for indemnification and/or advancement of expenses, arising under any
indemnification agreement between the undersigned and the Company or under the
bylaws, certificate of incorporation of other similar governing document of the
Company.
THE UNDERSIGNED ACKNOWLEDGES THAT THE EXECUTIVE HAS BEEN ADVISED BY LEGAL
COUNSEL AND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF

    
A-1

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

KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.”
THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY
RIGHTS THE EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR
COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE
UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:
(A)    THE EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING
THIS RELEASE;
(B)    THE EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE
SIGNING IT; AND
(C)    THE EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE
THIS RELEASE, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT
REVOCATION PERIOD.
The undersigned represents and warrants that there has been no assignment or
other transfer of any interest in any Claim which the Executive may have against
Releasees, or any of them, and the undersigned agrees to indemnify and hold
Releasees, and each of them, harmless from any liability, Claims, demands,
damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of
them, as the result of any such assignment or transfer or any rights or Claims
under any such assignment or transfer.  It is the intention of the parties that
this indemnity does not require payment as a condition precedent to recovery by
the Releasees against the undersigned under this indemnity.
The undersigned agrees that if the Executive hereafter commences any suit
arising out of, based upon, or relating to any of the Claims released hereunder
or in any manner asserts against Releasees, or any of them, any of the Claims
released hereunder, then the undersigned agrees to pay to Releasees, and each of
them, in addition to any other damages caused to Releasees thereby, all
attorneys’ fees incurred by Releasees in defending or otherwise responding to
said suit or Claim.
The undersigned further understands and agrees that neither the payment of any
sum of money nor the execution of this Release shall constitute or be construed
as an admission of any liability whatsoever by the Releasees, or any of them,
who have consistently taken the position that they have no liability whatsoever
to the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Release this ____ day of
___________, ____.

A-2

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

                        

A-3