Exhibit 10.2

 

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EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) is effective as of
December 15, 2014 (the “Effective Date”), and is made by and between Epiq
Systems, Inc., a Missouri corporation (the “Company”), and Brad D. Scott, an
individual (“Executive”).

WHEREAS, the Executive is the President and Chief Operating Officer of the
Company and a member of the Executive Committee (as defined below); and

WHEREAS, the Company and Executive desire to enter into this Agreement providing
for, among other things, Executive’s continuing employment by the Company on the
terms and conditions provided herein.

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

1. Definitions. Capitalized terms used but not defined in this Agreement shall
have the meanings ascribed to such terms in the Plan (as defined below). For
purposes of this Agreement:

(a) “Accrued Obligations” shall mean: (i) (A) any unpaid Base Salary through the
End Date; (B) reimbursement for any unreimbursed reasonable and appropriate
business expenses incurred through the End Date; and (C) any accrued but unused
vacation time, as of the End Date, in accordance with Company policy, in each
case, payable within sixty (60) days following the End Date (or as otherwise
required by applicable law); and (ii) all other accrued and vested payments,
benefits and fringe benefits to which the Executive shall be entitled up to and
including the End Date in accordance with the applicable compensation
arrangement or benefit plan or program of the Company.

(b) “Affiliates” shall mean with respect to an entity, any entity that Controls,
is Controlled by, or is under common Control with, that entity, and shall
include Subsidiaries.

(c) “Awards” shall have the meaning as set forth in the Plan.

(d) “Base Salary” shall mean the Executive’s annual base compensation rate for
services paid by the Company to the Executive at the time immediately prior to
the End Date, as reflected in the Company’s payroll records. Base Salary shall
not include commissions, bonuses, overtime pay, incentive compensation, benefits
paid under any qualified plan, any group medical, dental or other welfare
benefit plan, non-cash compensation, or any other additional compensation, but
shall include amounts reduced pursuant to the Executive’s salary reduction
agreement under Section 125, 132(f)(4) or 401(k) of the Internal Revenue Code,
if any, or a nonqualified elective deferred compensation arrangement, if any, to
the extent that in each such case the reduction is to base salary.

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(e) “Board” shall mean the Board of Directors of the Company.

(f) “Bonus” shall mean the greater of: (i) the cash value of the most recent
annual bonus actually earned (whether payable or paid in cash, stock or a
combination of both) by the Executive pursuant to a Bonus Arrangement; or
(ii) for each of the Company’s fiscal years 2014 and 2015, One Million Dollars
and Zero Cents ($1,000,000.00).

(g) “Bonus Arrangement” shall mean the Executive’s bonus, as provided under the
Company’s annual cash incentive compensation plan or program, any applicable
employment agreement between the Executive and the Company or as otherwise
determined by the Board or the Compensation Committee.

(h) “Cause” shall mean with respect to Executive one or more of the following:
(i) Executive being charged with a felony under the laws of the United States or
any state thereof, or any act of fraud or dishonesty; (ii) commission of an act
or omission that subjects Executive to being enjoined, suspended, barred or
otherwise disciplined for violation of any laws, regulations and rules
applicable to Executive, the Company, or any if its Affiliates; (iii) the
commission by Executive of any act or omission that constitutes misconduct and
is injurious to the Company or any of its Affiliates; (iv) Executive’s conduct
causing Company or any of its Affiliates public disgrace or disrepute or
substantial economic harm; (v) Executive’s failure or refusal to perform any
lawful duty under this Agreement or as reasonably directed by the CEO, which
failure is not cured, if curable, within five (5) business days after delivery
of notice thereof to Executive; (vi) any act or omission aiding or abetting a
competitor, supplier or customer of the Company or any of its Affiliates to the
disadvantage or detriment of the Company or any of its Affiliates;
(vii) commission by Executive of any willful act taken by Executive in bad faith
against the interests of the Company or any of its Affiliates; (viii) gross
negligence or willful misconduct with respect to the Company or any of its
Affiliates; or (ix) any material breach of this Agreement which, if curable, is
not cured within ten (10) business days after delivery of written notice thereof
to Executive. The cure period may be extended for such reasonable time as is
necessary to affect a cure as long as the Executive in the sole discretion of
the CEO begins to take reasonable steps to cure the event within the first five
(5) days after delivery of written notice to Executive; provided that following
a Change in Control, “Cause” shall mean only a termination for the Executive
being charged with a felony under the laws of the United States of any state
thereof, or any act of fraud or dishonesty. “Cause” also includes any of the
above grounds for dismissal regardless of whether the Company or any of its
Affiliates learns of it before or after terminating Executive’s employment.

(i) “Change in Control” shall have the meaning as set forth in the Plan.

(j) “Code Section 280G” shall mean Internal Revenue Code Section 280G and the
treasury regulations and other official guidance promulgated thereunder from
time to time.

(k) “Code Section 409A” shall mean Internal Revenue Code Section 409A and the
treasury regulations and other official guidance promulgated thereunder from
time to time.

 

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(l) “Code Section 4999” shall mean Internal Revenue Code Section 4999 and the
treasury regulations and other official guidance promulgated thereunder from
time to time.

(m) “Company Property” shall mean all Company property and equipment assigned
and provided to Executive by the Company to help Executive carry out Executive’s
Company responsibilities including but not limited to keys, credit cards, access
cards, Confidential Information, laptops, computer related and other office
equipment, mobile telephone, and other computer or communication devices.

(n) “Confidential Information” shall mean and includes any and all confidential
and/or proprietary information of the Company, its Affiliates and their
respective customers and suppliers, including but not limited to information
relating to the following: proprietary information; technical data, inventions,
trade secrets, intellectual property, know-how, software, developments,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration; business matters, business strategies, affairs, finances, sales,
financial condition, operations; marketing, product information, research,
product plans, products, services, customer lists, customers, markets; former,
current, or prospective clients, vendors or employees; and other information in
any form of a similar nature not available to the public; provided that
Confidential Information does not include any of the foregoing information or
items that are publicly known and generally available through no wrongful act of
Executive or of others who were under confidentiality obligations as to the
item(s) or information involved.

(o) “Control” (including with correlative meanings, the terms “Controlling,”
“Controlled by” and “under common Control with”) shall mean the possession
directly or indirectly of the power to direct or cause the direction of the
management and policies of an entity, whether through the ownership of voting
securities, by trust, management agreement, contract or otherwise.

(p) “Disability” shall mean a physical or mental illness, injury, or condition
that: (i) prevents, or is likely to prevent, as certified by a physician,
Executive from performing one or more of the essential functions of Executive’s
position, for at least 120 consecutive calendar days or for at least 150
calendar days, whether or not consecutive, in any 365 calendar day period; and
(ii) which cannot be accommodated with a reasonable accommodation, without undue
hardship on the Company, as specified in the Americans with Disabilities Act.

(q) “Disputes” (and each, a “Dispute”) shall mean any and all disputes,
controversies or claims that arise out of or in connection with, or relate in
any manner to, the rights and liabilities of the parties hereunder or any
provision of this Agreement or the interpretation, enforceability, performance,
breach, termination or validity hereof relating to the resolution of disputes
and questions including without limitation concerning arbitrability or any claim
under any state or federal law, regulation or statute or common law theory
governing or relating to the employment relationship (except claims for workers
compensation or unemployment benefits).

(r) “Employment Period” shall mean the period of time from and including the
Effective Date through and including the End Date.

 

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(s) “End Date” shall mean the last day of employment of the Executive by the
Company.

(t) “Executive Management Committee” shall mean the executive management of the
Company (e.g., the Chief Executive Officer (“CEO”), President, Chief Operating
Officer, Chief Financial Officer, and other C-level executive management of the
Company approved by the CEO).

(u) “Good Reason” shall mean if Executive resigns from employment with the
Company as a result of one or more of the following reasons: (i) a material
reduction in Executive’s responsibilities, duties or authority, without
Executive’s express prior authorization which shall not be unreasonably
withheld, delayed or conditioned; (ii) any failure by the Company to provide, or
a material reduction in, any compensation or benefits, including any
perquisites, to which Executive is entitled as of the Effective Date (including
with respect to Executive’s travel in the conduct of business) and/or that are
agreed to be provided under this Agreement; (iii) any requirement that
Executive’s principal office be based more distant than fifty (50) miles from
New York, New York; (iv) any material breach by the Company of this Agreement;
or (v) the failure of the Company to obtain an assumption in writing of its
obligation to perform this Agreement by any successor to all or substantially
all of the assets of the Company within forty-five (45) days after a Change of
Control; provided that written notice of Executive’s resignation for Good Reason
must be delivered to the Company within fifteen (15) days after the occurrence
of any such event in order for Executive’s resignation with Good Reason to be
effective hereunder; and provided further that, in order for Executive’s
resignation for Good Reason to be effective hereunder, the Company must not have
cured such event (if curable) within thirty (30) days after receiving written
notice thereof, or if the event cannot be reasonably cured within such thirty
(30) days, the cure period shall be extended for such reasonable time as is
necessary to effect a cure as long as the Company begins to take reasonable
steps to cure the event within the first thirty (30) days.

(v) “Plan” shall mean that certain Epiq Systems, Inc. Amended and Restated 2004
Equity Incentive Plan, effective January 1, 2014.

(w) “Prior Inventions” shall mean all inventions, original works of authorship,
developments, improvements, and trade secrets that were made by Executive prior
to Executive’s employment with the Company, as set forth on Exhibit A to this
Agreement.

(x) “Release” shall mean the Company’s executive separation (or similar) and
general release agreement providing for among other things the release of all
Claims (as defined therein) Executive may have against the Company and its
Affiliates and other Released Parties (as defined therein).

(y) “Restricted Period” shall mean the eighteen (18) month period following the
End Date; provided that if Executive is terminated by the Company following a
Change in Control, then the “Restricted Period” shall mean the twenty-four
(24) month period following the End Date.

(z) “Separation Consideration” shall mean:

 

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(i) a cash amount equal to the sum of the Bonus and eighteen (18) months of Base
Salary; and

(ii) regular monthly payments (payable 1 month in arrears) equal to the
difference between (A) the Executive’s monthly premium rate for health insurance
for Executive and Executive’s dependents under the Company’s relevant health
insurance plans (e.g., medical, dental, and vision) in effect on the End Date,
and (B) the monthly premium paid by Executive for substantially similar health
insurance coverage for Executive and Executive’s dependents (whether through the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) or otherwise) after the
End Date, until the earlier of (Y) eighteen (18) months from the End Date, or
(Z) Executive’s employment by a person, company, or other entity that offers
health insurance;

provided that, following a Change in Control, the “Separation Consideration”
shall mean:

(i) a cash amount equal to two times the sum of the Bonus and Base Salary;

(ii) regular monthly payments (payable 1 month in arrears) equal to the
difference between (A) the Executive’s monthly premium rate for health insurance
for Executive and Executive’s dependents (as applicable) under the Company’s
relevant health insurance plans (e.g., medical, dental, and vision) in effect on
the End Date, and (B) the monthly premium paid by Executive for substantially
similar health insurance coverage for Executive and Executive’s dependents
(whether through the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) or
otherwise) after the End Date, until the earlier of (Y) twenty-four (24) months
from the End Date, or (Z) Executive’s employment by a person, company, or other
entity that offers health insurance;

(iii) a payment equivalent to, or at the discretion of Executive, the
continuation of, twenty-four (24) months of other benefits to which Executive
was entitled as of the End Date; and

(iv) a cash amount of Twenty-Five Thousand Dollars and Zero Cents ($25,000.00),
which represents an amount to assist Executive with executive outplacement
services.

Notwithstanding the foregoing, the Separation Consideration shall be payable
within sixty (60) days following the End Date (or as otherwise required by
applicable law or as expressly set forth above relating to regular monthly
payments or other consideration), provided that Executive shall not be entitled
to receive the Separation Consideration unless and until: (x) Executive has
executed and delivered the Release to the Company; (y) the Release has become
fully effective in all respects; and (z) Executive reaffirms and does not breach
the post-termination obligations contained in this Agreement and has not
breached the provisions of the Release or breached the provisions of Sections 7,
8 or 10 hereof.

(aa) “Subsidiaries” shall mean any corporation or other entity of which the
securities or other ownership interests having the voting power to elect a
majority of the board of directors or other governing body are, at the time of
determination, owned by a parent company, directly or indirectly.

 

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(bb) “Taxes” shall mean any and all federal, state, local or foreign withholding
taxes, excise taxes, or employment taxes or any other taxes applicable to this
Agreement.

(cc) “Work Product” shall mean all discoveries, concepts, ideas, inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, patents, trademarks and copyrights, copyrightable work and mask work
(whether or not including any confidential information) and all registrations or
applications related thereto, all other proprietary information and all similar
or related information (whether or not patentable or capable of being registered
under applicable trademark or copyright law) which relate to the Company’s and
any of its Affiliates’ actual or anticipated business, research and development
or existing or future products or services and which are conceived, developed or
made by Executive or other employees, officers, directors or agents of the
Company and any of its Affiliates (whether alone or jointly with others) while
employed by the Company and its Affiliates (or any of their predecessors or
successors), whether before or after the Effective Date.

2. Employment. The Company shall continue to employ Executive, and Executive
hereby accepts such continued employment with the Company, upon the terms and
conditions set forth in this Agreement. Although Executive’s principal location
for employment shall be New York, New York, Executive agrees that Executive will
travel as business conditions warrant and as reasonably requested.

3. Term.

(a) Executive’s employment with Company shall continue during the Employment
Period until (i) either Executive or Company terminates Executive’s employment
with Company, or (ii) Executive’s Disability or death.

(b) Executive can terminate the Employment Period at any time with or without
Good Reason, by providing sixty (60) days’ written notice to the Company.
However, Company reserves the right either to accelerate Executive’s intended
End Date to an earlier actual date or to allow Executive’s intended End Date to
stand. Company can terminate Executive’s employment at any time with or without
Cause, subject to the Company’s potential obligations to Executive in Section 6
hereof. Except as otherwise provided herein, any termination of Executive’s
employment by the Company, shall be effective on the date specified in a written
notice from the Company to Executive. Termination of Executive’s employment with
Company will be effective immediately upon the Disability or death of Executive.

(c) Unless otherwise requested by the Company, upon any termination of the
Executive’s employment with the Company (without regard to which party initiated
such termination or if termination was with or without Cause or Good Reason),
the Executive shall (i) promptly resign from any position as an officer,
director or fiduciary of any Company-related entity that the Executive may hold
as of the End Date, and (ii) immediately return to the Company all Company
Property issued to Executive during the Employment Period.

(d) For clarification purposes, the post-termination obligations of this
Agreement, including but not limited to Sections 7, 8 and 10 hereof, shall
remain in effect following any termination of the Employment Period, without
regard to which party initiated such termination or if termination was with or
without Cause or Good Reason.

 

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4. Position and Duties.

(a) During the Employment Period, Executive shall serve as President and Chief
Operating Officer of the Company, and shall have the normal duties,
responsibilities, functions and authority of such positions as assigned from
time to time by the CEO or the Board. Executive hereby accepts such continued
employment and agrees to devote Executive’s full employment energies, interest,
abilities and time to the performance of Executive’s duties to the Company or
any of its Affiliates as assigned by the Company. Executive shall promptly and
faithfully comply with all the rules and regulations of applicable governmental
regulatory agencies and with the reasonable instructions, directions, requests,
rules and regulations of the Company in connection with the performance of
Executive’s duties.

(b) Executive agrees that, during the Employment Period, Executive’s services
shall be exclusive to the Company and therefore Executive will not engage in any
other employment, occupation, consulting or other business activity directly
related to the business in which the Company and its Affiliates are involved or
become involved during the Employment Period, nor will Executive engage in any
other activities that conflict with Executive’s obligations to the Company and
its Affiliates. Executive agrees to the Conflict of Interest Guidelines set
forth on Exhibit B to this Agreement. Notwithstanding the foregoing, Executive
may perform such other work, whether for consideration or as a volunteer, only
if and to the extent that such other work does not interfere with Executive’s
duties to the Company. Executive shall not make any investment of money or time
in any business that is or may be competitive or which is being formed or
organized to be competitive with or similar to or adverse to any of the
Company’s or any of its Affiliates’ businesses, services, or product(s), whether
such business is conducted by a proprietorship, partnership, corporation or
other entity or venture. However, nothing herein shall prohibit Executive from
being a passive owner of not more than 4.9% of the outstanding stock of any
class of a corporation which is publicly traded, so long as Executive has no
active participation in the business of such corporation.

5. Compensation and Benefits.

(a) As of the Effective Date, Executive’s Base Salary shall be payable by the
Company in regular installments in accordance with the Company’s general payroll
practices (as such practices may be in effect from time to time).

(b) During the Employment Period, Executive shall be entitled to participate in
all of the employee benefit programs of the Company for which members of the
Executive Management Committee are generally eligible, as such programs may be
modified, replaced or eliminated from time to time. Any payment that Executive
is required to make pursuant to such employee benefit programs may be adjusted
or implemented from time to time consistent with changes affecting the
participants generally in such programs.

(c) During the Employment Period, Executive shall be entitled to up to six
(6) weeks of paid vacation per calendar year, which amount shall be pro-rated
for any partial

 

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calendar year of employment during the Employment Period; provided, however,
that Executive shall schedule such vacation time with the CEO and the Executive
Committee in a manner consistent with the business needs of the Company and its
Affiliates. Executive’s unused vacation time shall not be carried forward to any
subsequent calendar year, and no compensation shall be payable in lieu thereof.

(d) During the Employment Period, the Company shall reimburse Executive for all
reasonable and appropriate expenses actually incurred by Executive in the course
of performing Executive’s duties and responsibilities under this Agreement,
consistent with the Company’s policies in effect from time to time with respect
to such expenses, upon presentation of expense statements, vouchers or other
supporting information as may be required under such policies in effect from
time to time.

(e) All amounts payable to Executive as compensation hereunder (including
Section 6 hereof) shall be subject to all required and customary withholding by
the Company.

(f) The Awards, including the vesting of Awards, shall be governed by the Plan
except as expressly set forth in this Agreement.

6. Termination of Employment.

(a) Termination without Cause or for Good Reason - If the Executive’s employment
with the Company is terminated by the Company without Cause or by the Executive
for Good Reason, then Executive shall be entitled to receive: (i) the Accrued
Obligations; and (ii) the Separation Consideration.

(b) Termination for Cause or without Good Reason - If the Executive’s employment
with the Company is terminated by the Company for Cause or by the Executive
without Good Reason, then Executive shall only be entitled to receive the
Accrued Obligations.

(c) Termination due to Disability – If the Executive’s employment with the
Company is terminated due to the Executive’s Disability, then within sixty
(60) days from the End Date (or as otherwise required by law), the Executive
shall be entitled to receive: (i) the Accrued Obligations; (ii) the right to
elect continuation of coverage of insurance benefits to the extent allowed by
law; and (iii) a cash amount equal to twelve (12) months’ Base Salary.

(d) Termination due to Death – If the Executive’s employment with the Company is
terminated due to the Executive’s death, then within sixty (60) days from the
End Date (or as otherwise required by law), the Executive’s estate and
Executive’s beneficiaries, as the case may be, shall be entitled to receive:
(i) the Accrued Obligations; (ii) the right to elect continuation of coverage of
insurance benefits to the extent allowed by law; and (iii) any other survivor
benefits that may become due pursuant to any employee benefit plan or program of
the Company.

(e) Payments, other consideration and benefits provided in this Section 6 shall
be in lieu of any termination or severance payments, other consideration or
benefits for which the Executive may be eligible under any of the plans,
policies or programs of the Company, and shall be reduced (offset) by any
statutory entitlements of the Executive (including notice of

 

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termination, termination pay and/or severance pay, but excluding statutory
unemployment benefits), and any payment related to an actual or potential
liability under the Worker Adjustment and Retraining Notification Act of 1988 or
similar state, local or foreign law.

(f) All payments, other consideration, and benefits provided under this
Section 6 shall be subject to all applicable Taxes and all required and
customary withholding by the Company.

7. Confidential Information.

(a) Executive acknowledges and agrees that Confidential Information concerning
the business or affairs of the Company and any of its Affiliates (which will
include certain third party confidential information entrusted to the Company
and its Affiliates) will be obtained by, created by, or disclosed or made
available to Executive while Executive is employed by the Company. Executive
agrees that Confidential Information (other than certain third party information
owned by such third parties) is the property of the Company and/or its
Affiliates, as the case may be. Executive agrees that at all times during the
Employment Period and thereafter, Executive shall not use (even for Executive’s
own purposes) or disclose any Confidential Information to any person or entity
without written authorization from the Board, except for the direct benefit of
the Company and its Affiliates during the Employment Period and strictly on a
need-to-know basis with persons and/or entities that have executed
confidentiality agreements with the Company and its Affiliates. Executive shall
deliver to the Company on the End Date, or at any other time as the Company may
request, any Company Property and all memoranda, notes, plans, documents,
electronically stored and hard copy information, information technology assets
and devices, records, reports, computer files, disks and tapes, printouts and
software and other documents and data (and copies thereof) embodying or relating
to Confidential Information, Work Product or the business of the Company or any
of its Affiliates that Executive may then possess or have under Executive’s
custody or control.

(b) Executive shall be prohibited from using or disclosing any confidential
information or trade secrets that Executive may have learned through any prior
employment. If at any time during the Employment Period, Executive believes
Executive is being asked to engage in work that will, or will be likely to,
jeopardize any confidentiality or other obligations Executive may have to former
employers, Executive shall immediately advise the CEO so that Executive’s duties
can be modified appropriately. Executive represents and warrants to the Company
that Executive took nothing with Executive which belonged to any former employer
when Executive left Executive’s prior position(s), and that Executive does not
have in Executive’s possession, custody or control any information that belongs
to any former employer. If at any time Executive discovers this is incorrect,
Executive shall promptly return any such materials to Executive’s former
employer. The Company does not want any such materials, and Executive shall not
be permitted to use or refer to any such materials in the performance of
Executive’s duties hereunder. Executive further represents and warrants that as
of the Effective Date, except as set forth on Exhibit A, Executive is not bound
by any confidentiality, non-disclosure, invention assignment, or other related
agreement, other than this Agreement.

8. Intellectual Property, Inventions and Patents. Executive acknowledges that
Work Product belongs to the Company or any of its Affiliates, as applicable.
Executive shall

 

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promptly disclose Work Product to the Company (including as appropriate the CEO,
members of the Executive Management Committee and the Company’s General Counsel)
and, at the Company’s expense, perform all actions reasonably requested by the
CEO or the Company’s General Counsel or the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
Executive acknowledges that all Work Product shall be deemed to constitute
“works made for hire” under the U.S. Copyright Act of 1976, as amended. To the
extent that any material produced under this Agreement may not be considered
“works made for hire,” or to the extent that this Section 8 is declared invalid
either in substance or purpose, in whole or in part, Executive hereby agrees to
irrevocably transfer, grant, convey, assign, and relinquish exclusively to the
Company (including any of its Affiliates, in the Company’s sole discretion) any
and all of Executive’s right, title, and interest, including ownership of
copyright, patent and/or trademark rights, to any material conceived, developed,
or made by Executive under this Agreement without the necessity of further
consideration.

9. Inventions Retained and Licensed. Executive acknowledges that Exhibit A
accurately specifies a list of Prior Inventions which belong to Executive, which
relate to the Company’s proposed business, products or research and development,
and which are not assigned to the Company hereunder; or, if no such list is
attached, Executive represents that there are no such Prior Inventions. If
during the course of Executive’s employment with the Company, Executive
incorporated or incorporates into a Company product, service, process or machine
a Prior Invention owned by Executive or in which Executive had or has an
interest, the Company is hereby granted and had and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license to make, have made,
modify, use, sublicense and sell such Prior Invention as part of or in
connection with such product, service, process or machine.

10. Restrictive Covenants.

(a) Non-Compete. Executive acknowledges and agrees that, during the course of
Executive’s employment with the Company (including its Affiliates), Executive
shall become familiar with the Company’s and its Affiliates’ trade secrets and
with other Confidential Information, and that Executive’s services shall be of
special, unique and extraordinary value to the Company and its Affiliates.
Therefore, in consideration of the Company’s agreement to employ Executive and
the compensation to be paid to Executive hereunder and in connection with such
employment, Executive agrees that, from the Effective Date until the end of the
Restricted Period, Executive shall not directly or indirectly compete with the
Company or any of its Affiliates or own any interest in, manage, control,
participate in, consult with, render services for, be employed in an executive,
managerial or administrative capacity by any person, corporation, firm or other
entity, or in any manner engage in any business that provides any product(s) or
service(s) that compete with any product(s) or service(s) offered or provided by
the Company or any of its Affiliates within any of their territories. With
respect to this non-compete provision, nothing herein shall prohibit Executive
from being a passive owner of not more than 4.9% of the outstanding stock of any
class of a corporation which is publicly traded, so long as Executive has no
active participation in the business of such corporation.

 

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(b) Non-Solicit. From the Effective Date until the end of the Restricted Period,
Executive shall not directly or indirectly either on Executive’s own behalf or
on behalf of any person or entity that is not the Company or any of its
Affiliates: (i) hire, solicit, induce, recruit, or encourage (which includes any
attempts to take such actions) (x) any employee or officer and/or agent of the
Company or any of its Affiliates to terminate their employment, agency or other
agreement with, or leave the employ of, the Company or any of its Affiliates in
order to work for any person, corporation, firm, company or business entity
other than the Company or any of its Affiliates, or (y) any former employee,
officer or agent of the Company or any of its Affiliates to violate any
post-termination obligations contained in their agreements with the Company or
any of its Affiliates, as the case may be; or (ii) in any way interfere with the
relationship between the Company or any of its Affiliates and any employee or
agent thereof; or (iii) induce, encourage or attempt to induce or encourage any
customer, referral source, supplier, licensee, licensor, franchisee or other
business relation of the Company or any of its Affiliates to cease doing
business with the Company or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any of its Affiliates.

(c) Executive agrees that the restrictive periods set forth in this Section 10
shall not expire, and shall be tolled, during any period in which the Executive
is in violation of any obligation contained in this Section 10, and all
restrictions shall automatically be extended by the period the Executive was in
violation of any such restrictions.

(d) Executive further agrees that the provisions of and restraints set forth in
this Section 10 are reasonable and necessary to protect the Company and its
Affiliates’ respective, legitimate business interests. For clarification
purposes, all post-termination obligations of this Agreement shall remain in
effect following the End Date. For further clarification purposes, no act may be
taken by the Executive after the End Date on behalf of the Company or any of its
Affiliates except as may be expressly set forth in a written agreement by and
between the Executive and the Company and/or any of its Affiliates. In the event
that Executive leaves the employ of the Company, and upon obtaining new
employment, Executive shall promptly provide written notice to the Company
regarding the identity of Executive’s new employer and hereby grants consent to
the Company to notify Executive’s new employer about Executive’s rights and
obligations under this Agreement.

11. Code Section 280G. Notwithstanding any other provision of this Agreement or
any other plan, arrangement or agreement to the contrary, if any of the
payments, other consideration or benefits provided or to be provided by the
Company or its Affiliates to the Executive or for the Executive’s benefit
pursuant to the terms of this Agreement or otherwise (“Covered Payments”)
constitute parachute payments (“Parachute Payments”) within the meaning of Code
Section 280G and would, but for this Section 11 be subject to the excise tax
imposed under Code Section 4999 (or any successor provision thereto) or any
similar tax imposed by state or local law or any interest or penalties with
respect to such taxes (collectively, the “Excise Tax”), then the Covered
Payments shall be either: (i) reduced to the minimum extent necessary to ensure
that no portion of the Covered Payments is subject to the Excise Tax (that
amount, the “Reduced Amount”); or (ii) payable in full if the Executive’s
receipt on an after-tax basis of the full amount of payments, other
consideration and benefits (after taking into account

 

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the applicable federal, state, local and foreign income, employment and excise
taxes (including the Excise Tax)) would result in the Executive receiving an
amount greater than the Reduced Amount. Any such reduction made pursuant to
(i) above shall be made by the Company in its sole discretion consistent with
the requirements of Code Section 409A.

12. Code Section 409A Compliance.

(a) The intent of the parties is that payments and benefits under this Agreement
comply with Code Section 409A, and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance therewith. To
the extent that any provision hereof is modified in order to comply with Code
Section 409A, such modification shall be made in good faith and shall, to the
maximum extent reasonably possible, maintain the original intent and economic
benefit to the Executive and the Company of the applicable provision without
violating the provisions of Code Section 409A. In no event whatsoever shall the
Company be liable for any additional tax, interest or penalty that may be
imposed on the Executive by Code Section 409A or damages for failing to comply
with Code Section 409A.

(b) To the extent required for purposes of Code Section 409A, if applicable, a
termination of employment shall not be deemed to have occurred for purposes of
any provision of this Agreement providing for the payment of any amount, other
consideration or benefit upon or following a termination of employment unless
such termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.”

(c) Notwithstanding anything to the contrary in this Agreement, if the Executive
is deemed on the End Date to be a “specified employee” within the meaning of
that term under Code Section 409A(a)(2)(B), then with regard to any payment,
other consideration or the provision of any benefit that is considered
“nonqualified deferred compensation” under Code Section 409A payable on account
of a “separation from service,” such payment, other consideration or benefit
shall not be made or provided until the date which is the earlier of: (i) the
expiration of the six (6)-month period measured from the date of such
“separation from service” of the Executive; or (ii) the date of the Executive’s
death, to the extent required under Code Section 409A. Upon the expiration of
the foregoing delay period, all payments, other consideration and benefits
delayed pursuant to this Section 12 (whether they would have otherwise been
payable in a single sum or in installments in the absence of such delay) shall
be paid or reimbursed to the Executive in a lump sum, and all remaining
payments, other consideration and benefits due under this Agreement shall be
paid or provided in accordance with the normal payment dates specified for them
herein.

(d) To the extent that reimbursements or other in-kind benefits under this
Agreement constitute “nonqualified deferred compensation” for purposes of Code
Section 409A: (i) all expenses or other reimbursements hereunder shall be made
on or prior to the last day of the taxable year following the taxable year in
which such expenses were incurred by the Executive; (ii) any right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit; and (iii) no such reimbursement, expenses eligible
for reimbursement, or in-kind benefits provided in any taxable year shall in any
way affect the

 

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expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year. For purposes of Code Section 409A, the Executive’s right to
receive installment payments pursuant to this Agreement shall be treated as a
right to receive a series of separate and distinct payments. Whenever a payment
under this Agreement specifies a payment period with reference to a number of
days, the actual date of payment within the specified period shall be within the
sole discretion of the Company.

13. Enforcement. If, at the time of enforcement of Sections 7, 8 or 10 of this
Agreement, a court or appropriate tribunal holds that the restrictions stated
herein are unreasonable under circumstances then existing, the parties hereto
agree that the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or geographical
area and that the court or appropriate tribunal shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law. Because Executive’s services are unique and because Executive
has access to Confidential Information including Work Product, the parties
hereto agree that the Company would suffer irreparable harm from a breach of
Sections 7, 8 or 10 by Executive and that money damages would not be an adequate
remedy for any such breach of this Agreement. Therefore, in the event of a
breach or threatened breach of this Agreement, the Company and any of its
Affiliates (including any of their respective successors or assigns), in
addition to other rights and remedies existing in their favor, shall be entitled
to specific performance and/or injunctive or other equitable relief from a court
or other tribunal of competent jurisdiction in order to enforce, or prevent any
violations of, the provisions hereof (without posting a bond or other security).
Executive acknowledges and agrees: (i) that the provisions and restrictions
contained in Sections 6, 7, 8, 9 and 10 are reasonable; (ii) that Executive has
reviewed the provisions of this Agreement with Executive’s legal counsel; and
(iii) that Executive is freely entering into this Agreement.

14. Executive’s Representations. Executive hereby represents and warrants to the
Company that: (i) the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which
Executive is a party or by which Executive is bound; (ii) Executive is not a
party to or bound by any employment agreement, non-compete or non-solicitation
agreement or confidentiality agreement with any other person or entity; and
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that
Executive has consulted with independent legal counsel regarding Executive’s
rights and obligations under this Agreement and that Executive fully understands
the terms and conditions contained herein.

15. Survival. Sections 5(e) through 28, inclusive, shall survive and continue in
full force in accordance with their terms notwithstanding the End Date.

16. Notices. Any notice or other communications to be given or delivered under
or by reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been given (i) when personally delivered, (ii) upon delivery
by a reputable overnight express courier (charges prepaid), or (iii) five days
following mailing by certified or registered mail,

 

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postage prepaid and return receipt requested. Unless another address is
specified in writing, notices and communications to Executive and the Company
shall be sent to the addresses indicated below:

Notices to Executive:

Brad D. Scott

c/o Epiq Systems

501 Kansas Avenue

Kansas City, KS 66105

Notices to the Company:

Epiq Systems, Inc.

Attention: General Counsel

501 Kansas Avenue

Kansas City, KS 66105

Any party hereto, may, by written notice to the other, change its address for
receipt of notices hereunder.

17. Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any action in any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

18. Complete Agreement. This Agreement and those documents expressly referred to
herein embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the subject
matter hereof in any way, including but not limited to that certain Employment,
Confidential Information, Invention Assignment and Arbitration Agreement between
Company and Executive dated December 24, 2011.

19. No Strict Construction. The language used in this Agreement shall be deemed
to be the language chosen by the parties hereto to express their mutual intent,
and no rule of strict construction shall be applied against any party.

20. Counterparts/Electronic Delivery. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. This Agreement, to the extent
signed and delivered by electronic means, shall be treated in all manner and
respects as an original agreement and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person.

 

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21. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, successors and assigns, except that Executive may not assign Executive’s
rights or delegate Executive’s duties or obligations hereunder without the prior
written consent of the Company.

22. Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Missouri, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Missouri or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Missouri. Executive expressly consents to
the personal jurisdiction of the state and federal courts located in Kansas
City, Kansas including for any lawsuit filed there against Executive by the
Company arising from or related to this Agreement (subject to Section 26 below).

23. Amendment and Waiver. The provisions of this Agreement may be amended or
waived only with the prior written consent of the Company and Executive
effectuated in a written amendment to this Agreement that has been signed by
both of the parties, and no course of conduct or course of dealing or failure or
delay by any party hereto in enforcing or exercising any of the provisions of
this Agreement (including, without limitation, the Company’s right to terminate
the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any
provision of this Agreement.

24. Insurance. The Company may in its sole discretion apply for and procure in
its own name and for its own benefit life and/or disability insurance on
Executive in any amount or amounts considered advisable. Executive agrees to
cooperate in any medical or other examination, supply any information and
execute and deliver any applications or other instruments in writing as may be
reasonably necessary to obtain and constitute such insurance.

25. Indemnification and Reimbursement of Payments on Behalf of Executive. The
Company and its Affiliates shall be entitled to deduct or withhold from any
amounts owing from the Company or any of its Affiliates to Executive any Taxes
imposed with respect to Executive’s compensation or other payments from the
Company or any of its Affiliates or Executive’s ownership interest in the
Company (including, without limitation, wages, bonuses, dividends, the receipt
or exercise of equity options and/or the receipt or vesting of restricted
equity). In the event the Company or any of its Affiliates does not make such
deductions or withholdings, Executive shall indemnify the Company and its
Affiliates for any amounts paid or payable by the Company with respect to any
such Taxes owed by Executive.

26. Dispute Resolution .

 

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(a) Except as otherwise expressly provided in this Agreement, the parties agree
that the arbitration procedure set forth below shall be the sole and exclusive
method for resolving and remedying any Dispute; provided that nothing in this
Section 26 shall prohibit a party hereto from instituting litigation to enforce
any Final Determination (as defined below) or to seek injunctive relief. The
parties hereby acknowledge and agree that, except as otherwise provided in this
Section 26 or in the Employment Arbitration Rules and Mediation Procedures (the
“Rules”) promulgated by the American Arbitration Association (the “Arbitration
Service”) as in effect from time to time, the arbitration procedures and any
Final Determination hereunder shall be governed by, and shall be enforced
pursuant to, the Federal Arbitration Act, 9 U.S.C. §1 et. seq., as may be
amended or superseded. THE COMPANY AND EXECUTIVE AGREE THAT, BY ENTERING INTO
THIS AGREEMENT, THE COMPANY AND EXECUTIVE ARE WAIVING THE RIGHT TO TRIAL BY
JURY. THE COMPANY AND EXECUTIVE FURTHER AGREE THAT THE COMPANY AND EXECUTIVE
SHALL BRING CLAIMS AGAINST THE OTHER ONLY IN THEIR RESPECTIVE INDIVIDUAL
CAPACITIES, AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR
REPRESENTATIVE PROCEEDING. FURTHER, UNLESS BOTH THE COMPANY AND EXECUTIVE AGREE
OTHERWISE, THE ARBITRATOR MAY NOT CONSOLIDATE THE CLAIMS OF MORE THAN ONE
PERSON, AND MAY NOT OTHERWISE PRESIDE OVER ANY FORM OF A REPRESENTATIVE OR CLASS
PROCEEDING. EXECUTIVE UNDERSTANDS THAT EACH PARTY’S PROMISE TO RESOLVE CLAIMS BY
ARBITRATION IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, RATHER THAN
THROUGH THE COURTS, IS CONSIDERATION FOR THE OTHER PARTY’S LIKE PROMISE.
EXECUTIVE FURTHER UNDERSTANDS THAT EXECUTIVE IS OFFERED CONTINUING EMPLOYMENT IN
CONSIDERATION OF AMONG OTHER THINGS EXECUTIVE’S PROMISE TO ARBITRATE CLAIMS. THE
PARTIES AGREE THAT ANY CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL
BE BARRED UNLESS COMMENCED WITHIN ONE YEAR AFTER THE EVENT GIVING RISE TO THE
CLAIM.

(b) Except as provided elsewhere herein, in the event that any party asserts
that there exists a Dispute, such party shall deliver a written notice to each
other party involved therein specifying the nature of the asserted Dispute and
requesting a meeting to attempt to resolve the same. If no such resolution is
reached within ten (10) business days after the delivery of such notice, the
party delivering such notice of Dispute (the “Disputing Person”) may thereafter
request that both parties submit the Dispute to mediation, and if both parties
agree to do so, then the Dispute will be submitted to mediation. If mediation
fails, or if either party refuses to submit the Dispute to mediation, then the
Disputing Person may commence arbitration hereunder by delivering to each other
party involved therein a demand for arbitration as required by the Rules which
shall specify the nature of any Dispute and any other matters required by the
Rules as in effect from time to time to be included therein (a “Demand for
Arbitration”). Such Demand for Arbitration shall be promptly submitted to the
Arbitration Service to commence the arbitration with the Arbitration Service.
The Company and Executive shall mutually agree upon one arbitrator (the
“Arbitrator”) to resolve any Dispute pursuant to the procedures set forth in
this Section 26 and the Rules. The Arbitrator shall permit and facilitate such
discovery as the parties shall reasonably request. If the Company and Executive
cannot mutually agree on the Arbitrator within fifteen (15) business days
following receipt of the list of arbitrators from the Arbitration Service, then
the Arbitration Service shall appoint the Arbitrator no later than twenty-five
(25) business days following the parties’ receipt of such list.

 

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(c) Except as otherwise provided by applicable law, the Company will pay the
costs of the Arbitration Service and the Arbitrator; provided that at the
conclusion of the arbitration, the Arbitrator shall award costs and expenses
(including the costs of the arbitration previously advanced and the reasonable
fees and expenses of attorneys, accountants and other experts) and reasonable
interest to the prevailing party.

(d) The arbitration shall be conducted in Kansas City under the Rules as in
effect from time to time. The parties shall use their reasonable best efforts to
cause the Arbitrator to conduct the arbitration so that a final result,
determination, finding, judgment and/or award (the “Final Determination”) is
made or rendered as soon as practicable, but in no event later than ninety
(90) business days after the delivery of the Demand for Arbitration nor later
than thirty (30) days following completion of the arbitration. Notwithstanding
any Missouri law to the contrary, the Final Determination shall be final and
binding on all parties and there shall be no appeal from or reexamination of the
Final Determination, except for fraud, perjury, evident partiality or misconduct
by the Arbitrator prejudicing the rights of any party and to correct manifest
clerical errors.

(e) Notwithstanding anything to the contrary, nothing in this Section 26 shall
be construed to impair the right of any person or entity to seek injunctive or
other equitable relief in any court of competent jurisdiction.

27. Executive’s Cooperation. During the Employment Period and thereafter,
Executive shall cooperate with the Company and any of its Affiliates in any
investigation, subpoena, any administrative, regulatory, settlement,
arbitration, litigation, mediation, or judicial proceeding or any dispute with a
third party as reasonably requested by the Company or any of its Affiliates,
including without limitation that Executive will be available to the Company or
any of its Affiliates upon reasonable notice for interviews and factual
investigations, appearing at the Company’s or any of its Affiliate’s request to
give testimony without requiring service of a subpoena or other legal process,
volunteering to the Company or any of its Affiliates all pertinent information
and turning over to the Company or any of its Affiliates all relevant documents
which are or may come into Executive’s possession, custody or control all at
times and on schedules that are reasonably consistent with Executive’s other
activities and commitments. In the event the Company or any of its Affiliates
requires Executive’s cooperation in accordance with this Section 27, (i) the
Company or any of its Affiliates, as appropriate, shall reimburse Executive
solely for reasonable travel expenses (including lodging and meals) upon
submission of receipts; and (ii) if Executive is no longer employed by the
Company, then the Company or any of its Affiliates, as appropriate, shall pay
Executive a per diem consulting charge of $1,000.00, and the Company or any of
its Affiliates, as appropriate, may, in its sole discretion, appoint and pay the
reasonable fees and expenses of attorneys, accountants and other professionals
retained with respect to such matter or matters.

 

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28. Legal Review. Executive agrees that Executive has been given a reasonable
opportunity to review this Agreement with counsel of Executive’s choosing.

 

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

 

EPIQ SYSTEMS, INC. By:  

/s/ Tom W. Olofson

Name:   Tom W. Olofson Its:   Chairman and Chief Executive Officer Date:  
December 15, 2014

/s/ Brad D. Scott

BRAD D. SCOTT Date:   December 15, 2014

 

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EXHIBIT A

Prior Inventions

None

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EXHIBIT B

Conflict of Interest Guidelines

It is the policy of Epiq Systems, Inc. and its subsidiaries and affiliates
(collectively, “Epiq”) to conduct all affairs in strict compliance with the
letter and spirit of the law and to adhere to the highest principles of business
ethics. Accordingly, all officers, employees and independent contractors must
avoid activities which are in conflict, or give the appearance of being in
conflict, with these principles and with the interests of Epiq. The following
are potentially compromising situations which must be avoided. Any exceptions
must be reported to, and written approval for continuation must be obtained
from, the Chief Executive Officer of Epiq Systems, Inc.

 

1. Revealing confidential information to outsiders or misusing confidential
information. Unauthorized divulging of information is a violation of this policy
whether or not for personal gain and whether or not harm to the Company is
intended.

 

2. Accepting or offering substantial gifts, excessive entertainment, favors or
payments which may be deemed to constitute undue influence or otherwise be
improper or embarrassing to Epiq.

 

3. Participating in civic or professional organizations that might involve
divulging confidential information of Epiq.

 

4. Initiating or approving personnel actions affecting reward or punishment of
employees or applicants where there is a family relationship or is or appears to
be a personal or social involvement.

 

5. Initiating or approving any form of personal or social harassment of
employees.

 

6. Investing or holding outside directorship in suppliers, customers, or
competing companies, including financial speculations, where such investment or
directorship might influence in any manner a decision or course of action of
Epiq.

 

7. Borrowing from or lending to employees, customers or suppliers.

 

8. Acquiring real estate of interest to Epiq.

 

9. Improperly using or disclosing to Epiq any proprietary information or trade
secrets of any former or concurrent employer or other person or entity with whom
obligations of confidentiality exist.

 

10. Unlawfully discussing prices, costs, customers, sales or markets with
competing companies or their employees.

 

11. Making any unlawful agreement with distributors with respect to prices.

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12. Improperly using or authorizing the use of any inventions which are the
subject of patent claims of any other person or entity.

 

13. Engaging in any conduct which is not in the best interests of Epiq.

Each officer, employee and independent contractor must take every necessary
action to ensure compliance with these guidelines and to bring problem areas to
the attention of higher management for review. Violations of this conflict of
interest policy may result in disciplinary action up to and including immediate
discharge.