Exhibit 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered
into as of December 19, 2013 and, except as provided herein, its terms will
become effective as of January 1, 2014 (the “Effective Date”), by and between
InnerWorkings, Inc., a Delaware corporation (the “Company”), and Eric Belcher
(“Executive”).

 

WITNESSETH:

 

WHEREAS, the Company and Executive entered into an employment agreement dated as
of November 14, 2008, which was amended as of February 22, 2013 (as so amended,
the “Prior Agreement”), which expires by its terms on December 31, 2013;

 

WHEREAS, the Company and Executive wish to amend and restate the Prior
Agreement;

 

WHEREAS, the Company wishes for Executive to remain in its employ as its
President and Chief Executive Officer; and

 

WHEREAS, Executive is willing to remain in the employ of the Company and to
serve as its President and Chief Executive Officer on the terms and conditions
hereafter set forth;

 

NOW, THEREFORE, the Company and Executive hereby agree that, effective as of the
Effective Date, the Prior Agreement is amended and restated and superseded by
this Agreement in its entirety.

 

1. Employment; Position and Duties. The Company agrees to employ Executive, and
Executive agrees to be employed by the Company, upon the terms and conditions of
this Agreement. Upon the Effective Date, Executive shall continue to be employed
as the President and Chief Executive Officer of the Company reporting to, and
shall continue to be a member of, the Board of Directors of the Company (the
“Board”). Executive shall be deemed to have resigned from the Board voluntarily,
without any further action required, upon the termination of Executive’s
employment with the Company. In this capacity, Executive agrees to devote his
full time, energy and skill to the faithful performance of his duties herein,
and shall perform the duties and carry out the responsibilities assigned to him
to the best of his ability and in a diligent, businesslike and efficient manner.
Notwithstanding the above, during the term of this Agreement, it shall not be a
violation of this Agreement for the Executive to serve on civic or charitable
boards or committees, deliver lectures, fulfill speaking engagements, teach at
educational institutions, manage personal investments and, with the consent of
the Board, service on corporate boards, so long as such activities do not
interfere with the performance of Executive’s responsibilities in accordance
with this Agreement. Executive’s duties and authority shall include all the
duties and authority contemplated by the Company’s by-laws and those customarily
performed by the President and Chief Executive Officer. As Chief Executive
Officer, Executive shall be the senior most executive officer of the Company.
Executive shall also have such additional duties and authority commensurate with
such positions as may be reasonably assigned by the Board. Executive shall
comply with any policies and procedures established for Company employees,
including, without limitation, those policies and procedures contained in the
Company’s employee handbook previously delivered to Executive.

 

 

 

 

2. Term of Employment. The term of this Agreement (the “Term”) shall commence on
the Effective Date and shall continue until and shall expire on December 31,
2014, as may be extended in accordance with this Section 2 and unless terminated
earlier by either party, in accordance with the terms of this Agreement. The
Term shall be extended automatically without further action by either party by
one (1) additional year (added to the end of the Term), and then on each
succeeding annual anniversary thereafter, unless either party shall have given
written notice to the other party prior to the date that is ninety (90) days
prior to the date which such extension would otherwise have become effective
electing not to further extend the Term, in which case Executive’s employment
shall terminate on the date upon which the extension would otherwise have become
effective, unless earlier terminated in accordance with this Agreement. This
Agreement may be terminated by Executive or by the Board, with or without Cause
(as defined below). Upon the termination of Executive’s employment with the
Company for any reason, neither party shall have any further obligation or
liability under this Agreement to the other party, except as set forth in
Sections 4, 5, 6, 7, 8, 9, and 10 of this Agreement. Non-renewal of the Term by
the Company shall be treated for all purposes under this Agreement as a
termination of Executive’s employment without Cause.

 

3. Compensation. Executive shall be compensated by the Company for his services
as follows:

 

(a) Base Salary. During the term of this Agreement, Executive shall be paid a
base salary (“Base Salary”) of $58,333.33 per month (or $700,000 on an
annualized basis) subject to applicable withholding, in accordance with the
Company’s normal payroll procedures. Executive’s base salary shall be reviewed
on an annual basis by the Board for possible increase (but not decrease) based
on the Company’s operating results and financial condition, salaries paid to
other Company executives, and general marketplace and other applicable
considerations. Such increased Base Salary, if any, shall then constitute
Executive’s “Base Salary” for purposes of this Agreement.

 

(b) Benefits. During the term of this Agreement, Executive shall have the right,
on the same basis as other members of senior management of the Company, to
participate in and to receive benefits under any of the Company’s executive and
employee benefit plans, long-term or equity incentive plans, insurance programs
and/or indemnification agreements, as may be in effect from time to time,
subject to any applicable waiting periods and other restrictions, and to the
benefits afforded to other members of senior management under the Company’s
vacation, holiday and business expense reimbursement policies (all such
benefits, the “Benefits”).

 

(c) Bonuses. In addition to the Base Salary, Executive shall be eligible to
receive an annual performance bonus at a target of not less than one hundred and
fifteen percent (115%) of his then annual Base Salary, with an opportunity to
earn a maximum performance bonus of two hundred percent (200%) of his
performance bonus target (the “Performance Bonus”). The Performance Bonus shall
be a discretionary bonus, determined in the sole discretion of the Board or the
Compensation Committee thereof, based upon Executive’s performance of his duties
and the Company’s financial performance, as well certain performance targets
that are approved by the Board or such Committee. The Company will pay
Executive’s Performance Bonus for each year at the same time as annual
performance bonus payments for such year (if any) are made to other participants
with respect to such fiscal year, and in all events within the two and one half
(2½) months following the end of the year in which the Performance Bonus is
earned. The Performance Bonus is intended to qualify for the short-term deferral
exception to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”).

 

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(d) Expenses. In addition to reimbursement for business expenses incurred by
Executive in the normal and ordinary course of his employment by the Company
pursuant to the Company’s standard business expense reimbursement policies and
procedures, the Company shall reimburse Executive for the full amount of his
insurance costs should he elect to participate in the Company’s insurance
program(s). In addition, Executive shall be reimbursed $1,000/month for
automobile expenses.

 

(e) Long Term Incentive Award. Beginning in fiscal year 2014, Executive shall be
eligible to receive, annually, on the same basis as long term incentive awards
to other senior executives, long term incentive awards with a targeted grant
date value of two hundred percent (200%) of Executive’s then annual Base Salary,
subject to adjustment by the Compensation Committee in its sole discretion.

 

4. Benefits Upon Termination.

 

(a) Termination for Cause or Termination for Other than Good Reason. In the
event of the termination of Executive’s employment by the Company for Cause (as
defined below), the termination of Executive’s employment by reason of his death
or disability, or the termination of Executive’s employment by Executive for any
reason other than Good Reason (as defined below), Executive shall be entitled to
no further compensation or benefits from the Company following the date of
termination, except the Accrued Obligations, which Accrued Obligations shall be
paid to Executive within thirty (30) days following the date of termination.

 

For purposes of this Agreement, Executive’s “Accrued Obligations” include, to
the extent not theretofore paid:

 

(i) Executive’s Base Salary earned through the date of termination;

 

(ii) Executive’s Benefits, vested or earned through the date of termination;

 

(iii) Executive’s Performance Bonus for the fiscal year immediately preceding
the fiscal year in which the date of termination occurs if such award has been
earned but has not been paid as of the date of termination;

 

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(iv) Executive’s vested restricted stock, stock options or other long-term or
equity-based incentive compensation; and

 

(v) Executive’s business expenses that have not been reimbursed by the Company
as of the date of termination that were incurred by Executive prior to the date
of termination in accordance with the applicable Company policy.

 

For purposes of this Agreement, a termination for “Cause” occurs if Executive’s
employment is terminated by the Company for any of the following reasons:

 

(A) theft, dishonesty or falsification of any employment or Company records by
Executive;

 

(B) the determination by the Board that Executive has committed an act or acts
constituting a felony or any act involving moral turpitude;

 

(C) the determination by the Board that Executive has engaged in willful
misconduct or gross negligence that has had a material adverse effect on the
Company’s reputation or business; or

 

(D) the continuing material breach by Executive of any provision of this
Agreement after receipt of written notice of such breach from the Board and a
reasonable opportunity to cure such breach.

 

For purposes of this Agreement, a termination by Executive shall be for “Good
Reason” if Executive terminates his employment for any of the following reasons:

 

(1) the Company materially reduces Executive’s duties or authority below, or
assigns Executive duties that are materially inconsistent with the duties and
authority contemplated by Section 1 of this Agreement, or any failure by the
Company to appoint or elect, or to reappoint or reelect Executive to any of the
positions set forth in Section 1;

 

(2) the Company requires Executive to relocate his office more than 100 miles
from the current office of the Company without his consent; or

 

(3) the Company has breached any provision of this Agreement, including, but not
limited to, the provisions relating to the payment or providing of compensation
and Benefits in accordance with Section 3 above, and such breach continues for
more than thirty (30) days after notice from Executive to the Company specifying
the action which constitutes the breach and demanding its discontinuance.

 

(b) Termination Without Cause or Termination for Good Reason. Each of the
Company and Executive is free to terminate this Agreement, and Executive’s
employment with the Company, at any time, for any reason, in its or Executive’s
absolute sole discretion. If Executive’s employment is terminated by the Company
for any reason other than (1) for Cause or (2) by reason of his death or
disability, or if Executive’s employment is terminated by Executive for Good
Reason, Executive shall only be entitled to:

 

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(i) receive an amount equal to the product of two (2) times the sum of (A)
Executive’s annual Base Salary as in effect on the date of termination, and (B)
Executive’s target annual Performance Bonus for the fiscal year in which the
date of termination occurs, payable in equal installments over a twenty-four
(24) month period following the termination of Executive’s employment in
accordance with the Company’s normal payroll procedures;

 

(ii) no later than March 15 following the end of the year in which such
termination occurs, in lieu of any annual Performance Bonus for the year in
which such termination occurs, payment of an amount equal to (A) the annual
Performance Bonus which would have been payable to Executive had Executive
remained in employment with the Company during the entire year in which such
termination occurred, multiplied by (B) a fraction, the numerator of which is
the number of days Executive was employed in the year in which such termination
occurs and the denominator of which is the total number of days in the year in
which such termination occurs;

 

(iii) immediate vesting of all outstanding equity-based awards which would
otherwise have vested based solely on the passage of time if Executive’s
employment had continued for a period of twenty-four (24) months following the
termination;

 

(iv) with respect to equity-based awards which would otherwise vest based on
performance, Executive shall vest in the portion of such award (which shall not
exceed 100% of such award) Executive would have been entitled to had Executive
remained employed until the last day of the applicable performance period
multiplied by a fraction, the numerator of which shall be the number of full
calendar months elapsed during the performance period through the date
Executive’s employment terminated plus twenty-four (24) additional months and
the denominator of which shall be the total number of months in the applicable
performance period, which awards shall vest and be paid, if the applicable
performance conditions are met, at the same time and in the same manner as
though Executive had remained employed by the Company; and

 

(v) the Accrued Obligations.

 

Notwithstanding anything to the contrary herein, no payments shall be paid under
this Section 4(b)(i) or (ii) unless and until Executive executes and delivers a
general release and waiver of claims (the “Release”) against the Company (and
any revocation period expires) by the Release Deadline, acknowledging
Executive’s obligations under Section 7 below, and in a form prescribed by the
Company; provided that, such Release shall not require Executive to release any
rights to Accrued Obligations, rights under the Indemnification Provisions (as
defined below), or under this Agreement, and the execution of such Release shall
be a condition to Executive’s rights under Section 4(b)(i) or (ii). The “Release
Deadline” means the date that is 60 calendar days after Executive’s separation
from service. Payment of any amount that is not exempt from Code Section 409A
that is conditioned upon the execution of the Release shall be delayed until the
Release Deadline, irrespective of when Executive executes the Release; provided,
however, that where Executive’s separation from service and the Release Deadline
occur within the same calendar year, the payment may be made up to 30 days prior
to the Release Deadline, and provided further that where Executive’s separation
from service and the Release Deadline occur in two separate calendar years,
payment may not be made before the later of January 1 of the second year or the
date that is 30 days prior to the Release Deadline. In addition, if Code Section
409A requires that a payment hereunder may not commence for a period of six (6)
months following termination of employment, then such payments shall be withheld
by the Company and paid as soon as permissible, along with such other monthly
payments then due and payable.

 

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5. Change in Control. Upon the occurrence of a Qualifying Termination (as
defined below), Executive shall be entitled to immediate vesting of all
outstanding equity-based awards (including immediate vesting at the target level
of performance for equity-based awards which would otherwise vest based on
performance). For purposes of this Agreement, a “Qualifying Termination” means a
termination of Executive’s employment within ninety (90) days prior to or
twenty-four (24) months following the consummation of a Change in Control as a
result of Executive’s (i) resignation for Good Reason or (ii) termination by the
Company without Cause (including due to a non-renewal of the Term by the
Company).

 

Notwithstanding the foregoing and notwithstanding any less favorable or contrary
treatment in an award agreement or other grant documentation with respect to
equity-based awards, the vesting of all equity-based awards that are not assumed
by a successor company or exchanged for a replacement award on no less favorable
economic terms will be fully accelerated as of the effective date of the Change
in Control (including immediate vesting at the target level of performance for
equity-based awards which would otherwise vest based on performance), and such
equity-based awards shall be paid to Executive within thirty (30) days after the
effective date of the Change in Control.

 

For purposes of this Agreement, a “Change in Control” means the occurrence of
any one or more of the following:

 

(a)An effective change in control pursuant to which any person or persons acting
as a group acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such person or persons) beneficial
ownership of stock of the Company representing fifty percent (50%) or more of
the voting power of the Company’s then outstanding stock; provided, however,
that a Change in Control shall not be deemed to occur by virtue of any of the
following acquisitions: (i) by the Company or any Affiliate, (ii) by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Affiliate, (iii) by any underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) by any Incumbent
Stockholders (as defined below);

 

(b)Any person or persons acting as a group (in each case, other than any
Incumbent Stockholders) acquires beneficial ownership of Company stock that,
together with Company stock already held by such person or group, constitutes
fifty percent (50%) or more of the total fair market value or voting power of
the Company’s then outstanding stock. The acquisition of Company stock by the
Company in exchange for property, which reduces the number of outstanding shares
and increases the percentage ownership by any person or group to 50% or more of
the Company’s then outstanding stock will be treated as a Change in Control;

 

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(c)Individuals who constitute the Board immediately after the Effective Date
(the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board during any 12-month period; provided, however, that: (i)
any person becoming a Director subsequent thereto whose election or nomination
for election was approved by a vote of a majority of the Incumbent Directors
then on the Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
Director, without written objection to such nomination) shall be an Incumbent
Director, provided that no individual initially elected or nominated as a
Director of the Company as a result of an actual or threatened election contest
with respect to Directors or as a result of any other actual or threatened
solicitation of proxies or consents by or on behalf of any person other than the
Board shall be deemed to be an Incumbent Director; and (ii) a Change in Control
shall not be deemed to have occurred pursuant to this paragraph (c) if, after
the Board is reconstituted, the Incumbent Stockholders beneficially own stock of
the Company representing more than thirty-five percent (35%) of the voting power
of the Company’s then outstanding stock; or

 

(d)Any person or persons acting as a group acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such person
or persons) assets from the Company that have a total gross fair market value of
at least forty percent (40%) of the total gross fair market value of all the
assets of the Company immediately prior to such acquisition. For purposes of
this section, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, without regard to any
liabilities associated with such assets. The event described in this paragraph
(d) shall not be deemed to be a Change in Control if the assets are transferred
to (i) any owner of Company stock in exchange for or with respect to the
Company’s stock, (ii) an entity in which the Company owns, directly or
indirectly, at least fifty percent (50%) of the entity’s total value or total
voting power, (iii) any person that owns, directly or indirectly, at least fifty
percent (50%) of the Company stock, or (iv) an entity in which a person
described in (d)(iii) above owns at least fifty percent (50%) of the total value
or voting power. For purposes of this section, and except as otherwise provided,
a person’s status is determined immediately after the transfer of the assets.

 

(e)For purposes of this definition of Change in Control, the term “Incumbent
Stockholders” shall include each and every one of the following: Incorp, LLC;
Richard A. Heise, Jr.; Old Willow Partners, LLC; Heise Family 2005 Grantor
Retained Annuity Trust; InnerWorkings Series C Investment Partners, LLC; Orange
Media, LLC; Baradaran Revocable Trust; Sam Nazarian; Shula Nazarian Torbati;
David and Angella Nazarian Family Trust; Anthony R. Bobulinski; Printworks, LLC;
Printworks Series E, LLC; Younes & Soraya Nazarian Revocable Trust; Younes
Nazarian 2006 Annuity Trust - Printworks; Soraya T. Nazarian 2006 Annuity Trust
- Printworks; New Enterprise Associates 11, Limited Partnership; NEA Ventures
2005, Limited Partnership; or any of their respective Affiliates, successors.

 

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In no event will a Change in Control be deemed to have occurred, with respect to
Executive, if an employee benefit plan maintained by the Company or an Affiliate
of the Company or Executive is part of a purchasing group that consummates the
transaction that would otherwise result in a Change in Control. The employee
benefit plan or Executive will be deemed “part of a purchasing group” for
purposes of the preceding sentence if the plan or Executive is an equity
participant in the purchasing company or group, except where participation is:
(i) passive ownership of less than two percent (2%) of the stock of the
purchasing company; or (ii) ownership of equity participation in the purchasing
company or group that is otherwise not significant, as determined prior to the
Change in Control by a majority of the non-employee continuing directors.

 

6. Employee Inventions and Proprietary Rights Assignment Agreement. Executive
agrees to abide by the terms and conditions of the Company’s standard Employee
Inventions and Proprietary Rights Assignment Agreement as executed by Executive
and attached hereto as Exhibit A.

 

7. Covenants Not to Compete or Solicit. During Executive’s employment and for a
period of two (2) years following the termination of Executive’s employment for
any reason, Executive shall not, anywhere in the Geographic Area (as defined
below), other than on behalf of the Company or with the prior written consent of
the Company, directly or indirectly:

 

(a) perform services for (whether as an employee, agent, consultant, advisor,
independent contractor, proprietor, partner, officer, director or otherwise),
have any ownership interest in (except for passive ownership of five percent
(5%) or less of any entity whose securities have been registered under the
Securities Act of 1933, as amended, or Section 12 of the Securities Exchange Act
of 1934, as amended), or participate in the financing, operation, management or
control of, any firm, partnership, corporation, entity or business that engages
or participates in a “competing business purpose” (as defined below);

 

(b) induce or attempt to induce any customer, potential customer, supplier,
licensee, licensor or business relation of the Company to cease doing business
with the Company, or in any way interfere with the relationship between any
customer, potential customer, supplier, licensee, licensor or business relation
of the Company or solicit the business of any customer or potential customer of
the Company, whether or not Executive had personal contact with such entity; and

 

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(c) solicit, encourage, hire or take any other action which is intended to
induce or encourage, or has the effect of inducing or encouraging, any employee
or independent contractor of the Company or any subsidiary of the Company to
terminate his or his employment or relationship with the Company or any
subsidiary of the Company, other than in the discharge of his duties as an
officer of the Company.

 

For the purpose of this Agreement, the term “competing business purpose” shall
mean the sale or provision of any printed materials, items, or other products
that are competitive with in any manner the products sold or offered by the
Company during the term of this Agreement. The term “Geographic Area” shall mean
the United States of America.

 

The covenants contained in this Section 7 shall be construed as a series of
separate covenants, one for each county, city, state or any similar subdivision
in any Geographic Area. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant contained in the
preceding Sections. If, in any judicial proceeding, a court refuses to enforce
any of such separate covenants (or any part thereof), then such unenforceable
covenant (or such part) shall be eliminated from this Agreement to the extent
necessary to permit the remaining separate covenants (or portions thereof) to be
enforced. In the event that the provisions of this Section 7 are deemed to
exceed the time, geographic or scope limitations permitted by applicable law,
then such provisions shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, permitted by applicable law.

 

8. Equitable Remedies. Executive acknowledges and agrees that the agreements and
covenants set forth in Sections 6 and 7 are reasonable and necessary for the
protection of the Company’s business interests, that irreparable injury will
result to the Company if Executive breaches any of the terms of said covenants,
and that in the event of Executive’s actual or threatened breach of any such
covenants, the Company will have no adequate remedy at law. Executive
accordingly agrees that, in the event of any actual or threatened breach by
Executive of any of said covenants, the Company will be entitled to seek
immediate injunctive and other equitable relief, without bond and without the
necessity of showing actual monetary damages. Nothing in this Section 8 will be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of any
damages that it is able to prove.

 

9. Dispute Resolution. In the event of any dispute or claim relating to or
arising out of this Agreement (including, but not limited to, any claims of
breach of contract, wrongful termination or age, sex, race or other
discrimination), Executive and the Company agree that all such disputes shall be
fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in Chicago, Illinois in accordance with its National
Employment Dispute Resolution rules, as those rules are currently in effect (and
not as they may be modified in the future). Executive acknowledges that by
accepting this arbitration provision he is waiving any right to a jury trial in
the event of such dispute. Notwithstanding the foregoing, this arbitration
provision shall not apply to any disputes or claims relating to or arising out
of (i) the misuse or misappropriation of trade secrets or proprietary
information or (ii) the breach of any non-competition or non-solicitation
covenants.

 

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10. Governing Law. This Agreement has been executed in the State of Illinois,
and Executive and the Company agree that this Agreement shall be interpreted in
accordance with and governed by the laws of the State of Illinois, without
regard to its conflicts of laws principles.

 

11. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns, provided that successor
or assignee is the successor to substantially all of the assets of the Company,
or a majority of its then outstanding stock, and that such successor or assignee
assumes the liabilities, obligations and duties of the Company under this
Agreement, either contractually or as a matter of law. In view of the personal
nature of the services to be performed under this Agreement by Executive, he
shall not have the right to assign or transfer any of his rights, obligations or
benefits under this Agreement, except as otherwise noted herein.

 

12. Entire Agreement. This Agreement, including its attached Exhibit A,
constitutes the entire employment agreement between Executive and the Company
regarding the terms and conditions of his employment. This Agreement supersedes
all prior negotiations, representations or agreements between Executive and the
Company, whether written or oral, concerning Executive’s employment.

 

13. No Conflict. Executive represents and warrants to the Company that neither
his entry into this Agreement nor his performance of his obligations hereunder
will conflict with or result in a breach of the terms, conditions or provisions
of any other agreement or obligation to which Executive is a party or by which
Executive is bound, including, without limitation, any noncompetition or
confidentiality agreement previously entered into by Executive.

 

14. Validity. Except as otherwise provided in Section 7, above, if any one or
more of the provisions (or any part thereof) of this Agreement shall be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions (or any part thereof) shall not in
any way be affected or impaired thereby.

 

15. Modification. This Agreement may not be modified or amended except by a
written agreement signed by Executive and the Company.

 

16. Code Section 409. This Agreement is intended to comply with Section 409A of
the Code, and the interpretative guidance thereunder, including the exceptions
for short-term deferrals, separation pay arrangements, reimbursements, and in
kind distributions, and shall be administered accordingly. Executive hereby
agrees that the Company may, without further consent from Executive, make the
minimum changes to this Agreement as may be necessary or appropriate to avoid
the imposition of additional taxes or penalties on Executive pursuant to Section
409A of the Code. The Company can not guarantee that the payments and benefits
that may be paid or provided pursuant to this Agreement will satisfy all
applicable provisions of Section 409A of the Code. In the case of any
reimbursement payment which is required to be made promptly under this
Agreement, such payment will be made in all instances no later than December 31
of the calendar year following the calendar year in which the obligation to make
such reimbursement arises. Notwithstanding the foregoing, if any payments or
benefits under this Agreement become subject to Section 409A of the Code, then
for the purpose of complying therewith, to the extent such payments or benefits
do not satisfy the separation pay exemption described in Treasury Regulation §
1.409A-1(b)(9)(iii) or any other exemption available under Section 409A of the
Code (the “Non-Exempt Payments”), if Executive is a specified employee as
described in Treasury Regulation § 1.409A-1(i) on the date of termination, any
amount of such Non-Exempt Payments which would be paid prior to the six-month
anniversary of the date of termination shall instead be accumulated and paid to
Executive in a lump sum payment within five (5) business days after such
six-month anniversary. A termination of employment shall be deemed to occur only
if it is a “separation from service” as such term is defined under Code Section
409A, and references to “termination,” “termination of employment,” or like
terms shall mean a “separation from service.”

 

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17. Adjustments Due to Excise Tax .

 

(a)           If it is determined that any amount or benefit to be paid or
payable to Executive under this Agreement or otherwise in conjunction with his
employment (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise in conjunction with his employment)
would give rise to liability of Executive for the excise tax imposed by Section
4999 of the Code, as amended from time to time, or any successor provision (the
“Excise Tax”), then the amount or benefits payable to Executive (the total value
of such amounts or benefits, the “Payments”) shall be reduced by the Company to
the extent necessary so that no portion of the Payments to Executive is subject
to the Excise Tax.  Such reduction shall only be made if the net amount of the
Payments, as so reduced (and after deduction of applicable federal, state, and
local income and payroll taxes on such reduced Payments other than the Excise
Tax (collectively, the “Deductions”)), is greater than the excess of (1) the net
amount of the Payments, without reduction (but after making the Deductions),
over (2) the amount of Excise Tax to which Executive would be subject in respect
of such Payments. In the event Payments are required to be reduced pursuant to
this Section 17(a), Executive shall designate the order in which such amounts or
benefits shall be reduced in a manner consistent with Code Section 409A.

 

(b)           The independent public accounting firm serving as the Company’s
auditing firm, or such other accounting firm, law firm or professional
consulting services provider of national reputation and experience reasonably
acceptable to the Company and Executive (the “Accountants”), shall make in
writing in good faith all calculations and determinations under this Section 17,
including the assumptions to be used in arriving at any calculations.  For
purposes of making the calculations and determinations under this Section 17,
the Accountants and each other party may make reasonable assumptions and
approximations concerning the application of Section 280G and Section 4999 of
the Code.  The Company and Executive shall furnish to the Accountants and each
other such information and documents as the Accountants and each other may
reasonably request to make the calculations and determinations under this
Section 17.  The Company shall bear all costs the Accountants incur in
connection with any calculations contemplated hereby.

 

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18. Legal Fees. The Company shall promptly reimburse Executive for any
reasonable legal fees and expenses incurred by Executive in connection with the
review of this Agreement and any documents ancillary thereto.

 

19. Indemnification. To the fullest extent permitted by the indemnification
provisions of the laws of the state or jurisdiction of the Company, as
applicable, in effect from time to time, and subject to the conditions thereof,
the Company shall:

 

(a) indemnify Executive against all liabilities and reasonable expenses that
Executive may incur in any threatened, pending, or completed action, suit or
proceeding, whether civil, criminal or administrative, or investigative and
whether formal or informal, because Executive is or was an officer or director
of or service provider to the Company or any of its affiliates, provided,
however, that Executive shall have acted in good faith and in a manner that
Executive reasonably believed to be in the best interests of the Company and

 

(b) pay for or reimburse the reasonable expenses upon submission of appropriate
documentation incurred by Executive in the defense of any proceeding to which
Executive is a party because Executive is or was an officer or director of or
service provider to the Company or any of its affiliates, including an
advancement of such expenses to the extent permitted by applicable law, subject
to Executive’s execution of any legally required repayment undertaking.

 

The preceding indemnification right shall be in addition to, and not in lieu of,
any rights to indemnification to which Executive may be entitled pursuant to the
documents under which the Company is organized as in effect from time to time
and shall not apply with respect to any action or failure to act by Executive
which constitutes willful misconduct or bad faith on the part of Executive. The
indemnification rights of Executive in this Section 19 are referred to below as
the “Indemnification Provisions.” The rights of Executive under the
Indemnification Provisions shall survive the cessation of Executive’s employment
with the Company. The Company shall also maintain a directors’ and officers’
liability insurance policy, or an equivalent errors and omissions liability
insurance policy, covering Executive with reasonable scope, exclusions, amounts
and deductibles based on Executive’s positions with the Company.

 

Notwithstanding the foregoing, the Company shall have no obligation to
indemnify, defend or hold harmless Executive from and against any liabilities
and expenses, or to pay for, or reimburse Executive for, any expenses arising
from or relating to (a) Executive’s gross negligence or intentional or willful
misconduct, or (b) actions or claims which are initiated by Executive unless
such action was approved in advance by the Board.

 

* * * * *

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the 19th day
of December, 2013.

 

INNERWORKINGS, INC., a Delaware corporation   EXECUTIVE         By:

/s/ Joseph Busky

  /s/ Eric Belcher Name: Joseph M. Busky   Eric Belcher Its:  

Chief Financial Officer

   

 

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