Exhibit
10.18


 





 


August 2,
2010


 


Sally J. Rau


 


Re:                             Employment Agreement


 


Dear Sally:


 


Velti plc, a company
organized under the laws of the Bailiwick of Jersey (the
“Company” or “Velti”
or “we” or “us”),
through Velti USA, Inc., a Delaware corporation and a direct, wholly-owned
subsidiary of the Company, is pleased to offer you the position of Chief
Administrative Officer, General Counsel and Secretary of the Company on the
following terms and conditions.


 


1.             Position
and Duties.  You will serve as Velti’s
Chief Administrative Officer, General Counsel and Secretary.  You will have the duties assigned to you by,
and you will report to, the Company’s Chief Executive Officer.  Your primary place of work will be at the
Company’s office in San Francisco, California. 
Subject to the terms of Section 11 hereof, the Company may change
your position, duties, and/or work location as determined by the Chief
Executive Officer and your duties will require you to travel to Velti offices
around the world as necessary.  You agree
to devote your full business time, energy, and skill to your duties at the
Company, which duties will include those duties normally performed by a Chief
Administrative Officer, General Counsel and Secretary, as well as any other
reasonable duties that may be assigned to you by the Chief Executive Officer
from time-to-time.


 


2.             Employment
Start Date.  Your employment with the
Company will start on, or as reasonably practicable following, August 6,
2010, subject to your reasonable transition period from your current
employment.


 


3.             Base
Salary and Allowances.  Your base
salary will be $25,000.00 per month (annual rate of $300,000.00), less payroll
deductions and all required withholdings, which salary will be paid
semi-monthly on the 15th and last day of each month in accordance with the
Company’s regular payroll schedule.  As
Chief Administrative Officer, General Counsel and Secretary, you will be an
exempt professional/administrative employee, and as a result, you will not be
eligible to earn overtime pay.


 


4.             First
Stock Option Grant.  Subject to
approval by the Company’s Board of Directors (the “Board”)
which we in good faith will endeavor to obtain (“Board
Approval”), and pursuant to the Company’s 2009 U.S. Employee
Share Incentive Plan (as amended and restated on March 23, 2010, the “Plan”), as soon as reasonably
possible following the start of your employment, the Company will grant you an
option to purchase 187,500 shares of the Company’s ordinary shares at the fair
market value as determined by the Board as of the date of grant (the “First Option”).  The First Option will be subject to the terms
and conditions of the Plan and the Company’s standard form of stock option
grant agreement, which you will be required to execute as a condition of
receiving the First Option.  The First
Option will be subject to a four year  vesting
schedule, pursuant to which twenty-five percent (25%) of the shares subject to
the First Option will vest on each of the first four


 

















 


anniversaries of the First Option grant date,
with all vesting subject to your continued employment.


 


5.             Second
Stock Option Grant.  Subject to Board
Approval, and pursuant to the Plan, as soon as reasonably possible following
the start of your employment,, the Company will grant you an option to purchase
50,000 shares of the Company’s ordinary shares at the fair market value as
determined by the Board as of the date of grant (the “Second
Option”).  The Second
Option will be subject to the terms and conditions of the Plan and the Company’s
standard form of stock option grant agreement, which you will be required to
execute as a condition of receiving the Second Option.  All of the shares of the Second Option will
vest in full on the first anniversary following the Company’s listing on the
NASDAQ Stock Market, with such vesting subject to your continued employment on
such first anniversary; to the extent that the Company’s listing on the NASDAQ
Stock Market has not occurred by the first anniversary of the date of grant of
the Second Option, the Second Option will be canceled in its entirety with no
vesting thereunder.


 


6.             Restricted
Deferred Share Award.  Subject to
Board Approval, and pursuant to the Plan, as soon as reasonably possible
following the start of your employment, the Company will provide you with a
deferred share award grant of 62,500 shares of the Company’s ordinary shares
(the “Deferred Share Award”).  The Deferred Share Award will be subject to
the terms and conditions of the Plan and the Company’s standard form of
restricted stock grant agreement, including payment by you of the nominal value
of such shares, which you will be required to execute as a condition of
receiving the Deferred Share Award.  The
Deferred Share Award will be subject to a four year  vesting schedule, pursuant to which twenty-five percent (25%)
of the shares subject to the Deferred Share Award will vest on each of the
first four anniversaries of the Deferred Share Award grant date, with all
vesting subject to your continued employment.


 


7.             Future
Equity Awards.  Subject to Board
Approval and your continued employment, we will grant you, on an annual basis,
and based on a Black-Scholes calculation at time of each grant, (i)  an
additional deferred share award with a then-fair market value of $137,500, and (ii) an
additional grant of stock options with a then-fair market value of $412,500
(the “Future Equity Awards”).  These grants will be made on such conditions
(including, but not limited to, vesting requirements and apportionment between
restricted stock and stock options) as may be determined by the Board to be
appropriate at the time of grant (provided, however,
that the vesting period shall be no greater than the average vesting period
applied to similar awards made to any of the Chief Executive Officer, Chief
Operating Officer, Chief Commercial Officer and Chief Financial Officer (the “Designated Officers”)), and will be
subject to the terms and conditions of the Plan (or any subsequent Company
equity plan) and the Company’s then-standard forms of equity agreement, which
you will be required to sign as a condition of these grants.


 


8.             Accelerated
Vesting Upon Change in Control.  In
the event of a Change in Control (as defined below), the vesting of any
unvested equity rights previously granted to you (including the First and
Second Options, the Deferred Share Award and the Future Equity Awards) will
accelerate such that fifty percent (50%) of those unvested Company equity
rights will become vested as of the effective date of the Change in Control.  Such accelerated vesting is in addition to
and not in lieu of any accelerated vesting triggered under the provisions of Section 11
below.


 

















 


9.             Other
Benefits.  You will be eligible to
participate in the Company’s group health and other benefit plans as they are
adopted by the Company and in accordance with the provisions of those
plans.  You will be entitled to fifteen
(15) days of paid time off (“PTO”) per
year, which will accrue daily on a pro rata basis.  You will be reimbursed promptly, but in any
event no more than 30 days after the submission of a valid claim, by the
Company for any reasonable, documented business expenses that you incur in the
course of your employment in accordance with the terms of the Company’s
business expense reimbursement policies; provided, however,
that under no circumstances will any such reimbursement of expenses (a) be paid no later than the last day
of the calendar year following the calendar year in which the expense was
incurred, (b) not be affected by the amount of expenses eligible for reimbursement
in any other calendar year, and (c) not be subject to liquidation or
exchange for another benefit.  The Company may change your
compensation and benefits from time-to-time as it deems appropriate or
necessary, subject to your rights under Section 11 below in connection
with a termination of employment for Good Reason..


 


10.           Company
Policies and Proprietary Information. 
As a Company employee, you will be required to abide by Company policies
and procedures as they may be adopted or modified from time-to-time, including,
but not limited to, its policies concerning unlawful discrimination and
harassment.


 


In your work for the Company, you will be
expected not to make unauthorized use or disclosure of any proprietary or
confidential information of any former employer or other third party.  Rather, you will be expected to use only that
information generally known and used by persons with training and experience
comparable to your own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by
the Company or by you on behalf of the Company. 
You agree that you will not bring onto Company premises or use in your
work for the Company any unpublished documents or property belonging to any
former employer or other third party that you are not authorized to use or
disclose.  By accepting employment with
the Company, you are representing that you will be able to perform your job
duties within these guidelines.


 


As a condition of your employment, you will be
required to read, sign, and comply with the Company’s Employee Nondisclosure
and Invention Assignment Agreement (the “ENIAA”), a
copy of which is attached and incorporated by reference.  You agree that you will not, at anytime
during your employment with the Company, directly or indirectly participate in
any business that is in any way competitive with the business of the Company.


 


11.           Termination
of Employment.  Our employment
relationship is “at-will.”  You may
terminate your employment with the Company for any reason (other than a “Good
Reason”, as defined below, in which case the notice provisions described below
shall apply) upon written notice of your termination to the Company’s Chief
Executive Officer.  Subject to the
remainder of this Section, the Company may terminate your employment at any
time and for any reason whatsoever, with or without cause or advance notice.


 


If your employment is terminated at any time
by the Company without Cause (as defined below) or you voluntarily terminate
your employment for Good Reason (as defined below), and if you execute a full
general release of known and unknown claims in a form reasonably satisfactory
to and in favor of the Company and its affiliated persons and entities (without
revocation during any statutorily-authorized revocation period), and you comply
in full with


 

















 


the ENIAA at all times during and after your
employment, the Company will provide you with the following severance benefits:
(a) salary continuation payments at your final base salary rate, less
applicable withholdings, for a period of six months (provided,
however, that if any of Designated Officers are entitled to more
than six months under such circumstances, such salary continuation shall be
extended to the average period applicable to the Designated Officers with such
benefits as a group and, provided further,
that to the extent your compensation is amended in the future to include an
annual cash bonus, such salary continuation shall include a pro-rated portion
of such forecast bonus amount); such salary continuation payments will be made
in accordance with the Company’s regular payroll procedures starting on the
first Company payroll date following the effective date of your termination of
employment with the Company; (b) the vesting of any unvested equity rights
previously granted to you (including the First and Second Options, the Deferred
Share Award and any Future Equity Awards) will accelerate such that any
unvested Company equity that would have become vested during the one year
period following the effective date of your termination of employment with the
Company will become vested on that termination date; and (c) in the event
that you timely elect to obtain continued group health insurance coverage under
COBRA, the Company will pay the premiums for such coverage for you and your
eligible dependents until the earlier of the date that is six months after the
effective date of your termination of employment with the Company or the date
on which you first are eligible to obtain other group health insurance
coverage.  If such a termination occurs
within eighteen (18) months following a Change in Control, and you satisfy all
of the conditions described in the previous sentence, and subject to the
immediately following paragraph, the time periods for the salary continuation
and COBRA premium benefits described in (a) and (c) shall be
increased to twelve (12) months, and the vesting of any unvested equity rights
previously granted to you will accelerate such that all of your unvested
Company equity will become vested on the effective date of your termination of
employment with the Company.


 


For purposes of this Agreement, your
employment shall not be deemed to have been terminated without Cause merely
because you cease to be employed by the Company and become employed by a new
employer involved in the Change of Control; provided that such new employer
shall be bound by this Agreement as if it were the Company hereunder with
respect to you.  It is also expressly
understood that termination without Cause shall not be deemed to have occurred
merely because, upon the occurrence of a Change of Control, you cease to be
employed by the Company and do not become employed by a successor to the
Company after the Change of Control if the successor makes an offer to employ
you on terms and conditions which, if imposed by the Company, would not give
you a basis on which to terminate employment for Good Reason.  Notwithstanding the foregoing, nothing in
this paragraph affects your rights under Section 8 hereof.


 


For purposes of this Agreement, the following
definitions apply:


 


a)              “Cause”
means any of the following:  (i) the
willful and continued failure by you to substantially to perform your duties
with the Company after written notice from the Company to you of, and a
reasonable opportunity to cure, such failure or inability (other than any such
actual or anticipated failure after the issuance by you of a notice of
termination for Good Reason), (ii) the willful engaging by you in conduct
which is demonstrably and materially injurious to the Company, monetarily or
otherwise, and including without limitation theft, dishonesty, misconduct, or
falsification of any employment or Company


 

















 


records; (iii) willful
disclosure of the Company’s confidential or proprietary information; (iv) your
conviction (including any plea of guilty or no contest) for any criminal act
that impairs your ability to perform your duties under this Agreement; (v) a
material breach of any agreement between you and the Company, including this
Agreement; (vi) a material violation of any Company policy; or (vii) your
death or Complete Disability (as defined below).  For purposes hereof, no act, or failure to
act, on your part, shall be deemed “willful” unless done, or omitted to be
done, by you in the absence of good faith and without a reasonable belief that
such act or omission was in the best interest of the Company.


 


b)             “Change in Control” means the first to occur, after the date of this Agreement,
of any of the following:


 


(i) any Person (excluding the
Company, any employee benefit plan of the Company or a corporation controlled
by the Company’s shareholders) is or becomes the “beneficial owner” (as such
term is defined in Rule 13d-3 under the U.S. Securities Exchange Act of
1934, as amended (the “Exchange Act”)),
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired directly
from the Company or its Subsidiaries) representing more than 45% of either the
then outstanding shares of shares of the Company or the combined voting power
of the Company’s then outstanding securities;


 


(ii) during any period of 12
consecutive months during the existence of this Agreement commencing on or
after the date hereof, the individuals who, at the beginning of such period,
constitute the Board (the “Incumbent Directors”)
cease to constitute at least a majority thereof because of a vote of the
Company’s shareholders, provided that a director who was not a director at the
beginning of such 12-month period shall be deemed to have satisfied such
12-month requirement (and be an Incumbent Director) if such director was
elected by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors either
actually (because they were directors at the beginning of such 12-month period)
or by prior operation of this clause (ii);


 


(iii) the consummation of a
merger or consolidation of the Company with any other corporation other than (A) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) at least
60% of the combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding immediately after such
merger or consolidation (including without limitation any redomiciliation of
the Company), or (B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the beneficial owner, as defined in clause (i), directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Subsidiaries) representing 45% or


 

















 


more of either the then outstanding
shares of Stock of the Company or the combined voting power of the Company’s
then outstanding securities;


 


(iv) the shareholders of the
Company or the Board approve a plan of complete liquidation or dissolution of
the Company; or


 


(v) there is consummated an
agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than a sale or disposition by the Company of
all or substantially all of the Company’s assets to an entity, at least 60% of
the combined voting power of the voting securities of which are owned by
Persons in substantially the same proportion as their ownership of the Company
immediately prior to such sale.


 


Upon the occurrence of a Change in
Control as provided above, no subsequent event or condition shall constitute a
Change in Control for purposes of this Agreement, with the result that there
can be no more than one Change in Control hereunder.


 


c)              “Complete Disability”
means your inability to perform the essential functions of your position, with
or without any reasonable accommodation, for a period of at least ninety (90)
days during any twelve (12) month period because of a “mental disability” or “physical
disability” as defined in California Government Code section 12926.


 


d)             “Good Reason”
means the occurrence of any of the following conditions without your written
consent, which condition(s) remain(s) in effect fifteen (15) days
after you provide written notice to the Board of such condition(s): (i)  a
material reduction in your base salary; (ii) a material reduction in your
aggregate compensation opportunity, including (A) your base salary, (B) bonus
opportunity, if any, and (C) long-term or other incentive compensation
opportunity, if any (taking into account, in the case of such bonus and
incentive opportunities, without limitation, any target, minimum and maximum
amounts payable and the attainability and reasonability of any performance
hurdles, goals and other measures);  (iii) a
material diminution in your title, authority, or responsibilities as the Chief
Administrative Officer, General Counsel and Secretary of the Company;  (iv) the relocation of your principal
place of work to a location that is more than fifty (50) miles distant from San
Francisco, California; or (v) the Company’s material breach of any
agreement with you.  You will waive your
right to claim that Good Reason exists if you do not provide written notice to
the Board of the condition(s) on which that claim is based within thirty
(30) days following the first occurrence of such condition(s), and/or you fail
to terminate your employment for Good Reason within thirty (30) days following
the expiration of the thirty (30) day period described in the preceding
sentence.


 


e)              “Person” shall
have the meaning ascribed thereto by Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof (except
that such term shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its subsidiaries, (iii) an


 

















 


underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company
in substantially the same proportion as their ownership of shares of the
Company, or (v) you or any “group” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) which includes you.


 


In the event that you terminate your
employment voluntarily (meaning you terminate your employment without Good
Reason) or your employment is terminated by the Company for Cause, you will not
be entitled to any severance payments or benefits from the Company.  Upon such termination, the Company will pay
you all wages (including base salary, bonuses, and accrued, unused PTO) that
you have earned as of the date of termination.


 


12.           Further
Conditions of Employment.  Your
employment with the Company is contingent on the satisfactory completion of any
background or reference check that is both customary and the Company reasonably
deems necessary or appropriate.  As a
condition of your employment, the Company reserves the right to require
additional such background checks for you while you are employed by the
Company, and you agree to authorize such checks as requested by the
Company.  As a further condition of your
employment, you will be required to provide appropriate evidence of your
identity and authorization to work in the U.S. within three (3) business
days of your hire date.


 


13.           Section 409A.  Notwithstanding anything set forth in this
Agreement to the contrary, no amount payable to you pursuant to this Agreement
on account of your termination of employment with the Company which constitutes
a “deferral of compensation” within the meaning of the Treasury Regulations
issued pursuant to Section 409A of the Internal Revenue Code (the “Section 409A Regulations”)
shall be paid unless and until you have incurred a “separation from service”
within the meaning of the Section 409A Regulations.  Furthermore, if you are a “specified employee”
within the meaning of the Section 409A Regulations as of the date of your
separation from service, no amount that constitutes a deferral of compensation
which is payable on account of your separation from service shall be paid to
you before the date (the “Delayed  Payment Date”) which is the
first day of the seventh month after the date of your separation from service
or, if earlier, the date of your death following such separation from
service.  All such amounts that would,
but for this subsection, become payable prior to the Delayed Payment Date will
be accumulated and paid on the Delayed Payment Date.


 


The Company intends that income provided to
you pursuant to this Agreement will not be subject to taxation under Section 409A
of the Internal Revenue Code (“Section 409A”).  The provisions of this Agreement shall be
interpreted and construed in favor of satisfying any applicable requirements of
Section 409A.  In the event that any
income provided to you pursuant to this Agreement, including under equity
instruments granted to you or obligated to be granted to you hereunder, become
subject to any excise tax under Section 409A, the Company shall reimburse
you for such excise tax, and shall also “gross-up” that reimbursement to
include any federal or state income taxes that you are assessed on that
reimbursement.


 


14.           Integration,
Modification and Governing Law.  This
Agreement, together with the ENIAA and the equity agreements described above,
forms the complete and exclusive statement of your employment agreement with
the Company.  The terms and conditions
set out in the agreements referenced in the prior sentence supersede any other
agreements


 

















 


between you and the Company or any promises or
representations made to you by anyone, whether oral or written.  This Agreement cannot be modified or amended
except in a subsequent written agreement signed by you and a duly authorized
member of the Board or the Company’s Chief Executive Officer.  For the purposes of construing this
Agreement, any ambiguity shall not be construed against either party as the
drafter, and this Agreement shall be interpreted in accordance with and
governed by California law, without regard to conflicts of laws principles.


 


15.           Expiration
of Offer.  This offer of employment
will remain open until the close of business on August 4, 2010, at which
time it will expire (if not previously accepted) and be of no further legal
force or effect.


 


We know this is a very important decision for
you and we are excited about the prospect of having you join our team.  Please sign and date this letter on the
spaces below and return it to me.  We
look forward to a productive and enjoyable work relationship with you.


 


 


	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
  Velti
  plc

  	
   

  
	
   

  	
   

  
	
  /s/
  Alex Moukas

  	
   

  
	
  By:

  	
  Alex Moukas

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  



 


 


I agree to and accept employment with Velti plc, through its
direct, wholly-owned subsidiary Velti USA, Inc., on the terms and
conditions set forth in this Agreement:


 


 


	
  /s/
  Sally
  J. Rau

  	
   

  	
  August 2, 2010

  
	
  Sally J.
  Rau