Document:

Exhibit 10.13

 

 

March 15,
2010

 

Ms. Joanne
Bradford

140 Derby Lane

Moraga, CA 94556

 

Re:                               Employment
Agreement with Demand Media, Inc.

 

Dear
Joanne:

 

On
behalf of Demand Media, Inc. (the “Company”), I am pleased to
offer you employment as the Chief Revenue Officer of the Company on the terms
and conditions set forth in this letter agreement (this “Agreement”).  You may accept this Agreement by signing and
returning a copy of this Agreement to the Company as provided below.

 

1.             Term of
Employment.  Your employment
under this Agreement shall commence on March 26, 2010 (the “Start Date”)
and will continue until March 31, 2014 (the “Initial Term”).  Notwithstanding the foregoing, and subject to
the provisions of Section 3 herein, either party may terminate this
Agreement on thirty (30) days’ prior written notice before the expiration of
the Initial Term.  After the Initial
Term, this Agreement shall continue in full force and effect for successive
one-year periods, subject to either party’s right to terminate the Agreement
upon no less than sixty (60) day’s prior written notice, and to the provisions
of Section 3 herein.

 

2.             Position
and Duties.  During the
Initial Term, the Company shall employ you as its Chief Revenue Officer, and
you shall report to the Company’s Chief Executive Officer (currently Richard
Rosenblatt).  Your duties shall include
such lawful duties as the Board may delegate to you from time to time that are
not inconsistent with duties assigned to a C-level officer of a company of
comparable size and with a similar business to that of the Company.  You agree to commit substantially all of your
working time, attention and efforts to the position on a full-time basis.  Subject to the foregoing, the Company
acknowledges that, outside of your obligations to the Company, you may also be
spending a reasonable amount of time on Permitted Activities (as defined
below).  This Agreement is personal to
you and you may not assign or delegate any of your rights or obligations
hereunder without first obtaining the written consent of the Company by action
of the Board of Directors of the Company (the “Board”).

 

3.             Compensation
and Benefits.  In
consideration for your services to the Company during the Initial Term, you
shall receive the following compensation and benefits from the Company.

 

(a)           Base
Salary.  The Company shall pay you an
annual base salary at the rate of two hundred twenty-five thousand dollars
($225,000 U.S.) per year to be paid in installments according to the Company’s
regular payroll policy, as in effect from time to time.  The Company shall withhold and deduct all
applicable federal and state income and employment and disability taxes from
your base salary as required by applicable laws.  Your salary shall be

 

 

reviewed
annually and you shall be eligible for discretionary annual increases in your
base salary in connection with the Company’s annual executive compensation and
performance review conducted by the Board.

 

(b)           Annual
Incentive Opportunity; Sales Commission.

 

(1)             Annual
Incentive Opportunity.  You shall be
eligible to participate in any bonus plan that the Company may maintain or
establish for the executives of the Company on the terms that apply to the
executives of the Company.  Such annual
target bonus shall be set at forty percent (40%) of your annual base salary in
effect during the year for which the bonus is applicable, based on the
attainment of your personal performance criteria and the Company’s attainment
of its business and financial performance criteria, in each case established
and evaluated by the Company in its sole discretion, provided,
that your actual bonus for any year may equal less than 40% of your base salary
(and may equal zero), depending upon whether and to what extent such criteria
are attained. Incentive bonuses shall be pro-rated for any partial year of
service.  Payment of any incentive
bonus(es), to the extent any such incentive bonus(es) become payable, will be
contingent upon your continued employment through the date on which such
payments are paid generally under the applicable bonus plan.  But if your employment is terminated by the
Company without Cause or by you for Good Reason (both as defined below) before
the Company pays incentive bonuses generally to its employees in respect of
service during calendar year 2010, you will nonetheless be entitled to receive
a prorated incentive bonus payment paid at the same time as the Company pays
incentive bonuses generally, subject to adjustment (either upwards or
downwards, as applicable) to the same extent as the bonus pool for the Company’s
executive employees is adjusted generally. 
The incentive payment(s) shall be paid in cash or such other form
agreed upon by you and the Compensation Committee of the Board or the Board.

 

(2)             Sales Commission.  For calendar year 2010, you shall be eligible
for commission payments as follows: (a) one quarter of one percent (0.25%)
of the sum of worldwide sales of premium, branded advertising and year 1
bookings of the Pluck enterprise solution (“Commissionable Sales”); and (b) if
Commissionable Sales exceed fifteen million dollars ($15,000,000) in 2010, one
half of one percent (0.50%) on sales above that threshold.   Commissionable Sales made prior to the Start
Date will be included in determining whether the $15,000,000 sales target has
been achieved.  But you will be paid
commission only on Commissionable Sales made after the Start Date.  Payments of commissions are made after the
end of each calendar quarter conditioned upon your continued employment with
the Company. The calculation of Commissionable Sales and other factors
affecting your commission shall be made by the Company in the exercise of its
reasonable discretion in accordance with the Company’s sales commission
policies.  Calculation and payment of all
sales commissions subsequent to calendar year 2010 shall be agreed upon between
you and the Company in advance of each successive calendar year.

 

(c)           Restricted
Stock and Stock Option Grant.

 

(1)           Restricted
Stock.  Subject
to the Board’s approval and the commencement of your employment, the Company
agrees to grant to you four hundred thousand (400,000) restricted
shares of the Company’s common stock (the “Restricted Stock”) under the

 

2

 

Company’s
Amended and Restated 2006 Equity Incentive Plan (as may be further amended from
time to time, the “Plan”) as soon as practicable after the Start
Date.  The terms and conditions of the Restricted Stock, including any restrictions
thereon, shall be set forth in a Restricted Stock agreement to be
entered into by the Company and you which shall evidence the grant of the Restricted Stock (the “Restricted Stock Agreement”).  Subject
to the provisions of this Section 3(c)(1) and Section 3(f) below,
all such shares of Restricted Stock shall be subject to and governed by the
terms and conditions of the Plan and the Restricted Stock Agreement.

 

(2)  Stock
Option.  Subject to the Board’s approval and the commencement
of your employment, the Company agrees to grant to you a non-qualified stock
option to purchase four hundred thousand (400,000) shares of the Company’s
common stock (the “Stock Option”) as soon as practicable following the Start
Date.  The Stock Option shall vest upon grant with respect to 100,000 shares subject thereto (the “Signing
Bonus Shares”).  The Stock
Option shall be granted to you under the Plan at an exercise price per share
equal to 100% of the fair market value of a share of the Company’s common stock
on the date of grant, as determined by the Board in accordance with the terms
of the Plan. The terms and conditions of the Stock Option, including any restrictions thereon, shall be set
forth in a Stock Option agreement to be entered into by the Company and you
which shall evidence the grant of the Stock
Option (the “Stock Option Agreement”).  The Stock
Option shall be subject to and governed by the terms and conditions of the Plan
and the Stock Option Agreement.

 

(3)           Scheduled  Vesting. The Restricted
Stock and the Stock Option shall be subject to such restrictions as the Company
shall determine, which may include, without limitation, any reacquisition and
transferability restrictions.  Subject to
your continued employment with the Company, the Restricted Stock shall vest as
follows: one-fourth (1/4) of the Restricted Stock on each of the first, second,
third and fourth anniversaries of the date of grant.  Further subject to your continued employment
with the Company, the Stock Option (other than the Signing Bonus Shares) shall
vest as follows: 75,000 shares subject to the Stock Option on the first
anniversary of the date of grant and an additional 6,250 shares subject to the
Stock Option on the first day of each month thereafter.

 

(d)           Section 401(k) Plan
and Other Benefits.  As an employee
of the Company, you shall be eligible to participate in the Company’s 401(k) Plan,
subject to the terms of that plan. 
Subject to the terms of such other plans, you shall be eligible to
receive such other benefits or rights as may be provided under any employee
benefit plans provided by the Company to its executives that are now or
hereafter will be in effect, including participation in life, medical,
disability and dental insurance plans. 
Nothing in this provision shall, or shall be construed to, obligate the
Company to maintain any particular benefit plan(s), including without
limitation, any 401(k) plan.

 

(e)           Vacation
and Sick Leave.  The Company’s
policy is to not provide a fixed number of paid vacation, personal or sick days
per year for executive level employees. 
As an executive officer, we expect you to use your judgment to take time
off from work for vacation or other personal time in a manner consistent with
performing your work in a timely fashion, providing excellent service to our
customers and partners and avoiding inconveniencing your co-workers.

 

3

 

(f)            Termination
and Change of Control Payments and Benefits.

 

(1)           Termination
for Cause or Termination Other than for Good Reason.  In the event that your
employment with the Company is terminated by the Company for Cause or is
terminated by you for any reason other than Good Reason, then you shall become
entitled to (i) payment of your accrued but unpaid salary through the date
of the termination of your employment, and (ii) reimbursement of any
business expenses that are reimbursable in accordance with Section 5 below
and are incurred by you prior to the date of termination, (together, the “Accrued
Obligations”).  The Accrued
Obligations shall be paid to you promptly following your termination of
employment, but in any event within fifteen (15) days after termination (or
such shorter period as may be required under applicable law).

 

(2)           Termination
Without Cause or for Good Reason or Termination Due to Death or
Disability.  In the event
that your employment with the Company is terminated by the Company without
Cause, is terminated by you due to a Good Reason or is terminated due to your
death or Disability and, in any event, such termination constitutes a “separation
from service” (within the meaning of Section 409A(a)(2)(A)(i) of the
Internal Revenue Code of 1986, as amended (the “Code”) and Treasury
Regulation Section 1.409A-1(h)) (a “Separation from Service”)),
then you or your estate (if applicable) shall be entitled to (i) the
Accrued Obligations; (ii) any incentive bonus due pursuant to Section 3(b)(1);
and (iii) sales commission payments due and owing to you pursuant to Section 3(b)(2) as
of the date of such Separation from Service plus the following severance
benefits (the “Severance”), subject to your (or your estate’s) execution
and non-revocation of an effective release and waiver of claims in form and
substance satisfactory to the Company.

 

(i)            Cash
Severance Payment.  The Company
shall pay you or your estate (if applicable) an amount equal to four (4) months
of your then-current base salary payable, subject to Section 10 below, in
substantially equal installments on the Company’s regularly scheduled payroll
dates over the four (4)-month period immediately following the date of such
Separation from Service (the “Termination Date”), provided, that such payments shall not
commence until the Company’s first payroll date occurring on or after the 30th
day following the Termination Date (the “First Payroll Date”) and any
amounts that would otherwise have been paid to you pursuant to this Section 3(f)(2)(i) prior
to such payroll date shall be paid in a lump-sum on the First Payroll Date,
and, provided, further, that in
no event shall any amounts be paid later than the fifteenth day of the third
month following the year in which the Termination Date occurs (the “Short-Term
Deferral Date”) and, to the extent that any payments pursuant to this Section 3(f)(2)(i) would
be paid to you after the Short-Term Deferral Date absent this proviso, such
amounts shall instead be paid to you on the last regularly scheduled Company
payroll date occurring on or prior to the Short-Term Deferral Date.  Each payment made pursuant to this Section 3(f)(2)(i) shall
be treated as a separate payment as permitted under Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

(ii)           Continuation
Coverage.  The Company
shall provide continuation healthcare coverage for you and your dependents, at
the same cost to you as immediately prior to the date of termination (subject
to premium increases affecting participants in such plan(s) generally),
for a period of four (4) months from your date of termination, to the
extent that each such individual received healthcare coverage immediately prior
to such termination, subject to

 

4

 

your
(and/or your dependents’) proper election of continuation healthcare coverage
under Section 4980B of the Internal Revenue Code and the regulations
thereunder, provided, that if,
prior to the expiration of the continuation coverage period, any plan pursuant
to which such benefits are provided ceases to be exempt from the application of
Section 409A (as defined below) under Treasury Regulation Section 1.409A-1(a)(5),
then an amount equal to each such remaining premium shall thereafter be paid to
you as currently taxable compensation in substantially equal monthly
installments over the remainder of the continuation coverage period.

 

(iii)         Accelerated
Vesting.  If a Separation of Service
described in Section 3(f)(2) occurs prior to a Change of Control, one
hundred thousand (100,000) shares of Restricted Stock and one hundred thousand
(100,000) shares of common stock subject to the Stock Option shall be deemed to
vest immediately prior to your date of termination.

 

(3)           Change
of Control.  If a Change of Control (as defined in the Plan) shall occur and either (x) you
remain employed by the Company through the three-month anniversary of such
Change of Control or (y) the Company terminates your employment other than
for Cause or you terminate your employment for Good Reason prior to such
three-month anniversary (in either case, an “Acceleration Event”), then,
in either case, the unvested portion of the Restricted Stock and Stock Option
shall vest immediately upon the occurrence of such Acceleration Event with
respect to the greater of (A) 100,000 shares of the Restricted Stock and
100,000 of the shares subject to the Stock Option or (B) fifty percent
(50%) of the shares of the then unvested shares subject to the Stock Option and
fifty percent (50%) of the then unvested Restricted Stock, provided
further, that if the Company terminates your employment other than
for Cause or you terminate your employment for Good Reason after a Change of
Control, an additional 100,000 shares of the Restricted Stock and 100,000 of
the shares subject to the Stock Option (or such lesser amount of the Stock
Option and Restricted Stock as remains unvested) shall vest immediately prior
to such termination.

 

(g)           Definitions.

 

As
used in this Agreement, the following terms shall have the meanings set forth
below:

 

(1)           “Cause” shall mean:

 

(i)            your failure (other than due
to Disability) to materially comply with written Company policies generally
applicable to Company officers or employees or any directive of the Board that
is reasonably achievable, that is not inconsistent with your position as Chief
Revenue Officer or the fulfillment of your fiduciary duties and that is not
otherwise prohibited by law or established public policy;

 

(ii)           your engagement in willful
misconduct against the Company that is materially injurious to the Company;

 

(iii)          your engagement in any
activity that is a conflict of interest or competitive with the Company (other
than (1) your management of current personal investments which do not
require your active participation in the management or the operation of

 

5

 

the
investments (2) your current position as a Board Member of Modelinia, Inc.,
and (3) other passive investment in which you do not take an operating
role, to the extent any such service does not prevent you from discharging all
of your duties under this Agreement (the activities described in clauses (1), (2) and
(3) are hereafter referred to as “Permitted Activities”);

 

(iv)          your engaging in any act of
fraud or dishonesty against the Company or any of its Affiliates or any
reckless or intentional, material breach of federal or state securities or
commodities laws or regulations;

 

(v)           your engaging in an act of
assault or other act of violence in the workplace;

 

(vi)          your harassment of any
individual in the workplace based on age, gender or other protected status or
class or material violation of any policy of the Company regarding harassment
(subject to investigation and verification by an independent third party of
such harassment claim); or

 

(vii)         your conviction, guilty plea
or plea of nolo contendre for any
felony charge.

 

provided, that with the exception of
clauses (ii) and (iv)-(vii), the Company shall not have Cause to terminate
your employment unless: (i) it provides you with written notice setting
forth in reasonable detail the acts or omissions constituting the grounds for
Cause, and (ii) it provides you at least thirty (30) days to cure the
conditions giving rise to such Cause, to the extent curable.

 

(2)           “Change of
Control” shall have the meaning
assigned to such term in the Plan.

 

(3)           “Disability” shall mean a
disability as determined under the Company’s applicable long-term disability
plan that prevents you from performing your duties under this Agreement (even
with a reasonable accommodation by the Company) for a period of six months or
more or, if no such plan applies, shall have the meaning determined in the
discretion of the Board.

 

(4)           “Good
Reason” shall mean any
one of the following without your consent:

 

(i)            any action by the Company
which results in a material diminution of your authority, duties or
responsibilities (other than (A) any insubstantial action not taken in bad
faith and which is promptly cured by the Company, to the extent curable, upon
notice by you, and (B) a change in your title, authority, duties and/or
responsibilities following a Change of Control if your new title is that of an
executive officer of the entity surviving such Change of Control (or, if
applicable, its parent company) reporting directly to the Chief Executive
Officer, Chief Operating Officer, or President of the entity surviving such
Change of Control (or, if applicable, its parent company) and your authority,
duties and responsibilities are commensurate with such title);

 

6

 

(ii)           a reduction in your base
salary;

 

(iii)          a material breach by the
Company of its obligations hereunder;

 

(iv)          the requirement by the
Company that you relocate your residence more than fifty (50) miles from your
current home address.

 

provided, that  you shall not have Good Reason to
terminate your employment with the Company unless (i) you provide the
Company with written notice of the acts or omissions constituting the grounds
for Good Reason (“Notice”) within ninety (90) days after you first
become aware (or should, with reasonable diligence, have become aware) of the
existence of the grounds for Good Reason (but in no event later than two years
after the initial existence of such occurrence), and (ii) you provide the
Company at least thirty (30) days to cure the conditions giving rise to such
Good Reason, and (iii) you terminate employment no later than one hundred
twenty (120) days after providing Notice to the Company.

 

4.             Confidentiality and Invention
Assignment Agreement.  In
connection with the Company’s entering into this Agreement and in further
consideration hereof, you hereby agree to execute, no later than substantially
contemporaneously with your Start Date, the Confidential Information and
Development Agreement attached hereto as Exhibit A.

 

5.             Business
Expenses.  You shall be
entitled to reimbursement by the Company for such customary, ordinary and
necessary business expenses as are incurred by you in the performance of your
duties and activities associated with promoting or maintaining the business of
the Company.  All expenses as described
in this paragraph shall be reimbursed only upon presentation by you of such
documentation as may be reasonably necessary to substantiate that all such
expenses were incurred in the performance of your duties in accordance with the
Company’s policies.

 

6.             Return Of
Company Property.  Upon your
termination of employment from the Company or as earlier requested by the
Company, you agree to return to the Company all Company documents (and all
copies thereof in any form contained) and other Company property in your
possession or control, including, but not limited to, Company files,
correspondence, memos, notebooks, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded
information, tangible property and equipment, credit cards, entry cards,
identification badges and keys; and any materials of any kind that contain or
embody any proprietary or confidential information of the Company (and all
reproductions thereof in whole or in part) (collectively, the “Company
Property”).  You agree to conduct a
good faith and diligent search of your belongings to ensure your compliance
with the provisions of this Section 6.

 

7.             Binding on
Successors.  This Agreement
shall be binding upon the Company and any entity which is a successor by
merger, acquisition, consolidation or otherwise to the business formerly
carried on by the Company, or an affiliate of any such entity, and becomes your
employer by reason of (or as the direct result of) any direct or indirect sale
or other disposition of the Company or substantially all of the assets of the
business currently carried on by the Company, without regard to whether or not
such person actively adopts this letter agreement.  

 

7

 

Any
failure by a successor to the Company to perform the Company’s obligations
hereunder (subject to clause (B) of subsection (i) of the definition
of Good Reason above) shall constitute a material breach of this Agreement.

 

8.             Arbitration.  You agree that any future
disputes between you and the Company (the “parties”) including but not
limited to disputes arising out of or related to this Agreement, shall be
resolved by binding arbitration before the American Arbitration Association in
accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association in effect at that time, except
where the law specifically forbids the use of arbitration as a final and
binding remedy, or where section 8(f) below specifically allows a
different remedy.

 

(a)           The parties agree initially
to attempt to resolve any such disputes in good faith, which may include
voluntary non-binding mediation paid for by the Company.

 

(b)           If the matter is not
resolved, the parties agree that the dispute shall be resolved by binding
arbitration according to the California Code of Civil Procedure, including the
provisions of Section 1283.05, pertaining to discovery.

 

(c)           The arbitrator shall have
the authority to determine whether the conduct complained of violates the
complainant’s rights and, if so, to grant any relief authorized by law; subject
to the exclusions of section (f) below. 
The arbitrator shall not have the authority to change or refuse to
enforce any lawful term of this Agreement.

 

(d)           The Company shall bear the
costs of the arbitration.  If the Company
prevails, you shall pay any litigation costs (but not attorneys’ fees) of the
Company to the same extent as if the matter had been heard in a court of
general jurisdiction.  Each party shall
pay its own attorneys’ fees, unless the arbitrator orders otherwise, pursuant
to applicable law.

 

(e)           Arbitration shall be the
exclusive final remedy for any dispute between the parties, such as disputes
involving claims for discrimination or harassment (such as claims under the
Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the
Americans with Disabilities Act, or the Age Discrimination in Employment Act),
wrongful termination, breach of contract, breach of public policy, physical or
mental harm or distress or any other disputes.

 

(f)            The parties agree that the
arbitration award shall be enforceable in any court having competent
jurisdiction to enforce this Agreement, so long as the arbitrator’s findings of
fact are supported by substantial evidence on the whole and the arbitrator has
not made errors of law; however, either party may bring an action in a court of
competent jurisdiction, regarding or related to matters involving the Company’s
confidential, proprietary or trade secret information, or regarding or related
to inventions that you may claim to have developed prior to or after joining
the Company, seeking preliminary injunctive relief in court to preserve the
status quo or prevent irreparable injury before the matter can be heard in
arbitration.

 

8

 

(g)           Any arbitration pursuant to
this Section 8 shall be conducted in the city of Los Angeles, California,
unless the parties mutually agree to a different location for the arbitration.

 

9.       Indemnification.   During
your employment with the Company,  the Company
shall maintain a Directors and Officers insurance policy covering its directors
and officers consistent with prevailing commercial practice, and you shall be
entitled to indemnification as set forth in the Company’s Certificate of
Incorporation and Bylaws.

 

10.     Section 409A.

 

(a)              General.  To the extent applicable, this Agreement
shall be interpreted in accordance with Code Section 409A (together with
Department of Treasury regulations and other official guidance issued
thereunder, “Section 409A”). 
Notwithstanding any provision of this Agreement to the contrary, in the
event that the Company determines in good faith that any compensation or
benefits payable under this Agreement may not be either exempt from or
compliant with Section 409A, the Company shall consult with you and adopt
such amendments to this Agreement or adopt other policies or procedures
(including amendments, policies and procedures with retroactive effect), or
take any other commercially reasonable actions necessary or appropriate to (i) preserve
the intended tax treatment of the compensation and benefits payable hereunder,
to preserve the economic benefits of such compensation and benefits, and/or (ii) to
exempt the compensation and benefits payable hereunder from Section 409A
or to comply with the requirements of Section 409A and thereby avoid the
application of penalty taxes thereunder; provided,
that this Section 10 does not, and shall not be construed so as to, create
any obligation on the part of the Company to adopt any such amendments,
policies or procedures or to take any other such actions or to indemnify you
for any failure to do so.

 

(b)           Potential Six-Month Delay.  Notwithstanding anything to the contrary in
this Agreement, compensation and benefits that become payable in connection
with your Separation from Service (if any), including without limitation any
Severance payments, shall be paid to you during the 6-month period following
your Separation from Service only to the extent that the Company reasonably
determines that paying such amounts at the time or times indicated in this
Agreement will not cause you to incur additional taxes under Section 409A.  If the payment of any such amounts is delayed
as a result of the previous sentence, then, on the first business day following
the end of such 6-month period (or such earlier date upon which such amount can
be paid under Section 409A without being subject to such additional taxes,
including as a result of your death), the Company shall pay to you a lump-sum
amount equal to the cumulative amount that would have otherwise been payable to
you during such 6-month period.

 

11.          Representations.

 

(a)           No
Violation of Other Agreements.  You hereby represent
and warrant to the Company that (1) you are entering into this Agreement
voluntarily and that, to the best of your knowledge after consultation with
counsel, the performance of your obligations hereunder will not violate any
agreement between you and any other person, firm, organization or other entity;
and (2) to the best of your knowledge after consultation with counsel, you
are not bound 

 

9

 

by
the terms of any agreement with any previous employer or other party to refrain
from competing, directly or indirectly, with the business of such previous
employer or other party that would be violated by your entering into this
Agreement and/or providing services to the Company pursuant to the terms of
this Agreement.

 

(b)           No
Disclosure of Confidential Information.   You hereby represent
and warrant to the Company that, to the best of your knowledge after
consultation with counsel, the performance of your duties under this Agreement
will not require you to, and you shall not, rely on in the performance of your
duties or disclose to the Company or any other person or entity or induce the
Company in any way to use or rely on any trade secret or other confidential or
proprietary information or material belonging to any of your previous
employers.

 

12.          Notice.  Any notice or other communication required or
permitted under this Agreement shall be effective only if it is in writing and
delivered personally or sent by fax, email or registered or certified mail,
postage prepaid, addressed as follows (or if it is sent through any other
method agreed upon by the Parties):

 

If
to the Company:

 

Demand
Media, Inc.

1333
2nd Street, Suite 100

Santa
Monica, CA 90401

Tel:
(310) 394 6400

Attention:
Chief Executive Officer

 

If
to you:

 

Joanne
Bradford

140
Derby Lane

Moraga,
CA 94556

Tel:
(415) 279-8388

 

and
to:

 

Joseph
A. Piesco, Jr., Esq.

Kasowitz,
Benson, Torres & Friedman LLP

1633
Broadway

New
York, NY 10019

Tel:
(212) 506-1955

 

or
to such other address as any Party hereto may designate by notice to the other
in accordance with this Section 12, and shall be deemed to have been given
upon receipt.

 

10

 

13.          Miscellaneous.

 

(a)           This Agreement (together
with the Restricted Stock Agreement, the Stock Option Agreement, and the
Confidential Information and Development Agreement) constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the
Company with regard to the terms and conditions of your employment with the
Company.  It is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein, and it supersedes any other such promises,
warranties or representations and any other written or oral statements
concerning your rights to any compensation, equity or benefits from the
Company, its predecessors or successors in interest.

 

(b)           Subject to the mandatory
arbitration provided in Section 8 above, jurisdiction and venue in any
action to enforce any arbitration award or to enjoin any action that violates
the terms of this Agreement shall be in the Superior Court of the County of Los
Angeles or the U.S. District Court for the Central District of California.

 

(c)           This Agreement may not be
modified or amended except in a writing signed by both you and a duly
authorized officer of the Company.  This
Agreement shall bind the heirs, personal representatives, successors and
assigns of both you and the Company, and inure to the benefit of both you and
the Company, their heirs, successors and assigns.  If any provision of this Agreement is
determined to be invalid or unenforceable, in whole or in part, this
determination shall not affect any other provision of this Agreement and the
provision in question shall be modified by the court so as to be rendered
enforceable in a manner consistent with the intent of the parties insofar as
possible.  Headings and subheadings in
this Agreement are solely for convenience and do not constitute terms of this
Agreement.

 

(d)           This Agreement may be signed
in counterparts and the counterparts taken together shall constitute one
agreement.  Facsimile signatures shall be
deemed as effective as original signatures.

 

(e)           This Agreement shall be
deemed to have been entered into and shall be construed and enforced in
accordance with the laws of the State of California as applied to contracts made
and to be performed entirely within California.

 

If
this Agreement is acceptable to you, please sign below and return the original,
fully executed Agreement to the Company. 
A copy of the Agreement is also being provided to you for your records.

 

11

 

I
and the other members of the Board of Directors of the Company look forward to
your future contributions to the Company.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  DEMAND
  MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard Rosenblatt

  
	
   

  	
   

  	
  Name:
  Richard Rosenblatt

  
	
   

  	
   

  	
  Title:
  CEO and Chairman of the Board

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED
  AND ACCEPTED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Joanne Bradford

  	
  March 15, 2010

  
	
  JOANNE
  BRADFORD

  	
   

  	
   

  

 

12Exhibit 10.14

 

DEMAND MEDIA, INC.

 

2006 EQUITY INCENTIVE PLAN

STOCK OPTION AGREEMENT

 

Demand Media, Inc. (the “Company”),
pursuant to its 2006 Equity Incentive Plan (the “Plan”); hereby grants
to Optionee listed below (“Optionee”), an option to purchase the number
of shares of the Company’s Common Stock set forth below (the “Option”), subject
to the terms and conditions of the Plan and this Stock Option Agreement. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Stock Option Agreement.

 

I.              NOTICE OF STOCK
OPTION GRANT

 

	
  Optionee:

  	
   

  	
  Richard Rosenblatt

  
	
   

  	
   

  	
   

  
	
  Date of Stock Option Agreement:

  	
   

  	
  April 19, 2007

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  April 19, 2007

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $1.00

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Granted:

  	
   

  	
  2,000,000 Shares

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $2,000,000

  

 

Type of Option:                    Incentive Stock
Option

 

Term/Expiration Date: The
Term/Expiration Date of this Option shall be April 19, 2013, provided, that (i) if a Liquidity
Event (as defined below) shall occur prior to April 19, 2013, then the
Term/Expiration Date of this Option shall instead be the later of the thirteen-month
anniversary of the consummation of the Liquidity Event or April 19, 2013,
and (ii) if an IPO (as defined below) shall occur prior to April 19,
2013, then the Term/Expiration Date of this Option shall instead be the later
to occur of (A) the thirtieth day following the VWAP Determination Date
(as defined below) applicable to the first Fiscal Quarter (as defined below)
immediately after the expiration of any applicable Market Standoff Period (as
defined in Section 4, below), or (B) April 19, 2013.

 

Vesting Schedule:               This Option shall vest and
become exercisable as follows:

 

(i)            If
a Liquidity Event occurs prior to April 19, 2013, subject to Optionee’s continued
employment with the Company through the first anniversary of the consummation
of such Liquidity Event, this Option shall vest and become exercisable with
respect to all Shares subject hereto on the first anniversary of such Liquidity
Event, provided, that if, within
ninety days prior to or within twelve months after the consummation of a
Liquidity Event, Optionee’s employment is terminated by the Company without
Cause (as defined in the employment agreement between the Company and Optionee,
dated April 18, 2006 (the “Employment Agreement”)), by Optionee for
Good Reason (as defined in the Employment Agreement) or terminates due to
Optionee’s

 

 

death or Disability (as defined below), this Option
shall vest and become exercisable with respect to all Shares subject hereto
immediately prior to any such termination;

 

(ii)           If
(a) prior to April 19, 2013, the Company engages in an initial public
offering of its Common Stock pursuant to an effective registration statement
under the Securities Act (an “IPO”), and (b) either (1) during
any Company fiscal quarter beginning after the expiration of any applicable
Market Stand-Off Period and ending prior to April 19, 2013 or (2) if
no such Company fiscal quarter meets the requirements of the preceding
Section (ii)(b)(1), during only the Company fiscal quarter beginning
immediately after the expiration of any applicable Market Standoff Period (any
such period, in either case, a “Fiscal Quarter”), the average of the
daily volume weighted average price of the Common Stock for such Fiscal Quarter
(such average, the “VWAP”) equals or exceeds the VWAP levels set forth
in the table below, then this Option shall vest and become exercisable with
respect to the number of Shares set forth opposite the applicable VWAP levels
specified in the table below on the date that the Administrator determines the
VWAP for such Fiscal Quarter, but in any event, no later than five business
days after the end of any such Fiscal Quarter (each such date, a “VWAP
Determination Date”), subject to Optionee’s continued employment with the
Company through such VWAP Determination Date, provided,
that if, following an IPO occurring on or prior to April 19,
2013, Optionee’s employment is terminated by the Company without Cause or by
Optionee for Good Reason or terminates due to Optionee’s death or total and
permanent Disability, this Option shall vest and become exercisable on the
first VWAP Determination Date immediately following such termination of
employment, if any, with respect to that number of Shares, if any, with respect
to which this Option would have vested on such VWAP Determination Date had
Optionee remained employed with the Company through such date:

 

	
  If, during a Fiscal Quarter, the

  Common Stock attains VWAP of:

  	
   

  	
  Then this
  Option shall vest and become

  exercisable, on the applicable VWAP

  Determination Date, with respect to:

  
	
  $13 or more*

  	
   

  	
  750,000 Shares*

  
	
  $14 or more*

  	
   

  	
  1,250,000 Shares*

  

 

*Without
limiting the generality of Section 14 of the Plan, the amounts set forth
in this table shall be appropriately adjusted to reflect common stock
dividends, combinations, splits, reverse splits and similar transactions.

 

For the avoidance of doubt, if the Company’s Common
Stock attains a VWAP during any Fiscal Quarter that satisfies multiple VWAP
targets (to the extent that this Option remains unvested and Optionee remains
employed by the Company through the applicable VWAP Determination Date (except
as otherwise provided above)), this Option shall vest and become exercisable with
respect to the cumulative Shares subject to the multiple VWAP targets, but
shall not, in any event vest and become exercisable with respect to the Shares
subject to any particular VWAP target more than once. By way of example and not
limitation, if the Common Stock attains VWAP of $14 during the first

 

2

 

Fiscal Quarter, then this Option shall vest and
become exercisable with respect to all 2,000,000 Shares subject hereto on the
first VWAP Determination Date, but if the Common Stock attains VWAP of $13
during each of the first two Fiscal Quarters and a VWAP of at least $14 during
the third Fiscal Quarter (assuming more than one Fiscal Quarter occurs), this
Option shall vest and become exercisable with respect to (i) 750,000
Shares on the first VWAP Determination Date, (ii) no additional Shares on
the second VWAP Determination Date, and (iii) an additional 1,250,000
Shares on the third VWAP Determination Date.

 

For purposes of this Stock Option Agreement, “Liquidity
Event” shall mean a Change of Control in which both (A) the total
consideration received by the Company’s stockholders (including by way of
distribution in the case of an asset sale transaction) is no less than $10 per
Share of Common Stock (or, if applicable, per Share of Common Stock underlying
any Common Stock equivalents such as convertible preferred stock) (as adjusted
for any Common Stock dividends, combinations, splits, reverse splits or similar
transactions), and (B) the consideration received by the Company’s stockholders
in such transaction is in the form of cash, cash equivalents or freely tradable
securities that the Company’s stockholders are able to transfer or sell without
restrictions (other than restrictions that may be applicable to employees or
executive officers of the Company in their capacities as such and other than
restrictions arising under Rule 145 of the Securities Act).

 

Termination Period: If Optionee’s
employment terminates for any reason prior to Optionee’s exercise of the
Option, in whole or in part, the exercisability of the Option in connection
with and following Optionee’s termination of employment shall be governed by
Sections 7, 8, 9 and 10 of the Agreement below.

 

II.            AGREEMENT

 

1.             Grant
of Option. The Company hereby grants to Optionee an Option to purchase the
number of Shares set forth in the Notice of Grant, at the exercise price per
Share set forth in the Notice of Grant (the “Exercise Price”). Notwithstanding
anything to the contrary anywhere else in this Stock Option Agreement, the
Option is subject to the terms, definitions and provisions of the Plan adopted
by the Company, which is incorporated herein by reference.

 

This Option is intended to qualify as an Incentive
Stock Option as defined in Section 422 of the Code; provided, that to the extent that the
aggregate Fair Market Value of stock with respect to which Incentive Stock
Options (within the meaning of Code Section 422, but without regard to
Code Section 422 (d)), including this Option, become exercisable for the
first time by Optionee during any calendar year, exceeds $100,000, such options
shall be treated as not qualifying under Code Section 422, and shall
instead be treated as Non-Qualified Stock Options to the extent required by
Code Section 422. The rule set forth in the preceding sentence shall
be applied by taking options into account in the order in which they were
granted. For purposes of these rules, the Fair Market Value of stock shall be
determined as of the time the option with respect to such stock is granted.

 

3

 

2.             Exercise
of Option. This Option is exercisable as follows:

 

(a)           Right
to Exercise.

 

(i)            This
Option shall be exercisable cumulatively according to the vesting schedule set
forth in the Notice of Grant. For purposes of this Stock Option Agreement,
except as expressly provided in Section (ii) of the Vesting Schedule,
Shares subject to this Option shall vest based on Optionee’s continued
employment with the Company.

 

(ii)           This Option may not be exercised for a fraction of a
Share.

 

(iii)          In
the event of Optionee’s death, Disability or other termination of Optionee’s
employment, the exercisability of the Option is governed by Sections 7, 8, 9
and 10 below.

 

(iv)          In
no event may this Option be exercised after the Term/Expiration Date set forth
in the Notice of Grant.

 

(b)           Method
of Exercise. This Option shall be exercisable by written Notice (substantially
in the form attached hereto as Exhibit A or in such other form as
the Administrator may prescribe). The Notice must state the number of Shares
for which the Option is being exercised, and must contain such other
representations and agreements with respect to such Shares as may be required
by the Company. The Notice must be signed by Optionee and shall be delivered in
person or by certified mail to the Secretary of the Company. The Notice must be
accompanied by payment of the Exercise Price plus payment of any
applicable withholding tax. This Option shall be deemed to be exercised upon
receipt by the Company of such written Notice accompanied by the Exercise Price
and payment of any applicable withholding tax. No Shares shall be issued
pursuant to the exercise of this Option unless such issuance and such exercise
comply with all relevant provisions of law and the requirements of any stock
exchange upon which the Shares may then be listed. Assuming such compliance,
for income tax purposes the Shares shall be considered transferred to Optionee
on the date on which the Option is exercised with respect to such Shares.

 

3.             Optionee’s
Representations. If the Shares purchasable pursuant to the exercise of this
Option have not been registered under the Securities Act or any applicable
state laws at the time this Option is exercised, Optionee shall, if required by
the Company, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit B and shall make such other written
representations as are deemed necessary or appropriate by the Company and/or
its counsel.

 

4.             Lock-Up
Period. Optionee hereby agrees that, if so requested by the Company or any
representative of the underwriters (the “Managing Underwriter”) in
connection with any registration of the offering of any securities of the
Company under the Securities Act or any applicable state laws, Optionee shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period (or such longer period as may be requested in writing
by the Managing Underwriter and agreed to in writing by the Company, but which
period shall not, in any event, exceed 270 days) (the “Market Standoff
Period”) following the effective date

 

4

 

of a registration statement of the Company filed under the Securities
Act; provided, that such
restriction shall apply only to the first registration statement of the Company
to become effective under the Securities Act that includes securities to be sold
on behalf of the Company to the public in an underwritten public offering under
the Securities Act. The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period and these restrictions shall be binding on any
transferee of such Shares.

 

5.             Method
of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of Optionee:

 

(a)           cash;

 

(b)           check;
or

 

(c)           with
the consent of the Administrator,

 

(i)            a
full recourse promissory note bearing interest (at no less than such rate as is
a market rate of interest and which then precludes the imputation of interest
under the Code), payable upon such terms as may be prescribed by the
Administrator and structured to comply with Applicable Laws;

 

(ii)           surrender of other Shares owned by Optionee which have a
Fair Market Value on the date of surrender equal to the Exercise Price of the
Shares as to which the Option is being exercised;

 

(iii)          surrendered Shares then issuable upon the exercise of the
Option having a Fair Market Value on the date of exercise equal to the
aggregate Exercise Price of the Option or exercised portion thereof;

 

(iv)          delivery of a notice that Optionee has placed a market sell
order with a broker with respect to Shares then issuable upon exercise of the
Option and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the aggregate Exercise
Price; provided, that payment of
such proceeds is then made to the Company upon settlement of such sale; or

 

(v)           any combination of the foregoing methods of payment.

 

6.             Restrictions
on Exercise. If the issuance of Shares upon such exercise or if the method
of payment for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, then the Option may not
be exercised. The Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation
before allowing the Option to be exercised.

 

7.             Voluntary
Resignation; Good Reason; Termination Without Cause. If Optionee’s employment
with the Company terminates due to Optionee’s voluntary resignation,
resignation for Good Reason or due to a termination by the Company without
Cause (excluding any termination due to Optionee’s death or Disability),
(a) if such termination occurs prior to an IPO

 

5

 

and/or due to Optionee’s voluntary resignation, the Option shall, to
the extent vested as of the date on which Optionee’s employment so terminates
(taking into consideration any vesting that may occur in connection with such
termination), remain exercisable through and including the thirtieth day after
Optionee’s employment so terminates, (b) if such termination occurs on or
after an IPO due to Optionee’s termination by the Company without Cause or by
Optionee for Good Reason (and not due to Optionee’s voluntary resignation), the
Option shall remain exercisable through and including the thirtieth day after
the VWAP Determination Date immediately following such termination of
employment (including with respect to any portion of the Option that may vest and
become exercisable on such VWAP Determination Date), provided, that in no event shall any portion of the Option
remain exercisable beyond the Term/Expiration Date set forth in the Notice of
Grant. To the extent that the Option has not vested or if Optionee does not
exercise the Option following a termination of employment described in this
Section 7, in either case, within the timeframe specified in this
Section 7, the Option shall terminate.

 

8.             Termination
for Cause. If Optionee’s employment is terminated by the Company for Cause,
the Option shall terminate as of the start of business on the date of
Optionee’s termination, regardless of whether the Option is then vested and/or
exercisable with respect to any Shares, and shall not in any event vest or be
exercisable thereafter.

 

9.             Disability
of Optionee. If Optionee’s employment terminates as a result of Optionee’s
total and permanent disability as defined in Code Section 22(e)(3) (“Disability”),
to the extent vested as of the date on which Optionee’s employment so
terminates (taking into consideration any vesting that may occur in connection
with such termination) and to the extent that the Option may vest and become
exercisable on the first VWAP Determination Date immediately following such a
termination of employment (only if an IPO has occurred prior to such
termination), the Option shall remain exercisable for six months from such date
of termination (but in no event later than the Term/Expiration Date set forth
in the Notice of Grant). To the extent that the Option has not vested or if
Optionee does not exercise the Option following a termination of employment
described in this Section 9, in either case, within the timeframe
specified in this Section 9, the Option shall terminate.

 

10.           Death
of Optionee. If Optionee’s employment terminates as a result of Optionee’s
death, to the extent vested as of the date on which Optionee’s employment so
terminates (taking into consideration any vesting that may occur in connection
with such termination) and to the extent that the Option may vest and become
exercisable on the first VWAP Determination Date immediately following such a
termination of employment (only if an IPO has occurred prior to such
termination), the Option shall remain exercisable for six months following the
date of death (but in no event later than the Term/Expiration Date set forth in
the Notice of Grant) by Optionee’s estate or by a person who acquires the right
to exercise the Option by bequest or inheritance. To the extent that the Option
has not vested or if the Option is not exercised by a permitted transferee
following a termination of employment described in this Section 10, in
either case, within the timeframe specified in this Section 10, the Option
shall terminate.

 

11.           No
Section 280G Gross-Up. Notwithstanding anything herein or in the Employment
Agreement to the contrary, in no event shall any value attributable under Code
Section 280G to this Option or the vesting thereof (a) obligate the
Company to make a Gross-Up

 

6

 

Payment (as defined in the Employment Agreement) with respect to any
value so attributable, or (b) be included in the denominator for purposes
of calculating the “base amount” (within the meaning of Treas. Reg. 1.280G-1
Q&A 34) that is allocable (in accordance with Treas. Reg. 1.280G-1 Q&A
38) to any other payments to Optionee that are subject to the Gross-Up Payment,
provided, that Optionee’s base
amount shall be allocated in accordance with Treas. Reg. 1.280G-1 for all purposes
other than the calculation of any Gross-Up Payment, including without
limitation, for purposes of determining any excise taxes actually payable in
respect of payments to Optionee. For the avoidance of doubt, to the extent that
the Option or the vesting thereof cause any other payments or benefits provided
to Purchaser to become subject to Code Section 280G (due to an increase in
the total value of payments made to Purchaser in connection with a
transaction), Optionee shall become eligible to receive a Gross-Up Payment with
respect to such other payments in accordance with the terms of the Employment
Agreement, but the value of the Gross-Up Payment shall not take into
consideration (other than for purposes of determining whether Code
Section 280G applies) any value attributable under Code Section 280G
to the Option or the vesting thereof.

 

12.             Non-Transferability of Option. This Option may
not be transferred in any manner except by will or by the laws of descent or
distribution. The Option may be exercised during the lifetime of Optionee only
by Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of Optionee.

 

13.             Term of Option. This Option may be exercised only
within the term set forth in the Notice of Grant.

 

14.             Restrictions on Shares. Optionee hereby agrees
that Shares purchased upon the exercise of the Option shall be subject to such
terms and conditions as the Administrator shall determine in its sole
discretion, including, without limitation, restrictions on the transferability
of Shares, the right of the Company to repurchase Shares, the right of the
Company to require that Shares be transferred in the event of certain
transactions, a right of first refusal in favor of the Company with respect to
permitted transfers of Shares, tag-along rights and take-along rights. Such
terms and conditions may, in the Administrator’s sole discretion, be contained
in the Exercise Notice with respect to the Option or in such other agreement as
the Administrator shall determine and which Optionee hereby agrees to enter
into at the request of the Company.

 

15.             Code Section 409A. Without limiting the
generality of any other provision of this Agreement, Section 23 of the
Plan pertaining to Code Section 409A is hereby explicitly incorporated
into this Agreement.

 

16.             No Right to Continue as Service Provider. Nothing
in the Plan or in this Stock Option Agreement shall confer upon Optionee any
right to continue as an Employee, Director or Consultant of the Company or any
Parent or Subsidiary, or shall interfere with or restrict in any way the rights
of the Company or any Parent or Subsidiary, which are hereby expressly
reserved, to discharge Optionee at any time for any reason whatsoever, with or
without Cause, except to the extent expressly provided otherwise in a written
employment agreement between Optionee and the Company or any Parent or
Subsidiary.

 

(Signature
Page Follows)

 

7

 

This Stock Option Agreement may be executed in two
or more counterparts, each of which shall be deemed an original and all of
which shall constitute one document.

 

	
   

  	
  DEMAND MEDIA, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shawn Colo

  
	
   

  	
  Name:

  	
  Shawn Colo

  
	
   

  	
  Title:

  	
  Secretary

  

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO THE OPTION HEREOF IS EARNED, EXCEPT TO THE LIMITED EXTENT
EXPRESSLY PROVIDED IN SECTION (II) OF THE VESTING SCHEDULE, ONLY BY
CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE
ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS STOCK OPTION
AGREEMENT, NOR IN THE COMPANY’S 2006 EQUITY INCENTIVE PLAN WHICH IS
INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH
RESPECT TO CONTINUATION AS A SERVICE PROVIDER OF THE COMPANY OR ANY PARENT OR
SUBSIDIARY, NOR SHALL IT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE
COMPANY’S RIGHT TO TERMINATE OPTIONEE’S SERVICE PROVIDER RELATIONSHIP AT ANY TIME,
WITH OR WITHOUT CAUSE AND WITH OR WITHOUT PRIOR NOTICE.

 

Optionee acknowledges receipt of a copy of the Plan
and represents that he is familiar with the terms and provisions thereof.
Optionee hereby accepts this Option subject to all of the terms and provisions thereof.
Optionee has reviewed the Plan and this Stock Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Stock Option Agreement and fully understands all provisions of
the Option. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Administrator upon any questions
arising under the Plan or this Option. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.

 

	
  Dated:

  	
  April 19, 2007

  	
   

  	
  By:

  	
  /s/ Richard Rosenblatt

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Richard Rosenblatt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Address:

  
	
   

  	
   

  	
   

  	
  c/o Demand
  Media, Inc. 

  
	
   

  	
   

  	
   

  	
  1454 Third St.

  
	
   

  	
   

  	
   

  	
  Santa Monica, CA 90401

  

 

8

 

DEMAND MEDIA, INC.

 

AMENDMENT TO OPTION
AGREEMENT

 

RECITALS

 

Demand Media, Inc. (the “Company”) and
Richard Rosenblatt (the “Optionee”) have entered into an Option
Agreement dated as of April 19, 2007 (the “Option Agreement”).

 

WHEREAS, the transferability provisions set forth
in the Option Agreement were intended to reflect the provisions set forth in Section 11
of the Company’s 2006 Equity Incentive Plan (the “Plan”);

 

WHEREAS, the Section 11 of the Plan has been
amended; and

 

WHEREAS, the Company and the Optionee desire to
amend the Option Agreement pursuant to this First Amendment to the Option
Agreement in light of such amendment to the Plan (the “Amendment”).

 

NOW, THEREFORE, for good valuable consideration,
receipt of which is hereby acknowledged by both the Company and the Optionee,
the Company and the Optionee hereby amend the Option Agreement as follows:

 

AMENDMENT

 

1.               Section 12 of the Option Agreement is deleted and replaced in its
entirety with the following:

 

Non-Transferability of Option.  This Option may not be
transferred in any manner except by will or by the laws of descent or
distribution.  The Option may be
exercised during the lifetime of Optionee only by Optionee.  The terms of this Option shall be binding
upon the executors, administrators, heirs, successors and assigns of
Optionee.  Notwithstanding the foregoing,
Optionee may transfer this Option to any one or more Permitted Transferees (as
such term is defined in the Plan), subject to compliance with and the
restrictions set forth in Section 11 of the Plan.   Any
Permitted Transferee shall hold the Option subject to all the provisions hereof
and shall acknowledge the same by signing a copy of this Agreement.

 

Except as expressly provided herein, all terms and
conditions of the Option Agreement shall remain in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the Optionee and the Company have executed this Amendment which shall
be effective as of the date first above written.

 

	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard Rosenblatt

  
	
   

  	
  Richard Rosenblatt

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DEMAND MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Shawn Colo

  
	
   

  	
   

  	
  Name: Shawn Colo

  
	
   

  	
   

  	
  Its: Secretary

  

 

2

 

SECOND AMENDMENT TO DEMAND
MEDIA, INC.

STOCK OPTION AGREEMENT

 

THIS SECOND AMENDMENT, dated as of
February 10, 2010 (the “Amendment  Effective  Date”), is
entered into by and between Demand Media, Inc., a Delaware corporation
(the “Company”) and Richard Rosenblatt (the “Executive”). All capitalized terms used herein but not
defined shall have the meanings provided in the Stock Option Agreement, dated
April 19, 2007, by and between the Company and the Executive, as amended
by the first amendment thereto (the “Option Agreement”).

 

RECITALS

 

WHEREAS, the Company
and the Executive previously entered into the Option Agreement, which sets
forth the terms and conditions of a grant to the Executive of certain stock
options; and

 

WHEREAS, the Company
and the Executive mutually desire to amend the Option Agreement to change
certain vesting terms applicable to the Option.

 

NOW, THEREFORE, the Company
and the Executive hereby agree that, effective as of the Amendment Effective
Date, in consideration of the covenants contained herein and other for good and
valuable consideration, the receipt of which is hereby acknowledged, the Option
Agreement is hereby amended as follows:

 

1.              The “Term/Expiration
Date” set forth in the “Notice of Stock Option Grant” is hereby
deleted and replaced in its entirety with the following:

 

“Term/Expiration Date: The
Term/Expiration Date of this Option shall be April 19, 2013, provided, that (i) if a Liquidity
Event (as defined below) shall occur prior to April 19, 2013, then the
Term/Expiration Date of this Option shall instead be the later of the
thirteen-month anniversary of the consummation of the Liquidity Event or April 19,
2013, and (ii) if an IPO (as defined below) shall occur prior to April 19,
2013, then the Term/Expiration Date of this Option shall instead be the later
to occur of (A) the thirteen-month anniversary of the IPO, or
(B) April 19, 2013.”

 

2.              Section (ii) of
the “Vesting Schedule” and all paragraphs
that follow Section (ii) but precede the “Termination
Period” provisions set forth in the “Notice of Stock Option Grant”
are hereby deleted and replaced in their entirety with the following:

 

“(ii)  If
(A) prior to April 19, 2013, the Company engages in an initial public
offering of its Common Stock pursuant to an effective registration statement
under the Securities Act (an “IPO”), and (B) the average closing
price of a share of Common Stock on the primary exchange on which such Common
Stock is traded (or, if the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the mean between the
high bid and low asked prices for a share of the Common Stock) during any
thirty-

 

 

calendar-day period following the IPO (which period
may include the date of the IPO) equals or exceeds ten dollars ($10)
(appropriately adjusted to reflect Common Stock dividends, combinations,
splits, reverse splits and similar transactions), then the Option shall vest
and become exercisable with respect to all Shares subject hereto on the first
calendar day following any such thirty-day period, subject to Optionee’s
continued employment with the Company through such vesting date, provided, that if Optionee’s employment is
terminated by the Company without Cause or by Optionee for Good Reason or
terminates due to Optionee’s death or total and permanent Disability, the
Option shall vest and become exercisable on the first date during the
twelve-month period immediately following such termination of employment on
which the Option would have vested pursuant to this clause (ii) had
Optionee remained employed through such date (if any).

 

For purposes of this Stock Option Agreement, “Liquidity
Event” shall mean a Change of Control in which both (A) the total
consideration received by the Company’s stockholders (including by way of
distribution in the case of an asset sale transaction) is no less than $10 per
Share of Common Stock (or, if applicable, per Share of Common Stock underlying
any Common Stock equivalents such as convertible preferred stock) (as adjusted
for any Common Stock dividends, combinations, splits, reverse splits or similar
transactions), and (B) the consideration received by the Company’s
stockholders in such transaction is in the form of cash, cash equivalents or
freely tradable securities that the Company’s stockholders are able to transfer
or sell without restrictions (other than (i) restrictions that may be
applicable to employees or executive officers of the Company in their
capacities as such, (ii) restrictions arising under Rule 145 of the
Securities Act and (iii) restrictions resulting from a contractual lock-up
not to exceed 180 days if the total market capitalization of the issuer of the
securities to which such lock-up applies (on a post-transaction basis) exceeds
$3.0 billion).”

 

3.              Section 7 of the Option
Agreement is hereby deleted and replaced in its entirety with
the following:

 

“7.           Voluntary
Resignation; Good Reason; Termination Without Cause. If Optionee’s employment
with the Company terminates due to Optionee’s voluntary resignation, resignation
for Good Reason or due to a termination by the Company without Cause (excluding
any termination due to Optionee’s death or Disability), (a) if such
termination occurs due to Optionee’s voluntary resignation, the Option shall,
to the extent vested as of the date on which Optionee’s employment so
terminates (taking into consideration any vesting that may occur in connection
with such termination), remain exercisable through and including the thirtieth
day after Optionee’s employment so terminates (but in no event later than the
Term/Expiration Date set forth in the Notice of Grant), or (b) if such
termination occurs due to Optionee’s termination by the Company without Cause
or by Optionee for Good Reason (and not due to Optionee’s voluntary resignation),
the Option shall remain exercisable, to the extent vested (including with
respect to any portion of the Option that may vest and become exercisable
following such termination of employment pursuant to clause (i) of the
Vesting Schedule set forth in the Notice of Grant if a Liquidity Event occurs
or pursuant to clause (ii) of the Vesting Schedule set forth in the Notice
of Grant if an IPO occurs or has occurred), through and including the
thirteen-month anniversary of such date of termination (but in no event later
than the

 

 

Term/Expiration Date set forth in the Notice of
Grant). To the extent that the Option has not vested or if Optionee does not
exercise the Option following a termination of employment described in this
Section 7, in either case, within the timeframe specified in this
Section 7, the Option shall terminate.”

 

4.            Section 9 of the Option Agreement is hereby
deleted and replaced in its entirety with the following:

 

“9.           Disability
of Optionee. If Optionee’s employment terminates as a result of Optionee’s
total and permanent disability as defined in Code Section 22 (e)(3) (“Disability”),
to the extent vested as of the date on which Optionee’s employment so
terminates (taking into consideration any vesting that may occur in connection
with such termination), the Option shall remain exercisable for a period of six
months from such date of termination (but in no event later than the
Term/Expiration Date set forth in the Notice of Grant), provided, that to the extent that the
Option has not vested as of the date on which Optionee’s employment so
terminates but may vest and become exercisable following such termination of
employment pursuant to clause (i) of the Vesting Schedule set forth in the
Notice of Grant if a Liquidity Event occurs or pursuant to clause (ii) of
the Vesting Schedule set forth in the Notice of Grant if an IPO occurs or has
occurred, the Option shall remain exercisable (including with respect to any
portion of the Option that may vest and become exercisable following such termination
of employment) through and including the date that is the earlier to occur of
(y) the six month anniversary of the date that the Option vests and
(z) the thirteen-month anniversary of such date of termination (but in no
event later than the Term/Expiration Date set forth in the Notice of Grant). To
the extent that the Option has not vested or if Optionee does not exercise the
Option following a termination of employment described in this Section 9,
in either case, within the timeframe specified in this Section 9, the
Option shall terminate.

 

5.              Section 10 of the
Option Agreement is hereby deleted and replaced in its entirety with
the following:

 

“10. Death of Optionee. If Optionee’s
employment terminates as a result of Optionee’s death, to the extent vested as
of the date on which Optionee’s employment so terminates (taking into
consideration any vesting that may occur in connection with such termination)
the Option shall remain exercisable for a period of six months from such date
of termination (but in no event later than the Term/Expiration Date set forth
in the Notice of Grant) by Optionee’s estate or by a person who acquires the
right to exercise the Option by bequest or inheritance; provided, that to the extent that the
Option has not vested as of the date on which Optionee’s employment so
terminates but may vest and become exercisable following such termination of
employment pursuant to clause (i) of the Vesting Schedule set forth in the
Notice of Grant if a Liquidity Event occurs or pursuant to clause (ii) of
the Vesting Schedule set forth in the Notice of Grant if an IPO occurs or has
occurred, the Option shall remain exercisable (including with respect to any
portion of the Option that may vest and become exercisable following such
termination of employment) by Optionee’s estate (or by a person who acquires
the right to exercise the Option by bequest or inheritance) through and
including the date that is the earlier to occur of (y) the six month
anniversary of the date that the Option vests and (z) the

 

 

thirteen-month anniversary of such date of
termination (but in no event later than the Term/Expiration Date set forth in
the Notice of Grant). To the extent that the Option has not vested or if the
Option is not exercised by a permitted transferee following a termination of
employment described in this Section 10, in either case, within the
timeframe specified in this Section 10, the Option shall terminate.

 

Except as expressly modified by the terms of this
Second Amendment to the Option Agreement, the terms and conditions of the
Option Agreement shall remain in full force and effect.

 

[Signature page follows]

 

 

IN WITNESS
WHEREOF, the Company and the Executive agree to the terms of
this Second Amendment to the Option Agreement, effective as of the Amendment
Effective Date.

 

	
   

  	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEMAND MEDIA, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Charles Hilliard

  
	
   

  	
   

  	
   

  	
  Name: Charles Hilliard

  
	
   

  	
   

  	
   

  	
  Title: Pres & CFO

  

 

 

	
  AGREED AND ACCEPTED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Richard Rosenblatt

  	
   

  	
  February 10, 2010

  
	
  Richard Rosenblatt

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