Document:

Exhibit

EXHIBIT 10.5

ADOBE SYSTEMS INCORPORATED
FISCAL YEAR 2016 EXECUTIVE ANNUAL INCENTIVE PLAN

PURPOSE AND ELIGIBILITY

Purpose  
As part of its total compensation program, Adobe Systems Incorporated (“Adobe” or the “Company”) has designed an annual cash-based incentive plan for its 2016 fiscal year (the “Performance Period”) for certain executive officers.  This Fiscal Year 2016 Executive Annual Incentive Plan (“AIP”) is designed to drive revenue growth, encourage accountability, drive execution of short-term priorities tied to long-term strategy and annual operating plan objectives, and recognize and reward executives upon the achievement of our objectives.  This AIP operates under, and is subject to the terms of, the Adobe Systems Incorporated Executive Cash Performance Bonus Plan (the “Master Bonus Plan”) that was approved by Adobe’s Executive Compensation Committee (the “Committee”) in January 2016 and is being submitted for approval by Adobe’s stockholders in April 2016.  Capitalized terms not defined herein have the meanings set forth in the Master Bonus Plan.

Eligibility 
Eligible participants in this AIP include executive officers of the Company who (i) are specifically designated by the Committee, (ii) are employed (full time or part time) during the Performance Period, (iii) are at least Senior Vice President level and (iv) are regular employees of Adobe at the end of the Performance Period (the “Participants”).  Participation in the AIP is at the discretion of the Committee, in consultation with Company management.
Employment Status
If an executive officer is hired after the beginning of the Performance Period and the Committee determines that such executive officer should be eligible to participate in the AIP, the Participant’s Target Award (as defined below) will be calculated by reference to  the annual base salary rate in effect at the end of the Performance Period (“Base Salary”) and be prorated based on the number of calendar days in the Performance Period during which the individual was employed as an executive officer. Unless the Committee explicitly determines otherwise in a manner that complies with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”) (in which case such determination shall govern), if a Participant’s AIP annual bonus target percentage changes during the Performance Period, the Participant’s Target Award will be prorated as follows: the Target Award will be based on the number of calendar days in the Performance Period with the former AIP annual bonus target percentage and the number of calendar days in the Performance Period with the new AIP annual bonus target percentage.  If a Participant’s employment terminates before the date the Actual Award (as defined below) is paid, the Participant will not be eligible for a bonus payment, or any portion of a bonus payment, except as provided in an applicable severance plan or in an individual retention agreement with the Participant.  If a Participant is on a leave of absence for the entire Performance Period, the Participant is not eligible for an AIP bonus payment.

Employees Covered by Internal Revenue Code Section 162(m)  
Notwithstanding the foregoing eligibility provisions, to the extent the Committee determines it to be necessary or desirable to achieve full deductibility of bonus compensation awarded under the AIP, the Committee, in its sole discretion, (i) may exclude from participation under the AIP those individuals who are or who may 

likely be “covered employees” under Section 162(m) whose employment in an eligible position commenced after the Committee established the Threshold Goal (as defined below), which generally will be a date not later than the 90th day of the Performance Period and (ii) may take other actions as necessary to ensure deductibility of the compensation paid under the AIP.
HOW THE AIP WORKS
Summary
Subject to the terms of this AIP, provided that the Company achieves a revenue-based Threshold Goal for the Performance Period, each Participant will be credited with (subject to the employment requirements set forth herein) a cash bonus payment equal to 200% of his or her Target Award (as defined below) and in no event greater than $5 million, subject to reduction pursuant to the metrics set forth in this AIP.  Such potentially reduced amount is the Participant’s Actual Award and will be determined by multiplying the Participant’s Target Award by a Corporate Performance Result (as set forth below and determining 50% of the Actual Award) and by an Individual  Performance Result (as  set forth below and determining 50% of the Actual Award).

The Actual Award is comprised of:

	
			
	Corporate Performance Result
(50%)
	+
	Individual Performance Result
(50%)

Part 1:  Determination of Target Award

The “Target Award” equals the product of the annual bonus target percentage (as designated by the Committee) and the Participant’s Base Salary.  For example, a Senior Vice President whose annual bonus target percentage is 75% and whose Base Salary is $500,000 has a Target Award of $375,000 ($500,000 x 75%).  The Target Award is the amount that would be earned and payable under the AIP upon achievement at the 100% level of both the Corporate Performance Result and the Individual Performance Result (provided the Threshold Goal is attained and employment requirements are satisfied). 
The maximum bonus a Participant may earn for the Performance Period is the lesser of: (i) 200% of his or her Target Award (regardless of the level of achievement of the Corporate Performance Result and the Individual Performance Result) and (ii) $5 million (the “Maximum Award”).

Part 2:  Achievement of Threshold Goal

In order for any Participant to earn any bonus under this AIP, Adobe must first achieve a “Threshold Goal” of at least 85% of its annual revenue target for the 2016 fiscal year, determined in accordance with Generally Accepted Accounting Principles, as set forth in the annual operating plan for the 2016 fiscal year approved by Adobe’s Board of Directors at the beginning of the fiscal year (the “Operating Plan”), disregarding the effects of any material acquisitions not incorporated into the Operating Plan.  For purposes of clarification, if a material acquisition is incorporated into the Operating Plan, the Threshold Goal will not be decreased.  

If the Company achieves the Threshold Goal, the AIP will be funded at 200% of the Target Award for all Participants, and each Participant will be credited with his or her Maximum Award, and the Maximum Award will then be subject to the metrics below to determine the Actual Award, which may result in a downward 

adjustment of the Maximum Award. If the Company does not achieve the Threshold Goal, the AIP will not be funded and Participants will earn no bonus under the AIP. The Company is under no obligation to pay out the entire funded or credited amount to Participants.

Part 3:  Determination of Actual Award

The Committee will determine the actual award earned and payable to that Participant (the “Actual Award”) by reducing the Maximum Award based on (i) achievement of certain Company objectives, as reflected by the calculation of the Corporate Performance Result, and (ii) individual performance including, without limitation, achievement of individual performance objectives selected for each Participant, as described below.  

Step 1:  Calculate Corporate Performance Result

The Corporate Performance Result is based on the company’s financial performance, as adjusted based on a number of goals related to the Company’s strategic corporate priorities, using the following formula:

	
					
	Corporate Performance Result 
(%)*
	=
	Financial Performance Result 
(%)*
	*
	Strategic Objectives Result
(%)**

*    May range from zero to 200 percent
**    May range from zero to 100 percent

Step 1A: Determine Financial Performance. The Company’s financial performance for the Performance Period (“Financial Performance Result”) is determined as set forth on the matrix attached as Exhibit A, based on metric comprised of (1) net new annualized recurring revenue in Digital Media and (2) bookings for the Adobe Marketing Cloud, in both cases as set forth in the Operating Plan.  The Financial Performance Result percentage (after potential adjustment in Step 1B below) will cap the Corporate Performance Result, which may be adjusted downward based on the outcome of certain strategic company objectives (as discussed in Step 1C). In determining the achievement of the Financial Performance metric, the Committee will disregard the effects of any material acquisitions not incorporated into the Operating Plan; however, the Committee may adjust the Financial Performance metric (either upward or downward) to include the effects of a material acquisition if Adobe’s Board of Directors determines that such corporate transaction is material to the Company and results in a modification to the Operating Plan.

Step 1B: Optional Discretionary Adjustment. The Committee, in its sole discretion, may add to or subtract from the Financial Performance Result up to 20 percentage points based on the Committee’s assessment of the Company’s qualitative performance for the Performance Period (including with respect to potential over-achievement or under-achievement of the Company’s strategic objectives); provided, however, that the maximum Financial Performance Result may not exceed 200%.

Step 1C: Determine Strategic Objectives Result. The “Strategic Objectives Result” is determined by the Committee, in its sole discretion, based on quantitative and qualitative analysis of the Company’s achievement of a number of strategic Company priorities established by the Committee in consultation with Adobe’s Board of Directors at the outset of the Company’s 2016 

fiscal year. The Committee will assess the Strategic Objectives Result on a scale of zero to 100 percent.

Step 1D: Determine Company Objectives Result. Following the Committee’s determination of the Financial Performance Result and the Strategic Objectives Result (as adjusted), the final Corporate Performance Result will be determined by the formula shown above.

Step 2: Calculate Individual Performance Result

At the outset of the Performance Period, the Committee, in consultation with the CEO (other than with respect to his own goals), sets individual performance goals for each Participant.  Following the Performance Period, the Committee, in consultation with the CEO (other than with respect to his own performance) assesses each Participant’s performance, including, without limitation, achievement of these goals (expressed as a percentage) (the “Individual Performance Result”). The Individual Performance Result is determined independently for each Participant, although the Committee may take the Company’s Financial or Corporate Performance into account in determining payouts.

A Participant’s Individual Performance Result may range from 0% to 200%.
Step 3: Calculate Actual Award  
Each Participant’s Actual Award is determined using the following formula based on the achievement determinations described in the above steps. 
	
							
	Actual Award 
($)
	=
	[(Corporate Performance Result * 50%)
	+
	(Individual Performance Result * 50%)]
	*
	Target Award 
($)

GENERAL

Administration
Actual Awards earned are paid on an annual basis approximately 45-60 days after the end of the Performance Period, but in no event after the later of (i) March 15th of the year following the calendar year in which the Actual Award is earned, or (ii) the 15th day of the third month following the fiscal year of the Company in which the Actual Award is earned, and in all cases in compliance with the short term deferral exception from Section 409A of the Internal Revenue Code of 1986, as amended.  The Company reserves the right to interpret and to make changes to or withdraw the AIP at any time, subject to applicable legal requirements.  All terms and conditions of the AIP are subject to compliance with applicable law.  Pursuant to Section 8(a) of the Master Bonus Plan, notwithstanding any contrary provision of the Master Bonus Plan or this AIP, the Committee, in its sole discretion, may eliminate or reduce the Actual Award payable to any Participant below that which otherwise would be payable in accordance with the provisions set forth above.
Recoupment

Any amounts paid under the AIP will be subject to recoupment in accordance with any clawback policy that Adobe adopts pursuant to the listing standards of any national securities exchange or association on which Adobe’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law or otherwise is adopted by Adobe’s Board of Directors.  No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with Adobe.

Exhibit A

FY16 Annual Incentive Plan –Financial Performance Result & Payout Scale

	
		
	Financial Performance as % of Operating Plan Targets 
(rounded)
	Financial Performance Result 
(%)

	85% and below
	0%

	86%
	15%

	87%
	30%

	88%
	50%

	89%
	65%

	90%
	75%

	91%
	85%

	92%
	88%

	93%
	91%

	94%
	93%

	95%
	95%

	96%
	96%

	97%
	97%

	98%
	98%

	99%
	99%

	100%
	100%

	101%
	110%

	102%
	120%

	103%
	130%

	104%
	140%

	105%
	150%

	106%
	160%

	107%
	170%

	108%
	180%

	109%
	190%

	110% and above
	200%

NOTE: The financial performance (as a percentage of operating plan target) will be rounded to the nearest whole number.tihc_ex101.htm

EXHIBIT 10.1
 
EMPLOYMENT AGREEMENT
 
This Employment Agreement (the "Agreement") by and between Elluminance, LLC, a Texas limited liability company (the "Company" or "ELMN"), and __________ ("Executive") is hereby entered into effective as of January 24, 2016 ("Effective Date").
 
RECITALS
 
Whereas, as of the Effective Date, the Company wishes to employ Executive, and Executive wishes to be employed by the Company, on the terms set forth herein; and
 
Whereas, in the course of his employment with the Company, Executive will become familiar with and aware of information as to ELMN's customers and specific manner of doing business, including the processes, techniques and trade secrets used by ELMN, and future plans with respect thereto, all of which have been and will be established and maintained at great expense to ELMN and which constitute trade secrets and the valuable goodwill of ELMN.
 
Therefore, in consideration of the mutual promises, terms, covenants and conditions set forth herein and the performance of each, it is hereby agreed as follows:
 
AGREEMENTS
 
	1. 	Employment and Duties.

 
		a. 	The Company hereby employs Executive as the Chief _________ Officer of Elluminance, LLC As such, Executive shall have the responsibilities, duties and authority customarily appertaining to such office and such other duties as may be reasonably assigned to Executive by the Members and which are consistent with such position. Executive hereby accepts this employment upon the terms and conditions herein contained and agrees to devote such time as is reasonable and customary to effectively carry out such function and to promote and further the business and interests of the Company and its affiliates.

			 
		b. 	Executive shall faithfully adhere to, execute and fulfill all reasonable and lawful policies established by the Company, to the extent such policies have been communicated to Executive in writing or the Executive is otherwise aware of such policies, and such policies are not inconsistent with any of the terms of this Agreement or with any federal, state or local law or regulation.

 
	 
	1

	

	 

  
	2. 	Compensation. For all services rendered by Executive, the Company shall compensate Executive as follows:

 
		a. 	Base Salary. The base salary payable to Executive from the Effective Date will be $200,000 per year ("Base Salary") payable in accordance with the Company's payroll procedures for officers until such time at Elluminance, LLC shall have raised at least $9,750,000 of capital for executing the business plan as set forth in that certain Letter of Intent attached hereto as Exhibit A (the "Significant Capitalization"). Immediately, upon the execution of the Significant Capitalization, the base salary payable to Executive will increase to an amount to be reviewed and approved by the Members of Elluminance, LLC. For any periods, on an annual basis such Base Salary shall be reviewed by the Members of Elluminance, and may be adjusted at its discretion in light of the Executive's position, responsibilities, performance and such other reasonable, job related factors that the Members deem appropriate. Any reduction of Executive's Base Salary shall constitute Good Reason as defined in Section 4.e. of this Agreement.

			 
		b. 	Incentive Compensation. The Executive will be entitled to receive additional compensation ("Incentive Compensation") based on the financial performance of the Company, when and if, established by the Members, as filed in the corporate minute books of the Company.

			 
		c. 	Executive Perquisites and Benefits. During the Term, Executive shall be entitled to receive additional benefits and compensation from the Company in the form and to the extent specified below:

 
		i. 	Executive shall be reimbursed for all business travel and other out of pocket expenses reasonably incurred by Executive in the performance of his duties pursuant to this Agreement and in accordance with the Company's policy for its officers. All such expenses shall be appropriately documented in reasonable detail by Executive upon submission of any request for reimbursement, and in a format and manner consistent with the Company's expense reporting policy.

			 
		ii. 	Executive shall be entitled to participate in the various employee benefit plans or programs provided to the other comparable officers (in terms of position) of the Company in general, subject to the regular eligibility requirements with respect to each of such benefit plans or programs, and such other benefits or perquisites as may be approved for Executive by the Members during the term of this Agreement. The preceding sentence shall not require the Company to establish or maintain any particular employee benefit plan, program, or arrangement, or in any way limit the Company's right to amend, modify or revoke any such employee benefit plan, program, or arrangement without Executive's consent.

			 
		iii. 	Executive shall be entitled to a permanent office at the Company's headquarters in and at the location wherever it presently exists or may be relocated, so long as the Company is located at such address, and a comparable office at any new headquarters in the event the Company relocates its headquarters.

 
	 
	2

	

	 

  
	3. 	Non Solicitation Agreement. Executive acknowledges that as a consequence of his employment with the Company, he will be furnished or have access to Confidential Information (as defined below). Executive further recognizes that the Company's willingness to enter into this Agreement is based in material part on Executive's agreement to the provisions of this paragraph 3 and that Executive's breach of the provisions of this paragraph 3 could materially damage the Company. Subject to the further provisions of this Agreement, Executive will not, during his actual employment with the Company and, following the termination of such employment for any reason for a period that shall expire on (i) the expiration of the Term, or (ii) 12 months after the termination of such employment if Executive's Employment is terminated For Cause or if Executive terminates his employment hereunder without Good Reason (the "Non solicitation Period"), directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership, corporation or business of whatever nature:

 
		a. 	call upon any person who is at that time or was within the preceding 12 months (who is known to Executive) an employee of ELMN (except for his Executive Assistant) for the purpose or with the intent of enticing such employee away from or out of the employ of ELMN; or

			 
		b. 	any existing shareholder of the Company.

 
The restriction on solicitation provided in this paragraph shall not be enforceable if Executive is terminated without Cause or if Executive terminates his employment hereunder for Good Reason.
 
The covenants in this paragraph 3 are severable and separate, and the non enforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the court deems reasonable, and the Agreement shall thereby be reformed. It is specifically agreed that the portion of the Non solicitation Period following termination of employment stated at the beginning of this paragraph 3, during which the agreements and covenants of Executive made in this paragraph 3 shall be effective, may be computed by excluding from such computation any time during which Executive is determined by a court of competent jurisdiction or arbitrator to be in material violation of any provision of this paragraph 3.
 
	4. 	Term; Termination; Rights on Termination. The term of this Agreement shall begin on the Effective Date and continue for a period of three years from the Effective Date (the "Term"), unless terminated sooner as herein provided. The Term shall be automatically extended, commencing on the third anniversary of the Effective Date and each successive anniversary thereof, for an additional one year period, unless the Company gives written notice to Executive as least ninety (90) days prior to the expiration of the original or any extended Term. This Agreement and Executive's employment may be terminated in any of the followings ways:

 
		a. 	Death. The death of Executive shall immediately terminate this Agreement with no severance compensation due Executive's estate except compensation provided in paragraph 2 of this Agreement that has been earned by Executive through the date of his death (including but not limited to unpaid Base compensation and Incentive Compensation); provided, however, the Company shall pay to Executive's then qualified beneficiaries, within 30 days following the date of Executive's death, a single sum amount equal to the result obtained by dividing (i) the cost of providing, for a period of 90 days after the death of Executive, the coverage under the Company's group health plan in which Executive or such beneficiaries participated immediately prior to Executive's death, by (ii) 0.6. Subject to approval of the insurer or reinsurer of the Company's group health plan, the maximum period of COBRA coverage shall be measured beginning on the 90th day after the Executive's date of death. Health coverage will be offered at covered individuals' expense for the requisite period preceding COBRA.

 
	 
	3

	

	 

  
		b. 	Disability. If Executive becomes entitled to and receives benefits under an insured long term disability plan of ELMN (incurs a "Disability"), the Company, with the approval of the Members (excluding for this purpose Executive if he is a Member), may terminate this Agreement and Executive's employment hereunder. In the event this Agreement is terminated as a result of Executive's Disability, Executive shall have no right to any severance compensation; provided, however, (i) Executive shall be entitled to any benefits payable to Executive under such long term disability plan, and (ii) the Company shall pay to Executive, within 30 days following the date Executive is determined to have a Disability, a single sum amount equal to the result obtained by dividing (A) the cost of providing, for a period of two years after the date Executive's employment is terminated following his Disability (the "Disability Termination Date"), the coverage under the Company's group health plan in which Executive or such beneficiaries participated immediately prior to the Disability Termination Date, by (B) 0.6. Subject to approval of the insurer or reinsurer of the Company's group health plan, the maximum period of COBRA coverage shall be measured beginning on the second anniversary of the Disability Termination Date. Health coverage will be offered at covered individuals' expense for the requisite period preceding COBRA.

    
In the event Executive ceases to be disabled, the provisions of paragraph 3 shall not apply unless the Company shall offer to reinstate Executive under an agreement containing terms and provisions no less beneficial to Executive than those set forth in this Agreement.
 
		c. 	Cause. The Company may terminate this Agreement and Executive's employment for "Cause," which shall be: (1) Executive's breach of this Agreement (which remains uncured at the end of a 10 day period after receipt of written notice of the breach including a specific statement of the nature of the breach); (2) fraud, misappropriation or embezzlement of funds or other property of ELMN, (3) Executive's conviction of a felony which, in the opinion of the Members (excluding Executive if Executive is a Member), brings Executive or ELMN into disrepute or causes harm to ELMN's business, customer relations, financial condition or prospects, or (4) violation of any statutory or common law duty of loyalty (as expressly modified herein) or other fiduciary duty (as modified herein) to ELMN, if any such duty exists. Any termination for Cause must be approved by the Members (excluding for this purpose Executive if he is a Member). In the event of a termination for Cause, Executive shall have no right to any severance compensation.

			 
		d. 	Without Cause or For Good Reason. Executive may be terminated without Cause and other than due to Disability by the Company during the Term only if such termination is approved by the Members (excluding for this purpose Executive if he is a Member). Should Executive be terminated by the Company without Cause and other than due to Disability or should Executive terminate with Good Reason during the Term, Executive shall be entitled to receive from the Company an amount equal to the sum of (i) any accrued but unpaid salary and benefits as specified in paragraph 4.h., (ii) an amount equal to Executive's Base Salary (then in effect) for whatever time period is remaining under the Term (without reduction to the extent Base Salary was reduced by more than 5% per year or 10% cumulatively over the Term of this Agreement), and (iii) an amount equal to any Incentive Compensation which would have been payable to Executive during the years remaining under the Term of this Agreement based on the Company's incentive compensation plan performance as established by the Members, projected forward on an annualized basis, less any Incentive Compensation previously paid. In the event the Company fails to offer to renew, extend or replace this Agreement before, at, or within one (1) year after, the end of its original three-year Term (or any term provided for in a written renewal or extension of the original Term), and Executive resigns from employment with the Company within ninety (90) days after such failure, Executive shall be entitled to receive from the Company an amount equal to one times Executive's Base Salary. All amounts payable hereunder shall be paid at the time of termination In addition, if such termination occurs within one year after a Change of Control (defined below), Company shall pay to Executive, the amounts specified in paragraphs 4.d(i)-(iii).

 
	 
	4

	

	 

  
For purposes of this paragraph 4.d:
 
"Change of Control" shall mean the effective date of the first to occur of the following events:
 
		 
	(i) 	any consolidation, merger or share exchange of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company's common stock would be converted into cash, securities or other property, other than a consolidation, merger or share exchange of the Company in which the holders of the Company's common stock immediately prior to such transaction have the same proportionate ownership of common stock of the surviving corporation immediately after such transaction; and

		 
		 
		 
	(ii) 	any sale, lease, exchange or other transfer (excluding transfer by way of pledge or hypothecation) in one transaction or a series of related transactions, of all or substantially all of the assets of the Company.

 
		e. 	Executive shall have "Good Reason" to terminate his employment hereunder as a consequence of any of the following events, unless such event is agreed to in writing by Executive: (i) a material reduction in his authority, titles, responsibilities or duties; (ii) the relocation of the Company's principal executive offices or Executive's principal office by more than 50 miles from his office in Austin, Texas (this does not apply to customary business travel throughout the United States and abroad associated with his role as Chief Technology Officer as required and determined by his job duties under Section 1; (iii) the request by the Members that Executive perform any illegal act to which criminal sanctions might apply; (iv) the failure of the Company to obtain a satisfactory agreement from any successor or assign of the Company to assume and agree to perform this Agreement, as contemplated in paragraph 9; (v) a material reduction of Executive's Base Salary; or (vi) a breach of this Agreement by the Company (including failure of the Company to pay Executive on a timely basis the amounts to which Executive is entitled under this Agreement); provided, however, Good Reason shall exist with respect to a matter only if such matter is not corrected by the Company within 30 days of its receipt of written notice of such matter from Executive.

			 
		f. 	If termination of Executive's employment arises out of the events set forth in paragraph 4 and Executive must enforce the payment of the severance amount due through litigation, the Company shall pay all amounts and damages to which Executive may be entitled as a result of such breach, including interest thereon and all reasonable legal fees and expenses and other costs incurred by Executive to enforce his rights hereunder.

			 
		g. 	Resignation Without Good Reason. Executive may, without Good Reason, terminate this Agreement and Executive's employment, effective 30 days after written notice is provided to the Company. If Executive resigns or otherwise terminates his employment without Good Reason, Executive shall receive all accrued but unpaid salary, bonus and benefits. Under no circumstances where Executive terminates Executive's employment without Good Reason, shall Executive be entitled to any pro rata share or payment of any bonus or other compensation which requires employment at the time of the determination or award for eligibility.

 
	 
	5

	

	 

  
		h. 	Upon termination of this Agreement for any reason provided above, in addition to the above payments, if any, Executive shall be entitled to receive all compensation earned (including but not limited to accrued vacation, sick leave and personal leave, and reimbursements due through the effective date of termination, paid to Executive in a lump sum on the next regularly scheduled payday following the effective date of termination. In the event that Executive's employment is terminated for Cause, or by Executive without Good Reason Executive shall not be entitled to any pro rata share or payment of any bonus or other compensation which requires employment at the time of the determination or award for eligibility. In addition, a termination of this Agreement for any reason provided above shall not alter or impair any of Executive's vested rights or benefits, if any, under any (i) employee benefit plan of ELMN or (ii) deferred compensation plan, including, without limitation, any stock option plan, of ELMN. All other rights and obligations of the Company and Executive under this Agreement shall cease as of the effective date of termination, except that Executive's obligations under paragraphs 3, 5, 6, and 7 herein shall survive such termination in accordance with their terms, unless or except as expressly provided otherwise in this Agreement. In the event the Company fails to timely satisfy its payment obligations to Executive hereunder upon termination, Executive's obligations under paragraphs 3, 5, 6 and 7 shall terminate and be of no further force and effect.

    
	5. 	Return of Company Property. All records, designs, patents, business plans, financial statements, manuals, memoranda, lists and other property delivered to or compiled by Executive for the exclusive use of the Company after the effective date of the Agreement (but not such materials as were previously owned or in the possession of Executive prior to the term hereof or obtained from a source other than the Company) by or on behalf of any of the Company or its representatives, vendors or customers for the purpose of the Company's business but not otherwise shall be and remain the property of the Company, and be subject at all times to its discretion and control. Likewise, all correspondence, reports, records, charts, advertising materials and other similar data pertaining to the business, activities or future plans of the Company which is collected by Executive after the date hereof shall be delivered promptly to the Company without request by it upon termination of Executive's employment for any reason and Executive shall not retain any copies of the same. The foregoing shall not apply to any personnel, compensation, or benefits information regarding Executive.

 
	6. 	Trade Secrets. Executive agrees that he will not, during Executive's actual employment and, following the termination of such employment for any reason, directly or indirectly, disclose any trade secrets of ELMN, except as required by law and prior to any such disclosure Executive shall give the Company prior written notice thereof and the opportunity to contest such disclosure.

 
	7. 	Confidentiality.

 
		a. 	Executive acknowledges and agrees that all Confidential Information (as defined below) of the Company is confidential and a valuable, special and unique asset of the Company that gives the Company an advantage over its actual and potential, current and future competitors. Executive further acknowledges and agrees that Executive owes the Company a fiduciary duty to preserve and protect all Confidential Information from unauthorized disclosure or unauthorized use, that certain Confidential Information constitutes "trade secrets" under applicable laws and that unauthorized disclosure or unauthorized use of the Confidential Information would irreparably injure the Company. During Executive's actual employment and, following the termination of such employment for any reason, for a period that shall expire three years after the termination of such employment, Executive shall: (a) hold all Confidential Information in strict confidence, and (b) not use any Confidential Information except for the benefit of the Company, in accordance with the duties assigned to Executive, and (c) not disclose any Confidential Information to any person or entity (except other employees of the Company who have a need to know the information in connection with the performance of their employment duties, and who have been informed of the confidential nature of the confidential information and have agreed to keep it confidential), or copy, reproduce, modify, transmit, including electronic transmission, decompile or reverse engineer any Confidential Information. Executive shall take reasonable precautions to protect the physical security of all documents and other material containing Confidential Information (regardless of the medium on which the Confidential Information is stored). This Agreement applies to all Confidential Information, whether now known or later to become known to Executive as a consequence of his employment by the Company, but not otherwise.

 
	 
	6

	

	 

  
		b. 	Upon the termination of Executive's employment with the Company for any reason, and upon written request of the Company at any other time, Executive shall promptly surrender and deliver to the Company all documents containing Confidential Information and shall not retain any such document or other material.

			 
		c. 	Because of the difficulty of measuring economic losses to the Company as a result of a breach of the covenants contained in paragraphs 3, 6 and 7, of this Agreement, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy, Executive agrees that such covenants may be enforced by the Company, in the event that a court of competent jurisdiction determines that he has breached, or has attempted or threatened to breach, any of such covenants, by injunctions, restraining orders, and orders of specific performance issued by a court of competent jurisdiction. This relief is in addition to all other remedies available at law.

    
		d. 	Nothing contained in paragraphs 6 or 7 of this Agreement shall be construed to limit the Company's common law and statutory rights regarding the protection of its trade secrets and Confidential Information.

			
		e. 	Nothing contained in paragraphs 6 or 7 of this Agreement shall be construed to limit Executive's right to use the expertise, skills, and knowledge he possessed as of the date of his execution of this Agreement, to the extent such use is consistent with applicable laws.

			
		f. 	As used in this Agreement, the term "Confidential Information" shall mean any information or material known to or used by or for ELMN that is not generally known to the public or persons in the Company's business and was not previously known to Executive prior to this Agreement. Subject to the foregoing, Confidential Information includes, but is not limited to, the following: all trade secrets of ELMN; all information that ELMN has marked as confidential or has otherwise described to Executive (either in writing or orally) as confidential; all nonpublic information concerning ELMN's products, services, prospective products or services, research, product designs, prices, discounts, costs, marketing plans, marketing techniques, market studies, test data, customers, customer lists and records, suppliers and contracts; all ELMN business records and plans; all ELMN personnel files; all financial information of or concerning ELMN; all information relating to operating system software, application software, software and system methodology, hardware platforms, technical information, inventions, computer programs and listings, source codes, and object codes, copyrights and other intellectual property; all technical specifications; any proprietary information belonging to ELMN; all computer hardware or software manuals; all training or instruction manuals; and all data and all computer system passwords and user codes. For purposes hereof, Confidential Information shall not include such information (i) that was known to Executive prior to the Effective Date or as a consequence of Executive's permitted activities that are unrelated to the Company,; (ii) which becomes known to the public or in the industry through no fault of Executive; (iii) the disclosure of which is required by law (including regulations and rulings) or the order of any competent governmental authority or Executive reasonably believes is required in connection with the defense of a lawsuit against Executive, provided that in either case, prior to disclosing any information, Executive shall give prior written notice thereof to the Company and provide the Company with the opportunity to contest such disclosure; or (iv) any personnel, compensation, or benefits information regarding Executive. Confidential Information shall not include, any information known to Executive prior to this Agreement, that is provided to, learned by or developed by Executive independently of his employment by Company or in connection with Executive's other business activities, was provided to Executive by third parties outside the Company who are not under any confidentiality restrictions or agreements with Company or is derived from any of the foregoing.

 
	 
	7

	

	 

  
	8. 	No Prior Agreements. Executive hereby represents and warrants to the Company that the execution of this Agreement by Executive and his employment by the Company and the performance of his duties hereunder will not violate or be a breach of any agreement, including any non competition agreement, invention or secrecy agreement, with a former employer, client or any other person or entity.

		 
	9. 	Assignment: Binding Effect. Executive understands that he has been selected for employment by the Company on the basis of his personal qualifications, experience and skills. Executive agrees, therefore, that he cannot assign all or any portion of his performance under this Agreement. Subject to the preceding two sentences, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and assets of the Company, to expressly assume and agree in writing reasonably satisfactory to Executive to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such written agreement prior to the effectiveness of any such succession shall be a material breach of this Agreement.

 
	10. 	No Mitigation; Offset. Executive shall not be required to mitigate the amount of any Company payment provided for in this Agreement by seeking other employment or otherwise' and Executive's obtaining other employment shall not reduce the amounts owed to him hereunder regardless of when such employment commences The amount of any payment required to be paid to Executive by the Company may be reduced by any amounts that are owed to the Company by Executive.

		 
	11. 	Release. Notwithstanding anything in this Agreement to the contrary, Executive shall not be entitled to receive any severance payments pursuant to paragraph 4. of this Agreement unless Executive has executed (and not revoked) a release of all claims arising under this Agreement or relating to Executive's employment or termination thereof, known or unknown, that Executive may have against the Company, its subsidiaries, their directors, officers, and employees, in a form of such release reasonably acceptable to the Company and Executive with such release becoming effective not later than sixty (60) days following Executive's termination date. Unless the Company wrongly refuses to pay or disputes the compensation owed to Executive hereunder, the Company shall have no obligation to commence payments pursuant to paragraph 4 until such a release becomes effective, provided that such release is consistent and enforceable under all applicable laws and this Agreement and that if the 60-day period spans two calendar years, the payments will commence in the second calendar year. Any such release executed by Executive pursuant to this Agreement will not act to waive any rights or claims that may arise after the date the release is executed.

 
	 
	8

	

	 

  
	12. 	Complete Agreement. This Agreement supersedes, and replaces in full, all representations, understandings and agreements (oral or written) between Executive and the Company or any of ELMN or any of their officers, directors or representatives existing as of the Effective Date and covering the same subject matter as this Agreement, save and except any indemnity obligations in prior Employment Agreements between the Company (or any predecessors) and Executive. This written Agreement is the final, complete and exclusive statement and expression of the agreement between the Company and Executive and of all the terms of this Agreement, and it cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or written agreements. This written Agreement may not be modified after the Effective Date except by a further writing signed by a duly authorized officer of the Company and Executive, and no term of this Agreement may be waived except by writing signed by the party waiving the benefit of such term. Without limiting the generality of the foregoing, either party's failure to insist on strict compliance with this Agreement shall not be deemed a waiver thereof.

		 
	13. 	Notice. Whenever any notice is required hereunder, it shall be given in email or writing addressed as follows:

    
		To the Company: 	Elluminance, LLC
11701 Bee Cave Rd., Suite 124
Austin, Texas 78138
Attn: Chairman

	 
	 
	  

		To Executive: 
	_______________________   _______________________
__________, Texas _______

 
Notice shall be deemed given and effective on the earlier of three days after the deposit in the U.S. mail of a writing addressed as above and sent first class mail, certified, return receipt requested, or when actually received by email. Either party may change the address for notice by notifying the other party of such change in accordance with this paragraph 13.
   
	14. 	Severability; Headings. If any portion of this Agreement is held invalid or inoperative, the other portions of this Agreement shall be deemed valid and operative and, so far as is reasonable and possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The paragraph headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the Agreement or of any part hereof.

 
	 
	9

	

	 

    
	15. 	Dispute Resolutions. Except with respect to injunctive relief as provided in paragraph 3b., neither party shall institute a proceeding in any court or administrative agency to resolve a dispute between the parties before that party has sought to resolve the dispute through direct negotiation with the other party. If the dispute is not resolved within two weeks after a demand for direct negotiations, then either party may initiate arbitration proceedings before a single arbitrator in Austin, Travis County, Texas The arbitrator shall not have the authority to modify or change any term of this Agreement, but may award the Executive any compensation or benefits or other damages as a consequence of Company's breach of this Agreement and due under the Agreement, and in addition, may award the Executive reasonable attorneys' fees and expenses and interest thereon if the Company breached its obligations to the Executive under this Agreement, or (ii) that the Company has otherwise materially breached this Agreement. In addition, the arbitrator may award the Company damages and attorneys' fees and expenses and interest thereon in the event the Arbitrator determines that the Executive has materially breached this Agreement. A decision by the arbitrator shall be final and binding. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The arbitrator may award costs and expenses, including reasonable attorneys' fees, to the prevailing party as determined by the arbitrator in any dispute arising under this Agreement.

    
	16. 	Governing Law. This Agreement shall in all respects be construed according to the laws of the State of Texas without regard to its conflicts of law provisions.

		 
	17. 	Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument.

   
	18. 	Section 409A Compliance. The Company and the Executive intend that any amounts or benefits payable or provided under this Agreement comply with the provisions of Section 409A of the Internal Revenue Code and the treasury regulations relating thereto so as not to subject Executive to the payment of the tax, interest and any tax penalty which may be imposed under Code Section 409A. The provisions of this Agreement shall be interpreted in a manner consistent with such intent. In furtherance thereof, to the extent that any provision hereof would otherwise result in Executive being subject ot payment of tax, interest and tax penalty under Code Section 409A, the Company and Executive agree to amend this Agreement in a manner that brings this Agreement into compliance with Code Section 409A and preserves to the maximum extent possible the economic value of the relevant payment or benefit under this Agreement.

    
	19. 	Indemnification. (a) In the event that the Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether civil, criminal, administrative or investigative (a "Proceeding"), other than any Proceeding initiated by the Executive or the Company related to any contest or dispute between the Executive and the Company or any of its affiliates with respect to this Agreement or the Executive's employment hereunder, by reason of the fact that the Executive is or was a director or officer of the Company, or any affiliate of the Company, or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise, the Executive shall be indemnified and held harmless by the Company to the maximum extent permitted under applicable law and the Company's operating agreement from and against any liabilities, costs, claims and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys' fees). Costs and expenses incurred by the Executive in defense of such Proceeding (including attorneys' fees) shall be paid by the Company in advance of the final disposition of such litigation upon receipt by the Company of: (i) a written request for payment; (ii) appropriate documentation evidencing the incurrence, amount and nature of the costs and expenses for which payment is being sought; and (iii) an undertaking adequate under applicable law made by or on behalf of the Executive to repay the amounts so paid if it shall ultimately be determined that the Executive is not entitled to be indemnified by the Company under this Agreement. During the Term and for a period of six (6) years thereafter, the Company or any successor to the Company shall purchase and maintain, at its own expense, directors' and officers' liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to other directors and similarly situated executives of the Company.

 
	 
	10

	

	 

 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective for all purposes as of the Effective Date.
 
	 
	ELLUMINANCE, LLC
	 

	 	 	 	 
		By:	/s/ Kamran Nezami 	 

	 
	Name:
	Kamran Nezami 	 

	 
	Title:
	Chairman	 

	 
	 
		 

	 
	 
	 
	 

	 
	EXECUTIV
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

 
 
11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00253-of-00352.parquet"}]]