Document:

AOL-EX10.1_2015.3.31-Q1

Exhibit 10.1
FINAL

AOL Inc. 2015 Annual Bonus Plan – U.S.

1
AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

1.  Objective 
The success of AOL Inc. (“AOL”), along with its subsidiaries and affiliates (together the “Company”), is to a great extent dependent on the caliber of its employees. The AOL Inc. Annual Bonus Plan is a critical tool in rewarding outstanding Company performance, segment/brand/group performance, individual performance and behaviors that contribute to the achievement of corporate objectives.  
The AOL Inc. Annual Bonus Plan provides eligible employees (other than employees whose participation is governed by the AOL Inc. Annual Incentive Plan for Executive Officers (the “Executive AIP”) and Section 6 herein) with the opportunity to receive cash incentives based on the financial and operational performance of the Company, their segment/brand/group (where applicable) as well as their own individual performance. 
The guidelines provided in the AOL Inc. Annual Bonus Plan – U.S. are applicable generally to eligible employees of entities formed within the United States.  The terms “ABP” and “this plan” as used herein refer to this plan document, and includes any addenda attached hereto.  A separate plan document governs the participation of eligible employees of entities formed outside the United States (the “International ABP”).  
2.  Eligibility 
Employees of AOL, or a direct or indirect wholly-owned AOL subsidiary formed within the United States, with employee job levels A through J are eligible to participate in the ABP, subject to the terms of the ABP and the following conditions (each such employee, a “Participant”).  
	
	
	a.    Employees must be scheduled to work a minimum of 25 hours or more per week to be eligible to participate. 

	b.    Employees eligible to participate in any other Company cash incentive plan, including but not limited to the International ABP, sales incentive plans and bonus plans, are not eligible to participate in the ABP. To avoid doubt, the preceding sentence does not apply to the AOL Inc. Stock Incentive Plan.

	c.    New employees who are hired on or after October 1 of a plan year are not eligible to participate in the ABP for such plan year. 

	d.    Certain individuals, including but not limited to any individuals classified by the Company as interns, fellows, fixed term employees, contractors, freelancers, bloggers or temporary workers, and any individuals who are not considered employees of the Company, are not eligible to participate in the ABP, unless required by state or local law. This list is not intended to be all inclusive and may be updated without prior notice.  Additionally, any individual who is subject to the terms of or is a signatory to any contract, letter agreement, or other document that acknowledges his or her status as an independent contractor or who is not otherwise classified by the Company for U.S. federal payroll tax purposes as a common law employee is not eligible to participate in the ABP, even if such individual is later determined to be a common law employee.

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

	
	
	e.    The eligibility of a Participant who is a participant in the Executive AIP will be determined pursuant to the Executive AIP and Section 6 of this plan. 
f.    Notwithstanding anything to the contrary herein, an employee who meets the eligibility requirements set forth in this Section 2 shall, if so designated by the Company in its sole discretion, participate in the International ABP in lieu of this plan (notwithstanding the eligibility requirements set forth in the International ABP).  

3.  Target Incentive 
 
	
	
	A Participant’s ABP target incentive is expressed as a percentage of such Participant’s annual base salary and calculated based on the Participant’s level for internal purposes (and not the Participant’s business title). If a Participant is a participant in the Executive AIP, then the applicable ABP target incentive for such Participant will be a component in the criteria used by the Compensation and Leadership Committee of AOL Inc.’s Board of Directors (and any successor thereto) (the “Committee”) to apply negative discretion in determining the actual annual incentive payable to such Participant pursuant to the terms of the Executive AIP. No annual incentive payment will be made to a participant in the Executive AIP unless and until the performance goal specified in Section 3.2 of the Executive AIP is achieved.

 
	
	
	Subject to Sections 7(e), (f) and (h), actual annual incentive payouts, if granted, with respect to a plan year will be calculated based on a Participant’s annual base salary rate as of December 31 of the plan year, in accordance with the administrative guidelines of the ABP.

4A.  Performance Measures & Weighting 
The following components of performance will be assessed in determining a Participant’s incentive payout and will be weighted as follows (expressed as a percentage of the Participant’s target incentive): 
	
				
	 
	Performance Components

	Internal Level
	Company
	Brand/Segment/Group
	Individual

	CEO and Corporate EVPs
	70%
	n/a
	30%

	Corporate - all SVPs and below
	50%
	n/a
	50%

	All other eligible Participants not listed above
	20%
	50%
	30%

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

	
	
	a.    Company performance shall be determined as provided in Section 4B below.
b.    With respect to individual performance, Participants are rated on a performance scale.  Regardless of Company and (if applicable) Brand/Segment/Group performance, employees in the lowest individual performance category (as determined by management in its sole discretion) will not be eligible to earn any bonus under this plan.
c.    The portion of a Participant’s incentive payout attributable to a Participant’s Brand/Segment/Group, if any, shall be based on the performance of the operating segment, brand or group of the Company for which the Participant provides substantial services.  With respect to a Participant who provides substantial services to one or more operating segments, brands and/or groups of the Company, the Brand/Segment/Group portion of the Participant’s incentive payout (if any) may be based on the performance of one or more of such operating segments, brands or groups, as determined and weighted at the beginning of the plan year (or as may be adjusted from time to time) by management in its sole discretion.  
  

	d.    With respect to a Participant who is a participant in the Executive AIP, the foregoing performance measures may be used by the Committee to apply negative discretion to determine the actual bonus payable to such Participant (as set forth in Section 3.4 of the Executive AIP); provided, however, that the Company has satisfied the performance goal specified in Section 3.2 of the Executive AIP.

4B.  Company Performance 
The Company’s performance shall be determined based on achievement of Company Metrics and (if applicable) Operational Criteria, weighted as follows: 
For Brand/Segment/Group EVPs  – Adjusted OIBDA: 33.3%; Revenue Net of TAC: 33.3%; and Multiplatform UVs: 33.3%.
For all other eligible Participants not listed above (including the CEO and Corporate EVPs) – Adjusted OIBDA: 16.7%; Revenue Net of TAC: 16.7%; Multiplatform UVs: 16.7%; and Operational Criteria: 50%.
For purposes of this Plan:
“Company Metric” refers to each of the following:
		
	i.
	Adjusted OIBDA — the Company’s consolidated 2015 operating income before depreciation and amortization excluding the impact of restructuring costs, non-cash equity-based compensation, gains and losses on all disposals of assets, non-cash asset impairments and write-offs and special items;

		
	ii.
	Revenue Net of TAC – the Company’s consolidated revenue for fiscal year 2015, minus traffic acquisition costs for the same period, as reported in the Company’s trending schedules for the period ending December 31, 2015; and

		
	iii.
	Multiplatform UVs – the Company’s average monthly unique visitors (UVs) for 2015 for desktop, smartphone, or tablet (browser or app), including exclusive video 

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

UVs on 3rd party partners, as determined by comScore (including, for purposes of this plan, any successor entity thereto), or such other definition of Multiplatform UVs as may be determined to be appropriate by the Company exercising its discretion from time to time. 
“Operational Criteria” refers to one or more criteria determined to be relevant in evaluating the Company’s progress against key operational objectives for the plan year and may include, without limitation, talent development, diversity, product roadmaps, momentum, and/or gain in market share.  
The CEO with the approval of the Committee shall designate the Operational Criteria applicable for the plan year (which need not be the same, or uniformly applied, for purposes of determining payouts among Participants), provided that for purposes of determining the CEO’s payout under the plan, the Committee shall establish the applicable Operational Criteria at the beginning of the plan year.  

5.  Funding  
The thresholds and goals for each of the Company Metrics and the financial measures for the operating segments, brands and/or groups of the Company, as applicable, are determined at the beginning of the plan year by the Company, and are approved by the Committee.  
Total ABP funding is based on the Company’s achievement of the Company Metrics. The ABP funding levels at various levels of achievement of the Company Metrics are determined at the beginning of the plan year (but may be subsequently adjusted in the sole discretion of the Company). The ABP funding level for achievement of the performance goals of the Company’s brand, segments and/or groups (if applicable) will be determined by the Company in its sole discretion.   
In general, each of the three identified Company Metrics operate independently.  The plan will be funded to the extent the minimum threshold of a Company Metric is achieved, but only as to the portion of the total approved ABP funding that has been allocated to the achievement of such Company Metric (e.g., if only Adjusted OIBDA and Revenue Net of TAC thresholds are met, the ABP will be funded only as to the portion of the total approved ABP funding allocable to these two Company Metrics). There will be no payout under the plan if none of the Company Metric thresholds are met.   
Generally, final ABP funding is at the discretion of the CEO, with the approval of the Committee; however, final ABP funding as to the CEO, the CFO and any employee subject to the Committee’s purview is also subject to approval of the Committee. 

6.  Participation In The Executive AIP

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

This Section 6 will apply only to those Participants who are also participants in the Executive AIP, which determination will be made by the Committee. Only with respect to annual incentives payable to such Participants should the ABP be considered a sub-plan of the Executive AIP. The eligibility of such Participants to participate in the Executive AIP will be determined pursuant to Section 5 of the Executive AIP and the second paragraph of this Section 6.  The performance goals for such Participants will be determined pursuant to Section 3 of the Executive AIP. In addition, this sub-plan for Participants who are participants in the Executive AIP will be administered in accordance with Section 4 of the Executive AIP. The method, timing and/or form of any annual incentive payouts to such Participants will be as set forth in the Executive AIP. Once the Committee determines in writing that performance goals have been achieved under the Executive AIP (pursuant to Section 3 of the Executive AIP), the Committee may use negative discretion to finalize the annual incentive payouts to such Participants, pursuant to the guidelines established under the ABP.  Any capitalized terms used in this section (and throughout the ABP with respect to a Participant who is a participant in the Executive AIP) but not otherwise defined herein, in connection with determining the annual incentive payouts for such Participant only, will have the meaning set forth in the Executive AIP. In the event of a conflict between any term or provision contained in the ABP and a term or provision of the Executive AIP, with respect to a Participant who is a participant in the Executive AIP, the terms and provisions of the Executive AIP will govern and prevail. 
Notwithstanding anything to the contrary in this plan or in the Executive AIP, any individual designated by the Committee to participate in the Executive AIP who is subsequently determined not to be a “covered employee” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), for the fiscal year of the Company in which the Company allocates its federal income tax deduction for payments under the Executive AIP based upon performance in the plan year, shall not be eligible to receive a bonus under the Executive AIP, but shall instead be eligible to receive a bonus under the ABP, with such individual’s bonus eligibility and award opportunity determined solely under the terms of the ABP.
7.  Administrative Guidelines 
		
	a.
	The ABP is an annual bonus plan based on Company, Brand/Segment/Group (if applicable) and individual performance from January 1, 2015 through December 31, 2015 (the “plan year”). 

		
	b.
	Any payout to a Participant with respect to a plan year will be distributed once a year in a lump sum, no later than March 15th of the year immediately following the end of such plan year.

		
	c.
	Bonus payouts, if any, under the ABP will be made to a Participant by his or her employer.  Subject to Section 7(h) herein, Participants must be continuously employed by the Company through the date of payout in order to be eligible to earn a payout.  A Participant whose employment with the Company has terminated, or who has received a notice of termination from the Company or provided notice of resignation to the Company, in each case prior to the date of payout, is not eligible to receive a payout, unless otherwise required by state or local law.

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

		
	d.
	Subject to Section 2, employees hired, promoted or transferred into an ABP eligible position may participate in the ABP effective as of the first day they were employed in an ABP eligible position. The ABP payment will be prorated daily based on the length of time such employee works in the ABP eligible position during the plan year. 

		
	e.
	A Participant transferring from an ABP eligible position to a non-ABP eligible position will be eligible to receive an ABP payout, prorated on a daily basis based on the portion of the plan year in which the Participant was employed in an ABP eligible position and the Participant’s annual rate of base salary immediately before such transfer, provided that the Company pays a bonus under the ABP to other Participants for that plan year. 

		
	f.
	Participants who are promoted or transferred from one ABP bonus target level to another during the plan year will be eligible to receive an ABP payout, prorated on a daily basis based on the length of time at each ABP bonus target level during the plan year and the Participant’s annual rate of base salary as in effect on the last day employed at each such ABP bonus target level.

		
	g.
	A bonus payable under the ABP may not exceed 200% of a Participant’s bonus target. 

		
	h.
	In the event a Participant dies during the plan year, the Participant’s beneficiaries will receive a prorated ABP payout at the Participant’s target level based on the number of days the Participant was employed in an ABP eligible position during such plan year, provided an ABP payout is approved for such plan year. In addition, if a Participant dies after the end of the plan year, but before payout, the Participant’s beneficiaries will receive the full ABP payout, at the Participant’s target incentive level, if an ABP payout is approved for such plan year. Any such ABP payouts will be made at the same time as other payouts would otherwise be payable to Participants under the terms of the ABP and, except as provided in Sections 7(e) and (f), will be calculated based on the Participant’s rate of annual base salary immediately prior to his or her death. 

		
	i.
	Notwithstanding anything to the contrary in Section 7(b) or any other provision herein, a Participant may, in the sole discretion of the Company, receive his or her ABP payout for the plan year in more than one installment, provided that (i) all such installments will be paid no later than March 15th of the year immediately following the end of such plan year, (ii) as to any installment payable prior to the end of the plan year, performance is then determined to be trending to meet or exceed the applicable performance thresholds described in Sections 4 and 5 for the plan year, and (iii) except as provided in Section 7(h), a Participant must be continuously employed by the Company through the date that any installment payment provided under this paragraph is payable in order to be eligible to earn such payment. Installments may be in equal or unequal amounts as determined by the Company in its sole discretion.

		
	j.
	There is no guaranteed ABP payout. Notwithstanding anything to the contrary herein, the Company may reduce any amounts payable to a Participant hereunder.  Any payments under the ABP are at the sole discretion of the Company. 

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

		
	k.
	The Company has the power to interpret the terms and conditions of the plan, subject to Committee approval when required.  Any decision made by the Company or the Committee regarding the plan is final and binding upon all parties. Determinations made by the Company or Committee need not be uniform and may be made selectively among Participants in the plan. 

8.  Miscellaneous
		
	a.
	Participation in the ABP does not constitute a contract of employment or a contractual agreement for payout, and does not guarantee employment for any duration of time. Participation in the ABP in any plan year does not guarantee participation in any following plan year.  All elements of the ABP are at the discretion of the Company.  The Company reserves the right to modify, revoke, suspend, terminate, or disregard all plan practices, policies or procedures, in whole or in part, published or unpublished, at any time, with or without notice, unless otherwise required by state or local law.  The ABP may, or may not, be renewed on a yearly basis, whether in whole or in part.  

		
	b.
	Subject to Committee approval when required, the Company reserves the right to exercise discretion in calculating the ABP payout, and in setting or adjusting any values or factors used in the calculation of the ABP payout.  Such discretion for Participants who are either participants in the Executive AIP and/or whose compensation must be reviewed and approved by the Committee resides solely with the Committee.

		
	c.
	Except with respect to any provision of the Executive AIP as it applies to a Participant in the Executive AIP, in the event of any inconsistency or conflict between the provisions of any other communications and the terms of this plan, the terms outlined in this plan will prevail. 

		
	d.
	Participants will not have the right to assign, pledge, or otherwise transfer any payments to which they may be entitled under the ABP. 

		
	e.
	The Company reserves the right to deduct any moneys owed to the Company by a Participant from any payout under the ABP prior to distribution, unless state or local laws require otherwise.  

		
	f.
	The Company will be entitled to withhold from any payment due to a Participant any and all applicable income and employment taxes.

		
	g.
	The ABP is intended to be exempt from Code Section 409A and shall be administered and interpreted accordingly. Notwithstanding any other provision of the ABP, if any provision of the ABP conflicts with the requirements of Code Section 409A, the requirements of Code Section 409A shall supersede any such provision.  In no event will the Company be liable for any additional tax, interest or penalties that may be imposed on a Participant by Code Section 409A or any damages for failing to comply with Code Section 409A.

		
	h.
	If any provision of the ABP shall be held to be void, invalid, illegal or unenforceable, in whole or in part, such provision shall be replaced with a provision that is as close as possible in effect to such invalid, illegal or unenforceable provision, and still be valid, legal and 

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)

enforceable, and the validity, legality and enforceability of the remaining provisions of the ABP shall not in any way be affected or impaired thereby.
		
	i. 
	Any payments under this plan are to be paid from the Company’s general assets.  No trust, account or other separate fund or segregation of assets will be established for payments pursuant to the plan.  

AOL INC. ANNUAL BONUS PLAN – U.S. (2015)AOL-EX10.2_2015.3.31-Q1

Exhibit 10.2
AOL INC.
SEGMENT PERFORMANCE SHARE UNITS (“SPSUs”)
UNDER THE AOL INC. 2010 STOCK INCENTIVE PLAN
SPSU TERMS AND CONDITIONS 
AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2015
These Segment Performance Share Unit Terms and Conditions, as amended from time to time (“Terms and Conditions”), apply to the award of SPSUs (each an “SPSU Award”) granted under the AOL Inc. 2010 Stock Incentive Plan, as amended from time to time (the “Plan”).  An SPSU Award shall be deemed to be an “Other Stock-Based Award” granted pursuant to Section 9 of the Plan.  An SPSU Award is intended to satisfy the applicable provisions of Section 162(m) of the Code with respect to an SPSU Award granted to a Covered Employee.  Each SPSU Award is subject to these Terms and Conditions and the terms, definitions and provisions of the Plan and applicable Notice of Grant and SPSU Award Agreement.  Capitalized terms that are used in these Terms and Conditions, but are not defined, shall have the meanings ascribed to them in the Plan or the applicable SPSU Award Agreement.         
		
	1.
	Certain Defined Terms.  

(a)    “ABP” means the AOL Inc. Annual Bonus Plan established annually that provides participants with the opportunity to receive cash incentives based upon annual performance, as such plan may be amended from time to time.
(b)    “Covered Employee” means any Participant who is (or who may be reasonably be expected to become) a “covered employee” within the meaning of Section 162(m).
(c)    “Employee” means any employee of the Company or one of its Affiliates, whether such employee is so employed at the time these Terms and Conditions are adopted or becomes so employed subsequent to their adoption. 
(d)    “Participant” means an Employee who has been granted an SPSU Award under the Plan which remains outstanding.  
(e)    “Plan” means the AOL Inc. 2010 Stock Incentive Plan, as amended from time to time.
(f)    “Section 162(m)” shall mean Section 162(m) of the Code, or any successor provision, and applicable Treasury Regulations and other applicable guidance thereunder.

(g)    “SPSU” means one notional unit equal in value to one Share, payable in cash or Shares in accordance with the provisions of these Terms and Conditions, the Plan and the applicable Notice of Grant and SPSU Award Agreement.  
(h)    “SPSU Award” means an award of SPSUs in respect of a performance period awarded to a Participant in accordance with the Plan, these Terms and Conditions and the terms of the Notice of Grant and SPSU Award Agreement relating to such SPSU Award.
(i)    “SPSU Award Agreement” means the written agreement evidencing an SPSU Award granted under the Plan pursuant to these Terms and Conditions.  Each SPSU Award Agreement shall be subject to these Terms and Conditions and the Plan and any other terms and conditions (not inconsistent with the Plan) determined by the Committee.
		
	2.
	Eligibility and Participation

(a)    Any Employee of the Company or one of its Affiliates shall be eligible to be granted SPSU Awards under the Plan.  The Committee in its sole discretion shall select Employees eligible to receive SPSU Awards.  
(b)    A Participant shall not be entitled to participate and shall cease participation in any other cash incentive plan or program of the Company or an Affiliate with respect to any performance period beginning on or after January 1, 2013 (other than the ABP, the Company’s Annual Incentive Plan for Executive Officers and the Plan), including but not limited to sales incentive bonus plans, performance programs, and revenue or other performance plans, except as the Committee may otherwise provide in the terms of a Participant’s SPSU Award.  In the event of a conflict between these Terms and Conditions and any plan or program of the Company or an Affiliate or a Participant’s employment agreement or offer letter with the Company, these Terms and Conditions will control.   
		
	3.
	Administration

(a)    The Committee shall have the full power and authority to make, and establish the terms and conditions of, any SPSU Award, consistent with the provisions of the Plan and these Terms and Conditions.  The Committee is authorized to interpret these Terms and Conditions, to establish, amend and rescind any rules and regulations relating to these Terms and Conditions, and to make any other determinations that it deems necessary or desirable for the administration of the SPSU Awards, and may delegate such authority, as it deems appropriate, consistent with the provisions of the Plan.  The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, these Terms and Conditions or in any SPSU Award Agreement or Notice of Grant in the manner and to the extent it shall deem necessary or appropriate, consistent with the terms of the Plan.  Any decision of the Committee in the interpretation and administration of these Terms and Conditions, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned (including, but not limited to, Participants and their beneficiaries or successors).

2

(b)    Pursuant to the Plan, the Committee has delegated its administrative authority with respect to SPSU Awards granted to Participants other than Covered Employees concurrently to the Company’s Chief Executive Officer, subject to the terms, conditions, limitations and guidelines as the Committee may establish in its sole discretion from time to time.  References to the Committee shall mean the Chief Executive Officer if he is working within the scope of such delegated authority.  Such delegation of authority shall not restrict the Committee from taking action regarding any matter within the scope of such delegation.  Any SPSU Awards to Covered Employees will be granted, administered, and interpreted exclusively by the Committee.  The Committee may not delegate its powers and duties with respect to the SPSU Awards in a manner as would cause the Plan or these Terms and Conditions not to comply with the requirements of Section 162(m).  
		
	4.
	SPSU Awards

(a)    The Committee is hereby authorized to grant SPSU Awards subject to the terms of these Terms and Conditions and the Plan.  The Committee shall determine, in its sole discretion, the number of SPSUs subject to any SPSU Award and may impose such conditions on the grant of SPSU Awards as it deems appropriate.  Each SPSU Award will be evidenced by a Notice of Grant and an SPSU Award Agreement.  The Notice of Grant shall specify the number of SPSUs subject to the SPSU Award.  
(b)    An SPSU Award shall confer on the holder thereof the right to receive payments, in whole or in part, upon the achievement of one or more performance goals during such performance periods as the Committee may establish.  The performance goals to be achieved during any performance period, the length of any performance period and any other terms and conditions of any SPSU Award shall be determined by the Committee.  Except as provided in Section 4(c) below, the Committee, or its delegate, may, in its discretion, reduce or increase the amount of a payout achieved and otherwise to be paid in connection with an SPSU Award.  The Committee may establish different performance periods or different performance goals for each Participant.
(c)    SPSU Awards that are granted to Covered Employees and that are intended to be “qualified performance-based compensation” within the meaning of Section 162(m), to the extent required by Section 162(m), shall be conditioned solely on the achievement of one or more objective performance goals established by the Committee within the time prescribed by Section 162(m), and shall otherwise comply with the requirements of Section 162(m), as described below.  
(i)    Timing of Designations; Setting of Performance Goals.  For each SPSU Award intended to be “qualified performance-based compensation,” the Committee shall, not later than 90 days after the beginning of each performance period, (i) designate all Participants that are Covered Employees for such performance period and (ii) establish in writing the objective performance goals based on one or more of the performance criteria listed in Section 9(b) of the Plan; provided, however, that, with respect to such performance goals, the outcome is substantially uncertain at the time the Committee actually establishes each performance goal. 

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(ii)    Certification.  Following the close of each performance period and prior to the vesting or payment of any amount to a Participant with respect to an SPSU Award, the Committee shall certify in writing as to the attainment of all factors upon which any payments to a Participant for that performance period are to be based.  
(iii)    Payment of SPSU Awards.  The Committee may, in its discretion, reduce the amount of a payout achieved and otherwise to be paid in connection with an SPSU Award intended to be “qualified performance-based compensation” under Section 162(m), but may not exercise discretion to increase such amount. 
		
	5.
	Adjustments to Performance Goals

The Committee may adjust the performance goals following the grant of an SPSU Award for any reason, including to reflect a change in corporate capitalization (such as a stock split or stock dividend) or a corporate transaction (such as a merger, consolidation, separation, reorganization or partial or complete liquidation), or to reflect equitably the occurrence of any extraordinary event, any change in applicable accounting rules or principles, any change in the Company’s method of accounting, any change in applicable law, or change due to any merger, consolidation, acquisition, reorganization, stock split, stock dividend, combination of shares or other changes in the Company’s corporate structure or shares, or any other change of a similar nature.  The Committee shall make the foregoing adjustments with respect to a Covered Employee’s SPSU Awards in a manner that the Committee deems appropriate on account of the occurrence of one of the events listed in this Section 5 in order to avoid the dilution or enlargement of a Participant’s rights under such SPSU Award, provided that the adjustment(s) otherwise conform to the requirements of Section 162(m) to preserve the treatment of such SPSU Award as “performance-based compensation” within the meaning of Section 162(m).
		
	6.
	Acknowledgement of Award

A Participant will not be entitled to any SPSU Award or any benefit of the Plan unless the Participant acknowledges and agrees to be bound by these Terms and Conditions, the Plan and the terms of the Notice of Grant and SPSU Award Agreement.  By executing the Notice of Grant, each Participant shall be deemed conclusively to have agreed with and consented to these Terms and Conditions and the terms of the Plan, the Notice of Grant and the SPSU Award Agreement.
		
	7.
	Settlement of SPSU Awards

(a)    The SPSU Award Agreement relating to an SPSU Award (i) shall specify whether such award may be settled in Shares or cash, or a combination thereof and (ii) may specify whether the holder thereof shall be entitled to receive dividend equivalents and/or share in other distributions to the Company’s stockholders with respect to the number of SPSUs subject to such SPSU Award. 
(b)    If an SPSU Award is settled in Shares, such Shares shall be issued in accordance with the Plan and shall reduce the Share Authorization as provided in Section 3 of the Plan.  

4

SPSU Awards settled in cash shall not reduce the Share Authorization.   No fractional Shares may be issued in whole or partial settlement of an SPSU Award.  
		
	8.
	Restrictions on Benefits.  

(a)    Each Participant acknowledges that a Participant’s continued employment with the Company and its Affiliates and a grant of an SPSU Award are sufficient consideration for the restrictions imposed upon a Participant by this Section 8 and provide benefits to which the Participant would not otherwise be entitled to enjoy. 
(b)    In consideration of benefits described in these Terms and Conditions and in the Notice of Grant and SPSU Award Agreement evidencing an SPSU Award, and in recognition that a Participant, as a result of employment with the Company, has had or will have access to and gain knowledge of highly confidential or proprietary information or trade secrets pertaining to the Company, each Participant agrees, as a material condition to the receipt of benefits described in these Terms and Conditions and in the Notice of Grant and SPSU Award Agreement evidencing an SPSU Award and for purposes of satisfying all the conditions for becoming entitled to enjoy the benefits described herein, to abide by the Participant’s Confidentiality and Invention Assignment Agreement or Confidentiality, Non-Competition and Proprietary Rights Agreement, as applicable, the Company’s Standards of Business Conduct, and any confidentiality agreement, employment agreement or offer letter between the Company or any of its Affiliates and the Participant.  In addition, each Participant agrees that while a Participant is employed by the Company and for twelve (12) months following termination of his/her employment for any reason, a Participant shall not, directly or indirectly, except as a shareholder holding less than a one percent (1%) interest in a corporation whose shares are traded on a national securities exchange, participate in the ownership, control, or management of, or perform any services for or be employed by (i) Time Warner, Inc., Yahoo!, Inc., The Walt Disney Company, including its Maker Studios, Inc. subsidiary, Google, Inc., including its YouTube subsidiary, Microsoft Corporation, IAC/Interactive Corp., Facebook, Inc., Amazon.com Inc., Pinterest Inc., Conversant, Inc., LinkedIn Corporation, and Twitter Inc., or any of their respective subsidiaries, affiliates or successors, or (ii) without the written consent of the Chief Executive Officer or the General Counsel of the Company, any entity that engages in any line of business that is substantially the same as any line of business which the Company engages in, conducts or, to Participant’s knowledge, has definitive plans to engage in or conduct, and has not ceased to engage in or conduct, or any of their respective subsidiaries, affiliates or successors, but only in those geographic areas in which the Company is then engaged, or has definitive plans to engage, in the conduct of such line of business (any such entity identified by this subsection (ii) is a “Competitive Entity”). Notwithstanding the preceding, in order to be considered a Competitive Entity, the entity must derive fifty percent (50%) or more of its total annual revenues from substantially similar products and services offered by the Company.
(c)    Remedies for Breach of These Covenants.  
(i)    Each Participant agrees that if the Company determines a Participant has violated any provisions of Section 8(b), then the Participant’s right to the payment under the terms of the SPSU Award shall not have been earned since the Participant will not 

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have satisfied all of the conditions for becoming entitled to enjoy the benefits provided under the SPSU Award and the SPSU Award, whether or not characterized as otherwise “earned” and/or “vested” or not, will be immediately terminated and cancelled, and the Participant shall immediately return to the Company the Company Shares equal to the number of Shares delivered in settlement of such vested SPSUs if such SPSUs were settled in Shares or Participant shall pay cash equal to the value of cash paid to Participant in settlement of such vested SPSUs if such payment was made in cash. 
(ii)    Each Participant acknowledges and agrees that any breach of a Participant’s obligations in Section 8(b) will cause irreparable harm to the Company and that in the event of such breach, the Company shall have, in additional to monetary damages and other remedies at law, the right to an injunction, specific performance and other equitable relief to prevent violations of a Participant’s obligations hereunder to the fullest extent not prohibited by law.
(d)    Enforceability of These Covenants.  
(i)    Each Participant acknowledges that the services to be performed by the Participant pursuant to their employment with the Company are of a special, unique, unusual, extraordinary and intellectual character.  Each Participant further acknowledges that the business of the Company is international in scope, that its products and services are marketed throughout the world, that the Company competes in nearly all of its business activities with other entities that are or could be located in nearly any part of the world and that the nature of a Participant’s services, position and expertise are such that a Participant is capable of competing with the Company from nearly any location in the world.
(ii)    Each Participant acknowledges that the geographic boundaries, scope of prohibited activities, and time duration of the preceding paragraphs are reasonable in nature and are no broader than are necessary to maintain the confidential information, trade secrets and the goodwill of the Company and to protect the other legitimate business interests of the Company and are not unduly restrictive on a Participant. Each Participant acknowledges that the covenants contained in this Section 8 shall be deemed to be a series of separate covenants and agreements, one for each and every county or political subdivision of each applicable state of the United States and each country of the world.  
(iii)    It is the desire and intent of each Participant and the Company that the provisions of this Section 8 be enforced to the fullest extent permissible under the governing laws and public policies of the State of New York, and to the extent applicable, each jurisdiction in which enforcement is sought.  Accordingly, if any provision of these Terms and Conditions or any provision deemed to be included herein shall be adjudicated to be invalid or unenforceable, such provision, without any action on the part of a Participant or the Company, shall be deemed amended to delete or to modify (including, without limitation, a reduction in duration, geographical area or prohibited business activities) the portion adjudicated to be invalid or unenforceable, such deletion or 

6

modification to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudication is made, and such deletion or modification to be made only to the extent necessary to cause the provision as amended to be valid and enforceable.
		
	9.
	Rights with Respect to SPSUs

    
The SPSU Award and the SPSUs granted thereunder do not and shall not give a Participant any of the rights and privileges of a stockholder.  A Participant’s rights with respect to the SPSU Award or the SPSUs granted thereunder remain forfeitable at all times prior to the date on which such rights become vested and fully earned and unrestricted  in accordance with these Terms and Conditions, the Plan and the terms of the applicable Notice of Grant and SPSU Award Agreement.
		
	10.
	Forfeiture of SPSU Awards and Recoupment of Gains 

    
All SPSU Awards shall be subject to forfeiture or other penalties pursuant to the Company’s Clawback Policy, as amended from time to time, and such forfeiture and/or penalty conditions or provisions as determined by the Committee and set forth in the applicable Award Agreement.  
		
	11.
	Successors and Assigns

The Terms and Conditions shall be binding on all successors and assigns of the Company and a Participant, including without limitation, the estate of such Participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.
		
	12.
	Amendment or Termination

The Committee may amend, alter, suspend, discontinue or terminate these Terms and Conditions at any time, consistent with the provisions of the Plan.  The Committee may amend, alter, suspend, discontinue or terminate any outstanding SPSU Award, prospectively or retroactively, but no such action may materially adversely affect the rights of the holder of such Award without the consent of the Participant or holder or beneficiary thereof. 
		
	13.
	Interpretations

These Terms and Conditions are subject in all respects to the terms of the Plan.  In the event that any provision of these Terms and Conditions is inconsistent with the terms of the Plan, the terms of the Plan shall govern.  Any question concerning administration or interpretation arising under these Terms and Conditions shall be determined by the Committee or its delegate, and such determination shall be final and conclusive upon all parties in interest. 
		
	14.
	Choice of Law

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These Terms and Conditions and any Notice of Grant and SPSU Award Agreement evidencing an SPSU Award shall be governed by and construed and enforced in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in New York without regard to the principles of conflicts of law.  Each Participant consents to personal jurisdiction in the state and federal courts of the State of New York in any proceeding concerning an SPSU Award.  Any and all disputes between a Participant and the Company or any Affiliate relating to an SPSU Award shall be brought only in a state or federal court of competent jurisdiction sitting in Manhattan, New York.
		
	15.
	Section 409A Compliance

The payments hereunder in settlement of the SPSU Awards are intended to be exempt from the provisions of Section 409A of the Code, as all such payments will be made no later than the 15th day of the third month after the later of (i) the first calendar year in which the Participant’s right to the payment is no longer subject to a substantial risk of forfeiture or (ii) the first taxable year of the Company in which the Participant’s right to payment is no longer subject to a substantial risk of forfeiture.  Notwithstanding the foregoing, none of the Company, its Affiliates, or any of their officers, directors, employees or representatives shall be liable to the Participant for any interest, taxes or penalties resulting from non-compliance with Section 409A of the Code. 

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