Document:

Exhibit 10.1

 

ECOLAB INC.

MANAGEMENT PERFORMANCE INCENTIVE PLAN

 

(As amended and restated on February 27, 2014)

 

1.                                      Purpose of Plan.

 

The purpose of the Ecolab Inc. Management Performance Incentive Plan, as amended (the “Plan”) is to advance the interests of Ecolab Inc. (the “Company”) and its stockholders by enabling the Company and its Subsidiaries to attract and retain key executives of outstanding ability, by focusing such key executives on pre-established, objective performance goals and by providing such key executives with opportunities to earn financial rewards based on the achievement of such performance goals. The Plan is intended to constitute a qualified performance-based compensation plan under Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be administered and interpreted so as to ensure such compliance. In addition, the Plan is intended to be exempt from the requirements of Section 409A of the Code by reason of the short term deferral exception under Treas. Reg. Sec. 1.409A-1(b)(4).

 

2.                                      Definitions.

 

For the purposes of the Plan, the following terms will have the meanings set forth below, unless the context clearly otherwise requires:

 

2.1                               “Award” means a right granted to a Participant pursuant to Section 5 of the Plan to receive a cash payment from the Company (or a Subsidiary) based upon the extent to which the Participant’s Performance Goal(s) are achieved during the relevant Performance Period and subject to the Committee’s discretion pursuant to Section 3.1.

 

2.2                               “Board” means the Board of Directors of the Company.

 

2.3                               “Code” is defined in Section 1 of the Plan.

 

2.4                               “Committee” is defined in Section 3 of the Plan.

 

2.5                               “Company” is defined in Section 1 of the Plan.

 

2.6                               “Disability” means the disability of the Participant such as would entitle the Participant to receive disability income benefits pursuant to the long-term disability plan of the Company or Subsidiary then covering the Participant or, if no such plan exists or is applicable to the Participant, a determination by the Committee that the Participant is permanently and totally disabled within the meaning of Section 22(e)(3) of the Code.

 

2.7                               “Executive Officer” means an executive officer of the Company within the meaning of Rule 3b-7 under the Securities Exchange Act of 1934, as amended.

 

2.8                               “GAAP” means generally accepted accounting principles set forth in the opinions, statements and pronouncements of the Financial Accounting Standards Board, United States (or predecessors or successors thereto or agencies with similar functions), or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, which are applicable to the circumstances as of the date of determination and in any event applied in a manner consistent with the application thereof used in the preparation of the Company’s financial statements.

 

 

2.9                               “Participant” means an Executive Officer of the Company to whom an Award is granted by the Committee under the Plan.

 

2.10                        “Performance Goal” means a performance objective established by the Committee for a particular Participant for a Performance Period pursuant to Section 5 of the Plan for the purpose of determining the extent to which an Award has been earned for such Performance Period. Each Performance Goal will consist of (a)  “Performance Criteria,” as defined in Section 5.2 of the Plan, which are one or more objectively determinable measures related to individual, business unit or Company performance, and (b) a “Performance Target,” which is the level at which the relevant Performance Criteria must be achieved for purposes of determining whether a cash payment is to be made under an Award, which may be stated as a threshold level below which no payment will be made, a maximum level at or above which full payment will be made and intermediate targets which will result in payment between such threshold and maximum level.

 

2.11                        “Performance Period” means a Plan Year or, for an Executive Officer who is first hired as, or first becomes eligible for this Plan as, an Executive Officer after the first day of the Plan Year and who becomes a Participant during the Plan Year, such portion of the Plan Year as determined by the Committee.

 

2.12                        “Plan” is defined in Section 1 of the Plan.

 

2.13                        “Plan Year” means the fiscal year of the Company.

 

2.14                        “Retirement” means termination of employment at an age and length of service such that the Participant would be eligible to an immediate commencement of benefit payments under the final average compensation formula of the Company’s defined benefit pension plan available generally to its employees, whether or not such individual actually elects to commence such payments (provided that, (i) if the Participant is not covered by the Company’s defined benefit pension plan, or (ii) if the Participant is covered under the cash balance formula of such plan, then the Participant will be deemed to be covered by the final average compensation formula of such plan for purposes of this Plan).

 

2.15                        “Subsidiary” means any entity that is directly or indirectly controlled by the Company, as determined by the Committee.

 

3.                                      Plan Administration.

 

3.1                               The Committee. The Plan will be administered by a committee appointed by the Board consisting solely of two or more directors, each of whom is an “outside director” within the meaning of Section 162(m)(4)(C)(i) of the Code (the “Committee”). In accordance with and subject to the provisions of the Plan, the Committee will have full authority and discretion with respect to Awards made under the Plan, including without limitation the following: (a) selecting the Executive Officers to be Participants; (b) establishing the terms of each Award; (c) determining the time or times when Awards will be granted; and (d) establishing the restrictions and other conditions to which the payment of Awards may be subject. The Committee will have no authority under the Plan to amend or modify, in any manner, the terms of any outstanding Award; provided, however, that (x) the Committee shall have the authority provided for in Section 3.2 of the Plan; and (y) the Committee shall have the authority to reduce or eliminate the compensation or other economic benefit due pursuant to an Award upon the attainment of one or more Performance Goals included in such Award. Each determination, interpretation or other action made or taken by the Committee pursuant to the provisions of the Plan will be conclusive and binding for all

 

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purposes and on all persons, and no member of the Committee will be liable for any action or determination made in good faith with respect to the Plan or any Award granted under the Plan.

 

3.2                               Adjustments. In the event of (a) any merger, reorganization, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights, offering, extraordinary dividend (including a spin-off) or other similar change affecting the Company’s shares, (b) any purchase, acquisition, sale or disposition of a significant amount of assets other than in the ordinary course of business, or of a significant business, (c) any change resulting from the accounting effects of discontinued operations, extraordinary income or loss, changes in accounting as determined under GAAP, or restatement of earnings or (d) any charge or credit resulting from an item which is classified as “non-recurring,” “restructuring,” or similar unusual item on the Company’s audited annual Statement of Income which, in the case of (a) — (d), results in a change in the components of the calculations of any of the Performance Criteria, as established by the Committee, in each case with respect to the Company or any other entity whose performance is relevant to the achievement of any Performance Goal included in an Award, the Committee (or, if the Company is not the surviving corporation in any such transaction, a committee of the board of directors of the surviving corporation consisting solely of two or more “outside directors” within the meaning of Section 162(m)(4)(C)(i) of the Code) shall, without the consent of any affected Participant, amend or modify the terms of any outstanding Award that includes any Performance Goal based in whole or in part on the financial performance of the Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event or events, such that the criteria for evaluating such financial performance of the Company or such other entity (and the achievement of the corresponding Performance Goal) will be substantially the same (as determined by the Committee or the committee of the board of directors of the surviving corporation) following such event as prior to such event; provided, however, that the Committee shall not take any action pursuant to this Section which would constitute an impermissible exercise of discretion pursuant to Section 162(m) of the Code.

 

4.                                      Participation.

 

The Participants for any Performance Period shall be those Executive Officers who are granted Awards by the Committee under the Plan for such Performance Period.

 

5.                                 Grant of Awards.

 

5.1                               Nature of Awards. An Award granted under the Plan shall provide for a cash payment to be made solely on account of the attainment of one or more pre-established, objective Performance Goals included in such Award, subject to the Committee’s authority pursuant to Sections 3 and 10 of the Plan.

 

5.2                               Performance Criteria. Performance Criteria which the Committee may include in Awards made under the Plan include the following measurements as applied to the Company as a consolidated entity or, except as to Diluted Earnings Per Share, a business division or business or staff unit thereof:

 

(a)                                 “Diluted Earnings Per Share” (“EPS”) means net income (loss) per common share, diluted, as reported in the Company’s audited year-end Consolidated Statement of Income (“Statement of Income”) for the Plan Year;

 

(b)                                 “Operating Income” means “operating income” as reported or included in the Company’s Statement of Income;

 

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(c)                                  “Net Sales” means “net sales” as reported or included in the Company’s Statement of Income;

 

(d)                                 “Days Sales Outstanding” (“DSO”) means the 12 point average of month-end DSO numbers, and month-end DSO numbers shall mean monthly performance for days sales invested in trade accounts receivable, determined by using the “exhaustion method”;

 

(e)                                  “Capital Expenditures” means “capital expenditures” reported or included in the Company’s year-end audited Consolidated Statement of Cash Flows for the Plan year;

 

(f)                                   “Inventory Days On Hand” (“DOH”) means, by category of inventory, the average of the 12 month-end DOH numbers, and the month-end DOH numbers shall mean, by category of inventory, (i) inventory on hand at standard cost, divided by (ii) cost of goods at standard cost based on either forecasted requirements or historical shipments;

 

(g)                                  “Controllable Expenses” means expenses under the control of the Participant;

 

(h)                                 “Return on Beginning Equity” means net income (loss) as reported or included in the Company’s Statement of Income divided by beginning of the year “shareholders equity” as reported or included in the Company’s year-end audited financial statements for the Plan Year; and

 

(i)                                     “Return on Net Assets” means (i) Operating Income, less income taxes at the applicable effective rate, divided by (ii) total assets less cash and cash equivalents, investments in securities and non-interest bearing liabilities as reported or included in the Company’s year-end audited financial statements for the Plan year, including footnotes.

 

Any Performance Goal based on one or more of the foregoing Performance Criteria may, in the Committee’s discretion, be expressed in absolute amounts, relative to one or more other Performance Criteria, as a growth rate or change from preceding periods, or as a comparison to the performance of specified companies or a published or special index (including stock market indices) or other external measures.

 

5.3                               Establishment of Performance Goals. Not later than 90 days after the commencement of the Plan Year (or such earlier date as may be required pursuant to Section 162(m) of the Code) the Committee shall determine in writing for each Participant:

 

(a)                                 the Performance Goal(s) for the Participant, including in each case one or more of the Performance Criteria set forth in Section 5.2 of the Plan and the Performance Target for each Performance Criteria;

 

(b)                                 if more than one Performance Goal is specified for a Participant, the relative weight assigned to each Performance Goal; and

 

(c)                                  the cash award expressed as a percentage of the base salary for the Participant for the Performance Period (as fixed at the time the Performance Goal(s) are established), provided that the Committee shall also place a maximum dollar amount on such cash award which may not exceed $7 million.

 

For an Executive Officer who is first hired as, or first becomes eligible for this Plan as, an Executive Officer and who becomes a Participant after the first day of the Plan Year, the Performance

 

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Goals shall be established by the Committee as set forth in this Section within the time period permitted by Section 162(m) of the Code.  In establishing the Performance Goals applicable to any Award, the Committee may provide that one or more objectively determinable adjustments may be made to the manner of calculating the Performance Criteria on which the Performance Goals are based to take into account the impact of events of the type specified in Section 3.2 of the Plan.

 

6.                                      Payment of Awards.

 

As soon as practicable after the Committee has received the appropriate financial and other data after the end of a Plan Year, the Committee will for each Participant certify in writing the extent to which the applicable Performance Goals for such Participant have been met and the corresponding amount of the Award earned by such Participant. Payment of each Award in a cash lump sum, less applicable withholding taxes pursuant to Section 8 of the Plan, shall be made as soon as practicable thereafter, but not later than the later of (i) the 15th  day of the third month following the end of the Participant’s first taxable year in which the right to payment is no longer subject to a substantial risk of forfeiture, or (ii) the 15th  day of the third month following the end of the Company’s first taxable year in which the right to payment is no longer subject to a substantial risk of forfeiture. Notwithstanding anything in the Plan to the contrary, no payment made pursuant to any Award in respect of any Performance Period shall exceed $7 million.

 

7.                                      Effect of Termination of Employment.

 

7.1                               Termination Due to Death, Disability or Retirement. In the event a Participant’s employment with the Company and all Subsidiaries is terminated by reason of death, Disability or Retirement during a Performance Period, the Participant (or the Participant’s estate) (subject to the Committee’s discretion as allowed by clause (y) of Section 3.1 of the Plan) shall be paid (pursuant to Section 6 of the Plan, including satisfaction of the applicable Performance Goals, after the completion of the Plan Year) a percentage of the amount earned according to the terms of the Award equal to the portion of the Performance Period through the Participant’s death, Disability or Retirement, as the case may be, as determined by the Committee.

 

7.2                               Termination for Reasons Other than Death, Disability or Retirement. In the event a Participant’s employment is terminated with the Company and all Subsidiaries prior to the end of the Performance Period for any reason other than death, Disability or Retirement, or a Participant is in the employ of a Subsidiary and the Subsidiary ceases to be a Subsidiary of the Company (unless the Participant continues in the employ of the Company or another Subsidiary), the Participant’s Award for such Performance Period shall be immediately forfeited and the Participant shall have no right to any payment thereafter; provided, however, that under such circumstances the Committee may pay the Participant (pursuant to Section 6 of the Plan, including satisfaction of the applicable Performance Goals) after completion of the Plan Year, an amount not to exceed a percentage of the amount earned according to the terms of the Award equal to the portion of the Performance Period through the Participant’s termination.

 

8.                                      Payment of Withholding Taxes.

 

The Company is entitled to withhold and deduct from the payment made pursuant to an Award or from future wages of the Participant (or from other amounts that may be due and owing to the Participant from the Company or a Subsidiary), or make other arrangements for the collection of, all amounts the Company (or Subsidiary) reasonably determines are necessary to satisfy any and all federal, state and local withholding and employment-related tax requirements attributable to any payment made pursuant to an Award.

 

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9.                                      Rights of Eligible Executive Officers and Participants; Transferability.

 

9.1                               Employment. Nothing in the Plan will interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment or otherwise modify the terms and conditions of the employment of any Executive Officer or Participant at any time, nor confer upon any Executive Officer or Participant any right to continue in the employ of the Company or any Subsidiary.

 

9.2                               Restrictions on Transfer. Except pursuant to testamentary will or the laws of descent and as otherwise expressly permitted by the Plan, no right or interest of any Participant in an Award will be assignable or transferable, or subjected to any lien, during the lifetime of the Participant, either voluntarily or involuntarily, directly or indirectly, by operation of law or otherwise.

 

9.3                               Non - Exclusivity of the Plan. Nothing contained in the Plan is intended to modify or rescind any previously approved compensation plans or programs of the Company or any Subsidiary or create any limitations on the power or authority of the Board or any committee thereof to adopt such additional or other compensation arrangements as the Board or committee may deem necessary or appropriate.

 

10.                               Plan Amendment, Modification and Termination.

 

The Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that Awards under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no amendments to the Plan will be effective without the approval of the stockholders of the Company if stockholder approval of the amendment is then required for the Plan to continue to be a qualified performance-based compensation plan pursuant to Section 162(m) of the Code. Any termination, suspension or amendment of the Plan may adversely affect any outstanding Award without the consent of the affected Participant.

 

11.                               Unfunded, Unsecured Obligation.

 

A Participant’s only interest under the Plan shall be the right to receive a cash payment under an Award pursuant to the terms of the Award and the Plan (subject to the authority of the Committee pursuant to Sections 3 and 10 of the Plan). No portion of the amount payable to Participants upon the achievement of any Performance Goal therein shall be held by the Company or any Subsidiary in trust or escrow or any other form of asset segregation. To the extent that a participant acquires a right to receive such a cash payment under the Plan, such right shall be no greater than the right of any unsecured, general creditor of the Company.

 

12.                               Effective Date and Duration of the Plan.

 

The Plan (originally titled the “1999 Ecolab Inc. Management Performance Incentive Plan”) was originally approved by the Board on February 19, 1999 and by the Company’s stockholders on May 14, 1999. The Plan was further amended and restated by the Board on February 28, 2004, and approved by the Company’s stockholders on May 7, 2004. The Plan was further amended and restated by the Board on February 27, 2009, and approved by the Company’s stockholders on May 8, 2009. The Plan was further amended and restated by the Board on February 27, 2014, subject to stockholder approval as required by Section 162(m) of the Code. No benefits will be granted or amounts will be paid pursuant to the further amended and restated Plan unless and until such stockholder approval is obtained. If approved, the further amended Plan shall be effective for the Plan Year beginning on January 1, 2014 and will remain in effect

 

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until the date of the first meeting of the Company’s stockholders that occurs in 2019. The Plan may be terminated at any time by the Board. Any payments pursuant to Awards outstanding upon termination of the Plan may continue to be made in accordance with the terms of the Awards, subject to the authority of the Committee pursuant to Sections 3 and 10 of the Plan.

 

13.                               Miscellaneous.

 

13.1                        Governing Law. Except to the extent in connection with other matters of corporate governance and authority (all of which shall be governed by the laws of the Company’s jurisdiction of incorporation), the validity, construction, interpretation, administration and effect of the Plan and any rules, regulations and actions relating to the Plan will be governed by and construed exclusively in accordance with the internal, substantive laws of the State of Minnesota, without regard to the conflict of law rules of the State of Minnesota or any other jurisdiction.

 

13.2                        Successors. The Plan will be binding upon and inure to the benefit of the successors of the Company and the Participants.

 

7Exhibit 10.7

 

THIS AGREEMENT IS SUBJECT TO ARBITRATION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into effective as of the 14th day of April 2014, by and between Sizmek Inc., a Delaware corporation, its subsidiaries, affiliates, successors and assigns (collectively, the “Corporation”), and Neil Nguyen (“Executive”).

 

WHEREAS, the Corporation and Executive desire to enter into an employment relationship on the terms and conditions set forth herein.

 

NOW, THEREFORE, the parties hereto, in consideration of the mutual covenants and promises hereinafter contained, do hereby agree as follows:

 

1.             Employment.  The Corporation hereby employs Executive in the initial capacity and title set forth below; and Executive hereby accepts employment by the Corporation, on the terms and conditions hereinafter set forth.

 

2.             Title and Duties.  Executive’s job title shall be President and Chief Executive Officer.  During the term of Executive’s employment, Executive’s principal duties and responsibilities shall be as are customarily associated with such position, and Executive shall perform such additional services and duties for the Corporation and its subsidiaries consistent with Executive’s position as the Board of Directors of the Corporation (the “Board”) may from time to time designate.  Executive agrees to hold such offices as may be assigned to him from time to time by the Corporation, reasonably consistent with his then position, and to devote substantially all of his full time, energies and best efforts to the performance thereof to the exclusion of all other business activities, except any other activities as the Corporation may consent to in writing.

 

3.             Employment Term.  The term of Executive’s employment hereunder shall begin on the effective date hereof and continue thereafter until terminated by the Corporation upon written notice to Executive, until terminated by Executive pursuant to Section 15, or as otherwise provided in Section 15 hereof, whichever event shall occur first.

 

4.             Salary and Additional Compensation.  As compensation for the services to be rendered by Executive to the Corporation pursuant to this Agreement, Executive shall be paid the following compensation and other benefits, which compensation and benefits may be paid or provided by the Corporation or Sizmek Technologies, Inc., its wholly-owned subsidiary:

 

(a)           Base Salary:  Salary shall be payable in equal bimonthly installments in arrears, or otherwise in accordance with the Corporation’s then-standard payroll practices.  Executive shall be paid an annual salary of $500,000, which shall be reviewed annually, and subject to increase (but not decrease) by the Corporation from time to time (“Base Salary”).

 

(b)           Annual Incentive Compensation:  In addition to Executive’s Base Salary, Executive will be eligible to receive additional compensation as set forth in Schedule 1 of this Agreement, which includes but is not limited to an Annual Incentive (as defined in Schedule 1), with Executive’s eligibility for any such additional compensation dependent upon his assent to the terms of this Agreement, as well as his execution of this Agreement.

 

(c)           Stock Incentive Plans:  In addition to Executive’s Base Salary, and Executive’s Annual Incentive, Executive shall be eligible to participate in the Corporation’s stock incentive plans,

 

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including through the issuance of Long-Term Incentive Awards (as defined below), subject to approval of the Compensation Committee (or other applicable committee) of the Board of Directors of the Corporation, and subject to any limitation as may be provided by applicable law or regulation.

 

(d)           Employee Benefit Plans:  Executive shall be eligible to participate, to the extent he may be eligible in accordance with the terms of any such plans, and to the extent employees at his level are eligible for any such plans, in any profit sharing, retirement, insurance, health or other employee benefit plan maintained by the Corporation.

 

(e)           Financial Planning Assistance.  Executive shall be eligible to receive reimbursement from the Corporation for financial planning services, up to a maximum annual reimbursement of $15,000.

 

(f)            Relocation: To the extent Executive is relocated on behalf of the Corporation, as further outlined in Section 15(c) below, Executive shall be eligible for relocation assistance to the same extent as other senior executives.

 

5.             Life Insurance.  The Corporation, in its discretion, may apply for and procure in its own name and for its own benefit, life insurance on the life of Executive in any amount or amounts considered advisable by the Corporation during the term of Executive’s employment, and Executive shall submit to any medical or other examination and execute and deliver any application or other instruction in writing, reasonably necessary to effectuate such insurance.

 

6.             Expenses.  During the term of his employment, the Corporation shall reimburse Executive in accordance with the Corporation’s policies and procedures for all proper expenses incurred by Executive in the performance of Executive’s duties hereunder, regardless of where incurred.

 

7.             Vacations and Leave.  Executive shall be entitled to vacation benefits in accordance with the Corporation’s vacation policy, but in no event less than four weeks of paid vacation per year, to be accrued in accordance with the Corporation’s vacation policy in effect from time to time, and such additional leave time as is customarily granted to the other executive officers of the Corporation.

 

8.             Non-Disclosure of Confidential Information.  For purposes of this Agreement, “Confidential Information” shall mean any trade secret, confidential, proprietary, or non-public information and materials concerning the Corporation and/or its clients, whether such information  or materials are memorized, memorialized in any manner, in hard copy, electronic, or other form, or that qualifies as confidential, restricted, or for internal use only pursuant to Corporation guidelines or the Employee Handbook; the Corporation’s products, business strategies, know-how designs, formulas, processes, and methods; research; marketing; pricing; business relationships; software, software code and other technologies; forecasts; margins; confidential information of other employees; plans and proposals; client information (including but not limited to lists of clients, client names, contact information, personal data or identifying numbers; financial data; historical information; preferences and strategies, as well as any compilations of same); and any other non-public, technical, non-technical, or business information, whether written or oral.  Executive acknowledges that the Corporation maintains much of its Confidential Information on its secured network and that the Confidential Information provides a competitive advantage to the Corporation.  The term “Confidential Information” does not include information that (a) has become known to the public generally through no fault of Executive, or (b) the Corporation regularly provides to third parties without restriction on use or disclosure.

 

To assist Executive in the performance of his duties, the Corporation agrees to provide and shall provide Executive with Confidential Information and materials as a result of his signing this Agreement,

 

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with such Confidential Information being in addition to any such information Executive received from the Corporation prior to signing this Agreement.  Executive acknowledges that he is receiving other good and valuable consideration, the adequacy of which Executive hereby expressly acknowledges.

 

Due to the sensitive nature of this Confidential Information, Executive acknowledges that the Corporation has legitimate business and competitive interests and legal rights to require non-disclosure of the Confidential Information to other companies and/or individuals and to require that the Confidential Information be used only for the Corporation’s benefit and, in the event of a client, the Confidential Information’s intended use.  Executive agrees that he will not at any time, either during or after his employment by the Corporation (except as authorized by the Corporation), divulge or disclose, directly or indirectly, to any person, firm, association or corporation other than bona fide employees of the Corporation or use for Executive’s own benefit, gain or otherwise, Confidential Information, unless compelled to do so by subpoena, judicial process or other governmental proceeding.  In the event Executive is compelled to make such disclosure, he will promptly provide written notice to the Corporation.

 

Executive, in the course of his employment for the Corporation, may disclose Confidential Information to legal counsel or those providing accounting services, financial services, venture capital services and similar professional services to the Corporation where there is a legitimate business need.

 

Executive also recognizes that the Corporation may receive from third parties, including customers, vendors, and business associates, their confidential or proprietary information subject to a duty on the Corporation’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Executive agrees to hold all such information in the strictest confidence and not to disclose it to any person, firm, or corporation or to use it except as necessary in carrying out Executive’s work for the Corporation consistent with the Corporation’s agreement with the third party that provided the confidential and proprietary information.

 

Executive represents that Executive’s employment by the Corporation does not and will not breach any agreement between Executive and any former employer, including any non-compete agreement or any agreement to keep in confidence or refrain from using information acquired by Executive prior to Executive’s employment by the Corporation. During Executive’s employment by the Corporation, Executive agrees that Executive will not violate any non-solicitation agreements Executive entered into with any former employer or third party, nor will Executive bring onto the premises of the Corporation or use any unpublished documents or any property belonging to any former employer or other third party, in violation of any lawful agreements with that former employer or third party.

 

9.           Agreement Not to Compete With the Corporation.   In order to protect the Corporation’s Confidential Information, and the Corporation’s business goodwill and competitive position, and in exchange for the Corporation providing Executive the consideration set forth herein, Executive agrees that during his employment with the Corporation, and for a period of 12 months following the termination of his relationship with the Corporation for any reason, Executive shall not, directly or indirectly, either as an employee, employer, consultant, agent, principal, partner, stockholder, corporate officer, director, or in any other individual or representative capacity, engage or participate in any business that is in competition in any manner whatsoever with the business of the Corporation.  For purposes of Sections 9 and 10, the terms “competition,” “compete” or “competing” mean engaging in the same or substantially similar business as (1) the Corporation’s or any of its Affiliates’ business of online ad serving and campaign management, including display, video, mobile and rich media, (2) any trading business that is fully integrated and packaged with an online ad serving and

 

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campaign management business, or any business providing a buy side real time bidding system connected to an ad management platform or providing solutions or services for outsourced media buying using a real time bidding system, or (3) any business providing solutions and services such as those provided by Peer39, Inc. in any manner whatsoever (other than as a passive investor), including without limitation, as a proprietor, partner, investor, shareholder, director, officer, employee, consultant, independent contractor, or otherwise.  “Affiliate” is defined as any legal entity that, directly or indirectly through one more intermediaries, controls, is controlled by, or is under the common control of the Corporation.

 

Executive acknowledges that the Corporation conducts its business on a worldwide basis, and that the restrictions contained in this Agreement are reasonable and necessary to the extent they are deemed to apply to any location in which the Corporation conducts business or conducted business during the period of Executive’s employment.

 

10.          Agreement Not to Solicit the Corporation’s Customers.   In order to protect the Corporation’s Confidential Information, and the Corporation’s business goodwill and competitive position, and in exchange for the Corporation providing Executive the consideration set forth herein, Executive agrees that, for a period of 12 months following the termination of his relationship with the Corporation for any reason, he shall not, either directly or indirectly, use the Corporation’s Confidential Information to call on, service, solicit, or accept competing business from the Corporation’s customers or prospective customers whom or which Executive, within the previous two (2) years, had or made contact with, in any form whatsoever, regarding the Corporation’s business.  Executive further agrees that he shall not assist any other person or entity in such a solicitation using the Corporation’s Confidential Information.

 

11.          Agreement Not to Recruit Other Employees.  In order to protect the Corporation’s Confidential Information, and the Corporation’s business goodwill and competitive position, and in exchange for the Corporation providing Executive the consideration set forth herein, Executive agrees that during his employment with the Corporation and for a period of 12 months following the end of Executive’s employment with the Corporation for any reason, he shall not, either directly or indirectly, call on, recruit, solicit, or induce any employee, contractor or officer of the Corporation whom Executive had contact with in the course of his employment with the Corporation to terminate his relationship with the Corporation, and will not assist any other person or entity in such a solicitation.  Executive further agrees that he will not discuss, by any means whatsoever, with any such employee, contractor or officer of the Corporation the termination of such individual’s relationship with the Corporation, during the time period set forth above.

 

12.          Reasonableness of and Remedies for Breach of Executive’s Covenants of Non-Disclosure and Non-Competition.  Executive has carefully read and considered the provisions of Sections 8, 9, 10, 11 and 14, and, having done so, agrees and acknowledges that the foregoing restrictions limit his ability to engage in competition in the geographic region and during the period provided for above.  Executive expressly warrants and represents that these restrictions with respect to time, geographic territory, and scope of activity are reasonable and necessary to protect the trade secrets of the Corporation and its parent or subsidiary corporations, officers, directors, shareholders and other employees, the Confidential Information the Corporation has agreed to provide to Executive, and the Corporation’s business goodwill and competitive position.

 

(a)           In the event that, notwithstanding the foregoing, any of the provisions of Sections 8, 9, 10, 11 and 14 shall be held to be invalid or unenforceable, the remaining provisions thereof shall nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not

 

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been included therein.  In the event that any provision of Sections 8, 9, 10, 11 and 14 shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems reasonable and enforceable, the time period and/or areas of restriction and/or related aspects deemed reasonable and enforceable by the court shall become and thereafter be the maximum restriction in such regard, and the restriction shall remain enforceable to the fullest extent deemed reasonable by such court.

 

(b)           In the event of a breach of any of the covenants in Sections 8, 9, 10, 11 and 14, the Corporation shall have the right to seek monetary damages for any such breach.  In addition, in the event of a breach or threatened breach of any of the covenants in Sections 8, 9, 10, 11 and 14, the Corporation shall have the right to seek equitable relief, including specific performance by means of an injunction against Executive or against Executive’s partners, agents, representatives, servants, employers, employees, and/or any and all persons acting directly or indirectly by or with him, to prevent or restrain any such breach.

 

13.          Notice to Subsequent Employer.  While the restrictive covenants described in Sections 8, 9, 10, 11 and 14 are in effect, Executive agrees to advise all future employers and business partners of the restrictions and obligations contained in this Agreement.  Executive further authorizes the Corporation to notify others of said restrictions, including customers of the Corporation and Executive’s future employers and business partners.  Notification of customers or Executive’s future employers or business partners of the terms of this Agreement shall not give rise to any claim in tort or contract against the Corporation by Executive, provided such notification is determined by the Corporation in good faith to be reasonably necessary for the Corporation to protect its Confidential Information, or to prevent the violation of any covenant not to compete, or violation of the prohibition of solicitation of customers or employees of the Corporation by Executive.

 

14.          Inventions.  Attached hereto as Exhibit A is a list describing all inventions, original works of authorship, developments, improvements and trade secrets which were made by Executive prior to his employment with the Corporation (“Prior Inventions”), which belong to Executive, which relate to the Corporation’s proposed business, products, or research and development, and which are not assigned to the Corporation hereunder; or, if no such list is attached, Executive represented that there are no such Prior Inventions.  If in the course of Executive’s employment with the Corporation, Executive incorporates into a Corporation product, process or machine a Prior Invention owned by Executive or in which Executive has an interest, the Corporation is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license to make, have made, modify, use or sell such Prior Invention as part of or in connection with such product, process or machine.

 

Executive agrees that he will promptly make full written disclosure to the Corporation, will hold in trust for the sole right and benefit of the Corporation, and hereby assign to the Corporation, or its designee, all Executive’s right, title, and interest in and to any and all inventions, original works of authorship, developments, concepts, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which Executive solely or jointly conceives or develops or reduces to practice, during the period of time Executive is in the employ of the Corporation (collectively referred to as “Inventions”).  Executive agrees to assist the Corporation, or its designee, at the Corporation’s sole expense, including but not limited to reasonable attorney’s fees, if any, incurred by Executive, in every proper way to secure the Corporation’s rights in the Inventions and any copyrights, patents, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Corporation of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments and all other instruments which the Corporation shall deem necessary in order to apply for and obtain such rights and in order to assign and convey to the Corporation the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, or other intellectual property rights relating thereto.  Executive further agrees that his obligation

 

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to execute or cause to be executed, when it is in his power to do so, any such instrument or papers shall continue after the termination of this Agreement.

 

15.          Termination; Notice of Termination.  Employment of Executive under this Agreement may/will be terminated:

 

(a)           By Executive’s death.

 

(b)           If Executive is “Totally Disabled.”  For the purposes of this Agreement, Executive will be totally disabled if he is “totally disabled” as defined in and for the period necessary to qualify for benefits under any disability income insurance policy and any replacement policy or policies covering Executive and Executive has been declared to be totally disabled by the insurer.  Notwithstanding the foregoing, Executive shall be deemed “totally disabled” if he is unable to perform his duties hereunder for any consecutive 90 day period or for any 180 days during a 360 day period.

 

(c)           By voluntary resignation of Executive, whether or not for Good Reason.  For purposes of this Agreement, the term “Good Reason” shall mean a termination of the Executive’s employment hereunder if any of the following events occur without the Executive’s express written consent: (i) the assignment to Executive of duties inconsistent with the title of Chief Executive Officer and President, the removal of the Executive from such office or any reduction in title or any reduction (other than a de minimis reduction) in the current scope, or degradation (other than a de minimis degradation) of, Executive’s current job responsibilities, duties or functions or material reduction in his support staff; (ii) the material reduction of Executive’s then-current Base Salary or target Annual Incentive; (iii) the relocation of Executive’s principal place of employment to a location more than 20 miles from Executive’s then-current principal place of employment, or the transfer of Executive’s principal place of employment to a place other than the Corporation’s Irving, Texas offices (excepting reasonable travel on the Corporation’s business); provided that a relocation to Austin, Texas or within 20 miles thereof shall not constitute Good Reason; or (iv) any material breach by the Corporation or any of its subsidiaries of this Agreement.  Executive must provide written notice to the Corporation of the occurrence of any of the foregoing events or conditions without Executive’s written consent within 90 days of the occurrence of such event.  The Corporation or any successor or affiliate shall have a period of 30 days to cure such event or condition after receipt of written notice of such event from Executive.  Any voluntary termination of employment for “Good Reason” following such 30-day cure period must occur no later than the date that is six months following the initial occurrence of one of the foregoing events or conditions without Executive’s written consent.

 

(d)           By the dissolution and liquidation of the Corporation (other than as part of a reorganization, merger, consolidation or sale of all or substantially all of the assets of the Corporation whereby the business of the Corporation is continued).

 

(e)           By the Corporation for Cause.  This Agreement and Executive’s employment with the Corporation may be terminated for Cause at any time.  For purposes of this Agreement, “Cause” shall mean only the following:  (i) a conviction of or a plea of guilty or nolo contendre by Executive to a non-motor vehicle felony or an act of fraud, embezzlement or theft or other criminal conduct against the Corporation; (ii) habitual neglect of Executive’s material duties or failure by Executive to perform or observe any substantial lawful obligation of such employment that is not remedied within 30 days after written notice thereof from  the Board; or (iii) any material breach by the Executive of this Agreement.  Should Executive dispute whether he was terminated for Cause, then the Corporation and the Executive shall enter immediately into binding arbitration pursuant to Section 23.

 

(f)            By the Corporation at any time without Cause.

 

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(g)           Any termination of Executive’s employment shall be communicated by a written “Notice of Termination.”  Such notice shall indicate a specific termination provision in this Agreement which is relied upon, recite the facts and circumstances claimed to provide the basis for such termination, if applicable and specify the date of termination, which shall not pre-date such notice.  In addition, (i) if such Notice of Termination is submitted by Executive, the date of termination specified in such Notice of Termination shall not be earlier than 60 days following the date of such Notice of Termination, and (ii) if such Notice of Termination is submitted by the Corporation in connection with a termination of Executive’s employment without Cause pursuant to Section 15(f), the date of termination specified in such Notice of Termination shall not be earlier than 60 days following the date of such Notice of Termination.  As used in the Agreement, “Date of Termination” shall mean the date of termination specified in the Notice of Termination; provided, however, that if Executive ceases to perform his duties hereunder following the delivery of a Notice of Termination by Executive or the Corporation but before the date of termination specified therein, “Date of Termination” shall mean the date Executive ceases to perform his duties hereunder.

 

16.        Payments Upon Termination.  Payments to Executive upon termination shall be limited to the following:

 

(a)           If Executive is terminated due to (i) voluntary resignation pursuant to Section 15(c) other than for Good Reason, (ii) dissolution and liquidation of the Corporation pursuant to Section 15(d) other than in conjunction with a Change in Control, or (iii) for Cause pursuant to Section 15(e), Executive shall be entitled to (A) all arrearages of Base Salary through the Date of Termination, payable on the Date of Termination, (B) any accrued but unused vacation through the Date of Termination, payable on the Date of Termination, (C) any Annual Incentive earned but not paid prior to the Date of Termination, payable in a lump sum payment on the date on which Annual Incentives for the calendar year to which such Annual Incentive relates are paid to the Corporation’s executive officers generally, but in all events such payment shall be made no later than  March 15 of the calendar year following the calendar year in which the Date of Termination occurs, plus (D) all other benefits, if any, under any group retirement plan, health benefits plan or other group benefit plan maintained by the Corporation or its subsidiaries and any reimbursement of expenses pursuant to Section 6 to which Executive may be entitled pursuant to the terms of such plans or agreements at the time of Executive’s Date of Termination  payable in accordance with the applicable plans and the Corporation’s customary policies as in effect from time to time (collectively, the “Accrued Obligations”), but shall not be entitled to further compensation.

 

(b)           If Executive is terminated due to death or Total Disability pursuant to Section 15(a) or 15(b), respectively, Executive shall be entitled to:

 

(i)            the Accrued Obligations;

 

(ii)           payment of an amount equal to any Annual Incentive to which Executive would have been entitled to receive for the calendar year in which Executive’s Date of Termination occurs had Executive remained employed by the Corporation pursuant to this Agreement, which Annual Incentive shall be determined by the Board or the Compensation Committee thereof based on the Corporation’s performance for such calendar year and in accordance with the terms of the applicable Annual Incentive program for such calendar year, payable in a lump sum payment on the date on which Annual Incentives for the calendar year in which the Date of Termination occurs are paid to the Corporation’s executive officers generally, but in all events such payment shall be made no later than March 15 of the calendar year following the calendar year in which the Date of Termination occurs; and

 

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(iii)          (A)          the vesting and/or exercisability of each of Executive’s outstanding Long-Term Incentive Awards (as defined below) (other than Performance Awards (as defined below)) shall be accelerated, with such acceleration to be effective as of Executive’s Date of Termination; and

 

(B)          unless otherwise provided in any agreement evidencing a Performance Award, with respect to each outstanding Performance Award held by Executive as of his Date of Termination, Executive (or his estate, if applicable) shall remain eligible to vest in such portion of the Performance Award as is attributable to the performance period(s) then-underway and scheduled to terminate on or prior to December 31 of the calendar year during which Executive’s Date of Termination occurs (the “Current Performance Period(s)”) in accordance with the terms of such Performance Award based on actual performance relative to the performance goals applicable to the Current Performance Period(s), which vesting and, if applicable, settlement shall be effective on the last day of the Current Performance Period(s) (or such other vesting and/or settlement date as may be provided in the agreement evidencing the Performance Award); provided, however, that in no event shall the vesting and, if applicable, settlement of such Award be effective later than March 15 of the calendar year following the calendar year in which Executive’s Date of Termination occurs. Any unvested portion of an outstanding Performance Award that is not eligible to vest based on the Current Performance Period(s) shall terminate as of Executive’s Date of Termination except as otherwise provided in any of the Corporation’s plan(s) and/or the award agreements under which any of Executive’s Long-Term Incentive Awards were granted.

 

Nothing in this Section 16(b)(iii) shall be construed to limit any more favorable vesting applicable to Executive’s Long-Term Incentive Awards in the Corporation’s plan(s) and/or the award agreements under which the Long-Term Incentive Awards were granted.  The foregoing provisions are hereby deemed to be a part of each Long-Term Incentive Award and, unless expressly superseded by the terms of any agreement evidencing a Performance Award, to supersede any less favorable provision in any agreement or plan regarding such Long-Term Incentive Award.  For purposes of this Agreement, “Long-Term Incentive Awards” means all stock options, restricted stock, restricted stock units and such other long-term incentive awards granted pursuant to the Corporation’s equity incentive award plans, long-term incentive award plans or agreements and any shares of stock issued upon exercise thereof.  For purposes of this Agreement, “Performance Awards” means any Long-Term Incentive Awards granted pursuant to the Corporation’s performance-based compensation plan or pursuant to any plan or agreement that Executive has entered into with the Corporation providing the payment, vesting or settlement of which is based upon the Executive’s or the Corporation’s performance.

 

(c)           If Executive is terminated by the Corporation without Cause, or Executive terminates his employment for Good Reason, then the Executive shall be entitled to receive the following payments and benefits:

 

(i) all Accrued Obligations;

 

(ii) subject to Executive’s execution and non-revocation of a full and final Release (as defined in Section 16(d) below), severance equal to the sum of (A) 12 months’ Base Salary at the rate in effect on the date of termination (or, if the Executive has terminated his employment for Good Reason due to a reduction in Base Salary, his Base Salary prior to such reduction), plus (B) an amount equal to Executive’s target Annual Incentive for the year in which the Date of Termination occurs, which amount shall be payable in a lump sum on the date that is 60 days following the Executive’s Date of Termination; and

 

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(iii)          (A)          the vesting and/or exercisability of such portion of Executive’s outstanding Long-Term Incentive Awards (other than Performance Awards) as would have vested with respect to the calendar year during which the Date of Termination occurs had Executive remained employed through the last day of such calendar year, pro-rated based on the number of full calendar quarters that Executive was employed during such calendar year prior to the Date of Termination, shall be accelerated, with such acceleration and, if applicable, settlement to be effective as of Executive’s Date of Termination; and

 

(B)          the Pro-Rata Portion (as defined below) of Executive’s outstanding Performance Awards that would have been eligible to vest with respect to the performance period(s) then-underway shall (1) remain outstanding and eligible to vest subject to the attainment of the performance measures as provided under the terms of the applicable award agreement, (2) only vest, in whole or in part, upon the attainment of such performance measures (with any performance multipliers only applied to the applicable Pro-Rata Portion), and (3) to the extent all or a portion of the applicable Pro-Rata Portion vests, become exercisable and/or payable at the time originally scheduled to be exercisable and/or paid under the terms of the applicable award agreement. Any unvested portion of an outstanding Performance Award that is not eligible to vest based on the this Section 16(c)(iii)(B) shall terminate as of Executive’s Date of Termination except as otherwise provided in any of the Corporation’s plan(s) and/or the award agreements under which any of Executive’s Long-Term Incentive Awards were granted.  “Pro-Rata Portion” shall mean for each performance period under a Performance Award that portion of the applicable Performance Award determined by multiplying the maximum amount payable pursuant to the performance period under the applicable Performance Award by a fraction, (i) the numerator of which is the number of full calendar quarters that Executive was employed during such performance period through the Date of Termination, and (ii) the denominator of which is the total number of full calendar quarters during such performance period; and

 

(C)          in the event such termination without Cause or resignation for Good Reason occurs following a Change in Control (as defined in the Corporation’s 2014 Incentive Award Plan), the vesting and/or exercisability of each of Executive’s outstanding Long-Term Incentive Awards shall be accelerated, with such acceleration and, if applicable, settlement to be effective as of Executive’s Date of Termination.

 

Nothing in this Section 16(b)(iii) shall be construed to limit any more favorable vesting applicable to Executive’s Long-Term Incentive Awards in the Corporation’s plan(s) and/or the award agreements under which the Long-Term Incentive Awards were granted.  The foregoing provisions are hereby deemed to be a part of each Long-Term Incentive Award and to supersede any less favorable provision in any agreement or plan regarding such Long-Term Incentive Award.

 

(d)           Notwithstanding any provision to the contrary in this Agreement, no amount shall be paid or benefit provided pursuant to Section 16(b)(ii) or (iii) or Section 16(c)(ii) or (iii) above and no accelerated vesting of any Long-Term Incentive Awards shall occur pursuant to Schedule 1 unless, on or prior to the 60th day following the date of Executive’s Date of Termination, an effective general release of claims agreement (the “Release”) in substantially the form attached hereto as Exhibit B has been executed by Executive (or, in the event of Executive’s death or incapacity due to Total Disability, his legal representative) and remains effective on such date and any applicable revocation period thereunder has expired.

 

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17.         Additional Termination Provisions.

 

(a)           Payment Delay.  Notwithstanding anything to the contrary in this Agreement, to the extent any payments to Executive pursuant to this Agreement are non-qualified deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then (i) to the extent required by Section 409A of the Code, no amount shall be payable unless Executive’s termination of employment constitutes a Separation from Service (as defined below), and (ii) if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (B) the date of Executive’s death.  Upon the earlier of such dates, all payments deferred pursuant to this Section 17(a) shall be paid in a lump sum to Executive.  The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall made by the Corporation in accordance with the terms of Section 409A of the Code and applicable guidance thereunder (including without limitation Treas. Reg. Section 1.409A-1(i) and any successor provision thereto).  For purposes of this Agreement, a “Separation from Service” shall mean Executive’s “separation from service” with the Corporation as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto.

 

(b)           Exceptions to Payment Delay.  Notwithstanding Section 17(a), to the maximum extent permitted by applicable law, amounts payable to Executive pursuant to this Agreement shall be made in reliance upon Treasury Regulation Section 1.409A-1(b)(9) (with respect to separation pay plans) or Treasury Regulation Section 1.409A-1(b)(4) (with respect to short-term deferrals).

 

(c)           Resignation Upon Termination. In the event of termination of this Agreement other than for death, Executive hereby agrees to resign from all positions held in the Corporation, including without limitation any position as a director, officer, agent, trustee or consultant of the Corporation or any subsidiary or affiliate of the Corporation.  Said resignation will be effective immediately upon the termination of this Agreement, unless the parties mutually agree in writing to a modified resignation date or dates.

 

18.          In-Kind Benefits and Reimbursements.  Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any tax year of Executive shall not affect in-kind benefits or reimbursements to be provided in any other tax year of Executive and are not subject to liquidation or exchange for another benefit.  Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be made to Executive in accordance with the Corporation’s reimbursement policy, but in no event later than the last day of Executive’s taxable year following the taxable year in which the expense was incurred.  In no event shall Executive be entitled to any reimbursement payments after the last day of Executive’s taxable year following the taxable year in which the expense was incurred.  This Section shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.

 

19.          Section 409A; Separate Payments; No Acceleration.  This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties.  In no event shall the Corporation be required to provide a tax gross-up payment to Executive

 

10

 

or otherwise reimburse Executive with respect to Section 409A Penalties.  For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each series of installment payments Executive may be eligible to receive under this Agreement shall be treated as a series of “separate payments” within the meaning of Section 409A of the Code.  No payment under this Agreement shall be made at a time earlier than that provided for in this Agreement unless such payment is (i) an acceleration of payment permitted to be made under Treasury Regulation §1.409A-3(j)(4) or (ii) a payment that would otherwise not be subject to additional taxes and interest under Section 409A.

 

20.          Waiver; Notice.  A party’s failure to insist on compliance or enforcement of any provision of this Agreement shall not affect the validity or enforceability or constitute a waiver of future enforcement of that provision or of any other provision of this Agreement by that party or any other party.  Any and all notices required or permitted herein shall be deemed delivered if delivered personally or if mailed by registered or certified mail to the Corporation and Executive at the respective addresses provided on the signature page of this Agreement, or at such other address or addresses as either party may hereafter designate in writing to the other.

 

21.        Governing Law; Severability.  This Agreement shall in all respects be subject to, and governed by, the laws of the State of Texas.  The invalidity or unenforceability of any provision in the Agreement shall not in any way affect the validity or enforceability of any other provision and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had never been in the Agreement.

 

22.          Amendments; Assignment.  This Agreement may be amended at any time by mutual consent of the parties hereto, with any such amendment to be invalid unless in writing, signed by the Corporation and Executive.  This Agreement, together with any amendments hereto, shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs and personal representatives, except that the rights and benefits of either of the parties under this Agreement may not be assigned without the prior written consent of the other party, provided that the Corporation may assign this Agreement to any affiliate of or successor to the Corporation.

 

23.          Arbitration.

 

(a)           Generally.  Except as otherwise provided in Section 12 of this Agreement or as otherwise required by law, any dispute, claim, question or controversy arising under or relating to this Agreement, Executive’s employment with the Corporation or the termination thereof (each such dispute, claim, question or controversy, a “Dispute”) shall be resolved by submitting such Dispute to binding arbitration administered by JAMS pursuant to its Employment Arbitration Rules and Procedures and subject to its Employment Arbitration Minimum Standards of Procedural Fairness (collectively, the “Rules”), and pursuant to the procedures set forth in this Section 23.  In the event of any conflict between the Rules and the procedures set forth in this Section 23, the procedures set forth in this Section 23 shall control.  Any such arbitration shall be brought within any otherwise applicable statute of limitations period, and shall be the sole and exclusive means for resolving such Dispute (other than for injunctive relief pursuant to Section 12 of this Agreement or as otherwise required by law).

 

(b)           Procedures.  Any arbitration shall be held in Dallas, Texas and conducted before a single neutral arbitrator selected by mutual agreement of the parties hereto within 30 days of the initiation of the arbitration or, if they are unable to agree, by JAMS under its rules.  The arbitrator shall take submissions and hear testimony, if necessary, and shall render a written decision as promptly as practicable.  The arbitrator may grant any legal or equitable remedy or relief the arbitrator deems just and equitable, to the same extent that remedies or relief could be granted by a state or federal court in the

 

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United States.  The decision of the arbitrator shall be final, binding and conclusive on all parties and interested persons.  It is the intention of the parties hereto that they shall be entitled to fair and adequate discovery in accordance with the Federal Rules of Civil Procedure.  The parties hereto shall keep confidential the fact of the arbitration, the dispute being arbitrated, and the decision of the arbitrator.

 

(c)           Enforcement; Costs.  Judgment upon the award rendered by the arbitrator may be entered in any court having competent jurisdiction. All direct costs and expenses of the arbitration, including the arbitrator’s fee, shall be paid by the Corporation regardless of who initiates the arbitration, and each party shall pay their own respective attorneys’ fees and disbursements. This arbitration clause constitutes a waiver of either party’s right to a jury trial for all disputes relating to all aspects of the employer/employee relationship including, without limitation, claims for wrongful discharge, breach of contract, or claims relating to violation of any laws and regulations relating to employment discrimination or harassment.

 

24.          Headings.  The various headings in this Agreement are inserted for convenience only and are not part of the Agreement.

 

25.          Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be original, but all of which together will constitute one and the same Agreement.

 

26.        Entire Agreement.  This Agreement revokes and replaces all agreements previously entered into by the parties hereto, if any, whether oral or written, regarding Executive’s employment with the Corporation and its subsidiaries other than the Indemnification Agreement between Executive and the Corporation dated February 5, 2014.  Any modification of this Agreement shall be effective only if it is in writing and signed by the party to be charged.  In the event of any conflict between the terms of this Agreement and the terms of any policy, plan, or program by the Corporation and its subsidiaries, including the Employee Handbook, the terms of this Agreement shall govern. With respect to any continuing rights and obligations as between the Corporation and Executive pursuant to the Employment Agreement between Executive and Digital Generation, Inc. effective January 1, 2012, as amended on January 24, 2013 (the “DG Agreement”), this Agreement supersedes, replaces and overrides the DG Agreement.

 

27.          Clawback.  All compensation received by Executive shall be subject to the provisions of any clawback policy implemented by the Corporation to comply with applicable law or regulation (including stock exchange rules), including, without limitation, any claw-back policy adopted to comply with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder.

 

28.          Right to Legal Counsel.  This Agreement has been drafted by legal counsel representing the Corporation, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges Executive has had an opportunity to review the Agreement and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Corporation and Executive have duly executed this Agreement as of the day and year first above written.

 

 

	
 
    	
CORPORATION:
    
	
 
    	
 
    
	
 
    	
Sizmek   Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Sean Markowitz
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Sean   Markowitz
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
General   Counsel & Corporate Secretary
    
	
 
    	
 
    
	
Address   for Notice Purposes:
    	
 
    
	
 
    	
 
    
	
Sizmek   Inc.
    	
 
    
	
750   West John Carpenter Freeway
    	
 
    
	
Suite 400
    	
 
    
	
Irving,   Texas 75039
    	
 
    
	
Attention:   Chairman of the Board
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Neil Nguyen
    
	
 
    	
 
    
	
 
    	
Printed   Name:   Neil Nguyen
    
	
 
    	
 
    
	
Address   for Notice Purposes:
    	
 
    
	
 
    	
 
    
	
1200   LAMBETH LN.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
LEWISVILLE,   TX 75056
    	
 
    

 

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Schedule 1

 

Additional Compensation

 

Annual Incentive.

 

Beginning in calendar year 2014, Executive shall be eligible for an annual incentive in a target amount of 100% of Base Salary (the “Annual Incentive”). The annual target incentive criteria shall be 80% based upon the Corporation’s achievement of financial objectives, which will include revenue and EBITDA, and 20% based on individual and management objectives. The exact detail regarding these criteria shall be determined in the sole discretion of the Corporation, after consultation with Executive.  Any such Annual Incentive so awarded shall be based upon a tiered schedule of achievement for the particular Annual Incentive year, as determined by the Compensation Committee.

 

Any Annual Incentive that becomes payable pursuant to this Schedule 1 shall be paid in conjunction with the timing of the corporate Annual Incentive process in effect at such time no later than March 15 of the year following the year for which such Annual Incentive was earned. Notwithstanding anything to the contrary contained in this Agreement or any applicable Annual Incentive plan, program or arrangement, but except as provided in Section 16, Executive shall be entitled to receive any such Annual Incentive only if Executive is employed on the last business day of the fiscal year to which the Annual Incentive relates.

 

Annual Long-Term Incentive Award.  Beginning with the year 2014, and during each year Executive will be eligible for an annual Long-Term Incentive Award, based on performance, to be determined in conjunction with an annual market benchmark review. Subject to Executive’s compliance with Section 16(d), there shall be accelerated vesting of 100% of all outstanding Long-Term Incentive Awards upon Executive’s termination of employment by the Corporation without Cause or Executive’s resignation for Good Reason, in each case following a Change in Control (as defined in the Corporation’s 2014 Incentive Award Plan).  Any additional equity acceleration may be set forth in the applicable award agreements evidencing the Long-Term Incentive Awards granted to Executive.

 

 

EXHIBIT A

 

LIST OF PRIOR INVENTIONS AND ORIGINAL WORKS OF AUTHORSHIP

 

	
Title
    	
 
    	
Date
    	
 
    	
Identifying Number or Brief Description
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
x
    	
no   inventions or improvements
    
	
 
    	
 
    
	
o
    	
additional   sheets attached
    

 

 

DATED: April 14, 2014

 

	
Signature   of Executive:
    	
/s/   Neil Nguyen
    	
 
    
	
 
    	
 
    	
 
    
	
Printed   Name of Executive:
    	
Neil   Nguyen
    	
 
    
				

 

 

EXHIBIT B

 

GENERAL RELEASE OF CLAIMS

 

[The language in this Release may change based on legal developments and evolving best practices; this form is provided as an example of what will be included in the final Release document.]

 

This GENERAL RELEASE OF CLAIMS (this “Release”) is entered into as of this            day of                 ,         , between Neil Nguyen (“Executive”), and Sizmek Inc., a Delaware corporation (the “Corporation”).

 

WHEREAS, Executive and the Corporation are parties to that certain Employment Agreement dated as of April     , 2014 (the “Agreement”);

 

WHEREAS, the parties agree that Executive is entitled to certain severance benefits under the Agreement, subject to Executive’s execution and non-revocation of this Release on the terms and conditions set forth herein and in the Agreement; and

 

WHEREAS, the Corporation and Executive now wish to fully and finally to resolve all matters between them.

 

NOW, THEREFORE, in consideration of, and subject to, the severance benefits payable to Executive pursuant to the Agreement, the adequacy of which is hereby acknowledged by Executive, and which Executive acknowledges that he would not otherwise be entitled to receive, the parties hereby agree as follows:

 

1.             General Release of Claims by Executive.

 

(a)           Executive, on behalf of himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Corporation and all predecessors, successors and their respective parent corporations, affiliates, related, and/or subsidiary entities, and all of their past and present investors, directors, shareholders, officers, general or limited partners, employees, attorneys, agents and representatives, and the employee benefit plans in which Executive is or has been a participant by virtue of his employment with or service to the Corporation (collectively, the “Corporation Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date hereof or, on or prior to the date hereof, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever Executive’s employment by or service to the Corporation (including any affiliate of the Corporation) or the termination thereof, including any and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and claims of any kind that may be brought in any court or administrative agency including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C.

 

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Section 206(d); regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; and the Executive Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.

 

Notwithstanding the generality of the foregoing, Executive does not release the following claims:

 

(i)            Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

 

(ii)           Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Corporation;

 

(iii)          Claims pursuant to the terms and conditions of the federal law known as COBRA or similar state law;

 

(iv)          Claims for indemnity under the bylaws of the Corporation, as provided for by Texas or Delaware law, under Executive’s Indemnification Agreement with the Corporation dated February 5, 2014, or under any applicable insurance policy with respect to Executive’s liability as an employee, director or officer of the Corporation;

 

(v)           Claims based on any right Executive may have to enforce the Corporation’s executory obligations under the Agreement; and

 

(vi)          Claims Executive may have to vested or earned compensation and benefits.

 

(b)           Executive acknowledges this Release was presented to him on                   , 20    , and that Executive is entitled to 21 days’ time in which to consider it.  Executive further acknowledges the Corporation has advised him that he is waiving his rights under the ADEA, and that Executive should consult with an attorney of his choice before signing this Release, and Executive has had sufficient time to consider the terms of this Release.  Executive represents and acknowledges that if Executive executes this Release before 21 days have elapsed, Executive does so knowingly, voluntarily, and upon the advice and with the approval of Executive’s legal counsel (if any), and that Executive voluntarily waives any remaining consideration period.

 

(c)           Executive understands that after executing this Release, Executive has the right to revoke it within 7 days after his execution of it.  Executive understands this Release will not become effective and enforceable unless the 7-day revocation period passes and Executive does not revoke the Release in writing.  Executive understands this Release may not be revoked after the 7-day revocation period has passed.  Executive also understands any revocation of this Release must be made in writing and delivered to the Corporation at its principal place of business within the 7 day period.  In the event any payments are made or benefits provided by the Corporation pursuant to Section 16(b)(ii) or (iii) or Section 16(c)(ii) of the Agreement or pursuant to Schedule 1 to the Agreement prior to the effective date of this Release and Executive revokes this Release pursuant to this Section 1(c) thereafter, Executive shall immediately repay to the Corporation any such amounts.  Executive hereby acknowledges and agrees Executive’s revocation right pursuant to this Section 1(c) does not apply to this sentence, which shall survive any revocation of this Release by Executive.

 

(d)           Executive understands this Release shall become effective, irrevocable, and binding upon Executive on the eighth day after his execution of it, so long as Executive has not revoked it

 

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within the time period and in the manner specified in clause (d) above.  Executive further understands Executive will not be given any severance benefits under the Agreement unless this Release is effective on or before the date that is 60 days following the Executive’s Date of Termination (as defined in the Agreement).

 

2.             No Assignment.  Executive represents and warrants to the Corporation Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Corporation Releasees.  Executive agrees to indemnify and hold harmless the Corporation Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive.

 

3.             Severability.  Whenever possible, each provision of this Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Release is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Release or the validity, legality or enforceability of such provision in any other jurisdiction, but this Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

4.             Arbitration.  This Release shall be subject to arbitration as set forth in Section 23 of the Agreement.

 

5.             Governing Law.  This Release shall in all respects be subject to, and governed by, the laws of the State of Texas.

 

6.             Entire Agreement.  This Release and the Agreement shall constitute the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof and supersede and preempt any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof or thereof.

 

7.             Amendment and Waiver.  The provisions of this Release may be amended or waived only by the written agreement of the Corporation and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Release shall affect the validity, binding effect or enforceability of this Release.

 

8.             Counterparts.  This Release may be executed in two counterparts, each of which shall be deemed to be an original and both of which together shall constitute one and the same instrument.  The parties hereto agree to accept a signed facsimile copy or portable document format of this Release as a fully binding original.

 

9.             Headings.  The headings set forth in this Release are for convenience only and shall not be used in interpreting this Release.  Either party’s failure to enforce any provision of this Release shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Release.

 

10.          Right to Legal Counsel.  This Release has been drafted by legal counsel representing the Corporation, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges Executive has had an opportunity to review this Release and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Release.

 

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[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Release as of the date first written above.

 

	
 
    	
CORPORATION:
    
	
 
    	
 
    
	
 
    	
Sizmek   Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXECUTIVE:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Printed   Name:  Neil Nguyen
    

 

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