Document:

Proofpoint-12312014-Ex1005

Proofpoint, Inc.                                    Corporate Bonus Program

 
Proofpoint, Inc.

Corporate Bonus Program

Program Objective

		
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	Align leadership and executives to key metrics driving the growth and success of the business. 

Program Administration

		
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	The Compensation Committee of the Board is chartered with oversight for the bonus plan and the program metrics.

		
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	The program structure and payout for each program period will be approved by the Compensation Committee based upon the recommendations of the Chief Executive Officer (“CEO”).

		
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	This bonus program does not represent a contractual right to receive awards from the Compensation Committee; the Compensation Committee may structure and grant awards entirely within its discretion. This program and all awards will be interpreted by the Compensation Committee, whose judgments and interpretations are final and conclusive. 

Bonus Design Philosophy

		
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	The Compensation Committee shall determine the duration of each program period.

		
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	Bonus percentage targets will be reviewed by the Compensation Committee annually.

Bonus opportunity and bonus rates (targets) will be determined by the Compensation Committee, based upon the recommendations of the CEO, and may be prorated for changes during the program year. 
		
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	Incentive program design is intended to provide for total compensation consistent with the market and target compensation philosophy when company and individual performance meets expectations.

		
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	Design is intended to encourage teamwork and cross functional communication to accomplish goals.

		
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	Program may be based and funded on achieving company performance metrics, as well as individual goals established by the CEO and the Compensation Committee, except that the CEO may not establish individual goals for himself/ herself or have any authority over his or her own bonus.  In addition, if deemed advisable by the Compensation Committee in order to satisfy Section 162(m) of the Internal Revenue Code of 1986 or other applicable law, the CEO may not establish performance or individual metrics or have authority over the bonus of executive officers.

		
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	Program will have a focus on satisfying financial expectations and internal business goals. The program may not fund if goals are not achieved.

Design Characteristics

		
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	The Compensation Committee will establish, based on management’s recommendations, the design of the program for each program period, including but not limited to, company performance metrics, the frequency and timing of funding the bonus pool, bonus targets, upside opportunities if target levels are exceeded, whether any bonuses will be paid in the event of company underperformance, individual performance metrics, the weighting of goals and timing of bonus payments.

		
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	The Compensation Committee may delegate to the CEO the right to review and approve recommendations for changes to individual performance metrics for all employees other than himself/herself or adjust management’s recommendations of attainment of individual performance metrics other than for himself/herself; provided however, if deemed advisable by the Compensation Committee in order to satisfy Section 162(m) of the Internal Revenue Code of 1986 or other applicable law, the CEO may not make changes to individual performance metrics or adjust recommendations of attainment of individual performance metrics or otherwise have authority over the bonus of executive officers

		
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	The Compensation Committee may establish processes for administering the program, including but not limited to, the process by which employees are added to the program and the process of bonus program attainment and payment 

		
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	The Compensation Committee reserves the right at its discretion with or without notice (as required), to review, change, amend or cancel the program, at any time; and may delegate to management such right, subject to applicable law and the terms of the Compensation Committee charter and no officer shall have any authority over his or her own bonus.

Employee Eligibility and Payment

		
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	Must be an active regular employee through the end of the program period and a regular active employee at the time of payout to earn and receive any bonus.

		
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	The Compensation Committee may set additional eligibility requirements for each program period, including the length of time an employee must be employed on a full-time and active basis, the level or positions of employees eligible to participate, eligibility of employees on approved leaves of absence, pro-ration of new hires and/or employees newly eligible for bonuses and eligibility of employees of Proofpoint’s subsidiaries, including foreign subsidiaries.

		
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	The Compensation Committee will determine the form in which bonuses will be paid, whether by cash or equity awards.  The terms of equity awards will be determined by the Compensation Committee and may be made pursuant to the company’s equity incentive plans.

Miscellaneous

Any liability of the company to pay a bonus shall stem only from the terms of this program and shall be subject to the terms and conditions hereunder. Any interest of a participant of this program shall be an unsecured claim against the general assets of the company.  Any right of participants to receive payment under an award shall be no greater than the right of any unsecured general creditor on claims of the company’s assets.  No participant will have any interest in any fund or in any specific asset of the company by reason of awards hereunder.

Nothing contained in the program and no action taken pursuant to the provisions of the program shall create or be construed to create a trust of any kind.  No property which may be acquired or invested by the company in connection with the program shall be deemed to be security for the obligations to participants, but shall be, and continue for all purposes to be, a part of the general funds of the company.  

The company intends that the program be unfunded for tax purposes and for purposes of Title I of Employee Retirement Income Security Act of 1974, as amended, if applicable.

No member of the Board and no officer or employee of the company shall be liable to any person for any action taken or omitted in connection with the administration of the program unless attributable to such person’s own fraud or willful misconduct; nor shall the company be liable to any person for any such action unless attributable to fraud or willful misconduct on the part of a director, officer or employee of the company.

The program shall not give any participant a right or guarantee of continued employment with the company or affect the right of the company to terminate the employment of any participant at any time, with or without cause, for any reason or no reason, except as may be restricted by law or contract.  

Tax Consequences

Payments under the program are subject to applicable federal and state withholding taxes, Social Security and similar taxes and the company may deduct the amount thereof from any payments required hereunder.  Participants remain responsible for the payment of any and all taxes applicable to income received or deemed to have been received hereunder.  

To the extent (a) any payments or benefits to which a participant becomes entitled under this program, or under any agreement or plan referenced herein, in connection with participant’s termination of employment with the company constitute deferred compensation subject to Section 409A of the Code and (b) participant is deemed at the time of such termination of employment to be a “specified employee” under Section 409A of the Code, then such payments shall not be made or commence until the earliest of (i) the expiration of the six (6)-month period measured from the date of participant’s “separation from service” (as such term is at the time defined in Treasury Regulations under Section 409A of the Code) from the company; or (ii) the date of participant’s death following such separation from service; provided, however, that such deferral shall only be effected to the extent required to avoid adverse tax treatment to participant, including (without limitation) the additional twenty percent (20%) tax for which participant would otherwise be liable under Section 409A(a)(1)(B) of the Code in the absence of such deferral.  Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this paragraph shall be paid to participant or participant’s beneficiary in one lump sum (without interest).  Any termination of participant’s employment is intended to constitute a “separation from service” as such term is defined in Treasury Regulation Section 1.409A-1.  It is intended that each installment of the payments provided hereunder constitute separate “payments” for purposes of Treasury Regulation Section 1.409A-2(b)(2)(i).  It is further  intended that payments hereunder satisfy, to the greatest extent possible, the exemption from the application of Code Section 409A (and any state law of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”).  The company and each participant will work together in good faith to consider either (i) amendments to any award; or (ii) revisions to any award with respect to the payment of any bonus amounts, which are necessary or appropriate to avoid imposition of any additional tax or income recognition prior to the actual payment to the participant under Section 409A of the Code and any Treasury Regulations and Internal Revenue Service guidance thereunder.  

Page 1Proofpoint-12312014-Ex1013

Exhibit 10.13

December 19, 2011

Darren Lee
688 East Canterbury Lane
Alpine, UT 84004

Dear Darren:

As you know, Proofpoint, Inc. ("Proofpoint" or the "Company") is in negotiations to acquire your current employer, NextPage, Inc. (''NextPage"). Subject to and conditioned upon the closing of Proofpoint's acquisition of NextPage (the "Acquisition"), Proofpoint would like to offer you employment with Proofpoint on the following terms and conditions. This letter shall serve to confirm the terms of your employment with the Company.

1. Title & Employment Commencement. Your title will be Vice President of Governance and Archiving. Your employment with Proofpoint shall commence on the business day immediately following the close of the Acquisition as defined in the written Acquisition agreement between Proofpoint and NextPage, subject to the terms and conditions herein, including your successful clearance of a background check discussed below.

2. Duties. You will report to me and I will assign and direct your job duties and responsibilities. You will work from our offices located in Draper, Utah. Of course, the Company may change your position, duties, and work location from time to time as it deems necessary.

3. Compensation.

		
	a.
	Salary. You will be paid a monthly salary of $18,750.00 less payroll deductions and all required withholdings. You will be paid semi-monthly on the Company's regular payroll dates.

		
	b.
	Management Bonus. You will be eligible to receive a bonus targeted at 30% of your annual base salary with upside potential based upon individual and/or company over­ performance. The bonus will be subject to the terms and conditions of the Proofpoint Bonus Plan Document. The Company reserves the right to change, amend or cancel this program at any time.

		
	c.
	Stock Option Plan. Upon the commencement of your employment and subject to Board approval, the Company will grant you an option to purchase 350,000 shares of the Company's Common Stock (the "Option") at an exercise price equal to the fair market value on the date of grant. The Option shall be subject to the vesting restrictions and all other terms of the Proofpoint's 2002 Stock Option Plan and your Stock Option Agreement.

		
	d.
	Signing Bonus. The Company agrees to pay to you a one-time upfront signing bonus in the amount of $50,000.00 less all applicable taxes and withholdings within 30 days of your employment start date ("Signing Bonus"). In the event you voluntarily terminate your employment within one year of your employment start date, you agree that you will re-pay the Signing Bonus back to the Company and you authorize the Company to deduct the Signing Bonus from any final paycheck, accrued vacation, or commissions owed at the time of separation, in accordance with applicable law. Should more of the Signing Bonus remain owing, you agree in such circumstance to pay the Company outright within 30 days of your last day of employment.

		
	e.
	Benefits. You will be eligible for the standard Company benefits for an employee in your position health insurance, dental insurance, vacation, sick leave, holidays, 401k, etc. in accordance with the terms of the applicable benefit plans.

3. Company Policies. As a Company employee, you will be expected to abide by Company rules and policies, and execute and abide by the Company's Proprietary Information and Inventions Agreement, a copy of which is attached hereto as Exhibit A for your execution.

4. Former Employers. In your work for the Company you will be expected not to use or disclose any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. During our discussions about your proposed job duties, you assured us that you would be able to perform those duties within the guidelines just described. You also agree that you will not bring onto Company premises any confidential information or property belonging to any former employer or other person to whom you have an obligation of confidentiality.

5. Exposure to Explicit Electronic Content. Because of the type of business Proofpoint conducts, during the course of your employment and as a bona fide occupational qualification of your employment you may be periodically exposed to electronic content that displays sexually explicit literary material and/or electronically conveyed images. By accepting employment with Proofpoint it is with the full understanding that your exposure to the content described above will not interfere with the performance of your job duties, will not cause you to consider the workplace intolerable or hostile, and will not cause you to believe that you are subject to sexual harassment in the workplace.

6. Alternative Dispute Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company you must agree to submit such disputes to arbitration. Accordingly, please sign the Arbitration Agreement attached as Exhibit B and return it to me.

7. Conflicts. As an exempt employee, you are expected to work the number of hours required to get the job done. However, you are generally expected to be present during normal business hours of the Company, which will be established by the Company and may be changed as needed to meet the needs of the business. You agree that during your employment with Proofpoint, you will not engage in any other employment, occupation, consulting or other business activity directly related to the business in which Proofpoint is now involved or becomes involved during the term of your employment, nor will you engage in any other activities that conflict with your obligations to Proofpoint.

8. Employment Status. The Company is an "at-will" employer. This means that you may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying Proofpoint. Likewise, the Company may terminate your employment at any time, for any reason, with or without cause or advance notice.

9. Miscellaneous. This letter, together with your Proprietary Information and Inventions Agreement and the Arbitration Agreement form the complete and exclusive statement of your employment agreement with Proofpoint. It supersedes any other agreements or promises made to you by anyone, whether oral or written, and it can only be modified in a written agreement signed by an Officer or the Vice President of Human Resources of the Company.

As required by law, this offer is subject to satisfactory proof of your right to work in the United States, your successful clearance of a routine background check (including executing the consent forms to perform those checks which are included with this letter attached hereto as Exhibit C), and signing the enclosed Proprietary Information and Arbitration Agreements. Please sign and date this letter, both of its exhibits, and the background check consent forms and return them to me by end of business Wednesday, December 21, 2011, if you wish to accept employment with Proofpoint under the terms described above. A duplicate original of this letter in included for your records.

We look forward to working with you to make Proofpoint a success. If there are any aspects of our offer, which you would like, clarified, please let me know.

Best regards,

/s/ Gary Steele

Gary Steele
Chief Executive Officer

Understood & Agreed:

/s/ Darren Lee

Darren Lee

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