Document:

Exhibit 10.11

 

June 5, 2008

 

Dean Hickman-Smith

[address]

 

Dear Dean:

 

It is my pleasure to offer you the full-time position of Senior Vice President, Worldwide Sales at Proofpoint Inc. (the “Company”).  This letter shall serve to confirm the terms of your employment with the Company.

 

1.             Duties.  You will be responsible for leading the world wide sales organization.  You will report to me and will work from our offices located in Sunnyvale, California.  Of course, the Company may change your position, duties, and work location from time to time as it deems necessary.

 

2.             Compensation.

 

a.                                       Salary.  You will he 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.                                      Commission / Non-Recoverable Draw.  You will he paid a non-recoverable draw in the total amount of $56,250, less payroll deductions and all required withholdings in the first six pay periods ($9.375.00 per paycheck) from the date of your employment.  You will be eligible for monthly commissions based on your attainment of quota under the terms and conditions of the Company’s applicable commission plan.  During, your first year of employment, you will be eligible to earn target commissions in the amount of $225,000.00 at 100% of quota attainment.  Earned commissions will he paid monthly.

 

c.                                       Stock Option Plan.  Upon the commencement of your employment and subject to Board approval, the Company will grant you an option to purchase 1% shares of the Company’s Common Stock (the “Option”) on a fully diluted basis including all options granted to employees 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.                                      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 he 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 he 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.

 

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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 the Chief Executive Officer or the Company.  You understand and agree that the Company has not made any representations or warranties regarding the tax treatment of any of the benefits detailed in this letter, including, but not limited to any potential taxes or other consequences relating to Internal Revenue Code Section 409A.  To the extent you have any questions about this or any other provisions in this letter, we encourage you to consult with independent counsel and tax advisors.

 

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 and reference 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.  Your employment, pursuant to this offer, is contingent upon H-1B approval.  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 Monday, June 9, 2008, if you wish to accept employment with Proofpoint under the terms described above.  If you accept our offer, we would like you to start on approximately July 21, 2008 contingent upon H-1B approval and subject to first successfully clearing the background and reference checks noted above.

 

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/   Dean Hickman-Smith
    	
 
    
	
Dean   Hickman-Smith
    	
 
    
	
 
    	
 
    	
 
    
	
Date   
    	
6/8/08
    	
 
    

 

3Exhibit 10.12

 

	
Proofpoint, Inc.
    	
Executive Bonus Plan
    

 

 

Executive Bonus Plan

 

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Plan Objective

 

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

 

Plan Administration

 

·                                          The reviewing body of the plan will be the Compensation Committee

·                                          Plan structure and payout will be approved by the Compensation Committee based upon the recommendations of the CEO

 

Bonus Design Philosophy

 

·                                          Plan year is defined as January 1 to December 31

·                                          Bonus percentage levels will be reviewed and approved by the Compensation Committee annually

·                                          Bonus percentage will be thirty (30) percent of base salary unless otherwise specified in writing

·                                          Base salary is defined as the annual base salary as of the end of the plan year

·                                          Incentive plan design should provide for total compensation consistent with the market when company and individual performance meets expectations

·                                          Design should encourage teamwork and cross functional communication to accomplish goals

·                                          Employees should focus on satisfying financial expectations as well as internal business goals

·                                          Bonuses should depend on factors that can be influenced by employees

·                                          Program will be based on meeting company performance metrics

 

Design Characteristics

 

·                                          The bonus pool will be funded if the Company threshold performance metrics for bookings is minimally 90% of bookings achievement and/or meeting the cash flow target.

·                                          Two key company metrics will be set annually by the CEO and approved by the Compensation Committee

·                                          Bonus plan provides for upside opportunity when individual and company performance exceeds target levels/expectations

·                                          Bonuses will depend on a combination of corporate and individual performance

·                                          Individual performance metrics will be based on three to five equally weighted measurable goals

·                                          Bonuses will be based on long-term performance (annual) and payable at the end of the fiscal year, approximately 90 days after the close of the year.

·                                          Company and individual performance metrics will not change during the year, regardless of changes in the business environment

·                                          The CEO will retain final approval authority over all bonus recommendations to the Compensation Committee

·                                          Management reserves the right at its discretion with or without notice, to review, change amend or cancel the Plan, at any time

 

Employee Eligibility

 

·                                          All regular full-time employees at a Vice President level or above reporting to the CEO not covered on any other compensation plan

·                                          The CEO has complete discretion to add other individuals to the plan

·                                          Must be an active regular employee in good standing through the end of the plan year and a regular active employee in good standing at the time of payout to receive any bonus

·                                          Employees on a Leave of Absence, will have their bonus period adjusted for the time they were on leave and payout pro-rated based upon the number of full weeks of employment/eligibility in the plan period however must be in the plan for at least 6 months to qualify

·                                         For those in the plan for the full 12 months, individual performance metrics must be completed and approved by the CEO no later than 2 months into the plan year.  If completed after 2 months, the bonus period will be adjusted to include the time from which the goals are completed and approved to the end of the plan year.

·                                          Employee must be in the plan for at least 6 months.  Individual performance metrics must be completed and approved by the CEO no later than 2 months after entry into the plan year.  The bonus period will be adjusted to include the time from which the goals are completed and approved to the end of the plan year.

·                                          New hires and/or employees newly eligible for bonuses will have the bonus pro-rated based on the number of full weeks of employment/eligibility in the plan period

 

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Process to Add an Employee to the Bonus Plan

 

1.                                       Upon hire or eligibility of an Executive Bonus Plan (“BP”) plan participant, the CEO indicates to HR the bonus effective date via an approved “Request for Offer Letter Form” or a “Personnel Action Notice” (PAN).  In cases where an existing employee is added to an EBP, it is recommended, but not required, that the effective date on the plan is the beginning of the following month.  In cases where a new hire is added to an EBP, the start date on the plan, whether it be the start date or the beginning of the next month, is at the CEO’s discretion.

 

2.                                       The employee will receive a copy of the EBP Plan Document and Annual Goals and Objectives Summary form to review, complete, and discuss with the CEO.  The employee’s Annual Goal & Objectives will provide a basis to measure and determine the employee’s bonus payout.

 

3.                                       Once the “Annual Goals & Objectives Summary” has been signed off, the CEO submits the final copy to Human Resources.

 

Annual Process of Bonus Plan

 

1.                                       The CEO will set the Company performance metrics each year.

 

2.                                       These metrics will be presented to and approved by the Compensation Committee.

 

3.                                       Individual performance metrics must be completed and approved by the CEO no later than 2 months into the plan year.  If completed after 2 months, the bonus period will be adjusted to include the time from which the goals are completed and approved to the end of the plan year.  Employee must be in the plan for at least 6 months.

 

4.                                       Review progress regularly of the stated goals and objectives.  As tasks are completed, indicate completion on the form.

 

5.                                       Upon conclusion of the fiscal year, the Finance organization will determine the company performance levels.

 

6.                                       Individual performance metrics will be reviewed and approved by the CEO.

 

7.                                       At the end of plan year, CEO and employee review and assess performance against the objectives and submit final recommendations to Human Resources.  Human Resources will summarize all bonus payments for final review and approval by the CEO.

 

8.                                       Final bonus payment amounts will be presented for approval to the Compensation Committee.

 

9.                                       Human Resources will submit final approved bonuses to Payroll for processing.

 

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Questions and Answers

 

Q.                                    If the company meets its thresholds, will I automatically receive the bonus?

 

Bonus targets are guidelines only and based upon individual and company performance metrics.  The CEO will review and discuss with you your performance against your objectives.  The Finance organization will determine the company performance levels for Proofpoint.  Combined these factors will determine your bonus payout.

 

Q.                                    If I achieve my individual results but the company does not, will I receive my bonus?

 

If Proofpoint under-performs based upon the annual metrics, the bonus plan will not be funded for that plan year.

 

Q.                                    What if I leave the company? Will I receive a bonus for the portion of the year I was here?

 

You must be an active regular employee in good standing when bonuses are paid.  Employees on a leave of absence at the time of the payout will receive payment upon return to active status provided they meet the eligibility requirements noted above.

 

Q.                                    I started or was eligible for my bonus mid-year.  How will my bonus be calculated?

 

Employee must be in the plan for at least 6 months.  Individual performance metrics must be completed and approved by the CEO no later than 2 months after entry into the plan year.  The bonus period will be adjusted to include the time from which the goals are completed and approved to the end of the plan year.  For new hires and/or employees newly eligible for bonuses, the bonus will be pro-rated based on the number of full weeks of employment/eligibility in the plan period.  In cases where an existing employee is added to an EBP, it is recommended, but not required, that the effective date on the plan is the beginning of the following month.  In cases where a new hire is added to an EBP, the start date on the plan, whether it be the start date or the beginning of the next month, is at the CEO’s discretion.

 

Q.                                    At the end of the bonus period, how are decisions made about my individual contribution?  Who approves my bonus amount?

 

The CEO will be responsible for approving your bonus based upon your individual performance against your objectives.  A final review of all bonus payments will be conducted by the CEO and Human Resources prior to final approval by the Compensation Committee.

 

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