Document:

EX-10.4(1)

			
	

	  	Exhibit 10.4(1)

 Scott Caldwell 
 Dear Scott,

 BSQUARE Corporation (the “Company”) is pleased to offer you revised terms of employment as the Company’s Vice President of Worldwide OEM
Sales effective as of February 21, 2014 (the “Effective Date”). As of the Effective Date this letter agreement supersedes in full the prior agreements between you and the Company regarding your employment or compensation (excluding,
for clarity, any agreement regarding proprietary rights or confidentiality). 
 You will continue to report to the CEO. You will be paid bi-weekly at a rate
equivalent to an annual salary of $135,000 (the “Base Salary”). In addition to the Base Salary, you will continue to be eligible for on target incentive compensation of 140% of your Base Salary at 100% achievement, governed and paid by the
terms of your Incentive Compensation Plan then in effect. 
 You will continue to be employed as an exempt employee and will not be entitled to overtime.

 You will be eligible for the following benefits, in addition to any other benefits made available to you by the Company from time to time: 

 

	 	•	 	A medical, dental, vision, life and disability plan 

  

	 	•	 	A 401(k) retirement plan, with Company matching contributions 

  

	 	•	 	Paid time off according to the Company’s standard policy 

  

	 	•	 	A new grant of options to purchase 30,000 shares of the Company’s common stock, granted on February 26, 2014 provided you are employed in good standing as of this date. These options are Non-Qualified Stock
Options (NSOs), and shall vest as follows: 33% shall vest on the first anniversary of the grant date of February 26, 2014, and the balance will vest in equal monthly installments for two years thereafter. The strike price is the closing price
of the Company’s common stock on the grant date. Stock options expire after 10 years. 

 Except as provided in the next paragraph, if
your employment is terminated by the Company when neither “cause” nor “long term disability” exists, and provided that you release the Company and its agents from any and all employment-related claims in a signed, written release
satisfactory in form and substance to the Company, (i) you will be entitled to receive severance equal to 3 months of your then annual Base Salary and (ii) you shall be eligible for continued COBRA coverage at the Company’s expense
for a period of 3 months following your termination date. The foregoing severance payments shall be paid out on regular payroll days post termination, subject to legally required and any individually agreed upon payroll deductions. During the period
subsequent to your termination date in which you are being paid such severance amounts, you would not be considered an employee and would therefore receive no Paid Time Off accrual, nor would you be entitled to benefits under the Company’s
health and welfare plans or retirement savings plan as an active employee, except as otherwise provided herein. 
 Immediately prior to consummation of a
Change of Control, all of your unvested stock options and restricted stock units shall become fully vested and immediately exercisable. In addition, if your employment is terminated by the Company or any successor thereto within 9 months following a
Change of Control when neither “cause” nor “long term disability” exists or if you terminate your employment for “good reason,” and provided that you release the Company and any successor thereto and its respective
agents from any and all employment-related claims in a signed, written release satisfactory in form and substance to the Company or any successor thereto, you will be entitled to receive a one-time lump sum severance payment equal to 9 months of
your then annual Base Salary and you shall be eligible for continued COBRA coverage at the Company’s expense for a period of 9 months following 

 

 
  

 
your termination date. The foregoing severance payments shall be in lieu of the severance payments described in the preceding paragraph, and after expiration of the 9-month period following a
Change of Control, you shall continue to be entitled to receive the severance payments described in the preceding paragraph on the terms and conditions set forth therein. 

For purposes hereof, “cause,” “good reason” and “Change of Control” are defined on Attachment A hereto, and “long
term disability” is defined in the Company’s sponsored Long Term Disability group insurance plan. 
 No severance shall be payable hereunder
unless the release described herein has been signed and become effective within sixty (60) days from the date of termination (the “Release Deadline”). Upon the release becoming effective, any severance payable hereunder will be
payable commencing on or as soon as administratively practicable after the Release Deadline. In the event the termination occurs at a time during the calendar year when the release could become effective in the calendar year following the calendar
year in which your termination occurs, then any payments hereunder that would be considered deferred compensation under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated
thereunder (“Section 409A”) will be paid commencing on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or, if later, the Release Deadline. 

Notwithstanding any other provision of this Letter Agreement, if at the time of the termination of your employment, you are a “specified employee,”
determined in accordance with Section 409A, any payments and benefits provided hereunder that constitute “nonqualified deferred compensation” subject to Section 409A that are provided on account of separation from service shall
not be paid until the first payroll date to occur following the six-month anniversary of your termination date (the “Specified Employee Payment Date”). The aggregate amount of any payments that would otherwise have been made during such
six-month period shall be paid in a lump sum on the Specified Employee Payment Date without interest, and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. 

The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the benefits to be provided hereunder will be
subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. You and the Company agree to work together in good faith to consider amendments to this Letter Agreement and to take such
reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to you under Section 409A. 

Furthermore, notwithstanding any other provision of this Letter Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments
or benefits provided or to be provided by the Company or any successor to you or for your benefit pursuant to the terms of this Letter Agreement or otherwise (“Covered Payments”) constitute parachute payments (“Parachute
Payments”) within the meaning of Section 280G of the Code and will be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any interest or penalties with respect to such excise tax
(collectively, the “Excise Tax”), then the Company shall pay to you, no later than the time the Excise Tax is required to be paid by you or withheld by the Company, an additional amount (the “Gross-up Payment”) equal to the sum
of the Excise Tax payable by you, plus the amount necessary to put you in the same after-tax position (taking into account any and all applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax and any
income and employment taxes imposed on the Gross-up Payment)) that you would have been in if you had not incurred any tax liability under Section 4999 of the Code. Any determination required under this paragraph, including whether any payments
or benefits are Parachute Payments, shall be made by the Company in its sole discretion. You shall provide the Company with such information and documents as the Company may reasonably request in order to make a determination under this paragraph.
The Company’s determinations shall be final and binding on the Company and you. 
 YOUR EMPLOYMENT IS AT-WILL AND ACCORDINGLY, YOU OR THE COMPANY MAY
TERMINATE THIS EMPLOYMENT RELATIONSHIP AT ANY TIME WITH OR WITHOUT NOTICE OR CAUSE. 

 

 
  

 Please indicate your acceptance by signing and returning a copy of this Letter Agreement. 

Sincerely, 
  

							
	 BSQUARE CORPORATION
	 		 	Acknowledged and agreed:
				
	By:	 	 /s/ Jerry Chase
	 		 	 /s/ Scott Caldwell

		 	Jerry Chase	 		 	Scott Caldwell
		 	President and CEO	 		 	

 

 
  

 ATTACHMENT A 

For purposes of this Letter Agreement, “cause” means and is limited to dishonesty, fraud, commission of a felony or of a crime involving moral
turpitude, destruction or theft of Company property, physical attack to a fellow employee, intoxication at work, use of controlled substances or alcohol to an extent that materially impairs your performance of your duties, willful malfeasance or
gross negligence in the performance of your duties, violation of law in the course of employment that has a material adverse impact on the Company or its employees, your failure or refusal to perform your duties, your failure or refusal to follow
reasonable instructions or directions, misconduct materially injurious to the Company, neglect of duty, poor job performance, or any material breach of your duties or obligations to the Company that results in material harm to the Company. 

For purposes hereof, “neglect of duty” means and is limited to the following circumstances: (i) you have, in one or more material respects,
failed or refused to perform your job duties in a reasonable and appropriate manner (including failure to follow reasonable directives), (ii) the Board, or a duly appointed representative of the Board, has counseled you in writing about the
neglect of duty and given you a reasonable opportunity to improve, and (iii) your neglect of duty either has continued at a material level after a reasonable opportunity to improve or has reoccurred at a material level within one year after you
were last counseled. 
 For purposes hereof, “poor job performance” means and is limited to the following circumstances: (i) you have, in one
or more material respects, failed to perform your job duties in a reasonable and appropriate manner, (ii) the Board, or a duly appointed representative of the Board, has counseled you in writing about the performance problems and given you a
reasonable opportunity to improve, and (iii) your performance problems either have continued at a material level after a reasonable opportunity to improve or the same or similar performance problems have reoccurred at a material level within
one year after you were last counseled. 
 For purposes of this Letter Agreement, “good reason” shall mean the occurrence of any of the following,
in each case without your written consent: 
  

	 	(i)	a material reduction in you Base Salary other than a general reduction in Base Salary that affects all similarly situated executives in substantially the same proportions; 

 

	 	(ii)	a material reduction in your bonus target; or 

  

	 	(iii)	a material, adverse change in your title, authority, duties or responsibilities (other than as required by applicable law). 

You cannot terminate your employment for good reason unless you have provided written notice to the Company of the existence of the circumstances providing
grounds for termination for good reason within thirty (30) days of the initial existence of such grounds and the Company has had at least thirty (30) days from the date on which such notice is provided to cure such circumstances. If you do
not terminate your employment for good reason within ninety (90) days after the first occurrence of the applicable grounds, then you will be deemed to have waived your right to terminate for good reason with respect to such grounds. 

Further, for purposes of this Letter Agreement, a “Change of Control” shall mean: 

 

	 	(i)	the acquisition of the Company by another entity by means of merger, consolidation or other transaction or series of related transactions resulting in the exchange of the outstanding shares of the Company for securities
of, or consideration issued, or caused to be issued by, the acquiring entity or any of its affiliates, provided, that after such event the shareholders of the Company immediately prior to the event own less than a majority of the outstanding voting
equity securities of the surviving entity immediately following the event; or 

 

 
  

	 	(ii)	any sale, lease, exchange or other transfer not in the ordinary course of business (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.EX-10.1

 Exhibit 10.1 

CYS INVESTMENTS, INC. 

2014 INCENTIVE COMPENSATION PLAN 

CYS Investments, Inc.’s 2014 Incentive Compensation Plan (the “Plan”) is a plan under which eligible employees of
CYS Investments, Inc. (the “Company”) may receive bonus awards representing the opportunity to receive a payment in accordance with, and subject to the terms of, the Plan (“Bonus Awards”). The amount, if any, that
will be payable under a Bonus Award will be determined by the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) based upon the Company’s and the employee’s performance during
the 2014 fiscal year, subject in all cases to the absolute sole discretion of the Compensation Committee as provided in the Plan. Bonus Award payments under the Plan will be paid no later than March 15, 2015.  

Purposes. The Plan is a component of the Company’s overall strategy to pay its employees for performance. The purposes of the Plan are to:
(i) attract and retain top performing employees, (ii) motivate employees by tying compensation to the Company’s absolute and relative performance, and (iii) reward exceptional individual performance that supports the
Company’s overall objectives. 
 Eligibility. All employees of the Company are eligible to participate in the Plan, except for employees
who (a) are classified as interns/project employees or (b) commence employment pursuant to an offer letter that excludes participation in the Plan. Those employees who are determined to be eligible for Bonus Awards under the Plan are
called “Participants.” An employee must commence employment or otherwise become eligible to participate in the Plan no later than July 1, 2014; provided, however that the Compensation Committee may make exceptions to
this requirement in its sole discretion as it deems appropriate. Being a Participant does not entitle the individual to receive a Bonus Award. 
 Plan
Year. The Plan operates on a fiscal year basis, January 1, 2014 through December 31, 2014 (the “Fiscal Year”). 

Bonus Awards. A Participant must be an active employee in good standing and on the payroll of the Company, or an approved subsidiary (an
“Approved Payroll”), on the day the Bonus Award is paid to receive any portion of a Bonus Award. A Participant who is not actively employed or on an Approved Payroll for whatever reason on the date a Bonus Award is paid is not
entitled to a Bonus Award payment. Bonus Award payments for the 2014 Fiscal Year for an employee that was not actively employed or on an Approved Payroll on January 1, 2014 will be paid on a pro-rata basis based on the period of the Fiscal Year
during which the Participant was employed by the Company. Notwithstanding the foregoing, a Participant may be eligible to receive a Bonus Award pursuant to his or her employment agreement even if such Participant is not actively employed or on an
Approved Payroll on the date a Bonus Award is paid. Additionally, the Compensation Committee may make exceptions to the foregoing in its sole discretion as it deems appropriate.  

 Notwithstanding any language to the contrary contained in this Plan and for the avoidance of
doubt, (a) a Participant is not entitled to a minimum Bonus Award payment or a guaranteed payment pursuant to this Plan and (b) the Compensation Committee, in its sole discretion, will be entitled to reduce the amount of any Bonus Award
payment eligible to be paid under the terms of this Plan and can elect not to make a Bonus Award payment even if eligible to be paid under the terms of this Plan. Subject to the foregoing language, the amount payable under a Bonus Award will be
calculated at the discretion of the Compensation Committee after considering the Company’s absolute and relative performance, the Participant’s minimum, target and maximum bonus opportunities in light of the Company’s performance and
the employee’s performance for the Fiscal Year. 
 The size of each Participant’s Bonus Award opportunity will be based on various
percentages of his or her base salary with respect to the following threshold levels based on the performance of the Company under each sub-component of the quantitative component (the “Quantitative Component”) and the Compensation
Committee’s determination of the Participant’s performance under the qualitative component (the “Qualitative Component”). 
  

							
	 	  	Percentage of Base Salary
	 Name
	  	Minimum	 	Target	 	Maximum
	 Kevin E. Grant
	  	100%	 	325%	 	550%
	 Frances R. Spark
	  	  50%	 	100%	 	150%
	 Richard E. Cleary
	  	  50%	 	100%	 	150%
	 Thomas A. Rosenbloom
	  	  50%	 	100%	 	150%
	 All Other Employees
	  	Will vary based on employee

 Components of the Plan. The Plan will be divided into two components, a Quantitative Component and a Qualitative
Component. The Bonus Award for each Participant will be eligible to be paid based on the percentage allocation between the two components as follows: 
  

					
	 Name
	  	Quantitative Component	 	Qualitative Component
	 Kevin E. Grant
	  	75%	 	25%
	 Frances R. Spark
	  	60%	 	40%
	 Richard E. Cleary
	  	60%	 	40%
	 Thomas A. Rosenbloom
	  	60%	 	40%
	 All other employees
	  	Will vary based on employee

 Quantitative Component. The Quantitative Component will be divided into two
sub-components, an absolute return sub-component (the “Absolute Return Sub-Component”) and a relative return sub-component (the “Relative Return Sub-Component”). The Absolute Return Sub-Component will represent 50%
of the total Quantitative Component and the Relative Return Sub-Component will represent 50% of the total Quantitative Component. As described in more detail below, the size of the Quantitative Component will be contingent upon (i) with respect
to the Absolute Return Sub-Component, the Company’s total stockholder return (“Book Value TSR”), based on the change in the Company’s book value per common share (“Book Value”) plus distributions
per share of the Company’s common stock declared during the Fiscal Year, in each case on a one year and three year basis, meeting or exceeding specified performance thresholds, and (ii) with respect to the Relative Return Sub-Component,
the Company’s relative total stockholder return, assuming reinvestment of dividends (“Relative TSR”), based on the  

  
 2 

 
change in stock price of and distributions on the Company’s common stock declared by the Company, in each case on a one and three year basis, compared to the competitor peer group that is
identified below. 
 Each participant in the Plan is granted an Incentive Award pursuant to the 2013 Equity Incentive Plan (the
“Equity Plan”). Subject to the conditions set forth above, the Incentive Award represents the opportunity to receive a cash payment of 50% of the Bonus Award under the Quantitative Component, subject to the Cash Payment Limit (as
defined below). The Incentive Award also represents the right to receive shares of restricted common stock of the Company with a value (on the date the shares are issued) equal to 50% of the Bonus Award under the Quantitative Component, plus any
portion of the Bonus Award that cannot be paid in cash on account of the Cash Payment Limit. The shares of restricted common stock issued in settlement of the Incentive Award will be subject to the vesting requirements and transfer restrictions as
described below. The “Quantitative Component” of the Plan is intended to permit the payment of “performance based compensation” under Section 162(m) of the Internal Revenue Code. 

The size of the Quantitative Component is predicated on the condition that the Company manages its investment portfolio within leverage
parameters established by the Board, in consultation with the Company’s management. If the Company exceeds the Board’s pre-determined leverage ratio (which the Board has initially set for the Fiscal Year as 8 to 1) (the “Leverage
Cap”), then any Bonus Awards under the Quantitative Component attributable to the Company’s leverage ratio being in excess of the Leverage Cap (with the leverage ratio calculated as of the end of each calendar month of the Fiscal Year
and included in management’s monthly report to the Board of Directors) will not be paid to the Participants. Notwithstanding the foregoing, the Board may adjust the Leverage Cap at any time during the applicable fiscal year based upon
consultation with the Company’s management. 
 Absolute Return Sub-Component. The Absolute Return Sub-Component will be based on
a one year and three year Book Value TSR calculation. The one year Book Value TSR will equal the difference between the Company’s net asset value per common share on December 31, 2013 (as reported in the Company’s Form 10-K for the
year ended December 31, 2013) (the “2013 Book Value”) and the Company’s preliminary book value per common share on December 31, 2014, taking into account a specified accrual for cash bonuses established by the
Compensation Committee and the Company’s senior executive officers (the “2014 Book Value”), plus distributions per share of the Company’s common stock declared by the Company during the Fiscal Year (the “One
Year Book Value TSR”). 
 The three year Book Value TSR will equal (a) the difference between the Company’s net asset
value per common share on December 31, 2011 (as reported in the Company’s Form 10-K for the year ended December 31, 2011) and the Company’s net asset value per common share on December 31, 2012 (as reported in the
Company’s Form 10-K for the year ending December 31, 2012) (the “2012 Book Value”), plus distributions per share of the Company’s common stock declared by the Company during the 2012 fiscal year, (b) with
such gain or loss compounded with the difference between the 2012 Book Value and the 2013 Book Value, plus distributions per share of the Company’s common stock declared by the Company during the 2013 fiscal year,

  
 3 

 
and (c) with such gain or loss compounded with the difference between the 2013 Book Value and the 2014 Book Value, plus distributions per share of the Company’s common stock
declared by the Company during the Fiscal Year (the “Three Year Book Value TSR”).  
 As stated above, the Absolute
Return Sub-Component will comprise 50% of the total Quantitative Component. This 50% component will be comprised of two sub-components, with 45% determined by the One Year Book Value TSR and 5% determined by the Three Year Book Value TSR. The amount
of the Bonus Award to be paid under the One Year Book Value TSR and the Three Year Book Value TSR will be determined based on the Company’s performance relative to the hurdle rates included in the following table, with linear interpolation for
achievement falling between the hurdle rates: 
  

			
	 Bonus Levels
	  	Annualized Hurdle Rates
	 No Bonus
	  	Less than 4%
	 Minimum
	  	  4%
	 Target
	  	10%
	 Maximum
	  	Greater than 12%

 Relative Return Sub-Component. The Relative Return Sub-Component will be based on a one year and three
year Relative TSR (in each case assuming reinvestment of dividends), based on the change in stock price of the Company and distributions on the Company’s common stock declared by the Company during the measurement period, compared to a
competitor peer group. The peer group consists of the following companies: American Capital Agency Corp., Anworth Mortgage Asset Corporation, Annaly Capital Management, Inc., Armour Residential REIT, Inc., Capstead Mortgage Corporation and Hatteras
Financial Corp.  
 As stated above, the Relative Return Sub-Component will comprise 50% of the total Quantitative Component. This
50% component will be comprised of two sub-components, with 25% determined by the one year Relative TSR and 25% determined by the three year Relative TSR. The amount of the Bonus Award to be paid under the one year Relative TSR and three year
Relative TSR will be determined based on the Company’s ranking among this peer group as described in the table below: 
  

			
	 Bonus Levels
	  	Ordinal Ranking Amongst
Peer Group
	 No Bonus
	  	6th or 7th
	 Minimum
	  	4th or 5th
	 Target
	  	3rd
	 Maximum
	  	1st or 2nd

 Qualitative Component. The Plan also includes the “Qualitative
Component” (described below) which is separate and distinct from the Quantitative Component. The Qualitative Component is not intended to satisfy the requirements of “performance based compensation” under Section 162(m) of the
Internal Revenue Code. The Qualitative Component is intended to allow the Compensation Committee, in its discretion, to provide additional compensation to Participants (as defined below) based on the Compensation Committee’s evaluation of the
Participant’s contributions to the success of the Company. The amount of each Bonus Award under the Qualitative Component will be determined by the Compensation Committee in its sole 

  
 4 

 
discretion based on its assessment of how each Participant has performed relative to the qualitative factors deemed relevant, including, but not limited to (i) for the Chairman and Chief
Executive Officer (the “CEO”): (A) leadership of the Board and the Company, (B) investor relations, stockholder communications and capital raising, (C) the Company’s performance relative to its budget and
(D) risk management and capital preservation, and (ii) for the other senior executive officers, qualitative performance objectives determined annually by the CEO and the Board, which may include criteria such as: (A) business
unit/functional area performance, and (B) leadership/organizational development. 
 Form of Bonuses. Bonus Awards will be divided into,
and paid in, two components, a cash component and a long-term equity component. The proportional size and form of each component is described below. 

Size of Cash Component of Bonus Awards. The aggregate cash component of each Participant’s Bonus Award
(the “Cash Component”) will be paid under an Incentive Award granted pursuant to the Equity Plan and will be 50% of such Participant’s total Bonus Award payment, as determined by the Compensation
Committee, but will not exceed 0.50% of the average stockholders’ equity of the Company for the Fiscal Year calculated monthly by averaging the stockholders’ equity as of the beginning and end of each month during the Fiscal Year and then
averaging each month’s average stockholders’ equity (the “Cash Payment Limit”). Each Participant will receive 50% of his or her individual Bonus Award payment in cash with such pro-rata
reductions as is necessary so that the Cash Payment Limit is not exceeded; provided, however, that an employee whose Bonus Award payment is less than $100,000 will receive 10% of
his or her individual Bonus Award payment in restricted stock under the Long-Term Equity Component (as defined below) and the remainder in cash. Notwithstanding the foregoing sentences in this section, the Compensation Committee may (i) elect
in its discretion to increase the Cash Payment Limit and the Cash Component of the Bonus Award payments to be greater than 50% if, pursuant to this section, certain employees receive greater than 50% of their Bonus Award payments in cash, and
(ii) increase the portion of an employee’s Bonus Award payment payable in cash, with a corresponding reduction in the amount of the Bonus Award payment paid under the Long-Term Equity Component, on a case by case basis in the discretion of
the Compensation Committee. 
 Size of Long-Term Equity Component of Bonus Pool. Except as
provided in the section above, the long-term equity component of each Participant’s Bonus Award payment (the “Long-Term Equity Component”) will be issued in settlement of an Incentive Award granted
pursuant to the Equity Plan and will be 50% of such Participant’s total Bonus Award payment. If the Cash Component exceeds the Cash Payment Limit, the Compensation Committee may, but will not be required to, increase the amount of the Long-Term
Equity Component by an amount equal to the excess amount of the Cash Component over the Cash Payment Limit. Except as provided in certain circumstances as described in the section above, each Participant will receive the Long-Term Equity Component
of their individual Bonus Award payment in the same percentage as the Long-Term Equity Component percentage of the total Bonus Awards.  

Awards under the Long-Term Equity Component will be in the form of Stock Awards (as defined in the Equity Plan) under the Equity Plan that
will vest ratably on an annual basis over a five-year period or such other period as may be determined by the Compensation Committee and will be subject to the terms of an award agreement approved by the Compensation Committee. 

  
 5 

 Bonus Awards Subject to “Clawback”. Each Bonus Award paid under the Plan, whether the Cash
Component or the Long-Term Equity Component, will be paid subject to the Company’s right to recoup or “clawback” all or part of the payment in accordance with the requirements of Company policy or applicable law. 

  
 6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00231-of-00352.parquet"}]]