Document:

Exhibit 10.14

 

AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

 

Amended
and Restated Employment Agreement (the “Agreement”) made as
of March 14, 2006, by and between 24/7 Real Media, Inc.,
a Delaware corporation, with its principal place of business at 132 W.31st
Street, 9th Floor, New York, New York 10001 (the “Company”), and
Jonathan K. Hsu (“Executive”).

 

WITNESSETH:

 

WHEREAS,
the Company and Executive are parties to an Employment Agreement (the “Prior
Agreement”), pursuant to which the Company employed Executive as its Executive
Vice President and Chief Financial Officer, and Executive agreed to serve in
such capacity; and

 

WHEREAS,
the Company and Executive now desire to amend and restate the Prior Agreement
in its entirety.

 

NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and Executive agree as follows:

 

1.                                      EMPLOYMENT.

 

(a)                                  The
Company hereby agrees to employ Executive, and Executive agrees to be employed
by the Company, on the terms and conditions herein contained as its Executive
Vice President and Chief Financial Officer, or in such other executive
managerial position or positions with the Company or its subsidiaries or
affiliates as shall hereafter be designated by the Chief Executive Officer (the
“CEO”) of the Company. Executive shall report directly to the CEO or such other
person as the CEO may designate and shall have such duties, authority and
responsibilities commensurate with Executive’s position for similarly sized
companies in the industry.

 

(b)                                 Executive
shall devote all of his business time, energy, skill and efforts to the
performance of his duties hereunder and shall faithfully and diligently serve
the Company. The foregoing shall not prevent Executive from participating in
not-for-profit activities or from managing his passive personal investments or
from providing incidental assistance to family members on matters of family
business or, subject to the approval of the Company, from serving on the boards
of directors of other entities, provided that these activities do not
materially interfere with Executive’s obligations hereunder.

 

(c)                                  Upon
the request of the Board, Executive shall also serve as a director or officer
of subsidiaries in positions commensurate with his position with the Company
without additional compensation. If any compensation is paid Executive by such
subsidiaries, they shall be a credit against amounts due hereunder.

 

1

 

2.                                      TERM OF EMPLOYMENT.

 

(a)                                  Except
for earlier termination as provided in Section 7 hereof or as extended in
this Section 2, Executive’s employment under this Agreement (the “Employment
Term”) shall commence on the date hereof (the “Commencement Date”) and continue
until terminated by either party pursuant to Section 7 hereof.

 

(b)                                 Notwithstanding
anything else herein, the provisions of Sections 8 and 9 hereof shall survive
and remain in effect notwithstanding the termination of the Employment Term or
a breach by the Company or Executive of this Agreement or any of its terms.

 

3.                                      COMPENSATION.

 

(a)                                  As
compensation for his services under this Agreement, the Company shall pay
Executive the base salary (the “Base Salary”) and the target bonuses (the “Target
Bonuses”) set forth on Exhibit A. Payment of the Base Salary shall be made
in equal installments twice a month. Payment of the Target Bonuses shall be as
specified on Exhibit A.

 

(b)                                 The
Base Salary and Target Bonuses set forth on Exhibit A shall be deemed to
be amended and restated by any final determination regarding Executive’s
compensation that is set forth in the official minutes of the Compensation
Committee of the Board of Directors.

 

4.                                      BENEFITS AND FRINGES.

 

(a)                                  During
the Employment Term, Executive shall be entitled to such benefits and fringes,
if any, as are generally provided from time to time by the Company to its
executive officers, including pension, retirement, savings, welfare (including
life and health insurance) and other employee benefit plans and arrangements.

 

(b)                                 Except
as otherwise specifically provided herein, the Executive shall be responsible
for the tax consequences of all benefits and fringes.

 

5.                                      EXPENSES. The Company shall reimburse Executive in
accordance with its expense reimbursement policy as in effect from time to time
for all reasonable expenses incurred by Executive in connection with the
performance of his duties under this Agreement upon the presentation by
Executive of an itemized account of such expenses and appropriate receipts and
otherwise in compliance with such rules relating thereto as the Company
may, from time to time, adopt.

 

6.                                      VACATION. During the Employment Term, Executive shall be
entitled to four weeks of paid
vacation per calendar year.

 

2

 

7.                                      TERMINATION.

 

(a)                                  Executive’s
employment under this Agreement and the Employment Term shall terminate upon
any of the following events:

 

(i)                                     Automatically
on the date of Executive’s death;

 

(ii)                                  Upon
written notice given by the Company to Executive if Executive is unable to
substantially perform his material duties hereunder for one hundred eighty
(180) continuous days during any period of three hundred sixty (360)
consecutive days by reason of physical or mental incapacity;

 

                                                (iii)                               Upon written notice by the Company to Executive for Cause. “Cause” shall mean (a) Executive being convicted of (or pleading nolo contendere to) a felony (other than a traffic violation) or a crime involving fraud, misappropriation, or embezzlement; (b) refusal of the Executive to attempt to properly perform his obligations under this Agreement, or follow any direction of the CEO consistent with this Agreement, which in either case is not remedied within ten (10) business days after receipt by Executive of written notice from the Company specifying the details thereof; provided, that, the refusal to follow a direction shall not be Cause if Executive in good faith reasonably believes that such direction is not legal, ethical or moral and promptly notifies the CEO in writing of such belief; (c) Executive’s gross negligence with regard to his duties or willful misconduct with regard to the business, assets or employees of the Company that is materially injurious to the financial condition or business reputation of the Company; or (d) any other breach by Executive of a material provision of this Agreement that remains uncured for twenty (20) business days after written notice thereof is given to Executive or such longer period as may reasonably be required to remedy the default, provided that Executive endeavors in good faith to remedy the default;
 

(iv)                              Upon
30 days’ written notice by the
Company without Cause; or

 

(v)                                 Upon
not less than 30 days’ written
notice by the Executive.

 

(b)                                 Upon
termination of the Employment Term, Executive shall be promptlys paid any
unpaid salary and accrued vacation through his date of termination and
reimbursement for any expenses incurred in connection with the official
business of the Company prior to his date of termination which he would be
otherwise entitled to reimbursement for in accordance with the Company’s
policies on the reimbursement of business expenses and any benefits or amounts
under any benefit or equity plan in accordance with the terms of said plan and
any fringe benefits due for the period prior to such termination. In addition,
he shall be paid any declared, but unpaid, bonus.

 

(c)                                  If
Executive’s termination is pursuant to subsection (a)(i) above,
Executive’s Beneficiary (as defined in the next sentence) shall continue to
receive payments of

 

3

 

Executive’s Base Salary, at the same time such amounts
would have been paid if Executive was still an employee of the Company for a
period of nine (9) months following Executive’s death. For purposes of
this provision, Executive’s Beneficiary shall be Executive’s spouse; if
Executive is not married on his date of death, Executive’s children, per stirpes;
and otherwise, Executive’s estate.

 

(d)                                 If
Executive’s termination is pursuant to subsection (a)(ii) above,
Executive shall be entitled to receive an amount equal to nine  months’ of Executive’s Base salary, in one
lump sum payment, less any amounts actually received by him pursuant to
long-term disability coverage, if any, provided for by the Company for the
matching pay period. After such nine months, Executive shall only be entitled
to any amounts due him under the long-term disability coverage, if any.

 

(e)                                  If
Executive’s termination is pursuant to subsection (a)(iv) above,
Executive shall receive:

 

(i)                                     for
nine months following the termination of Executive’s employment, at the same
time as it would have been paid if he were an employee of the Company, his Base
Salary;

 

(ii)                                  continued
medical and dental coverage for a period of nine months following termination
of Executive’s employment; and,

 

(iii)                               a prorated portion of his Target Bonuses for
the year of termination, reduced by amounts already paid, plus a lump-sum
payment equal to 100% the total Target Bonuses for the full-year in which
termination occurs.

 

(f)                                    All
amounts payable pursuant to this Section 7 shall be subject to required
withholding. The Company shall have no other obligations to Executive as a
result of his termination.

 

8.                                      CONFIDENTIAL INFORMATION AND NON-COMPETITION. Executive has
entered into a Non-Competition and Non-Disclosure and Developments Agreement,
dated March [  ], 2006, which
agreement is set forth on Exhibit B and is made a part hereof as
though fully set forth herein.

 

9.                                      INDEMNIFICATION. During the Employment Term and thereafter,
the Company shall defend Executive
to the fullest extent permitted by law against any claims, demands, suits or
actions, and indemnify Executive to the fullest extent
permitted by law against any judgments, fines, amounts paid in settlement and
reasonable expenses (including attorneys’ fees), and advance amounts necessary
to pay the foregoing at the earliest time and to the fullest extent permitted
by law, in connection with any claim, action or proceeding (whether civil or
criminal) against Executive (other than a claim brought by the Company) as a
result of Executive serving as an officer, director or employee of the Company
or in any capacity at the request of the Company, in or with regard to any
other entity, employee benefit plan or enterprise. This duty
to defend and indemnify shall be in addition to, and not in lieu of, any other
defense and indemnification rights. Executive shall be entitled to pursuant to
the Company’s Certificate of

 

4

 

Incorporation or By-laws
or otherwise. Following Executive’s termination of employment, the Company
shall continue to cover Executive under the Company’s directors and officers
insurance for the period during which Executive may be subject to
potential liability for any claim, action or proceeding (whether civil or
criminal) as a result of his service as an officer or director of the Company
or in any capacity at the request of the Company, at the highest level then
maintained for any then current or former officer or director.

 

10.                               EXECUTIVE REPRESENTATION. Executive represents and warrants
that he is not limited under any contractual or other provision from entering
into this Agreement and performing his obligations hereunder.

 

11.                               ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes
the full and complete understanding of the parties hereto and will supersede
all prior agreements and understandings, oral or written, with respect to the
subject matter hereof. Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by either party, or anyone acting on behalf of either party, which
are not embodied herein and that no other agreement, statement or promise not
contained in this Agreement shall be valid or binding. This Agreement may not
be modified or amended except by an instrument in writing signed by the party
against whom or which enforcement may be sought.

 

12.                               SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this Agreement
or affecting the validity or enforceability of any of the terms or provisions
of this Agreement in any other jurisdiction.

 

13.                               WAIVER OF BREACH. The waiver by any party of a breach of any
provisions of this Agreement, which waiver must be in writing to be effective,
shall not operate as or be construed as a waiver of any subsequent breach.

 

14.                               NOTICES. All notices hereunder shall be in writing and shall
be deemed to have been duly given when delivered by hand, or one (1) day
after sending by United States Postal Service express mail or other “overnight
mail service,” or three (3) days after sending by certified or registered
mail, postage prepaid, return receipt requested. Notice shall be sent as
follows:  if to Executive, to his home
address as listed in the Company’s records; and if to the Company, at its
office as set forth at the head of this Agreement. Either party may change
the notice address by notice given as aforesaid.

 

15.                               ASSIGNABILITY; BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of Executive and Executive’s legal
representatives, heirs and distributees, and shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement may not
be assigned by Executive. This Agreement may not be assigned by the
Company except in connection with a merger or a sale by the Company of all or
substantially all of its assets, and then only provided that the assignee
specifically assumes in writing all of the Company’s obligations hereunder.

 

5

 

16.                               ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement, other than injunctive relief under Section 8
(provided that Executive may initiate an arbitration proceeding to recover
legal fees in connection with such injunctive activities under the last
sentence of this Section 16) shall be settled exclusively by arbitration,
conducted before a panel of three (3) arbitrators in New York, New York,
in accordance with the rules of the American Arbitration Association then
in effect, and judgment may be entered on the arbitrators’ award in any
court having jurisdiction. The decision of the arbitrators shall be final and
binding on the parties. The parties shall equally divide all costs of the
American Arbitration Association and the arbitrators, except that the
arbitrators shall direct the Company to reimburse Executive’s portion of the
cost on the same basis as set forth in the next sentence with regard to legal
fees. Each party shall bear its own legal fees in any dispute except that, in
the event the Executive prevails on any material issue, the arbitrators shall
award the Executive his legal fees attributable to all matters other than
frivolous positions taken by the Executive (as determined by the arbitrators).

 

17.                               GOVERNING LAW. All issues pertaining to the validity,
construction, execution and performance of this Agreement shall be construed
and governed in accordance with the laws of the State of New York, without
giving effect to the conflict or choice of law provisions thereof.

 

18.                               HEADINGS. The headings in this Agreement are intended solely
for convenience or reference and shall be given no effect in the construction
or interpretation of this Agreement.

 

19.                               COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

 

[Remainder of page intentionally
left blank]

 

6

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed and Executive has hereunto set his hand as of the date first set
forth above.

 

 

	
   

  	
  24/7 REAL MEDIA, INC.

  
	
   

  
	
   

  
	
   

  	
  By: 

  	
   

  	
  /s/ David J. Moore

  	
   

  
	
   

  	
  David J. Moore

  
	
   

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  
	
   

  
	
   

  	
   

  	
  /s/ Jonathan K. Hsu

  	
   

  
	
   

  	
   

  	
   

  	
  Jonathan K. Hsu

  	
   

  
						

 

 

EXHIBIT A

 

BASE SALARY:

The Company shall pay Executive a base salary
at a rate of $220,000.00 per annum (the “Base Salary”). Annual increases in
Base Salary shall be at least 3.0%, effective the first day of each calendar
year.

 

TARGET
BONUSES:

 

The total amount of the target bonuses set
forth in this Exhibit A shall not be decreased from year to year;
provided, that, target bonus levels and the factors on which they are payable may be
adjusted from year to year by agreement of the parties hereto to reflect the
Company’s new budget for each year.

 

REVENUE BONUS

Executive has a target revenue bonus
compensation of $50,000.00 (“Target Revenue Bonus”) during FY2006. The
quarterly revenue bonus (“Quarterly Revenue Bonus”) will be determined by the
following formula:

 

	
  Actual Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly Revenue

  	
   

  	
  X

  	
   

  	
  Target Revenue
  Bonus

  	
   

  	
  =

  	
   

  	
  Quarterly
  Revenue Bonus

  
	
  Annual Company

  
	
  Revenue Goal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The Quarterly Revenue Bonus shall be paid
quarterly, within 45 days after the end of each quarter.

 

GROSS PROFIT
BONUS

Executive has a target gross profit bonus
compensation of $50,000.00 (“Target Gross Profit Bonus”) during FY2006. The
quarterly gross profit bonus (“Quarterly Gross Profit Bonus”) will be
determined by the following formula:

 

	
  Actual Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly Gross Profit

  	
   

  	
  X

  	
   

  	
  Target Gross
  Profit Bonus

  	
   

  	
  =

  	
   

  	
  Quarterly
  Gross Profit Bonus

  
	
  Annual Company

  
	
  Gross Profit Goal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

The Quarterly Gross Profit Bonus shall be
paid quarterly, within 45 days after the end of each quarter.

 

A-I

EBITA BONUS

 

Executive has a target EBITDA bonus
compensation of $50,000.00 (“Target EBITDA Bonus”) during FY2006. The annual
EBITDA bonus (“Annual EBITDA Bonus”) will be determined by the following
formula:

 

	
  Actual Company

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Annual EBITDA

  	
   

  	
  X

  	
   

  	
  Target
  EBITDA Bonus

  	
   

  	
  =

  	
   

  	
  Annual
  EBITDA Bonus

  
	
  Annual Company

  
	
  EBITDA Goal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

EBITDA Percentage is defined as Actual
Company Annual EBITDA divided by Annual Company EBITDA Goal. If the EBITDA
Percentage is above 120%, Executive will be paid the Target EBITDA Bonus
multiplied by 120%. No bonus will be paid if the EBITDA Percentage is less than
80%. The Annual EBITDA Bonus shall be paid annually, upon completion of the
annual company audit.

 

A-II

 

EXHIBIT B

 

NON-COMPETITION

AND

NON-DISCLOSURE
AND DEVELOPMENTS AGREEMENT

 

NON-COMPETITION
AND NON-DISCLOSURE AND DEVELOPMENTS AGREEMENT (the “Agreement”)
dated March [    ], 2006 between 24/7 Real Media, Inc.,
a Delaware corporation (the “Company”), with a place of business at 132 W.31st
Street, 9th Floor, New York, NY 10001, and Jonathan K. Hsu (“Executive”).

 

WHEREAS,
the Company sells Internet advertising on behalf of affiliated Web sites and
offers email and customer management services (the “Business”); and

 

WHEREAS,
the Company has developed certain proprietary information in the course of
growing its Business; and

 

WHEREAS,
Executive acknowledges the proprietary nature of the Company’s information and
recognizes that Company would be irreparably damaged if Executive were to disclose
or make unauthorized use of any proprietary information; and

 

WHEREAS,
Executive desires to continue to work for the Company.

 

NOW,
THEREFORE, in consideration of the continuation of Executive’s
employment with the Company and the compensation and other benefits Executive
will continue to receive as an employee, it is agreed as follows:

 

1.                                      Non-Competition
and Confidential Information:

 

1.1                               Executive
understands and agrees that the Company has in the past and will in the future,
continue to expend large sums of money, and apply its unique and special “know-how”,
and has in the past and will continue in the future, to devote a great effort
in building an effective organization by utilization of unique and effective
management, sales, service, marketing, finance, and other corporate techniques.
Executive further understands and agrees that the Company has gained a unique
reputation for its ability to solicit, market, sell, and service high
visibility Internet and Web-commerce accounts and that this reputation is a
major factor in bringing about the sales of the same and accounts for the
continued success of the Company in the complex and evolving Business in which
the is Company engaged.

 

1.2                               Executive
understands, admits, and agrees that he will necessarily become privy to
relationships with other employees of the Company, the Company’s customers,
customer lists, advertisers, advertiser lists, confidential plans and
structures, and other confidential

 

B-I

 

information and trade
secrets, and that, to the extent Executive is directly or indirectly involved
in the marketing or sales aspect of the Company’s Business, he will necessarily
establish a unique and strong personal and professional relationship with the
Company’s customers during the term of this Agreement, and that the aforesaid
information and other information obtained as to customers’ and advertisers’
methods of doing business, specifications of customers’ and advertisers’
advertising requirements and capacities, the time, places and other details of
when, where, and how to contact and best serve customers and advertisers,
customers’ and advertisers’ bias and prejudice as to various services,
information as to other employees or third parties who influence decisions, and
the extensive and frequent customer and advertiser contact in the personal
relationship acquired with customer and advertiser, all constitute legitimate
and protectable business interests of the Company, and are now, and even though
same may be enhanced by Executive, will continue to be extremely
confidential information and thereby exclusive property of the Company. Executive
agrees that he will hold in strictest confidence and not use for his own
benefit, or the benefit of any third party, any such confidential information.

 

1.3                               Executive
acknowledges, admits and agrees that the Company has a legitimate business
interest and right in prohibiting Executive from soliciting or enticing
customers or advertisers of the Company after termination of Executive’s
relationship with the Company, and the restrictions, limitations, and covenants
made by Executive herein, specifically within this Section 1, are
reasonable and valid and should be strictly enforced and upheld by any court of
competent jurisdiction.

 

1.4                               Executive
further understands and agrees that all customers of the Business at the time
of the signing of this Agreement and all such customers of the Company during
the term of his employment and during the term of this Agreement, are the
exclusive customers of the Company and not those of Executive.

 

1.5                               Executive
therefore agrees that, in consideration of the continuation of Executive’s
employment and the compensation Executive will continue to receive as an
employee, the sufficiency of which consideration is hereby acknowledged, until
the earlier of five (5) years from the date hereof or one (1) year
after the effective date of termination of Executive’s employment with the
Company (the “Non-Competition Period”), Executive absolutely and
unconditionally agrees that he will not directly or indirectly, either for his
own account or for the benefit of any person, firm or corporation, engage in
any business that is competitive with the Business.

 

1.6                               Executive
agrees that during the Non-Competition Period, Executive shall not discuss or
accept any relationship as a sales or marketing representative, consultant,
director, manager, officer, executive, or other employee, or representative
with any person, firm or corporation which during the term of this Agreement
was or is engaged in business activities which are competitive to the Business,
except for any such relationship that would not in any way involve or relate to
such activities or businesses.

 

B-II

 

1.7                               During
the Non-Competition Period, Executive shall not directly or indirectly own or
be a shareholder, partner of, or otherwise participate in any company that is
engaged in business activities that are competitive to the Business. Notwithstanding,
the above, Executive may hold up to a five percent (5%) interest in any
such publicly held or traded company and shall have an unlimited right to
invest in any mutual fund which is publicly traded or managed by a major
financial institution.

 

1.8                               During
the Non-Competition Period, Executive agrees to refrain from knowingly,
directly or indirectly, soliciting the Company’s employees or independent
agents so as to induce them to leave their employment or relationship with the
Company.

 

1.9                               During
the Non-Competition Period, Executive shall inform any prospective new
employer or associate prior to accepting any employment or any business
relationship of the existence of this Agreement or provide same with a copy of
this Agreement.

 

1.10                        In the
event any covenant made in this Agreement shall be more restrictive than
permitted by applicable law, it shall be limited to the extent which is so
permitted. Nothing in this Agreement shall be construed as preventing the
Company from pursuing any and all other remedies available to it for the breach
or threatened breach of covenants made in this Agreement, including recovery of
money damages or temporary or permanent injunctive relief. Accordingly,
Executive acknowledges that the remedy at law for breach of the provisions of
this agreement may be inadequate and that, in addition to any other remedy
the Company may have, it shall be entitled to an injunction restraining
any breach or threatened breach, without any bond or other security being
required and without the necessity of showing actual damages.

 

2.                                      Executive
Work Product

 

2.1                               During
the term of Executive’s employment with the Company, Executive agrees to work
exclusively for the Company.

 

2.2                               Executive
agrees to disclose promptly to the Company all ideas, inventions, discoveries,
improvements, designs, formulae, processes, production methods and
technological innovations (“Intellectual Property”), whether or not patentable,
which he may conceive or make, alone or with others, during his employment
with the Company, whether or not during working hours, and which directly or
indirectly:

 

2.2.1                     relate to the
Business of the Company; or

 

2.2.2                     are based on
or derived from his knowledge of the actual or planned business activities of
the Company; or

 

2.2.3                     are aided by
the use of materials, facilities or information belonging to the Company.

 

B-III

 

2.3                               Executive
agrees to assign to the Company (and to bind his heirs, executors and
administrators, to assign) all Intellectual Property covered by Section 2.2
of this Agreement.

 

2.4                               Without
further compensation, but at the Company’s expense, Executive agrees to give
all testimony and execute all patent applications, rights of priority,
assignments and other documents, and in general do all lawful things requested
of the Executive by the Company to enable the Company to obtain, maintain and
enforce its rights to such Intellectual Property.

 

2.5                               Executive
also recognizes that any Intellectual Property of the type covered by Section 2.2
of this Agreement which is conceived or made by the Executive within one year
of the termination of his employment with the Company is likely to have been
conceived in significant part in the course of his employment with the
Company. Accordingly, Executive agrees that any such Intellectual Property
shall be presumed to have been conceived in the course of his employment with
the Company unless and until Executive establishes the contrary by clear and
convincing evidence.

 

3.                                      Representations
and Warranties by Executive.

 

Executive represents and
warrants to the Company that:

 

3.1                               this
Agreement is valid and binding upon and enforceable against him in accordance
with its terms;

 

3.2                               he
is not bound by or subject to any contractual or other obligation or any law
that would be violated by his execution or performance of this Agreement; and

 

3.3                               he
is not the subject of any pending or, to the best of his knowledge, threatened,
claim, action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this Agreement.

 

4.                                      Notices. All notices or other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered by hand, or one (1) day after sending by United States Postal
Service express mail or other “overnight mail service,” or three (3) days
after sending by certified or registered mail, postage prepaid, return receipt
requested, to the parties at the addresses set forth below (or at such other
address as a party may specify by notice to the other in accordance with
this provision):

 

4.1                               If
to Executive, to his home address as listed in the Company’s records.

 

B-IV

 

4.2                               If
to the Company:

 

24/7 Media Real, Inc.

132 W.31st Street,
9th Floor

New York, NY 10001

Attention: General
Counsel

 

5.                                      Miscellaneous.

 

5.1                               This
Agreement may not be changed or terminated orally.

 

5.2                               Executive
may not assign any of his rights or delegate any of his duties under this
Agreement. The Company may assign any or all of its rights under this
Agreement to any subsequent owner of the Company’s business, and the assignee
shall have the right to enforce this Agreement to the same extent as the
Company.

 

5.3                               No
waiver of any term or condition of this Agreement shall be deemed to be a
waiver of any subsequent breach of that term or condition or any breach of any
other term or condition of this Agreement. Any waiver must be in writing.

 

5.4                               This
Agreement does not give Executive any rights to employment by the Company and,
unless otherwise provided in a separate writing executed by an officer of the
Company and the Executive, the Executive’s employment at the Company shall be
at will by both Executive and the Company.

 

5.5                               If
any provision of this Agreement would be deemed invalid or unenforceable for
any reason, including, without limitation, because of its geographic or
business scope or duration, such provision shall be construed in such a way as
to make it valid and enforceable to the maximum extent possible. Any invalidity
or unenforceability of any provision in this Agreement shall not affect or
render invalid or unenforceable any other provision of this Agreement or any
other Agreement or instrument.

 

5.6                               This
Agreement shall be governed by and construed in accordance with the laws of the
state of New York, without giving effect to the conflict or choice of law
provisions thereof.

 

B-V

 

IN
WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed and Executive has hereunto set his hand as of the date first set
forth above.

 

 

	
   

  	
  24/7 Real Media, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ David J. Moore

  	
   

  
	
   

  	
  David J. Moore

  
	
   

  	
  Chairman
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  	
   

  	
  /s/ Jonathan K. Hsu

  	
   

  
	
   

  	
  Jonathan K. Hsu

  
								

 

B-VIExhibit 10.3.5

 

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION
AGREEMENT (the “Agreement”) is entered into as of                   between
INVESTMENT TECHNOLOGY GROUP, INC., a Delaware corporation (the “Company”) and                                 ,
an employee of the Company (“Employee”).

 

WHEREAS, the Compensation
Committee of the Board of Directors of the Company has determined that it is in
the interest of the Company to provide the Employee with an option to purchase
the common stock of the Company:

 

NOW THEREFORE, the
parties agree as follows:

 

1.1.          The Company has granted to the
Employee a nonqualified stock option (the “Option”) to purchase                 shares
of the Company’s Common Stock (the “Common Stock”), for a price per share equal
to $          per share (the “Option
Price”).  The date of grant of the Option
is             (“Grant
Date”).  This Option is intended to be a
nonqualified stock option and shall not be treated as an incentive stock option
under the provisions of the Internal Revenue Code of 1986, as amended.

 

1.2.          The Option is granted under Section 6.1
of the Company’s 1994 Stock Option and Long-Term Incentive Plan (the “Plan”).  All of the terms and conditions of the Plan
are hereby incorporated by reference in this Agreement as though fully set
forth herein.  Terms defined in the Plan
but not in this Agreement shall have the meanings set forth in the Plan.  To the extent of any conflict between the
provisions of this Agreement and those of the Plan, the provisions of the Plan
shall govern.  Employee acknowledges
receipt of a copy of the Plan, accepts the Option subject to the terms and
conditions set forth in the Plan and this Agreement, and consents to and agrees
to comply with such terms and conditions.

 

1.3.          This Option is granted for no
consideration other than the services of Employee and Employee’s agreements set
forth herein.

 

1.4.          The grant of the Option is exempt from
the provisions of Section 16(b) of the Securities Exchange Act of
1934 (the “Exchange Act”) pursuant to the provisions of Rule l6b-3, all of
the requirements of which have been satisfied.

 

2.1.          Except as provided herein, the Option
will vest and become exercisable in full on the third anniversary of the Grant
Date.  In the event of termination of
Employee’s employment with the Company (including all subsidiaries) by reason
of death or disability, the Option shall become vested and exercisable in full
at the time of such termination.  In the
event of termination of Employee’s employment with the Company (including all
subsidiaries)

 

 

for any other reason, prior to the date the Option otherwise becomes
vested, the Option shall be forfeited. 
Notwithstanding any other provision of this Agreement to the contrary,
the Option will become vested and exercisable in full immediately prior to a
Change of Control (as defined in Section 3.2 below), provided the Employee’s
employment with the Company (including all subsidiaries) has not terminated
prior to such time.

 

2.2.          The Option (to the extent not earlier
exercised or forfeited) will expire at 5:00 p.m., Eastern time, on the
earliest of (i) the fifth anniversary of the Grant Date, (ii) if
Employee’s employment with the Company (including all subsidiaries) terminates
by reason of death or disability, one year following such termination of
employment, or (iii) if Employee’s employment with the Company (including
all subsidiaries) terminates for any other reason, 60 days after the date of
such termination.  Notwithstanding any
other provision of this Agreement to the contrary, in the event of a Change of
Control at a time when the Employee is an employee of the Company (including
all subsidiaries), the Option will be exercisable until 5:00 p.m., Eastern
time, on the fifth anniversary of the Grant Date, without regard to whether the
Employee’s employment with the Company or any of its subsidiaries continues
after such Change of Control.

 

3.1.          To the extent the Option is
exercisable under the provisions of Sections 2.1 and 2.2 hereof, the Option may
be exercised by giving written notice of exercise of the Option to the
Secretary of the Company, and it shall be deemed to have been received either
when delivered personally to the office of the Secretary or at 11:58 p.m.
on the date of any U.S. Postal Service postmark on the notice, whichever is
earlier (the “Exercise Date”).  Such
notice shall be irrevocable and must be accompanied by the payment of the
purchase price as provided in Section 4 below.  Upon the exercise of the Option, the Company
will transfer or will cause to be issued a certificate or certificates for the
Common Stock being purchased as promptly as practicable.

 

3.2.                              “Change
of Control” means and shall be deemed to have occurred:

 

(a)           if any person (within the meaning of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other
than the Company or a Related Party, is or becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
Voting Securities representing 30% percent or more of the total voting power of
all the then-outstanding Voting Securities; or

 

(b)           if
the individuals who, as of the date hereof, constitute the Board of Directors
of the Company, together with those who first become directors subsequent to
such date and whose recommendation, election or nomination for election to the
Board of Directors of the Company was approved by a vote of at least a majority
of the directors then still in office who either were directors as of the date
hereof or whose recommendation, election or nomination for

 

2

 

election was previously so approved, cease for any reason to constitute
a majority of the members of the Board of Directors of the Company; or

 

(c)           upon
consummation of a merger, consolidation, recapitalization or reorganization of
the Company, reverse split of any class of Voting Securities, or an acquisition
of securities or assets by the Company other than (i) any such transaction
in which the holders of outstanding Voting Securities immediately prior to the
transaction receive (or retain), with respect to such Voting Securities, voting
securities of the surviving or transferee entity representing more than 50
percent of the total voting power outstanding immediately after such
transaction, with the voting power of each such continuing holder relative to
other such continuing holders not substantially altered in the transaction, or (ii) any
such transaction which would result in a Related Party beneficially owning more
than 50 percent of the voting securities of the surviving or transferee entity
outstanding immediately after such transaction; or

 

(d)           upon
consummation of the sale or disposition by the Company of all or substantially
all of the Company’s assets, other than any such transaction which would result
in a Related Party owning or acquiring more than 50 percent of the assets owned
by the Company immediately prior to the transaction; or

 

(e)           if
the stockholders of the Company approve a plan of complete liquidation of the
Company.

 

 “Related Party”
means (a) a majority-owned subsidiary of the Company; (b) an employee
or group of employees of the Company or any majority-owned subsidiary of the
Company; (c) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any majority-owned subsidiary of the
Company; or (d) a corporation owned directly or indirectly by the
stockholders of the Company in substantially the same proportion as their
ownership of Voting Securities.

 

“Voting Securities or Security” means any securities
of the Company which carry the right to vote generally in the election of directors.

 

4.1.          The purchase price of Common Stock
purchased by the Employee upon exercise of the Option (the “Option Shares”)
shall be paid in full to the Company at the time of such exercise in cash
(including by check) or by the surrender of Common Stock of the Company or a
combination thereof, in accordance with Section 9.3 of the Plan, provided
that Common Stock held for less than six months may be surrendered only with
the approval of the Committee.

 

5.1.          The number and kind of shares
purchasable upon exercise of the Option, and other terms of the Option, may be
appropriately adjusted, in the discretion of the

 

3

 

Committee, in accordance with Section 5.5 of the Plan, in order to
prevent dilution or enlargement of the rights of the Employee.

 

6.1.          The Employee represents and warrants
that the Employee is acquiring the Option for his/her own account and not with
a view to distribution of this Option or the Option Shares.  As a condition to the exercise of the Option,
and in the event that the Option Shares have not yet been registered under the
Securities Act of 1933, as amended (the “Act”) at the time they are issued, the
Company may require the Employee to make any representation and/or warranty to
the Company as may, in the judgment of counsel to the Company, be required
under any applicable law or regulation, including but not limited to a
representation and warranty that the Option Shares are being acquired only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is
required under the Act or any other applicable law, regulation or rule of
any governmental agency.

 

7.1.          Neither the Employee nor any other
person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey the
Option or any amounts payable pursuant to the provisions of this Agreement,
which Option and amounts are, and all rights under this Agreement are,
expressly declared to be unassignable and nontransferable, other than by will
or under the laws of descent and distribution. 
No part of the Option or such amounts payable shall be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by the Employee or any other person, nor be
transferable by operation of law in the event of the Employee’s or any other
person’s bankruptcy or insolvency.

 

8.1.          Neither the Employee nor any other
person shall acquire by reason of the Option or the Option Shares any right in
or title to any assets, funds or property of the Company whatsoever including,
without limiting the generality of the foregoing, any specific funds or assets
which the Company, in its sole discretion, may set aside in anticipation of a liability.  No trust shall be created in connection with
or by the granting of the Option or the purchase of any Option Shares, and any
benefits which become payable hereunder shall be paid from the general assets
of the Company.  The Employee shall have
only a contractual right to the amounts, if any, payable pursuant to this
Agreement, unsecured by any asset of the Company or any of its affiliates.

 

9.1.          Nothing herein will limit the Company’s
right to issue Common Stock, or options or other rights to purchase Common
Stock, to its employees, subject to vesting, expiration and other terms and conditions
deemed appropriate by the Company and its affiliates.

 

10.1.        The
Employee authorizes the Company to withhold, in accordance with any applicable
law, from any compensation payable to him/her any taxes required to be withheld
by federal, state or local law upon the issuance of Option Shares or the
payment of

 

4

 

money pursuant to the exercise of the Option.  The Employee may elect to have the Company
withhold Option Shares to pay any applicable withholding taxes resulting from
the exercise of the Option, in accordance with any rules or regulations of
the Committee then in effect.

 

11.1.        Shares
issued pursuant to exercise of the Options shall be shares of Common Stock, the
issuance of which is registered under the Act.

 

12.1.        The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors, transferees and assignees of the Employee and the Company.

 

13.1.        In
any action at law or in equity to enforce any of the provisions or rights under
this Agreement, including any arbitration proceedings to enforce such
provisions or rights, the unsuccessful party to such litigation or arbitration,
as determined by the court in a final judgment or decree, or by the panel of arbitrators
in its award, shall pay the successful party or parties all costs, expenses and
reasonable attorneys’ fees incurred by the successful party or parties
(including without limitation costs, expenses and fees on any appeals), and if
the successful party recovers judgment in any such action or proceeding such
costs, expenses and attorneys’ fees shall be included as part of the judgment.

 

14.1.        The
Employee agrees to perform all acts and execute and deliver any documents that
may be reasonably necessary to carry out the provisions of this Agreement,
including but not limited to all acts and documents related to compliance with
federal and/or state securities laws.

 

15.1.        For
convenience, this Agreement may be executed in any number of identical
counterparts, each of which shall be deemed a complete original in itself and
may be introduced in evidence or used for any other purposes without the
production of any other counterparts.

 

16.1.        This
Agreement shall be construed and enforced in accordance with Section 10 of
the Plan.

 

17.1.        This
Agreement, together with the Plan, sets forth the entire agreement between the
parties with reference to the subject matter hereof, and there are no
agreements, understandings, warranties, or representations, written, express,
or implied, between them with respect to the Option other than as set forth
herein or therein, all prior agreements, promises, representations and
understandings relative thereto being herein merged.

 

18.1.        Nothing
expressed or implied herein is intended or shall be construed to confer upon or
give to any person, other than the parties hereto, any right, remedy or claim
under or by reason of this Agreement or of any term, covenant or condition
hereof.

 

5

 

19.1.        This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived only by a written instrument
executed by the parties hereto or, in the case of a waiver, by the party
waiving compliance.  Any such written
instrument must be approved by the Committee to be effective as against the
Company.  The failure of any party at any
time or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same.  No waiver by any party of the breach of any
term or provision contained in this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.

 

20.1.        Any
notice to be given hereunder shall be in writing and delivered personally or
sent by registered or certified mail, postage prepaid, and, if to the Company,
addressed to it at 380 Madison Avenue, New York, New York 10017, Attn: General
Counsel, and, if to the Employee, addressed to him/her at the address set forth
in his/her offer letter, or to such other address of such party as that party
may designate by written notice to the other.

 

21.1.        Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.

 

22.1         Neither
this Agreement nor any action taken hereunder shall be construed as giving Employee
the right to be retained in the employ of the Company (or any of its
subsidiaries) nor shall it interfere in any way with the right of the Company
(or any of its subsidiaries) to terminate Employee’s employment at any time.

 

6

 

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

 

	
   

  	
  INVESTMENT
  TECHNOLOGY GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Raymond L. Killian, Jr.

  
	
   

  	
   

  	
  CEO and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

7

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