Document:

Form of Subscription Agreement

 Exhibit 10.2 
 SUBSCRIPTION AGREEMENT 
 Rainmaker Systems, Inc. 

900 East Hamilton Avenue, Suite 400 
 Campbell, CA 95008 
 Ladies and Gentlemen: 

The undersigned (the “Investor”) hereby confirms its agreement with Rainmaker Systems, Inc., a Delaware corporation (the
“Company”), as follows: 
 1. This Subscription Agreement, including the Terms and Conditions for Purchase of
Units attached hereto as Annex I which are incorporated herein by this reference as if fully set forth herein (the “Terms and Conditions” and, together with this Subscription Agreement, this “Agreement”) is
made as of the date set forth below between the Company and the Investor. 
 2. The Company has authorized the sale and issuance
to certain investors of up to an aggregate of 4,000,000 units (the “Units”), each Unit consisting of (i) one (1) share (each, a “Share” and, collectively, the “Shares”) of common stock,
par value $0.001 per share, of the Company (the “Common Stock”), and (ii) one warrant (each, a “Warrant” and, collectively, the “Warrants”) to purchase 0.40 shares of Common Stock, in
substantially the form attached hereto as Exhibit B, for a purchase price of $1.05 per Unit (the “Purchase Price”). Units will not be issued or certificated and the Shares and Warrants are immediately separable and will be
issued separately. The shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the “Warrant Shares” and, together with the Units, the Shares and the Warrants, are referred to herein as the
“Securities”. 
 3. The offering and sale of the Units (the “Offering”) are being made
pursuant to (a) an effective Registration Statement on Form S-3, No. 333-171946 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”), including
the Prospectus contained therein (the “Base Prospectus”), (b) if applicable, certain “free writing prospectuses” (as that term is defined in Rule 405 under the Securities Act of 1933, as amended (the
“Act”)), that have been or will be filed, if required, with the Commission and delivered to the Investor on or prior to the date hereof (the “Issuer Free Writing Prospectus”), containing only certain supplemental
information regarding the Units, the terms of the Offering and/or the Company, and (c) a Prospectus Supplement (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Securities and terms of the Offering and the Company that has been or will be filed with the Commission and has been delivered to the Investor prior to the Closing. 

4. The Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the
Investor the number of Units set forth below (the “Investor Units”) for the aggregate purchase price set forth below (the “Investor Purchase Price”). The Investor Units shall be purchased pursuant to the Terms and
Conditions. The Investor acknowledges that the Offering is not being underwritten by the placement agent named in the Prospectus Supplement and that the Closing of the Offering is subject to a minimum aggregate offering amount of $3,000,000.

 5. The manner of settlement of the Shares included in the Investor Units purchased by the
Investor (the “Investor Shares”) shall be as follows: 
 Delivery by crediting the account of the
Investor’s prime broker (as specified by such Investor on Exhibit A annexed hereto) with the Depository Trust Company (“DTC”) through its Deposit/Withdrawal At Custodian (“DWAC”) system, whereby
Investor’s prime broker shall initiate a DWAC transaction on the Closing Date using its DTC participant identification number, and released by Computershare Investor Services, LLC, the Company’s transfer agent (the “Transfer
Agent”), at the Company’s direction. NO LATER THAN 8:00 A.M. (EASTERN TIME) ON THE SECOND BUSINESS DAY IMMEDIATELY AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL: 

 

	 	(I)	DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO BE CREDITED WITH THE INVESTOR SHARES ARE MAINTAINED TO SET UP A DWAC INSTRUCTING THE TRANSFER AGENT TO
CREDIT SUCH ACCOUNT OR ACCOUNTS WITH THE INVESTOR SHARES, AND 

  

	 	(II)	REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE AGGREGATE PURCHASE PRICE FOR THE INVESTOR UNITS BEING PURCHASED BY THE INVESTOR TO THE FOLLOWING ACCOUNT:

  

			
	Bank:	  	Citibank, N.A.
		  	666 Fifth Avenue
		  	New York, NY 10103
	ABA No.:	  	021000089
	Account Name:	  	Kramer Levin Naftalis & Frankel LLP IOLA Account
	Account No.:	  	37317968
	Reference:	  	Rainmaker Systems, Inc./ Merriman Capital, Inc.

 IT IS THE INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM
THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DWAC IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE INVESTOR UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR
SETTLEMENT IN A TIMELY MANNER, THE SHARES AND THE WARRANTS MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER. 
 6. The executed Warrant shall be delivered in accordance with the terms thereof. 

  
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 7. The Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company, (b) it is not a member of the Financial Industry Regulatory Authority, Inc. or an Associated Person (as
such term is defined under the NASD Membership and Registration Rules Section 1011) as of the Closing, and (c) neither the Investor nor any group of Investors (as identified in a public filing made with the Commission) of which the
Investor is a part in connection with the Offering of the Shares, acquired, or obtained the right to acquire, 20% or more of the Common Stock (or securities convertible into or exercisable for Common Stock) or the voting power of the Company on a
post-transaction basis. 
 Exceptions:
                                         
                                         
                           
 (If no exceptions, write “none.” If left blank, response will be deemed to be “none.”) 
 8. The Investor represents that it has received (or otherwise had made available to it by the filing by the Company of an electronic version thereof with the Commission) the Base Prospectus, declared
effective by the Commission on March 7, 2011, which is a part of the Company’s Registration Statement, and the documents incorporated by reference therein, any Issuer Free Writing Prospectus and the Prospectus Supplement (collectively, the
“Disclosure Package”), prior to or in connection with the receipt of this Agreement. The Investor acknowledges that, prior to the delivery of this Agreement to the Company, the Investor will receive certain additional information
regarding the Offering and the Company, including the pricing information (the “Offering Information”). Such information may be provided to the Investor by any means permitted under the Act, including the Prospectus Supplement, a
free writing prospectus and oral communications. The Investor acknowledges that the Disclosure Package contains information that may be material to the Company and its securities that will not be disclosed to the public until the Company files a
Current Report on Form 8-K in accordance with Section 13 of Annex I hereto, and the Investor agrees not to transact or agree to transact in the Company’s securities (other than as contemplated by this Agreement) unless and
until (a) the Company files a Current Report on Form 8-K with the Commission in accordance with Section 13 of Annex I hereto and (b) The Nasdaq Stock Market, LLC has opened for regular trading on June 23, 2011.

 9. No offer by the Investor to buy Investor Units will be accepted and no part of the Investor Purchase Price will be
delivered to the Company until the Investor has received or has public access to the Disclosure Package and the Offering Information and the Company has accepted such offer by countersigning a copy of this Agreement, and any such offer may be
withdrawn or revoked, without obligation or commitment of any kind, at any time prior to the Company (or the Agent (as defined in the Terms and Conditions) on behalf of the Company) sending (orally, in writing or by electronic mail) notice of its
acceptance of such offer. An indication of interest will involve no obligation or commitment of any kind until the Investor has been delivered the Disclosure Package and Offering Information and this Agreement is accepted and countersigned by or on
behalf of the Company. 

  
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 Number of Units:
                                         
                    
 Purchase Price Per Unit:
$1.05 
 Aggregate Investor Purchase Price: $
                             
 Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose. 

 

					
	Dated as of: June         , 2011
	
	  

	INVESTOR (print exact legal name)
			
	By:	 		 	  

		 		 	Print Authorized Signatory Name:

			
		
	Title:	 	  

			
		
	Address:	 	  

	
	  

 [Signature Page to Rainmaker Systems, Inc. Subscription Agreement] 

 Agreed and Accepted 
 this          day of June, 2011: 
  

			
	RAINMAKER SYSTEMS, INC.
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

 [Signature Page to Rainmaker Systems, Inc. Subscription Agreement] 

 ANNEX I 

TERMS AND CONDITIONS FOR PURCHASE OF UNITS 
 1. Authorization and Sale of the Units. Subject to the terms and conditions of this Agreement, the Company has authorized the sale of the Units. 

2. Agreement to Sell and Purchase the Units; Agent. 

 

	 	2.1	At the Closing (as defined in Section 3.1), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms
and conditions set forth herein, the number of Units set forth on the last page of the Agreement to which these Terms and Conditions for Purchase of Units are attached as Annex I (the “Signature Page”) for the aggregate
purchase price therefor set forth on the Signature Page. 

  

	 	2.2	The Company anticipates that other investors (the “Other Investors”) will participate in the Offering, and expects to complete sales of Units to
them. The Company agrees that such Other Investors will execute substantially the same form of Subscription Agreement as this Agreement. The Investor and the Other Investors are hereinafter sometimes collectively referred to as the
“Investors,” and this Agreement and the Subscription Agreements executed by the Other Investors are hereinafter sometimes collectively referred to as the “Agreements.” 

 

	 	2.3	Investor acknowledges that the Company has agreed to pay Merriman Capital, Inc. (the “Agent”) a fee of six and one half percent (6.5%) in
respect of the sale of Shares (and, upon exercise of the Warrants, the sale of Warrant Shares) to the Investor. In addition, Investor acknowledges that the Company has agreed to issue to the Agent, upon completion of the Offering, warrants to
purchase shares of Common Stock in an amount equal to three percent (3%) of the shares of Common Stock sold in the Offering at a per share exercise price equal to the Purchase Price (the “Placement Fee”).

  

	 	2.4	The Company has entered into a Placement Agent Agreement, dated the date hereof (the “Placement Agreement”), with the Agent that contains
certain representations, warranties, covenants and agreements of the Company that may be relied upon by the Investor, which shall be a third party beneficiary thereof. 

 

	 	2.5	The Company covenants and agrees to use commercially reasonable efforts to keep the Registration Statement effective for as long as is needed to deliver freely
tradable Warrant Shares. 

 3. Closing and Delivery of the Units and Funds. 

 

	 	3.1	Closing. The completion of the purchase and sale of the Units (the “Closing”) shall occur at a place and time (the
“Closing Date”) to be specified by the Company and the Agent, and of which the Investors will be notified in advance by the Agent, in accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). At the Closing, (a) the Company shall cause the Transfer Agent to deliver to the Investor the number of Shares set forth on the Signature Page registered in the name of the Investor or, if so indicated on the
Investor Questionnaire attached hereto as Exhibit A, in the name of a nominee designated by the Investor, (b) the Company shall cause to be delivered to the Investor a Warrant to purchase a number of whole Warrant Shares determined by
multiplying the number of Units set forth on the signature page by 0.40 and rounding up to the nearest whole number, and (c) the aggregate purchase price for the Units being purchased by the Investor will be delivered by or on behalf of the
Investor to an escrow account identified by the Agent pending the Closing and the release of the aggregate purchase price to the Company. 

  

	 	3.2	Conditions to the Obligations of the Parties. 

 (a) Conditions to the Company’s Obligations. The Company’s obligation to issue and sell the Units to the Investor shall be subject to: (i) the receipt by the Company following
release from escrow of the purchase price for the Units being purchased hereunder as set forth on the Signature Page and (ii) the accuracy of the representations and warranties made by the Investor and the fulfillment of those undertakings of
the Investor to be fulfilled prior to the Closing Date. 
 (b) Conditions to the Investor’s Obligations. The
Investor’s obligation to purchase the Units will be subject to (x) the representations and warranties made by the Company in the Agreements and the Placement Agreement shall be true and correct as of the date hereof and as of the Closing
Date and the Company shall have fulfilled those undertakings of the Company required to be fulfilled prior to the Closing Date, as set forth in the Placement Agreement, and (y) that the Agent shall not have: (i) terminated the Placement
Agreement pursuant to the terms thereof or (ii) determined that the conditions to the closing in the Placement Agreement have not been satisfied. The Investor’s obligations are expressly not conditioned on the purchase by any or all of the
Other Investors of the Units that they have agreed to purchase from the Company. The Investor understands and agrees that, in the event that the Agent, in its sole discretion determines that the conditions to closing in the Placement Agreement have
not been satisfied or if the Placement Agreement may be terminated for any other reason permitted by the Placement Agreement, then the Agent may, but shall not be obligated to, terminate the Placement Agreement, which shall have the effect of
terminating this Subscription Agreement pursuant to Section 14 below. The Agent shall not have the authority to amend or modify the Company’s representations and 

  
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warranties set forth in Section 3 of the Placement Agreement or the closing conditions contained in Section 7 of the Placement Agreement in a manner adverse to the Investor or waive any
provisions or conditions contained therein without the consent of the Investor. 
  

	 	3.3	Delivery of Funds. BY NO LATER THAN 8:00 A.M. (EASTERN TIME) ON THE SECOND BUSINESS DAY IMMEDIATELY AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE INVESTOR
AND THE COMPANY, the Investor shall remit by wire transfer the amount of funds equal to the aggregate purchase price for the Investor Units being purchased by the Investor to the following account: 

 

			
	Bank:	  	Citibank, N.A.
		  	666 Fifth Avenue
		  	New York, NY 10103
	ABA No.:	  	021000089
	Account Name:	  	Kramer Levin Naftalis & Frankel LLP IOLA Account
	Account No.:	  	37317968
	Reference:	  	Rainmaker Systems, Inc./ Merriman Capital, Inc.

  

	 	3.4	Delivery of Shares. BY NO LATER THAN 8:00 A.M. (EASTERN TIME) ON THE SECOND BUSINESS DAY IMMEDIATELY AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
INVESTOR AND THE COMPANY, the Investor shall direct the broker-dealer at which the account or accounts to be credited with the Investor Shares are maintained, which broker/dealer shall be a DTC participant, to set up a DTC Deposit/Withdrawal at
Custodian (“DWAC”) instructing the Transfer Agent to credit such account or accounts with the Shares. Such DWAC instruction shall indicate the settlement date for the deposit of the Shares, which date shall be provided to the Investor by
the Agent. Simultaneously with the delivery to the Company of the funds, the Company shall direct the Transfer Agent to credit the Investor’s account or accounts with the Investor Shares pursuant to the information contained in the DWAC.

 4. Representations, Warranties and Covenants of the Investor. 

The Investor acknowledges, represents and warrants to, and agrees with, the Company and the Agent, that: 

 

	 	4.1	 The Investor (a) is knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to, investments
in securities presenting an investment decision like that involved in the purchase of the Units, including investments in securities issued by the Company and investments in comparable companies, (b) has answered all questions on the Signature
Page and the Investor Questionnaire and the answers thereto are true and correct as of the date hereof and will be true 

  
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and correct as of the Closing Date and (c) in connection with its decision to purchase the number of Units set forth on the Signature Page, has received and is relying only upon the
Disclosure Package and the documents incorporated by reference therein and the Offering Information. 

  

	 	4.2	(a) No action has been or will be taken in any jurisdiction outside the United States by the Company or the Agent that would permit an offering of the Units, or
possession or distribution of offering materials in connection with the issue of the Securities in any jurisdiction outside the United States where action for that purpose is required, (b) if the Investor is outside the United States, it will
comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Securities or has in its possession or distributes any offering material, in all cases at its own expense and (c) the
Agent is not authorized to make and has not made any representation, disclosure or use of any information in connection with the issue, placement, purchase and sale of the Units, except as set forth or incorporated by reference in the Base
Prospectus, the Prospectus Supplement or any Issuer Free Writing Prospectus. 

  

	 	4.3	(a) The Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all
necessary action to authorize the execution, delivery and performance of this Agreement, and (b) this Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles
of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as to the enforceability of any rights to indemnification or contribution that may be violative of the public policy underlying any
law, rule or regulation (including any federal or state securities law, rule or regulation). 

  

	 	4.4	The Investor understands that nothing in this Agreement, the Prospectus, the Disclosure Package, the Offering Information or any other materials presented to the
Investor in connection with the purchase and sale of the Units constitutes legal, tax or investment advice. The Investor has consulted such legal, tax and investment advisors and made such investigation as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of the Units. 

  

	 	4.5	 Since the date on which any Agent first contacted the Investor about the Offering, the Investor has not disclosed any information regarding the
Offering to any third parties (other than its legal, accounting and other 

  
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advisors) and has not engaged in any purchases or sales involving the securities of the Company (including, without limitation, any Short Sales involving the Company’s securities). The
Investor covenants that it will not engage in any purchases or sales in the securities of the Company (including Short Sales) or disclose any information about the Offering (other than to its advisors that are under a legal obligation of
confidentiality) prior to the time that the transactions contemplated by this Agreement are publicly disclosed. The Investor agrees that it will not use any of the Securities acquired pursuant to this Agreement to cover any short position in the
Common Stock if doing so would be in violation of applicable securities laws. For purposes hereof, “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under
the Exchange Act, whether or not against the box, and all types of direct and indirect stock pledges, forward sales contracts, options, puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under the
Exchange Act) and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers. 

5. Survival of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement
or by the Agent, all covenants, agreements, representations and warranties made by the Company and the Investor herein will survive the execution of this Agreement, the delivery to the Investor of the Shares and the Warrants being purchased and the
payment therefor. 
 6. Notices. All notices, requests, consents and other communications hereunder will be in writing,
will be mailed (a) if within the domestic United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile or (b) if delivered from outside the United
States, by International Federal Express or facsimile, and (c) will be deemed given (i) if delivered by first-class registered or certified mail domestic, three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed and (iv) if delivered by facsimile, upon electronic confirmation of receipt and will be delivered
and addressed as follows: 
 (a) if to the Company, to: 

Rainmaker Systems, Inc. 
 900 East Hamilton Avenue 
 Campbell, California 95008 

Attention: Timothy Burns, CFO 
 Fax: (408) 340-2625 

  
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 with a copy to: 

Paul, Hastings, Janofsky & Walker, LLP 
 55 Second Street, 24th Floor 
 San Francisco, CA 94105 

Attention: David F. Dedyo 
 Fax: (415) 856-7328 
 (b) if to the Investor, at its address on the Signature
Page hereto, or at such other address or addresses as may have been furnished to the Company in writing. 
 7. Changes.
This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor. 
 8. Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement. 

9. Severability. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby. 
 10. Governing Law. This Agreement will be governed by, and construed in accordance with, the internal laws of the State of New York, without giving effect to the principles of conflicts of law that
would require the application of the laws of any other jurisdiction. 
 11. Counterparts. This Agreement may be executed
in two or more counterparts, each of which will constitute an original, but all of which, when taken together, will constitute but one instrument, and will become effective when one or more counterparts have been signed by each party hereto and
delivered to the other parties. The Company and the Investor acknowledge and agree that the Company shall deliver its counterpart to the Investor along with the Prospectus Supplement (or the filing by the Company of an electronic version thereof
with the Commission). 
 12. Confirmation of Sale. The Investor acknowledges and agrees that such Investor’s receipt
of the Company’s signed counterpart to this Agreement, together with the Prospectus Supplement (or the filing by the Company of an electronic version thereof with the Commission), shall constitute written confirmation of the Company’s sale
of Units to such Investor. 
 13. Press Release and 8-Ks. The Company and the Investor agree that the Company shall,
prior to the opening of the financial markets in New York City on the business day immediately after the date hereof, (a) issue a press release announcing the Offering and disclosing all material information regarding the Offering,
(b) file a Current Report on Form 8-K with the Commission including a form of this Agreement and the Placement Agreement as exhibits thereto, which such Current Report on Form 8-K shall include all material information regarding the Offering,
and (c) if applicable, file another Current Report on Form 8-K with the 

  
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Commission disclosing any other material information regarding the Company that is contained in the Disclosure Package. Notwithstanding the foregoing, the Company shall not publicly disclose the
name of the Investor or any affiliate or investment adviser of the Investor, or include the name of the Investor or any affiliate or investment adviser of any Investor in any press release or filing with the Commission or any regulatory agency or
trading market, without the prior written consent of such Investor, except (i) as required by federal securities law and (ii) to the extent such disclosure is required by law or trading market regulations, in which case the Company shall
provide the Investor with prior written notice of such disclosure permitted under this sub-clause (ii). As of the filing of the Form 8-Ks referred to in clauses (b) and (c) described above, the Investor shall not be in possession of any
material, non public information received from the Company, any subsidiary of the Company or any of their respective officers, directors or employees in connection with the Offering. 

14. Termination. In the event that the Placement Agreement is terminated by the Agent pursuant to the terms thereof, this
Agreement shall terminate without any further action on the part of the parties hereto. The Investor shall have the right to terminate this agreement if the Closing has not occurred on or before June 28, 2011. 

  
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 EXHIBIT A TO SUBSCRIPTION AGREEMENT 

RAINMAKER SYSTEMS, INC. 
 INVESTOR QUESTIONNAIRE 
 Pursuant to Section 3 of Annex I to the
Agreement, please provide us with the following information: 
  

	1.	The exact name that your Shares and Warrants are to be registered in. You may use a nominee name if appropriate: 

 

	2.	The relationship between the Investor and the registered holder listed in response to item 1 above: 

 

	3.	The mailing address of the registered holder listed in response to item 1 above: 

 

	4.	The Social Security Number or Tax Identification Number of the registered holder listed in the response to item 1 above: 

 

	5.	Name of DTC Participant (broker-dealer at which the account or accounts to be credited with the Shares are maintained): 

 

	6.	DTC Participant Number: 

	7.	Name of Account at DTC Participant being credited with the Shares: 

  

	8.	Account Number at DTC Participant being credited with the Shares. 

  
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 EXHIBIT B TO SUBSCRIPTION AGREEMENT 

FORM OF WARRANT 
 [Attached as Exhibit 4.1 to this Current Report on Form 8-K filed with the Commission on June 23, 2011.]Letter Agreement - Michael J. Thomson, dated September 2, 2010

 Exhibit 10.12 

 

			
	  

 

	  	Dennis Zeleny
	  	Senior Vice President and
	  	Chief Human Resources Officer
	  	
	  	  
 Sunoco, Inc.

	  	1735 Market Street Ste LL
	  	Philadelphia PA 19103-7583
	  	215 977 3222
	  	Fax 215 977 3131
	  	dzeleny@sunocoinc.com

September 2, 2010 
 Mr. Michael J. Thomson 
 599 Beacon Court 

Lenoir City, TN 37772 
 Dear Mike: 
 This letter agreement (“Letter Agreement”) serves to set
forth the terms of the compensation arrangement between Sunoco, Inc. and you in connection with Sunoco’s separation of SunCoke Energy, either by means of a spin-off transaction, including an initial public offering, (following which SunCoke
would be an independent publicly-traded company) (“Spin-Off”) or by means of a sale transaction (following which SunCoke would be owned by an entity other than Sunoco) (“Sale”). For purposes of this Letter Agreement, the term
Transaction refers to the Spin-Off or Sale, as applicable. This letter agreement is subject to final approval by the Compensation Committee of Sunoco, Inc. 
 Because your leadership is very important to the successful execution of the Transaction, Sunoco is prepared to offer you the following incentive arrangement to ensure that Sunoco and SunCoke will have
the benefit of your continued employment as described below: 
 Compensation Terms: 

1. Payments Upon Consummation of Transaction. Subject to the completion (the “Closing”) of the Transaction on or prior to
January 1, 2012 and your continuous employment with Sunoco or SunCoke through the date of the Closing: 
 (a) Sunoco shall
pay to you, as soon as reasonably practicable (but in no event later than the fifteenth business day following the Closing), a lump sum cash payment in the amount of $500,000, less applicable tax and other withholdings. 

(b) (i) In the event of a Spin-Off, as soon as reasonably practicable following the occurrence of the Spin-Off, SunCoke will grant to you
a number of SunCoke share units equal to the quotient obtained by dividing $500,000 by the closing price of SunCoke common stock on the grant date, which share units shall vest on the earlier of (A) the one year anniversary of the Spin-Off,
subject to your employment with SunCoke on such vesting date, or (B) the termination of your employment with SunCoke due to death or Disability, or by SunCoke (other than for Just Cause). In the

 
event of any other termination of your employment prior to the one year anniversary of the Spin-Off, you will forfeit any share units granted pursuant to this clause (i). Except as specifically
provided herein, the terms and conditions of the share units shall be subject to the terms and conditions of SunCoke’s equity incentive plan and SunCoke’s standard form of award agreement. 

(ii) In the event of a Sale, subject to your employment with SunCoke through the applicable payment event set forth in
clause (A) or (B) below, on the earlier of (A) the one-year anniversary of the Sale, and (B) the termination of your employment due to death or Disability, or by SunCoke (other than for Just Cause), SunCoke shall pay to you, as
soon as reasonably practicable (but in no event later than the fifteenth business day following such payment event) a lump sum cash payment in the amount of $500,000, less applicable tax and other withholdings. In the event of any other termination
of your employment prior to the one year anniversary of the Sale, you will forfeit the right to any payment pursuant to this clause (ii). 
 (c) (i) In the event that SunCoke terminates your employment (other than for Just Cause and other than as a result of your death or Disability) following a Spin-Off, (A) if the termination of
employment occurs on or after January 3, 2012 and prior to March 3, 2012, SunCoke shall pay to you a lump sum cash payment in an amount equal to the “Unvested Option Award Value (Spin-Off),” and (B) if the termination of
employment occurs on or after May 3, 2012 and prior to July 2, 2012, SunCoke shall pay to you a lump sum cash payment in an amount equal to the “Unvested CSU Award Value (Spin-Off).” In the event of any other termination of your
employment, you will forfeit the right to any payment pursuant to this clause (i). Any payments required by this clause (i) shall be made as soon as reasonably practicable, but in no event later than the fifteenth business day following the
date of your termination of employment. 
 (ii) In the event that SunCoke terminates your employment (other than
for Just Cause and other than as a result of your death or Disability) following a Sale, (A) if the termination of employment occurs on or after January 3, 2012 and prior to March 3, 2012, SunCoke shall pay to you a lump sum cash
payment in an amount equal to the “Unvested Option Award Value (Sale),” and (B) if the termination of employment occurs on or after May 3, 2012 and prior to July 2, 2012, SunCoke shall pay to you a lump sum cash payment in
an amount equal to the “Unvested CSU Award Value (Sale).” In the event of any other termination of your employment, you will forfeit the right to any payment pursuant to this clause (ii). Any payments required by this clause
(ii) shall be made as soon as reasonably practicable, but in no event later than the fifteenth business day following the date of your termination of employment. 
 Just to clarify, you will have no rights pursuant to this Section 1 if you receive a payment pursuant to Section 2 of this Letter Agreement. 

  
 2 

 2. Payment if Transaction Not Consummated. If a Transaction is not consummated by
January 1, 2012, and you remain employed by Sunoco or SunCoke through January 1, 2012, Sunoco shall pay to you a lump sum cash payment of $200,000, less applicable tax and other withholdings, no later than January 16, 2012. This
payment will be in lieu of any payments and incentives described in Section 1 above. 
 Other Terms:

 3. Defined Terms: 
 (a) “Disability” as used in this Letter Agreement shall have the same meaning as that term is defined in the Sunoco, Inc. Executive Involuntary Severance Plan (as of March 3, 2010).

 (b) “Just Cause” as used in this Letter Agreement shall have the same meaning as that term is defined in the
Sunoco, Inc. Executive Involuntary Severance Plan (as of March 3, 2010). 
 (c) “Unvested Option Award Value
(Sale)” means an amount equal to the product obtained by multiplying (i) the number of Sunoco shares underlying the portion of the option granted to you on March 3, 2010 (A) that initially was scheduled to vest on March 3,
2012 and (B) that has not vested previously by (ii) the excess, if any of (A) the closing price of Sunoco common stock on the date of your termination of employment (or if such day is not a trading day on the trading day immediately
following such day) over (B) the per share exercise price of such option. 
 (d) “Unvested CSU Award Value
(Sale)” means an amount equal to the product obtained by multiplying (i) the number of Sunoco common stock units from the July 2, 2008 grant (A) that initially were scheduled to vest on July 2, 2012 and (B) that have
not vested previously by (ii) the closing price of Sunoco common stock on the date of your termination of employment (or if such day is not a trading day on the trading day immediately following such day). 

(e) “Unvested Option Award Value (Spin-Off)” means an amount equal to the product obtained by multiplying (i) the number
of SunCoke shares underlying the portion of the option granted to you on March 3, 2010 (as adjusted in connection with the Spin-Off) (A) that initially was scheduled to vest on March 3, 2012 and (B) that has not vested previously
by (ii) the excess, if any of (A) the closing price of SunCoke common stock on the date of your termination of employment (or if such day is not a trading day on the trading day immediately following such day) over (B) the per share
exercise price of such option (as adjusted in connection with the Spin-Off). 
 (f) “Unvested CSU Award Value
(Spin-Off)” means an amount equal to the product obtained by multiplying (i) the number of SunCoke common stock units from the July 2, 2008 grant (as adjusted in connection with the Spin-Off) (A) that initially were scheduled to
vest on July 2, 2012 and (B) that have not vested previously by (ii) the closing price of SunCoke common stock on the date of your termination of employment (or if such day is not a trading day on the trading day immediately following
such day). 

  
 3 

 4. Employment Rights. Nothing expressed or implied in this Letter Agreement will
create any right or duty on the part of Sunoco or SunCoke or you to have you remain in the employment of Sunoco or SunCoke. Nothing in this Letter Agreement shall affect any rights you may have under any agreement or plan of Sunoco or SunCoke in the
event of your termination of employment, including without limitation the Sunoco, Inc. Executive Involuntary Severance Plan (as of March 3, 2010). 
 5. Assignability. Sunoco, in its discretion, may assign this Letter Agreement to SunCoke or any of its successors or to any entity that acquires SunCoke in a Sale, and upon such assignment, any
obligations of Sunoco under this Letter Agreement shall become obligations of such assignee. 
 6. Entire Agreement. This
Letter Agreement constitutes the entire agreement of the parties with respect to the subject matter set forth above and supersedes any and all prior agreements, arrangements, communications, whether oral or written in respect to the matters covered
in this Letter Agreement. Notwithstanding the foregoing, nothing in this Letter Agreement is intended to or shall supersede or modify in any respect, your benefits or obligations under any other agreements that you may have previously entered into
or under any of Sunoco’s or SunCoke’s plans 
 7. Governing Law. This Letter Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the Commonwealth of Pennsylvania. This Letter Agreement may be amended, modified or supplemented, only by a written instrument executed by both you and Sunoco. 

IN WITNESS WHEREOF, the parties hereto have executed this Letter Agreement as of the day and year first set forth above, 

 

			
	SUNOCO, INC.
		
	By:	 	 /s/ Dennis Zeleny

	Name:	 	Dennis Zeleny
	Title:	 	Senior Vice President and Chief Human Resources Officer
	Date:	 	9/30/10

  

			
	Accepted and Agreed:
	
	 /s/ Michael J. Thomson

	Michael J. Thomson
	Date:	 	9/30/10

  

			
	cc:	  	L. L. Elsenhans
		  	C. J. Cunningham

  
 4

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