Document:

EX-10.12

 Exhibit 10.12 

 

			
	

	  	 CafePress Inc.
 1850 Gateway Drive, Ste. 300
 San Mateo, CA 94404

Office: (650) 655-3000
 Fax: (650) 240-0260

 EMPLOYMENT AGREEMENT 
 October 5, 2012 
 Wes Herman 
 4637 Tall Pines Drive 
 Atlanta, GA 30327 

 

	RE:	Offer of Employment with CafePress Inc. 

 Dear
Wes: 
 CafePress Inc., a Delaware corporation (the “Company”), is pleased to offer you the position of
President, ezPrints Division reporting to Bob Marino, Chief Executive Officer. We look forward to welcoming you as a part of our team! All capitalized terms used but not otherwise defined herein shall have the meanings set forth in the
Agreement and Plan of Merger by and between Company and EZ Prints, Inc., dated as of October 5, 2012 (the “Merger Agreement”). 
 Your base salary will be at an annualized rate of $300,000 paid bi-weekly, less payroll deductions and all required withholdings and shall not be reduced during the Term of this letter agreement. As an
exempt professional employee and in accordance with Georgia law, you will not be entitled to overtime compensation. You will be eligible for the Company’s standard benefits package available to employees (see enclosed summary). Except as
otherwise provided in this letter agreement, you also will be entitled to participate in the current benefit plans offered to all of Senior Management of the Company at the same level in place as of the Closing Date. Notwithstanding the foregoing,
the Company makes no representations and warranties as to future benefits plans that may be offered and/or in place throughout the Term nor your eligibility for participation in them. 

In lieu of participating in any Company Senior Management cash bonus plan for the period beginning on the Closing Date and ending on
the last day of Company’s Q3 of 2013, you will be entitled to receive an Earn-Out Payment under that certain Earn-Out Bonus Agreement dated as of October 5, 2012, and subject to all terms and conditions as set forth therein. Beginning with
the CafePress Q4 of 2013, you shall be eligible for a bonus under the terms and conditions of any Company Senior Management cash bonus plan as may be approved by the Compensation Committee of the Board of Directors for fiscal year ended
December 31, 2013, solely pro rata for Q4 2013, and thereafter for each fiscal year beginning during the Term. During the Term, you shall be eligible to receive a target bonus of at least 40% of your annualized salary, with an upside of 60%, as
a bonus pursuant to the Company’s Senior Management bonus plan for pro rata Q4 2013 and for each subsequent bonus period, if a bonus plan is approved by the Compensation Committee of the Board of Directors. Your actual bonus award will be
calculated based on incentive targets, which reflect a combination of achievement against Company and business unit performance. All goals under the Senior Management bonus plan shall be administered by the Compensation Committee of the Board of
Directors in their discretion. All bonuses shall be paid in accordance with the terms of such bonus plan and shall be payable upon approval and any other terms set by the Compensation Committee. At present the bonus plans are payable in two
installments one based on the first six (6) months performance metrics and the second on the last six (6) months of performance metrics each year. Bonuses shall be paid promptly upon approval of the Compensation Committee and if any
awarded, shall be made no later than March 15th of
the calendar year following the calendar year in which the bonus is earned. 

  

			
	

	  	 CafePress Inc.
 1850 Gateway Drive, Ste. 300
 San Mateo, CA 94404

Office: (650) 655-3000
 Fax: (650) 240-0260

  

 You will be offered Nonqualified Stock Options consistent with a separate Stock Option Agreement dated
as of the Closing Date in the amount of 200,000 option shares priced at fair market value as of the Closing Date of the transaction contemplated by the Merger Agreement. 
 Subject to earlier termination as provided herein, your employment with the Company shall be for a term of two (2) years, commencing on the Closing Date (“Term”). You agree to execute the
Company’s separate form of Non-Competition and Non-Solicitation Agreement as provided to you as well as the Company’s standard form of Confidentiality and Inventions Agreement. . 

If your employment is terminated by CafePress during the Term for any reason after a date twelve (12) months from the Closing
Date other than for “Cause” (as defined below), or you terminate your employment for “Good Reason” (as defined below), the Company will pay you a severance amount equal to twelve (12) months of your then current annualized
salary (“Severance”). If your employment is terminated by Company for any reason other than “Cause” (as defined below), or you terminate your employment for “Good Reason” (as defined below), prior to the one year
anniversary of the Closing Date, you will receive an amount equal to the entire “Earn-Out Payment” that would have been received had it been earned during the Earn-Out Period in accordance with the terms of the Merger Agreement and the
Earn-Out Bonus Agreement by and between Company, EZ Prints, Inc. and you (“Earn Out Bonus Agreement”), notwithstanding that such Earn-Out Payment may not actually be earned under the Earn-Out Bonus Agreement. Any Severance payments that
may be due pursuant to this letter agreement shall be paid in the form of ten (10) equal installment payments payable over a period of ten (10) months, with the first installment being paid on the first (1st) day of the first month which occurs thirty (30) days
following your Separation from Service (as defined in Treasury Regulation Section 1.409A-1(h)). Any Earn-Out Payment shall be made at the time and in the form set forth in the Earn-Out Bonus Agreement. All payments of any kind shall be subject
to applicable tax withholding. 

  

			
	

	  	 CafePress Inc.
 1850 Gateway Drive, Ste. 300
 San Mateo, CA 94404

Office: (650) 655-3000
 Fax: (650) 240-0260

  

 After the expiration of the Term, Company agrees that you shall continue to enjoy the Severance benefits
on the same terms and conditions noted herein regardless of the expiration of this employment letter agreement. For avoidance of doubt, no other terms and conditions of this letter agreement shall survive its expiration or termination. 

For purposes of this letter agreement only, (1) “Cause” shall mean any of the following: (a) conviction of any felony, or any
misdemeanor where imprisonment is imposed; (b) the commission of any act of fraud, embezzlement or dishonesty with respect to the Company; and c) any unauthorized use or disclosure of confidential information or trade secrets of CafePress;
(d) willful misconduct or gross negligence in the performance of job duties, including refusal to comply in any material respect with the legal directives of the Company’s Chief Executive Officer, Chief Financial Officer or Board of
Directors, so long as such directives are not inconsistent with such individual’s position and duties, and such refusal is not remedied within thirty (30) days after written notice from the Company’s Chief Executive Officer, Chief
Financial Officer or Board of Directors, which notice shall state that failure to remedy such conduct may result in termination for Cause; and (e) repeated unexcused absences from employment with CafePress, and (2) “Good Reason”
shall mean if (x) there is a change of greater than fifty (50) miles in the principal geographic location at which you provide services to CafePress from the former offices of EZPrints in Norcross, Georgia, or(y) there is a material
reduction in your base compensation (other than a general reduction that affects all other members of CafePress’ executive management team equally),; provided, however, that anything herein to the contrary notwithstanding, your employment shall
not be deemed terminated for “Good Reason” unless (i) you provide written notice stating the basis for the termination to the Company within thirty (30) days of the first occurrence of such condition; (ii) you cooperate in
good faith with the Company’s efforts, for a period of thirty (30) days following such notice (the “Cure Period”), to remedy the condition; (iii) notwithstanding such efforts, the Good Reason condition continues to exist;
and (iv) you terminate your employment within ninety (90) days after the end of the Cure Period. If the Company cures the Good Reason condition during the Cure Period, Good Reason shall be deemed not to have occurred. Notwithstanding the
foregoing, if during the first twelve (12) months of employment the Company materially reduces your title, reporting structure to the CEO, duties, or removes any areas of management of the Going Forward Business (as defined in the Merger
Agreement), than you shall be entitled to invoke a “Good Reason” termination as noted above, and Company shall likewise retain all opportunities related to the Cure Period as noted as well, and shall be entitled to the same rights of
payment of the Earn Out Bonus Payment under the same conditions. 

  

			
	

	  	 CafePress Inc.
 1850 Gateway Drive, Ste. 300
 San Mateo, CA 94404

Office: (650) 655-3000
 Fax: (650) 240-0260

  

 In addition to your base salary and bonus opportunities, you will be reimbursed for up to $5,000 per
year in reasonable expenses, including travel fees and conference expenses, in connection with your membership in and attendance at conferences sponsored by the Young President’s Organization or the World President’s Organization, for up
to twice per year. 
 Notwithstanding any provision of this letter agreement to the contrary, in the event you are a
Specified Employee as of the date of your Separation from Service, as those terms are defined in Treasury Regulations Section 1.409A-1(i-h), any amounts that are “deferred compensation” subject to Code Section 409A of the
Internal Revenue Code of 1986, as amended, that become payable upon your Separation from Service shall be held for delayed payment and shall be distributed on or immediately after the date which is six months after the date of your Separation from
Service. If a payment date that complies with Section 409A is not otherwise provided in this letter agreement for any payment (in cash or in-kind) or reimbursement that would otherwise constitute “deferred compensation” under
Section 409A, then such payment or reimbursement, to the extent such payment or reimbursement becomes due hereunder, shall in all events be made not later than 2
 1/2 months after the end of the calendar year in which the payment or reimbursement is no longer subject to a substantial risk of forfeiture. 
 The offer of employment contained in this letter agreement is valid until the close of business on the Closing Date and comprises a closing condition to the transactions contemplated pursuant to the
Merger Agreement. This letter agreement represents the entire agreement and understanding between you and the Company regarding its subject matter and it supersedes and replaces any and all prior agreements and understandings between you and the
Company regarding its subject matter. Please let us know of your decision to join the Company by signing a copy of this letter agreement and returning it to us no later than the Closing Date. Your employment is contingent upon (1) successful
completion of complete background, reference and credit checks pursuant to Company policy; (2) signing of the Company’s Proprietary Information and Assignment of Inventions Agreement; (3) signing the Non-Competition and
Non-Solicitation Agreement, and (4) the Closing of the transactions contemplated by the Merger Agreement. 

  

			
	

	  	 CafePress Inc.
 1850 Gateway Drive, Ste. 300
 San Mateo, CA 94404

Office: (650) 655-3000
 Fax: (650) 240-0260

  

 You must also establish your identity and authorization to work as required by the Immigration Reform
and Control Act of 1986 (IRCA). Enclosed is a copy of the Employment Verification Form (I-9), with instructions required by IRCA. Please review this document and bring the appropriate original documentation on your first day of work. If you are a
legal alien authorized to work in the United States, Company will begin to provide immigration assistance by paying reasonable visa processing costs and fees after you have completed one year of service as a Company employee. 

By signing this letter agreement, you confirm to the Company that you have no contractual commitments or other legal obligations that would prohibit you
from performing your duties for the Company. In addition, if you join the Company, you agree that you will not engage in any other employment, consulting or other business activity without the prior written consent of your manager. 

Notwithstanding anything herein to the contrary, nothing in this offer letter shall affect, modify or limit the rights of the parties under the Merger
Agreement or the related Earn Out Bonus Agreement, including, without limitation, the rights of the parties thereto to submit disputes arising out of the Merger Agreement to a court of competent jurisdiction in accordance with the provisions of
thereof. 
 We hope you are as excited about joining the Company as we are about your potential to contribute to this exciting Company.
Wes, we look forward to you becoming part of the CafePress Inc. team! 
 We would like you to start the day immediately following
the Closing Date. Please indicate that date next to the signature line of this offer letter. 
 Very truly yours,

 CafePress Inc. 
  

			
	By:	 	 /s/ Monica Johnson

	Name: Monica Johnson
	Title: Chief Financial Officer

 I have read and understood this offer letter and hereby acknowledge, accept and agree to the terms set forth above.

  

			
	Accepted by:	 	/s/ Wes Herman

			
	Start Date:EX-10.13

 Exhibit 10.13 
 EARN-OUT BONUS AGREEMENT 
 This Earn-Out Bonus Agreement (the
“Agreement”) is being entered into as of the 5th day of October, 2012 (the “Effective Date”) between CafePress Inc., a Delaware corporation (“Parent”), EZ Prints, Inc., a Delaware corporation (the
“Company”), and Wes Herman (the “Executive”). 
 WHEREAS, the Company, Parent and certain
other parties thereto have entered into an Agreement and Plan of Merger, dated as of October 5, 2012 (the “Merger Agreement”), as a result of which the Company will become a wholly-owned subsidiary of Parent (the
“Merger”); 
 WHEREAS, as a material inducement to Parent to enter into the Merger Agreement and consummate the
Merger, the Company, its stockholders and the Executive wish to enter into this Agreement; 
 WHEREAS, the Company considers it
essential to the best interests of its stockholders to enter into this Agreement with the Executive to induce the Executive to continue to provide services to the Company after the closing of the Merger contemplated by the Merger Agreement (the
“Closing”) and through the Earn-Out Period (as defined below) and to exert his efforts towards the successful achievement of any Earn-Out Payment (as defined below). 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, Parent
and the Executive agree as follows: 
 1. Definitions. All capitalized terms set forth herein and not defined herein are
as set forth in the Merger Agreement. 
 2. Eligibility and Payment of Earn-Out Payment. 

(a) Parent shall pay an earn-out payment (the “Earn-Out Payment”) to the Executive with respect to the Earn-Out Period,
if earned in accordance with the terms and conditions of the Merger Agreement and this Agreement. To be eligible for any Earn-Out Payment, (1) the Executive must be employed by Parent for the entire Earn-Out Period unless Executive’s
employment is earlier terminated by Parent without Cause (as defined in the Employment Letter Agreement) or by Executive for Good Reason (as defined in the Employment Letter Agreement), in which case the entire Earn-Out Payment that would have been
received had it been earned during the Earn-Out Period shall be paid to Executive in accordance with this Section 2, notwithstanding that such Earn-Out Payment may not actually be earned, and (2) the Executive shall deliver the Release (as
defined below) in connection with the receipt of any Earn-Out Payment, regardless of whether Executive is still employed by Parent. The Earn-Out Payment shall be determined as follows: 

(i) The aggregate value of the Earn-Out Payment shall be no greater than One Million Dollars ($1,000,000) and shall be allocated and paid
in a combination of cash and/or in stock in the same manner and in the same form as set forth in the Merger Agreement. 

 (ii) For the avoidance of doubt, if Integration Plan has not been executed and the CAGR is
less than 24%, the Earn-Out Payment shall be zero. 
 (b) During the Earn-Out Period and subject to the calculations set forth
in the Merger Agreement, based on such calculations and on the thresholds set forth in Appendix 1 hereto, Parent shall pay the applicable Earn-Out Payment up to the maximum targets at the amounts expressed in Appendix 1 pursuant to the
terms and conditions on payment under Sections 2(c)-(e) below. 
 (c) The final determination of the amount of the Earn-Out
Payment shall be made by Parent using the final calculations of any earn-out payments finally determined pursuant to Section 1.7(d) of the Merger Agreement. Any disputes relating to the calculation of the Earn-Out Payment shall be resolved
pursuant to the terms and conditions set forth in the Merger Agreement. For the avoidance of doubt, the final determination of any earn-out payment under the Merger Agreement shall be used to calculate the Earn-Out Payment hereunder. All
calculations of any Earn-Out Payment shall be set forth in a written notice from Parent to the Executive. An amount equal to the Earn-Out Payment, if any, shall be paid by Parent in accordance with the terms and mechanisms set forth in the Merger
Agreement. 
 (d) The Executive acknowledges and agrees that: (a) nothing in this Agreement is intended to or shall
(i) limit Parent’s right to operate the Going Forward Business or Company in a commercially reasonable manner at any time following the Closing, (ii) require Parent to continue any line of business conducted or employ any
individual(s), or (iii) limit Parent from improving or modifying any aspect of the Going Forward Business in the exercise of its reasonable business judgment ; and (b) the right to payment under this Section 2 is a contract right and
not a security and shall not give rise to any rights or duties (including fiduciary duties), express or implied, other than those expressly set forth herein. 
 (e) Notwithstanding anything to the contrary herein, (i) Parent shall pay any Earn-Out Payment that may be due in accordance with this Section 2 , subject to, and conditioned upon, the
Executive’s delivery of an effective release of claims against Parent, the Company and their respective affiliates, directors, officers and shareholders in the form attached hereto as Appendix 2 (the “Release”) no later
than sixty (60) days following the final determination of such Earn-Out Payment (provided, however, that if such 60-day period straddles more than one calendar year, the Earn-Out payment shall be made in the later calendar year); and
(ii) under no circumstances shall Parent be required to pay any Earn-Out Payment to the Executive to the extent the Executive has breached or is currently in breach of any Herman Employment Agreements (iii) in no event shall Parent be
required to pay any Earn-Out Payment to the Executive if Executive is not employed by Parent at the time that the Earn-Out Payment is due.; and (iv) under no circumstances shall Parent by required to pay any Earn-Out Payment to the Executive if
any Claim arises related to fraud committed by Executive or Company for which Executive had Knowledge as defined in the Merger Agreement. 
 3. Section 409A. The provisions regarding all payments to be made hereunder shall be interpreted in such a manner that all such payments either comply with Section 409A of the Code or are
exempt from the requirements of Section 409A of the Code as “short-term deferrals” as described in Section 409A of the Code. To the extent that any amounts payable hereunder are determined to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code, such amounts shall be subject to such additional rules and requirements as specified by the board of directors of Parent from time to time in order to comply with
Section 409A of the Code and the settlement of any such amounts may not be accelerated or delayed except to the extent permitted by Section 409A of the Code. 

 4. Miscellaneous. 

(a) Amendment and Termination. The Agreement may only be amended by a written instrument executed by the Company, Parent and the
Executive. This Agreement shall terminate and be of no further force or effect on the first to occur of: (i) the date any Earn-Out Payment to be paid to the Executive hereunder is paid, (ii) the date that is six (6) months following
expiration of the Earn-Out Period and (iii) the date the Executive ceases to be eligible to receive any Earn-Out Payment. 

(b) No Contract for Continuing Services. This Agreement shall not be construed as creating any contract for continued services
between Parent, the Company or any of their respective subsidiaries or affiliates and the Executive and nothing herein contained shall create and express or implied contract of employment. 

(c) Integration. This Agreement constitutes the entire agreement between Parent, the Company and the Executive concerning the
subject matter hereof and supersedes any written or oral agreement between such parties concerning such subject matter. 
 (d)
Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.
Except for any disputes relating the amount of any Earn-Out Payment covered by Section 2 (which shall preliminarily be resolved pursuant to Section 2), any action or proceeding arising out of or relating to this Agreement or any
transaction contemplated hereby may be brought in the courts of the State of Delaware sitting in the Delaware Chancery Court, or, if it has or can acquire jurisdiction, in the United States District Court for the District encompassing the State of
Delaware, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such action or proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in
respect of the action or proceeding shall be heard and determined only in any such court and agrees not to bring any action or proceeding arising out of or relating to this Agreement or any transaction contemplated hereby in any such other court.
The parties agree that any party may file a copy of this paragraph with any court as written evidence of the knowing, voluntary and bargained agreement among the parties irrevocably to waive any objections to venue or to convenience of forum.
Process in any action or proceeding referred to in the first sentence of this section may be served on any party anywhere in the world. 
 (e) Tax Withholding. Parent shall have the right to deduct from all payments hereunder any taxes required by law to be withheld with respect to such payments. 

 (f) Benefits and Burdens. This Agreement shall inure to the benefit of and be binding
upon Parent and the Company and their respective successors, executors, administrators, heirs and permitted assigns. 
 (g)
Enforceability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in
full force and effect and the application of such provision to other Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision
of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision. 

(h) Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The
failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach. 
 (i) Obligations of Successors. In addition to any obligations imposed by law upon any successor
to the Company, Parent or the Company will use its commercially reasonable efforts to require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the
Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. 

(j) Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Until and unless each party has
received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). Any
signature page delivered electronically or by facsimile (including transmission by Portable Document Format or other fixed image form) shall be binding to the same extent as an original signature page. 

(k) Attorneys’ Fees. If any action, suit, arbitration or other proceeding for the enforcement of this Agreement is brought
with respect to or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions hereof, the successful or prevailing party shall be entitled to recover reasonable attorneys’ fees and other costs
incurred in that proceeding, in addition to any other relief to which is may be entitled. 
 [Remainder of page intentionally
left blank] 

 IN WITNESS WHEREOF, Parent, the Company and the Executive have caused this Agreement to be
signed, all as of the date first written above. 
  

			
	PARENT
		
	By:	 	 /s/ Bob Marino

	 Name: Bob Marino

	 Title:   Chief Executive Officer

	
	COMPANY
		
	By:	 	 /s/ Bob Marino

	 Name: Bob Marino

	 Title:   Chief Executive Officer

	
	EXECUTIVE
	
	 /s/ Wes Herman

	  

	 Wes Herman

 Appendix 1 

Earn-Out Calculations 
 EARNOUT PAYMENT—WES HERMAN 
  

									
	 	  	Total Value of Stock	 
	 Revenue 
CAGR
	  	 	 	  	 	 
	 < 20%
	  	 	—  	  	  	 	—  	  
	 21.0%
	  	 	—  	  	  	 	—  	  
	 22.0%
	  	 	—  	  	  	 	—  	  
	 23.0%
	  	 	—  	  	  	 	—  	  
	 24.0%
	  	 	—  	  	  	 	300,000	  
	 25.0%
	  	 	—  	  	  	 	300,000	  
	 26.0%
	  	 	—  	  	  	 	346,667	  
	 27.0%
	  	 	—  	  	  	 	393,333	  
	 28.0%
	  	 	—  	  	  	 	440,000	  
	 29.0%
	  	 	—  	  	  	 	486,667	  
	 30.0%
	  	 	—  	  	  	 	533,333	  
	 31.0%
	  	 	—  	  	  	 	580,000	  
	 32.0%
	  	 	—  	  	  	 	626,667	  
	 33.0%
	  	 	—  	  	  	 	673,333	  
	 34.0%
	  	 	—  	  	  	 	720,000	  
	 35.0%
	  	 	—  	  	  	 	766,667	  
	 36.0%
	  	 	—  	  	  	 	813,333	  
	 37.0%
	  	 	—  	  	  	 	860,000	  
	 38.0%
	  	 	—  	  	  	 	906,667	  
	 39.0%
	  	 	—  	  	  	 	953,333	  
	 40.0%
	  	 	—  	  	  	 	1,000,000	  

 Appendix 2 
 Form of Release

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