AMENDED AND
RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(the “Agreement” ) dated as of July 30,
2009 (the “Date of this Agreement” ), is made by
and between Local.com Corporation, a Delaware corporation (the
“Employer” or “Company” ),
and Stanley B. Crair (the “Executive”
).
WHEREAS, the Employer and Executive entered into
that certain Employment Agreement, dated as of July 6, 2005 (
“Original Agreement” ).
WHEREAS, the Employer and Executive wish to
amend and restate the Original Agreement on the terms set forth
below.
Accordingly,
the parties hereto agree as follows:
The Employer hereby employs the Executive, and
the Executive hereby accepts such employment, for an initial term
commencing as of the Date of this Agreement and ending on the first
anniversary of such date, unless sooner terminated in accordance
with the provisions of Section 4 or Section 5; with such
employment to continue thereafter for successive one-year periods
in accordance with the terms of this Agreement beginning on each
anniversary of the Date of this Agreement (subject to termination
as aforesaid) unless either party notifies the other party in
writing not less than thirty (30) days before expiration of
the initial term and each annual renewal thereof (the period during
which the Executive is employed hereunder being hereinafter
referred to as the “Term” ) of an intent not to
renew this Agreement.
During the Term, the Executive shall be employed
by the Employer as its President and Chief Operating Officer, and
as such, the Executive shall faithfully perform for the Employer
the duties and have the powers customary for such position,
including general oversight, including financial oversight, of the
Employer’s operations and preservation of the
Employer’s assets. During the Term, the Executive shall be
required to report to the Chief Executive Officer of the Employer
(the “CEO” ). The Executive shall devote
substantially all of his business time and effort to the
performance of his duties hereunder, and shall work primarily at
the Employer’s main business offices. Executive shall not be
prohibited from engaging in such personal, charitable, or other
nonemployment activities as do not interfere with full time
employment hereunder and which do not violate the other provisions
of this Agreement.
3.1 Salary . In consideration of the
services to be rendered under this Agreement, the Employer shall
pay the Executive during the Term a salary at the rate of Two
Hundred Seventy Thousand Dollars ($270,000) per annum (the
“Annual Salary” ), in accordance with the
customary payroll practices of the Employer applicable to senior
executives, provided the payments are no less frequent than monthly
(or, if there is no such policy, payments shall be semi-monthly).
The Annual Salary shall be annually reviewed by the Employer for
possible increases. The Annual Salary shall be subject to possible
further increase from time to time at the discretion of the CEO,
the Board of Directors of the Employer ( “Board”
), or a committee of the Board designated for such purpose. Any
increased Annual Salary shall thereupon be the “Annual
Salary” for the purposes hereof. The Executive’s
Annual Salary shall not be decreased without his prior written
consent at any time during the Term. In the event the Company shall
employ any person other than Executive and the CEO at an Annual
Salary equal to or greater than the Executive’s then-current
Annual Salary, exclusive of commissions paid to employees engaged
primarily in sales, the Board or a committee of the Board
designated for such purpose will undertake a comprehensive review
of Executive’s compensation and where appropriate, recommend
revisions to Executive’s compensation as
appropriate.
3.2 Incentive Compensation . During the
Term, the Executive shall be eligible to receive, in addition to
his Annual Salary, an annual bonus (the “Bonus”
) of up to fifty percent (50%) of the Annual Salary. Any increase
in the bonus target shall thereupon be the “Bonus” for
the purposes hereof. The amount of such Bonus and any performance
standards or goals required to be attained in order to receive such
Bonus shall be mutually agreed upon by Executive and the CEO or
such committee of the Board as they shall designate for such
purpose from time to time and memorialized in a writing executed by
Executive and Employer, as may be amended from time to time by the
mutual written agreement of Employer and Executive. The Bonus shall
be declared and paid according to the Company’s payroll
policies and practices as of the date first set forth above. Any
actual Bonus paid shall be determined by achievement of mutually
agreed goals and company performance.
3.3 Stock Options . The Executive
received stock option ( “Options”) grants under
the Employer’s Equity Incentive Plans for shares of common
stock of the Employer pursuant to the terms of the Original
Agreement and pursuant to additional grants from the Employer. Upon
either (i) a Change of Control, defined below, of the
Employer, or (ii) a termination of the executive by Employer
without Cause (defined in Section 5.1(a) below), or a
termination by Executive for Good Reason (defined in
Section 5.2(a) below), if such event of termination without
cause or for good reason occurs within 120 days prior and/or
subsequent to the execution and delivery of an acquisition, merger,
consolidation or other agreement which results in a Change of
Control, any Options that Employee receives from Employer shall
become fully vested immediately and shall remain exercisable during
the term of each such option as if the Executive were still
employed by Employer. For purposes of this Agreement “Change
of Control” shall mean the occurrence of any one of the
following events:
(a) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing thirty-five percent (35%) or more, excluding in the
calculation of Beneficial Ownership securities acquired directly
from the Company, of the combined voting power of the
Company’s then outstanding voting securities;
(b) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing over fifty percent (50.00%) or more of the combined
voting power of the Company’s then outstanding voting
securities;
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(c) the following individuals cease for any
reason to constitute a majority of the number of directors of the
Company then serving: individuals who, as of July 30, 2009,
constitute the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination
for election by the Company’s stockholders was approved or
recommended by a vote of the at least two-thirds (2/3) of the
directors then still in office who either were directors on July
30, 2009 or whose appointment, election or nomination for election
was previously so approved or recommended;
(d) there is a consummated merger or
consolidation of the Company or any direct or indirect subsidiary
of the Company with any other corporation, other than (A) a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving or parent entity) more than
fifty percent (50.00%) of the combined voting power of the voting
securities of the Company or such surviving or parent equity
outstanding immediately after such merger or consolidation or
(B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which
no person, directly or indirectly, acquired twenty-five percent
(25%) or more of the combined voting power of the Company’s
then outstanding securities (not including in the securities
beneficially owned by such person any securities acquired directly
from the Company or its Affiliates); or
(e) the stock holders of the Company
approve a plan of complete liquidation of the Company or there is
consummated an agreement for the sale or disposition by the Company
of all or substantially all of the Company’s assets (or any
transaction having a similar effect), other than a sale or
disposition by the Company of all or substantially all of the
Company’s assets to an entity, at least fifty percent (50%)
of the combined voting power of the voting securities of which are
owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to
such sale.
The terms of this Section 3.3 shall be
included in the applicable stock option agreements between Employer
and Executive relating to the issuance of any Options. For purposes
of this Section 3.3, the following terms used above shall have
the following meanings:
“Affiliate” shall mean an affiliate of the Company, as
defined in Rule 12b-2 promulgated under Section 12 of the
Securities Exchange Act of 1934, as amended from time to time (the
“Exchange Act” );
“Beneficial Owner”
shall have the meaning set forth in
Rule 13d-3 under the Exchange Act; and
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“Person” shall have the meaning set forth in
Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not
include (1) the Company, (2) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company,
(3) an underwriter temporarily holding securities pursuant to
an offering of such securities or (4) a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of shares of
Common Stock of the Company. ]
3.4 Benefits . Except as otherwise
provided herein, the Executive shall be entitled to participate in
any group life, medical or disability insurance plans, health
programs, retirement plans, fringe benefit programs and similar
benefits that may be available to other senior executives of the
Employer generally, on the same terms as such other executives, to
the extent that the Executive is eligible under the terms of such
plans or programs as they may be in effect from time to time.
Employer will provide coverage for the Executive under the
Employer’s health benefits plan and will pay 100% of the cost
of spouse or dependent coverage up to a total of $1,500 per month.
Coverage under the health benefits plan is currently in
effect.
3.5 Expenses . The Employer shall pay or
reimburse the Executive for all ordinary and reasonable
out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the
performance of the Executive’s services under this Agreement,
provided that (i) such expenditure is of a nature qualifying
it as a proper business expense deduction on the Employer’s
federal and state income tax returns and (ii) the Executive
submits proof of such expenses, with the properly completed forms
as prescribed from time to time by the Employer, no later than
30 days after the end of the monthly period in which such
expenses have been so incurred.
3.6 Compliance with Section 409A of the
Internal Revenue Code; Short-Term Deferral Exemption . This
Agreement is not intended to provide for any deferral of
compensation subject to Section 409A of the Internal Revenue
Code (the “ Code ”) and, accordingly, any
compensation provided pursuant to this Agreement is intended to be
paid not later than the later of: (i) the fifteenth day of the
third month following Executive’s first taxable year in which
such benefit is no longer subject to a substantial risk of
forfeiture, and (ii) the fifteenth day of the third month
following the first taxable year of the Employer in which such
benefit is no longer subject to a substantial risk of forfeiture,
as determined in accordance with Section 409A of the Code and
any Treasury Regulations and other guidance issued thereunder. The
date determined under this subsection is referred to as the “
Short-Term Deferral Date .” Notwithstanding anything
to the contrary herein, in the event that any benefits provided
pursuant to this Agreement are not actually or constructively
received by the Executive on or before the Short-Term Deferral
Date, to the extent such benefit constitutes a deferral of
compensation subject to Code Section 409A, then such benefit
shall be paid upon the Executive’s separation from service,
with respect to the Employer and its affiliates within the meaning
of Section 409A of the Code. Notwithstanding any other
provision of this Agreement to the contrary, Executive and the
Company shall in good faith amend this Agreement to the extent
necessary to comply with the requirements under Section 409A
of the Code and any regulations or other guidance issued
thereunder, in order to ensure that any amounts paid or payable
hereunder are not subject to the additional 20% income tax
thereunder while maintaining to the maximum extent practicable the
original intent of this Agreement.
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4.
Termination upon Death or Disability .
If the Executive dies during the Term, the Term
shall terminate as of the date of death, and the obligations of the
Employer to or with respect to the Executive shall terminate in
their entirety upon such date except as otherwise provided under
this Section 4. If the Executive becomes disabled for purposes
of the long-term disability plan of the Employer for which the
Executive is eligible, or, in the event that there is no such plan,
if the Executive by virtue of ill health or other disability is
unable to perform substantially and continuously the duties
assigned to him for more than 180 consecutive or non-consecutive
days out of any consecutive 12-month period, then the Employer
shall have the right, to the extent permitted by law, to terminate
the employment of the Executive upon notice in writing to the
Executive. Upon termination of employment due to death or
disability, (i) the Executive (or the Executive’s estate
or beneficiaries in the case of the death of the Executive) shall
be entitled to receive any Annual Salary and other benefits earned
and accrued under this Agreement prior to the date of termination
(and reimbursement under this Agreement for expenses incurred prior
to the date of termination), including, but not limited to a
pro-rata Bonus for the year of termination (which in no event shall
be less than a similar pro-rata portion of the Executive’s
bonus for the preceding year) to be paid at such time as Bonuses
are ordinarily paid; (ii) in the case of termination due to
disability, the Executive shall be entitled to receive his Annual
Salary for twelve (12) months following such termination less
any amounts for which Executive is eligible to receive from long
term disability insurance benefits under disability coverage
furnished by the Employer to the Executive during such twelve
(12) month period; (iii) the Executive (or, in the case
of his death, his spouse and/or dependents) shall continue to
receive all applicable benefits elected by Executive for which he
received reimbursement for pursuant to Section 3.4 herein for
a period of twelve (12) months following such termination and
Company shall continue to pay for the foregoing in accordance with
Section 3.4 herein as if no such termination had occurred; and
(iv) the Executive (or, in the case of his death, his estate
and beneficiaries) shall have no further rights to any other
compensation or benefits hereunder on or after the termination of
employment, or any other rights hereunder, except as otherwise
provided in the plans and policies of the Employer.
5.
Certain Terminations of Employment .
5.1 Termination for Cause; Termination of
Employment by the Executive without Good Reason .
(a) For
purposes of this Agreement, “Cause” shall mean
the Executive’s:
(i) conviction of (or pleading nolo
contendere to) a felony involving the crime of theft or a related
or similar act of unlawful taking, or a felony involving the
federal or California securities or pension laws, or any felony,
which results in material economic harm to the Employer;
(ii) engagement in the performance of his
duties hereunder or otherwise to the material and demonstrable
detriment of the Employer, in willful misconduct, willful or gross
neglect, fraud, misappropriation or embezzlement;
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(iii) After notice from the Board, and, if
requested by Executive, the opportunity to be heard by the Board,
the failure to adhere to the lawful and reasonable directions of
the Board that are consistent with the terms of this Agreement (so
long as the directive does not give the Executive Good Reason (as
defined below) to terminate his employment as described in
Section 5.2), or the failure to devote substantially all of
the business time and effort to the Employer (except for any
activities expressly authorized by the Employer);
(iv) material breach of any of the
provisions of Section 6, other than inadvertent breaches;
or
(v) breach in any material respect of the
terms and provisions of this Agreement and failure to cure such
breach within thirty (30) days following written notice from
the Employer specifying such breach; provided however, if Executive
delivers written notice to Employer during the 30 day cure
period requesting to be heard at a meeting of the Board, his
termination under this Section 5.2(a)(v) shall not be effective
until such Board meeting at which Executive had an opportunity to
be heard.
provided that
Cause shall not exist except on written notice given to the
Executive at any time not more than 60 days following the
later of either the occurrence of any of the events described above
or Employer’s actual knowledge thereof, which events in any
case must have occurred after the effective date of this
Agreement.
(b) The Employer may terminate the
Executive’s employment hereunder for Cause, and the Executive
may terminate his employment for any or no reason on at least
30 days’ and not more than 60 days’ written
notice given to the Employer. If the Employer terminates the
Executive for Cause, or the Executive terminates his employment and
the termination by the Executive is not covered by Section 4
or 5.2, (i) the Executive shall receive Annual Salary and
other benefits earned and accrued under this Agreement prior to the
termination of employment (and reimbursement under this Agreement
for expenses incurred prior to the termination of employment); and
(ii) the Executive shall have no further rights to any other
compensation or benefits hereunder on or after the termination of
employment, or any other rights hereunder, except as otherwise
provided in the plans and policies of the Employer.
5.2
Termination by the Employer without Cause; or by the Executive
for Good Reason .
(a) For purposes of this Agreement,
“Good Reason” shall mean, unless otherwise
consented to in writing by the Executive;
(i) a reduction in Annual Salary or in
benefits of the Executive, or the failure of the Employer timely to
make any Annual Salary payment due to the Executive, provided that
such deferral or failure to pay continues unremedied for more than
thirty (30) days;
(ii) any action by the Employer that
results in a material diminution in the Executive’s title(s),
status, position, authority, duties or responsibilities;
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(iii) a
material breach of any provision of this Agreement by the
Employer;
(iv) a failure of the Employer to have any
successor entity specifically assume this Agreement;
(v) if there is a Change of Control of the
Company and Executive terminates his employment for any reason or
no reason at all during the 120 day period immediately
following the Change of Control;
(vi) a relocation of the Executive to
offices other than those set forth herein, or a relocation of the
offices set forth herein to a location more than 25 miles from its
current location, without Executive’s prior written
consent;
(vii) a
change in Executive’s reporting so that he no longer reports
directly to the CEO; or
(viii) the assignment to Executive of any
duties or responsibilities which are inconsistent with his status,
position or responsibilities as set forth in Section 2
hereof.
Notwithstanding the foregoing, (i) Good
Reason shall not be deemed to exist unless notice of termination on
account thereof (specifying a termination date no later than
30 days from the date of such notice) is given no later than
the later of either (1) 60 days after
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