THIS EMPLOYMENT AGREEMENT
(this “Agreement”),
effective as of August 1, 2009 (the “Effective
Date”), is between Dolan Media Company, a Delaware
corporation (the “Company”), and Vicki J. Duncomb
(“Executive”).
Prior to the Effective Date, the Company
employed Executive as its Vice President, Finance and, on such
date, the Company promoted Executive to its Vice President and
Chief Financial Officer. Accordingly, beginning with the Effective
Date, the Company desires to employee Executive and Executive
desires to be employed by the Company as the Vice President and
Chief Financial Officer of the Company on the terms and conditions
contained herein.
In consideration of the premises, the mutual
covenants of the parties hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as
follows:
1.1 Engagement of Executive . The Company
agrees to employ Executive as the Vice President and Chief
Financial Officer of the Company and Executive accepts such
employment by the Company for a period of two (2) years
beginning on the Effective Date and ending on July 31, 2011
(the “Employment Period”); provided, however, that,
effective on August 1, 2010, the Employment Period shall, on a
daily basis, be automatically extended by one (1) day, such
that at any time, the remaining Employment Period shall be one
(1) year; provided further that such day-to-day extensions
shall cease in the event either the Company or Executive, as the
case may be, provides written notice of such cessation to the other
party and such cessation of the automatic extensions shall be
effective as of the date of delivery of such notice as determined
pursuant to Section 5.2 below. Notwithstanding anything to the
contrary contained herein, the Employment Period is subject to
termination by the Company or Executive pursuant to Section 3
below.
(a) Service with the Company .
During the Employment Period, Executive shall (i) serve as the
Company’s Vice President and Chief Financial Officer and
shall report directly to the Chief Operating Officer and,
indirectly, to the Chief Executive Officer and the Board of
Directors of the Company (the “Board”), (ii) have
such responsibilities, duties and authorities, and render such
services for the Company, that Executive has or renders for the
Company prior to the Effective Date, and (iii) have such other
responsibilities, duties and authorities, and render such other
services for the Company, that are consistent with
Executive’s position as Vice President and Chief Financial
Officer, as the Chief Operating Officer, the Chief Executive
Officer or the Board may from time to time reasonably
direct.
(b) Service with Subsidiaries and other
Affiliates . During the Employment Period, Executive shall
(i) have such responsibilities, duties and authorities, and
render such services for the Company’s subsidiaries and other
affiliates that (x) Executive renders for such subsidiaries
and other affiliates as of the Effective Date and (y) that are
consistent with Executive’s position as Vice President and
Chief Financial Officer of the Company, as the Board, the Chief
Executive Officer or the Chief Operating Officer may from time to
time reasonably direct; and (ii) at the reasonable request of
the Board, Chief Executive Officer or Chief Operating Officer,
serve as the Vice President and Chief Financial Officer or director
of each subsidiary or other affiliate of the Company;
provided that Executive shall not be entitled to any
additional compensation for serving as an officer or director of
the Company’s subsidiaries and other affiliates.
(c) Performance of Duties .
Executive will devote her best efforts, energies and abilities and
her full business time, skill and attention (except for permitted
vacation periods and reasonable periods of illness) to the business
and affairs of the Company, its subsidiaries and other affiliates
and shall perform the duties and carry out the responsibilities
assigned to her, to the best of her ability and in a diligent,
trustworthy, businesslike and efficient manner. Executive
acknowledges that her duties and responsibilities will require her
full-time business efforts and agrees that during the Employment
Period she will not engage in any other business activity or have
any business pursuits or interests, except activities or interests
which do not conflict with the business of the Company, its
subsidiaries and other affiliates and do not interfere with the
performance of Executive’s duties hereunder; provided
that Executive shall be permitted to (i) continue to serve on
civic and charitable boards and committees (provided that in July
of each year hereunder, Executive furnishes the Board with a list
of the civic and charitable boards and committees that Executive is
then serving on) and (ii) manage her personal investments and
affairs, in each case so long as the activities referred to in
clauses (i) and (ii) above otherwise comply with the terms and
conditions of this Agreement, including the provisions of this
Section 1.2(c); provided further that Executive
shall not, without the prior written consent of the Board, be
permitted to serve on any for profit entity’s board of
directors or committee or hold any similar position with respect to
any such entity.
2.1 Base Salary . Beginning on
August 1, 2009 and ending December 31, 2009, the Company
will pay Executive a base salary (“Base Salary”) at the
annual rate of $225,000. For the calendar year beginning
January 1, 2010, and for each subsequent calendar year during
the Employment Period, the Company will pay Executive a Base Salary
equal to the Base Salary for the previous calendar year increased
by the positive percentage change, if any, in the CPI (as defined
below) from the month of December from two (2) years prior to
the month of December from the previous year ( e.g. , the
Base Salary effective for the 2010 calendar year will be equal to
the Base Salary from 2009 increased by an amount equal to the
positive percentage change, if any, in the CPI from the month of
December in 2008 to the month of December in 2009). The Base Salary
shall be payable in regular installments in accordance with the
Company’s general payroll practices for salaried employees.
For purposes hereof, “CPI,” for any month of December,
means Consumer Price Index for All Urban Consumers, U.S. City
Average, all items, not seasonally adjusted, for such month and
compiled upon data (with the base 1982-84 equals 100) for such
month (the “Index”). In the event that publication or
issuance of the Index is discontinued or suspended, the CPI shall
be an index published or issued by the United States Department of
Labor or any bureau or agency thereof that computes information
from substantially the same statistical categories and
substantially the same geographic areas as those computed in the
Index and that weights such categories in a substantially similar
way to the weighting of the Index at the Effective Date. In the
event that the Index is calculated upon a base year other than
1982-84, such adjustments to the CPI for each calendar year shall
be calculated as necessary to ensure that the CPI for each such
calendar year is based on the same Index. Executive’s Base
Salary shall be subject to annual review by the Compensation
Committee of the Board (the “Committee”) and may be
further increased (but not decreased) from time to time as the
Board determines.
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2.2 Annual Bonus . During the Employment
Period, in addition to the Base Salary, Executive shall be eligible
to receive an annual performance-based cash bonus (“Annual
Bonus”) with respect to each fiscal year of the Company. The
Annual Bonus shall be based upon quantitative and qualitative
performance targets. Those targets, as well as the Annual Bonus
target amount, shall be established by the Committee in its sole
discretion in accordance with the Company’s annual bonus
plan. The Annual Bonus for a fiscal year shall be paid to Executive
in a cash lump sum in accordance with the terms of the
Company’s annual bonus plan, but in any event shall be paid
within two and one-half months after such fiscal year.
2.3 Benefits . In addition to the Base
Salary and Annual Bonus (if any) payable to Executive hereunder,
the Executive shall be entitled to four (4) weeks of paid
vacation time per year hereunder; club membership(s) as may be
approved from time to time by the Committee; and all other pension,
welfare and fringe benefits and perquisites that are generally made
available to other senior executive officers of the Company (to the
extent possible under applicable law) during the Employment Period
(the “Benefits”); provided that the Company does
not guarantee the adoption or continuance of any particular benefit
plan or program or particular benefit.
2.4 Reimbursement of Expenses . The
Company shall pay or reimburse Executive for reasonable expenses
incurred in the discharge of her duties hereunder, in accordance
with the Company’s executive expense reimbursement policy as
in effect from time to time. Executive shall provide the Company
with such vouchers or receipts as the Company deems reasonably
necessary to verify the amount of such expenses. The Company shall
pay the reasonable fees, expenses and disbursements incurred by
Executive in connection with the negotiation and preparation of
this Agreement; provided , however , that such amount
shall be paid as soon as administratively possible and in no event
later than March 15, 2010.
2.5 Taxes, etc . All compensation payable
to Executive hereunder is stated in gross amount and shall be
subject to all applicable withholding taxes, other normal payroll
deductions and any other amounts required by law to be
withheld.
2.6 Legal Fees and Expenses . The Company
shall pay to Executive all reasonable legal fees and expenses
incurred by Executive in disputing in good faith any termination of
her employment hereunder or in seeking in good faith to obtain or
enforce any benefit or right under this Agreement, provided that
Executive shall have a reasonable basis for her position. Without
limiting the generality of the forgoing, if any amount is not paid
hereunder when due, including, but not limited to, any amount of
Base Salary, Annual Bonus (if any), fees or expenses, the amount
thereof shall bear interest from the due date thereof until paid in
full at the rate of 10% per annum; provided, however, that the
reimbursement for fees and expenses pursuant to this
Section 2.6 shall be made no later than the end of the
calendar year following the calendar year in which such legal fees
or expenses were incurred. This Section 2.6 shall remain in
effect throughout the Employment Period and for a period of five
(5) years following the termination of the Employment
Period.
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(a) The Employment Period (i) shall
automatically terminate immediately upon Executive’s death,
(ii) may be terminated at any time by the Board as set forth
herein for Cause or without Cause, or by reason of
Executive’s Permanent Disability, upon written notice to
Executive, (iii) may be terminated at any time by Executive with
Good Reason upon written notice to the Company, or (iv) may be
terminated at any time by Executive without Good Reason and without
liability upon thirty (30) days prior written notice to the
Company.
(b) In addition to the capitalized terms
defined elsewhere in this Agreement, the following capitalized
terms shall have the following meanings when used in this
Agreement:
“Cause” means the occurrence of any
of the following events:
(i) a material breach by Executive of any
of the terms and conditions of this Agreement, which breach remains
uncured ten (10) days after receipt by Executive of written
notice of such breach;
(ii) Executive continues to willfully and
materially fail to perform her duties hereunder, or engages in
excessive absenteeism unrelated to illness or permitted vacation,
ten (10) days after a written demand for performance is
delivered to Executive by the Board or its representative, which
written demand specifically identifies the manner in which the
Board believes that Executive has not performed Executive’s
duties;
(iii) Executive’s commission of
theft, fraud, misappropriation or embezzlement in connection with
the Company’s or its subsidiaries’ or affiliates’
business; or
(iv) Executive’s commission of
criminal misconduct constituting a felony;
provided that, (x) for purposes of this definition,
no act or failure to act by Executive shall be
“willful” if it is done, or omitted to be done, in good
faith by Executive with a reasonable belief that Executive’s
act or omission was in the best interests of the Company, (y) the
Board shall not be permitted to terminate the Employment Period for
Cause unless and until the Board shall have delivered to Executive
a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the members of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice
is provided to Executive and Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that,
in the good faith opinion of the Board, the Executive is guilty of
the conduct described in the definition of “Cause” and
specifying the particulars thereof in reasonable detail, and
(z) the definition of “Cause” hereunder shall
supersede any definition of “cause” contained in any
employee benefit or incentive compensation plan or agreement now or
hereafter adopted by the Company and applicable to Executive that
provides for a forfeiture or payment upon the Executive’s
violation of a Company policy or similar such conduct under such
plan or agreement.
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“Good Reason” means the occurrence,
without Executive’s express written consent, of any of the
following events; provided , however , that Executive
gives the Company written notice of circumstances giving rise to
any of the following events no later than ninety (90) days
after the date that such circumstances come into existence; and
provided further that any termination of Executive’s
employment for Good Reason, as a result of any such event or
condition that is not timely cured, must occur no later than the
second anniversary of the date that such event occurs: (i) the
Company moves its principal offices from the Minneapolis-St. Paul
metropolitan area and requires Executive to relocate to the
vicinity of such new offices; (ii) any material diminution by
the Company in Executive’s duties or responsibilities
inconsistent with the terms hereof, which diminution remains
uncured thirty (30) days after receipt by the Company of
written notice of such breach; (iii) the Company materially
breaches any of its obligations hereunder, which breach remains
uncured thirty (30) days after receipt by the Company of
written notice of such breach; (iv) a diminution in
Executive’s Base Salary or the target amount of any Annual
Bonus, or a material diminution in Benefits available to Executive
on the Effective Date or as hereafter may be made available to
Executive, other than, in each case under this clause (iv):
(x) any such diminution that is cured within thirty
(30) days after receipt by the Company of written notice of
such diminution, or (y) any diminution of Benefits that also
applies to the other senior executives of the Company.
“Permanent Disability” as used
herein shall mean that (i) Executive has begun receiving
disability income insurance payments under any disability income
insurance policy that the Company is then maintaining for the
benefit of executive-level employees or (ii) if the Company is
not then maintaining disability income insurance for
executive-level employees, Executive is unable to perform, by
reason of physical or mental incapacity, her duties or obligations
under this Agreement for a period of sixty (60) days in any
consecutive 120-day period. The Board shall determine, according to
the facts then available, whether and when Executive’s
Permanent Disability has occurred. Such determination shall be
reasonable and the Board, in making such determination, shall take
into consideration the opinion of Executive’s personal
physician, if reasonably available.
“Person” means any individual,
partnership, limited liability company, corporation, joint venture,
trust, or other entity.
“Separation from Service” means
Executive’s termination of employment from the Company which
constitutes a “separation from service,” as such term
is defined under Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”) or applicable guidance or
regulations thereunder.
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3.2 Compensation After Termination .
(a) If the Employment Period is terminated (i) by reason
of Executive’s death, (ii) by the Company for Cause or
by reason of Executive’s Permanent Disability, or
(iii) by Executive without Good Reason, then the Company shall
have no further obligations hereunder, including under
Section 2, or otherwise with respect to Executive’s
employment from and after the termination date, except (x) for
payment of Executive’s Base Salary and Benefits accrued
through the date of termination and any Annual Bonus due pursuant
to Section 2.2 for the immediately preceding fiscal year to the
extent unpaid on the date of such termination, and (y) in the
event the Employment Period is terminated due to Executive’s
death or Permanent Disability, Executive shall receive a pro rata
Annual Bonus as provided in Section 3.2(b)(iv), and the
Company shall continue to have all other rights available hereunder
at law, in equity or otherwise in connection with such termination;
provided , however , such pro rata Annual Bonus, if
any, shall be paid at such time as such Annual Bonus would normally
be required to be paid under the Company’s annual bonus plan;
provided further , that if the Employment Period is
terminated by reason of Executive’s Permanent Disability and
such pro rata Annual Bonus would be payable under the
Company’s annual bonus plan earlier than the date which is
six (6) months following the date on which Executive incurs a
Separation from Service with th
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