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TheStreet.com
Term
Sheet for Gregory Barton
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Title and
Reporting Relationship: Executive Vice President, Business and
Legal Affairs, General Counsel and Secretary. Mr. Barton shall report
directly to the Company’s (TSCM’s) Chief Executive Officer
(CEO).
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Full-Time
Duties and Service on Board of Trustees of WisdomTree Trust:
Gregory shall devote his full-time work efforts and duties to TSCM
throughout his employment with TSCM. Notwithstanding Gregory’s full-time
dedication to TSCM, he may continue to serve on the Board of Trustees of
WisdomTree Trust, provided that such service does not materially interfere
with his ability to perform his duties for TSCM (including without
limitation his duty to serve as Corporate Secretary for
TSCM).
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Base
Salary: $275,000 annualized rate, with potential annual increases
at the discretion of the Compensation
Committee.
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Target
Bonus: 75% of Mr. Barton’s annualized rate of base pay at the
beginning of each calendar year, contingent on achieving performance goals
established by TSCM’s Compensation Committee and CEO for each performance
year (with input from Gregory), with potential annual increases to the
targeted amount at the discretion of TSCM’s Compensation Committee and
CEO. For the avoidance of doubt, Gregory’s target bonus for 2009 shall be
prorated for the period of 2009 served as an employee of TSCM (e.g., if
Gregory serves as a TSCM employee from July 1, 2009 through December 31,
2009, the 2009 target bonus would be: 75% x $275,000 x 50% (representing
one-half of 2009 worked with TSCM) =
$103,125).
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The
specific performance objectives applying to Gregory’s 2009 bonus opportunity
shall established by TSCM’s Compensation Committee and CEO within 30 days after
his first day of employment with TSCM, and shall be comprised of:
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TSCM’s
2009 operating results versus the objectives established by the
Compensation Committee and CEO for 2009 (representing 33% of
the total 2009 bonus opportunity);
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Gregory’s
establishment of a strategy for TSCM’s licensing business, together with
the performance of the licensing business versus operating objectives
established by the Compensation Committee and CEO for the licensing
business for 2009 (representing 33% of the total 2009 bonus
opportunity);
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The
achievement of a material reduction in TSCM’s overall annual legal
expenses (inclusive of Gregory’s base salary) versus the annualized rate
of legal fees experienced by TSCM in 2006, 2007, and 2008 (representing
33% of the total 2009 bonus
opportunity).
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Long-Term
Incentive Opportunity: One-time grant of 175,000
restricted stock units (RSUs), awarded under TSCM’s 2007 Performance
Incentive Plan (with RSUs being payable in full-value TSCM shares in
accordance with the terms of the annual vesting schedule described below,
unless the payment date is accelerated or the RSUs are forfeited, as
provided below). Gregory will have the option to elect to have his tax
withholding obligation in connection with the RSUs satisfied through the
withholding of shares underlying the RSU
award.
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Grant of RSUs: Granted
as soon as practicable after Gregory’s first day of employment with
TSCM.
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Vesting of
RSUs:
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Annual Vesting: Unless
vesting is accelerated pursuant to an event described herein, or the RSUs
are forfeited prior to vesting, RSUs shall vest according to the following
schedule:
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17,500
RSUs shall vest on the 1st
anniversary of the RSU grant date;
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An
additional 17,500 RSUs shall vest on the 2nd anniversary of the RSU grant
date;
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An
additional 17,500 RSUs shall vest on the 3rd anniversary of the RSU grant
date;
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An
additional 17,500 RSUs shall vest on the 4th anniversary of the RSU grant
date;
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The
remaining 105,000 RSUs shall vest on the 5th anniversary of the RSU grant
date.
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Shares of
TSCM stock underlying RSUs that vest according to the above schedule shall be
distributed to Gregory free and clear of all vesting restrictions (net of shares
withheld to pay taxes, if so elected by Gregory) within 30 days following the
applicable vesting date of such RSUs.
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Accelerated Vesting on Certain
Events: In the event of the first to occur of any one of the three
events described immediately below in (A), (B), or (C) below, some or all
unvested RSUs that have not been forfeited prior to such event shall have
their vesting accelerated upon the following
terms:
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(A)
A change-in-control (CIC) event (for purposes of this Term Sheet, having
the same definition as provided in the 2007 Performance Incentive Plan)
shall result in immediate 100% vesting of all RSUs that are unvested on
the effective date of consummation of the
CIC.
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(B)
An involuntary termination of Gregory’s employment without Cause (“Cause”
generally defined as egregious acts such as fraud, commission of a felony,
etc., determined in the good faith judgment of TSCM’s Compensation
Committee) shall result in partial vesting on the effective date of
termination of the following number of
RSUs:
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87,500
RSUs, PLUS;
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The
number of RSUs represented by the product of (i) 87,500 MULTIPLIED by (ii)
a fraction, the numerator of which is the lesser of: (a) 730; or (b) the
number of calendar days from and including Gregory’s 366th
calendar day of employment with TSCM, to and including the effective date
of Gregory’s employment termination under this provision, and the
denominator of which is 730 (for the avoidance of doubt, if Gregory’s
employment termination under this provision occurs prior to the 366th
calendar day of Gregory’s employment with TSCM, this fraction shall equal
zero); MINUS
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The
number of RSUs that had vested prior to the effective date of Gregory’s
employment termination under this
provision.
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Notwithstanding
any other provision of this Term Sheet, accelerated vesting of RSUs under this
provision shall be contingent on Gregory executing a release of legal claims
against TSCM, in such format as is provided in the good faith judgment of the
Compensation Committee and the CEO. In the absence of a properly executed
release of legal claims, all unvested RSUs shall be forfeited without payment
following an involuntary termination without Cause.
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(C)
A voluntary termination by Gregory for Good Reason (with “Good Reason”
having the definition ascribed to such term under the “Good Reason” safe
harbor provisions of Section 409A of the Internal Revenue Code and the
Treasury Regulations promulgated thereunder (“Section 409A”), all as
determined in good faith by TSCM’s Compensation Committee) shall result in
partial vesting on the effective date of termination of the following
number of RSUs:
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87,500
RSUs, PLUS;
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The
number of RSUs represented by the product of (i) 87,500 MULTIPLIED by (ii)
a fraction, the numerator of which is the lesser of: (a) 730; or (b) the
number of calendar days from and including Gregory’s 366th
calendar day of employment with TSCM, to and including the effective date
of Gregory’s employment termination under this provision, and the
denominator of which is 730 (for the avoidance of doubt, if Gregory’s
employment termination under this provision occurs prior to the 366th
calendar day of Gregory’s employment with TSCM, this fraction shall equal
zero); MINUS
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The
number of RSUs that had vested prior to the effective date of Gregory’s
employment termination under this
provision.
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Notwithstanding
any other provision of this Term Sheet, accelerated vesting of RSUs under this
provision shall be contingent on Gregory executing a release of legal claims
against TSCM, in such format as is provided in the good faith judgment of the
Compensation Committee and the CEO. In the absence of a properly executed
release of legal claims, all unvested RSUs shall be forfeited without payment
following a voluntary termination for Good Reason.
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Death or Disability: In
the event of Gregory’s death or disability (generally defined as a
physical or mental condition incapacitating Gregory from the ability to
effectively execute his role with TSCM, as determined in good faith by
TSCM’s Compensation Committee) before the occurrence of any one of the
“Accelerated Vesting” events described above, Gregory shall vest in a
prorated number of the RSUs, with the proration determined as a function
of the length of time served by Gregory with TSCM prior to death or
disability in relation to the two-year period following grant of the RSUs
(e.g., a disability at the 1st
anniversary of the RSU grant date would result in vesting and accelerated
delivery of 50% of the RSU award, net of any RSUs that have already vested
prior to death or disability). As an example, and for the avoidance of
doubt, if a death or disability happens immediately after the 1st
anniversary of the RSU grant date, the net number of RSUs that would vest
under this provision would equal [(175,000/2) – 17,500 (the RSUs that
vested according to their normal annual schedule)] =
70,000).
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Payment Acceleration
Events: Unless sooner forfeited due to a “Forfeiture Event”
described below, and other than the distribution of shares underlying RSUs
that have vested according to their regular vesting schedule (i.e., the
10%, 10%, 10%, 10%, 60% schedule described above in this Term Sheet), all
outstanding and previously undistributed RSUs shall be paid to Gregory on
an accelerated basis following any of the employment termination events
described below, with delivery of the RSU value occurring at the times
described below:
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Consummation
of a CIC, with delivery of RSU value occurring within 30 days after the
effective date of the CIC; or
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An
involuntary termination of Gregory’s employment without Cause, in which
case, delivery of RSU value will occur within 30 days after the effective
date of termination, contingent on proper execution of a release of legal
claims against TSCM, as provided in this Term Sheet;
or
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A
voluntary termination by Gregory for Good Reason in which case, delivery
of RSU value will occur within 30 days after the effective date of
termination, contingent on proper execution of a release of legal claims
against TSCM, as provided in this Term Sheet;
or
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Disability
(as defined in Section 409A), in which case, delivery of RSU value will
occur within 30 days after the effective date of Disability;
or
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Death,
in which case, delivery of RSU value will occur within 30 days after
death.
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Forfeiture Events: All
RSUs that have not been paid to Gregory by delivery of the underlying
shares (except in the case of voluntary termination without Good Reason,
in which case the prior clause shall be deemed to refer to RSUs that have
not vested) prior to the 5th
anniversary of the date of grant of the RSUs shall be forfeited without
payment (regardless of the vested status of the RSUs) if any one of the
following occurs prior to delivery (vesting, in the case of voluntary
termination without Good Reason) of the TSCM shares underlying the RSU
awards:
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TSCM
involuntarily terminates Gregory’s employment for “Cause”;
or
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Gregory
voluntarily terminates his employment as without Good Reason prior to the
fifth anniversary of his first day of employment with TSCM;
or
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Gregory
engages in competitive activity (to be defined in the RSU award agreement)
with TSCM within two years after his last day of employment with TSCM;
or
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Gregory
breaches the provisions to be included within the RSU award agreement
pertaining to non-solicitation of employees and clients of TSCM (within
the two-year period following employment termination), confidentiality of
information, or disparagement of
TSCM.
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In
addition, TSCM reserves the right to claw back RSU value delivered if within two
years after delivery of the RSU value Gregory engages in competitive activities
that violate the terms of the non-compete/non-solicit covenants to be included
in the RSU award agreement, or if he violates the non-disparagement or
confidentiality provisions of the RSU award agreement.
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General
Severance: In the event that, prior to the effective date of a CIC,
Gregory’s employment is involuntarily terminated by TSCM without Cause,
then subject to the caveat prohibiting payment of both general severance
and CIC severance (as described below), TSCM shall pay Gregory a general
severance amount determined according to the following formula, but in no
event greater than 52 weeks of Gregory’s base pay (at the annualized rate
in effect immediately prior to
termination):
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Four
weeks of Gregory’s base pay (at the annualized rate in effect immediately
prior to termination); PLUS
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5
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An
amount of severance represented by the product of: (i) an amount of money
equal to four weeks of Gregory’s base pay (determined by reference to the
annualized rate of base pay in effect immediately prior to termination);
MULTIPLIED by (ii) a fraction, the numerator of which is the number of
calendar days from and including Gregory’s 366th
calendar day of employment with TSCM, to and including the effective date
of Gregory’s employment termination under this provision, and the
denominator of which is 365 (for the avoidance of doubt, if Gregory’s
employment termination under this provision occurs prior to the 366th
calendar day of Gregory’s employment with TSCM, this fraction shall equal
zero).
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Notwithstanding
any other provision of this Term Sheet, payment of general severance under this
provision shall be contingent on Gregory executing a release of legal claims
against TSCM, in such format as is provided in the good faith judgment of the
Compensation Committee and the CEO. In the absence of a properly executed
release of legal claims, no general severance shall be paid.
Subject
to the CIC caveat prohibiting payment of both general severance and CIC
severance (as described below), and further subject to execution of a release of
legal claims against TSCM as provided above, TSCM shall pay Gregory the general
severance within 30 days following the effective date of termination. In the
event that Gregory qualifies to receive CIC severance, and if prior to the
payment of CIC severance TSCM has already paid Gregory general severance
amounts, the full value of such general severance amounts paid shall be offset
against any CIC severance payable to Gregory.
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Change-in-Control
Severance: Subject to the caveat prohibiting payment of both
general severance and CIC severance (as described above), if a CIC is
consummated prior to November 15, 2011, and if Gregory’s employment is
terminated within two years after the effective date of consummation of
the CIC (i) by TSCM without Cause or (ii) by Gregory for Good Reason,
Gregory would be paid 12 months of base salary at the annualized rate in
effect on the date of employment
termination.
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For
all purposes of this Term Sheet, Gregory shall receive the described
benefits associated with a CIC (i.e., CIC severance and RSU vesting) if
Gregory is employed at the time events or efforts are initiated that
directly lead to consummation of a CIC, provided that such a CIC will only
so qualify for this provision if the consummation of the CIC occurs within
six months of Gregory’s last day of
employment.
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Payment
shall be made within 30 days after the effective date of the CIC, unless a
delay is necessary to avoid imposition of additional taxes under Section
409A (in which case, the delay shall be for the minimum time frame
necessary to avoid additional 409A
taxes).
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Perks and
Health and Welfare Benefits: Gregory will be eligible to
receive perquisites and general health and welfare benefit coverage at a
level at least equal to those provided to other comparably situated
full-time executives of TSCM.
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Internal
Revenue Code Section 409A Saving Clause: TSCM will make all
reasonable efforts to deliver the value in connection with RSUs and CIC
severance in a manner that avoids imposition of additional taxes under
Internal Revenue Code Section 409A.
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Signed,
this 2nd day of June, 2009
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/s/ William Gruver
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/s/ Gregory Barton
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William
Gruver, Compensation Committee Chair
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Gregory
Barton
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of
TheStreet.com
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