Exhibit (d)(7)
Revised August 6, 2015
July 13, 2015
Ernie Cormier
504 Brush Hill Road
Milton, MA 02186
Dear Ernie:
Today is a good day! In connection with AOL Inc.’s acquisition of Millennial Media, Inc. (“Millennial”), AOL Inc. (together with its subsidiaries, “AOL” or the “Company”) is pleased to offer you the position of Senior Vice President and Chief Product Officer reporting to Seth Demsey, on the terms and conditions set forth in this letter. Please read this letter carefully.
The terms of employment set forth in this letter are conditioned upon the closing of AOL’s acquisition of Millennial (the “Closing”) and do not become effective until the date of the Closing (the “Closing Date”). In the event the Closing does not occur, the Company will promptly notify you and this offer will be null and void and not become effective.
This letter constitutes the full terms and conditions of your employment with the Company and is contingent on you starting employment with the Company on the Closing Date. This letter supersedes any prior oral or written promises that may have been made to you by Millennial or the Company, including, but not limited to, any offer letter, employment agreement, severance agreement, bonus plan, commission plan, incentive program, sales program, or any similar arrangement, including any bonus or commission arrangement set forth in your employment agreement or offer letter, contractor agreement, consulting agreement or other arrangement entered into between you and Millennial; provided that this letter will not supersede, modify or otherwise affect the terms and conditions of the applicable Millennial equity plan and employment or award agreement governing your equity awards, or the treatment of equity awards contemplated by the Merger Agreement governing AOL’s acquisition of Millennial. Further, the provisions in your equity award agreements with Millennial (including Section 2.3 of your Millennial employment agreement) that provide for the vesting of Millennial restricted share units upon a change in control, or upon a termination without “Cause” or resignation with “Good Reason” in connection with a change in control will not be superseded, modified or otherwise affected by the terms of this letter, and will apply with respect to the cash-based awards into which such restricted share unit awards will convert as of the Closing; provided that the definition of “good reason” used therein shall be superseded by the definition of
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“Good Reason” set forth in this letter. Except as otherwise provided in this letter, any such prior oral or written promise made to you by Millennial or the Company is hereby terminated, and you agree that by accepting this offer you are consenting to terminate any such oral or written promises made to you by Millennial or the Company and waiving any applicable notice requirements.
Base Salary: Your semi-monthly base salary will be $18,750, less applicable withholdings, which if calculated on a yearly basis is $450,000 (“Base Salary”). Your semi-monthly paydays fall on the 15th and the last day of each month. If the 15th or the last day of the month falls on a weekend or bank holiday, the payday is the preceding business day.
Signing Bonus:You will also receive a one-time signing bonus of $25,000.00, less applicable withholdings. It will be paid the second pay period following your first day of employment.
2015 Millennial Bonus:You will receive a pro-rated annual incentive payment based upon the assumption of full achievement of targets set forth in your annual incentive plan with Millennial (for the avoidance of doubt, such amount will be a pro-rated portion of $320,000) through the Closing Date (“Millennial Bonus”). The Millennial Bonus will be made payable on or before sixty (60) days following the Closing Date.
AOL Annual Bonus Plan:In addition to your Base Salary, you will be eligible to participate in AOL’s Annual Bonus Plan (“ABP”), pursuant to its terms as determined by the Company from time to time. AOL will review its performance (including any Segment/Brand/Group performance, if applicable) and your individual performance to determine your eligibility for a bonus under the ABP, if any (“Bonus”). Any Bonus (and its amount, if a Bonus is paid) is fully discretionary. Your target Bonus as a percentage of your Base Salary is seventy-five (75%) percent. For the current calendar year, your Bonus will be pro-rated as of the Closing Date for the portion of the year you are employed at AOL in an ABP eligible position.
AOL Founder’s Grant:You will be granted a one-time “founder’s grant” with a grant date value of $700,000.00 (rounded down to the nearest whole unit) (the “Founder’s Grant”). The Founder’s Grant will be in the form of AOL Restricted Stock Units (“RSUs”) and will vest on June 30, 2018, subject to your continued employment with the Company through the vesting date.
RSUs are valued based on the fair market value of AOL as determined under the terms of the applicable plan, notices and award agreements under which they are issued. Upon vesting, you are eligible to receive either the cash value of your RSUs based on the most recent valuation of AOL or the stock equivalent of such award.
The Founder’s Grant is subject to corporate approval and will be governed by the plan, agreements and notices under which it is issued, the terms and conditions of which you hereby agree to accept and which are incorporated herein by reference.
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Equity Grant: Within thirty-one (31) days of your hire date, you will be granted a one-time sign-on grant with a grant date value of $600,000 (rounded down to the nearest whole unit) (the “Sign-On Grant”). The Sign-On Grant will be in the form of RSUs and will vest over a 3-year period, with one-third (1/3) vesting on each of the first, second and third anniversaries of the grant date, subject to your continued employment through the applicable vesting date. The Sign-On Grant is subject to corporate approval and will be governed by the plan, agreements and notices under which it is issued, the terms and conditions of which you hereby agree to accept and which are incorporated herein by reference.
Ongoing, you will be eligible to receive annual equity-based awards in accordance with the Company’s annual equity award cycle with an annual target value of $600,000 subject to your performance and the available equity pool.
All such awards are to be granted upon and subject to corporate approval and are subject to the terms and conditions of the applicable plan, notices and award agreements.
Health and Welfare Benefits:The Company offers a generous and comprehensive benefits package, including health, disability, and life insurance. Effective immediately following the Closing Date (the “Eligibility Date”), you and your family members will be eligible to participate in a full range of benefits in accordance with the Company’s current eligibility requirements. It will be necessary for you to make benefit elections within thirty (30) days of your Eligibility Date with the Company. If you do not make an election within the designated timeframe, you will be automatically enrolled into our health plan at the default level of benefits coverage with sole responsibility for any associated costs. Employee benefits are subject to change at the sole discretion of the Company.
Vacation Policy:You will accrue vacation at the regular Company vacation accrual rate based on your years of service in accordance with the Company’s vacation policy. For purposes of determining your rate of accrual, you will receive service credit for your time worked at Millennial.
Key Employment Conditions:This offer is contingent on your submission of satisfactory proof of eligibility to work in the United States. You must bring documentary proof of your eligibility to work with you on your first day of work.
This offer and your continued employment is contingent upon the satisfactory results of a background check as determined by the Company in its discretion, which may include confirmation of your Social Security number, verification of prior employment, verification of education, if applicable, and a criminal records check. If the results of the background check are not satisfactory or if the Company determines that you have falsified or failed to disclose relevant information on your background check application, the Company reserves the right to withdraw this offer and will terminate your employment.
If you have any claims or actions against Millennial or the Company or are aware of any facts that would support any claim or action against Millennial or the Company, please immediately
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advise Robin Eletto atreletto@millennialmedia.com. Otherwise, by signing this offer letter, you are acknowledging that you have no such claims or actions and are not aware of any facts that would support a claim or action against Millennial or the Company. Notwithstanding the foregoing, nothing herein waives or modifies your rights to indemnification under Millennial’s bylaws, director and officer liability or other insurance or otherwise.
In addition, as a condition of your employment, you must sign and comply with the enclosed Confidentiality and Invention Assignment Agreement for Sale of Business (“CIA Agreement”). You agree that acceptance of this offer and your start of employment at AOL also constitutes your agreement to the terms of the CIA Agreement.
Further, as a condition of your employment, you will be required to electronically sign AOL’s Standards of Business Conduct within the first thirty (30) days of your employment and periodically thereafter during your employment as requested by the Company as an affirmation of your agreement to the Company’s code of ethical and appropriate workplace conduct.
Termination:The terms and conditions of any prior Millennial severance you may have been eligible for as detailed in your offer of employment or employment agreement with Millennial are hereby terminated and replaced by the following.
Your employment with the Company is at-will, meaning that you or the Company may terminate your employment at any time for any reason not prohibited by law, with or without notice or Cause (as defined below), provided the following conditions are observed and subject to the following consequences.
In the event the Company terminates your employment for Cause (as defined below) or you resign your employment or in the event of your death, you shall be entitled as of the termination date to no further compensation under this letter, except for your Base Salary through the termination date, any accrued, but unused vacation in accordance with Company policy, reimbursement of any expenses properly incurred prior to termination, and any benefits that may be payable upon termination under any of the Company’s benefit plans.
In the event the Company terminates your employment without Cause, you will be entitled to receive the payments and benefits described below, conditioned upon your execution and delivery to the Company of a standard separation agreement, which shall contain, among other obligations, a valid release of any and all claims against the Company and its related entities and agents:
| | • | | An amount equal to twelve (12) months of your Base Salary at the time of termination, less applicable withholdings. This amount will be paid in twenty-four (24) semi-monthly, substantially equal installments starting on the second payroll period following your termination date (“Original Payment Date”); provided, however, that if your separation agreement is not effective and irrevocable on the Original Payment Date, the first payment will be made on the second payroll period following the date that it becomes effective and irrevocable and will include any prior installments otherwise payable to |
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| | you beginning on the Original Payment Date. These payments will not be eligible for deferrals to the Company’s 401(k) plan |
| | • | | If you are eligible for and timely elect COBRA continuation coverage for your medical, dental and/or vision benefits, the Company will pay the COBRA premium for you and your eligible dependents to continue coverage under those benefits pursuant to COBRA (based on your elected level of coverage as in effect immediately prior to your termination date) for twelve (12) months beginning the first day of the calendar month following your termination date, or until such earlier date as you cease to be eligible for COBRA continuation coverage. After such time, provided you remain eligible, you may, at your own expense, continue medical, dental and/or vision benefits for whatever balance of time remains under COBRA. |
| | • | | Subject to the terms of the ABP, if you are terminated between January 1 and March 15 of any calendar year, you will be entitled to a Bonus payment under the ABP for the calendar year ending prior to your termination (“Prior Year”) equal to the amount that would have otherwise been payable to you based on the actual attainment of performance goals for such year, less applicable tax withholdings, but in no event to exceed 100% of your ABP target payout; provided that (i) the Company pays a Bonus to eligible employees under the Company’s ABP for the Prior Year, (ii) the Bonus has not already been paid to you at the time of termination of your employment, and (iii) you were otherwise eligible for such Bonus payment if you had remained employed through the date of payout. This amount will be paid to you in a lump sum on the earlier of the date on which other eligible employees are paid bonuses under the ABP for the Prior Year provided the separation agreement has become effective and irrevocable by its terms, or the sixtieth (60th) day following your termination of employment. This payment will not be eligible for deferrals to the Company’s 401(k) plan. |
| | • | | The services of a professional outplacement and counseling firm, as designated by the Company, for twelve (12) months to assist you in securing employment following your separation from employment with the Company. |
| | • | | In order for you to be entitled to the payments described in this section, your separation agreement must become effective within the time period specified therein and in all events within sixty (60) days following your termination date. If the 60-day period spans two calendar years, then the payments provided in the first bullet point above will commence on the first regularly scheduled payroll date that occurs in the second calendar year (or such later date as may be otherwise specified above) and will include any prior installments that would have been paid beginning on the Original Payment Date. |
For purposes of this letter, “Cause” shall be limited to (i) your conviction of, or nolo contendere or guilty plea to, a felony (whether any right to appeal has been or may be exercised); (ii) your failure or refusal, without proper cause (which proper cause shall include by reason of death or disability as defined below), to perform your duties with the Company, including your
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obligations under this letter, if such failure or refusal remains uncured for fifteen (15) days after written notice to you; (iii) fraud, embezzlement, misappropriation, or reckless or willful destruction of Company property; (iv) a breach of any statutory or common law duty of loyalty to the Company; (v) your violation of the Confidentiality Agreement, this offer letter or the SBC, if such violation of this offer letter remains uncured for fifteen (15) days after written notice to you; (vi) your improper conduct substantially prejudicial to the Company’s business; (vii) your failure to reasonably cooperate in any internal or external investigation involving the Company; or (viii) your indictment for a felony alleging fraud, embezzlement, misappropriation or destruction of Company property, or alleging fraud, embezzlement, or monetary theft with respect to another party.
For purposes of this letter, “Good Reason” shall mean (i) a material diminution of your authority, responsibilities or duties; provided, however, that the impact of the acquisition of Millennial or the Company and subsequent conversion of Millennial or the Company to a division or unit of the acquiring company will not by itself result in a diminution of your authority, responsibilities or duties; (ii) a material diminution by the Company in your Base Salary; (iii) the Company’s requiring you to be based anywhere other than Boston, MA; or (iv) a material breach of this offer letter by the Company;provided, that prior to any termination for Good Reason, you shall first provide the Company with reasonable written notice within sixty (60) days from the initial existence of the Good Reason condition, setting forth the reasons that you believe exist that give rise to “Good Reason” for resignation, stating that the Company shall have thirty (30) days to cure such “Good Reason”, and if the Company has not remedied the “Good Reason” condition within thirty (30) days following such notice from you, then you must resign your employment with Company within thirty (30) days of the end of the remedy period or you will forever waive your right to resign for Good Reason for such condition upon that occurrence, but not future occurrences of the same condition. You acknowledge that this definition has no application other than for purposes of pre-Closing Millennial restricted share unit awards (as converted into the cash-based awards described above).
Notwithstanding anything to the contrary herein, the Company reserves the right to terminate your employment on account of your disability (as the term “disability” is defined in the Company’s long-term disability plan, but which definition must also constitute a “disability” for purposes of Section 409A of the Code), and in such event the Company shall have no further obligation to you or your heirs other than: (i) to pay your Base Salary through the termination date, any accrued unused vacation in accordance with Company policy, reimbursement of any expenses properly incurred prior to termination, and any benefits payable upon termination under any Company benefit plan, and (ii) provided you are eligible for and timely elect COBRA continuation coverage for your medical, dental and/or vision benefits, to pay the COBRA premium for you and your eligible dependents to continue coverage under those benefits pursuant to COBRA (based on your elected level of coverage as in effect immediately prior to your termination date) for twelve (12) months beginning the first day of the calendar month following your termination date, or until such earlier date as you cease to be eligible for COBRA continuation coverage. After such twelve (12) month period, provided you remain eligible, you may, at your own expense, continue medical, dental and/or vision benefits for whatever balance of time remains under COBRA.
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Noncompetition: You acknowledge that the services to be performed under this offer letter are of a special, unique, unusual, extraordinary and intellectual character. You further acknowledge that the business of the Company is international in scope, that its products and services are marketed throughout the world, that Company competes in nearly all of its business activities with other entities that are or could be located in nearly any part of the world and that the nature of your services, position and expertise are such that you are capable of competing with the Company from nearly any location in the world.
You also agree that, in addition to your obligations under the Confidentiality Agreement, while employed by the Company and for twelve (12) months following termination of your employment for any reason, you shall not, directly or indirectly, except as a shareholder holding less than a one percent (1%) interest in a corporation whose shares are traded on a national securities exchange, participate in the ownership, control, or management of, or perform any services for or be employed by (i) Time Inc., Yahoo!, Inc., The Walt Disney Company, including its Maker Studios, Inc. subsidiary, Google, Inc., including its YouTube subsidiary, Microsoft Corporation, IAC/Interactive Corp., Facebook, Inc., LinkedIn Corporation, Amazon.com, Inc., Pinterest, Inc., Conversant, Inc. and Twitter Inc., or any of their respective subsidiaries, affiliates or successors, or (ii) without the written consent of the Chief Executive Officer or the General Counsel of the Company, any entity that engages in any line of business that is substantially the same as any line of business which Company engages in, conducts or, to your knowledge, has definitive plans to engage in or conduct, and has not ceased to engage in or conduct, or any of their respective subsidiaries, affiliates or successors, but only in those geographic areas in which Company is then engaged, or has definitive plans to engage, in the conduct of such line of business (any such entity identified by this paragraph (ii) is a “Competitive Entity”). Notwithstanding the preceding, in order to be considered a Competitive Entity, the entity must derive fifty percent (50%) or more of its total annual revenues from substantially similar products and services offered by Company.
You acknowledge that the geographic boundaries, scope of prohibited activities, and time duration of the preceding paragraphs are reasonable in nature and are no broader than are necessary to maintain the confidential information, trade secrets and the goodwill of Company and to protect the other legitimate business interests of Company and are not unduly restrictive on you.
You and the Company agree and intend that the covenants contained in this offer letter, including but not limited to the covenants set forth in this section, shall be deemed to be a series of separate covenants and agreements, one for each and every county or political subdivision of each applicable state of the United States and each country of the world. It is the desire and intent of the parties hereto that the provisions of this offer letter be enforced to the fullest extent permissible under the governing laws and public policies of the State of New York, and to the extent applicable, each jurisdiction in which enforcement is sought. Accordingly, if any provision in this offer letter or deemed to be included in this offer letter shall be adjudicated to be invalid or unenforceable, such provision, without any action on the part of the parties hereto, shall be deemed amended to delete or to modify (including, without
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limitation, a reduction in duration, geographical area or prohibited business activities) the portion adjudicated to be invalid or unenforceable, such deletion or modification to apply only with respect to the operation of such provision in the particular jurisdiction in which such adjudication is made, and such deletion or modification to be made only to the extent necessary to cause the provision as amended to be valid and enforceable.
Cooperation: During and after your employment, you agree to assist the Company, upon its reasonable request, in connection with any litigation, investigation, or other matter involving the Company or its directors, officers, employees, shareholders, agents, representatives, clients or vendors. You agree that such assistance may include, but is not limited to, meeting with the Company’s representatives and legal counsel upon request. The Company will reimburse reasonable costs and expenses (including personal attorneys’ fees) incurred by you in connection with such assistance.
Return of Company Property: Upon termination of your employment, or at any other time the Company so requests, you must promptly return to your manager all the Company property in your possession, including, but not limited to, keys, access cards, computers, pagers and other mobile devices, badges, laptops, phones and the original and all copies of any written, recorded, or computer readable information about Company practices, procedures, trade secrets, customer lists or marketing associated with the Company’s business, and any other information deemed proprietary or confidential in accordance with Company policies and/or the CIA agreement.
At-Will Employment: Your employment with the Company is at-will, meaning that you or the Company may terminate the employment at any time for any reason not prohibited by law, with or without cause or notice. Nothing in this offer is intended to create a contract for employment or guarantee of continued employment with the Company. This at-will employment relationship cannot be modified except by an express written agreement signed by you and an authorized officer of the Company.
Governing Law and Jurisdiction: This offer letter, including the CIA Agreement and any other enclosed documents, will be governed by, construed and enforced in accordance with the laws of the State of New York without regard to the principles of conflicts of law. By accepting this offer, you irrevocably consent and submit to the personal jurisdiction of the Supreme Court of the State of New York, in New York, New York, and the United States District Court for the Southern District of New York, which you agree shall be the exclusive forum, in connection with any suit, action, arbitration or other proceeding concerning the interpretation of the terms of this offer letter and the enclosed documents, and you waive and agree not to assert any defense of lack of jurisdiction, that venue is improper, inconvenient forum, or otherwise.
Severability: If any term or clause of this letter should ever be determined to be unenforceable, you and the Company agree that this will not affect the enforceability of any other term or clause of this letter. Further, if any provision of this letter is deemed overbroad or unreasonable, such provision shall be enforced to the maximum extent possible under law.
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Section 409A: This letter is intended to be exempt from Section 409A of the Code, which is how the Company intends to administer and interpret this letter. The Company is not liable for any tax, interest or penalties that may be imposed on you by Section 409A of the Code or any damages for failing to comply with Section 409A of the Code. To the extent not so exempt, this offer letter (and any definitions in this offer letter) will be construed in a manner that complies with Section 409A of the Code, and incorporates by reference all required definitions and payment terms.
Section 280G: You and the Company agree that your execution of a non-competition agreement is a material inducement to the severance payments and benefits provided pursuant to this offer letter, and the Company further agrees such severance payments and benefits are payable on account of such non-competition agreement. Notwithstanding the foregoing, if at any time or from time to time, it shall be determined by independent tax professionals selected by Company (“Tax Professional”) that any payment or benefit you would receive from the Company or otherwise (“Payment”) is or will be, but for the provisions of this paragraph, subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Reduced Amount. The “Reduced Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax, or (y) the largest portion, up to and including the total, of the Payment, whichever amount ((x) or (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax, results in your receipt of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a Reduced Amount will give rise to the greater after tax benefit, the reduction in the Payments will occur in the following order: (a) reduction of cash payments; (b) cancellation of accelerated vesting of equity awards other than stock options; (c) cancellation of accelerated vesting of stock options; and (d) reduction of other benefits paid to you. Within any such category of payments and benefits (that is, (a), (b), (c) or (d)), a reduction will occur first with respect to amounts that are not “deferred compensation” within the meaning of Section 409A and then with respect to amounts that are. In the event that acceleration of compensation from your equity awards is to be reduced, such acceleration of vesting will be canceled, subject to the immediately preceding sentence, in the reverse order of the date of grant.
This letter and the enclosed documents referenced herein constitute the full terms and conditions of your employment with the Company. It supersedes all prior discussions, letters, agreements, plans, commitments, promises, or understandings or any kind related thereto, whether oral or written, between you and the Company.
If you agree to accept this offer please sign and date this letter and the enclosed CIA Agreement so that we can begin making arrangements for your arrival.
We hope that your employment with the Company will prove to be exciting and beneficial for both you and us. We truly look forward to having you aboard. If you have any questions, please do not hesitate to contact me.
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|
| Sincerely, |
|
| /s/ Terri L. Zandhuis |
|
| Terri Zandhuis |
| Chief People Officer |
| AOL Inc. |
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| ACCEPTED: | | /s/ Ernie Cormier | | | | DATE: | | Aug 6, 2015 |
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