Classmates.com 2003 Annual Report Download - page 81

3.6
Business Expenses
. The Company shall promptly reimburse Employee for all reasonable and necessary business expenses
(including reasonable expenses consistent with past practices or otherwise as agreed by Employee and the Chief Executive
Officer for lodging in proximity to the Company's headquarters) incurred by Employee in connection with the business of the
Company and the performance of his duties under this Agreement, subject to Employee providing the Company with reasonable
documentation thereof.
3.7 Telecommuting . Employee shall be entitled to telecommute for a portion of the work week consistent with past practices or
otherwise as agreed by Employee and the Chief Executive Officer.
4. Termination .
4.1 Termination for Cause .
(a) Termination "for cause" is defined as follows: the Company terminates Employee's employment with the Company
(1) if Employee is convicted of a felony, including any act of moral turpitude, which adversely impacts the Company, or (2) if
Employee fails, after receipt of detailed written notice and after receiving a period of at least thirty (30) days following such
notice to cure such failure, to use his reasonable good faith efforts to follow the direction of the Company's Board of Directors
and to perform his obligations hereunder.
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(b) The Company may terminate this Agreement for any of the reasons stated in Section 4.1(a) by giving written notice to
Employee without prejudice to any other remedy to which the Company may be entitled. The notice of termination shall specify
the grounds for termination. If Employee's employment hereunder is terminated "for cause" pursuant to this Section 4.1,
Employee shall be entitled to receive hereunder his accrued but unpaid Base Salary and vacation pay through the date of
termination, and reimbursement for any expenses as set forth in Section 3.6, through the date of termination, but shall not be
entitled to receive any unpaid portion of the Annual Bonus or any other amount.
4.2 Termination Without Cause . If Employee's employment is terminated without "cause" as defined in Section 4.1(a), or if
Employee is Involuntarily Terminated (as defined below), the Company (or its successor, as the case may be) shall pay to
Employee (i) any accrued but unpaid Base Salary and vacation through the date of termination, (ii) reimbursement for any
expenses as set forth in Section 3.6, through the date of termination, (iii) Employee's Annual Bonus, prorated through the date of
termination, and (iv) a severance payment in an amount equal to three times Employee's Base Salary and Annual Bonus, payable
in one lump sum on the date of termination, subject to withholding as may be required by law. For the purposes of Section 4.2
(iii) and Section 4.2(iv) above, Annual Bonus shall mean the greater of 75% of Employee's then current Base Salary or the
Annual Bonus paid to Employee for the preceding fiscal year in the event of Involuntary Termination, or 75% of Employee's
then current Base Salary in the event of termination without cause. In addition, if Employee's employment is terminated without
cause (other than if Employee is Involuntarily Terminated), Employee will be credited with an additional twelve (12) months of
service toward vesting in all stock options then held by Employee (the "Option Shares") in addition to the service he has accrued
toward vesting through the date of termination, and the Repurchase Option will lapse with respect to a number of Restricted
Shares equal to (x) the sum of the number of full months that have elapsed between the Grant Date and the date of termination,
plus twelve (12) additional months, divided by (y) 48 months, multiplied by (z) the total number of Restricted Shares (for
purposes of illustration, if Employee's employment is terminated without cause on January 27, 2005, the Repurchase Option will
lapse with respect to 50,000 Restricted Shares). If Employee's employment is terminated due to death or permanent disability,
vesting of all Option Shares will be accelerated in full and the Repurchase Option will lapse with respect to all Restricted
Shares. If Employee is Involuntarily Terminated, vesting of all Option Shares will be accelerated in full and all such options
shall remain in effect for a one (1) year period following the date of termination, and the Repurchase Option will lapse with
respect to all Restricted Shares.
As used in this Section 4.2, Employee shall be deemed terminated without cause if Employee resigns following a breach by the
Company of its obligations hereunder; provided, however, in the event of an unintentional breach by the Company, Employee
shall provide the Company with written notice of such breach and the Company shall have fifteen days following such notice to
cure such breach. As used in this Section 4.2, Employee shall be deemed "Involuntarily Terminated" if (i) the Company or any
successor to the Company terminates Employee's employment without cause in connection with or following a Corporate
Transaction; or (ii) in connection with or following a Corporate Transaction there is (a) a decrease in Employee's title or
responsibilities (it being deemed to be a decrease in title and/or responsibilities if Employee is not offered the position of
Executive Vice President and General Counsel of the Company or its successor as well as the acquiring and ultimate parent
entity, if any, following the Corporate Transaction), (b) a decrease in pay and/or benefits from those provided by the Company
immediately prior to the Corporate Transaction or (c) a requirement that Employee re-locate out of the greater Los Angeles
metropolitan area. "Corporate Transaction" shall mean: (a) a change in ownership or control of the Company
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