Employment Agreement

First Amendment to Employment Agreement

Change in Control Plan

First Amendment to Change in Control Plan



EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated effective as of April 1, 2007 (the “Effective Date”), between Dolan Media Company, a Delaware corporation (the “Company”), and James P. Dolan (“Executive”) amends, restates and supersedes that certain Employment Agreement, dated as of April 1, 2002, between Dolan Media Company, a predecessor company (also with the same company name) to the Company that later assumed that Employment Agreement, and Executive (the “Prior Agreement”).

PRELIMINARY RECITALS

     The Company currently employs Executive as its Chief Executive Officer and President and Executive is currently serving as Chairman of the Board of Directors of the Company (the “Board”).

     The Company and Executive desire to amend, restate and supersede the Prior Agreement.

     The Company desires to continue to employ Executive and Executive desires to be employed by the Company as the Chief Executive Officer and President of the Company on the terms and conditions contained herein.

AGREEMENT

     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. Employment.

     1.1 Engagement of Executive. The Company agrees to employ Executive as the Chief Executive Officer and President 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 March 31, 2009 (the “Employment Period”); provided, however, that, effective on April 1, 2008, 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.

     1.2 Duties and Powers.

          (a) Service with the Company. During the Employment Period, Executive shall (i) serve as the Company’s Chief Executive Officer and President and shall report directly to the Board, (ii) have such responsibilities, duties and authorities, and render such services for

 

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the Company, that Executive has or renders for the Company as of 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 Chief Executive Officer and President, as 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 Chief Executive Officer and President of the Company, as the Board may from time to time reasonably direct; and (ii) at the reasonable request of the Board, serve as the President and Chief Executive Officer and 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 his best efforts, energies and abilities and his 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 him, to the best of his ability and in a diligent, trustworthy, businesslike and efficient manner. Executive acknowledges that his duties and responsibilities will require his full-time business efforts and agrees that during the Employment Period he 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 (x) civic and charitable boards and committees (provided that in March 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 (y) the board of directors of Advisor Media, Inc. and Peoples Educational Holdings, Inc., and (ii) manage his 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, other than the positions and entities listed in clause (i)(y) above, 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. Compensation.

     2.1 Base Salary. Beginning on January 1, 2007 and ending December 31, 2007, the Company will pay Executive a base salary (“Base Salary”) at the annual rate of Four Hundred and Sixty-Three Thousand Dollars ($463,000). For the calendar year beginning January 1, 2008, 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 2008 calendar year will be equal to the Base Salary from 2007 increased by an amount equal to the positive percentage change, if any, in the CPI from the month of December in 2006 to the month of December in 2007). The Base Salary shall be payable in regular

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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.

     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”) of at least 60% of Executive’s Base Salary (the “Target Amount”) with respect to each fiscal year of the Company. The Annual Bonus shall be based upon quantitative and qualitative performance goals for the applicable fiscal year. Those goals shall be established by the Committee in its sole discretion in accordance with the Company’s annual bonus plan. The Annual Bonus shall be paid in a cash lump sum in accordance with the terms of the Company’s annual bonus plan.

     2.3 Discretionary Bonus. In addition to any Annual Bonus, the Committee may, in its sole discretion, decide at any time to award the Executive with a discretionary bonus in an amount determined by the Committee if it determines that such discretionary bonus is appropriate.

     2.4 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.

     2.5 Reimbursement of Expenses. The Company shall pay or reimburse Executive for reasonable expenses incurred in the discharge of his 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, 2008.

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     2.6 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.

     2.7 Indemnification. Executive shall be indemnified, and shall have his expenses advanced with respect thereto, by the Company to the fullest extent authorized or permitted by applicable law (as the same now exists or may hereafter be amended) by reason of the fact that he is or was serving as a director, officer, employee or agent of any of the Company or its subsidiaries or affiliates (or is or was serving at the request of the Company as a director, officer, employee or agent of another enterprise) and the Company shall maintain directors and officers liability insurance during the Employment Period and thereafter to the same extent as the maximum amount of such coverage provided from time to time to other members of the Board.

     2.8 Legal Fees and Expenses. It is the intent of the Company that Executive shall not be required to incur any legal expenses associated with the enforcement of his rights under this Agreement by litigation or other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to Executive hereunder. Accordingly, if the Company has failed, or is alleged to have failed, to comply with any of its obligations under this Agreement, or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, in whole or in part, or institutes any litigation designed to deny, or to recover from, Executive any benefits intended to be provided to Executive hereunder, the Company irrevocably authorizes Executive from time to time to retain counsel of his choice, at the expense of the Company as hereinafter provided, to represent Executive in connection with the initiation or defense of any litigation, arbitration or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company in any jurisdiction. The Company shall reimburse the Executive within thirty (30) days after each written request therefore any and all reasonable attorneys’ and related fees and expenses actually incurred by Executive in any such proceeding or otherwise as a result of the Company’s failure to perform this Agreement or any provision hereof or as a result of the Company or any other person contesting the validity or reasonableness of this Agreement. 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 2.8 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 2.8 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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3. Termination.

     3.1 Termination.

          (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 thirty (30) days after receipt by Executive of written notice of such breach;

          (ii) Executive’s willful and material failure to perform his duties hereunder, including willful excessive absenteeism unrelated to illness or permitted leave, which willful and material failure remains uncured thirty (30) days after receipt by Executive of written notice of such failure from the Board or its written representative, such written notice to specifically identify the alleged failure;

          (iii) Executive is convicted of, or pleads guilty or nolo contendere to, theft, fraud, misappropriation or embezzlement in connection with the Company’s or its subsidiaries’ or affiliates’ business; or

          (iv) Executive is convicted of, or pleads guilty or nolo contendere to, 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 three-quarters (3/4) of the members of the Board (other than Executive) 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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          “Change of Control” means any of (i) a sale or conveyance to any Person of assets of the Company constituting (x) the business information operating division, (y) the professional services operating division, or (z) all or substantially all of the Company’s assets, (ii) a merger, reorganization, consolidation or other transaction pursuant to which the beneficial owners of the voting securities of the Company immediately before such transaction are not expected to beneficially own, immediately after such transaction, directly or indirectly, more than 50% of the voting securities of the surviving entity (or its parent) resulting from such transaction in substantially the same proportions as immediately before such transaction, or (iii) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, as the case may be.

     “Good Reason” means (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) the Company removes Executive as the Company’s Chief Executive Officer or substantially diminishes Executive’s duties or responsibilities with respect to the Company; (iii) the Company 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 Base Salary or the target amount of any Annual Bonus, or a material diminution in Benefits available to the Executive on the Effective Date or as hereafter may be made available to the Executive, in each case other than: (x) an inadvertent and isolated act or omission that is promptly cured upon notice by Executive to the Company or (y) any diminution of Benefits applicable to the other senior executives of the Company; (v) the failure of the Company’s successor in a Change of Control (pursuant to (i)(z) or (ii) of the definition thereof) to assume this Agreement in connection with such Change of Control, (vi) the occurrence of a Change of Control pursuant to clauses (i)(x) or (i)(y) of the definition thereof, or (vii) on or after a Change of Control, a notice by the Company to Executive, pursuant to Section 1.1, to terminate the automatic daily extension of the Employment Period; provided, however that subsections (v), (vi) and (vii) of this definition of Good Reason shall no longer be effective upon and following an initial public offering of the Company’s common stock.

     “Permanent Disability” as used herein shall mean that (i) Executive has begun receiving long-term disability income insurance payments under any long-term 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 long-term disability income insurance for executive-level employees, Executive is unable to perform, by reason of physical or mental incapacity, his duties or obligations under this Agreement for a period of ninety (90) 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

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409A of the Internal Revenue Code of 1986, as amended (the “Code”) or applicable guidance or regulations thereunder.

     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 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 the Company, payment of such Annual Bonus shall be made on the date which is six (6) months following Executive’s Separation from Service.

     (b) If the Employment Period is terminated by the Company without Cause or by Executive with Good Reason, then, in either case, the Company shall pay, or provide, to Executive:

          (i) Executive’s Base Salary and Benefits accrued through the date of termination;

          (ii) any Annual Bonus due for the immediately preceding fiscal year to the extent unpaid on the date of such termination;

          (iii) an amount equal to one (1) year of the annual Base Salary (at such amount before any diminution of Base Salary constituting Good Reason for Executive’s resignation), payable to Executive in a lump sum on the date which is six (6) months following Executive’s Separation from Service; and

          (iv) a pro-rated portion (based upon the number of days elapsed in the fiscal year in which the Employment Period is terminated through the date of such termination) of the Annual Bonus, if any, that would have been payable to Executive for such fiscal year (before any diminution in the target amount of such Annual Bonus constituting Good Reason for Executive’s resignation) had Executive remained employed by the Company for the entire fiscal year. 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, however, that if 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 the Company, payment of such Annual Bonus shall be made on the date which is six (6) months following Executive’s Separation from Service;

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provided that the Company’s obligation under Sections 3.2(b)(iii) and (iv) is contingent on, if the Company so elects in its sole discretion, Executive’s and Company’s execution, delivery and non-rescission of a mutual release of all claims against the Company and the Executive, as applicable, in the form of Exhibit A attached hereto.

Except for its obligations under this Section 3.2(b) and as otherwise provided in Section 3.3, 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.

     3.3 Continuation of Medical and Dental Benefits. (a) If the Employment Period is terminated (i) by the Company without Cause or (ii) by Executive with Good Reason, then, during the eighteen (18) months following such termination (such period, the “Benefits Period”), the Company shall provide medical and dental benefits to Executive and his covered dependents (in all events below determined without regard for any diminution of such coverage constituting Good Reason for his resignation hereunder), at the Company’s expense, subject to Executive timely electing coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) on the following terms and conditions:

          (A) So long as the terms of the medical and dental plan (the “Plan”) under which the medical and dental benefits are provided allow Executive’s continued participation therein, the Company will continue to offer Executive medical and dental coverage substantially equivalent to the medical and dental coverage which Executive was receiving immediately prior to such termination;

          (B) If during the Benefits Period Executive is no longer eligible to receive the medical and dental coverage provided under subparagraph (A) under the Plan but is eligible for a conversion option providing comparable benefits (with full coverage credit for any preexisting condition limitation) as those provided to Executive and his covered dependents under the Plan as he was receiving immediately prior to such termination, then Executive shall exercise such conversion option if directed by the Company and the Company shall thereafter pay the premium for such medical and dental coverage to be provided under such conversion option for the duration of the Benefits Period; and

          (C) If during the Benefits Period Executive and his covered dependents are no longer eligible to receive medical and dental coverage under the Plan and are not eligible (or are no longer eligible) for conversion coverage under the Plan, in both cases comparable to such coverage that Executive and his covered dependents were receiving immediately prior to such termination as provided under subparagraphs (A) and (B) above, then the Company shall reimburse Executive for the duration of the Benefits Period for the premiums that Executive incurs to acquire medical and dental coverage which is comparable to the medical and dental coverage which Executive was receiving immediately prior to the end of coverage under the Plan or conversion option.

     (b) Any medical and dental coverage provided by the Company under this Section 3.3 shall run simultaneously with any benefits to which Executive or his dependents may be entitled under COBRA.

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     3.4 Payment Delay. Any amount to be paid or benefit to be provided by the Company to the Executive under Section 3.3 (and any other payment under this Agreement made in connection with Executive’s termination of employment) which is deferred compensation subject to Section 409A of the Code or applicable guidance or regulations thereunder, shall be paid to Executive in a lump sum on the date which is six (6) months following the date of Executive’s Separation from Service.

     3.5 No Mitigation; No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action (provided Executive enters into and does not rescind the general release provided in Section 3.2(b) and subject to the proviso in the succeeding sentence) which the Company may have against Executive or others, other than any action the Company may need to take pursuant to Section 304 of the Sarbanes-Oxley Act of 2002. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment; provided that the Company’s obligation under Section 3.3 with respect to medical and dental benefits shall be limited to the extent that Executive obtains any such medical or dental benefits from another employer during the benefit continuation period provided thereunder, in which case the Company may reduce the coverage of any medical and dental benefits it is required to provide Executive under Section 3.3 as long as the aggregate coverages of the combined benefits provided by the Company and such other employer are comparable to the benefits to be provided to Executive by the Company under Section 3.3. The provisions of this Section 3.5 shall survive the expiration or earlier termination of this Agreement for any reason.

4. Negative Covenants.

     4.1 Confidential Information. Other than in the performance of his duties hereunder, during the Employment Period and thereafter, Executive shall keep secret and retain in strictest confidence, and shall not, without the prior written consent of the Board, furnish, make available or disclose to any third party or use for Executive’s own benefit or the benefit of any third party, any Confidential Information. As used herein, “Confidential Information” shall mean any information relating to the business or affairs of the Company, including, but not limited to, the Company’s products, servicing methods, development plans, costs, finances, marketing plans, equipment configurations, data, data bases, access or security codes or procedures, business opportunities, names of customers, research and development, inventions, algorithms, know-how and ideas, and other proprietary information used by the Company in connection with its business; provided, however, that Confidential Information shall not include any information which is in the public domain or becomes generally known in the industry other than as a result of Executive’s breach of the covenant contained in this Section 4.1 or the disclosure of which may be required by law or in a judicial or administrative proceeding. Executive acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to the Company.

     4.2 Non-Competition and Interference with Relationships. During the Employment Period and for a period of twelve (12) months following the expiration or earlier termination of the Employment Period (the “Restricted Term”), Executive shall not, directly or indirectly, alone or in combination with any other firm, partnership, company, corporation or person:

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          (a) (i) engage in, participate in or otherwise assist (whether as an owner, officer, partner, principal, joint venturer, shareholder, director, member, manager, investor, employee, agent, independent contractor, consultant or otherwise) any other person, entity or business (a “Competitor”) engaged in or planning to engage in the Business of the Company (as defined below) in any State of the United States of America, or in any foreign country in which the Company or an affiliate or subsidiary of the Company is conducting such Business of the Company on the date of such termination (the “Restricted Territory”), unless (x) at the time of the proposed action by Executive, (1) the revenues of any such Competitor from a Business of the Company for the preceding fiscal year of such Competitor constituted less than fifteen percent (15%) of the total revenues of such Competitor for such fiscal year and (2) Executive provides the Company with a signed certificate from the independent accountants for such Competitor stating that, in such independent accountants’ good faith reasonable judgment, the annual revenues of such Competitor from a Business of the Company will be less than fifteen percent (15%) of the total annual revenues of such Competitor during the Restricted Term, or (y) the sole action of Executive with respect to a Competitor that is a publicly traded company consists of acquiring not more than 5% of the outstanding shares of such Competitor; or (ii) solicit or encourage any customer or partner of the Company or its affiliates (determined as of the date of the termination of the Employment Period) to terminate or otherwise alter his, her or its relationship with the Company; or

          (b) employ, retain or solicit or attempt to solicit for employment or retention as an independent contractor, or otherwise attempt to hire, persuade or assist in the hiring of (or assist any other party to take any such action regarding), any individual employed or engaged by the Company during the Restricted Term; or encourage, induce, or persuade any such person to terminate his or her employment or other relationship with the Company.

          (c) For purposes hereof, “Business of the Company” means (i) the “court and commercial” newspaper and/or “business journal” publishing business, (ii) the business of providing mortgage default processing services and/or appellate services to the legal profession, or (iii) any additional business in which the Company becomes engaged or has actively and substantially implemented plans to become engaged as of the date of termination of the Employment Period; provided that in the event any of the foregoing businesses are sold or are discontinued during the Restricted Period, the “Business of the Company” shall cease to include such sold or discontinued business as of the date of sale or discontinuation; provided further that if the Company becomes re-engaged or implements plans to become re-engaged in any such sold or discontinued business, the “Business of the Company” shall again include such business.

     4.3 Mutual Non-Disparagement. Neither party shall, at any time during the Employment Period or thereafter, make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally or otherwise, or take any action which may, directly or indirectly, disparage or be damaging to the other party (including any of the Company’s subsidiaries, other affiliates, officers, directors, employees, partners or stockholders); provided that nothing in this Section 4.3 shall preclude either party from making truthful statements or disclosures that are required by applicable law, regulation or legal process.

     4.4 Scope and Severability. The parties acknowledge that the Business of the Company is and will be national and international in scope and thus the covenants in this Section

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4 would be particularly ineffective if the covenants were to be limited to a particular geographic area of the United States. If any court of competent jurisdiction at any time deems the Restricted Term unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in Section 4 not fully enforceable, the other provisions of Section 4, and this Agreement in general, will nevertheless stand and to the fullest extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Term be deemed to be the longest period permissible by law, but not in excess of the length provided for in Section 4.2, and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances, but not in excess of the territory provided for in Section 4.2).

     4.5. Remedies. Executive acknowledges and agrees that the covenants set forth in this Section 4 (collectively, the “Restrictive Covenants”) are reasonable and necessary for the protection of the Company’s business interests, that irreparable injury will result to the Company if Executive breaches any of the terms of the Restrictive Covenants, and that in the event of Executive’s actual or threatened breach of any of the Restrictive Covenants, the Company will have no adequate remedy at law. Executive accordingly agrees that in the event of any actual or threatened breach by him of any of the Restrictive Covenants, the Company shall be entitled to immediate temporary injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages. The provisions of Section 4 shall survive the expiration or earlier termination of this Agreement for any reason.

5. Miscellaneous.

     5.1 Determinations by the Board or the Committee. Except as specifically provided herein to the contrary (such as, without limitation, Executive’s rights to appear before the Board in connection with any determination of Cause with respect to a termination of the Employment Period by the Company), with respect to any determinations to be made by the Board or the Committee in connection with Executive’s employment hereunder, Executive shall not have the right to participate in the deliberations of such determination and shall abstain from any vote of the Board or the Committee with respect thereto.

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     5.2 Notices. Any notices required hereunder shall be in writing and shall be deemed delivered upon actual receipt (or refusal to accept receipt) and may be sent by (i) personal delivery, (ii) U.S. certified or registered mail, return receipt requested, or (iii) reputable overnight air courier service; for the Company, to the address listed below or for the Executive, to the last address on file with the Company (or such other addresses as may be designated by either party by giving notice in accordance with this Section 5.2):

          To the Company:

Dolan Media Company
706 Second Avenue South
Minneapolis, Minnesota 55402
Attention: John Bergstrom, Compensation Committee

     5.3 Entire Agreement. This Agreement embodies the complete agreement and understanding among the parties and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including, without limitation, the Prior Agreement.

     5.4 Counterparts. This Agreement may be executed on separate counterparts, each of which is deemed to be an original and both of which taken together constitute one and the same agreement.

     5.5 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective successors and permitted assigns. Executive may not assign any of his rights or obligations hereunder without the written consent of the Company.

     5.6 Amendments and Waivers. Any provision of this Agreement may be amended or waived only with the prior written consent of the Company and Executive.

     5.7 Governing Law. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the laws of the State of Delaware, without giving effect to provisions thereof regarding conflict of laws.

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     5.8 Section 409A. It is intended that any income or payments to Executive provided pursuant to this Agreement (any such income or payments being referred to as “Payments”) will not be subject to the additional tax and interest under Section 409A (a “Section 409A Tax”). The provisions of the Agreement will be interpreted and construed in favor of complying with any applicable requirements of Section 409A necessary in order to avoid the imposition of a Section 409A Tax. The Company and Executive agree to amend (including retroactively) the Agreement in order to comply with Section 409A, including amending to facilitate the ability of Executive to avoid the imposition of, or reduce the amount of, any Section 409A Tax. The Company and Executive shall reasonably cooperate to provide full effect to this provisions and the consent to any amendment described in the preceding sentence shall not be unreasonably withheld by either party. The parties agree that neither party has (a) an obligation to bring any potential Section 409A Tax to the attention of the other party or (b) any liability for any Section 409A Tax or any other reporting or withholding obligation to the other party.

     IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first written above.

 

 

 

 

 

 

 

COMPANY:

 

 

 

 

DOLAN MEDIA COMPANY

 

 

 

 

 

 

 

 

 

/s/ Scott J. Pollei

 

Scott J. Pollei

 

 

 

 

Executive Vice President and

 

 

 

 

Chief Financial Officer

 

 

 

 

 

 

 

 

 

/s/ John Bergstrom

 

John Bergstrom

 

 

 

 

Chairman of the Compensation Committee

 

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

/s/ James P. Dolan

 

James P. Dolan

 

 

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EXHIBIT A

MUTUAL RELEASE

     THIS MUTUAL RELEASE (this “Release”) is made as of this ___day of                     ,                     , by and between Dolan Media Company, a Delaware corporation (the “Company”), and James P. Dolan (“Executive”).

PRELIMINARY RECITALS

     A. Executive and the Company entered into that certain Amended and Restated Employment Agreement, dated as of April 1, 2007 (the “Agreement”).

     B. Executive’s employment with the Company as Chief Executive Officer and President has terminated.

     C. In connection with the termination of Executive’s employment, under the Agreement, the Company may elect to require that Executive enter into a mutual release of claims in consideration of the Company providing him with certain payments, benefits and a release of claims.

     D. This Mutual Release will not become effective unless both parties have signed it and the rescission period has expired without any rescission by Executive.

AGREEMENT

     In consideration of the payments and other benefits due Executive under the Agreement, the parties’ mutual execution of this release and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Executive’s Release: Executive, intending to be legally bound, does hereby, on behalf of himself and his agents, representatives, attorneys, assigns, heirs, executors and administrators (collectively, the “Executive Parties”) REMISE, RELEASE AND FOREVER DISCHARGE the Company, its affiliates, subsidiaries, parents, joint ventures, and its and their officers, directors, shareholders, members, managers and employees, and its and their respective successors and assigns, heirs, executors, and administrators (collectively, the “Company Parties”) from all causes of action, suits, debts, claims and demands whatsoever in law or in equity, which Executive or any of the Executive Parties ever had, now has, or hereafter may have, by reason of any matter, cause or thing whatsoever, through the date of this Release, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship with Company, the terms and conditions of that employment relationship, and the termination of that employment relationship, including, but not limited to, any claims arising under the Age Discrimination in Employment Act (“ADEA”), as amended, 29 U.S.C. § 621 et seq., Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1966, 42 U.S.C. § 1981, the Civil Rights Act of 1991, Pub. L. No. 102-166, the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., the National Labor Relations Act, 29 U.S.C. § 151 et seq., the Constitution for the State of Minnesota or the Minnesota Human Rights Act, and any other claims under any federal, state or local common

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law, statutory, or regulatory provision, now or hereafter recognized, and any claims for reasonable attorneys’ fees and costs, but not including such claims to payments, benefits and other rights provided Executive under the Agreement or as may be due Executive under any employee benefit plan of the Company in accordance with the terms of such plan. Executive does not release any claims that the law does not allow to be waived or any claims that may arise after the date on which he signs this Release. In addition, Executive does not release the right to file an administrative charge of discrimination, or to cooperate with an administrative agency asserting such claims on his behalf. This Release is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort. Except as specifically provided herein, it is expressly understood and agreed that this Release shall operate as a clear and unequivocal waiver by Executive of any claim for accrued or unpaid wages, benefits or any other type of payment.

     Executive, on behalf of himself and the Executive Parties, agrees never to bring any action or proceeding against the Company or any Company Party, regarding any matter released pursuant to the previous first paragraph of this Section 1. Executive agrees that in the event that any claim, suit or action released by this Release shall be commenced by him or any of the Executive Parties against the Company or any Company Party, this Release shall constitute a complete defense to any such claim, suit or action so instituted.

     Executive further agrees and recognizes that he has permanently and irrevocably severed his employment relationship with the Company, that he shall not seek employment with the Company or any presently-affiliated entity at any time in the future, and that the Company has no obligation to employ him in the future.

     2. The Company’s Release: The Company hereby intending to be legally bound, does hereby REMISE, RELEASE and FOREVER DISCHARGE Executive and his agents, representatives, attorneys, assigns, heirs, executors and administrators from all debts, claims and demands whatsoever in law or in equity, which Company ever had, now has, or hereafter may have, by reason of any matter, cause or thing whatsoever, through the date of this Release, and particularly, but without limitation of the foregoing general terms, any claims arising from or relating in any way to Executive’s employment relationship with the Company. The Company does not release any claims that the law does not allow to be waived or any claims that may arise after the date on which the Company signs this Release. This Release is effective without regard to the legal nature of the claims raised and without regard to whether any such claims are based upon tort, equity, implied or express contract or discrimination of any sort.

     3. The parties agree and acknowledge that the Agreement, and the settlement and termination of any asserted or unasserted claims against the Executive, the Executive Parties, the Company and the Company Parties pursuant to this Release, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by the Company or any of the Company Parties to Executive.

     4. Executive certifies and acknowledges as follows:

          (a) That he has read the terms of this Release, and that he understands its terms and effects, including the fact that he has agreed to RELEASE AND FOREVER

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DISCHARGE the Company and all Company Parties from any legal action or other liability of any type related in any way to the matters released pursuant to this Release other than as provided in the Agreement and in this Release;

          (b) That he has signed this Release voluntarily and knowingly in exchange for the consideration described herein, which he acknowledges is adequate and satisfactory to him and which he acknowledges is in addition to any other benefits to which he is otherwise entitled;

          (c) That he has been advised in writing to consult with an attorney prior to signing this Release;

          (d) That he does not waive rights or claims that may arise after the date this Release is executed other than those claims arising under the Agreement or any employee benefit plan of the Company in accordance with the terms of such plan;

          (e) That the Company has provided him with a period of twenty-one (21) days within which to consider this Release, and that Executive has signed on the date indicated below after concluding that this Release is satisfactory to him; and

          (f) That he has fifteen (15) calendar days after signing this Release within which to rescind this Release. To rescind his acceptance of this Release, Executive must deliver a written, signed statement that he rescinds his acceptance to the Company by hand or by mail within the fifteen-day revocation period. All deliveries must be made to the Company as provided in Section 5.2 of the Agreement.

     Intending to be legally bound hereby, Executive and the Company executed the foregoing Release this                      day of                     ,                     .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

James P. Dolan

 

 

 

 

 

 

 

 

 

Witness:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DOLAN MEDIA COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

 

Witness:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

TOP OF DOCUMENT


Exhibit 10.5

FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT

          THIS FIRST AMENDMENT, by and between Dolan Media Company, a Delaware corporation (the “Company”); and James P. Dolan (“Executive”), is entered into on this 29th day of December 2008, but effective as of the applicable dates set forth below.

PRELIMINARY RECITALS

          A. Employment Agreement. The Company and Executive have entered into a written Employment Agreement (the “Employment Agreement”), dated as of April 1, 2007 (the “Original Effective Date”), which remains in effect. Since then, Executive has continued to serve as Chief Executive Officer and President of the Company, pursuant to the Employment Agreement; and Executive is also currently serving as Chairman of the Board of Directors of the Company. Any capitalized terms used in this Amendment, and not defined herein, shall have the meanings specified in the Employment Agreement.

          B. Purpose of Amendment. The Company and Executive desire to minimize the risk to Executive of premature income taxation and unnecessary penalties under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by amending certain provisions of the Employment Agreement to comply with Section 409A of the Code or applicable guidance or regulations thereunder.

AMENDMENT

          NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree to amend the Employment Agreement as follows:

          1. As of the Original Effective Date, the last sentence of Section 2.2 is hereby amended to read as follows:

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. As of the Original Effective Date, the definition of “Good Reason” in Section 3.1(b) is hereby amended to read as follows:

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) the Company removes Executive as the Company’s Chief Executive Officer or otherwise substantially diminishes Executive’s duties or responsibilities with respect to the Company; (iii) the Company breaches any of its obligations hereunder,

1


 

which breach remains uncured thirty (30) days after receipt by the Company of written notice of such breach; (iv) a material 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.

          3. As of the Original Effective Date, the last sentence of Section 3.2(b) (concerning certain payments due after termination of Executive’s employment by the Company without Cause or by Executive with Good Reason) is hereby deleted and replaced by three sentences reading as follows:

If the Company does not execute and deliver any such release to Executive at least sixty (60) days before the end of the six (6) month period following Executive’s Separation from Service, the Company shall be deemed to have elected not to require Executive’s execution of such a release. If the Company shall have timely executed and delivered such a release to Executive, and Executive either fails to execute and deliver the release to the Company at least thirty (30) days before the end of that six (6) month period, or he does so but rescinds such release before any payment is otherwise due under Section 3.2(b)(iii) or Section 3.2(b)(iv), the Company shall have no obligations under Sections 3.2(b)(iii) and (iv). Except for the Company’s obligations, if any, under this Section 3.2(b) and as otherwise provided in Section 3.3, 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.

          4. Except as expressly amended in this First Amendment, the Employment Agreement shall remain in full force and effect according to its terms.

          IN WITNESS WHEREOF, the undersigned Executive and the Company have executed this Amendment on the date first stated above, but effective retroactively as of the applicable effective dates stated above.

 

 

 

 

 

 

 

COMPANY:

 

 

 

 

 

 

 

 

 

DOLAN MEDIA COMPANY

 

 

 

 

 

 

 

 

 

/s/ Scott J. Pollei

 

 

 

 

 

 

 

 

 

By: Scott J. Pollei, Executive Vice

 

 

 

 

President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

/s/ John Bergstrom

 

 

 

 

 

 

 

 

 

By: John Bergstrom, Chairman of the

 

 

 

 

Compensation Committee

 

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 

 

 

 

 

/s/ James P. Dolan

 

 

 

 

 

 

 

 

 

James P. Dolan

 

 

2



 

Exhibit 10.12

DOLAN MEDIA COMPANY

EXECUTIVE CHANGE IN CONTROL PLAN

     The purpose of this Dolan Media Company Executive Change in Control Plan (the “Plan”) is to secure the continued services of certain senior executives of Dolan Media Company and to ensure their continued dedication to their duties in the event of any threat or occurrence of a Change in Control of the Company. The Plan was approved by the Board of Directors on June 22, 2007, effective contingent upon the consummation of an initial public offering of the Shares of Common Stock of the Company. The Plan is effective on the date that such initial public offering is consummated (the “Effective Date”).

ARTICLE I

DEFINITIONS

     Section 1.1 Definitions

     Whenever used in this Plan, the following capitalized terms shall have the meanings set forth in this Section 1.1. Certain other capitalized terms are defined elsewhere in this Plan.

     (a) “Annual Target Bonus Amount” means the annual target bonus for each Participant, if any, as set by the Compensation Committee in accordance with the Company’s annual bonus plan or policy for the calendar year in which the Participant incurs a termination of employment.

     (b) “Base Salary” means (i) for a Participant who has an individual employment agreement with the Company, the annual base salary as specified in such employment agreement as in effect during the calendar year in which the Participant incurs a termination of employment (including any increases approved by the Compensation Committee), or (ii) for a Participant who does not have an individual employment agreement with the Company, the base salary shall equal the product of (x) the monthly salary as in effect during the last full month prior to the month in which the Participant incurs a termination of employment multiplied by (y) twelve (12).

     (c) “Board” means the Board of Directors of the Company.

     (d) “Cash Severance Payment” means the cash payment of severance compensation as provided in Section 4.2.

     (e) “Cause” means:

     (i) the willful and continued failure by a Participant to substantially perform his or her duties for the Company (other than any such failure resulting from his or her incapacity due to physical or mental illness or any such failure subsequent to the delivery of a notice of the Company’s intent to terminate the Participant’s employment without Cause or subsequent to the expiration of the Company’s remedy period following the Participant’s delivery to the Company of a notice of his or her intent to terminate employment for Good Reason), and such

 

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willful and continued failure continues after a demand for substantial performance is delivered to the Participant by the Company which specifically identifies the manner in which the Participant has not substantially performed his or her duties; or

          (ii) the willful engaging by the Participant in illegal conduct or gross misconduct which is injurious to the business or reputation of the Company.

For purposes of determining whether “Cause” exists, no act or failure to act on the part of the Participant shall be considered “willful” unless done, or omitted to be done, in bad faith and without reasonable belief that the action or omission was in, or not opposed to, the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions to a Participant by a more senior officer of the Company shall be conclusively presumed to be done, or omitted to be done, in good faith and in the best interests of the Company. Cause shall not exist unless and until the Company has delivered to the Participant a copy of a resolution duly adopted by two-thirds (2/3) of the entire Board (excluding the Participant if applicable) at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in clause (i) or (ii) has occurred and specifying the particulars thereof in detail. The Company must notify the Participant of any event constituting Cause within ninety (90) days following the Company’s knowledge of its existence or such event shall not constitute Cause under this Plan. Notwithstanding the foregoing, with respect to a Participant who has entered into an employment agreement with the Company, “Cause” shall have the meaning specified in such agreement.

     (f) “Change in Control” means (a) the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of more than fifty percent (50%) of the outstanding voting Shares; provided, however, a Change in Control shall not be deemed to occur solely because more than fifty percent (50%) of the outstanding voting Shares is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by the Company or any of its subsidiaries, or (ii) any Person which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of the Company in approximately the same proportion as their ownership of voting Shares immediately prior to such acquisition; (b) a merger, consolidation or other reorganization involving the Company if the stockholders of the Company and their affiliates, immediately before such merger, consolidation or other reorganization, do not, as a result of such merger, consolidation, or other reorganization, own directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting shares of the entity resulting from such merger, consolidation or other reorganization; (c) a complete liquidation or dissolution of the Company; or (d) the sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries determined on a consolidated basis.

 

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     (g) “Change in Control Period” means the period described in Section 9.7 hereunder.

     (h) “Code” means the Internal Revenue Code of 1986, as amended.

     (i) “Committee” means the committee appointed by the Chief Executive Officer of the Company to administer the Plan pursuant to Section 8.1.

     (j) “Common Stock” means common stock, par value $.001 per share, of the Company.

     (k) “Company” means Dolan Media Company, a Delaware corporation, any successor or assignee as provided in Article VI and any Subsidiary, as applicable.

     (l) “Compensation” means a Participant’s Base Salary plus Annual Target Bonus Amount for the year in which the termination of employment occurs (determined without regard to any diminution in such Base Salary or Annual Target Bonus Amount constituting Good Reason for Participant’s resignation). Notwithstanding anything herein to the contrary, “Compensation” shall not include a Participant’s income from the grant or vesting of restricted stock, or from the grant, vesting, or exercise of stock options, or any other awards under any of the Company’s equity incentive plans.

     (m) “Compensation Committee” means the compensation committee of the Board.

     (n) “Disability” means a Participant’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, as determined by the Committee. Notwithstanding the foregoing, with respect to a Participant who has entered into an employment agreement with the Company, “Disability” shall have the meaning specified in such agreement as “Disability” or “Permanent Disability.”

     (o) “Eligible Employee” means a regular full-time salaried employee of the Company who is a member of a select group of management or highly compensated employees of the Company.

     (p) “Employee Grade” means the grade to which a Participant is designated in accordance with Section 3.1 or assigned by the Compensation Committee in accordance with Section 3.2.

     (q) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     (r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     (s) “Good Reason” means the occurrence, without a Participant’s express written consent, of any of the following events, provided that the Participant gives the

 

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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:

     (i) a reduction by the Company of a Participant’s Base Salary and Annual Target Bonus Amount (if any) as in effect immediately before a Change in Control;

     (ii) (A) any material and adverse change in a Participant’s authority, duties and responsibilities as in effect immediately before the Change in Control, or an adverse change, after the occurrence of a Change in Control, in the duties, responsibilities, authority or the managerial level of the individual or body of individuals to whom a Participant reports; provided, however, that Good Reason shall not be deemed to occur upon a change in duties or responsibilities (other than reporting responsibilities) that is solely and directly a result of the Company no longer being a publicly traded entity and does not involve any other event set forth in this paragraph (ii), or (B) a material and adverse change in a Participant’s titles or offices (excluding, if applicable, membership on the Board) with the Company as in effect immediately prior to a Change in Control;

     (iii) the Company’s requiring a Participant to be based more than fifty (50) miles from the location of such Participant’s place of employment immediately before a Change in Control, except for normal business travel in connection with the Participant’s duties with the Company; or

     (iv) the failure of the Company to obtain the assumption agreement from any successor as contemplated in Article VI hereof.

Good Reason shall not exist unless, following receipt by the Company of the Participant’s notice under this Section 1.1(s), the Company is provided with thirty (30) days to remedy the circumstances that would constitute Good Reason. After receipt, Participant’s right to terminate employment for Good Reason shall not be affected by incapacities due to mental or physical illness and a Participant’s continued employment shall not, subject to the requirements under this Section 1.1(s), constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided that any termination of a Participant’s employment for Good Reason as a result of such event or condition must occur no later than the second anniversary of the date that such condition arises. Notwithstanding the foregoing, with respect to a Participant who has entered into an employment agreement with the Company, “Good Reason” shall have the meaning specified in such agreement.

     (t) “Multiplier” for each Employee Grade shall be the number set forth opposite such Employee Grade below:

 

 

 

Employee Grade

 

Multiplier

Grade One

 

2.0

Grade Two

 

1.0

 

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     (u) “Participant” means an Eligible Employee designated (i) as of the Effective Date, in Section 3.1 as a participant in the Plan or (ii) after the Effective Date, by the Compensation Committee to participate in the Plan pursuant to Section 3.2; provided, however, that with respect to an Eligible Employee who has not entered into an employment agreement with the Company, such Eligible Employee shall not become a Participant eligible to receive any benefits under the Plan until the Employee has executed a copy of, and delivered to the Company, the Restrictive Covenant Agreement attached as Exhibit “A”.

     (v) “Person” means any individual, sole proprietorship, corporation, partnership, joint venture, limited liability company, association, joint-stock company, trust, unincorporated organization, institution, public benefit corporation, entity or government instrumentality, division, agency, body or department.

     (w) “Release” means, (i) with respect to a Participant who has entered into an employment agreement with the Company that has a release attached as an exhibit to such employment agreement, such release, or (ii) with respect to a Participant who has not entered into an employment agreement with the Company or who has entered into an employment agreement that does not have a release attached as an exhibit, a release acceptable to the Company and in a form substantially similar to the Separation and General Release Agreement attached hereto as Exhibit “B”.

     (x) “Separation from Service” means a Participant’s termination of employment from the Company which constitutes a “separation from service,” as such term is defined under Section 409A of the Code or applicable guidance or regulations thereunder.

     (y) “Severance Benefit” means the Cash Severance Payment and all other payments and benefits as provided in Articles II and IV.

     (z) “Share” means a share of the Common Stock.

     (aa) “Subsidiary” means any corporation or other Person, a majority of the voting power, equity securities or equity interest of which is owned directly or indirectly by the Company. (bb)

ARTICLE II

INDEMNIFICATION AND GROSS-UP FOR EXCISE TAXES

     Section 2.1 Gross-Up

     (a) In the event that a Participant shall become entitled to amounts pursuant to Article IV hereof (collectively, the “Company Payments”), and such Company Payments will be subject to the tax imposed by Section 4999 of the Code or any similar provision of state or local income tax law (the “Excise Tax”), the Company shall pay to such Participant at the time specified in Section 2.1(c) below, an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Participant, after deduction of any Excise Tax on the Company Payments and any federal, state and local income or payroll tax on the Gross-Up Payment provided hereby, but before deduction for any federal, state, and local

 

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income or payroll tax on the Company Payments, shall be equal to the Company Payments. Notwithstanding the foregoing provisions of this Section 2.1(a) to the contrary, if it shall be determined that the Participant is entitled to a Gross-Up Payment, but the Company Payments do not exceed one hundred ten percent (110%) of the greatest amount that could be paid to the Participant without the Company Payments giving rise to any Excise Tax (the “Reduced Amount”), then no Gross-Up Payment shall be made to the Participant and the Company Payments, in the aggregate, shall be reduced to the Reduced Amount.

     (b) To the extent a Participant is eligible to receive a Gross-Up Payment pursuant to this Article II, the Company shall provide such Participant with a written statement (the “Statement”) showing the computation of such Gross-Up Payment and the Excise Tax to which it relates, and setting forth the determination of the amount of gross income the Participant is required to recognize as a result of such payments and the Participant’s liability for the Excise Tax. All computations and determinations required to be made under this Article II, including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such computations and determinations, shall be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the Participant within fifteen (15) business days of the receipt of notice from the Company or the Participant that there has been a Company Payment, or such earlier time as is requested by the Company (the “Determination”). For purposes of the Determination, the Participant shall be deemed to (i) pay federal income taxes at the highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, and (ii) pay applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.

     (c) The Company shall pay the Gross-Up Payment to the Participant within thirty (30) days following receipt of the Statement; provided, however, that any such Gross-Up Payment shall not be made later than the last day of the calendar year following the year in which the Participant remits the Excise Tax to the relevant tax authority.

     (d) The Participant shall cause his or her federal, state and local income tax returns for the period in which such Participant receives such Gross-Up Payment to be prepared and filed in accordance with the Statement, and, upon such filing, the Participant shall certify in writing to the Company that such returns have been so prepared and filed. At the Participant’s request, the Company shall furnish to the Participant, at no cost, assistance in preparing his or her federal, state and local income tax returns for the period in which the Participant receives such Gross-Up Payment in accordance with such statement. Notwithstanding the provisions of Section 2.1(a), the Company shall not be obligated to indemnify the Participant from and against any tax liability, cost or expenses (including, without limitation, any liability for the Excise Tax

 

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or attorney’s fees or costs) to the extent such tax liability, cost or expense is attributable to the Participant’s failure to comply with the provisions of this Section 2.1(d).

     (e) The costs for the Accounting Firm’s actions taken pursuant to this Article II shall be borne one hundred percent (100%) by the Company.

ARTICLE III

ELIGIBILITY

     Section 3.1 Named Participants

     The following Eligible Employees are hereby designated as Participants at the applicable Employee Grade as listed below:

 

 

 

Participant

 

Employee Grade

James P. Dolan

 

One

Scott Pollei

 

One

Mark Stodder

 

One

Mark Baumbach

 

Two

Vicki Duncomb

 

Two

     Section 3.2 Appointed Participants

     In addition to the Participants named in Section 3.1, the Compensation Committee shall have the authority to designate an Eligible Employee as a Participant, and to designate such matters as the date that participation by the Eligible Employee shall commence and the appropriate Employee Grade, in each case at its sole discretion.

ARTICLE IV

SEVERANCE BENEFITS

     Section 4.1 Right to Severance Benefit; Release

     Subject to the execution and delivery by the Participant of the Release, and to such Release becoming effective, the Participant shall be eligible to receive (i) a Cash Severance Payment from the Company in the amount provided in Section 4.2 at such time as provided in Section 4.4, and (ii) such other benefits and rights provided in Article II and Sections 4.5 and 4.6, in each case provided that the Participant incurs a termination of employment from the Company within ninety (90) days immediately preceding or twelve (12) months immediately following the occurrence of a Change in Control for any reason other than:

     (a) Death,

     (b) Disability,

     (c) Termination by the Company for Cause,

     (d) Voluntary termination by the Participant for other than Good Reason, or

 

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     (e) A corporate transaction by the Company selling the Subsidiary which employed the Participant before such transaction, but only if such Participant is offered employment with the purchaser of such Subsidiary on substantially the same terms and conditions under which such Participant worked for the such subsidiary before the transaction.

     Section 4.2 Amount of Cash Severance Payment

     The amount of the Cash Severance Payment shall equal the product of the Participant’s Compensation multiplied by the Multiplier for the Participant’s Employee Grade, less applicable withholdings.

     Section 4.3 No Mitigation; Offset

     The Company acknowledges and agrees that the Participant shall be entitled to receive all amounts due pursuant to this Article IV regardless of any income which the Participant may receive from other sources following termination of employment from the Company. Notwithstanding anything herein to the contrary, any Severance Benefit payable or benefit provided to a Participant hereunder shall be reduced by severance payments or comparable benefits to which the Participant is entitled under any plan or program sponsored by the Company or under any similar arrangement entered into by the Company and the Participant, including, but not limited to, employment agreements.

     Section 4.4 Payment of Severance Benefit

     The Participant’s ability to receive the Severance Benefit is contingent upon (i) the Participant executing, timely delivering to the Company and not revoking the Release provided to the Participant by the Company and (ii) the Participant’s compliance with the restrictive covenants set forth in the employment agreement or any other agreement entered into by the Participant and the Company, including, but not limited to, the Restrictive Covenant Agreement attached as Exhibit “A”; provided, that, if a Participant breaches any such restrictive covenant, then, in addition to other available remedies provided in such agreement or under applicable law, such Participant shall cease to be eligible for any Severance Benefit or other benefits under this Plan, and, upon the Company’s written request, must promptly repay to the Company any Severance Benefit and monetary value of other benefits previously received under the Plan; provided further that any amount to be repaid shall be on a gross basis, without reduction for any taxes incurred. Provided that the Participant meets these conditions, the Cash Severance Payment shall be paid to the Participant, in one lump sum cash payment, on the six (6) month anniversary of the Participant’s Separation from Service.

     Section 4.5 Medical and Dental Benefits Continuation

     Any Participant who is entitled to the Cash Severance Payment hereunder, shall, for the eighteen (18) month period following his or her termination of employment with the Company, be eligible to continue coverage in the medical and dental plans maintained by the Company during such period on the same terms and conditions as if the Participant remained an active employee of the Company during such eighteen (18) month period. The coverage required by this Section 4.5 need only be provided by the Company if the Participant (on behalf of himself or

 

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herself and his or her eligible dependents) makes the appropriate election as required by Section 4980B of the Code and otherwise complies with the requirements of Section 4980B of the Code.

     Section 4.6 Outplacement Services

     Any Participant who is entitled to the Cash Severance Payment hereunder shall also receive from the Company, in addition to amounts due pursuant to Section 4.2 hereof, an amount equal to forty-five thousand dollars ($45,000). It is intended by the Company that such amount be used by the Participant for outplacement services. Amounts due pursuant to this Section 4.6 shall be payable on the date that the Cash Severance Payment becomes due pursuant to Section 4.4 hereof.

     Section 4.7 Withholding of Taxes

     The Company shall withhold from any amounts or benefits payable to the Participant under this Plan all federal, state, local, city, employment or other taxes required by applicable law to be withheld by the Company.

ARTICLE V

OTHER RIGHTS AND BENEFITS NOT AFFECTED

     Section 5.1 Other Benefits

     Subject to Section 4.3, neither the provisions of this Plan nor the Severance Benefit provided for hereunder shall reduce any amounts otherwise payable, or in any way diminish a Participant’s rights as an employee, whether existing now or hereafter, under any employee benefit, incentive, retirement, welfare, stock option, stock bonus or stock-based, or stock purchase plan, program, policy or arrangement or any written employment agreement or other plan, program policy or arrangement not related to severance.

     Section 5.2 Employment Status

     This Plan does not constitute a contract of employment or impose on a Participant any obligation to remain in the employ of the Company, nor does it impose on the Company any obligation to retain a Participant in his or her present or any other position, nor does it change the status of a Participant’s employment as an employee at will (or otherwise). Nothing in this Plan shall in any way affect the right of the Company in its absolute discretion to change or reduce a Participant’s compensation at any time, or to change or terminate at any time one or more of its employee benefit plans.

ARTICLE VI

SUCCESSOR TO THE COMPANY

     The Company shall require any successor or assignee, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all the business or assets of the Company, unconditionally to assume and agree to perform the Company’s obligations under this Plan, in the same manner and to the same extent that the Company would be required to perform if no succession or assignment had taken place. In such event, the term “Company”, as

 

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used in this Plan, shall mean (from and after, but not before, the occurrence of such event) the Company as herein before defined and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Plan.

ARTICLE VII

CLAIMS

     Section 7.1 Claims Procedure

     If a Participant has (a) a claim for compensation or benefits which are not being paid under the Plan, (b) another claim for benefits under the Plan, or (c) a claim for clarification of rights under this Plan, then such Participant (or his or her designee) (a “Claimant”) may file with the Committee a written claim setting forth the amount and nature of the claim, supporting facts, and the Claimant’s address. The Committee shall notify each Claimant of its decision in writing by written or electronic means within 90 days after its receipt of a claim, unless otherwise agreed by the Claimant. In special circumstances, the Committee may extend for a further 90 days the deadline for its decision, provided the Committee notifies the Claimant of the need for the extension within 90 days after its receipt of a claim. If a claim is denied, the written notice of denial shall set forth the reasons for such denial, refer to pertinent provisions of the Plan on which the denial is based, describe any additional material or information necessary for the Claimant to realize the claim, and explain the claims review procedure under the Plan and a statement of a Participant’s right to bring a cause of action under Section 502(a) of ERISA after receiving a denial upon appeal.

     Section 7.2 Claims Review Procedure

     A Claimant whose claim has been denied or such Claimant’s duly authorized representative may file, within 60 days after notice of such denial is received by the Claimant, a written request for review of such claim by the Committee. If a request is so filed, the Committee shall review the claim and notify the Claimant in writing of its decision within 60 days after receipt of such request, unless otherwise agreed by the Claimant. In special circumstances, the Committee may extend for up to 60 additional days the deadline for its decision, provided the Committee notifies the Claimant of the need for the extension within 60 days after its receipt of the request for review. The notice of the final decision of the Committee shall include the reasons for its decision, specific references to the Plan on which the decision is based and a statement of a Participant’s right to receive, upon request and without charge, reasonable access to and copies of all documents, records and other information relevant to the claim for benefits. The decision of the Committee shall be final and binding on all parties.

 

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ARTICLE VIII

ADMINISTRATION

     Section 8.1 Committee

          The Chief Executive Officer of the Company (the “CEO”) shall appoint not less than three (3) members of a committee, to serve at the pleasure of the CEO to administer the Plan. Members of the Committee may but need not be employees of the Company and may but need not be participants in the Plan, but a member of the Committee who is eligible to participate in the Plan shall not vote or act upon any matter which relates solely to such member as a Plan participant. All decisions of the Committee shall be by a vote or written evidence of intention of the majority of its members and all decisions of the Committee shall be final and binding.

     Section 8.2 Committee Membership

          Any member of the Committee may resign at any time by giving thirty (30) days’ advance written notice to the CEO and to the remaining members (if any) of the Committee. A member of the Committee, who at the time of his or her appointment to the Committee was an employee or director of the Company, and who for any reason ceases to be neither an employee nor a director, as applicable, of the Company, shall cease to be a member of the Committee effective on the date he or she ceases to be neither an employee nor director, as applicable, of the Company unless the CEO affirmatively continues his or her appointment as a member of the Committee. If there is a vacancy in the membership of the Committee, the remaining members shall constitute the full Committee. The CEO may fill any vacancy in the membership of the Committee, or enlarge the Committee, by giving written notice of appointment to the person so appointed and to the other members (if any) of the Committee, effective as stated in such written notice. However, the CEO shall not be required to fill any vacancy in the membership of the Committee if there remain at least three members of the Committee. Any notice required by this Section may be waived by the person entitled thereto.

     Section 8.3 Duties

     Except as otherwise provided herein, the Committee shall have the power and duty in its sole and absolute discretion to do all things necessary or convenient to effect the intent and purposes of the Plan, whether or not such powers and duties are specifically set forth herein, and, by way of amplification and not limitation of the foregoing, the Committee shall have the power in its sole and absolute discretion to:

     (a) provide rules for the management, operation and administration of the Plan, and, from time to time, amend or supplement such rules;

     (b) interpret and construe the Plan in its sole and absolute discretion to the fullest extent permitted by law, which interpretation and construction shall be final and conclusive upon all persons;

     (c) correct any defect, supply any omission, or reconcile any inconsistency in the Plan in such manner and to such extent as it shall deem appropriate in its sole discretion to carry the same into effect;

 

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     (d) make all determinations relevant to eligibility for benefits under the Plan, including determinations as to: whether a Participant has incurred a termination of employment, the existence of Cause or Good Reason, whether the amounts or benefits to be provided under the Plan would be subject to additional taxes and penalties under Section 409A of the Code, and compliance with applicable restrictive covenants;

     (e) enforce the Plan in accordance with its terms and the Committee’s interpretation or construction of the Plan as provided in subsection (b) above; and

     (f) do all other acts and things necessary or proper in its judgment to carry out the purposes of the Plan in accordance with its terms and intent.

     The Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and to otherwise supervise the administration of the Plan.

ARTICLE IX

MISCELLANEOUS

     Section 9.1 Applicable Law

     This is an employee benefit plan subject to ERISA and shall be governed by and construed in accordance with ERISA and, to the extent applicable and not preempted by ERISA, the law of the State of Delaware applicable to contracts made and to be performed entirely within that State, without regard to its conflict of law principle.

     Section 9.2 Construction

     No term or provision of this Plan shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provisions of this Plan and any present or future law, ordinance, or regulation, the latter shall prevail, but in such event the affected provision of this Plan shall be curtailed and limited only to the extent necessary to bring such provision with the requirements of the law.

     Section 9.3 Severability; Equitable Modification

     If a provision of this Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of this Plan and this Plan shall be construed and enforced as if the illegal or invalid provision had not been included. If any court of competent jurisdiction shall deem any provision of the Agreement too restrictive, the other provisions shall stand, and the court shall modify the provision at issue to the point of greatest restriction permissible by law.

     Section 9.4 Headings

     The Section headings in this Plan are inserted only as a matter of convenience of reference, and in no way define, limit, or extend or interpret the scope of this Plan or of any particular Section.

 

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     Section 9.5 Assignability

     A Participant’s rights or interests under this Plan shall not be assignable or transferrable (whether by pledge, grant of a security interest, or otherwise), except by will or by the laws of descent and distribution.

     Section 9.6 No Waiver

     Any waiver of breach of any of the terms, provisions, or conditions of this Agreement must be in writing to be effective, and shall not be construed or held to be a waiver of any other breach, or a waiver of, acquiescence in, or consent to any further succeeding breach thereof.

     Section 9.7 Term

     This Plan shall continue in full force and effect until its terms and provisions are completely carried out, unless terminated by the Board with at least a majority vote before the commencement of a Change in Control Period (as defined below). A “Change in Control Period” shall commence upon the earlier of (i) the first day the Company (or any Person on its behalf) begins negotiations to effect a Change in Control and (ii) the Company executing a letter of intent (whether or not binding) or a definitive agreement to effect a Change in Control and shall expire upon the first to occur of (A) the occurrence of a Change in Control and (B) the first anniversary of the commencement of the Change in Control Period.

     Section 9.8 Amendment/Termination

     This Plan may be amended in any respect by resolution adopted by the Board until the commencement of a Change in Control Period; provided, however, that this Section 9.8 shall not be amended, and no amendment to the Plan shall be effective if made during a Change in Control Period except to the extent that such amendment is agreed to by the affected Participants in writing. After a Change in Control occurs, this Plan shall no longer be subject to amendment, change, substitution, deletion, revocation or termination in any respect whatsoever until the second anniversary of such Change in Control. No agreement or representations, written or oral, express or implied, with respect to the subject matter hereof, have been made by the Company which are not expressly set forth in this Plan. Amendment or termination of the Plan shall not accelerate (or defer) the time of any payment under the Plan that is deferred compensation subject to Section 409A of the Code if such acceleration (or deferral) would subject such deferred compensation to additional tax or penalties under Section 409A.

     Section 9.9 Notices

     For purposes of this Plan, notices and all other communications provided for herein shall be in writing and shall be deemed to have been duly given when personally delivered, or sent by certified or overnight mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board. All notices and communications shall be deemed to have been received on the date of delivery thereof if personally delivered, on the third business day after the mailing thereof, or on the date after sending by overnight mail, except that notice of

 

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change of address shall be effective only upon actual receipt. No objection to the method of delivery may be made if the written notice or other communication is actually received.

     Section 9.10 Exculpation

     To the extent permitted by applicable law, no member of the Committee serving as Plan administrator nor any other officer, employee or director of the Company acting on behalf of the Company with respect to this Plan shall be directly or indirectly responsible or otherwise liable by reason of any action or default as a member of that Committee, Plan administrator or other officer or employee of the Company acting on behalf of the Company with respect to this Plan, or by reason of the exercise of or failure to exercise any power or discretion as such person, except for any action, default, exercise or failure to exercise resulting from such person’s gross negligence or willful misconduct. To the extent permitted by applicable law, no member of the Committee shall be liable in any way for the acts or defaults of any other member of the Committee, or any of its advisors, agents or representatives.

     Section 9.11 Indemnification

     The Company shall indemnify and hold harmless each member of the Committee serving as Plan administrator, and each other officer, employee or director of the Company acting on behalf of the Company with respect to this Plan, against any and all expenses and liabilities arising out of his or her own membership on the Committee, service as Plan administrator, or other actions respecting this Plan on behalf of the Company, except for expenses and liabilities arising out of such person’s gross negligence or willful misconduct. A person indemnified under this Section who seeks indemnification hereunder (“Indemnitee”) shall tender to the Company a request that the Company defend any claim with respect to which the Indemnitee seeks indemnification under this Section and shall fully cooperate with the Company in the defense of such claim. If the Company shall fail to timely assume the defense of such claim, then the Indemnitee may control the defense of such claim. However, no settlement of any claim otherwise indemnified under this Section shall be subject to indemnity hereunder unless the Company consents in writing to such settlement.

     Section 9.12 Information

     The Company and the Participant shall furnish to the Committee in writing all information the Committee may deem appropriate for the exercise of their powers and duties in the administration of the Plan. Such information may include, but shall not be limited to, the names of all Plan participants, their earnings and their dates of birth, employment, termination or death. Such information shall be conclusive for all purposes of the Plan, and the Committee shall be entitled to rely thereon without any investigation thereof.

     Section 9.13 No Property Interest

     The Plan is unfunded. Severance pay shall be paid exclusively from the general assets of the Company and any liability of the Company to any person with respect to benefits payable under the Plan shall give rise solely to a claim as an unsecured creditor against the general assets of the Company. Any claim a Participant may have, or any interest in or right to any compensation, payment or benefit payable hereunder, shall rely solely upon the unsecured

 

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promise of the Company for the payment thereof, and nothing herein contained shall be construed to give to or vest in a Participant or any other person now or at any time in the future, any right, title, interest or claim in or to any specific asset, fund, reserve, account, insurance or annuity policy or contract, or other property of any kind whatsoever owned by the Company, or in which the Company may have any right, title or interest now or at any time in the future.

     Section 9.14 Beneficiary

     Any payment due under this Plan after a Participant’s death shall be paid to such person or persons, jointly or successively, as such Participant may designate, in writing filed with the Committee during such Participant’s lifetime in a form acceptable to the Committee, which a Participant may change without the consent of any beneficiary by filing a new designation of beneficiary in like manner. If no designation of beneficiary is on file with the Committee or no designated beneficiary is living or in existence upon such Participant’s death, such payments shall be made to such Participant’s surviving spouse, if any, or if none, to such Participant’s estate.

     Section 9.15 Plan Year

     The fiscal records of the Plan shall be kept on the basis of a plan year which is the calendar year.

 

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Exhibit A

Restrictive Covenants Agreement

     THIS AGREEMENT (this “Agreement”), effective as of ___, 2007 (the “Effective Date”), is between Dolan Media Company, a Delaware corporation (the “Company”), and                      (“Executive”).

PRELIMINARY RECITALS

     The Company currently employs Executive as its                     .

     The Company desires to continue to employ Executive and Executive desires to be employed by the Company as the                      of the Company on the terms and conditions contained herein.

     The Company has approved the Dolan Media Company Executive Change in Control Plan (the “Plan”) and has designated the Executive as a Participant pursuant to Section 3.1 of the Plan.

     Upon the execution of this Agreement, the Executive shall be a Participant in the Plan.

AGREEMENT

     In consideration of the premises, the mutual covenants of the parties hereinafter set forth and other good and valuable consideration, including, but not limited to, the continued employment of the Executive and the benefits under the Plan, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Confidential Information. Other than in the performance of his or her duties hereunder, while employed by the Company and thereafter, Executive shall keep secret and retain in strictest confidence, and shall not, without the prior written consent of the Board, furnish, make available or disclose to any third party or use for Executive’s own benefit or the benefit of any third party, any Confidential Information. As used herein, “Confidential Information” shall mean any information relating to the business or affairs of the Company, including, but not limited to, the Company’s products, servicing methods, development plans, costs, finances, marketing plans, equipment configurations, data, data bases, access or security codes or procedures, business opportunities, names of customers, research and development, inventions, algorithms, know-how and ideas, and other proprietary information used by the Company in connection with its business; provided, however, that Confidential Information shall not include any information which is in the public domain or becomes generally known in the industry other than as a result of Executive’s breach of the covenant contained in this Paragraph 1 or the disclosure of which may be required by law or in a judicial or administrative proceeding. Executive acknowledges that the Confidential Information is vital, sensitive, confidential and proprietary to the Company.

A-1

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     2. Non-Competition and Interference with Relationships. During employment and for a period of twelve (12) months following the Separation of Service (as such term is defined in the Plan) of the Executive (the “Restricted Term”), Executive shall not, directly or indirectly, alone or in combination with any other firm, partnership, company, corporation or person:

          (a) (i) engage in, participate in or otherwise assist (whether as an owner, officer, partner, principal, joint venturer, shareholder, director, member, manager, investor, employee, agent, independent contractor, consultant or otherwise) any other person, entity or business (a “Competitor”) engaged in or planning to engage in the Business of the Company (as defined below) in any State of the United States of America, or in any foreign country in which the Company or an affiliate or subsidiary of the Company is conducting such Business of the Company on the date of such termination (the “Restricted Territory”), unless (x) at the time of the proposed action by Executive, (1) the revenues of any such Competitor from a Business of the Company for the preceding fiscal year of such Competitor constituted less than fifteen percent (15%) of the total revenues of such Competitor for such fiscal year and (2) Executive provides the Company with a signed certificate from the independent accountants for such Competitor stating that, in such independent accountants’ good faith reasonable judgment, the annual revenues of such Competitor from a Business of the Company will be less than fifteen percent (15%) of the total annual revenues of such Competitor during the Restricted Term, or (y) the sole action of Executive with respect to a Competitor that is a publicly traded company consists of acquiring not more than 1% of the outstanding shares of such Competitor; or (ii) solicit or encourage any customer or partner of the Company or its affiliates (determined as of the date of the Separation of Service) to terminate or otherwise alter his or her, her or its relationship with the Company; or

          (b) employ, retain or solicit or attempt to solicit for employment or retention as an independent contractor, or otherwise attempt to hire or assist in the hiring of (or assist any other party to take any such action regarding), any individual employed or engaged by the Company during the Restricted Term; or encourage, induce, or persuade any such person to terminate his or her or her employment or other relationship with the Company.

          (c) For purposes hereof, “Business of the Company” means (i) the “court and commercial” newspaper and/or “business journal” publishing business, (ii) the business of providing mortgage default processing services and/or appellate services to the legal profession, or (iii) any additional business in which the Company becomes engaged or has actively and substantially implemented plans to become engaged as of the date of termination of the Employment Period; provided that in the event any of the foregoing businesses are sold or are discontinued during the Restricted Period, the “Business of the Company” shall cease to include such sold or discontinued business as of the date of sale or discontinuation; provided further that if the Company becomes re-engaged or implements plans to become re-engaged in any such sold or discontinued business, the “Business of the Company” shall again include such business.

A-2

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     3. Mutual Non-Disparagement. Neither party shall, at any time while the Executive is employed by the Company or thereafter, make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally or otherwise, or take any action which may, directly or indirectly, disparage or be damaging to the other party (including any of the Company’s subsidiaries, other affiliates, officers, directors, employees, partners or stockholders); provided that nothing in this Paragraph 3 shall preclude either party from making truthful statements or disclosures that are required by applicable law, regulation or legal process.

     4. Scope and Severability. The parties acknowledge that the Business of the Company is and will be national in scope and thus the covenants in this Agreement would be particularly ineffective if the covenants were to be limited to a particular geographic area of the United States. If any court of competent jurisdiction at any time deems the Restricted Term unreasonably lengthy, or the Restricted Territory unreasonably extensive, or any of the covenants set forth in this Agreement not fully enforceable, the other provisions of this Agreement, and this Agreement in general, will nevertheless stand and to the fullest extent consistent with law continue in full force and effect, and it is the intention and desire of the parties that the court treat any provisions of this Agreement which are not fully enforceable as having been modified to the extent deemed necessary by the court to render them reasonable and enforceable and that the court enforce them to such extent (for example, that the Restricted Term be deemed to be the longest period permissible by law, but not in excess of the length provided for in Paragraph 2, and the Restricted Territory be deemed to comprise the largest territory permissible by law under the circumstances, but not in excess of the territory provided for in Paragraph 2).

     5. Remedies. Executive acknowledges and agrees that the covenants set forth in this Agreement (collectively, the “Restrictive Covenants”) are reasonable and necessary for the protection of the Company’s business interests, that irreparable injury will result to the Company if Executive breaches any of the terms of the Restrictive Covenants, and that in the event of Executive’s actual or threatened breach of any of the Restrictive Covenants, the Company will have no adequate remedy at law. Executive accordingly agrees that in the event of any actual or threatened breach by him of any of the Restrictive Covenants, the Company shall be entitled to immediate temporary injunctive and other equitable relief, without bond and without the necessity of showing actual monetary damages. Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of any damages or other remedies as specified in Section 4.4 of the Plan. The provisions of this Agreement shall survive the expiration or earlier termination of this Agreement for any reason.

 

 

 

 

 

 

 

 

 

 

 

DOLAN MEDIA COMPANY

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Executive Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

Executive Name (print)

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

 

Dated:

 

 

 

 

 

 

 

 

 

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Exhibit B

Separation and General Release Agreement

     Dolan Media Company (“Company”), and                      (“Employee”), agree that this Separation Agreement and General Release (“Agreement”) sets forth their complete agreement and understanding regarding the termination of Employee’s employment with Company.

     1. Separation Date. Employee’s employment with Company will terminate/was terminated effective                      (the “Separation Date”). Employee represents that the Employee has returned all Company property to Company. Except as specifically provided below, Employee shall not be entitled to receive any benefits of employment following the Separation Date.

     2. Consideration of Company. In consideration for the releases and covenants by Employee in this Agreement, Company will provide Employee with: describe severance benefits.

     3. Employee Release of Rights and Agreement Not to Sue. Employee (defined for the purpose of this Paragraph 3 as Employee and Employee’s agents, representatives, attorneys, assigns, heirs, executors, and administrators) fully and unconditionally releases the Released Parties (defined as the Company and any of its past or present employees, agents, insurers, attorneys, administrators, officials, directors, shareholders, divisions, parents, subsidiaries, predecessors, successors, employee benefit plans, and the sponsors, fiduciaries, or administrators of the Company’s employee benefit plans) from, and agrees not to bring any action, proceeding or suit against any of the Released Parties regarding, any and all known or unknown claims, causes of action, liabilities, damages, fees, or remunerations of any sort, arising or that may have arisen out of or in connection with Employee’s employment with or termination of employment from the Company, including but not limited to claims for:

(a) violation of any written or unwritten contract, agreement, policy, benefit plan, retirement or pension plan, option plan, severance plan, or covenant of any kind, or failure to pay wages, bonuses, employee benefits, other compensation, attorneys’ fees, damages, or any other remuneration; and/or

(b) discrimination, harassment, or retaliation on the basis of any characteristic protected under law, including but not limited to race, color, national origin, sex, sexual orientation, religion, disability, marital or parental status, age, union activity or other protected activity; and/or

(c) denial of protection or benefits under any statute, ordinance, executive order, or regulation, including but not limited to claims under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act, the Workers’ Adjustment and Retraining Notification, the Employee Retirement Income Security Act of 1974, the Illinois Wage Payment and Collection Act, the Illinois Human Rights Act, or any other federal, state or

B-1

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local statute, ordinance, or regulation regarding employment, termination of employment, or discrimination in employment; and/or

(d) violation of any public policy or common law of any state relating to employment or personal injury, including but not limited to claims for wrongful discharge, defamation, invasion of privacy, infliction of emotional distress, negligence, interference with contract.

     4. No Disparagement or Encouragement of Claims. Except as required by lawful subpoena or other legal obligation, Employee agrees not to make any oral or written statement that disparages or places the Company (including any of its past or present officers, employees, products or services) in a false or negative light, or to encourage or assist any person or entity who may or who has filed a lawsuit, charge, claim or complaint against the Released Parties (as defined in Paragraph 3, above). Employee affirms that Employee has not done anything before signing this Agreement that would violate this paragraph. If Employee receives any subpoena or becomes subject to any legal obligation that implicates this paragraph, Employee will provide prompt written notice of that fact to the Company (as provided below) and enclose a copy of the subpoena and any other documents describing the legal obligation. [OPTIONAL]

     5. Non-admission/Inadmissibility. This Agreement does not constitute an admission that the Company took any wrongful, unlawful, or harmful action, and the Company specifically denies any wrongdoing. This Agreement is offered solely to resolve fully all matters related to Employee’s employment with and termination from Company. This Agreement shall not be used as evidence in any proceeding, except one alleging a breach of this Agreement.

     6. Severability. The provisions of this Agreement shall be severable such that the invalidity of any provision shall not affect the validity of other provisions; provided, however, that if a court or other binding authority holds that any release in Paragraph 3 is illegal, void or unenforceable, Employee agrees to promptly execute a release and agreement that is legal and enforceable.

     7. Governing Law. This Agreement shall be governed by and construed in accordance with Delaware law, without regard to its principles of conflicts of laws.

     8. Entire Agreement. This Agreement represents the entire agreement and understanding concerning Employee’s separation from the Company. This Agreement supersedes and replaces any and all prior agreements, understandings, discussions, negotiations, or proposals concerning the matters addressed herein; provided, however, that the Company’s Executive Change in Control Plan, including without limitation Employee’s obligations thereunder and the applicable restrictive covenants to which the Employee is bound, shall remain in full force and effect. In deciding to sign this Agreement, Employee has not relied on any express or implied promise, statement, or representation by the Company, whether oral or written, except as set forth herein.

     9. [FOR EMPLOYEES AGE 40+ ONLY] Revocation Period. Employee has the right to revoke this Agreement, solely with regard to Employee’s release of claims under the Age

B-2

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Discrimination in Employment Act and the Older Workers Benefit Protection Act, for up to seven days after Employee signs it. In order to revoke this Agreement, Employee must sign and send a written notice of the decision to do so, addressed to [insert title, and address], and that written notice must be received by the Company no later than the eighth day after Employee signed this Agreement. If Employee revokes this Agreement, Employee will not be entitled to any of the consideration from the Company described in paragraph 2 above or under the Company’s Change in Control Plan.

     10. Voluntary Execution of Agreement. Employee acknowledges that:

 

a.

 

Employee has carefully read this Agreement and fully understands its meaning;

 

 

b.

 

Employee had the opportunity to take up to 21 days [45 days for those age 40+ discharged in a termination affecting more than 1 employee] after receiving this Agreement to decide whether to sign it;

 

 

c.

 

Employee understands that the Company is herein advising him, in writing, to consult with an attorney before signing it;

 

 

d.

 

Employee is signing this Agreement, knowingly, voluntarily, and without any coercion or duress; and

 

 

e.

 

everything Employee is receiving for signing this Agreement is described in the Agreement itself, and no other promises or representations have been made to cause Employee to sign it.

 

 

 

 

 

 

 

 

 

 

 

DOLAN MEDIA COMPANY

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

Employee Signature

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Title:

 

 

 

 

 

Employee Name (print)

 

 

 

 

 

 

 

 

 

 

 

Dated:

 

 

 

Dated:

 

 

 

 

 

 

 

 

 

B-3

 

 

EX-10.21 6 c49940exv10w21.htm EX-10.21

Exhibit 10.21

FIRST AMENDMENT TO
DOLAN MEDIA COMPANY
EXECUTIVE CHANGE IN CONTROL PLAN

INTRODUCTION

          A. Plan and Authority to Amend. On June 22, 2007, the Board of Directors of Dolan Media Company (the “Company”) approved the Dolan Media Company Executive Change in Control Plan (the “Plan”), to be effective upon the consummation of an initial public offering of the Shares of Common Stock of the Company. The Plan became effective on August 7, 2007, when that initial public offering was consummated (the “Effective Date”). Section 9.8 of the Plan states that it may be amended in any respect by resolution adopted by the Board, until the commencement of a Change in Control Period. Any capitalized terms used in this Amendment, and not defined herein, shall have the meanings specified in the Plan.

          B. Purpose of Amendment. The Company desires to minimize the risk to Participants of premature income taxation and unnecessary penalties under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by amending certain provisions of the Plan to comply with Section 409A of the Code or applicable guidance or regulations thereunder.

AMENDMENT

          NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree to amend the Employment Agreement as follows:

          1. As of the Effective Date, clause (i) of the definition of “Good Reason” in Section 1.1(s) is hereby amended to read as follows:

          (i) a material reduction by the Company of a Participant’s Base Salary and Annual Target Bonus Amount (if any) as in effect immediately before a Change in Control;

          2. As of the Effective Date, Section 2.1(c) is hereby amended to read as follows:

     (c) The Company shall pay the Gross-Up Payment to the Participant within thirty (30) days following receipt of the Statement; provided, however, that any such Gross-Up Payment shall not be made later than the last day of the calendar year following the year in which the Participant remits the Excise Tax to the relevant tax authority; and shall not be made before the six (6) month anniversary of the Participant’s Separation from Service.

          3. As of the Effective Date, a new sentence is hereby inserted at the end of Section 4.4 (concerning the timing of a Cash Severance Payment), reading as follows:

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If the Company shall have timely delivered the form of Release to a Participant, and the Participant either fails to execute and deliver the Release to the Company at least thirty (30) days before that six (6) month anniversary, or he does so but rescinds such Release before any Cash Severance Payment is otherwise due the Participant under this Section 4.4, the Company shall have no obligations to provide the Severance Benefit.

          4. Confirmation of Plan And Execution of Amendment. Except as expressly amended in this First Amendment, all of the terms and conditions of the Plan shall remain in full force and effect.

          IN WITNESS WHEREOF, the Compensation Committee of the Board, on behalf of the Company, approved this First Amendment at its meeting on October 29, 2008; and has caused this instrument to be executed by an officer of the Company on this 15th day of December 2008, to be retroactively effective as of the Effective Date.

 

 

 

 

 

 

DOLAN MEDIA COMPANY
 

 

 

By  

/s/ James P. Dolan  

 

 

 

James P. Dolan, its Chairman, 

 

 

 

President and Chief Executive Officer 

 

 

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