DUCK CREEK TECHNOLOGIES, INC. (Form: 10-Q, Received: 04/07/2022 16:34:14)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 28, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 001-39449

Duck Creek Technologies, Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware	84-3723837
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Duck Creek Technologies, Inc. 22 Boston Wharf Road, Floor 10 Boston, MA	02210
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (888) 724-3509

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value per share

DCT

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 5, 2022, the registrant had 132,523,537 shares of common stock, $0.01 par value per share, outstanding.

Special Note Regarding Forward-Looking Statements

Some of the information contained in the section entitled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Quarterly Report on Form 10-Q contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this report are based upon our historical performance and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to our operations, financial results, financial condition, business, prospects, growth strategy and liquidity. For more information regarding these risks and uncertainties as well as certain additional risks that we face, refer to Part II, “Item 1A. Risk Factors” as well as the factors more fully described in “Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” and in our Annual Report on Form 10-K for the year ended August 31, 2021, and those described from time to time in our future reports filed with the Securities and Exchange Commission. Accordingly, there are, or will be, important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to:

•

our history of losses;

•

loss of key employees;

•

changes in our product revenue mix as we continue to focus on sales of our Software-as-a-service (“SaaS”) solutions, which will cause fluctuations in our results of operations and cash flows between periods;

•

our reliance on orders and renewals from a relatively small number of customers for a substantial portion of our revenue, and the substantial negotiating leverage customers have in renewing and expanding their contracts for our solutions;

•

the success of our growth strategy focused on SaaS solutions and our ability to develop or sell our solutions into new markets or further penetrate existing markets;

•

our ability to manage our expanding operations;

•

intense competition in our market;

•

third parties may assert we are infringing or violating their intellectual property rights;

•

U.S. and global market and economic conditions, particularly adverse in the insurance industry;

•

additional complexity, burdens and volatility in connection with our international sales and operations;

•

the length and variability of our sales and implementation cycles;

•

data breaches, unauthorized access to customer data or other disruptions of our solutions;

•

the significant influence that Apax VIII Fund, a global private equity fund (collectively, with its affiliates, “Apax”) and Accenture plc, a public limited company incorporated in Ireland (collectively, with its affiliates, “Accenture”), will have on the composition of our board of directors, our management, business plans and policies, and any conflicts of interest between Apax and Accenture, on the one hand, and our other stockholders, on the other hand;

•

impact of pandemics, including the COVID-19 pandemic, on U.S. and global economies, our business, our employees, results of operations, financial condition, demand for our products, sales and implementation cycles, and the health of our customers’ and partners’ businesses; and

•

the other risks and uncertainties described under Part II, “Item 1A. Risk Factors.”

These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. The forward-looking statements made in this report relate only to events as of the date on which the statements are made. We do not undertake any obligation to publicly update or review any forward-looking statement except as required by law, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this report that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

Basis of Presentation

As used in this Quarterly Report on Form 10-Q unless the context otherwise requires, references to “we,” “us,” “our,” the “Company,” “Duck Creek,” and similar references refer to Duck Creek Technologies, Inc. together with its subsidiaries, and the following terms have the meanings or are calculated as set forth below:

•

We define “subscription revenue” as the revenue derived from the sale of our SaaS solutions through recurring fee arrangements for the period indicated.

•

We define “ACV” as the committed total contract value of new software sales in dollar terms divided by the corresponding minimum number of committed months, with the resultant minimum monthly commitment being multiplied by twelve.

•

We define “carriers” as property and casualty (“P&C”) insurance carriers.

•

We define “core systems” as the following key functions of carriers: policy administration, claims management and billing.

•

We define “customers” as buying entities that contract individually for our products and services. For example, multiple subsidiaries of a single carrier may each constitute a customer if each entity contracts with us separately. By contrast, a carrier that uses our products across multiple subsidiaries under a single enterprise license agreement would constitute a single customer.

•

We define “DWPs” as the gross dollar value of total premiums paid to carriers by policyholders.

Certain monetary amounts, percentages, and other figures included in this Quarterly Report on Form 10-Q have been subject to rounding adjustments. Percentage amounts included in this Quarterly Report on Form 10-Q have not in all cases been calculated on the basis of such rounded figures, but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this Quarterly Report on Form 10-Q may vary from those obtained by performing the same calculations using the figures in our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. Certain other amounts that appear in this Quarterly Report on Form 10-Q may not sum due to rounding. When we state that we are a leading SaaS provider of core systems for the P&C insurance industry, we are basing our leadership on our subscription revenue for fiscal 2021.

Our fiscal year ends on August 31. Unless otherwise noted, any reference to a year preceded by the word “fiscal” refers to the fiscal year ended August 31 of that year. For example, references to “fiscal 2022” refer to the fiscal year ended August 31, 2022. Any reference to a year not preceded by “fiscal” refers to a calendar year. Accordingly, our first three fiscal quarters are the successor three-month periods following August 31 (i.e., November 30, February 28 and May 31).

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Other Comprehensive Income (Loss)	3
	Consolidated Statements of Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

iii

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share information)

(Unaudited)


	February 28,			August 31,
	2022			2021
Assets
Current assets:
Cash and cash equivalents	$	348,592		$	185,657
Short-term investments		—			191,981
Accounts receivable, net		39,065			34,629
Unbilled revenue		29,648			24,423
Prepaid expenses and other current assets		18,055			14,381
Total current assets		435,360			451,071
Property and equipment, net		13,333			14,305
Operating lease assets		16,653			17,798
Goodwill		272,455			272,455
Intangible assets, net		57,438			65,359
Deferred tax assets		1,334			2,331
Unbilled revenue, net of current portion		954			1,401
Other assets		20,446			19,413
Total assets	$	817,973		$	844,133
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	485		$	2,070
Accrued liabilities		31,976			46,437
Contingent earnout liability		—			5,462
Lease liability		4,057			4,110
Deferred revenue		24,155			29,577
Total current liabilities		60,673			87,656
Lease liability, net of current portion		19,033			21,273
Deferred revenue, net of current portion		56			—
Other long-term liabilities		1,967			4,466
Total liabilities		81,729			113,395
Commitments and contingencies
Stockholders' equity
Common stock, 135,125,113 shares issued and 132,493,651 shares outstanding at February 28, 2022, 134,625,379 shares issued and 132,000,317 shares outstanding at August 31, 2021, 300,000,000 shares authorized at February 28, 2022 and August 31, 2021, par value $0.01 per share		1,351			1,346
Preferred stock, 0 shares outstanding, 50,000,000 shares authorized at February 28, 2022 and August 31, 2021, par value $0.01 per share		—			—
Treasury stock, common shares at cost; 2,631,462 shares at February 28, 2022 and 2,625,062 shares at August 31, 2021		(68,000	)		(67,764	)
Accumulated deficit		(41,452	)		(41,265	)
Accumulated other comprehensive income		—			64
Additional paid in capital		844,345			838,357
Total stockholders' equity		736,244			730,738
Total liabilities and stockholders' equity	$	817,973		$	844,133

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands, except share and per share information)

(Unaudited)


	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Revenue:
Subscription	$	39,593		$	30,608		$	75,298		$	58,517
License		4,649			3,588			6,561			4,938
Maintenance and support		6,204			5,885			12,481			12,075
Professional services		25,972			22,571			55,499			46,028
Total revenue		76,418			62,652			149,839			121,558
Cost of revenue:
Subscription		14,244			11,411			28,829			21,495
License		413			446			657			834
Maintenance and support		984			859			1,864			1,701
Professional services		16,448			14,826			31,690			28,542
Total cost of revenue		32,089			27,542			63,040			52,572
Gross margin		44,329			35,110			86,799			68,986
Operating expenses:
Research and development		14,316			12,681			26,637			23,785
Sales and marketing		13,571			14,165			26,738			26,762
General and administrative		16,831			14,617			31,866			29,035
Change in fair value of contingent consideration		—			95			67			98
Total operating expenses		44,718			41,558			85,308			79,680
Income (loss) from operations		(389	)		(6,448	)		1,491			(10,694	)
Other income (expense), net		(32	)		510			(728	)		463
Interest expense, net		(35	)		(38	)		(153	)		(81	)
Income (loss) before income taxes		(456	)		(5,976	)		610			(10,312	)
Provision for income taxes		423			388			797			703
Net loss	$	(879	)	$	(6,364	)	$	(187	)	$	(11,015	)
Net loss per share information1
Net loss per share of common stock, basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.00	)	$	(0.08	)
Weighted average shares of common stock, basic and diluted		132,103,016			130,982,116			132,057,733			130,851,680

See Note 8—Net Loss Per Share for additional details.

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Other Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Net loss	$	(879	)	$	(6,364	)	$	(187	)	$	(11,015	)
Other comprehensive loss:
Unrealized losses on available-for-sale securities		(51	)		(6	)		(64	)		(6	)
Total other comprehensive loss		(51	)		(6	)		(64	)		(6	)
Comprehensive loss	$	(930	)	$	(6,370	)	$	(251	)	$	(11,021	)

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(In thousands, except share information)

(Unaudited)


	Common stock				Treasury Stock					Additional paid-in			Accumulated Other Comprehensive			Accumulated			Total stockholders'
	Shares		Amount		Shares		Amount			capital			Income			deficit			equity
Balance at August 31, 2021		134,625,379	$	1,346		2,625,062	$	(67,764	)	$	838,357		$	64		$	(41,265	)	$	730,738
Net income																	692			692
Repurchase of common stock						3,301		(141	)											(141	)
Share-based compensation expense											2,481									2,481
Issuance of common stock upon exercise of stock options		4,897									132									132
Vesting of restricted stock awards		60,148		1							(1	)								-
Unrealized loss on available-for-sale securities														(13	)					(13	)
Balance at November 30, 2021		134,690,424	$	1,347		2,628,363	$	(67,905	)	$	840,969		$	51		$	(40,573	)	$	733,889
Net income																	(879	)		(879	)
Repurchase of common stock						3,099		(95	)											(95	)
Share-based compensation expense											3,380									3,380
Vesting of restricted stock awards		434,689		4							(4	)								-
Unrealized loss on available-for-sale securities														(51	)					(51	)
Balance at February 28, 2022		135,125,113	$	1,351		2,631,462	$	(68,000	)	$	844,345		$	—		$	(41,452	)	$	736,244

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity

(In thousands, except share information)

(Unaudited)


	Common stock				Treasury Stock					Additional paid-in			Accumulated Other Comprehensive			Accumulated			Total stockholders'
	Shares		Amount		Shares		Amount			capital			Loss			deficit			equity
Balance at August 31, 2020		133,269,301	$	1,333		2,555,556	$	(64,688	)	$	821,446		$	—		$	(24,334	)	$	733,757
Net loss		—		—		—		—			—			—			(4,651	)		(4,651	)
Repurchase of common stock		—		—		1,475		(57	)		—			—			—			(57	)
Share-based compensation expense		—		—		—		—			2,333			—			—			2,333
Vesting of restricted stock awards		142,193		1		—		—			(1	)		—			—			—
Balance at November 31, 2020		133,411,494	$	1,334		2,557,031	$	(64,745	)	$	823,778		$	—		$	(28,985	)	$	731,382
Net loss		—		—		—		—			—			—			(6,364	)		(6,364	)
Proceeds from follow-on offering, net of issuance costs		90,000		1		—		—			3,452						—			3,453
Share-based compensation expense		—		—		—		—			2,478									2,478
Issuance of common stock upon exercise of stock options		36,809		—		—		—			993			—			—			993
Vesting of restricted stock awards		543,170		6		—		—			(6	)		—			—			—
Unrealized loss on available-for-sale securities		—		—		—		—			—			(6	)		—			(6	)
Balance at February 28, 2021		134,081,473	$	1,341		2,557,031	$	(64,745	)	$	830,695		$	(6	)	$	(35,349	)	$	731,936

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended February 28,
	2022			2021
Operating activities:
Net loss	$	(187	)	$	(11,015	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation of property and equipment		1,364			1,587
Amortization of capitalized software		1,122			996
Amortization of intangible assets		7,921			8,175
Amortization of deferred financing fees		57			57
Share-based compensation expense		4,322			7,608
Loss on change in fair value of contingent earnout liability		67			98
Payment of contingent earnout liability in excess of acquisition date fair value		(1,650	)		—
Changes to allowance for credit losses		2,189			10
Deferred taxes		997			(515	)
Changes in operating assets and liabilities
Accounts receivable		(6,625	)		(5,600	)
Unbilled revenue		(4,778	)		(3,359	)
Prepaid expenses and other current assets		(3,588	)		(3,111	)
Other assets		(462	)		(679	)
Accounts payable		(1,839	)		508
Accrued liabilities		(12,643	)		(10,671	)
Deferred revenue		(5,367	)		(1,893	)
Operating leases		(1,148	)		(323	)
Cash settlement of vested phantom stock		(279	)		(6,904	)
Other long-term liabilities		(2,499	)		1,938
Net cash used in operating activities		(23,026	)		(23,093	)
Investing activities:
Purchase of short-term investments		—			(287,912	)
Maturities of short-term investments		191,917			—
Capitalized internal-use software		(687	)		(750	)
Purchase of property and equipment		(573	)		(672	)
Net cash provided by (used in) investing activities		190,657			(289,334	)
Financing activities:
Proceeds from follow-on offering, net of issuance costs		—			3,452
Payment of deferred IPO costs		—			(3,650	)
Payment of deferred Class E offering costs		—			(192	)
Purchase of treasury stock		(236	)		(57	)
Proceeds from stock option exercises		132			993
Payments of contingent earnout liability		(3,879	)		(1,923	)
Payment of deferred financing costs		(713	)		—
Net cash used in financing activities		(4,696	)		(1,377	)
Net increase (decrease) in cash and cash equivalents		162,935			(313,804	)
Cash and cash equivalents – beginning of period		185,657			389,878
Cash and cash equivalents – end of period	$	348,592		$	76,074
Supplemental disclosure of other cash flow information:
Cash paid for income taxes		1,245			1,209
Purchases of property and equipment recorded in accounts payable and accrued liabilities		270			—
Cash payments of contingent earnout liability		5,529			5,529

See accompanying notes to consolidated financial statements.

DUCK CREEK TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(amounts in thousands except unit and per unit and share and per share amounts)

(Unaudited)

(1)

Nature of Business

Duck Creek Technologies, Inc (the Company) is a leading provider of core systems to the property and casualty (P&C) insurance industry through our cloud offering, Duck Creek OnDemand, delivered as software-as-a-service (SaaS). Products offered include Duck Creek Policy, Duck Creek Billing, Duck Creek Claims, Duck Creek Rating, Duck Creek Insights, Duck Creek Distribution Management, Duck Creek Producer, Duck Creek Reinsurance Management, Duck Creek Anywhere Managed Integrations, and Duck Creek Industry Content. The Company also provides its products via perpetual and term license arrangements to customers with legacy systems that have yet to move to the cloud.

The Company was formed as a Delaware corporation on November 15, 2019, with no operating assets or operations for the purpose of facilitating an initial public offering (the IPO) and related Reorganization Transactions (as described below) in order to carry on the business of Disco Topco Holdings (Cayman), L.P. and its subsidiaries (the Operating Partnership). Unless otherwise indicated or the context otherwise requires, references to “Duck Creek Technologies” and the “Company” refer to (a) prior to the consummation of the Reorganization Transactions and the IPO, to Disco Topco Holdings (Cayman), L.P., and its subsidiaries, and (b) after the consummation of the Reorganization Transactions and IPO to Duck Creek Technologies, Inc, and its subsidiaries.

Initial Public Offering

On August 14, 2020, the Company completed its IPO. It sold 17,250,000 shares of common stock (including shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares) at a public offering price of $27.00 per share for net proceeds of $429.2 million, after deducting underwriting discounts, commissions, and estimated offering expenses.

The Company used (i) $43.1 million of the net proceeds received from the IPO to redeem all of the outstanding LP Units of the Operating Partnership retained by Accenture plc (Accenture) and RBW Investment GmbH & Co. (RBW), after giving effect to the contributions that were part of the Reorganization Transactions, at a redemption price per LP Unit equal to the IPO price less underwriting discounts and commissions, (ii) $64.7 million of the net proceeds received from the IPO to repurchase from Apax Partners L.P. (Apax) a portion of the shares in the Company received by Apax in the Reorg Merger (as described below) at a repurchase price per share equal to the IPO price less underwriting discounts and commissions, and (iii) $6.7 million of net proceeds received from the IPO to cash settle outstanding equity awards of certain international employees.

Reorganization Transactions

The Company and the Operating Partnership completed a series of transactions concurrently with or immediately following the completion of the IPO (Reorganization Transactions) which are described below:

•

The Company adopted an amended and restated certification of incorporation that authorized, immediately prior to the IPO, one class of common stock and one class of preferred stock.

•

Apax contributed the entity that held all of Apax’s equity interests in the Operating Partnership and all of Apax’s interest in the general partner of the Operating Partnership (General Partner) to a newly-formed Cayman company (the Reorg Subsidiary) in exchange for shares in the Reorg Subsidiary.

•

Accenture contributed to the Company, directly or indirectly, (i) a portion of its equity interests in the Operating Partnership and (ii) all of its interest in the General Partner in exchange for newly-issued common stock in the Company.

•

Certain members of management contributed to the Company, directly or indirectly, all of their respective equity interests in the Operating Partnership in exchange for (i) newly-issued common stock in the Company or (ii) restricted common stock in the Company and options to acquire common stock in the Company with an exercise price equal to the fair market value on the date of grant.

•

All other investors in the Operating Partnership (excluding Apax, Accenture, and RBW) contributed to the Company, directly or indirectly, all of their equity interests in the Operating Partnership in exchange for newly-issued common stock in the Company.

•

The Company contributed a portion of the net proceeds received from the IPO to the Operating Partnership and the Operating Partnership redeemed the outstanding LP Units of the Operating Partnership owned by Accenture and RBW that were not contributed to the Company.

•

Immediately following the completion of the IPO, (i) Apax exchanged all of its shares in the Reorg Subsidiary for newly-issued common stock in the Company and (ii) the Reorg Subsidiary merged with and into the Company (and subsequently ceased existence) (collectively, the Reorg Merger).

•

Following these transactions and the subsequent redemption of the outstanding LP Units owned by Accenture and RBW that were not contributed to the Company, the Company indirectly owns all of the LP Units of the Operating Partnership and all interest in the General Partner.

The Reorganization Transactions are considered transactions between entities under common control. As a result, Disco Topco Holdings (Cayman), L.P., is considered the predecessor of Duck Creek Technologies, Inc. for accounting purposes. This has resulted in the presentation of Disco Topco Holdings (Cayman), L.P.’s historical consolidated financial statements as the historical consolidated financial statements of Duck Creek Technologies, Inc. Duck Creek Technologies, Inc., has accounted for Disco Topco Holdings (Cayman), L.P.’s assets and liabilities at their historical carrying amounts.

(2)

Basis of Presentation, Consolidation, and Summary of Significant Accounting Policies

(a)

Basis of Presentation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) set by the Financial Accounting Standards Board (FASB), and pursuant to the rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Accordingly, certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. References to GAAP issued by the FASB in these notes are to the FASB Accounting Standards Codification (FASB ASC).

These consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2021 filed with the SEC on October 29, 2021. Operating results for interim periods are not necessarily indicative of the results that may be expected for any future period or the entire fiscal year.

(b)

Risk and Uncertainties

There have been no changes to the Company’s Risks and Uncertainties as disclosed in our Annual Report on Form 10-K, filed with the SEC on October 29, 2021, and incorporated herein by reference.

(c)

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

(d)

Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended August 31, 2021. There have been no material changes to the significant accounting policies during the six months ended February 28, 2022.

Allowance for Credit Losses

The Company maintains an allowance for expected credit losses for its accounts receivable balance. The allowance reflects the expected collectability of the balance and is based on historical losses, customer-specific factors, and current economic conditions. Credit losses are recorded in general and administrative expense while billing and other revenue adjustments are recorded as a reduction to revenue.

Investments

At the time of purchase, the Company determines the appropriate classification of investments based upon its intent with regard to such investments. All of the Company’s investments are classified as available-for-sale. The Company classifies investments as short-term when their remaining contractual maturities are one year or less from the balance sheet date, and as long-term when the investment has a remaining contractual maturity of more than one year from the balance sheet date. The Company records investments at fair value with unrealized gains and losses recorded as a component of other comprehensive income (loss).

(e)

Recently Adopted Accounting Pronouncements

There have been no changes to our recently adopted accounting pronouncements since the Company’s Annual Report on Form 10-K for the year ended August 31, 2021.

(f)

Recent Accounting Pronouncements Not Yet Effective

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This new guidance provides temporary optional expedients and exceptions to current guidance to ease the financial reporting burdens related to the expected market transition from the London Interbank Offered Rate (LIBOR) to alternative reference rates. We may elect to apply the optional expedients and exceptions prospectively through December 31, 2022. The Company does not expect the new standard to have a material impact on its consolidated financial statements.

Other recent accounting pronouncements that are or will be applicable to the Company did not, or are not expected to, have a material impact on the Company’s present or future financial statements.

(g)

Revenue Recognition

The Company derives its revenues primarily from the following four sources, which represent performance obligations of the Company:

•

Sales of hosted software services (SaaS) under subscription arrangements.

•

Sales of software licenses. Software license revenue is derived from the sale of perpetual and term license arrangements to customers.

•

Sales of maintenance and support services. Maintenance and support services include telephone and web-based support, software updates, and rights to unspecified software upgrades on a when-and-if-available basis during the maintenance term.

•

Sales of professional services. Professional services primarily relate to the implementation of the Company’s SaaS offerings and software licenses.

In accordance with ASC 606, the Company recognizes revenue from the identified performance obligations, as determined in its contracts with customers, as control is transferred to the customer in an amount that reflects the consideration the Company expects to receive. The Company applies the following five steps to achieve the core principle of ASC 606:

(1)

Identify the contract with the customer

The Company considers the terms and conditions of the contracts and its customary business practices in identifying contracts under ASC 606. The Company has determined that a contract with a customer exists when the contract is approved, each party’s rights regarding the services to be transferred can be identified, payment terms for the services can be identified, the customer has the ability and intent to pay, and the contract has commercial substance. The Company applies judgment in determining the customer’s ability and intent to pay, which is based on a variety of factors, including the customer’s historical payment experience or, in the case of a new customer, credit and financial information pertaining to the customer.

(2)

Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the products and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available from third parties or

from the Company, and are distinct in the context of the contract, whereby the transfer of the products or services is separately identifiable from other promises in the contract.

(3)

Determine the transaction price

The transaction price is determined based on the consideration to which the Company expects to be entitled in exchange for transferring products or services to the customer. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that no significant future reversal of cumulative revenue under the contract will occur. The sale of the Company’s software and SaaS products may include variable consideration relating to changes in a customer’s direct written premium (DWP) managed by these solutions. The Company estimates variable consideration based on historical DWP usage to the extent that a significant revenue reversal is not probable to occur.

In instances where the timing of revenue recognition differs from the timing of invoicing, the Company has determined that contracts generally do not include a significant financing component. The primary purpose of the Company’s invoicing terms is to provide customers with simplified and predictable ways of purchasing our products and services, not to receive financing from customers or to provide customers with financing.

(4)

Allocate the transaction price to the performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (SSP).

(5)

Recognize revenue when (or as) the Company satisfies a performance obligation

Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised product or service to a customer. Revenue is recognized when control of the products or services are transferred to the Company’s customers, in an amount that reflects the consideration that it expects to receive in exchange for those products or services.

The Company records revenue net of applicable sales taxes collected. Sales taxes collected from customers are recorded as part of accounts payable in the accompanying consolidated balance sheets and are remitted to state and local taxing jurisdictions based on the filing requirements of each jurisdiction.

Disaggregation of Revenue

The Company provides disaggregation of revenue based on product and service type on the consolidated statements of operations as it believes these categories best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

The following table summarizes revenue by geographic area based on the location of the customer contracting entity, regardless of where the products or services are used, for the three and six months ended February 28, 2022 and 2021:


	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
United States	$	71,108	$	56,668	$	139,849	$	110,084
All other		5,310		5,984		9,990		11,474
Total revenue	$	76,418	$	62,652	$	149,839	$	121,558

Subscription Arrangements

The transaction price allocated to subscription arrangements is recognized as revenue over time throughout the term of the contract as the services are provided on a continuous basis, beginning after the SaaS environment is provisioned and made available to customers. The Company’s subscription arrangements generally have terms of three to seven years and are generally payable on a monthly basis over the term of the subscription arrangement, which is typically noncancelable. Revenue is recognized ratably using contractual DWP as the measure of progress.

Software Licenses

The Company has concluded that its software licenses provide the customer with the right to functional intellectual property (IP), and are distinct performance obligations as the customer can benefit from the software licenses on their

own. The transaction price allocated to perpetual and term license arrangements is recognized as revenue at a point in time when control is transferred to the customer, which generally occurs at the time of delivery. Perpetual software license fees are generally payable when the contract is executed. Term license fees are generally payable in advance on an annual basis over the term of the license arrangement, which is typically noncancelable. Perpetual and term license arrangements are delivered before related services are provided, including maintenance and support services, and are functional without such services.

Maintenance and Support Services

Maintenance and support contracts associated with the Company’s software licenses entitle customers to receive technical support and software updates, on a when and if available basis, during the term of the maintenance and support contract. Technical support and software updates are considered distinct from the related software licenses but accounted for as a single performance obligation as they each constitute a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. The transaction price allocated to software maintenance and support is recognized as revenue over time on a straight-line basis over the term of the maintenance and support contract. Maintenance and support fees are generally payable in advance on a monthly, quarterly, or annual basis over the term of the maintenance and support contract. Maintenance and support contracts are priced as a percentage of the associated software license.

Professional Services

The Company’s professional services revenue is primarily comprised of implementation services provided to customers. The majority of professional services engagements are billed to customers on a time and materials basis. The Company has determined that professional services provided to customers represent distinct performance obligations. These services may be provided on a stand-alone basis or bundled with other performance obligations, including subscription arrangements, software licenses, and maintenance and support services. The transaction price allocated to these performance obligations is recognized as revenue over time as the services are performed. In those limited instances where professional services arrangements are sold on a fixed price basis, revenue is recognized over time using an input measure of time incurred to date relative to total estimated time to be incurred at project completion. Professional services arrangements are generally invoiced monthly in arrears.

The Company records reimbursable out-of-pocket expenses associated with professional services contracts in both revenue and cost of revenue.

Contracts with Multiple Performance Obligations

The Company’s contracts with customers can include multiple performance obligations, where the transaction price is allocated to each identified performance obligation based on their relative SSP. The Company’s contracts may also grant the customer an option to acquire additional products or services, which the Company assesses to determine whether or not any discount on the products or services is in excess of levels normally available to similar customers and, if so, accounts for the optional product or service as an additional performance obligation.

The Company typically determines SSP based on the observable prices of the promised goods or services charged when sold separately to customers, which are determined using contractually stated prices. In instances where SSP is not directly observable, the Company determines SSP based on its overall pricing objectives, taking into consideration market conditions and other factors, including customer size and geography. The various products and services comprising contracts with multiple performance obligations are typically capable of being distinct and accounted for as separate performance obligations. The Company allocates revenue to each of the performance obligations included in a contract with multiple performance obligations at the inception of the contract.

The SSP for perpetual or term license arrangements sold in contracts with multiple performance obligations is determined using the residual approach. The Company utilizes the residual approach because the selling prices for software licenses are highly variable and a SSP is not discernible from past transactions or other observable evidence. Periodically, the Company evaluates whether the use of the residual approach remains appropriate for performance obligations associated with software licenses when sold as part of contracts with multiple performance obligations. As a result, if the SSP analysis illustrates that the selling prices for software licenses are no longer highly variable, the Company will utilize the relative allocation method for such arrangements.

Contract Modifications

The Company may enter into amendments to previously executed contracts which constitute a contract modification. The effect of a contract modification on the transaction price when the remaining products or services are not distinct is recognized to revenue on a cumulative catch-up basis. Contract modifications are accounted for prospectively when it results in the promise to deliver additional products and services that are distinct and the increase in the price of the contract corresponds to the SSP of the additional products or services.

Contract Balances

Contract assets and liabilities are presented net at the contract level for each reporting period. Contract assets consist of unbilled revenue and represent amounts under contracts with customers where revenue recognized exceeds the amount billed to the customer. Contract liabilities consist of deferred revenue and include billings and payments received in advance of revenue recognized. Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining balance is recorded as noncurrent.

During the three months ended February 28, 2022 and 2021, $3.3 million and $2.8 million, respectively, and during the six months ended February 28, 2022 and 2021, $20.2 million and $13.3 million, respectively of the Company’s unbilled revenue balance that was included in the corresponding unbilled revenue balance at the beginning of the period presented became an unconditional right to payment and was billed to its customers.

During the three months ended February 28, 2022 and 2021, the Company recognized revenue of $7.8 million and $9.2 million, respectively, and for the six months ended February 28, 2022 and 2021, $21.4 million and $24.1 million, respectively, that was included in the corresponding deferred revenue balance at the beginning of the period presented.

Transaction Price Allocated to the Remaining Performance Obligations

Remaining performance obligations represent contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. As of February 28, 2022, approximately $481.8 million of revenue is expected to be recognized from remaining performance obligations in the amount of approximately $86.8 million in fiscal 2022 and approximately $395.0 million thereafter. The estimated revenues do not include unexercised contract renewals. The Company applied the practical expedient in accordance with ASC 606 to exclude amounts related to professional services contracts that are on a time and materials basis.

(3)

Contingent Earnout Liability

The following table summarizes the changes in fair value of the Company’s contingent earnout liability during the six months ended February 28, 2022:


	Outline Systems, LLC
Balance at August 31, 2021	$	5,462
Change in fair value, including accretion		67
Payments to sellers		(5,529	)
Balance at February 28, 2022	$	—

The final earnout payment related to the Outline acquisition was made in November 2021. The total cumulative earnout paid to the Outline sellers was $10.3 million.

(4)

Fair Value Measurements

Available-for-sale investments within cash equivalents and short-term investments consist of the following (in thousands):


	February 28, 2022
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Money market funds - presented in cash and cash equivalents	$	220,068	$	—	$	—	$	220,068
Total	$	220,068	$	—	$	—	$	220,068


	August 31, 2021
	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
U.S. Government agency securities - presented in short-term investments	$	191,917	$	64	$	—	$	191,981
Total	$	191,917	$	64	$	—	$	191,981

The Company has recorded the securities at fair value in its consolidated balance sheet and unrealized gains and losses are reported as a component of accumulated other comprehensive income (loss). The amount of realized gains and losses reclassified into earnings are based on the specific identification of the securities sold or securities that reached maturity date. There were no sales, two purchases within cash and cash equivalents, and eight maturities of securities during the six months ended February 28, 2022.

Fair Value

The Company measures certain financial assets and liabilities at fair value. Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market.

Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

•

Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

•

Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

•

Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The following tables present the Company’s financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories as of February 28, 2022 and August 31, 2021:


	February 28, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds - presented in cash and cash equivalents	$	220,068	$	—	$	—	$	220,068
Total assets	$	220,068	$	—	$	—	$	220,068
Liabilities:
Liability classified awards	$	780	$	—	$	383	$	1,163
Total liabilities	$	780	$	—	$	383	$	1,163


	August 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
U.S. Government agency securities - presented in short-term investments	$	—	$	191,981	$	—	$	191,981
Total assets	$	—	$	191,981	$	—	$	191,981
Liabilities:
Liability classified awards	$	1,448	$	—	$	1,588	$	3,036
Contingent earnout liability		—		—		5,462		5,462
Total liabilities	$	1,448	$	—	$	7,050	$	8,498

The contingent earnout liability related to business combinations is recorded at fair value on the acquisition date and is adjusted each reporting period for changes in fair value, which can result from changes in anticipated payments and changes in assumed discount periods and rates. These inputs are unobservable in the market and therefore categorized as level 3 inputs as defined above. Quoted prices for liability classified stock appreciation rights are not readily available. Accordingly, the Company uses a Black-Scholes model to estimate the fair value of these awards, which utilizes level three inputs. The following table summarizes the changes in the estimated fair value of the Company’s level 3 categorized liability classified awards for the six months ended February 28, 2022:


Balance as of August 31, 2021	$	1,588
Additions due to new awards		—
Net change in the fair value		(1,205	)
Cash settlement of awards		—
Balance as of February 28, 2022	$	383

(5)

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of February 28, 2022 and August 31, 2021 consisted of the following:


	February 28,		August 31,
	2022		2021
Directors and officers insurance	$	3,084	$	5,515
Computer software and licenses		9,956		5,861
Other		5,015		3,005
Total prepaid expenses and other current assets	$	18,055	$	14,381

(6)

Property and Equipment, Net

Property and equipment, net as of February 28, 2022 and August 31, 2021 consisted of the following:


	February 28,			August 31,
	2022			2021
Leasehold improvements	$	10,393		$	10,572
Internal-use software		9,041			8,230
Computer equipment		5,297			4,849
Furniture and fixtures		1,809			2,304
Office equipment		379			496
Assets under construction		111			111
Total property and equipment	$	27,030		$	26,562
Less accumulated depreciation and amortization		(13,697	)		(12,257	)
Property and equipment, net	$	13,333		$	14,305

Depreciation expense related to property and equipment was $0.7 million and $0.8 million for the three months ended February 28, 2022 and 2021, respectively and $1.4 million and $1.6 million for the six months ended February 28, 2022 and 2021, respectively.

The Company has determined the useful life of capitalized internal-use software to be three years. Amortization expense related to internal-use software was $0.6 million and $0.5 million for the three months ended February 28, 2022 and 2021, respectively and $1.1 million and $1.0 million for the six months ended February 28, 2022 and 2021, respectively.

(7)

Goodwill and Intangible Assets

The Company’s goodwill is the result of its acquisitions of other businesses and represents the excess of purchase consideration over the fair value of assets acquired and liabilities assumed. There has been no change to the $272.5 million carrying amount of goodwill since August 31, 2019.

Intangible assets as of February 28, 2022 and August 31, 2021 consisted of the following:


	February 28, 2022
	Gross carrying amount		Accumulated amortization		Net carrying amount		Weighted average remaining life
Customer relationships	$	103,600		56,955	$	46,645	4.8 years
Acquired technology		32,235		25,727		6,508	1.5 years
Trademarks and tradenames		9,400		5,248		4,152	4.3 years
Domain name		100		55		45	4.4 years
Backlog		6,700		6,612		88	0.4 years
	$	152,035	$	94,597	$	57,438


	August 31, 2021
	Gross carrying amount		Accumulated amortization		Net carrying amount		Weighted average remaining life
Customer relationships	$	103,600		51,815	$	51,785	5.3 years
Acquired technology		32,235		23,509		8,726	1.8 years
Trademarks and tradenames		9,400		4,778		4,622	4.8 years
Domain name		100		50		50	4.8 years
Backlog		6,700		6,524		176	0.8 years
	$	152,035	$	86,676	$	65,359

Amortization expense was $3.9 million and $4.1 million for the three months ended February 28, 2022 and 2021, respectively, and $7.9 million and $8.2 million for the six months ended February 28, 2022 and 2021, respectively. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the assets. Amortization expense associated with the backlog intangible asset is classified as a reduction of revenue in the accompanying consolidated statements of operations.

As of February 28, 2022, the estimated future amortization of purchased intangible assets is as follows:


Fiscal year:
2022	$	7,872
2023		15,225
2024		11,453
2025		11,307
2026 and thereafter		11,581
Total	$	57,438

(8)

Net Loss Per Share

The Company calculates basic earnings per share by dividing the net income (loss) by the weighted average number of shares of common stock outstanding for the period. The diluted earnings per share is computed by assuming the exercise, settlement, and vesting of all potential dilutive common stock equivalents outstanding for the period using the treasury stock method.

The following table sets forth a reconciliation of the numerator and denominator used to compute basic earnings per share of common stock.


	Three Months Ended February 28,						Six Months Ended February 28,
	2022			2021			2022			2021
Numerator
Net loss	$	(879	)	$	(6,364	)	$	(187	)	$	(11,015	)
Denominator
Weighted average shares of common stock - basic and diluted		132,103,016			130,982,116			132,057,733			130,851,680
Net earnings (loss) per share - basic and diluted	$	(0.01	)	$	(0.05	)	$	(0.00	)	$	(0.08	)

As of February 28, 2022, and 2021, 1,619,702 and 2,810,693, respectively, shares outstanding of potential common stock, using of the treasury stock method, were excluded from the computation of diluted weighted-average shares of common stock outstanding because their effect would have been antidilutive.

(9)

Other Assets

Other assets as of February 28, 2022 and August 31, 2021 consisted of the following:


	February 28,		August 31,
	2022		2021
Deferred contract costs	$	13,559	$	14,056
Other noncurrent assets		6,887		5,357
Total other assets	$	20,446	$	19,413

The amortization related to deferred contracts costs was $0.6 million and $1.2 million for the three months ended February 28, 2022 and 2021, respectively, and $1.2 million and $1.8 million for the six months ended February 28, 2022 and 2021, respectively. There was no impairment loss in relation to the costs capitalized.

(10)

Accounts Receivable and Allowance for Credit Losses

Accounts receivable, net as of February 28, 2022 and August 31, 2021, consisted of the following:


	February 28,			August 31,
	2022			2021
Accounts receivable	$	41,758		$	36,054
Allowance for credit losses		(2,693	)		(1,425	)
Accounts receivable, net	$	39,065		$	34,629

The following table presents changes to the allowance for credit losses during the six months ended February 28, 2022:


Allowance, August 31, 2021	$	(1,425	)
Net changes to credit losses		(2,189	)
Write-offs, net		711
Recoveries of previously reserved amounts		210
Allowance, February 28, 2022	$	(2,693	)

(11)

Accrued Liabilities

Accrued liabilities as of February 28, 2022 and August 31, 2021 consisted of the following:


	February 28,		August 31,
	2022		2021
Accrued bonuses	$	8,489	$	18,831
Accrued vacation		7,099		5,572
Accrued hosting fees		6,789		7,500
Accrued withholding taxes		2,425		2,771
Liability-classified phantom units and SARs		1,163		3,036
Accrued professional service fees		454		369
Accrued commissions		294		1,429
Other		5,263		6,929
Total accrued liabilities	$	31,976	$	46,437

(12)

Credit Facility

On October 22, 2021, the Company executed an amended and restated credit agreement for its revolving credit facility, increasing its maximum borrowing capacity from $30.0 million to $45.0 million.

The revolving credit facility has a term of five years and is secured by substantially all of the Company’s tangible assets. Interest accrues on the revolving credit facility at a variable rate based upon the type of borrowing made by the Company. Borrowings can either incur interest at a rate of LIBOR (as administered by ICE Benchmark Administration) plus an applicable margin, or incur interest at the higher of: (i) the Prime Rate, (2) the Fed Funds Rate plus 0.5%, or (3) LIBOR plus 1.0%, plus an applicable margin. The applicable margin ranges from 1.0% to 2.0% depending on the interest rate basis and type of borrowing elected. In addition to interest on the revolving credit facility, the Company pays a commitment fee of 0.5% per annum on the unused portion of the revolving credit facility. Repayment of any amounts borrowed are not required until maturity of the revolving credit facility, however the Company may repay any amounts borrowed at any time, without premium or penalty.

The Company is required to meet certain financial and nonfinancial covenants under the terms of the revolving credit facility. These covenants include limits on the creation of liens, limits on making certain investments, limits on incurring additional indebtedness, and maintaining a leverage ratio at or below a maximum level. The Company was in compliance with these financial and nonfinancial covenants as of February 28, 2022.

There was no outstanding balance under the revolving credit facility at February 28, 2022 or August 31, 2021. Letters of credit of $0.8 million and $0.9 million were outstanding under the revolving credit facility at February 28, 2022 and August 31, 2021, respectively.

(13)

Commitments and Contingencies

(a)

Litigation

From time to time, the Company is a party to or can be threatened with litigation in the ordinary course of business. The Company regularly analyzes current information, including, as applicable, the Company’s defenses and insurance coverage and, as necessary, provides accruals for probable and estimable liabilities for the eventual disposition of any matters. The Company was not a party to any material legal proceedings as of February 28, 2022 or 2021.

(b)

Guarantees

The Company’s products are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and substantially in accordance with the Company’s product documentation under normal use and circumstances. The Company’s services are generally warranted to be performed in a professional manner and to materially conform to the specifications set forth in the related customer contract. The Company’s arrangements also include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights.

To date, the Company has not incurred any material costs as a result of such indemnifications or commitments and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

(14)

Share-Based Compensation

Share-based compensation expense has been recorded in the accompanying consolidated statements of operations as follows for the three and six months ended February 28, 2022 and 2021:


	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Cost of subscription revenue	$	121	$	132	$	163	$	212
Cost of maintenance and support revenue		9		8		17		15
Cost of professional services revenue		353		1,139		253		1,750
Research and development		513		709		742		1,220
Sales and marketing		448		1,395		388		2,294
General and administrative		1,666		1,133		2,759		2,117
Total share-based compensation expense	$	3,110	$	4,516	$	4,322	$	7,608

(15)

Segment Information and Information about Geographic Areas

The Company considers operating segments to be components of the Company for which separate financial information is available and evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the chief executive officer. The chief executive officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by product and geographic region, for purposes of allocating resources and evaluating financial performance. Accordingly, the Company has determined that it has a single operating segment.

Revenues by geographic area presented based upon the location of the customer are included in Note 2(g).

Property and equipment, net by geographic area are as follows:


	February 28,		August 31,
	2022		2021
United States	$	11,937	$	12,814
All other		1,396		1,491
Total property and equipment, net	$	13,333	$	14,305

(16)

Related-Party Transactions

Services Provided on Behalf of and by Accenture

As of February 28, 2022, Accenture held 16% of the outstanding shares of common stock of the Company.

The Company provides certain professional services and software maintenance services to end customers as a subcontractor to Accenture as part of its typical revenue generating arrangements. During the three and six months ended February 28, 2022 and 2021, the Company recognized immaterial amounts of revenue relating to services performed in this subcontractor capacity.

In addition, the Company also engages Accenture to provide certain professional services on behalf of the Company as part of its typical revenue generating arrangements. During both the three and six months ended February 28, 2022 and 2021, the Company incurred immaterial expenditures relating to services performed by Accenture.

Revenue Contracts with Investors

During the six months ended February 28, 2022, the Company recognized revenue from customers that invested in the Company’s Class E Preferred Units whose shares converted to common stock in our IPO. The Company recognized aggregate revenue of $8.8 million and $8.1 million during the three months ended February 28, 2022 and 2021, respectively, and $15.0 million and $15.6 million during the six months ended February 28, 2022 and 2021, respectively. Deferred revenue from these customers was $2.5 million and $4.1 million as of February 28, 2022 and August 31, 2021, respectively.

Outstanding accounts receivables due from these customers was $8.2 million and $5.0 million as of February 28, 2022 and August 31, 2021, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section entitled Part II, “Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a leading provider of core systems to the property and casualty (P&C) insurance industry through our cloud offering, Duck Creek OnDemand, delivered as software-as-a-service (SaaS). We have achieved our leadership position by combining over twenty years of deep domain expertise with the differentiated SaaS capabilities and low-code configurability of our technology platform. We believe we are the first company to provide carriers with an end-to-end suite of enterprise-scale core system software that is purpose-built as a SaaS solution. Our product portfolio is built on our modern technology foundation, the Duck Creek Platform, and works cohesively to improve the operational efficiency of insurers’ core processes (policy administration, billing and claims management) as well as other critical functions. The Duck Creek Platform enables our customers to be agile and rapidly capitalize on market opportunities, while reducing their total cost of technology ownership.

Our deep understanding of the P&C insurance industry has enabled us to develop a single, unified suite of insurance software products that is tailored to address the key challenges faced by carriers worldwide. Our solutions promote carriers’ agility, intelligence and efficiency by enabling rapid integration and streamlining the ability to capture, access and utilize data more effectively. The Duck Creek Suite includes several products that support the P&C insurance process lifecycle, such as:

•

Duck Creek Policy: a solution that enables insurers to develop and launch new insurance products and manage all aspects of policy administration, from product definition to quoting, binding, and servicing

•

Duck Creek Billing: a solution that supports fundamental payment and invoicing capabilities (such as billing and collections, commission processing, disbursement management and general ledger capabilities) for all insurance lines and bill types

•

Duck Creek Claims: a solution that supports the entire claims lifecycle from first notice of loss through investigation, payments, negotiations, reporting and closure

In addition, we offer other innovative solutions, such as Duck Creek Rating, Duck Creek Insights, Duck Creek Digital Engagement, Duck Creek Distribution Management, Duck Creek Producer, Duck Creek Reinsurance Management, Duck Creek Anywhere Managed Integrations and Duck Creek Industry Content, which provide additional features and functionalities that further help our customers meet the increasing and evolving demands of the P&C industry. Our customers purchase and deploy Duck Creek OnDemand, our SaaS solution, either individually or as a suite.

We sell our SaaS solutions through recurring fee arrangements where revenue is recognized on a monthly basis following deployment to the customer, which we refer to as subscription revenue. Substantially all of our new bookings come from the sale of SaaS subscriptions of Duck Creek OnDemand. For the six months ended February 28, 2022 and 2021, SaaS ACV bookings represented 92% and 100% of our total ACV bookings, respectively. Historically, we have also sold our products through perpetual and term license arrangements, most commonly installed on-premise, where license revenue is typically recognized in full upon delivery of the software to the customer. We generally price our SaaS and license arrangements at individually negotiated rates based on the amount of a customer’s DWP that will be managed by our solutions with pre-determined fee adjustments as the customer’s DWP increases over the term of the contract, which typically ranges from three to seven years for our SaaS arrangements. We typically invoice our customers monthly, in advance, for SaaS fees whereas our term licenses are typically invoiced annually, in advance. The total cost of a perpetual license is billed in full upon contract signing.

We also derive revenue from maintenance and support services on our perpetual and term license products (primarily software updates, rights to unspecified software upgrades on a when-and-if-available basis and remote support services). We recognize revenue on a monthly basis as maintenance and support services are provided to customers. We generate revenue by providing professional services for both our SaaS solutions and perpetual and term license products (primarily related to implementation services) to the extent requested by our customers. The vast majority of our professional services revenue is recognized on a time and materials basis as the work is delivered to our customers. Our customers may also choose to obtain implementation services through our network of third-party SI partners who provide implementation and other related services to our customers. Our partnerships with leading SIs allow us to grow our business more efficiently by giving us scale to service our growing customer base. We continue to grow our

services organization, including increasing the number of qualified consultants we employ and investing time and resources to develop relationships with new SI partners in existing and new markets.

We sell our products and services to a wide variety of carriers, including many of the largest and most recognizable brands in the P&C insurance industry, as well as smaller national and regional carriers. Our direct sales team focuses on obtaining new customers, which includes carriers that currently operate internally developed or competing systems, as well as selling into our existing customer base, which includes marketing our SaaS solutions to our term and perpetual license customers to drive adoption of our SaaS solutions and cross-selling additional applications. We are committed to continued training and development in order to increase the productivity of our sales team, with regional sales centers in North America, Europe and Australia. Our sales team is complemented by our partnerships with third-party partners, including leading SIs and solution partners. These partners provide additional market validation to our offerings, enhance our sales force through co-marketing efforts and offer greater speed and efficiency of implementation capabilities and related services to our customers. We also engage in a variety of traditional and online marketing activities designed to provide sales support and build brand recognition and enhance our reputation as an industry leader.

We believe our strong customer relationships are a result of our ability to develop innovative technology and incorporate our deep domain expertise into products that serve mission critical functions in our customers’ day-to-day operations. We have over 150 insurance customers, over 70 of which have purchased one or more of our SaaS solutions. For customer concentration purposes, customers are assessed two ways: individual entities (customers) and combining customers that are under common control (affiliated entities). We did not have any affiliated entities that accounted for more than 10% of our total revenue in the second quarter of fiscal 2022 and one affiliated entity that accounted for more than 10% of our total revenue in the second quarter of fiscal 2021.

Key Factors and Trends Affecting Our Results of Operations

Increased focus on the sale of our SaaS solutions and resulting changing revenue mix. A central part of our strategy is to continue to grow our subscription revenue by signing new SaaS customers and increasing sales to our existing SaaS customers. Additionally, over time we also expect to migrate existing term and perpetual license customers to our SaaS solutions. As a result, our software revenue mix will continue to change over time as the portion of license revenue (primarily recognized up-front) decreases and the portion of subscription revenue (recognized monthly) increases, which may make our results in any one period difficult to compare to any other period. For the three months ended February 28, 2022 and 2021, subscription revenue was 78% and 76% of software revenue, respectively. For the six months ended February 28, 2022 and 2021, subscription revenue was 80% and 77% of software revenue, respectively.

Continued and increased adoption of our solutions by customers. Strong customer relationships are a key driver of our success given the importance of customer references for new sales. Our long-term relationships with existing customers provide us with significant opportunities to reach customer decision-makers and sell our product offerings that address the specific customer’s needs, allowing us to recognize incremental sales with lower sales and marketing spend than for a new customer. With the continued launch of new functionality for the Duck Creek Suite, we have the opportunity to realize incremental value by selling additional functionality to customers that do not currently utilize our full product portfolio and by encouraging existing term and perpetual license customers to adopt our SaaS solutions. As we demonstrate our value to customers, we believe we will have the opportunity to sell them additional solutions. Moreover, because our products are priced on the basis of the amount of DWP generated by our customers, we expect our revenue will grow as our customers grow their businesses.

Timing of license revenue recognition and changing contract terms. Because our offerings are typically priced based on a customer’s DWP, and our business relies on a relatively small number of high-value contracts, the license revenues recognized in any fiscal period in which we sign a term license with a large global carrier may be disproportionally higher than revenues recognized in a period in which we only sign term licenses with smaller carriers. We generally experience lengthy sales cycles because potential customers typically undertake a rigorous pre-purchase decision-making and evaluation process. Additionally, our license revenue may significantly increase in any given period in which a new license contract is signed. In fiscal 2018, we revised our contracting practices and began to sell our term licenses with an initial two-year committed term and optional annual renewals instead of our historical three to six year committed terms. This contracting change has impacted historical period-over-period revenue comparisons. However, because of our revenue mix shift to subscription and since our contracts going forward are expected to have, initial two-year committed terms, this change is not expected to have a material impact on the comparability of our results and in future periods. Our term license revenue accounted for 9% of software revenue during both the three months ended February 28, 2022 and 2021, respectively, and for 7% of software revenue during both the six months ended February 28, 2022 and 2021, respectively.

Investment in sales and marketing organization. We plan to continue to invest in our sales and marketing efforts to grow our customer base, increase sales of additional functionality to existing customers and encourage carriers who currently operate legacy systems or use one or more of our competitor’s applications to adopt our SaaS solutions. We expect to add sales personnel and expand our marketing activities. We also intend to continue to expand our international sales and marketing organization, which we believe will be an important factor in our continued growth. Our sales and marketing expenses totaled $13.6 million and $14.2 million in the

three months ended February 28, 2022 and 2021, respectively, and $26.7 million and $26.8 million in the six months ended February 28, 2022 and 2021, respectively. We expect sales and marketing expenses to increase in absolute dollars for the foreseeable future.

Investment in SaaS operations. We will continue to invest in Duck Creek OnDemand, including continued growth in the number of our cloud and SaaS operations experts, to further our goal of delivering the best experience for our SaaS customers. Personnel related costs of our SaaS operations team and data hosting costs are the fastest growing components of our cost of subscription revenue. Our cost of subscription revenue totaled $14.2 million and $11.4 million in the three months ended February 28, 2022 and 2021, respectively, and $28.8 million and $21.5 million in the six months ended February 28, 2022 and 2021, respectively.

Investment in technology and research and development efforts. We are committed to continuing to deliver market-leading software to carriers and believe that maintaining our product leadership is critical to driving further revenue growth. As a result, we intend to continue to make significant investments in our research and development efforts to extend the functionality and breadth of our current solutions as well as develop and launch new products and tools to address the evolving needs of the P&C insurance industry. Our research and development expenses totaled $14.3 million and $12.7 million during the three months ended February 28, 2022 and 2021, respectively, and $26.6 million and $23.8 million during the six months ended February 28, 2022 and 2021, respectively. We expect research and development expenses to increase in absolute dollars for the foreseeable future.

Mix of professional services revenue. Our professional services teams ensure the successful configuration and integration of our solutions and provide continuous support to our customers. We recognize most of our professional services revenue during initial deployment and recognize additional revenue for services provided over the lifetime of a customer’s use of our software. Over time, a customer’s spend on professional services decreases as a percentage of their overall spend with us. In addition, although we plan on increasing our professional services headcount in the long-term, we expect to shift an increasing percentage of implementation work to our network of third-party SIs to better enable us to meet growing market demand. As a result, we expect our overall professional services revenue to increase in absolute dollars due to the growth in the number of our SaaS customers, but to decrease as a percentage of total revenue. During the three months ended February 28, 2022 and 2021, our professional services revenue was $26.0 million and $22.6 million, respectively, and $55.5 million and $46.0 million during the six months ended February 28, 2022 and 2021, respectively.

COVID-19 expenses. In March 2020, we implemented various measures in response to the ongoing COVID-19 pandemic to ensure the safety of our employees. Over a two-day period, we shifted 100% of our employee base to work from home and suspended international and domestic travel. This policy remained largely in place throughout fiscal year 2021, with only certain exceptions being made on a case-by-case basis. In the beginning of fiscal year 2022, we began re-opening offices and resumed some business travel. As a result, there have been slight increases in travel-related expenses in fiscal year 2022.

Due to the success of our work from home program, we have established a remote-first policy for all employees. Under this policy, employees can work from home but have the option to work out of physical office locations when they would like.

Share-based Compensation. For the six months ended February 28, 2022, a portion of our share-based compensation decreased due to liability-based awards whose value depends, in part, upon the Company’s stock price and other market-based metrics.

Components of Results of Operations

Revenue

We generate our revenue from selling subscriptions to our SaaS solutions, licensing our term and perpetual software applications, providing maintenance and support services (primarily software updates, rights to unspecified software upgrades on a when-and-if-available basis and remote support services) to our term and perpetual license customers and providing professional services (primarily related to implementation services) to the extent requested by either our SaaS or term and perpetual license customers. We generally price our SaaS and licenses arrangements based on the amount of a customer’s DWP that will be managed by our software solutions and may include volume-based pricing for customers managing a higher amount of DWP with our solutions. Our SaaS and license contracts generally include provisions for additional fees when the amount of the customer’s DWP managed by our software solutions exceed agreed-upon caps within defined reporting periods, which are recognized on an as incurred basis. Software revenue is comprised of subscription revenue and revenue from licenses and maintenance and support services. Total revenue is comprised of software revenue plus revenue from our professional services.

Subscription

Our subscription revenue is comprised of fees from customers accessing our Duck Creek OnDemand platform and other SaaS solutions. Revenue for a reporting period is generally recognized ratably in proportion to the total contractual DWP, beginning when the service has been made available to the customer. Our subscription revenue accounted for 78% and 76% of software revenue during the three months ended February 28, 2022 and 2021, respectively, and 80% and 77% of software revenue during the six months ended February 28, 2022 and 2021, respectively.

Licenses

On an increasingly limited basis, we sell licenses for our solutions on either a renewable term basis or a perpetual basis. The total contractual consideration allocated to the license is recognized as revenue upon delivery of the software to a customer, assuming all other revenue recognition criteria are satisfied. We sell our term licenses with an initial two-year committed term and optional annual renewals, with the revenue allocated to the initial two-year license period recognized in full upon delivery of the license. We expect potential volatility across quarters for our license revenue due to the timing of license renewals and sales. Our license revenue accounted for 9% of software revenue during both the three months ended February 28, 2022 and 2021, respectively, and 7% of software revenue during both the six months ended February 28, 2022 and 2021, respectively.

Maintenance and Support

In connection with our term and perpetual license arrangements, we offer maintenance and support under renewable, fee-based contracts that include unspecified software updates and upgrades released when and if available, software patches and fixes and email and phone support. Our maintenance and support fees are typically priced as a fixed percentage of the associated license fees. We recognize maintenance and support revenue from customers ratably over the committed term of the contract. Substantially all term and perpetual license customers purchase an agreement for maintenance and support. We expect to continue to generate a relatively consistent stream of revenue from the maintenance and support services we provide to our existing license customers. However, we expect revenue from maintenance and support services to decrease as a percentage of software revenue as we continue to deemphasize license sales in favor of our SaaS solutions. Our maintenance and support revenue accounted for 12% and 15% of software revenue during the three months ended February 28, 2022 and 2021, respectively, and 13% and 16% of software revenue during the six months ended February 28, 2022 and 2021, respectively.

Professional Services

We offer professional services, primarily related to implementation of our products, in connection with both our SaaS solutions and software license products. The vast majority of professional services engagements are billed to customers on a time and materials basis and revenue is generally recognized upon delivery of our services. We expect our professional services revenue to grow over time in absolute dollars due to customer growth and an increasing need for implementation services but decrease as a percentage of total revenue. We believe the rate at which we sell our software will drive a greater need for implementation services that will support both an increase in our professional services revenue and an increase in demand for the services provided by our third-party SIs. Our professional services revenue generates lower gross margins than our software revenue and accounted for 34% and 36% of our total revenue for the three months ended February 28, 2022 and 2021, respectively, and 37% and 38% of our total revenue for the six months ended February 28, 2022 and 2021, respectively.

Cost of Revenue

Our cost of revenue has fixed and variable components and depends on the type of revenue earned in each period. Cost of revenue includes amortization expense associated with acquired technology and other operating expenses directly related to the cost of products and services, including depreciation expense. We expect our cost of revenue to increase in absolute dollars as we continue to hire personnel, to provide hosting services, technical support and consulting services to our growing customer base.

Cost of Subscriptions

Our cost of subscription revenue is primarily comprised of cloud infrastructure costs, royalty fees paid to third-parties, amortization of acquired technology intangible assets and personnel-related expenses for our SaaS operations teams, including salaries and other direct personnel-related costs.

Cost of Licenses

Our cost of license revenue is primarily comprised of royalty fees paid to third-parties and amortization of acquired technology intangible assets.

Cost of Maintenance and Support

Our cost of maintenance and support revenue is comprised of personnel-related expenses for our technical support team, including salaries and other direct personnel-related costs. While we expect the cost of maintenance and support revenue will increase in the near term, it may decrease in the future if we successfully transition our term and perpetual license customers to our SaaS solutions.

Cost of Professional Services

Our cost of professional services revenue is primarily comprised of personnel-related expenses for our professional service employees and contractors, including salaries and other direct personnel-related costs.

Gross Margins

Gross margins have been and will continue to be affected by a variety of factors, including the average sales price of our products and services, DWP volume growth, the mix of revenue between SaaS solutions, software licenses, maintenance and support and professional services and changes in cloud infrastructure and personnel costs. As we transition our product mix to include more SaaS customers, we expect our overall gross margin percentages to decrease in the near-term due to our SaaS gross margin percentages being lower than our license gross margin percentages. Over time, we expect gross margins to increase as we onboard additional customers, achieve growth within existing customers and realize greater economies of scale.

Operating Expenses

Research and Development

Our research and development expenses consist primarily of costs incurred for personnel-related expenses for our technical staff, including salaries and other direct personnel-related costs. Additional expenses include consulting and professional fees for third-party development resources. We expect our research and development expenses to increase in absolute dollars for the foreseeable future as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions. Costs incurred in the preliminary design and development stages of our SaaS projects are generally expensed as incurred in accordance with FASB ASC 350-40, Internal-Use Software. Once a SaaS project has reached the application development stage, certain internal, external, direct and indirect costs may be subject to capitalization. Generally, costs are capitalized until the technology is available for its intended use. Subsequent costs incurred for the development of future upgrades and enhancements, which are expected to result in additional functionality, follow the same protocol for capitalization.

Sales and Marketing Expenses

Our sales and marketing expenses consist primarily of personnel related costs for our sales and marketing functions, including salaries and other direct personnel-related costs. Additional expenses include marketing program costs, including costs related to our Formation (held annually, when possible) conference and amortization of acquired intangible assets related to customer relationships. While we expect our sales and marketing expenses to increase on an absolute dollar basis in the near term as we continue to increase investments to support our growth, we also anticipate that sales and marketing expenses will remain relatively consistent as a percentage of total revenue.

General and Administrative Expenses

Our general and administrative expenses consist primarily of personnel-related costs for our executive, finance, human resources, information technology and legal functions, including salaries and other direct personnel-related costs. Additional expenses include professional fees, amortization of acquired trademarks, tradenames and domain name intangible assets, insurance and acquisition-related costs. While we expect other general and administrative expense to increase on an absolute dollar basis in the near term as we continue to increase investments to support our growth and as a result of our becoming a public company, we also anticipate that general and administrative expenses will decrease as a percentage of total revenue over time.

Change in Fair Value of Contingent Consideration

Certain of our acquisitions have included a component of contingent consideration to be paid to the sellers if certain performance levels are achieved by the acquired entity over a specific period of time. Contingent consideration was initially recorded at fair value on the acquisition date based, in part, on a range of estimated probabilities for achievement of these performance levels. The fair value was periodically adjusted as actual performance levels become known and updates were made to the estimated probabilities for future performance. A gain or loss was recognized in the income statement for fair value adjustments. As a result of additional acquisitions, it is possible that we will incur gains or losses in the future due to the change in the fair value of contingent consideration.

Other Income (Expense), Net

Other income (expense), net consists primarily of foreign exchange gains and losses resulting from fluctuations in foreign exchange rates on receivables and payables denominated in currencies other than the U.S. dollar.

Interest Expense, Net

Interest expense, net comprises interest expense accrued or paid on our indebtedness, net of interest income earned on our cash balances. We expect interest income (expense) to vary each reporting period depending on the amount of outstanding indebtedness, cash, cash equivalents, and investment balances, and prevailing interest rates.

Provision for Income Taxes

We are subject to taxes in the United States as well as other tax jurisdictions or countries in which we conduct business. Earnings from our non-U.S. activities are subject to local country income tax and may be subject to current U.S. income tax. Due to cumulative losses, we maintain a valuation allowance against our deferred tax assets, except in certain foreign subsidiaries that generate income. We consider all available evidence, both positive and negative, in assessing the extent to which a valuation allowance should be applied against our deferred tax assets. Realization of our U.S. deferred tax assets depends upon future earnings, the timing and amount of which are uncertain.

Results of Operations

Comparison of the Three Months Ended February 28, 2022 and 2021

The following table sets forth our consolidated results of operations for the periods indicated, expressed in total dollar terms and as a percentage of total revenue:


	Three Months Ended February 28,
(dollars in thousands)	2022						2021
				Percent of Total Revenue						Percent of Total Revenue
Revenue
Subscription	$	39,593			52	%	$	30,608			49	%
License		4,649			6			3,588			6
Maintenance and support		6,204			8			5,885			9
Professional services		25,972			34			22,571			36
Total revenue		76,418			100			62,652			100
Cost of revenue
Subscription		14,244			19			11,411			18
License		413			1			446			1
Maintenance and support		984			1			859			1
Professional services		16,448			22			14,826			24
Total cost of revenue		32,089			43			27,542			44
Gross margins		44,329			57			35,110			56
Operating expenses
Research and development		14,316			19			12,681			20
Sales and marketing		13,571			18			14,165			23
General and administrative		16,831			22			14,617			23
Change in fair value of contingent consideration		—			—			95			—
Total operating expense		44,718			59			41,558			66
Loss from operations		(389	)		(1	)		(6,448	)		(10	)
Other income (expense), net		(32	)		—			510			1
Interest expense, net		(35	)		—			(38	)		—
Loss before income taxes		(456	)		(1	)		(5,976	)		(9	)
Provision for income taxes		423			1			388			1
Net loss	$	(879	)		(1	)%	$	(6,364	)		(10	)%

The following table sets forth share-based compensation expense included in our results of operations for the periods indicated:


	Three Months Ended February 28,				Six Months Ended February 28,
	2022		2021		2022		2021
Cost of subscription revenue	$	121	$	132	$	163	$	212
Cost of maintenance and support revenue		9		8		17		15
Cost of services revenue		353		1,139		253		1,750
Research and development		513		709		742		1,220
Sales and marketing		448		1,395		388		2,294
General and administrative		1,666		1,133		2,759		2,117
Total share-based compensation expense	$	3,110	$	4,516	$	4,322	$	7,608

Revenue

Subscription

Subscription revenue increased $9.0 million, or 29%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021, due to a combination of sales to new customers and increased revenue generated from existing customers, which includes sales of new services and contractual growth.

License

License revenue increased $1.1 million, or 30%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to timing of existing customer renewals, including multi-year license renewals which did not occur in the prior period.

Maintenance and Support

Maintenance and support revenue increased $0.3 million, or 5%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to increases of maintenance and support growth fees charged to customers during the period.

Professional services

Professional services revenue increased $3.4 million, or 15%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to several large implementation projects and growth of our existing software customer base, partially offset by a decrease from completed project implementations.

Cost of Revenue

Cost of revenue increased $4.5 million, or 17%, in the three months ended February 28, 2022 compared to the three months ended February 28, 2021.

Cost of Subscriptions

Cost of subscription revenue increased $2.8 million, or 25%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to an increase in SaaS customers. This increase is comprised primarily of a $1.8 million increase in hosting costs from increased usage and a $1.1 million increase in payroll and related costs as we continue to build out the SaaS operations team and support customer growth.

Cost of License

Cost of license revenue decreased 7% in the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to a decrease in the amount of amortization on previously acquired technology intangible assets.

Cost of Maintenance and Support

Cost of maintenance and support revenue increased $0.1 million, or 15%, in the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to an increase in personnel-related costs required to support our term and perpetual license customers.

Cost of Professional Services

Cost of professional services revenue increased $1.6 million, or 11%, in the three months ended February 28, 2022 versus the three months ended February 28, 2021, mainly attributable to an increase of $2.0 million in payroll and related costs, driven by increased headcount and contingent labor increased $0.6 million. These increases were partially offset by a $0.8 million decrease in share-based compensation expense and decrease of $0.4 million in bonus compensation expense.

Gross Margins

Gross margins increased $9.2 million, or 26%, in the three months ended February 28, 2022 versus the three months ended February 28, 2021, primarily due to a $6.2 million increase in subscription gross margin, a $1.8 million increase in professional services gross margin, a $1.1 million increase in license gross margin, and a nominal increase in maintenance and support gross margin. The increase in subscription gross margins was driven by strong growth in subscription revenue.

Our gross margin percentage increased to 57% from 56% in the three months ended February 28, 2022 versus the three months ended February 28, 2021. The subscription gross margin percentage increased to 64% from 63%, professional services gross margin percentage increased to 37% from 34% and license gross margin percentage increased to 91% from 88% while maintenance and support gross margin percentage decreased to 84% from 85%.

Operating Expenses

Research and Development Expense

Research and development expense increased $1.6 million, or 13%, during the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to a $1.6 million increase in payroll costs from an increase in headcount.

Sales and Marketing Expense

Sales and marketing expense decreased $0.6 million, or (4%), during the three months ended February 28, 2022 versus the three months ended February 28, 2021, primarily due to a $1.3 million decrease in share-based compensation expense and bonus compensation expense, partially offset by a $0.7 million increase in payroll costs from increased headcount.

General and Administrative Expense

General and administrative expense increased $2.2 million, or 15%, in the three months ended February 28, 2022 versus the three months ended February 28, 2021, primarily due to a $1.4 million increase in allowance for credit losses, a $0.5 million increase in share-based compensation expense, a $0.4 million increase in professional service fees, a $0.3 million increase on losses from the disposal of fixed assets, and a $0.3 million increase related to computer hardware and software expenses. These increases were partially offset by a $0.5 million decrease in bonus compensation expense and $0.4 million decrease in facilities.

Change in Fair Value of Contingent Consideration

Change in fair value of contingent consideration is due to changes in estimated contingent consideration as well as present value calculations related to the contingent consideration estimates of the acquisition of Outline Systems LLC, a provider of P&C distribution channel management software and longstanding member of our partner ecosystem (now Duck Creek Distribution Management). The final contingent consideration was paid in full during the first quarter fiscal year 2022.

Other Income (Expense), Net

Other income (expense), net decreased $0.5 million during the three months ended February 28, 2022 as compared to the three months ended February 28, 2021, primarily due to fluctuations in foreign exchange rates on receivables and payables denominated in currencies other than the U.S. dollar.

Interest Expense, Net

Interest expense, net remained consistent for the three months ended February 28, 2022 versus the three months ended February 28, 2021. Interest expense consists of fees paid to maintain the revolving credit facility, though there were no outstanding borrowings in either period. These expenses were partially offset by interest income received from cash, cash equivalents, and short-term investments.

Provision for Income Taxes

Provision for income taxes increased 9% in the three months ended February 28, 2022 versus the three months ended February 28, 2021 primarily due to the impact of goodwill amortized for tax not for book, impact of higher profits in foreign subsidiaries and state taxes.

Results of Operations

Comparison of the Six Months Ended February 28, 2022 and 2021

The following table sets forth our consolidated results of operations for the periods indicated, expressed in total dollar terms and as a percentage of total revenue:


	Six Months Ended February 28,
(dollars in thousands)	2022						2021
				Percent of Total Revenue						Percent of Total Revenue
Revenue
Subscription	$	75,298			51	%	$	58,517			48	%
License		6,561			4			4,938			4
Maintenance and support		12,481			8			12,075			10
Professional services		55,499			37			46,028			38
Total revenue		149,839			100			121,558			100
Cost of revenue
Subscription		28,829			19			21,495			18
License		657			—			834			1
Maintenance and support		1,864			1			1,701			1
Professional services		31,690			21			28,542			23
Total cost of revenue		63,040			41			52,572			43
Gross margins		86,799			59			68,986			57
Operating expenses
Research and development		26,637			18			23,785			20
Sales and marketing		26,738			18			26,762			22
General and administrative		31,866			21			29,035			24
Change in fair value of contingent consideration		67			—			98			—
Total operating expense		85,308			57			79,680			66
Income (loss) from operations		1,491			2			(10,694	)		(9	)
Other income (expense), net		(728	)		—			463			—
Interest expense, net		(153	)		—			(81	)		—
Income (loss) before income taxes		610			-			(10,312	)		(8	)
Provision for income taxes		797			1			703			1
Net loss	$	(187	)		(0	)%	$	(11,015	)		(9	)%

The following table sets forth share-based compensation expense included in our results of operations for the periods indicated:


	Six Months Ended February 28,
	2022		2021
Cost of subscription revenue	$	163	$	212
Cost of maintenance and support revenue		17		15
Cost of professional services revenue		253		1,750
Research and development		742		1,220
Sales and marketing		388		2,294
General and administrative		2,759		2,117
Total share-based compensation expense	$	4,322	$	7,608

Revenue

Subscription

Subscription revenue increased $16.8 million, or 29%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021, due to a combination of sales to new customers and increased revenue generated from existing customers, which includes sales of new services and contractual growth.

License

License revenue increased $1.6 million, or 33%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to timing of existing customer renewals, including multi-year license renewals which did not occur in the prior period.

Maintenance and Support

Maintenance and support revenue increased $0.4 million, or 3%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to renewal term increases of maintenance and support fees charged to customers during the period.

Professional services

Professional services revenue increased $9.5 million, or 21%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to continued work on several large implementation projects and growth of our existing software customer base, partially offset by a decrease from completed project implementations.

Cost of Revenue

Cost of revenue increased $10.5 million, or 20%, in the six months ended February 28, 2022 compared to the six months ended February 28, 2021.

Cost of Subscriptions

Cost of subscription revenue increased $7.3 million, or 34%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to an increase in SaaS customers, and is comprised of a $4.2 million increase in hosting costs due to usage increase, a $2.0 million increase in payroll and related costs, and a $0.8 million increase in computer hardware and software costs.

Cost of License

Cost of license revenue decreased $0.2 million, or 21% in the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to a decrease in the amount of amortization on previously acquired technology intangible assets.

Cost of Maintenance and Support

Cost of maintenance and support revenue increased $0.2 million, or 10%, in the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to an increase in personnel-related costs required to support our term and perpetual license customers.

Cost of Professional Services

Cost of professional services revenue increased $3.1 million, or 11%, in the six months ended February 28, 2022 versus the six months ended February 28, 2021, mainly attributable to an increase of $3.5 million in payroll and related costs, driven by increased headcount and contingent labor increased $1.1 million. These increases were partially offset by a $1.5 million decrease in share-based compensation expense.

Gross Margins

Gross margins increased $17.8 million, or 26%, in the six months ended February 28, 2022 versus the six months ended February 28, 2021, primarily due to a $9.4 million increase in subscription gross margin, a $6.3 million increase in professional services gross margin, a $1.8 million increase in license gross margin, and a nominal increase in maintenance and support gross margin. The increase in subscription gross margins was driven by strong growth in subscription revenue.

Our gross margin percentage increased to 58% from 57% in the six months ended February 28, 2022 versus the six months ended February 28, 2021. The subscription gross margin percentage experience a nominal decrease to 62% from 63%, professional services gross margin percentage increased to 43% from 38% and license gross margin percentage increased to 90% from 83% while maintenance and support gross margin percentage experienced a nominal decrease to 85% from 86%.

Operating Expenses

Research and Development Expense

Research and development expense increased $2.9 million, or 12%, during the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to a $2.6 million increase in payroll costs from increased headcount and $0.4 million increase in hosting costs. These increases were partially offset by a $0.5 million decrease in share-based compensation expense.

Sales and Marketing Expense

Sales and marketing expense remained consistent for the six months ended February 28, 2022 versus the six months ended February 28, 2021, primarily due to an increase of $1.6 million in payroll and bonus costs from increased headcount, a $0.4 million increase in recruiting, and a $0.4 million increase in travel and entertainment. These increases were offset by a $1.9 million decrease in share-based compensation and a $0.5 million decrease in marketing programs spend.

General and Administrative Expense

General and administrative expense increased $2.8 million, or 10%, in the six months ended February 28, 2022 versus the six months ended February 28, 2021, primarily due to a $2.2 million increase in allowance for credit losses, a $0.6 million increase in share-based compensation expense, a $0.5 million increase related to computer hardware and software expenses, a $0.3 million increase on losses from the disposal of fixed assets, and a $0.3 million increase in insurance expense. These increases were partially offset by a $0.9 million decrease in professional services expense and a $0.5 million decrease in facilities.

Change in Fair Value of Contingent Consideration

Other Income (Expense), Net

Other income (expense), net decreased $1.2 million, or 257% during the six months ended February 28, 2022 as compared to the six months ended February 28, 2021, primarily due to fluctuations in foreign exchange rates on receivables and payables denominated in currencies other than the U.S. dollar, partially offset by a $0.1 million gain on the derecognition of a lease liability.

Interest Expense, Net

Interest expense, net decreased $0.1 million, or 89% during the six months ended February 28, 2022 versus the six months ended February 28, 2021. Interest expense consists of fees paid to maintain the revolving credit facility, though there were no outstanding borrowings in either period. These expenses were partially offset by interest income received from cash, cash equivalents, and short-term investments during the period.

Provision for Income Taxes

Provision for income taxes increased 13% in the six months ended February 28, 2022 versus the six months ended February 28, 2021 primarily due to the impact of goodwill amortized for tax not for book, impact of higher profits in foreign subsidiaries and state taxes.

Liquidity and Capital

To date, we have financed our operations primarily through cash provided by operating activities, our revolving credit facility, and, most recently, through net proceeds received from our IPO. As of February 28, 2022, we had $348.6 million in cash and cash equivalents, no outstanding borrowings under our revolving credit facility, and $0.8 million of outstanding letters of credit. We also had $44.2 million of additional principal availability under our revolving credit facility. We believe that our existing cash and cash equivalents, together with cash provided by operating activities and amounts available under our revolving credit facility, will be sufficient to meet our operating working capital and capital expenditure requirements over at least the next twelve months. Our future

cash requirements will depend on many factors, including our rate of revenue growth, the expansion of our sales and marketing activities, the timing and extent of our spending to support our research and development efforts, investments in cloud infrastructure and operating costs, and expansion into other markets. At any given time, we may be evaluating one or more potential investments in, or acquisitions of, businesses or technologies, which could require us to seek additional equity or debt financing. Additional sources of liquidity and capital resources, including equity or debt financing, may not be available on terms favorable to us or at all.

As of February 28, 2022, $121.9 million of cash was held by our foreign subsidiaries. Of this cash balance, $100.0 million is the result of repaying an intercompany loan during the three months ended November 30, 2021 and is held in a U.S. dollar-based bank account. We currently do not anticipate a need to repatriate these funds to finance our U.S. operations; however, we may utilize all or part of the $100.0 million to finance future acquisitions.

Summary of Cash Flows for the Six Months Ended February 28, 2022 and 2021

The following summarizes our cash flows from operating, investing and financing activities for the periods indicated:


	Six Months Ended February 28,
($ in thousands)	2022			2021
Net cash used in operating activities	$	(23,026	)	$	(23,093	)
Net cash provided by (used in) investing activities		190,657			(289,334	)
Net cash used in financing activities		(4,696	)		(1,377	)
Net increase (decrease) in cash and cash equivalents		162,935			(313,804	)
Cash and cash equivalents – beginning of period		185,657			389,878
Cash and cash equivalents – end of period	$	348,592		$	76,074

Operating Activities

We used $23.0 million of cash from operating activities during the six months ended February 28, 2022, resulting from our net income, after including the impact of non-cash benefits, of $16.2 million and $39.2 million of cash used in working capital activities. Cash used in working capital activities during the six months ended February 28, 2022 was primarily due to annual bonus payments of $18.8 million, an increase in accounts receivable and unbilled revenue of $11.4 million, an increase in prepaid expenses of $3.6 million, and a decrease in deferred revenue of $5.4 million.

We used $23.1 million of cash from operating activities during the six months ended February 28, 2021, resulting from our net income, after including the impact of non-cash benefits, of $7.0 million and $30.1 million of cash used in working capital activities. Cash used in working capital activities during the six months ended February 28, 2021 was primarily due to annual bonus payments of $18.2 million and Phantom unit settlement payments of $6.9 million as result of our IPO in the prior period.

Non-cash charges in all periods include depreciation and amortization, share-based compensation expense, deferred taxes, and change in fair value of contingent earn-out liability.

Investing Activities

We had cash provided by investing activities of $190.7 million during the six months ended February 28, 2022 compared to cash used in investing activities of $289.3 million in the six months ended February 28, 2021. During the six months ended February 28, 2022, we had maturities of short-term investments of $191.9 million compared to purchases of short-term investments of $287.9 million in the six months ended February 28, 2021.

In the six months ended February 28, 2022, we spent cash of $0.6 million on purchases of property, plant and equipment, compared to $0.7 million during the six months ended February 28, 2021. Additionally, our capitalized costs for internal use software were $0.7 million during the six months ended February 28, 2022 compared to $0.8 million during the six months ended February 28, 2021.

Financing Activities

We used $4.7 million of cash in financing activities during the six months ended February 28, 2022, compared to cash used in financing activities of $1.4 million during the six months ended February 28, 2021. Cash used in financing activities during the six months ended February 28, 2022 primarily related to a $3.9 million contingent earnout liability payment, as compared to a $1.9

million contingent earnout liability payment in the prior year. During the six months ended February 28, 2021, the Company made $3.7 million in payments of deferred IPO costs and received $3.5 million in proceeds from a follow-on offering.

Other Financial Data and Key Metrics

Non-GAAP Financial Measures

We report our financial results in accordance with accounting principles generally accepted in the United States (“GAAP”); however, management believes evaluating the Company’s ongoing operating results may be enhanced if investors have additional non-GAAP financial measures. Specifically, management reviews Adjusted EBITDA, Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Income from Operations and Non-GAAP Net Income (Loss), each of which is a non-GAAP financial measure, to manage our business, make planning decisions, evaluate our performance and allocate resources and, for the reasons described below, considers them to be effective indicators, for both management and investors, of our financial performance over time.

We believe that Adjusted EBITDA, Free Cash Flow, Non-GAAP Gross Margin, Non-GAAP Income from Operations and Non-GAAP Net Income (Loss) help investors and analysts in comparing our results across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, including net income and cash flows from operating activities. For example, with respect to Adjusted EBITDA, some of these limitations include:

•

it does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

•

it does not reflect changes in, or cash requirements for, our working capital needs;

•

it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;

•

it does not reflect our income tax expense or the cash requirements to pay our taxes; and

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

These non-GAAP financial measures are not universally consistent calculations, limiting their usefulness as comparative measures. Other companies may calculate similarly titled financial measures differently than we do or may not calculate them at all. Additionally, these non-GAAP financial measures are not measurements of financial performance or liquidity under GAAP. In order to facilitate a clear understanding of our consolidated historical operating results, you should examine our non-GAAP financial measures in conjunction with our historical combined financial statements and notes thereto included elsewhere in this Quarterly Report.

The non-GAAP financial measures and principal metrics we use in managing our business are set forth below:

Adjusted EBITDA. We define Adjusted EBITDA as net loss before interest expense, net; other income (expense), net; provision for income taxes; depreciation of property and equipment; amortization of intangible assets; share-based compensation expense; and the change in fair value of contingent consideration. We believe Adjusted EBITDA provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. Adjusted EBITDA was $7.3 million and $3.0 million for the three months ended February 28, 2022 and 2021,

respectively, and $15.1 million and $6.6 million for the six months ended February 28, 2022 and 2021, respectively. A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measure, is presented below for the periods indicated.


	Three Months Ended February 28,						Six Months Ended February 28,
($ in thousands)	2022			2021			2022			2021
GAAP Net loss	$	(879	)	$	(6,364	)	$	(187	)	$	(11,015	)
Provision for income taxes		423			388			797			703
Other income (expense), net		32			(510	)		728			(463	)
Interest expense, net		35			38			153			81
Depreciation of property and equipment		660			800			1,364			1,587
Amortization of intangible assets		3,904			3,994			7,833			7,988
Share-based compensation expense		3,110			4,516			4,322			7,608
Change in fair value of contingent earnout liability		—			95			67			98
Adjusted EBITDA	$	7,285		$	2,957		$	15,077		$	6,587
Adjusted EBITDA as a percent of total revenue		10	%		5	%		10	%		5	%

Free Cash Flow. We define Free Cash Flow as net cash provided by operating activities, less purchases of property and equipment and capitalized internal-use software. We consider Free Cash Flow to be an important measure in facilitating period-to-period comparisons of liquidity. We use Free Cash Flow in conjunction with traditional GAAP measures as part of our overall assessment of liquidity. Free Cash Flow was $1.2 million and ($1.6) million for the three months ended February 28, 2022 and 2021, respectively, and ($24.3) million and ($24.5) million for the six months ended February 28, 2022 and 2021, respectively. A reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most directly comparable GAAP financial measure, is presented below for the periods indicated.


	Three Months Ended February 28,						Six Months Ended February 28,
($ in thousands)	2022			2021			2022			2021
Net cash provided by (used in) operating activities	$	1,577		$	(921	)	$	(23,026	)	$	(23,093	)
Purchases of property and equipment		(33	)		(484	)		(573	)		(672	)
Capitalized internal-use software		(321	)		(214	)		(687	)		(750	)
Free Cash Flow	$	1,223		$	(1,619	)	$	(24,286	)	$	(24,515	)

Non-GAAP Gross Margin. We define Non-GAAP Gross Margin as GAAP gross margin before the portion of share-based compensation expense; amortization of intangible assets; and amortization of capitalized internal-use software that is included in cost of revenue. We believe Non-GAAP Gross Margin provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of gross margin. Non-GAAP Gross Margin was $46.5 million and $38.1 million for the three months ended February 28, 2022 and 2021, respectively, and $90.6 million and $74.3 million for the six months ended February 28, 2022 and 2021, respectively. A reconciliation of Non-GAAP Gross Margin to gross margin, the most directly comparable GAAP financial measure, is presented below for the periods indicated.


	Three Months Ended February 28,				Six Months Ended February 28,
($ in thousands)	2022		2021		2022		2021
GAAP Gross Margin	$	44,329	$	35,110	$	86,799	$	68,986
Share-based compensation expense		483		1,280		433		1,977
Amortization of intangible assets		1,097		1,186		2,218		2,372
Amortization of capitalized internal-use software		561		498		1,122		996
Non-GAAP Gross Margin	$	46,470	$	38,074	$	90,572	$	74,331

Non-GAAP Income from Operations. We define Non-GAAP Income from Operations as GAAP loss from operations before share-based compensation expense; amortization of intangible assets; and the change in fair value of contingent consideration. We believe Non-GAAP Income from Operations provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. Non-GAAP Income from Operations was $6.6 million and $2.2 million for the three months ended February 28, 2022 and 2021, respectively, and $13.7 million and $5.0 million for the six months ended February 28, 2022 and 2021, respectively. A reconciliation of Non-GAAP Income from Operations to loss from operations, the most directly comparable GAAP financial measure, is presented below for the periods indicated.


	Three Months Ended February 28,						Six Months Ended February 28,
($ in thousands)	2022			2021			2022		2021
GAAP Income (Loss) from Operations	$	(389	)	$	(6,448	)	$	1,491	$	(10,694	)
Share-based compensation expense		3,110			4,516			4,322		7,608
Amortization of intangible assets		3,904			3,994			7,833		7,988
Change in fair value of contingent earnout liability		—			95			67		98
Non-GAAP Income from Operations	$	6,625		$	2,157		$	13,713	$	5,000

Non-GAAP Net Income (Loss). We define Non-GAAP Net Income as GAAP net loss before share-based compensation expense; amortization of intangible assets; and change in fair value of contingent earnout liability. We believe Non-GAAP Net Income provides investors and other users of our financial information consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. Non-GAAP Net Income was $5.0 million and $2.0 million for the three months ended February 28, 2022 and 2021, respectively, and $9.8 million and $4.1 million for the six months ended February 28, 2022 and 2021, respectively. A reconciliation of Non-GAAP Net Income to net loss, the most directly comparable GAAP financial measure, is presented below for the periods indicated.


	Three Months Ended February 28,												Six Months Ended February 28,
($ in thousands)	2022			Per Share			2021			Per Share			2022			Per Share			2021			Per Share
GAAP Net loss	$	(879	)	$	(0.01	)	$	(6,364	)	$	(0.05	)	$	(187	)	$	(0.00	)	$	(11,015	)	$	(0.08	)
Add: GAAP tax provision (1)		423						388						797						703
GAAP pre-tax income (loss)		(456	)					(5,976	)					610						(10,312	)
Share-based compensation expense		3,110						4,516						4,322						7,608
Amortization of intangible assets		3,904						3,994						7,833						7,988
Change in fair value of contingent earnout liability		—						95						67						98
Non-GAAP pre-tax income		6,558						2,629						12,832						5,382
Non-GAAP tax provision applied at a 24% tax rate (1)		1,574						631						3,080						1,292
Non-GAAP Net Income (1)	$	4,984		$	0.04		$	1,998		$	0.01		$	9,752		$	0.07		$	4,090		$	0.03

Shares used in computing Non-GAAP income per share amounts (2):
GAAP weighted-average shares - basic and diluted		132,103,016						130,982,116						132,057,733						130,851,680
Non-GAAP dilutive shares (using the treasury stock method)		1,619,702						2,810,693						1,619,702						2,810,693
Non-GAAP weighted-average shares - diluted		133,722,718						133,792,809						133,677,435						133,662,373

(1)

Our GAAP tax provision is primarily related to state taxes and income taxes in profitable foreign jurisdictions. We maintain a full valuation allowance against our deferred tax assets in the U.S. For purposes of determining our Non-GAAP Net Income, we have applied a tax rate of 24% which represents our estimated effective tax rate.

(2)

For all periods presented, the Company had a GAAP net loss and non-GAAP net income. As such, outstanding potential shares of common stock are only included for the calculation of Non-GAAP earnings per share since these shares would be anti-dilutive for the calculation of GAAP earnings per share.

SaaS Net Dollar Retention Rate. We calculate SaaS Net Dollar Retention Rate by annualizing the recurring subscription revenue recorded in the last month of the measurement period for those revenue-generating customers in place throughout the entire measurement period (the latest twelve-month period). We divide the result by annualized SaaS revenue from the month that is immediately prior to the beginning of the measurement period, for all revenue-generating customers in place at the beginning of the measurement period. Our SaaS Net Dollar Retention Rate was 115.5% and 120.7% as of February 28, 2022 and 2021, respectively. Our calculation excludes one existing contract for a service no longer offered on a standalone basis by the Company. We believe SaaS Net Dollar Retention Rate is an important metric for the Company because, in addition to providing a measure of retention, it indicates our ability to grow revenue within existing customer accounts. SaaS Net Dollar Retention Rate is included in a set of metrics that we calculate quarterly to review with management as well as periodically with members of our board of directors.

SaaS Annual Recurring Revenue (“SaaS ARR”). We calculate SaaS ARR by annualizing the recurring subscription revenue recognized in the last month of the measurement period (the latest twelve-month period). Our SaaS ARR was $151.4 million and $118.1 million as of February 28, 2022 and 2021, respectively. Our calculation excludes one existing contract for a service no longer offered on a standalone basis by the Company. We believe SaaS ARR provides important information about our ability to acquire new subscription SaaS customers and to maintain and expand our relationship with existing subscription SaaS customers. SaaS ARR is included in a set of metrics that we calculate quarterly to review with management as well as periodically with members of our board of directors.

Indebtedness

On October 4, 2016, we entered into a credit agreement with a group of lenders for a revolving credit facility with a maximum borrowing capacity of $30.0 million that was originally scheduled to mature on October 4, 2019. On October 2, 2019, we amended certain of the financial covenants and extended our credit agreement for two years to a maturity date of October 2, 2021. On October 22, 2021, the Company executed an amended and restated credit agreement for its revolving credit facility with a five-year term, increasing its maximum borrowing capacity from $30.0 million to $45.0 million.

Our revolving credit facility is guaranteed by the Company and certain of its domestic subsidiaries and secured by substantially all of our tangible and intangible assets. Interest accrues on our revolving credit facility at a variable rate based upon the type of borrowing made by us. Loans under our revolving credit facility bear interest at a rate of LIBOR (as administered by ICE Benchmark Administration) plus an applicable margin, or incur interest at the higher of: (i) the Prime Rate, (2) the Fed Funds Rate plus 0.5%, or (3) LIBOR plus 1.0%, plus an applicable margin. The applicable margin ranges from 1.0% to 2.0% depending on the interest rate basis and type of borrowing elected (eurocurrency rate loan, base rate loan, swing rate loan or letter of credit). In addition to interest on our revolving credit facility, we pay a commitment fee of 0.5% per annum on the unused portion of our revolving credit facility, as well as customary letter of credit fees. Repayment of any amounts borrowed are not required until maturity of our revolving credit facility, however we may repay any amounts borrowed at any time, without premium or penalty.

We incurred $0.7 million of costs directly related to obtaining our revolving credit facility which have been recorded as deferred financing fees and are amortized to legal expense on a straight-line basis over the term of our revolving credit facility. During fiscal 2017, we executed an irrevocable standby letter of credit totaling $0.8 million against our revolving credit facility in lieu of a cash security deposit for one of our office leases. Two additional irrevocable standby letters of credit were executed during fiscal 2019 for $0.2 million and $0.1 million, respectively, against our revolving credit facility in lieu of cash deposits for two of our office leases. In fiscal 2020, the $0.2 million letter of credit was reduced by $0.1 million. Apart from the letters of credit, we did not have any borrowings outstanding on our revolving credit facility as of February 28, 2022 and 2021.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements, as defined in Regulation S-K, Item 303(a)(4)(ii) promulgated by the SEC under the Securities Act, in the six months ended February 28, 2022 and 2021, respectively.

Critical Accounting Policies and Estimates

The process of preparing our financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions we believe to be reasonable under the circumstances. The most significant estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Actual amounts may differ from these estimates and judgments. A summary of our significant accounting policies is contained in Note 2 of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended August 31, 2021 filed with the SEC on October 29, 2021.

Recent Accounting Pronouncements

A summary of recent accounting pronouncements and our assessment of any expected impact of these pronouncements if known is included in Note 2 of our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks in the ordinary course of our business, including interest rate and foreign currency exchange risks.

Interest Rate Risk

As of February 28, 2022, our cash and cash equivalents balance did not include any restricted cash, and we had no outstanding indebtedness under our revolving credit facility.

To date, we have not been exposed, nor do we anticipate being exposed, to material risks due to changes in interest rates. A hypothetical 10% change in interest rates during any of the periods presented would not have had a material impact on our consolidated financial statements.

Foreign Currency Exchange Risk

Our reporting currency is the U.S. dollar, and the functional currency of each of our subsidiaries is the U.S. dollar. Gains or losses due to transactions in foreign currencies are included in “Other Income (Expense)” in our consolidated statements of operations. We have not engaged in the hedging of foreign currency transactions to date, although we may choose to do so in the future. We do not believe that a 10% increase or decrease in the relative value of the U.S. dollar to other currencies would have a material effect on operating results.

Our market risks, and the way we manage them, are summarized in Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" of our Annual Report on Form 10-K for the fiscal year ended August 31, 2021 (filed October 29, 2021). There have been no material changes to our market risks or to our management of such risks as of February 28, 2022.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of February 28, 2022, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rules 13a-15(d) and 15d-15(d) under the Exchange Act) during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of conducting our business, we have in the past and may in the future become involved in various legal actions and other claims. We may also become involved in other judicial, regulatory and arbitration proceedings concerning matters arising in connection with the conduct of our businesses. Some of these matters may involve claims of substantial amounts. These legal proceedings may be subject to many uncertainties and there can be no assurance of the outcome of any individual proceedings. Although the outcomes of legal proceedings are inherently difficult to predict, we are not currently involved in any material legal proceedings that, if determined adversely to us, would have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A. Risk Factors.

Our business involves significant risks. You should carefully consider the risks described in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended August 31, 2021. If any of these risks or uncertainties actually occur, our business, financial condition, prospects, results of operations and cash flow could be materially and adversely affected. In that case, the market price of our common stock could decline. These risks are not the only risks we face. Additional risks or uncertainties not currently known to us, or that we currently deem immaterial, may also have a material adverse effect on our business, financial condition, prospects, results of operations or cash flows, as well as the market price of our securities. We cannot assure you that any of the events discussed in the risk factors will not occur.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Not applicable.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Not applicable.

Item 6. Exhibits.


Exhibit Number		Description

10.1*		Employment Agreement, dated as of February 26, 2022 and effective as of April 4, 2022, by and between Duck Creek Technologies LLC and Kevin R. Rhodes

10.2*		Amendment to Employment Agreement, dated as of March 31, 2022, by and between Duck Creek Technologies LLC and Eugene Van Biert, Jr.

10.3*		Employment Agreement, dated as of November 6, 2016, by and between Duck Creek Technologies LLC and Eugene Van Biert, Jr.

10.4*		Employment Agreement, dated as of August 3, 2020, by and between Duck Creek Technologies LLC and Eva F. Harris (formerly Huston).

31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith.

† Compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Duck Creek Technologies, Inc.

Date: April 7, 2022	By:	/s/ Michael A. Jackowski
		Michael A. Jackowski
		Chief Executive Officer
		(principal executive officer)

Date: April 7, 2022	By:	/s/ Kevin R. Rhodes
		Kevin R. Rhodes
		Chief Financial Officer
		(principal financial officer and principal accounting officer)

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on this 26th day of February, 2022 and shall be effective as of the 4th day of April, 2022 (the “Effective Date”) by and between Duck Creek Technologies LLC (the “Company”) and Kevin Rhodes (the “Employee”).

R E C I T A L S:

The Company Group (as defined below) is engaged in the software, and the software as a service, business. In furtherance of such business, the parties hereto desire to enter into this Agreement, effective as of the Effective Date.

NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and the compensation provided for herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee agree as follows:

Effect of Prior Agreements.

Entire Agreement. This Agreement expresses the whole and entire agreement between the parties with reference to the employment of the Employee after the Effective Date and will supersede and replace, effective as of the Effective Date, any prior understandings or arrangements (whether written or oral) between the Employee and the Company or any of its Affiliates (the “Company Group”) or any of its equity holders (and their affiliates).

Definitions. Wherever used in this Agreement, including, but not limited to, the Recitals and Sections 1 and 2, the following terms shall have the meanings set forth below (unless otherwise indicated by the context), and such meanings shall be applicable to both the singular and plural form (except where otherwise expressly indicated):

“Board” means the board of directors of the Parent.

“Cause” means, during employment, the Employee’s (i) embezzlement, misappropriation of corporate funds, or other acts of material dishonesty; (ii) commission or conviction of any felony, or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any such felony or misdemeanor; (iii) any act constituting a willful or volitional act or failure to act which causes or can be expected to cause injury to the Company Group, as defined below (but not counting decisions, acts or omissions made in the ordinary course of business); (iv) material failure to comply or adhere to the Company’s policies, which have been communicated to the Employee in writing; (v) material breach during employment of the Restrictive Covenants Agreement, as defined below; or (vi) material dishonesty, gross negligence or intentional misconduct (including willfully violating any law, rule or regulation). The Employee shall not be terminated for Cause unless he is provided with written notice from the Company

setting forth the acts or omissions giving rise to such termination and, if curable and excluding items (i), (ii) and (vi), he fails to cure such events or omissions within 15 days of receipt of such notice.

“Change of Control” shall have the meaning set forth in the Parent’s 2020 Omnibus Incentive Plan.

“Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued thereunder.

“Commencement Date” means the sixty-first (61st) day following the Employee’s Termination Date.

“Disability” means the Employee’s inability, because of physical or mental illness or injury, to perform the essential functions of his customary duties to the Company, even with a reasonable accommodation, and the continuation of such disabled condition for a period of 120 continuous days, or for not less than 180 days during any continuous 24-month period.

“Good Reason” means, without Employee’s prior written consent, (i) a failure to pay, or a reduction in Employee’s Annual Base Salary, as defined below, or his Target Bonus opportunity as a percentage of his Annual Base Salary (as the term Target Bonus is defined below), other than any reduction not greater than 10% that is made pursuant to an across-the-board reduction applicable to all similarly situated executives; (ii) Company’s failure to award the equity grants specified in sections 5(e) and (f); (iii) a material diminution in Employee’s duties or responsibilities as Chief Financial Officer as were in effect immediately prior thereto; (iv) a change in the Employee’s reporting structure that results in the Employee no longer directly reporting to the Company’s Chief Executive Officer; (v) a relocation of the Employee’s primary place of business to a location that is more than 50 miles outside of Boston, Massachusetts; and (vi) a failure by any successor to the Company to assume all rights and obligations under this Agreement; provided that any such event described in clauses (i)-(vi) above shall constitute Good Reason only if the Company fails to cure such event within 30 days after the Company’s receipt from Employee of written notice of the event which constitutes Good Reason; provided, further, that Good Reason shall cease to exist for an event on the 90th day following its occurrence, unless Employee has given the Company written notice thereof prior to such date and terminates his employment (provided the event is not cured) within 60 days following the date of such notice.

“Parent” means Duck Creek Technologies, Inc.

“Person” means any individual, person, partnership, limited liability company, joint venture, corporation, company, firm, group or other entity.

“Section 409A” means Section 409A of the Code and regulations and other guidance issued thereunder.

“Separation from Service” means a “separation from service” from the Company or any of its subsidiaries or affiliates within the meaning of Section 409A.

“Termination Date” means the date the Employee’s employment is terminated, and which termination is a Separation from Service.

Titles, Duties and Reporting. During the Term (as defined in Section 4), the Employee shall be employed as the Chief Financial Officer of the Company. The Employee shall have the duties and authorities customarily associated with this position and as otherwise reasonably determined by the Company’s Chief Executive Officer. During the Term, Employee shall report directly to the Company’s Chief Executive Officer.

Term of Employment.

Term. Commencing on the Effective Date, the Employee shall be employed by the Company until the Employee or the Company terminates the Employee’s employment as provided in Section 7 (such period, the “Term”).

Compensation.

Annual Base Salary. During the Term, the Employee’s annual base salary will be $420,000 (“Annual Base Salary”); which shall be subject to annual review on each anniversary of the Effective Date for increase but not decrease. The Company agrees to use commercially reasonable efforts to ensure the Employee’s base salary and annual bonus are reported on a W-2.

Annual Bonus. For each fiscal year during the Term, the Employee will be entitled to receive a cash bonus (the “Annual Bonus”) based on achievement of performance goals established by the Board (the “Performance Goals”). The target Annual Bonus shall be 60% of Annual Base Salary (“Target Bonus”), payable at target if the target Performance Goals are achieved. Except as provided in Section 7(d) below, payment of any Annual Bonus shall be subject to the Employee’s continued employment with the Company through the time of payment. Any Annual Bonus shall be paid in the fiscal year following the end of the performance period, within a reasonable period of time following the end of such fiscal year and in all events no later than the time such bonuses for the applicable fiscal year are paid to similarly situated active employees of the Company. All funding to the bonus plan is 100% discretionary; the Board reserves the right to modify, change, or terminate the Annual Incentive Bonus Plan at any time without notice. The determination of the Company’s Board of Directors with respect to your bonus will be final and binding.

Sign-On Bonus. You will receive a one-time sign-on bonus of $153,500 (the “Sign-on Bonus”). This Sign-on Bonus will be paid in one lump sum payment in a separate check or through the Company’s normal payroll no later than thirty (30) days after your start date. The Sign-On Bonus will be subject to all required taxes and withholdings. If your employment with the Company terminates for any reason within 12 months of your start date, you agree to repay the full amount of the

Sign-on Bonus. You further agree that any repayment of the Sign-on Bonus that may become due to the Company under this Agreement may be deducted to the extent permitted by law from any amounts due you from the Company as of your termination, including wages, accrued vacation pay, incentive compensation payments, and/or bonuses, and you hereby expressly authorize any such deduction.

Benefit Plans. The Employee shall receive employee benefits no less favorable than other similarly situated employees of the Company in the United States. The Employee will also be reimbursed for reasonable business expenses in accordance with the Company’s expense reimbursement policy, which reimbursements shall be made within sixty (60) days following the Employee’s submission of a written invoice to the Company describing such expenses in reasonable detail.

Initial Grant of Restricted Stock: Within sixty (60) days following the Effective Date, the Employee shall be awarded Restricted Stock consisting of Class A Shares of common stock of the Company with a value of $2,450,000 on the date of the grant (the “Initial Grant”), which shall vest 25% on each of the first four (4) anniversaries of the date of grant subject to your continued employment through the applicable vesting date. Notwithstanding anything to the contrary provided herein, these shares shall at all times be governed by the terms of the applicable award agreement and the Duck Creek Technologies, Inc. 2020 Omnibus Incentive Plan.

Future Equity Grants. Beginning with fiscal year 2023 and each year thereafter while Employee is employed by the Company, the Company shall, in addition to and separate from the Initial Grant described in Section 5(e) of this Agreement, grant to Employee one of the following: (i) restricted shares of the Company’s common stock with a grant date fair market value of $1,250,000, (ii) restricted stock units with respect to shares of the Company’s common stock with a grant date fair market value of $1,250,000, (iii) a stock option to purchase shares of the Company’s common stock, which stock option shall have a Black Scholes value of $1,250,000 as of the date of the grant, (iv) phantom stock with respect to shares of the Company’s common stock having a grant date fair market value of $1,250,000 as of the date of the grant, or (v) another type of or combination of awards, the value of which is derived from shares of the Company’s common stock, with a grant date fair market value of $1,250,000. The form of award will be based on the Company’s existing equity incentive plan or similar plan adopted by the Company in favor of executive officers of the Company and its subsidiaries and will have vesting provisions and other material terms (e.g., change of control treatment) consistent with those applicable to similarly situated officers of the Company.

Indemnification. The Employee shall receive indemnification for third-party claims (and advancement of expenses) protection and coverage under directors’ and officers’ liability insurance policies on a basis no less favorable than the basis under which any director or officer of the Company is so indemnified and insured.

Non-Compete, Non-Solicitation, and other Covenants. On the date hereof, the Employee shall enter into the “Restrictive Covenants Agreement,” attached hereto as Exhibit A; provided that such agreement will become effective on the Effective Date; provided, however, the non-competition restrictions in Section 8(a) of the Restrictive Covenants Agreement shall become effective on the date that is ten (10) business days following the date hereof.

Termination and Other Post Termination Benefits

Termination for Cause or by the Employee without Good Reason. The Company shall have the right to terminate the Employee’s employment under this Agreement at any time for Cause upon written notice to the Employee as provided in subparagraph (f) below. The Employee shall have the right to terminate the Employee’s employment under this Agreement without Good Reason upon 30 days’ advance written notice to the Company as provided in subparagraph (f) below. In the event the employment of the Employee is terminated by the Company for Cause or by the Employee without Good Reason, the Employee shall have no right to receive compensation or other benefits under this Agreement (other than the Accrued Payments set forth in Section 7(d)) for any period after such termination. In addition, the Employee shall remain entitled to any rights under Section 5(e), the last sentence of Section 7(d) and Section 19.

Termination Other Than for Cause or by the Employee with Good Reason. If the employment of the Employee is terminated by the Company without Cause (other than due to death or Disability) or by the Employee with Good Reason, the Employee shall be entitled to the following compensation and benefits, in addition to the Accrued Payments set forth in Section 7(d):

continued payments of the Employee’s Annual Base Salary and Target Bonus, in accordance with the Company’s standard payroll practices, for a period of 12 months; provided, however, if such termination occurs on, or within one year after, a Change of Control (provided such event is also a “change of control event” as determined in accordance with Section 409A), such amount shall be paid in a lump sum on the Commencement Date; and

ii.

a pro rata bonus in respect of the fiscal year in which Employee’s Termination Date occurs (to be paid in accordance with Section 5(b) in an amount equal to the product of (A) the bonus that the Employee would have been entitled to receive based on actual achievement of the applicable Performance Goals through the Termination Date and (B) a fraction (x) the numerator of which is the number of days in such fiscal year through the Termination Date and (y) the denominator of which is the number of days during the applicable fiscal year; and

iii.

Provided that the Employee timely elects to continue coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), for the 12 calendar months immediately following the end of the calendar

month in which the Termination Date occurs, the Company shall pay a portion of the premiums so that the Employee’s cost for coverage is commensurate with active employees; provided that, if the Company determines that such payments would cause adverse tax consequences to the Company or the Employee or otherwise not be permitted under the Company health and welfare plans or under law, the Company shall instead provide the Employee with monthly cash payments during such 12-month period in an amount equal to the amount of the Company’s monthly contributions referenced above; provided, further, that such contributions shall cease to be effective as of the date that the Employee obtains health and welfare benefits from a subsequent employer (the payments set forth in clauses (i) and (ii), collectively, the “Severance Payments”).

Notwithstanding the foregoing, the Severance Payments shall be reduced by the Non-Compete Payment (as defined in the Restrictive Covenants Agreement), if applicable, to the extent permitted under applicable law and Section 18 of this Agreement; provided that any such reduction shall be applied to the earliest amount payable pursuant to this Section 7(b) with respect to which such reduction is permissible.

If the Employee breaches any of the covenants set forth in the Restrictive Covenants Agreement (as applicable and pursuant to the terms therein), the Employee shall not be entitled to receive any further compensation or benefits pursuant to this Section 7(b) from and after the date of such breach and the Employee shall be required to promptly repay any compensation the Employee received pursuant to this Section 7(b) prior to the date of such breach. Notwithstanding anything to the contrary contained herein, the Company shall have no obligation to pay the payments and provide the benefits set forth in this Section 7(b) unless, within sixty (60) days after the Termination Date, the Employee executes and delivers to the Company a release of claims in a form substantially similar to the form attached hereto as Exhibit B and the revocation period of such release expires.

Death / Disability. If the Employee’s employment is terminated due to his death or Disability, the Employee (or his estate, as applicable) shall be entitled to receive the COBRA Payment (payable as set forth in Section 7(b) of this Agreement) and the Accrued Payments set forth in Section 7(d).

Accrued Payments. In the event of a termination of employment for any reason, the Employee will receive (A) the Employee’s accrued and unpaid base salary, accrued vacation pay (in accordance with Company policy) and unreimbursed business expenses (if any) through the Termination Date, payable as soon as practicable following the Termination Date, (B) except in the event of a termination for Cause or a resignation by the Employee without Good Reason, the earned but unpaid portion, if any, of any Annual Bonus with respect to a fiscal year ending prior to the Termination Date, payable at the same time annual bonuses for such fiscal year are otherwise paid to the Company’s senior executives, and (C) all other amounts to which the Employee is entitled under any compensation plan of the

Company at the time such payments are due (items (A) through (C) collectively, the “Accrued Payments”). In addition, for all terminations, the Employee shall remain entitled to any payments or benefits provided under any outstanding equity or long-term incentive agreements, in accordance with the terms of such agreements.

No Mitigation Obligation. In receiving any payments pursuant to this Section 7, the Employee shall not be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee hereunder and such amounts shall not be reduced or terminated whether or not the Employee attains other employment.

Notice of Termination. A termination of the Employee’s employment by the Company or the Employee for any reason other than death shall be communicated by Notice of Termination to the other party hereto. For this purpose, a “Notice of Termination” means a written notice which specifies the effective date of termination consistent with this Agreement.

Severability. All agreements and covenants contained in this Agreement are severable, and in the event any of them shall be held to be invalid by any competent court, this Agreement shall be interpreted as if such invalid agreements or covenants were not contained herein.

Assignment Prohibited. This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of his, her, or its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that nothing in this Section 9 shall preclude the Employee from designating a beneficiary to receive any benefit payable under this Agreement upon the Employee’s death pursuant to Section 7(c). Notwithstanding the foregoing, the Company may assign their rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company Group (by merger or otherwise).

10.

No Attachment. Except as otherwise provided in this Agreement or required by applicable law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect.

11.

Headings. The headings of paragraphs and sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

12.

special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the Commonwealth of Massachusetts shall be applicable and shall govern to the exclusion of the law of any other forum. Any action, special proceeding or other proceeding with respect to this Agreement shall be brought exclusively in the federal or state courts situated within Suffolk County, Massachusetts, and by execution and delivery of this Agreement, the Employee and the Company irrevocably consent to the exclusive jurisdiction of those courts and the Employee hereby submits to personal jurisdiction in the Commonwealth of Massachusetts. The Employee and the Company irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. The Employee and the Company acknowledge and agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement. In any action to enforce the terms of this Agreement, the prevailing party shall be entitled to recover his or its reasonable attorneys’ fees and costs incurred in such action.

13.

Binding Effect. This Agreement shall be binding upon, and inure to the benefit of, the Employee and the Employee’s heirs, executors, administrators and legal representatives, and the Company and its permitted successors and assigns. If the Employee should die while any payment, benefit or entitlement is due to the Employee hereunder, such payment, benefit or entitlement shall be paid or provided to the Employee’s designated beneficiary(ies) (or if there is no designated beneficiary, to his estate.

14.

Counterparts. This Agreement may be executed by electronic means in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

15.

Notices. All notices, requests, demands and other communications to any party under this Agreement shall be in writing (including telefacsimile transmission, email transmission (in PDF format) or similar writing) and shall be given to such party at his, her, or its address or telefacsimile number set forth below or at such other address or telefacsimile number as such party may hereafter specify for the purpose of giving notice to the other party:

(a) If to the Employee:

to the Employee’s home address reflected in the Company’s books and records, and if to the Employee’s legal representative, to such Person at the address of which the Company is notified in accordance with this Section 15.

(b) If to the Company:

Duck Creek Technologies LLC
22 Boston Wharf Road, 10th Floor
Boston, MA 02210
Attention: Michael Jackowski, Chief Executive Officer

Each such notice, request, demand or other communication shall be effective (i) if given by mail, 72 hours after such communication is deposited in the mail with first class postage prepaid, addressed as aforesaid or (ii) if given by any other means, when delivered at the address specified in this Section 15. Delivery of any notice, request, demand or other communication by telefacsimile or email shall be effective when received if received during normal business hours on a business day. If received after normal business hours, the notice, request, demand or other communication will be effective at 10:00 a.m. on the next business day.

16.

Modification of Agreement. No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith. No evidence of any waiver or modification shall be offered or received in evidence at any proceeding, arbitration, or litigation between the parties hereto arising out of or affecting this Agreement, or the rights or obligations of the parties hereunder, unless such waiver or modification is in writing, duly executed as aforesaid. The parties further agree that the provisions of this Section 16 may not be waived except as herein set forth.

17.

Taxes. To the extent required by applicable law, the Company shall deduct and withhold all necessary federal, state, local and employment taxes and any other similar sums required by law to be withheld from any payments made pursuant to the terms of this Agreement.

18.

Compliance with Section 409A. It is the Company’s intent that payments and benefits under this Agreement comply with Section 409A, to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, the Employee shall not be considered to have terminated employment with the Company or any subsidiary or affiliate thereof for purposes of this Agreement unless the Employee would be considered to have incurred a Separation from Service from the Company or any of its subsidiaries or affiliates. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in this Agreement that are due within the “short-term deferral period” as defined in Section 409A or any other exemption under Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. To the extent that any reimbursements or in-kind benefits due to the Employee under this Agreement constitute “deferred compensation” under Section 409A, any such reimbursements and in-kind benefits shall be paid to Employee in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section

409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Employee’s Separation from Service shall instead be paid on the first business day after the date that is six months following the Employee’s Separation from Service (or death, if earlier). This Agreement may be amended in any respect deemed by the Company in good faith to be necessary in order to preserve compliance with Section 409A without imposing any additional interest, taxes or penalties on the Employee.

19.

Section 280G. Notwithstanding anything in this Agreement or otherwise to the contrary, in the event that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company or any member of the Company Group, or any entity that effectuates a change of control (or any of its affiliates) to or for the benefit of the Employee (whether pursuant to the terms of this Agreement or any other plan, equity-based award, arrangement, agreement or otherwise) (all such payments, awards, benefits and/or distributions being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then Employee will receive either (a) the full amount of the Total Payment, or (b) the amount of benefits provided as to such lesser extent that would result in no portion of the Total Payments being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state, local, employment and other taxes and Excise Tax (including, without limitation, any interest or penalties on such taxes), results in Employee’s receipt, on an after-tax basis, of the greatest amount of payments and benefits provided for under this Agreement or otherwise. Notwithstanding the foregoing, to the extent the Company decides it is in the best interest to seek approval by the Company’s stockholders as a method for cleansing such potential parachute payments, Employee agrees if requested, to submit such payments to a stockholder vote, with the vote determining Employee’s right to keep or receive such excess amounts, as required by Treas. Reg. 1.280G-1 Q&A 7(2)(b). Any determinations that are made pursuant to this Section 19 shall be made by a nationally recognized certified public accounting firm that shall be selected by the Company (and paid by the Company) prior to any transaction that is subject to Section 280G of the Code (the “Accountant”), which determination shall be certified by the Accountant and set forth in a certificate delivered to the Employee setting forth in reasonable detail the basis of the Accountant’s determinations.

20.

Recitals. The recitals to this Agreement shall form a part of this Agreement.

(The remainder of this page was intentionally left blank)

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

Duck Creek Technologies, LLC

By: /s/ Michael A. Jackowski

Name: Michael A. Jackowski
Title: Chief Executive Officer

EMPLOYEE

/s/ Kevin Rhodes

Name: Kevin Rhodes

Exhibit A

RESTRICTIVE COVENANTS AGREEMENT

In consideration of (a) my employment by Duck Creek Technologies LLC and/or any of its subsidiaries (the “Company” and, together with Duck Creek Technologies, Inc. (the “Parent”) and all of its affiliates (other than any investors or equity holders in the Parent) collectively, the “Company Entities”) pursuant to that certain Employment Agreement by and between Duck Creek Technologies LLC and me, dated February 26, 2022, and effective as of April 4, 2022 (the “Employment Agreement”), (b) receipt of my restricted stock equity compensation award issued pursuant to the Parent’s 2020 Omnibus Incentive Plan (the “RSA Award”), (c) the provision by the Company Entities of trade secrets and confidential information to me, (d) the Company Entities’ introduction to me of their clients and customers, and other good and valuable consideration, the receipt and sufficiency of which I acknowledge, I agree to the terms and conditions of this Restrictive Covenants Agreement(this “Agreement”) as set forth below. Any term not defined herein shall have the meaning set forth in the Employment Agreement.

Proprietary Information. I agree that all information, whether or not in writing, concerning the Company Entities’ business, technology, business relationships, employee and consultant relationships or financial affairs that the Company Entities have not released to the general public (or is otherwise not known within the relevant trade or industry) and which I received during employment with the Company (“Proprietary Information”) is and will be the exclusive property of the Company Entities. By way of illustration, Proprietary Information may include information or material which has not been made generally available to the public (or otherwise known within the trade or relevant industry), such as: (a) corporate information, including plans, strategies, methods, policies, resolutions, negotiations or litigation; (b) marketing information, including strategies, methods, customer identities or other information about customers, prospect identities or other information about prospects, or market analyses or projections, customer lists, prospective customer lists and any customer and/or prospective customer list database; (c) financial information, including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; and (d) operational and technological information, including plans, specifications, manuals, forms, templates, software, designs, methods, procedures, formulas, discoveries, inventions, improvements, concepts and ideas; and (e) personnel information, including personnel lists, reporting or organizational structure, resumes, personnel data, compensation structure, performance evaluations and termination arrangements or documents. Proprietary Information also includes information received in confidence by the Company Entities from their respective customers or suppliers or other third parties.

Recognition of Company’s Rights. I will not, at any time, without the Company’s prior written permission, either during or after my employment, disclose any Proprietary Information to anyone outside of the Company Entities other than in connection with the performance of my duties as an employee of the Company or any Company Entity, or use any Proprietary Information for any purpose other than the performance of my duties as an employee of the Company or any Company Entity. I will cooperate with the Company Entities and use my reasonable best efforts to prevent the unauthorized disclosure of all Proprietary Information. I will deliver to the Company

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all copies of Proprietary Information in my possession or control upon the earlier of a request by the Company or termination of my employment, except to the extent I am permitted to retain such information pursuant to Section 19 of this Agreement. Notwithstanding anything to the contrary in this Agreement or otherwise, I shall be permitted to disclose Proprietary information (i) to the extent necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (ii) as required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over me; provided in such event, to the extent legally permitted, I give the Company reasonable notice of such requirement and an opportunity to oppose such request (and I will reasonably cooperate with the Company in such opposition).

Rights of Others. I understand that the Company Entities are now and may hereafter be subject to nondisclosure or confidentiality agreements with third parties which require the Company Entities to protect or refrain from use of such third persons’ proprietary information. I agree to be bound by the non-disclosure or confidentiality terms of such agreements in the event I have access to such proprietary information and have knowledge of such agreements.

Commitment to Company Entities; Avoidance of Conflict of Interest. While an employee of the Company, I will devote my full business time and efforts to the business of the Company Entities and I will not engage in any other business activity that conflicts with my duties to the Company Entities. It is agreed that Employee remain on the Board of Trustees of Merrimack College. I will advise the General Counsel of the Company or his or her nominee at such time as any activity of either the Company Entities or another business presents me with a conflict of interest or the appearance of a conflict of interest as an employee of the Company. I will take whatever action is reasonably requested of me by the Company to resolve any conflict or appearance of conflict which it finds to exist. Notwithstanding the foregoing, during employment (and thereafter) I can manage my personal and family investments, engage in charitable and/or educational activities, including service on boards of directors of charitable and/or educational organizations, serve on industry advisory committees and/or boards and, to the extent approved by the board of directors of Parent, serve as a member of the board of directors or managers of any for-profit entity; provided that such activities do not interfere with my duties and responsibilities to the Company Entities.

Developments. I will make full and prompt disclosure to the Company of all Developments during the period of my employment that: (a) relate to the business of any Company Entity or any customer of or supplier to any Company Entity or any of the products or services being researched, developed, manufactured or sold by any Company Entity or which may be used with such products or services; or (b) result from tasks assigned to me by a Company Entity; or (c) result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company Entity (collectively, “Company-Related Developments”). I acknowledge that all copyrightable Company-Related Developments are created by me on a “work for hire” basis. To the extent any such copyrightable work is deemed by a court not be a “work for hire” and with respect to all other Intellectual Property Rights in any Company-Related Developments, I hereby do assign and transfer and, to the extent any such assignment cannot be made at present, will assign and transfer, to the Company Entities and their successors and assigns all my right, title and interest

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in all such Company-Related Developments. “Developments” means inventions, discoveries, designs, developments, methods, modifications, improvements, processes, algorithms, databases, computer programs, formulae, techniques, trade secrets, graphics or images, and audio or visual works and other works of authorship, whether or not patentable or copyrightable that are created, made, conceived or reduced to practice by me (alone or jointly with others) or under my direction. “Intellectual Property Rights” means all patents, patent applications, trademarks and trademark applications, copyrights and copyright applications, trade secrets and other intellectual property rights in all countries and territories worldwide and under any international conventions.

To preclude any possible uncertainty, I have set forth on Appendix A attached hereto a complete list of Developments that I have, alone or jointly with others, conceived, developed or reduced to practice prior to the commencement of my employment with the Company that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (“Prior Inventions”). If disclosure of any such Prior Invention would cause me to violate any prior confidentiality agreement, I understand that I am not to list such Prior Inventions in Appendix A but am only to disclose a cursory name for each such invention, a listing of the party(ies) to whom it belongs and the fact that full disclosure as to such inventions has not been made for that reason. I have also listed on Appendix A all patents and patent applications in which I am named as an inventor, other than those which have been assigned to the Company (“Other Patent Rights”). If no such disclosure is attached, I represent that there are no Prior Inventions or Other Patent Rights. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company’s product, process or machine or other work done for the Company Entities, I hereby grant to the Company a nonexclusive, royalty-free, paid-up, irrevocable, worldwide license (with the full right to sublicense) to make, have made, modify, use, sell, offer for sale and import such Prior Invention. Notwithstanding the foregoing, I will not incorporate, or permit to be incorporated, Prior Inventions in any Company-Related Development without the Company’s prior written consent.

This Agreement does not obligate me to assign to the Company any Development which is developed entirely on my own time and does not relate to the business efforts or research and development efforts in which the Company actually is engaged or is planning to be engaged or was engaged anytime while I was employed by the Company Entities, and does not result from the use of premises or equipment owned or leased by the Company Entities. However, I will also promptly disclose to the Company any such Developments for the purpose of determining whether they qualify for such exclusion. I understand that to the extent this Agreement is required to be construed in accordance with the laws of any state which precludes a requirement in an employee agreement to assign certain classes of inventions made by an employee, this Section 5 will be interpreted not to apply to any invention which a court rules and/or the Company agrees falls within such classes. I also hereby waive all claims to any moral rights or other special rights which I may have or accrue in any Company-Related Developments.

Documents and Other Materials. I will keep and maintain adequate and current records of Company-Related Developments developed by me during my employment, which records will be available to and remain the sole property of the Company at all times.

All files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models,

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prototypes, or other written, photographic or other tangible material containing Proprietary Information, whether created by me or others, which come into my custody or possession, are the exclusive property of the Company to be used by me only in the performance of my duties for the Company Entities. Any property situated on Company Entities’ premises and owned by any Company Entity, including, without limitation, computers, disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company at any time with or without notice. In the event of the termination of my employment for any reason, I will deliver to the Company all files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, and other materials of any nature pertaining to the Proprietary Information of the Company Entities or to my work for the Company Entities, and will not take or keep in my possession any of the foregoing or any copies. Notwithstanding anything to the contrary in this Agreement or otherwise, I may retain the information set forth in Section 19 below.

Enforcement of Intellectual Property Rights. I will cooperate with the Company at its sole expense, both during and after my employment with the Company, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights in Company-Related Developments. At the Company’s sole expense, I will sign, both during and after the term of this Agreement, all papers, including, without limitation, copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company reasonably deems necessary or desirable in order to protect its rights and interests in any Company-Related Development. If the Company is unable, after reasonable effort, to secure my signature on any such papers, I hereby irrevocably designate and appoint each officer of the Company as my agent and attorney-in-fact to execute any such papers on my behalf, and to take such actions as the Company reasonably deems necessary or desirable in order to protect its rights and interests in any Company- Related Development.

10.

Non-Competition and Non-Solicitation. In order to protect the Company Entities’ Proprietary Information and good will:

(a) while I am employed by the Company or any of the other Company Entities and, unless the Company elects not to enforce the non-competition restriction set forth in this Section 8(a), by providing written notice to me, no later than the Termination Date, for a period of twelve (12) months following the Termination Date resulting from either (i) my resignation from employment with the Company Entities for any reason or (ii) the Company Entities’ termination of my employment with the Company Entities due to Non-Compete Cause (as defined below) (such post-employment restricted period the “Non-Compete Restricted Period”), I will not, directly or indirectly, render advice or perform the same or similar services in the Restricted Area (as defined below) for any Competitor (as defined below) as those I performed for the Company Entities at any time during the 24-month period prior to the Termination Date; provided, however, that notwithstanding the foregoing, the Non-Compete Restricted Period shall automatically be extended to two (2) years following the Termination Date as set forth in clauses (i) and (ii) above in the event that I breach a fiduciary duty to the Company Entities or unlawfully take, physically or electronically, any property belonging to the Company Entities; and

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(b) while I am employed by the Company or any of the Company Entities and for a period of twelve (12) months following the Termination Date resulting for any reason or no reason (the “Non-Solicitation Restricted Period”), I will not, directly or indirectly, on behalf of a Competitor and for purposes of providing products or services competitive with the Business (as defined below) or to encourage the termination or diminishment of such Person’s business relationship with the Company Entities: (i) call upon, solicit, contact, or transact business (or attempt to do any of the foregoing) for any Customer (as defined below) or Potential Customer (as defined below) of the Company Entities that I called upon, solicited, contacted, or serviced for the Company Entities during my employment or, on or following the Termination Date, during the 24-month period prior to the Termination Date; (ii) call upon, solicit, contact, or transact business (or attempt to do any of the foregoing) for any Customer or Potential Customer; (iii) call upon, solicit, or contact or transact business with any vendor or supplier of the Company Entities who during my employment is a vendor or supplier of any of the Company Entities, or on or following the Termination Date, was a vendor or supplier of the Company Entities during the 24-month period prior to the Termination Date or about whom I had knowledge; or (iv) otherwise divert or take away (or attempt to do any of the foregoing) any business of the Company Entities to a Competitor of the Company Entities.

Notwithstanding the foregoing, nothing in this Section 8 shall be violated by actions taken in the good faith performance of my duties to the Company Entities.

I recognize and agree that as part of my job duties and responsibilities, I will be providing services for or on behalf of the Company Entities that are co-extensive with the entire geographic scope of the Company Entities’ business, and that because of the global nature and scope of these executive duties and responsibilities and because of the global nature and scope of the Company Entities’ business and their focus on the Business, my performance of my duties and responsibilities is not tied to any specifically designated territory or geographic region.

Accordingly, the “Restricted Area” shall mean shall mean any country in which I provided services or had a material presence or influence for or on behalf of the Company Entities during the 24-month period prior to the Termination Date.

I acknowledge and agree that the RSA Award represents fair and reasonable consideration for the non-competition restriction in Section 8(a), including, if applicable, during the Non-Compete Restricted Period. Unless the Company elects, pursuant to Section 8(a), not to enforce the non-competition restriction set forth in Section 8(a) during the Non-Compete Restricted Period, the Company shall pay me, upon the commencement of the Non-Compete Restricted Period through the expiration of the Non-Compete Restricted Period, an amount equal to 50% of my highest annualized base compensation within the two (2) year period immediately preceding the Termination Date (such amount, the “Non-Compete Payment”) in equal installments in accordance with the Company’s customary payroll practices as in effect on the Termination Date and commencing on the Company’s first payroll date following the Termination Date; provided, however, that the Company shall have no obligation to pay, and I shall not be entitled to receive, such Non-Compete Payment during any extension of the Non-Compete Restricted Period as a result of my breach of a fiduciary duty to the Company Entities or unlawful taking of, either physically or electronically, any property belonging to the Company Entities. In the event that I breach any of my obligations under Section 8(a), including my breach of a fiduciary duty to the

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Company Entities or unlawful taking of, either physically or electronically, property of the Company Entities, the Company’s obligations to provide the Non-Compete Payment shall thereupon immediately cease, and the Company shall be entitled, in addition to any remedies available in equity and at law, including, without limitation, injunctions and monetary damages, to recover from me any and all amounts of the Non-Compete Payment previously paid to me.

Any Severance Payments payable to me pursuant to my Employment Agreement shall be reduced by the Non-Compete Payment, if applicable, to the extent permitted under applicable law in accordance with Section 4(b) of my Employment Agreement.

“Business” means the business of selling policy, billing and/or claims software to property and casualty insurance companies.

“Competitor” shall mean any Person that engages in the Business but shall not include any division, subsidiary or affiliate of a Person engaged in the Business (and such entity or division, as applicable, which engages in the Business represents no more than 10% of such entity’s (or, in case of an affiliate, the entire controlled group’s) annual revenues) if such division, subsidiary or affiliate does not itself engage in the Business; provided, however, that I shall not render advice or provide services on business matters with any individual employed by any such division, subsidiary or affiliate engaged in the Business.

“Customer” shall mean during my employment any Person who purchased or contracted to purchase any products or services offered by the Company in the Company Entities’ Business and, on or following my Termination Date, any Person which, at any point during the twelve (12) month period of time preceding termination of my employment with the Company for any reason, purchased or contracted to purchase any products or services offered by the Company in the Company Entities’ Business.

“Non-Compete Cause” shall mean cause as defined under Massachusetts law, as applicable to the Massachusetts Noncompetition Agreement Act, MGLc.149, §24L, including, without limitation, Cause as defined in my Employment Agreement.

“Potential Customer” shall mean during my employment any Person who is identified on a list by any Company Entity as a potential client or customer for the Business and on or following my Termination Date, any Person which, at any point during the twelve (12) month period of time preceding termination of my employment with the Company for any reason, was identified on a list as a potential client or customer of the Business.

In addition to the above provisions of this Section 8, during the Non-Solicitation Restricted Period, I agree that, other than in the ordinary course of performing my duties for any Company Entity, I will not, directly or indirectly or by action in concert with others, (A) encourage or influence (or seek to encourage or influence) any Person who is an employee, director, or independent contractor of the Company Entities, or on or following the termination of my employment, was an employee, director or independent contractor during the last year of my employment with the Company, to terminate employment or engagement with the Company Entities; or (B) solicit or hire any Person who is or was engaged as an employee, director or independent contractor by the Company Entities during the last year of my employment with the Company. To the extent permitted by applicable

A-6

law, in the event of a proven breach of this Section 8 by me, the Non-Compete Restricted Period and the Non-Solicitation Restricted Period set forth herein shall be extended automatically by the period of such breach. All of the foregoing provisions of this Section 8 notwithstanding, I may own not more than five percent (5%) of the issued and outstanding shares of any class of securities of an issuer whose securities are listed on a national securities exchange or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended, as long as such investment is a passive investment and I have no control over the business.

Notwithstanding anything herein to the contrary, the foregoing restrictions shall not apply with regard to (i) general solicitations that are not specifically directed to employees, agents or independent contractors of any Company Entity or (ii) actions taken in the good faith performance of my duties for and/or for the benefit of the Company Entities. For the avoidance of doubt, the foregoing restrictions shall not apply with regard to solicitations or hirings by any of my future employers without my direct or indirect involvement; provided, however, that I have not directed or caused any such employer to solicit or hire any such employee, agent or independent contractor.

11.

Government Contracts. I acknowledge that the Company Entities may have from time to time agreements with other Persons or with the United States Government or its agencies which impose obligations or restrictions on the Company Entities regarding inventions made during the course of work under such agreements or regarding the confidential nature of such work. I agree to comply with any such obligations or restrictions upon the direction of the Company Entities. In addition to the rights assigned under Section 5, I also assign to the Company (or any of its nominees) all rights which I have or acquire in any Developments, full title to which is required to be in the United States under any contract between the Company Entities and the United States or any of its agencies.

12.

Permitted Disclosures.

(a) Pursuant to 18 U.S.C. § 1833(b), I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to my attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If I file a lawsuit for retaliation by the Company for reporting a suspected violation of law, I may disclose the trade secret to my attorney and use the trade secret information in the court proceeding, if I (i) file any document containing the trade secret under seal, and (ii) do not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.

(b) Nothing in this Agreement or any other agreement by and between the Company Entities and me shall prohibit or restrict me from (i) voluntarily communicating with any government agency, including the Securities and Exchange Commission (“SEC”), or any self-regulatory organization regarding possible violations of law, in each case without advance notice to the Company Entities, (ii) recovering a SEC whistleblower award as provided under Section 21F of the Securities Exchange Act of 1934, or (iii) disclosing any Proprietary Information to a court or other administrative or legislative body in response to a subpoena; provided that I first promptly notify

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and provide the Company Entities with the opportunity to seek, and join in its efforts at the sole expense of the Company Entities, to challenge the subpoena or obtain a protective order limiting its disclosure, or other appropriate remedy.

13.

Cooperation. During my employment with the Company and at all times thereafter, at the request of the Company, upon reasonable notice and at reasonable times (taking into account my other personal and business commitments), I shall cooperate fully with the Company Entities in any (a) litigation, administrative proceeding or inquiry that involves the Company Entities or their then-current or former officers, directors, employees or agents; and/or (b) investigation or inquiry conducted by or on behalf of the Company Entities or any governmental or regulatory authority, in each case, with respect to any matter about which I have knowledge or information or in which I was involved. The Company shall reimburse me for reasonable out-of-pocket expenses incurred by me under this Section 11 (provided that I provide the Company with reasonable documentation of such expenses).

14.

Nondisparagement. Following termination of my employment and at all times thereafter, I will not make or publish, or cause to be made or published, any statement or information that disparages or defames any of the Company Entities or any of their respective partners, officers, directors, shareholders, or employees. The Company agrees not to intentionally make or publish, or cause to be made or published, any official statement or formal announcement that disparages or defames me. Notwithstanding the foregoing, nothing in this Section 12 shall prevent the parties from making any truthful statement (a) necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (b) required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over the party.

15.

Prior Agreements. I hereby represent that, except as I have fully disclosed previously in writing to the Company, I am not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of my employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. I further represent that my performance of all the terms of this Agreement as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me in confidence or in trust prior to my employment with the Company. I will not disclose to the Company Entities or induce the Company Entities to use any confidential or proprietary information or material belonging to any previous employer or others.

16.

Remedies Upon Breach. I understand that the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company Entities and I consider them to be reasonable for such purpose. Any breach of this Agreement is likely to cause the Company Entities substantial and irrevocable damage and therefore, in the event of such breach, the Company Entities, in addition to such other remedies which may be available, will be entitled to specific performance and other injunctive relief, without the posting of a bond. If I violate this Agreement, as determined by a final judgment of a court of competent jurisdiction, in addition to all other remedies available to the Company Entities at law, in equity, and under contract, I agree

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that I am obligated to pay the Company Entities’ reasonable costs of enforcement of this Agreement, including attorneys’ fees and expenses.

17.

Use of Voice, Image and Likeness. During my employment and for a reasonable period thereafter, I give the Company permission to use any and all of my voice, image and likeness, with or without using my name, in connection with the products and/or services of the Company Entities, for the purposes of advertising and promoting such products and/or services and/or the Company Entities, and/or for other purposes deemed appropriate by the Company in its reasonable discretion, except to the extent expressly prohibited by law.

18.

Publications and Public Statements. Other than in the ordinary course of the Company’s business, I will obtain the Company’s written approval before publishing or submitting for publication outside the Company any material that relates to my work at the Company and/or incorporates any Proprietary Information.

19.

No Employment Obligating. I understand that this Agreement does not create an obligation on the Company or any other Person to continue my employment. I acknowledge that, unless otherwise provided in my Employment Agreement with the Company, my employment with the Company is at will and therefore may be terminated by the Company or me at any time and for any reason, with or without cause.

20.

Survival and Assignment by the Company. I understand that my obligations under this Agreement will continue in accordance with its express terms regardless of any changes in my title, position, duties, salary, compensation or benefits or other terms and conditions of employment. I further understand that my obligations under this Agreement will continue following the termination of my employment regardless of the manner of such termination. The Company will have the right to assign this Agreement to its successors and assigns.

21.

Exit Interview: Return of Company Property. If and when I depart from the Company, I may be required to attend an exit interview and sign an “Employee Exit Acknowledgement” to reaffirm my acceptance and acknowledgement of the obligations set forth in this Agreement. For eighteen (18) months following termination of my employment, I will notify the Company of any change in my address and of each subsequent employment or business activity, including the name and address of my employer and the nature of my activities, reasonably related to the Business; provided that the failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities. On my last day of employment with the Company or upon an earlier request by the Company, to the extent practicable, or as soon as reasonably practicable following my last day of employment with the Company, I shall promptly return to the Company any and all documents and other physical or tangible things regardless of whether in paper or electronic form, in my possession, custody or control, that are the property of any of the Company Entities, and any and all documents or other tangible things in my possession, custody or control that disclose or embody any technical or other information that is confidential or proprietary to the Company Entities or any third party that has disclosed such information to any of the Company Entities subject to an obligation of confidentiality. I agree to return and not destroy, alter, erase or otherwise change any software, data or other information belonging to any of the Company Entities. Notwithstanding the foregoing and for the avoidance of doubt, I am entitled to maintain,

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and the Company Entities acknowledge my right in respect of, individual personnel documents, such as my payroll and tax records and any documents or information relating to my compensation and/or equity interests in any Company Entity.

22.

Disclosure to Future Employers. I agree that prior to accepting employment or engagement with any other Person during my employment with the Company, and for eighteen (18) months after my last day of employment with the Company, I shall inform such prospective employer or prospective counterparty of the existence and details of this Agreement and provide such prospective employer or prospective counterparty with a copy of this Agreement, and, in addition, I agree that promptly following the commencement of employment or engagement with such Person during such period, I shall provide the Company with written notice, including (a) the name of the employer or counterparty; (b) the business engaged in or to be engaged in by the employer or counterparty; (c) my position with the employer or counterparty; (d) the location of my employment or engagement; and (e) the territory in which I have job duties or responsibilities; provided, however, that the foregoing shall apply if and only to the extent that any covenant or commitment set forth in this Agreement would be relevant with respect to such Person; and; provided further, that my failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities.

23.

Additional Acknowledgements. I acknowledge that I have been advised to consult with an attorney of my choosing prior to signing this Agreement, including the non-competition covenant set forth in Section 8(a). I further acknowledge that the non-competition covenant set forth in Section 8(a) of this Agreement shall not become effective for ten (10) business days following the date on which it was provided to me.

24.

Severability; Blue Penciling. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

25.

Interpretation. This Agreement will be deemed to be made and entered into in the Commonwealth of Massachusetts, and will in all respects be interpreted, enforced and governed under the laws of the Commonwealth of Massachusetts without regard to conflicts-of-law principles. I hereby agree to consent to personal jurisdiction of the state and federal courts situated within Suffolk County, Massachusetts for purposes of enforcing this Agreement, and waive any objection that I might have to personal jurisdiction or venue in those courts.

IN WITNESS WHEREOF, I and the Company have duly executed this Agreement as of the date below.

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Signed:

Name: Kevin Rhodes

Date: /s/ Kevin Rhodes 2/26/22

A-11

Acknowledged and Confirmed

Duck Creek Technologies LLC

By: /s/ Michael A. Jackowski
Name:
Title:

Duck Creek Technologies, Inc.

By:
Name:
Title:

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APPENDIX A

To: Duck Creek Technologies LLC

From: Kevin Rhodes

Date: 2/26/2022

SUBJECT: Prior Inventions

The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company and Accenture that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

☒ No inventions or improvements

☐ See below:

☐ Additional sheets attached

The following is a list of all patents and patent applications in which I have been named as an inventor

☒ None

☐ See below:

Appendix A-1

Exhibit B

RELEASE OF CLAIMS

As a condition precedent to Kevin Rhodes (“Employee”) receiving payments as provided for in Section 7(b) of that certain Employment Agreement by and between Duck Creek Technologies LLC (the “Company”) and Employee, dated START DATE (the “Employment Agreement”), Employee hereby agrees to the terms of this Release of Claims (this “Release”) as follows:

Release.

Employee, on behalf of Employee and Employee’s heirs, executors, administrators, successors and/or assigns, hereby voluntarily, unconditionally, irrevocably and absolutely releases and discharges the Company, its parent, and each of their subsidiaries, affiliates and partnerships, and all of their past and present employees, officers, directors, agents, owners, shareholders, representatives, members and attorneys, and all of their successors and assigns (collectively, the “Released Parties”), from all claims, charges, demands, causes of action, and liabilities, known or unknown, suspected or unsuspected of any nature whatsoever (hereinafter, “Claims”) that Employee has or may have against the Released Parties (i) from the beginning of time through the date upon which Employee signs this Release, including any Claims for an alleged violation of any or all federal, state and local laws or regulations, including, but not limited to, the following, each as may be amended and as may be applicable: Title VII of the Civil Rights Act; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Rehabilitation Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act; the Worker Adjustment and Retraining Notification Act; the Fair Credit Reporting Act; the Equal Pay Act; the Employee Retirement Income Security Act; the National Labor Relations Act; Uniformed Services Employment and Reemployment Rights Act; the Equal Pay Act; the False Claims Act; Sections 1981 through 1988 of Title 42 of the United States Code; the Occupational Safety and Health Act; the Fair Labor Standards Act; Massachusetts Wage Act; the Massachusetts Fair Employment Practices Act; Claims for negligent or intentional infliction of emotional distress, breach of contract, fraud or any other unlawful behavior, and/or punitive damages, liquidated damages, penalties, attorneys’ fees, costs and/or expenses or (ii) arising under any agreement between Employee and any Released Party; provided, however, that this Release does not bar any Claims (A) with respect to Employee’s rights under Sections 5(e), 7(b), 7(d), 18 or 19 of the Employment Agreement, (B) that may not be waived by private agreement under applicable law, such as claims for workers’ compensation or unemployment insurance benefits, (C) with respect to indemnification, advancement of expenses and/or coverage under any director and officer insurance policy, including pursuant to any written agreement or corporate governance document or limited partnership of any Released Party, or (D) with respect to all rights under the Company’s 401(k) plan. Nothing in this Release prohibits or restricts Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment; provided that Employee hereby waives the right to recover any monetary damages or other relief against any Released Parties with respect to Claims released by Employee herein.

B-1

21.

Consultation/Voluntary Agreement. Employee acknowledges that the Company has advised Employee of Employee’s right to consult with an attorney prior to executing this Release. Employee has carefully read and fully understands all of the provisions of this Release. Employee is entering into this Release, knowingly, freely and voluntarily in exchange for good and valuable consideration to which Employee would not be entitled in the absence of executing and not revoking this Release.

22.

Review and Revocation Period.

Employee has been given at least twenty-one (21) calendar days (including the time period permitted under Section 7(b) of the Employment Agreement) to consider the terms of this Release, although Employee may sign it sooner.

Employee will have seven (7) calendar days from the date on which such Employee signs this Release to revoke Employee’s consent to the terms of this Release. Such revocation must be in writing and must be e-mailed to [lori.b.hannay@duckcreek.com]. Notice of such revocation must be received within the seven (7) calendar days referenced above.

In the event of such revocation by Employee, this Release shall be null and void in its entirety and Employee shall not have any rights to the payments set forth above. Provided that Employee does not revoke this Release within the time period set forth above, this Release shall become effective on the eighth (8th) calendar day after the date upon which Employee signs it.

23.

Savings Clause. If any term or provision of this Release is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Release or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision of this Release is invalid, illegal or unenforceable, this Release shall be enforceable as closely as possible to its original intent, which is to provide the Released Parties with a full release of all legally releasable claims through the date upon which Employee signs this Release.

24.

Third-Party Beneficiaries. Employee acknowledges and agrees that all Released Parties are third-party beneficiaries of this Release and have the right to enforce this Release.

25.

Governing Law. This Release shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts without regard to the application of any choice-of-law rules that would result in the application of another state’s laws.

B-2

IN WITNESS WHEREOF, Employee has executed this Release, as of the below-indicated date, which may be signed and delivered by facsimile or .pdf.

EMPLOYEE

Date Executed:

B-3

Exhibit 10.2

AMENDMENT TO

EMPLOYMENT AGREEMENT

THIS AMENDMENT (this “Amendment”) is made and entered into as of March 31, 2022, by and between Duck Creek Technologies LLC, a subsidiary of the Duck Creek Technologies, Inc. (together, the “Company”), and Eugene Van Biert, Jr. (the “Executive”).

WHEREAS, the Company and the Executive previously entered into an Employment Agreement, dated November 6, 2016 (the “Employment Agreement”);

WHEREAS, the Company’s Board of Directors has appointed the Executive to serve as the Company’s Chief Operating Officer, effective as of March 3, 2022 (the “Appointment Date”);

WHEREAS, the Company and the Executive desire to amend the Employment Agreement as set forth in this Amendment in connection with the Appointment, effective as of the Appointment Date.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, together with other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Effective as of the Appointment Date, the Executive shall cease serving in the role of the Company’s Chief Revenue Officer and shall instead serve as the Company’s Chief Operating Officer.

Effective as of the Appointment Date, the Executive’s Annual Base Salary shall be $420,000.

Section 5(b) of the Employment Agreement is deleted as of the Appointment Date and replaced with the following:

Annual Bonus.

(i) For the period of employment with the Company beginning on September 1, 2021 and ending on March 2, 2022, the Executive will be entitled to receive a cash bonus equal to (A) 100% of the Executive’s Annual Base Salary (as in effect immediately prior to the Appointment Date) based on the achievement of the applicable performance goals established by the Board (the “Performance Goals”), with an opportunity to earn up to 150% of Annual Base Salary for exceeding the applicable the target Performance Goals, multiplied by (B) a fraction, the numerator of which is 183 (i.e., the number of days from September 1, 2021 to March 2, 2022) and the denominator of which is 365.

(ii) For the period of employment with the Company beginning on March 3, 2022 and ending on August 31, 2022, the Executive will be entitled to receive a

cash bonus equal to (A) 60% of Annual Base Salary based on the achievement of the applicable target Performance Goals, with an opportunity to earn up to 100% of Annual Base Salary for exceeding the applicable target Performance Goals, multiplied by (B) a fraction, the numerator of which is 182 (i.e., the number of days from March 3, 2022 to August 31, 2022) and the denominator of which is 365.

(iii) Beginning for fiscal year 2023 (i.e., beginning on September 1, 2022) and for each fiscal year of the Company thereafter during the Term, the Executive shall be entitled to receive an annual cash bonus equal to 60% of Annual Base Salary based on the achievement of the applicable target Performance Goals, with an opportunity to earn up to 100% of Annual Base Salary for exceeding the applicable target Performance Goals.

(iv) Payment of any earned cash bonus under this Section 5(b) (the “Annual Bonus”) shall be subject to the Executive’s continued employment with the Company through the time of payment. Any Annual Bonus shall be paid in the fiscal year following the end of the applicable performance period, within a reasonable period of time following the end of such fiscal year and in all events no later than the time such bonuses for the applicable fiscal year are paid to similarly situated active employees of the Company.

Terms not defined herein shall have the meanings assigned to such terms in the Employment Agreement.

Except as otherwise set forth in this Amendment, the terms of the Employment Agreement shall remain in full force and effect.

This Amendment will be governed by and construed in accordance with the laws of the Illinois without giving effect to any choice or conflict of law provision or rule.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

DUCK CREEK TECHNOLOGIES, LLC

By: /s/ Michael A. Jackowski

Name: Michael A. Jackowski
Title: Chief Executive Officer

EXECUTIVE

/s/ Eugene Van Biert, Jr.

Name: Eugene Van Biert, Jr.

Exhibit 10.3

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into on this 6th day of November, 2016 (the “Effective Date”) by and between Duck Creek Technologies, LLC (the “Company”) and Eugene C. Van Biert, Jr. (the “Employee”).

R E C I T A L S:

Disco Topco Holdings (Cayman), L.P. (the “Issuer”) and the Company (collectively, and together with all other subsidiaries of the Issuer, the “Company Group”) are engaged in the software and the software as a service business. In furtherance of such business, the parties hereto desire to enter into this Agreement, effective as of the Effective Date.

Effect of Prior Agreements.

Entire Agreement. This Agreement expresses the whole and entire agreement between the parties with reference to the employment of the Employee after the Effective Date and will supersede and replace, effective as of the Effective Date, any prior understandings or arrangements (whether written or oral) between the Employee and the Company Group or any of its equity holders (and their affiliates).

“Accenture” means Accenture LLP.

“Apax” means Apax Partners LP.

“Board” means the board of directors/managers of the general partner of the Issuer, and any successor boards thereof

“Cause” means, during employment, the Employee’s (i) embezzlement, misappropriation of corporate funds, or other acts of material dishonesty; (ii) commission or conviction of any felony, or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any such felony or misdemeanor; (iii) any act constituting a willful or volitional act or failure to act which causes or can be expected to cause injury to the Company Group, as defined below (but not counting decisions, acts or omissions made in the ordinary course of business); (iv) material failure to comply or adhere to the Company’s policies, which have been communicated to Employee in writing; (v) material breach during employment of the Restrictive Covenant Agreement, as defined below; or (vi) material dishonesty, gross negligence or intentional misconduct (including willfully violating any law, rule or regulation). Employee shall not be terminated for Cause unless he is provided with written notice from the Company setting forth the acts or omissions giving rise to such termination and, if curable and excluding items (i), (ii) and (vi), he fails to cure such events or omissions within 15 days of receipt of such notice.

“Change of Control” means the consummation of a transaction, whether in a single transaction or in a series of related transactions, pursuant to which:

(i)

an independent third party, or a group of independent third parties, (A) acquire (whether by merger, consolidation, or transfer or issuance of equity interests or otherwise) beneficial ownership of at least a majority of the outstanding equity securities of the Issuer (or any surviving or resulting company) (unless the Sponsors or their affiliates retain a majority of the outstanding equity securities of the general partner of the Issuer entitled to appoint a majority of the members to the board of directors of such entity) or (B) acquire assets constituting all or substantially all of the assets of the Issuer and its subsidiaries (as determined on a consolidated basis); provided, that a merger, recapitalization or other sale or business combination transaction shall not be deemed a “Change of Control” if after such transaction the Sponsors (or their affiliates) beneficially own, in the aggregate, at least a majority of the

outstanding equity securities of the Issuer and/or any subsidiary(ies) of the Issuer which beneficially owns substantially all of the assets of the Issuer or the parent or successor of the Issuer; or

(ii)

Accenture acquires more than 50 percent of the equity interests in the Issuer and/or any subsidiary(ies) of the Issuer which beneficially owns substantially all of the assets of the Issuer or the parent or successor of the Issuer.

For the avoidance of doubt, the acquisition of Class A Units in the Issuer by Apax and its affiliates or Class B Units in the Issuer by Accenture and its affiliates shall not constitute a “Change of Control.”

“Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued thereunder.

“Commencement Date” means the sixty-first (61”) day following the Employee’s Termination Date.

“Good Reason” means, without Employee’s prior written consent, a material reduction in Employee’s Annual Base Salary, as defined below, or his Target Commission opportunity as a percentage of his Annual Base Salary (as the term Target Commission is defined below); provided that any such event shall constitute Good Reason only if the Issuer or the Company, as applicable, fails to cure such event within 30 days after the Company’s receipt from Employee of written notice of the event which constitutes Good Reason; provided, further, that “Good Reason” shall cease to exist for an event on the 90th day following its occurrence, unless Employee has given the Company written notice thereof prior to such date and terminates his employment (provided the event is not cured) within 60 days following the date of such notice.

“Person” means any individual, person, partnership, limited liability company, joint venture, corporation, company, firm, group or other entity.

“Section 409A” means Section 409A of the Code and regulations and other guidance issued thereunder.

“Separation from Service” means a “separation from service” from the Company or any of its subsidiaries or affiliates within the meaning of Section 409A.

“Sponsors” means Accenture and Apax.

“Termination Date” means the date the Employee’s employment is terminated, and which termination is a Separation from Service.

Titles, Duties and Reporting. During the Term (as defined in Section 4), the Employee shall be employed as Chief Revenue Officer of the Company. Employee shall have the duties and authorities customarily associated with this position and as otherwise reasonably determined by the Company’s Chief Executive Officer. During the Term, Employee shall report directly to the Company’s Chief Executive Officer.

Term of Employment.

Term. Commencing on the Effective Date, Employee shall be employed by the Company until Employee or the Company terminate Employee’s employment as provided in Section 7 (such period, the “Term”).

Compensation.

Annual Base Salary. During the Term, the Employee’s annual base salary will be $275,000 (“Annual Base Salary”); which shall be subject to annual review on each anniversary of the Effective Date for increase but not decrease..

Annual Commission. For each fiscal year during the Term, the Employee will be entitled to receive a commission (the “Annual Commission”) pursuant to the terms of the Company’s commission plan, as in effect from time to time (the “Commission Plan”). The target

commission level shall be 100% of Annual Base Salary (“Target Commission”), with an opportunity to earn up to 150% of Annual Base Salary for performance exceeding the target goals, as set forth in the Commission Plan. Except as provided in Section 7(d) below and in the Commission Plan, payment of any Annual Commission shall be subject to the Employee’s continued employment with the Company through the time of payment. Any Annual Commission shall be paid on a quarterly basis based on quarterly targets agreed to by the Company pursuant to the terms set forth in the Commission Plan.

Sign-on Bonus. Shortly following the Effective Date, the Employee will be eligible to receive a lump-sum cash payment of $50,000 (the “Sign-on Bonus”). In the event that the Employee’s employment with the Company is terminated by the Company for Cause or by the Employee without Good Reason prior to the first anniversary of the Effective Date, the Employee shall repay the entire amount of the Sign-on Bonus to the Company.

Draw Against Commission. Shortly following the Effective Date, the Employee will be eligible to receive a lump-sum cash payment of $25,000 (the “Draw Against Commission”), which represents a draw against the first Annual Commission payable to the Employee, such that, the amount of the first Annual Commission payable to the Employee shall be reduced by the full amount of the Draw Against Commission. In the event that the Employee’s employment with the Company is terminated for any reason prior to such time that the first Annual Commission becomes payable to the Employee, the Employee shall repay the entire amount of the Draw Against Commission to the Company.

Benefit Plans. Employee shall receive employee benefits no less favorable than other similarly situated employees of the Company Group in the United States. Employee will also be reimbursed for reasonable business expenses in accordance with the Company’s expense reimbursement policy, which reimbursements shall be made within sixty (60) days following Employee’s submission of a written invoice to the Company describing such expenses in reasonable detail.

Grant of Class D Units. Shortly following the Effective Date, the Employee will be eligible to receive 2,500,000 Class D Units (“Class D Units”) in the Issuer. Notwithstanding

anything to the contrary provided herein, Class D Units shall at all times be governed by the terms of the applicable award agreement and any other documents referred to therein.

Indemnification. The Employee shall receive indemnification for third party claims (and advancement of expenses) protection and coverage under directors’ and officers’ liability insurance policies on a basis no less favorable than the basis under which any director or officer of the Issuer and/or the Company is so covered.

Non-Compete, Non-Solicitation, and other Covenants.

On the date hereof, the Employee shall enter into the “Restrictive Covenant Agreement”, attached hereto as Exhibit A.

Termination and Other Post Termination Benefits.

Cause / Without Good Reason. The Company shall have the right to terminate the Employee’s employment under this Agreement at any time for Cause upon written notice to the Employee as provided in subparagraph (f) below. The Employee shall have the right to terminate the Employee’s employment under this Agreement without Good Reason upon 30 days’ advance written notice to the Company as provided in subparagraph (f) below. In the event the employment of the Employee is terminated by the Company for Cause or by the Employee without Good Reason, the Employee shall have no right to receive compensation or other benefits under this Agreement (other than the Accrued Payments set forth in Section 7(d)) for any period after such termination. In addition, the Employee shall remain entitled to any rights under Section 5(g), the last sentence of Section 7(d) and Section 19.

Other Than Cause / Good Reason. If the employment of the Employee is terminated by the Company without Cause (other than due to death or Disability) or is terminated by the Employee for Good Reason, the Employee shall be entitled to the following compensation and benefits, in addition to the Accrued Payments set forth in Section 7(d):

(i)

continued payments of the Employee’s Annual Base Salary, in accordance with the Company’s standard payroll practices, for a period of 12 months commencing on the Commencement Date; provided, however if such

termination occurs on, or within one year after, a Change of Control (provided such event is also a “change of control event” as determined in accordance with Section 409A), such amount shall be paid in a lump sum on the Commencement Date; and

(ii)

a payment equal to $12,000, in lieu of continued contributions toward health coverage costs for the Employee, payable in a lump sum on the Commencement Date (“COBRA Payment”).

If the Employee breaches any of the covenants set forth in the Restrictive Covenant Agreement, the Employee shall not be entitled to receive any further compensation or benefits pursuant to this Section 7(b) from and after the date of such breach and the Employee shall be required to promptly repay any compensation the Employee received pursuant to this Section 7(b) prior to the date of such breach. Notwithstanding anything to the contrary contained herein, the Company shall have no obligation to pay the payments and provide the benefits set forth in this Section 7(b) unless, within sixty (60) days after the Termination Date, the Employee executes and delivers to the Company a release of claims in the form attached hereto as Exhibit B and the revocation period of such release expires.

Death / Disability. If the Employee’s employment is terminated due to his death or Disability, Employee (or his estate, as applicable) shall be entitled to receive the COBRA Payment (payable as set forth in Section 7(b) of this Agreement) and the Accrued Payments set forth in Section 7(d).

Accrued Payments. In the event of a termination of employment for any reason, Employee will receive (A) the Employee’s accrued and unpaid base salary, vacation (in accordance with Company policy) and unreimbursed business expenses (if any) through the Termination Date, payable as soon as practicable following the Termination Date, (B) except in the event of a termination for Cause, the earned but unpaid portion, if any, of any Annual Commission with respect to the period ending on the Termination Date, payable in accordance with the terms of the Commission Plan, and (C) all other amounts to which the Employee is entitled under any compensation plan of the Company at the time such payments are due (items (A) through (C)

collectively, the “Accrued Payments”). In addition, for all terminations, the Employee shall remain entitled to any payments or benefits provided under any outstanding equity or long-term incentive agreements, in accordance with the terms of such agreements, including, without limitation, any award agreement for the Class D Units and any related documentation thereto.

Assignment Prohibited. This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of his, her, or its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that nothing in this Section 9 shall preclude the Employee from designating a beneficiary to receive any benefit payable under this Agreement upon the Employee’s death pursuant to Section 7(c). Notwithstanding the foregoing, the Company and Issuer may assign their rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company Group (by merger or otherwise).

10.

11.

12.

Governing Law. The parties intend that this Agreement and the performance hereunder and all suits and special proceedings hereunder shall be governed by and construed in accordance with and under and pursuant to the laws of the State of Illinois without regard to conflicts of law principles thereof and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Illinois shall be applicable and shall govern to the exclusion of the law of any other forum. Any action, special proceeding or other proceeding with respect to this Agreement shall be brought exclusively in the federal or state courts of the State of Illinois, and by execution and delivery of this Agreement, the Employee and the Company irrevocably consent to the exclusive jurisdiction of those courts and the Employee hereby submits to personal jurisdiction in the State of Illinois. The Employee and the Company irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non-conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. The Employee and the Company acknowledge and agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement.

13.

14.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

15.

Notices.. All notices, requests, demands and other communications to any party under this Agreement shall be in writing (including telefacsimile transmission, email transmission (in PDF format) or similar writing) and shall be given to such party at his, her, or its address or telefacsimile number set forth below or at such other address or telefacsimile number as such party may hereafter specify for the purpose of giving notice to the other party:

If to the Employee:

to the Employee’s home address reflected in the Company’s books and records, and if to Employee’s legal representative, to such Person at the address of which the Company is notified in accordance with this Section 15.

If to the Company:

Duck Creek Technologies LLC
161 North Clark Street
Chicago, IL 60601
Attention: Michael Jackowski

with copy to, which shall not constitute notice to the Company

c/o Apax Partners, L.P.
601 Lexington Ave. 53rd Floor
New York, NY 10022

Each such notice, request, demand or other communication shall be effective (i) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (ii) if given by any other means, when delivered at the address specified in this Section 15. Delivery of any notice, request, demand or other communication by telefacsimile or email shall be effective when received if received during normal business hours on a business day. If received after normal business hours, the notice, request, demand or other communication will be effective at 10:00 a.m. on the next business day.

16.

17.

18.

Compliance with Section 409A. It is the Company’s intent that payments and benefits under this Agreement comply with Section 409A, to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, the Employee shall not be considered to have terminated employment with the Company or any subsidiary or affiliate thereof for purposes of this Agreement unless the Employee would be considered to have incurred a Separation from Service from the Company or any of its subsidiaries or affiliates. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in this Agreement that are due within the “short term deferral period” as defined in Section 409A or any other exemption under Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. To the extent that any reimbursements or in-kind benefits due to the Employee under this Agreement constitute “deferred compensation” under Section 409A, any such reimbursements and in-kind benefits shall be paid to Employee in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Employee’s Separation from Service shall instead be paid on the first

business day after the date that is six months following the Employee’s Separation from Service (or death, if earlier). This Agreement may be amended in any respect deemed by the Company in good faith to be necessary in order to preserve compliance with Section 409A without imposing any additional interest, taxes or penalties on the Employee.

19.

If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code, prior to the closing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) shall make good faith efforts to obtain shareholder approval of the portion of the Total Payments, such that upon shareholder approval, no portion of the Total Payments shall be subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of such portion of the Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.

In the event that (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “stock” of the Company Group is “readily tradable” on an “established securities

market” or otherwise within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code, then, to the extent necessary to make no portion of the Total Payments subject to the Excise Tax, the portion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code, provided that, in the case of all of the foregoing Total Payments, all amounts that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G of the Code.

Section 19(b) shall not apply and no reduction of Total Payments will occur if (i) clause 19(b)(ii) is applicable and (ii) (1) the net amount of such Total Payments, as reduced pursuant to Section 19(b) (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is less than (2) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

Any determinations that are made pursuant to this Section 19 shall be made by a nationally recognized certified public accounting firm that shall be selected by the Company (and paid by the Company) prior to any transaction that is subject to Section 280G of the Code (the “Accountant”), which determination shall be certified by the Accountant and set forth in a certificate delivered to the Employee setting forth in reasonable detail the basis of the Accountant’s determinations.

20.

Recitals. The recitals to this Agreement shall form a part of this Agreement.

(The remainder of this page was intentionally left blank)

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

Duck Creek Technologies LLC

By: Disco Topco Holdings (Cayman), L.P., its sole member

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

Solely for the purposes of Sections 5(f) and 5(g) of this Agreement:

Disco Topco Holdings (Cayman), L.P.

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

EMPLOYEE

/s/ Eugene C. Van Biert, Jr.

Name: Eugene C. Van Biert, Jr.

Exhibit A

RESTRICTIVE COVENANTS AGREEMENT

In consideration of (a) my employment or continued employment by Duck Creek Technologies, LLC and/or any of its subsidiaries (the “Company” and, together with Disco Topco Holdings (Cayman), L.P. (the “Parent”) and all of its affiliates (other than any investors or equity holders in the Parent) collectively, the “Company Entities”), (b) my receipt of Class D Units pursuant to the Parent’s Amended and Restated Agreement of Limited Partnership, dated on or about August 1, 2016, (c) the provision by the Company Entities of trade secrets and confidential information to me, (d) the Company Entities’ introduction to me of their clients and customers, and other good and valuable consideration, the receipt and sufficiency of which I acknowledge, I agree to the terms and conditions of this Restrictive Covenants Agreement (this “Agreement”) as follows:

1. Recognition of Company’s Rights. I will not, at any time, without the Company’s prior written permission, either during or after my employment, disclose any Proprietary Information to anyone outside of the Company Entities other than in connection with the performance of my duties as an employee of the Company or any Company Entity, or use any Proprietary Information for any purpose other than the performance of my duties as an employee of the Company or any Company Entity. I will cooperate with the Company Entities and use my reasonable best efforts to prevent the unauthorized disclosure of all Proprietary Information. I will deliver to the Company all copies of Proprietary Information in my possession or control upon the earlier of a request by the Company or termination of my employment, except to the extent I am permitted to retain such information pursuant to Section 19 of this Agreement. Notwithstanding anything to the contrary in this Agreement or otherwise, I shall be permitted to disclose Proprietary information (i) to the extent necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (ii) as required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any

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committee thereof) with apparent jurisdiction over me; provided, in such event, to the extent legally permitted, I give the Company reasonable notice of such requirement and an opportunity to oppose such request (and I will reasonably cooperate with the Company in such opposition).

2. Rights of Others. I understand that the Company Entities are now and may hereafter be subject to nondisclosure or confidentiality agreements with third persons which require the Company Entities to protect or refrain from use of such third persons’ proprietary information. I agree to be bound by the non-disclosure or confidentiality terms of such agreements in the event I have access to such proprietary information and have knowledge of such agreements.

3. Commitment to Company Entities; Avoidance of Conflict of Interest. While an employee of the Company, I will devote my full business time and efforts to the business of the Company Entities and I will not engage in any other business activity that conflicts with my duties to the Company Entities. I will advise the General Counsel of the Company or his or her nominee at such time as any activity of either the Company Entities or another business presents me with a conflict of interest or the appearance of a conflict of interest as an employee of the Company. I will take whatever action is reasonably requested of me by the Company to resolve any conflict or appearance of conflict which it finds to exist. Notwithstanding the foregoing, during employment (and thereafter) I can manage my personal and family investments, engage in charitable and/or educational activities, including service on boards of directors of charitable and/or educational organizations, serve on industry advisory committees and/or boards and, to the extent approved by the board of directors of Parent, serve as a member of the board of directors or managers of any for-profit entity; provided that such activities do not interfere with my duties and responsibilities to the Company Entities.

4. Developments. I will make full and prompt disclosure to the Company of all Developments during the period of my employment that: (a) relate to the business of any Company Entity or any customer of or supplier to any Company Entity or any of the products or services being researched, developed, manufactured or sold by any Company Entity or which may be used with such products or services; or (b) result from tasks assigned to me by a Company Entity; or (c) result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the Company Entity (collectively, “Company-Related Developments”). I acknowledge that all copyrightable Company-Related Developments are created by me on a “work for hire” basis. To the extent any such copyrightable work is deemed by a court not be a “work for hire” and with respect to all other Intellectual Property Rights in any Company-Related Developments, I hereby do assign and transfer and, to the extent any such assignment cannot be made at present, will assign and transfer, to the Company Entities and their successors and assigns all my right, title and interest in all such Company-Related Developments. “Developments” means inventions, discoveries, designs, developments, methods, modifications, improvements, processes, algorithms, databases, computer programs, formulae, techniques, trade secrets, graphics or images, and audio or visual works and other works of authorship, whether or not patentable or copyrightable that are created, made, conceived or reduced to practice by me (alone or jointly with others) or under my direction. “Intellectual Property Rights” means all patents, patent applications, trademarks and trademark applications, copyrights and copyright applications, trade secrets and other intellectual property rights in all countries and territories worldwide and under any international conventions.

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applications in which I am named as an inventor, other than those which have been assigned to the Company (“Other Patent Rights”). If no such disclosure is attached, I represent that there are no Prior Inventions or Other Patent Rights. If, in the course of my employment with the Company, I incorporate a Prior Invention into a Company’s product, process or machine or other work done for the Company Entities, I hereby grant to the Company a nonexclusive, royalty-free, paid-up, irrevocable, worldwide license (with the full right to sublicense) to make, have made, modify, use, sell, offer for sale and import such Prior Invention. Notwithstanding the foregoing, I will not incorporate, or permit to be incorporated, Prior Inventions in any Company-Related Development without the Company’s prior written consent.

5. Documents and Other Materials. I will keep and maintain adequate and current records of Company-Related Developments developed by me during my employment, which records will be available to and remain the sole property of the Company at all times. All files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, whether created by me or others, which come into my custody or possession, are the exclusive property of the Company to be used by me only in the performance of my duties for the Company Entities. Any property situated on a Company Entities’ premises and owned by any Company Entity, including without limitation computers, disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company at any time with or without notice. In the event of the termination of my employment for any reason, I will deliver to the Company all files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, and other materials of any nature pertaining to the Proprietary Information of the Company Entities or to my work for the Company Entities, and will not take or keep in my possession any of the foregoing or any copies. Notwithstanding anything to the contrary in this Agreement or otherwise, I may retain the information set forth in Section 19 below.

6. Enforcement of Intellectual Property Rights. I will cooperate with the Company at its sole expense, both during and after my employment with the Company, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights in Company-Related Developments. At the Company’s sole expense, I will sign, both during and after the term of this Agreement, all papers, including without limitation copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company reasonably deems necessary or desirable in order to protect its rights and interests in any Company-Related Development. If the Company is unable, after reasonable effort, to secure my signature on any such papers, I hereby irrevocably designate and appoint each officer of the Company as my agent and attorney-in-fact to execute any such papers on my behalf, and to take such actions as the Company

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reasonably deems necessary or desirable in order to protect its rights and interests in any Company-Related Development.

7. Non-Competition and Non-Solicitation. In order to protect the Company Entities’ Proprietary Information and good will, while I am employed by the Company and for a period of twelve (12) months following the termination of my employment for any reason, except as provided in the last two sentences of this Section 8, I agree that I will not directly or indirectly: (a) perform the same or similar services in the Restricted Area (as defined below) for any Competitor (as defined below) as those I performed for the Company Entities during my employment with the Company; (b) engage in or become employed in any capacity by, or become an officer, director, agent, consultant, contractor, shareholder or partner of any partnership, corporation or entity that at the time of my engagement is engaged in, or is planning to engage in, the Business, unless I am engaged solely by a division or affiliate of such partnership, corporation or entity that does not engage in the Business and the entity or division, as applicable, which engages in the Business represents no more than 10% of such entity’s (or, in case of an affiliate, the entire controlled group’s) annual revenues and I am not involved, directly or indirectly, in any plans to engage in the Business, or I am providing services to a portfolio company of a private equity fund which does not engage in the Business (even if the private equity fund has another portfolio company which engages in the Business; provided I provide no services to such other portfolio company or advise on the acquisition or purchase of any Competitor) or have a passive (no more than 5%) equity interest in a private equity or hedge fund that owns an entity engaged in or planning to be engaged in the Business as long as I do not provide services directly to such Business (“Carve-out”); (c) on behalf of a Competitor: (i) call upon, solicit, contact, or provide any services (or attempt to do any of the foregoing) for any Customer or Potential Customer of the Company Entities that I called upon, solicited, contacted, or serviced for the Company Entities during my employment or, on or following my termination date, within the two years prior to my termination date; (ii) call upon, solicit, contact, or provide any services (or attempt to do any of the foregoing) for any Customer or Potential Customer; (iii) call upon, solicit, or contact or provide any services to any vendor or supplier of the Company Entities who during my employment is a vendor or supplier of any of the Company Entities, or on or following my termination date, was a vendor or supplier of the Company Entities during the 24 month period prior to my termination date or about whom I had knowledge; or (iv) otherwise divert or take away (or attempt to do any of the foregoing) any business of the Company Entities to a Competitor of the Company Entities; or (d) undertake planning for or organization of a business competitive with the Company Entities’ Business.

Notwithstanding the foregoing, nothing in this Section 8 shall be violated by actions taken in the good faith performance of my duties to the Company Entities or any activities by me permitted by the Carve-out.

I recognize and agree that as part of my job duties and responsibilities, I will be providing services for or on behalf of the Company Entities that are coextensive with the entire geographic scope of the Company Entities’ business, and that because of the global nature and scope of these executive duties and responsibilities and because of the global nature and scope of the Company Entities’ business and their focus on the Business, my performance of my duties and responsibilities is not tied to any specifically designated territory or geographic region.

Accordingly, the “Restricted Area” shall mean the geographical areas in which the Company Entities (i) are actively marketing their products and services as of my last day of employment with the Company or (ii) have made a significant investment in time and money to prepare to market their products and services within one (1) year prior to the Termination Date.

“Business” means the business of selling policy, billing and/or claims software to property and casualty insurance companies.

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“Competitor” shall mean any person or entity that engages in the Business but shall not include any division, subsidiary or affiliate of a person or entity engaged in the Business (and such entity or division, as applicable, which engages in the Business represents no more than 10% of such entity’s (or, in case of an affiliate, the entire controlled group’s) annual revenues) if such division, subsidiary or affiliate does not itself engage in the Business; provided, however, that I shall not interact on business matters with any individual employed by any such division, subsidiary or affiliate engaged in the Business.

“Customer” shall mean during my employment any person or entity who purchased or contracted to purchase any products or services offered by the Company in the Company Entities’ Business and, on or following my termination date, any person or entity which, at any point during the twelve (12) month period of time preceding termination of my employment with the Company for any reason, purchased or contracted to purchase any products or services offered by the Company in the Company Entities’ Business.

“Potential Customer” shall mean during my employment any person or entity who is identified on a list by any Company Entity as a potential client or customer for the Business and on or following my termination date, any person or entity which, at any point during the twelve (12) month period of time preceding termination of my employment with the Company for any reason, was identified on a list as a potential client or customer of the Business.

In addition to the above provisions of this Section 8, while I am employed by the Company and for a period of twelve (12) months following the termination of my employment for any reason (“Non-Solicitation Restricted Period”), I agree that, other in the ordinary course of performing my duties for any Company Entity, I will not directly or indirectly or by action in concert with others, (A) encourage or influence (or seek to encourage or influence) any person who is an employee, director, or independent contractor of the Company Entities, or on or following the termination of my employment, was an employee, director or independent contractor during the last year of my employment with the Company, to terminate employment or engagement with the Company Entities; (B) combine or coordinate with other employees, directors, agents, contractors or other representatives of the Company Entities for the purpose of organizing any business activity competitive to the Company Entities’ Business; or (C) solicit or hire any person who is or was engaged as an employee, director or independent contractor by the Company Entities during the last year of my employment with the Company. To the extent permitted by applicable law, in the event of a proven breach of this Section 8 by me, the Non-Competition Restricted Period and the Non-Solicitation Restricted Period set forth herein shall be extended automatically by the period of such breach. All of the foregoing provisions of this Section 8 notwithstanding, I may own not more than five percent (5%) of the issued and outstanding shares of any class of securities of an issuer whose securities are listed on a national securities exchange or registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended as long as such investment is a passive investment and I have no control over the business.

8. Government Contracts. I acknowledge that the Company Entities may have from time to time agreements with other persons or with the United States Government or its agencies which impose obligations or restrictions on the Company Entities regarding inventions made during the course of work under such

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agreements or regarding the confidential nature of such work. I agree to comply with any such obligations or restrictions upon the direction of the Company Entities. In addition to the rights assigned under Section 5, I also assign to the Company (or any of its nominees) all rights which I have or acquire in any Developments, full title to which is required to be in the United States under any contract between the Company Entities and the United States or any of its agencies.

9. Defend Trade Secrets Act. Pursuant to 18 U.S.C. § 1833(b), I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to my attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If I file a lawsuit for retaliation by the Company for reporting a suspected violation of law, I may disclose the trade secret to my attorney and use the trade secret information in the court proceeding, if I (i) file any document containing the trade secret under seal, and (ii) do not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.

10. Cooperation. During my employment with the Company and at all times thereafter, at the request of the Company, upon reasonable notice and at reasonable times (taking into account my other personal and business commitments), I shall cooperate fully with the Company Entities in any (a) litigation, administrative proceeding or inquiry that involves the Company Entities or their then-current or former officers, directors, employees or agents; and/or (b) investigation or inquiry conducted by or on behalf of the Company Entities or any governmental or regulatory authority, in each case, with respect to any matter about which I have knowledge or information or in which I was involved. The Company shall reimburse me for reasonable out-of-pocket expenses incurred by me under this Section 11 (provided that I provide the Company with reasonable documentation of such expenses).

11. Nondisparagement. Following termination of my employment and at all times thereafter, I will not make or publish, or cause to be made or published, any statement or information that disparages or defames any of the Company Entitles or any of their respective partners, officers, directors, shareholders, or employees.

The Company agrees not to intentionally make or publish, or cause to be made or published, any official statement or formal announcement that disparages or defames me. Notwithstanding the foregoing, nothing in this Section 12 shall prevent the parties from making any truthful statement (a) necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (b) required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over the party.

12. Prior Agreements. I hereby represent that, except as I have fully disclosed previously in writing to the Company, I am not bound by the terms of any agreement with any previous employer or other party to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of my employment with the Company or to refrain from competing, directly or indirectly, with the business of such previous employer or any other party. I further represent that my performance of all the terms of this Agreement as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me in confidence or in trust prior to my employment with the Company. I will not disclose to the Company Entities or induce the Company Entities to use any confidential or proprietary information or material belonging to any previous employer or others.

A-6

13. Remedies Upon Breach. I understand that the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company Entities and I consider them to be reasonable for such purpose. Any breach of this Agreement is likely to cause the Company Entities substantial and irrevocable damage and therefore, in the event of such breach, the Company Entities, in addition to such other remedies which may be available, will be entitled to specific performance and other injunctive relief, without the posting of a bond. If I violate this Agreement, as determined by a final judgment of a court of competent jurisdiction, in addition to all other remedies available to the Company Entities at law, in equity, and under contract, I agree that I am obligated to pay the Company Entities’ reasonable costs of enforcement of this Agreement, including attorneys’ fees and expenses.

14. Use of Voice, Image and Likeness. During my employment and for a reasonable period thereafter, I give the Company permission to use any and all of my voice, image and likeness, with or without using my name, in connection with the products and/or services of the Company Entities, for the purposes of advertising and promoting such products and/or services and/or the Company Entities, and/or for other purposes deemed appropriate by the Company in its reasonable discretion, except to the extent expressly prohibited by law.

15. Publications and Public Statements. Other than in the ordinary course of the Company’s business, I will obtain the Company’s written approval before publishing or submitting for publication outside the Company any material that relates to my work at the Company and/or incorporates any Proprietary Information.

16. No Employment Obligation. I understand that this Agreement does not create an obligation on the Company or any other person to continue my employment. I acknowledge that, unless otherwise provided in my employment agreement with the Company, my employment with the Company is at will and therefore may be terminated by the Company or me at any time and for any reason, with or without cause.

17. Survival and Assignment by the Company. I understand that my obligations under this Agreement will continue in accordance with its express terms regardless of any changes in my title, position, duties, salary, compensation or benefits or other terms and conditions of employment. I further understand that my obligations under this Agreement will continue following the termination of my employment regardless of the manner of such termination. The Company will have the right to assign this Agreement to its successors and assigns.

18. Exit Interview; Return of Company Property. If and when I depart from the Company, I may be required to attend an exit interview and sign an “Employee Exit Acknowledgement” to reaffirm my acceptance and acknowledgement of the obligations set forth in this Agreement. For eighteen (18) months following termination of my employment, I will notify the Company of any change in my address and of each subsequent employment or business activity, including the name and address of my employer and the nature of my activities, reasonably related to the Business; provided that the failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities. On my last day of employment with the Company or upon an earlier request by the Company, to the extent practicable, or as soon as reasonably practicable following my last day of employment with the Company, I shall promptly return to the Company any and all documents and other physical or tangible things regardless of whether in paper or electronic form, in my possession, custody or control, that are the property of any of the Company Entities, and any and all documents or other tangible things in my possession, custody or control that disclose or embody any technical or other information that is confidential or proprietary to the Company Entities or any third party that has disclosed such information to any of the Company Entities subject to an obligation of confidentiality. I agree to return and not destroy, alter, erase or otherwise change any software, data or other information belonging to any of

A-7

the Company Entities. Notwithstanding the foregoing and for the avoidance of doubt, I am entitled to maintain, and the Company Entities acknowledge my right in respect of, individual personnel documents, such as my payroll and tax records and any documents or information relating to my compensation and/or equity interests in any Company Entity.

19. Disclosure to Future Employers. I agree that prior to accepting employment or engagement with any other person during my employment with the Company, and for eighteen (18) months after my last day of employment with the Company, I shall inform such prospective employer or prospective counterparty of the existence and details of this Agreement and provide such prospective employer or prospective counterparty with a copy of this Agreement, and, in addition, I agree that promptly following the commencement of employment or engagement with such person during such period, I shall provide the Company with written notice, including (a) the name of the employer or counterparty; (b) the business engaged in or to be engaged in by the employer or counterparty; (c) my position with the employer or counterparty; (d) the location of my employment or engagement and (e) the territory in which I have job duties or responsibilities; provided, however, that the foregoing shall apply if and only to the extent that any covenant or commitment set forth in this Agreement would be relevant with respect to such person; and, provided further, that my failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities.

20. Severability; Blue-Penciling. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

20. Interpretation. This Agreement will be deemed to be made and entered into in the State of Illinois, and will in all respects be interpreted, enforced and governed under the laws of the State of Illinois without regard to conflicts-of-law principles. I hereby agree to consent to personal jurisdiction of the state and federal courts situated within Illinois and of any state and county in which the Company contends that I have breached this Agreement for purposes of enforcing this Agreement, and waive any objection that I might have to personal jurisdiction or venue in those courts.

IN WITNESS WHEREOF, I have duly executed this Agreement as of the
date below.

Signed: /s/ Eugene C. Van Biert, Jr.

Type or print name: Eugene C. Van Biert, Jr.

Date: 11/6/16

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Acknowledged and Confirmed

Disco Topco Holdings (Cayman), L.P.

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

Duck Creek Technologies LLC

By: Disco Topco Holdings (Cayman), L.P., its sole member
By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

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APPENDIX A

To: Duck Creek Technologies, LLC.

From: Eugene C. Van Biert, Jr.

Date: 11/6/16

SUBJECT: Prior Inventions

The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by the Company that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company:

☒ No inventions or improvements

☐ See below:

☐ Additional sheets attached

The following is a list of all patents and patent applications in which I have been named as an inventor

☒ None

☐ See below:

Appendix A-1

Exhibit B

RELEASE OF CLAIMS

As a condition precedent to Eugene C. Van Biert, Jr. (“Employee”) receiving payments as provided for in Section 7(b) of that certain Employment Agreement by and between Duck Creek Technologies, LLC (the “Company”) and Employee, dated [.] (“the Employment Agreement”), Employee hereby agrees to the terms of this Release of Claims (this “Release”) as follows:

1. Release.

Employee, on behalf of Employee and Employee’s heirs, executors, administrators, successors and/or assigns, hereby voluntarily, unconditionally, irrevocably and absolutely releases and discharges the Company, its parent, and each of their subsidiaries, affiliates and partnerships, and all of their past and present employees, officers, directors, agents, owners, shareholders, representatives, members and attorneys, and all of their successors and assigns (collectively, the “Released Parties”), from all claims, charges, demands, causes of action, and liabilities, known or unknown, suspected or unsuspected of any nature whatsoever (hereinafter, “Claims”) that Employee has or may have against the Released Parties (i) from the beginning of time through the date upon which Employee signs this Release, including any Claims for an alleged violation of any or all federal, state and local laws or regulations, including, but not limited to the following, each as may be amended and as may be applicable: Title VII of the Civil Rights Act; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Rehabilitation Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act; the Worker Adjustment and Retraining Notification Act; the Fair Credit Reporting Act; the Equal Pay Act; the Employee Retirement Income Security Act; the National Labor Relations Act; Uniformed Services Employment and Reemployment Rights Act; the Equal Pay Act; the False Claims Act; Sections 1981 through 1988 of Title 42 of the United States Code; the Occupational Safety and Health Act; the Fair Labor Standards Act; the Illinois Human Rights Act; the Right to Privacy in the Workplace Act; the Illinois Health and Safety Act; the Illinois Worker Adjustment and Retraining Notification Act; the Illinois One Day Rest in Seven Act; the Illinois Union Employee Health and Benefits Protection Act; the Illinois Employment Contract Act; the Illinois Labor Dispute Act; the Victims’ Economic Security and Safety Act; the Illinois Whistleblower Act; the Illinois Equal Pay Act; Cook County Human Rights Ordinance; Chicago Human Rights Ordinance; the Illinois Constitution; Claims for negligent or intentional infliction of emotional distress, breach of contract, fraud or any other unlawful behavior, and/or punitive damages, liquidated damages, penalties, attorneys’ fees, costs and/or expenses or (ii) arising under any agreement between Employee and any Released Party; provided, however, that this Release does not bar any Claims (A) with respect to Employee’s rights under Sections 5(g), 7(b), 7(d), 18 or 19 of the Employment Agreement, (B) that may not be waived by private agreement under applicable law, such as claims for workers’ compensation or unemployment insurance benefits, (C) with respect to indemnification, advancement of expenses and/or coverage under any director and officer insurance policy, including pursuant to any written agreement or corporate governance document or limited partnership of any Released Party, (D) with respect to all rights under the Company’s 401(k) plan or (E) with respect to the Class C Units, if any, or Class D Units of the Issuer (as defined in the Employment Agreement). Nothing in this Release prohibits or restricts Employee’s right to file a charge with or participate in a charge by the

B-1

Equal Employment Opportunity Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment; provided that Employee hereby waives the right to recover any monetary damages or other relief against any Released Parties with respect to Claims released by Employee herein.

2. Consultation/Voluntary Agreement. Employee acknowledges that the Company has advised Employee of Employee’s right to consult with an attorney prior to executing this Release. Employee has carefully read and fully understands all of the provisions of this Release. Employee is entering into this Release, knowingly, freely and voluntarily in exchange for good and valuable consideration to which Employee would not be entitled in the absence of executing and not revoking this Release.

3. Review and Revocation Period.

(a) Employee has been given at least twenty-one (21) calendar days (including the time period permitted under Section 7(b) of the Employment Agreement) to consider the terms of this Release, although Employee may sign it sooner.

(b) Employee will have seven (7) calendar days from the date on which such Employee signs this Release to revoke Employee’s consent to the terms of this Release. Such revocation must be in writing and must be e-mailed to [TO COME]. Notice of such revocation must be received within the seven (7) calendar days referenced above.

(c) In the event of such revocation by Employee, this Release shall be null and void in its entirety and Employee shall not have any rights to the payments set forth above. Provided that Employee does not revoke this Release within the time period set forth above, this Release shall become effective on the eighth (8th) calendar day after the date upon which Employee signs it.

4. Savings Clause. If any term or provision of this Release is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Release or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision of this Release is invalid, illegal or unenforceable, this Release shall be enforceable as closely as possible to its original intent, which is to provide the Released Parties with a full release of all legally releasable claims through the date upon which Employee signs this Release.

5. Third-Party Beneficiaries. Employee acknowledges and agrees that all Released Parties are third-party beneficiaries of this Release and have the right to enforce this Release.

6. Governing Law. This Release shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to the application of any choice-of-law rules that would result in the application of another state’s laws.

B-2

IN WITNESS WHEREOF, Employee has executed this Release, as of the below-indicated date, which may be signed and delivered by facsimile or .pdf.

EMPLOYEE

/s/ Eugene C. Van Biert, Jr.

Name: Eugene C. Van Biert, Jr.
Date Executed: 11/6/16

B-3

Exhibit 10.4

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into on this August 3, 2020 (the “Effective Date”) by and between Duck Creek Technologies, LLC (the “Company”) and Eva F. Huston (the “Employee”).

R E C I T A L S:

Effect of Prior Agreements.

Entire Agreement. This Agreement expresses the whole and entire agreement between the parties with reference to the employment of the Employee after the Effective Date and will supersede and replace, effective as of the Effective Date, any prior understandings or arrangements (whether written or oral) between the Employee and the Company Group or any of its equity holders (and their affiliates).

“Accenture” means Accenture LLP.

“Apax” means Apax Partners LP.

“Board” means the board of directors/managers of the general partner of the Issuer, and any successor boards thereof.

“Cause” means, during employment, the Employee’s (i) embezzlement, misappropriation of corporate funds, or other acts of material dishonesty; (ii) commission or conviction of any felony, or of any misdemeanor involving moral turpitude, or entry of a plea of guilty or nolo contendere to any such felony or misdemeanor; (iii) any act constituting a willful or volitional act or failure to act which causes or can be expected to cause injury to the Company Group, as defined below (but not counting decisions, acts or omissions made in the ordinary course of business); (iv) material failure to comply or adhere to the Company’s policies, which have been communicated to Employee in writing; (v) material breach during employment of the Restrictive Covenant Agreement, as defined below; or (vi) material dishonesty, gross negligence or intentional misconduct (including willfully violating any law, rule or regulation). Employee shall not be terminated for Cause unless he is provided with written notice from the Company setting forth the acts or omissions giving rise to such termination and, if curable and excluding items (i), (ii) and (vi), he fails to cure such events or omissions within 15 days of receipt of such notice.

“Change of Control” shall have the meaning set forth in the equity incentive compensation plan that is expected to be adopted by Duck Creek Technologies, Inc. in connection with the IPO; provided that, for the avoidance of doubt, the IPO shall not constitute a “Change of Control.”

“Code” means the Internal Revenue Code of 1986, as amended, and rules and regulations issued thereunder.

“Commencement Date” means the sixty-first (61st) day following the Employee’s Termination Date.

“IPO” means an initial public offering and sale of Duck Creek Technologies, Inc.’s common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended from time to time.

“Person” means any individual, person, partnership, limited liability company, joint venture, corporation, company, firm, group or other entity.

“Section 409A” means Section 409A of the Code and regulations and other guidance issued thereunder.

“Separation from Service” means a “separation from service” from the Company or any of its subsidiaries or affiliates within the meaning of Section 409A.

“Sponsors” means Accenture and Apax.

“Termination Date” means the date the Employee’s employment is terminated, and which termination is a Separation from Service.

Titles, Duties and Reporting. During the Term (as defined in Section 4), the Employee shall be employed as Executive Vice President, Chief Strategy Officer of the Company. Employee shall have the duties and authorities customarily associated with this position and as otherwise reasonably determined by the Company’s Chief Executive Officer.

Term of Employment.

Compensation.

Annual Base Salary. During the Term, the Employee’s annual base salary will be $350,000 (“Annual Base Salary”); which shall be subject to annual review on each anniversary of the Effective Date for increase but not decrease. The Company agrees to use commercially reasonable efforts to ensure Employee’s base salary and annual bonus are reported on a W-2.

Annual Bonus. For each fiscal year during the Term, the Employee will be entitled to receive a cash bonus (the “Annual Bonus”) based on achievement of performance goals established by the Board (the “Performance Goals”). The target Annual Bonus shall be 50% of Annual Base Salary (“Target Bonus”), payable at target if the target Performance Goals are achieved, with an opportunity to earn up to 100% of Annual Base Salary for performance exceeding the target Performance Goals. Except as provided in Section 7(d) below, payment of any Annual Bonus shall be subject to the Employee’s continued employment with the Company through the time of payment. Any Annual Bonus shall be paid in the fiscal year following the end of the performance period, within a reasonable period of time following the end of such fiscal year and in all events no later than the time such bonuses for the applicable fiscal year are paid to similarly situated active employees of the Company.

Equity Incentive Compensation. As soon as practicable following the completion of the IPO, the Employee will be eligible to receive one or more equity incentive compensation awards under an equity incentive compensation plan that is expected to be adopted by Duck Creek Technologies, Inc., subject to such equity incentive compensation plan becoming effective.

Non-Compete, Non-Solicitation, and other Covenants. On the date hereof, the Employee shall enter into the “Restrictive Covenant Agreement,” attached hereto as Exhibit A; provided that such agreement will become effective on the Effective Date.

Termination and Other Post Termination Benefits.

Cause. The Company shall have the right to terminate the Employee’s employment under this Agreement at any time for Cause upon written notice to the Employee as provided in subparagraph (f) below. The Employee shall have the right to terminate the Employee’s employment under this Agreement upon 30 days’ advance written notice to the Company as provided in subparagraph (f) below. In the event the employment of the Employee is terminated by the Company for Cause or by the Employee for any reason, the Employee shall have no right to receive compensation or other benefits under this Agreement (other than the Accrued Payments set forth in Section 7(d)) for any period after such termination. In addition, the Employee shall remain entitled to any rights under Section 5(e), the last sentence of Section 7(d) and Section 19.

Other Than Cause. If the employment of the Employee is terminated by the Company without Cause (other than due to death or Disability), the Employee shall be entitled to the following compensation and benefits, in addition to the Accrued Payments set forth in Section 7(d):

continued payments of the Employee’s Annual Base Salary, in accordance with the Company’s standard payroll practices, for a period of 12 months; provided, however, if such termination occurs on, or within one year after, a Change of Control (provided such event is also a “change of control event” as determined in accordance with Section 409A), such amount shall be paid in a lump sum on the Commencement Date; and

ii.

a payment equal to $12,000, in lieu of continued contributions toward health coverage costs for the Employee, payable in a lump sum on the Commencement Date (“COBRA Payment”).

Termination Date, payable as soon as practicable following the Termination Date, (B) except in the event of a termination for Cause or a resignation by the Employee for any reason, the earned but unpaid portion, if any, of any Annual Bonus with respect to a fiscal year ending prior to the Termination Date, payable at the same time annual bonuses for such fiscal year are otherwise paid to the Company’s senior executives, and (C) all other amounts to which the Employee is entitled under any compensation plan of the Company at the time such payments are due (items (A) through (C) collectively, the “Accrued Payments”). In addition, for all terminations, the Employee shall remain entitled to any payments or benefits provided under any outstanding equity or long-term incentive agreements, in accordance with the terms of such agreements, including, without limitation, any award agreement for the Class D Units and any related documentation thereto.

payable under this Agreement upon the Employee’s death pursuant to Section 7(c). Notwithstanding the foregoing, the Company and Issuer may assign their rights and obligations under this Agreement (i) to any successor to all or substantially all of the business or the assets of the Company Group (by merger or otherwise), and (ii) to Duck Creek Technologies, Inc. in connection with the IPO.

10.

11.

12.

Governing Law. The parties intend that this Agreement and the performance hereunder and all suits and special proceedings hereunder shall be governed by and construed in accordance with and under and pursuant to the laws of the State of Illinois without regard to conflicts of law principles thereof and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Illinois shall be applicable and shall govern to the exclusion of the law of any other forum. Any action, special proceeding or other proceeding with respect to this Agreement shall be brought exclusively in the federal or state courts of the State of Illinois, and by execution and delivery of this Agreement, the Employee and the Company irrevocably consent to the exclusive jurisdiction of those courts and the Employee hereby submits to personal jurisdiction in the State of Illinois. The Employee and the Company irrevocably waive any objection, including any objection based on lack of jurisdiction, improper venue or forum non conveniens, which either may now or hereafter have to the bringing of any action or proceeding in such jurisdiction in respect to this Agreement or any transaction related hereto. The Employee and the Company acknowledge and

agree that any service of legal process by mail in the manner provided for notices under this Agreement constitutes proper legal service of process under applicable law in any action or proceeding under or in respect to this Agreement.

13.

14.

Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

15.

(1)

If to the Employee:

(2)

If to the Company:

Duck Creek Technologies LLC

22 Boston Wharf Road, 10th Floor

Boston, MA 02210

Attention: Michael Jackowski

with copy to, which shall not constitute notice to the Company

c/o Apax Partners, L.P.

601 Lexington Ave. 53rd Floor

New York, NY 10022

16.

17.

18.

compliance therewith. Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, the Employee shall not be considered to have terminated employment with the Company or any subsidiary or affiliate thereof for purposes of this Agreement unless the Employee would be considered to have incurred a Separation from Service from the Company or any of its subsidiaries or affiliates. Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separate identified payment for purposes of Section 409A, and any payments described in this Agreement that are due within the “short-term deferral period” as defined in Section 409A or any other exemption under Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. To the extent that any reimbursements or in-kind benefits due to the Employee under this Agreement constitute “deferred compensation” under Section 409A, any such reimbursements and in-kind benefits shall be paid to Employee in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Employee’s Separation from Service shall instead be paid on the first business day after the date that is six months following the Employee’s Separation from Service (or death, if earlier). This Agreement may be amended in any respect deemed by the Company in good faith to be necessary in order to preserve compliance with Section 409A without imposing any additional interest, taxes or penalties on the Employee.

19.

being hereinafter referred to as the “Total Payments”) would be subject to the excise tax under Section 4999 of the Code (or any successor provision) (the “Excise Tax”), then:

If no “stock” of the Company Group is then “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code, prior to the closing of the applicable transaction, the Company (or the applicable corporation undergoing a change in control) shall make good faith efforts to obtain shareholder approval of the Total Payments, such that upon shareholder approval, such portion of the Total Payments shall be not subject to the Excise Tax. The Employee shall fully cooperate to ensure that such shareholder approval of all such Total Payments is valid (including by executing all required waivers). Failure to obtain such shareholder approval following good faith efforts of the Company (or the applicable corporation undergoing a change in control) shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax. In addition, the Employee can voluntarily decide not to execute the waiver, in which case the failure of the Company (or the applicable corporation undergoing a change in control) to obtain such shareholder approval shall not constitute a breach of this Agreement or result in any additional payments to be made to the Employee with respect to the Excise Tax.

In the event that (i) the shareholder approval described in Section 19(a) is not obtained or (ii) the “stock” of the Company Group is “readily tradable” on an “established securities market” or otherwise within the meaning of Section 280G(b)(5)(A)(ii)(I) of the Code, then, to the extent necessary to make such portion of the Total Payments not subject to the Excise Tax, the portion of the Total Payments that do not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced (if necessary, to zero), and all other Total Payments shall thereafter be reduced (if necessary, to zero), with any such reduction being made as follows: cash payments being reduced before equity-based compensation or other non-cash compensation or benefits, in each case, in reverse order beginning with payments or benefits that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code;

provided that, in the case of all of the foregoing Total Payments, all amounts that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) as would result in no portion of the payments being considered “excess parachute payments” under Section 280G of the Code.

Section 19(b) shall not apply and no reduction of Total Payments will occur if (i) clause 19b(ii) is applicable and (ii) (1) the net amount of such Total Payments, as reduced pursuant to Section 19(b) (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is less than (2) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of excise tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).

20.

Recitals. The recitals to this Agreement shall form a part of this Agreement.

(The remainder of this page was intentionally left blank)

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

Duck Creek Technologies LLC

By: Disco Topco Holdings (Cayman), L.P., its sole member

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

Solely for the purposes of Sections 5(d) and 5(e) of this Agreement:

Disco Topco Holdings (Cayman), L.P.

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

EMPLOYEE

/s/ Eva Huston

Name: Eva Huston

Exhibit A

RESTRICTIVE COVENANTS AGREEMENT

Proprietary Information. I agree that all information, whether or not in writing, concerning the Company Entities’ business, technology, business relationships, employee and consultant relationships or financial affairs that the Company Entities have not released to the general public (or is otherwise not known within the relevant trade or industry) and which I received during employment with the Company (“Proprietary Information”)) is and will be the exclusive property of the Company Entities. By way of illustration, Proprietary Information may include information or material which has not been made generally available to the public (or otherwise known within the trade or relevant industry), such as: (a) corporate information, including plans, strategies, methods, policies, resolutions, negotiations or litigation; (b) marketing information, including strategies, methods, customer identities or other information about customers, prospect identities or other information about prospects, or market analyses or projections, customer lists, prospective customer lists and any customer and/or prospective customer list database; (c) financial information, including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; and (d) operational and technological information, including plans, specifications, manuals, forms, templates, software, designs, methods, procedures, formulas, discoveries, inventions, improvements, concepts and ideas; and (e) personnel information, including personnel lists, reporting or organizational structure, resumes, personnel data, compensation structure, performance evaluations and termination arrangements or documents. Proprietary Information also includes information received in confidence by the Company Entities from their respective customers or suppliers or other third parties.

A-1

information pursuant to Section 19 of this Agreement. Notwithstanding anything to the contrary in this Agreement or otherwise, I shall be permitted to disclose Proprietary information (i) to the extent necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (ii) as required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over me; provided in such event, to the extent legally permitted, I give the Company reasonable notice of such requirement and an opportunity to oppose such request (and I will reasonably cooperate with the Company in such opposition).

Rights of Others. I understand that the Company Entities are now and may hereafter be subject to nondisclosure or confidentiality agreements with third persons which require the Company Entities to protect or refrain from use of such third persons’ proprietary information. I agree to be bound by the non-disclosure or confidentiality terms of such agreements in the event I have access to such proprietary information and have knowledge of such agreements.

Commitment to Company Entities; Avoidance of Conflict of Interest. While an employee of the Company, I will devote my full business time and efforts to the business of the Company Entities and I will not engage in any other business activity that conflicts with my duties to the Company Entities. I will advise the General Counsel of the Company or his or her nominee at such time as any activity of either the Company Entities or another business presents me with a conflict of interest or the appearance of a conflict of interest as an employee of the Company. I will take whatever action is reasonably requested of me by the Company to resolve any conflict or appearance of conflict which it finds to exist. Notwithstanding the foregoing, during employment (and thereafter) I can manage my personal and family investments, engage in charitable and/or educational activities, including service on boards of directors of charitable and/or educational organizations, serve on industry advisory committees and/or boards and, to the extent approved by the board of directors of Parent, serve as a member of the board of directors or managers of any for-profit entity; provided that such activities do not interfere with my duties and responsibilities to the Company Entities.

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works and other works of authorship, whether or not patentable or copyrightable that are created, made, conceived or reduced to practice by me (alone or jointly with others) or under my direction. “Intellectual Property Rights” means all patents, patent applications, trademarks and trademark applications, copyrights and copyright applications, trade secrets and other intellectual property rights in all countries and territories worldwide and under any international conventions.

All files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, whether created by me or others, which come into my custody or possession, are the exclusive property of the Company to be used by me only in the performance of my duties for the

A-3

Company Entities. Any property situated on a Company Entities’ premises and owned by any Company Entity, including, without limitation, computers, disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company at any time with or without notice. In the event of the termination of my employment for any reason, I will deliver to the Company all files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, specification sheets, program listings, blueprints, models, prototypes, or other written, photographic or other tangible material containing Proprietary Information, and other materials of any nature pertaining to the Proprietary Information of the Company Entities or to my work for the Company Entities, and will not take or keep in my possession any of the foregoing or any copies. Notwithstanding anything to the contrary in this Agreement or otherwise, I may retain the information set forth in Section 19 below.

Enforcement of Intellectual Property Rights. I will cooperate with the Company at its sole expense, both during and after my employment with the Company, with respect to the procurement, maintenance and enforcement of Intellectual Property Rights in Company-Related Developments. At the Company’s sole expense, I will sign, both during and after the term of this Agreement, all papers, including without limitation copyright applications, patent applications, declarations, oaths, assignments of priority rights, and powers of attorney, which the Company reasonably deems necessary or desirable in order to protect its rights and interests in any Company-Related Development. If the Company is unable, after reasonable effort, to secure my signature on any such papers, I hereby irrevocably designate and appoint each officer of the Company as my agent and attorney-in-fact to execute any such papers on my behalf, and to take such actions as the Company reasonably deems necessary or desirable in order to protect its rights and interests in any Company-Related Development.

Non-Competition and Non-Solicitation. In order to protect the Company Entities’ Proprietary Information and good will, while I am employed by the Company and for a period of twelve (12) months following the termination of my employment for any reason, except as provided in the last two sentences of this Section 8, I agree that I will not directly or indirectly: (a) perform the same or similar services in the Restricted Area (as defined below) for any Competitor (as defined below) as those I performed for the Company Entities during my employment with the Company; (b) engage in or become employed in any capacity by, or become an officer, director, agent, consultant, contractor, shareholder or partner of any partnership, corporation or entity that at the time of my engagement is engaged in, or is planning to engage in, the Business, unless I am engaged solely by a division or affiliate of such partnership, corporation or entity that does not engage in the Business and the entity or division, as applicable, which engages in the Business represents no more than 10% of such entity’s (or, in case of an affiliate, the entire controlled group’s) annual revenues and I am not involved, directly or indirectly, in any plans to engage in the Business, or I am providing services to a portfolio company of a private equity fund which does not engage in the Business (even if the private equity fund has another portfolio company which engages in the Business; provided I provide no services to such other portfolio company or advise on the acquisition or purchase of any Competitor) or have a passive (no more than 5%) equity interest in a private equity or hedge fund that owns an entity engaged in or planning to be engaged in the Business as long as I do not provide services directly to such Business (“Carve-out”); (c) on behalf of a Competitor: (i) call upon, solicit, contact, or provide any services (or attempt to do any of the foregoing) for any Customer or Potential Customer of the Company Entities that I called upon, solicited, contacted, or serviced for the Company Entities during my

A-4

employment or, on or following my termination date, within the two years prior to my termination date; (ii) call upon, solicit, contact, or provide any services (or attempt to do any of the foregoing) for any Customer or Potential Customer; (iii) call upon, solicit, or contact or provide any services to any vendor or supplier of the Company Entities who during my employment is a vendor or supplier of any of the Company Entities, or on or following my termination date, was a vendor or supplier of the Company Entities during the 24-month period prior to my termination date or about whom I had knowledge; or (iv) otherwise divert or take away (or attempt to do any of the foregoing) any business of the Company Entities to a Competitor of the Company Entities; or (d) undertake planning for or organization of a business competitive with the Company Entities’ Business.

“Business” means the business of selling policy, billing and/or claims software to property and casualty insurance companies.

“Potential Customer” shall mean during my employment any person or entity who is identified on a list by any Company Entity as a potential client or customer for the Business and on or following

A-5

my termination date, any person or entity which, at any point during the twelve (12) month period of time preceding termination of my employment with the Company for any reason, was identified on a list as a potential client or customer of the Business.

10.

Government Contracts. I acknowledge that the Company Entities may have from time to time agreements with other persons or with the United States Government or its agencies which impose obligations or restrictions on the Company Entities regarding inventions made during the course of work under such agreements or regarding the confidential nature of such work. I agree to comply with any such obligations or restrictions upon the direction of the Company Entities. In addition to the rights assigned under Section 5, I also assign to the Company (or any of its nominees) all rights which I have or acquire in any Developments, full title to which is required to be in the United States under any contract between the Company Entities and the United States or any of its agencies.

11.

Defend Trade Secrets Act. Pursuant to 18 U.S.C. § 1833(b), I will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to my attorney and (B) solely for the purpose of reporting or investigating

A-6

a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If I file a lawsuit for retaliation by the Company for reporting a suspected violation of law, I may disclose the trade secret to my attorney and use the trade secret information in the court proceeding, if I (i) file any document containing the trade secret under seal, and (ii) do not disclose the trade secret, except pursuant to court order. Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.

12.

13.

Nondisparagement. Following termination of my employment and at all times thereafter, I will not make or publish, or cause to be made or published, any statement or information that disparages or defames any of the Company Entitles or any of their respective partners, officers, directors, shareholders, or employees. The Company agrees not to intentionally make or publish, or cause to be made or published, any official statement or formal announcement that disparages or defames me. Notwithstanding the foregoing, nothing in this Section 12 shall prevent the parties from making any truthful statement (a) necessary with respect to any litigation, arbitration or mediation involving this Agreement or any other agreement between myself and any Company Entity, including, but not limited to, the enforcement of such agreement, in the forum in which such litigation, arbitration or mediation properly takes place or (b) required by law, legal process or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with apparent jurisdiction over the party.

14.

15.

A-7

the Company Entities, in addition to such other remedies which may be available, will be entitled to specific performance and other injunctive relief, without the posting of a bond. If I violate this Agreement, as determined by a final judgment of a court of competent jurisdiction, in addition to all other remedies available to the Company Entities at law, in equity, and under contract, I agree that I am obligated to pay the Company Entities’ reasonable costs of enforcement of this Agreement, including attorneys’ fees and expenses.

16.

17.

18.

No Employment Obligation. I understand that this Agreement does not create an obligation on the Company or any other person to continue my employment. I acknowledge that, unless otherwise provided in my employment agreement with the Company, my employment with the Company is at will and therefore may be terminated by the Company or me at any time and for any reason, with or without cause.

19.

20.

Exit Interview; Return of Company Property. If and when I depart from the Company, I may be required to attend an exit interview and sign an “Employee Exit Acknowledgement” to reaffirm my acceptance and acknowledgement of the obligations set forth in this Agreement. For eighteen (18) months following termination of my employment, I will notify the Company of any change in my address and of each subsequent employment or business activity, including the name and address of my employer and the nature of my activities, reasonably related to the Business; provided that the failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities. On my last day of employment with the Company or upon an earlier request by the Company, to the extent practicable, or as soon as reasonably practicable following my last day of employment with the Company, I shall promptly return to the Company any and all documents and other physical or tangible things regardless of whether in paper or electronic form, in my possession, custody or control, that are the property of any of the Company Entities, and any and all documents or other tangible things in my possession, custody or control that disclose or embody any technical or other information that is confidential or proprietary to the

A-8

Company Entities or any third party that has disclosed such information to any of the Company Entities subject to an obligation of confidentiality. I agree to return and not destroy, alter, erase or otherwise change any software, data or other information belonging to any of the Company Entities. Notwithstanding the foregoing and for the avoidance of doubt, I am entitled to maintain, and the Company Entities acknowledge my right in respect of, individual personnel documents, such as my payroll and tax records and any documents or information relating to my compensation and/or equity interests in any Company Entity.

21.

Disclosure to Future Employers. I agree that prior to accepting employment or engagement with any other person during my employment with the Company, and for eighteen (18) months after my last day of employment with the Company, I shall inform such prospective employer or prospective counterparty of the existence and details of this Agreement and provide such prospective employer or prospective counterparty with a copy of this Agreement, and, in addition, I agree that promptly following the commencement of employment or engagement with such person during such period, I shall provide the Company with written notice, including (a) the name of the employer or counterparty; (b) the business engaged in or to be engaged in by the employer or counterparty; (c) my position with the employer or counterparty; (d) the location of my employment or engagement and (e) the territory in which I have job duties or responsibilities; provided, however, that the foregoing shall apply if and only to the extent that any covenant or commitment set forth in this Agreement would be relevant with respect to such person; and; provided, further, that my failure to provide any such notice shall not constitute a waiver of any right or remedy I may have hereunder or under any employment, equity or other contractual arrangement with any of the Company Entities.

22.

Severability; Blue-Penciling. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it shall be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it shall then appear.

23.

Interpretation. This Agreement will be deemed to be made and entered into in the State of Illinois, and will in all respects be interpreted, enforced and governed under the laws of the State of Illinois without regard to conflicts-of-law principles. I hereby agree to consent to personal jurisdiction of the state and federal courts situated within Illinois and of any state and county in which the Company contends that I have breached this Agreement for purposes of enforcing this Agreement, and waive any objection that I might have to personal jurisdiction or venue in those courts.

IN WITNESS WHEREOF, I have duly executed this Agreement as of the date below.

Signed: /s/ Eva Huston

A-9

Type or print name: Eva Huston

Date: 8-3-20

A-10

Acknowledged and Confirmed

Disco Topco Holdings (Cayman), L.P.

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

Duck Creek Technologies LLC

By: Disco Topco Holdings (Cayman), L.P., its sole member

By: Disco (Cayman) GP Co., its general partner

By: /s/ Michael A. Jackowski
Name: Michael A. Jackowski
Title: Authorized Signatory

A-11

APPENDIX A

To: Duck Creek Technologies LLC

From: Eva Huston

Date: 8-3-20

SUBJECT: Prior Inventions

☒ No inventions or improvements

☐ See below:

☐ Additional sheets attached

The following is a list of all patents and patent applications in which I have been named as an inventor

☒ None

☐ See below:

Appendix A-1

Exhibit B

RELEASE OF CLAIMS

As a condition precedent to [_] (“Employee”) receiving payments as provided for in Section 7(b) of that certain Employment Agreement by and between Duck Creek Technologies, LLC (the “Company”) and Employee, dated [●] (“the Employment Agreement”), Employee hereby agrees to the terms of this Release of Claims (this “Release”) as follows:

Release.

Employee, on behalf of Employee and Employee’s heirs, executors, administrators, successors and/or assigns, hereby voluntarily, unconditionally, irrevocably and absolutely releases and discharges the Company, its parent, and each of their subsidiaries, affiliates and partnerships, and all of their past and present employees, officers, directors, agents, owners, shareholders, representatives, members and attorneys, and all of their successors and assigns (collectively, the “Released Parties”), from all claims, charges, demands, causes of action, and liabilities, known or unknown, suspected or unsuspected of any nature whatsoever (hereinafter, “Claims”) that Employee has or may have against the Released Parties (i) from the beginning of time through the date upon which Employee signs this Release, including any Claims for an alleged violation of any or all federal, state and local laws or regulations, including, but not limited to, the following, each as may be amended and as may be applicable: Title VII of the Civil Rights Act; the Age Discrimination in Employment Act; the Americans with Disabilities Act; the Rehabilitation Act; the Family and Medical Leave Act; the Sarbanes-Oxley Act; the Worker Adjustment and Retraining Notification Act; the Fair Credit Reporting Act; the Equal Pay Act; the Employee Retirement Income Security Act; the National Labor Relations Act; Uniformed Services Employment and Reemployment Rights Act; the Equal Pay Act; the False Claims Act; Sections 1981 through 1988 of Title 42 of the United States Code; the Occupational Safety and Health Act; the Fair Labor Standards Act; the Illinois Human Rights Act; the Right to Privacy in the Workplace Act; the Illinois Health and Safety Act; the Illinois Worker Adjustment and Retraining Notification Act; the Illinois One Day Rest in Seven Act; the Illinois Union Employee Health and Benefits Protection Act; the Illinois Employment Contract Act; the Illinois Labor Dispute Act; the Victims’ Economic Security and Safety Act; the Illinois Whistleblower Act; the Illinois Equal Pay Act; Cook County Human Rights Ordinance; Chicago Human Rights Ordinance; the Illinois Constitution; Claims for negligent or intentional infliction of emotional distress, breach of contract, fraud or any other unlawful behavior, and/or punitive damages, liquidated damages, penalties, attorneys’ fees, costs and/or expenses or (ii) arising under any agreement between Employee and any Released Party; provided, however, that this Release does not bar any Claims (A) with respect to Employee’s rights under Sections 5(e), 7(b), 7(d), 18 or 19 of the Employment Agreement, (B) that may not be waived by private agreement under applicable law, such as claims for workers’ compensation or unemployment insurance benefits, (C) with respect to indemnification, advancement of expenses and/or coverage under any director and officer insurance policy, including pursuant to any written agreement or corporate governance document or limited partnership of any Released Party, (D) with respect to all rights under the Company’s 401(k) plan or (E) with respect to the Class C Units, if any, or Class D Units of the Issuer (as defined in the Employment Agreement). Nothing in this Release prohibits or restricts Employee’s right to file a charge with or participate in a charge by the Equal Employment Opportunity

B-1

Commission, or any other local, state, or federal administrative body or government agency that is authorized to enforce or administer laws related to employment; provided that Employee hereby waives the right to recover any monetary damages or other relief against any Released Parties with respect to Claims released by Employee herein.

Review and Revocation Period.

(a)

(b)

Employee will have seven (7) calendar days from the date on which such Employee signs this Release to revoke Employee’s consent to the terms of this Release. Such revocation must be in writing and must be e-mailed to lori.b.hannay@duckcreek.com. Notice of such revocation must be received within the seven (7) calendar days referenced above.

(c)

Third-Party Beneficiaries. Employee acknowledges and agrees that all Released Parties are third-party beneficiaries of this Release and have the right to enforce this Release.

Governing Law. This Release shall be governed by, and construed in accordance with, the laws of the State of Illinois, without regard to the application of any choice-of-law rules that would result in the application of another state’s laws.

B-2

IN WITNESS WHEREOF, Employee has executed this Release, as of the below-indicated date, which may be signed and delivered by facsimile or .pdf.

EMPLOYEE

[_]

Date Executed:

B-3

EXHIBIT 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael Jackowski, certify that:



1.	I have reviewed this Quarterly Report on Form 10-Q of Duck Creek Technologies, Inc.;



2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:



(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)	[Paragraph omitted in accordance with Exchange Act Rule 13a-14(a)];



(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):



(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.



Dated:	April 7, 2022	/s/ Michael A. Jackowski
		Michael A. Jackowski
		Chief Executive Officer (principal executive officer)

EXHIBIT 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin Rhodes, certify that:



1.	I have reviewed this Quarterly Report on Form 10-Q of Duck Creek Technologies, Inc.;



2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have:



(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)	[Paragraph omitted in accordance with Exchange Act Rule 13a-14(a)];



(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and



5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):



(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and



(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.



Dated:	April 7, 2022	/s/ Kevin R. Rhodes
		Kevin R. Rhodes
		Chief Financial Officer (principal financial officer and principal accounting officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Duck Creek Technologies, Inc. (the "Company") for the period ended February 28, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:	April 7, 2022	/s/ Michael A. Jackowski
		Michael A. Jackowski
		Chief Executive Officer (principal executive officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Duck Creek Technologies, Inc. (the “Company”) for the period ended February 28, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:	April 7, 2022	/s/ Kevin R. Rhodes
		Kevin R. Rhodes
		Chief Financial Officer (principal financial officer and principal accounting officer)