Exhibit 10.2

NUANCE COMMUNICATIONS, INC.

EMPLOYMENT AGREEMENT

This Agreement is made by and between Nuance Communications, Inc. (the
“Company”) and Paul A. Ricci (the “Executive”), effective as of November 11,
2011 (the “Effective Date”).

1. Duties and Scope of Employment.

(a) Positions and Duties. Executive will serve as Chairman of the Board and
Chief Executive Officer of the Company. Executive will render such business and
professional services in the performance of Executive’s duties (consistent with
Executive’s position within the Company) as shall reasonably be assigned to him
by the Company’s Board of Directors (the “Board”).

(b) Board Membership. During the Employment Term (as defined below), Executive
will serve as the Chairman of the Board, subject to any required stockholder
approval.

(c) Obligations. During the Employment Term, Executive will devote Executive’s
full business efforts and time to the Company. For the duration of the
Employment Term, Executive agrees not to actively engage in any other
employment, occupation or consulting activity for any direct or indirect
remuneration without the prior approval of the Board of Directors of the
Company. Such approval will not be unreasonably withheld, provided, however,
that Executive may, without the approval of the Board, serve in any capacity
with any civic, educational or charitable organization, or as a member of
corporate Boards of Directors (but in all cases subject to Executive’s
compliance with the terms of the Confidential Information Agreement and the
terms of this Agreement).

2. Employment Term.

Subject to earlier termination as provided for below, the Company will employ
Executive for a term of three (3) years commencing on the Effective Date through
November 11, 2014. The term of employment hereunder may then be extended for
successive additional terms of one (1) year each (each, a “Successive One-Year
Term”) with mutual written notice of intention to extend by the Company and the
Executive at least one hundred and eighty (180) days prior to the end of the
initial three (3) year term or any Successive One-Year Term. The Company or
Executive may terminate this agreement after the initial term or after any
Successive One-Year Term by giving written notice of intent to terminate this
Agreement (a “Notice of Non-Renewal”). The term of employment under this
Agreement shall include the initial three (3) year period and any extension
thereof (the “Employment Term”). Notwithstanding the foregoing, Executive and
the Company acknowledge that this employment relationship may be terminated at
any time prior to the expiration of the Employment Term, upon ninety (90) days
written notice to the other party, with or without Cause or for any or no
reason, at the option either of the Board or Executive and that in the event the
Company or Executive terminate Executive’s employment with the Company prior to
the end of the Employment Term, Executive only will be entitled to those
payments and benefits, if any, provided for in Section 5 of this Agreement.

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3. Compensation.

(a) Base Salary. The Company will pay Executive as compensation for Executive’s
services a Base Salary at the annualized rate of $800,000 and will be reviewed,
at a minimum of once per year to ensure Executive’s total compensation is
consistent with current market practices and in line with Executive’s
performance. The Base Salary will be paid through payroll periods that are
consistent with the Company’s normal payroll practices and will be subject to
the usual, required withholding.

(b) Performance Bonus. Executive will be eligible to receive a target bonus of
up to one-hundred percent (100%) of Executive’s then Base Salary based upon the
achievement of performance criteria established within four (4) months of the
start of the applicable bonus period by the Compensation Committee of the Board,
after consultation with Executive. The performance standards will be based on
the Company’s achievement of goals for proforma revenue and earnings or such
other performance goals mutually agreed to by Executive and the Company, each as
defined by the Compensation Committee of the Board. The actual percentage of
Base Salary payable as a bonus for any year will depend, upon the extent to
which the applicable performance criteria have been achieved. Any bonus that
actually is earned will be paid as soon as practicable (but no later than two
and one-half (2  1/2) months) after the end of the fiscal year for which the
bonus is earned, but only if Executive was employed with the Company through the
end of such fiscal year. This performance bonus is not earned unless Executive
is employed through the end of the fiscal year.

(c) Equity Grants.

Upon the execution of this Agreement, and upon determination of the Compensation
Committee of the Board that Executive’s performance has been satisfactory, the
Company will grant to the Executive the right to purchase seven hundred and
fifty thousand (750,000) shares of restricted common stock of the Company at a
per share purchase price equal to the par value of the Company’s common stock on
the date of the grant (the “Stock Purchase Right”). The Stock Purchase Right
will time-vest annually on the grant date anniversary in equal increments of two
hundred and fifty thousand (250,000) shares over a 3-year period. In addition,
the Company will grant to the Executive seven hundred and fifty thousand
(750,000) shares under a performance-based restricted stock unit award (the “RSU
Award”) that will vest upon determination of achievement of goals as set and
determined by the Compensation Committee of the Board, in even increments over
three (3) fiscal periods, Fiscal Year 2012, Fiscal Year 2013 and Fiscal Year
2014. The Stock Purchase Right and the RSU Award (together, the “Stock Awards”)
shall be represented by, and subject to, the terms of a award agreements to be
prepared in accordance with the terms herein.

Annually, commencing with the conclusion of each Fiscal Year, the Compensation
Committee of the Board will review the Executive’s performance to ensure that
total compensation, including any equity award grants, are consistent with
current market practices and will issue additional awards based on the
Executive’s performance at the discretion of the Committee.

(d) Car Allowance. During the Employment Term, the Company will reimburse
Executive up to $20,000 per calendar year, net of withholding taxes, (or such
greater amount as approved by the Board or Compensation Committee, consistent
with the Company’s practice with respect to other executive officers) for use
towards a car leased by the Company or via a car allowance included in the
Executive’s pay. The lease allowance is inclusive of insurance costs to cover
the leased vehicle. The

 

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Company shall make such reimbursement payments by March 15th of year following
the calendar year Executive incurred such eligible car allowance expenses.

(e) Tax & Financial Services Allowance. The Company will reimburse Executive for
reasonable professional services expenses incurred by Executive for tax,
financial and/or estate planning. The Company will reimburse Executive only for
expenses that do not exceed twenty five thousand dollars ($25,000), net of
withholding taxes, per calendar year. The Company shall make such reimbursement
payments by the end of the third month following the calendar year Executive
incurred such eligible tax and financial service allowance expenses.

(f) Expenses. The Company will reimburse Executive for reasonable travel,
lodging and other expenses incurred by Executive in the furtherance of the
performance of Executive’s duties hereunder, in accordance with the Company’s
expense reimbursement policy as in effect from time to time.

4. Benefits.

(a) Employee Benefits. During the Employment Term, Executive will be entitled to
participate in the employee benefit plans currently and hereafter maintained by
the Company of general applicability to other senior executives of the Company,
including, without limitation, the Company’s group medical, dental, vision,
disability, life insurance, and flexible-spending account plans. The Company
reserves the right to cancel or change the benefit plans and programs it offers
to its employees at any time.

(b) Executive Medical Benefit. During the Employment Term, the Company shall
offer Executive a supplemental enhanced executive wellness benefit, provided
that the expense incurred by the Company shall not exceed fifty thousand dollars
($50,000) per year, net of withholding taxes. Any reimbursement made pursuant to
this Section 4(b) will be paid by the Company by the end of the third month
following the calendar year Executive incurred any eligible supplement executive
medical expense. No unused benefit from one calendar year will carry forward or
otherwise be available for future calendar years.

(c) Life Insurance Policy. During the Employment Term, the Company shall
continue to pay the annual premium for an enhanced life insurance benefit equal
to $1,000,000 in value. The life insurance policy shall be a term-life policy
with Executive as the owner of the policy.

(d) Long-Term Disability Policy. During the Employment Term, the Company will
pay the premiums for an enhanced long-term disability insurance policy that will
provide coverage of sixty percent (60%) of Executive’s base eligible earnings.
This long-term disability policy will be subject to Executive’s continuing to
satisfy all applicable eligibility requirements imposed by the long-term
disability insurance company.

(e) Post Retirement Medical Benefit. For the period following Executive’s
retirement, until such time as Executive is age sixty five (65), provided
Executive is an active full-time employee of the Company at the time of his
retirement, the Company shall reimburse Executive up to a maximum amount of two
hundred and fifty thousand dollars ($250,000), net of withholding taxes, for
expenses incurred to purchase medical or health insurance during a ten (10) year
period. The Company shall make such reimbursement payments by the end of the
third month following the calendar year Executive incurred such eligible
post-retirement medical or health insurance expenses.

 

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5. Severance.

Upon termination of employment, Executive shall receive payment of (a) his Base
Salary, as then in effect, through the date of termination of employment, and
(b) all accrued vacation, expense reimbursements and any other benefits (other
than severance benefits, except as provided below) due to Executive through the
date of termination of employment in accordance with established Company plans
and policies or applicable law (the “Accrued Obligations”). In addition, the
following will apply:

(a) Termination By the Company other than for Cause Death or Disability. If
Executive terminates employment following receipt of a Notice of Non-Renewal
from the Company or is terminated by the Company for a reason other than Cause,
Death or Disability (each as defined below) then, subject to Executive’s
compliance with the provisions in Section 5(f), Executive will be entitled to
receive through the term of the Severance Period: (i) continuing payments of one
and half (1 1/2) times Executive’s Base Salary, as then in effect, during the
Severance Period, to be paid periodically in accordance with the Company’s
normal payroll policies and subject to the usual, required withholding, plus one
hundred and fifty percent (150%) of Executive’s target Performance Bonus which
had been in effect in the fiscal year ending prior to the year of termination,
to be paid periodically in accordance with the Company’s normal payroll policies
and subject to the usual, required withholding, (ii) continued payment by the
Company of the group medical, dental and vision continuation coverage premiums
for Executive and Executive’s eligible dependents under Title X of the
Consolidated Budget Reconciliation Act of 1985, as amended (“COBRA”) during the
Severance Period under the Company’s group health plans, as then in effect;
(iii) continued payment of the annual premium for the remaining term of the life
insurance policy specified in Section 4(c) above; (iv) the continued vesting for
a period of twenty-four months (24 months) for Executive’s stock options and the
Stock Purchase Right; (v) accelerated vesting of any unvested restricted stock
units (including specifically the RSU Award) , and (vi) an extended period of
time to exercise vested options for a period of two (2) years or until their
original expiration date.

(b) Termination due to Death or Disability. If the Executive’s employment with
the Company is terminated due to his Death or his becoming Disabled, then
Executive or Executive’s estate (as the case may be) will (i) receive an amount
equal to one and half (1 1/2) times Executive’s Base Salary at the time of the
death or disability plus an amount equal to (100%) of Executive’s target
Performance Bonus, as then in effect in the fiscal year ending prior to the
death or disability, (ii) continued payment of the annual premium for the
remaining term of the life insurance policy specified in Section 4(c) above;
(iii) be entitled to immediate one hundred percent (100%) vesting of any Company
stock options or Stock Awards held by the Executive that were unvested
immediately prior to his termination of employment, (iv) an extended period of
time to exercise vested options for a period of two (2) years or until their
original expiration date, (v) receive Company-paid coverage for a period up to
three (3) years or as eligible under Title X of the Consolidated Budget
Reconciliation Act of 1985, as amended (“COBRA”) for Executive (if applicable)
and Executive’s eligible dependents under the Company’s health benefit plans
(or, at the Company’s option, coverage under a separate plan), providing
benefits that are no less favorable than those provided under the Company’s
plans immediately prior to Executive’s death, (vi) receive the allowance
remaining under the post retiree medical benefit provided under Section 4(e),
and (vii) be entitled to receive all compensation and benefits from the Company
for which he is eligible under other policies or plans.

 

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(c) Termination After Change of Control or Due to Good Reason at any Time. If,
(i) at any time during the Employment Term Executive resigns for Good Reason (as
defined below); or (ii) within twelve (12) months following a Change of Control
(as defined below), Executive’s employment with the Company is terminated for a
reason other than (A) Cause, (B) Executive becoming Disabled or (C) Executive’s
death, then, subject to Executive’s compliance with the provisions in
Section 5(e), Executive will be entitled to receive the severance payments and
benefits set forth in Section 5(a) and the post retiree medical benefit provided
under Section 4(e); provided, however Executive shall receive (i) two
(2.0) times his Base Salary as then in effect, (ii) plus an amount equal to two
(2.0) times his target Performance Bonus which had been in effect in the fiscal
year ending prior to the year of termination, and (iii) immediate 100%
acceleration of any unvested options or other equity awards (including
specifically the Stock Awards), rather than continued vesting over the severance
period.

(d) Other Termination. If the Executive terminates employment with the Company
(i) after providing a Notice of Non-Renewal or (ii) other than for Good Reason
(as defined below), or if Executive’s employment with the Company is terminated
for Cause, then Executive will receive payment of the Accrued Obligations but he
shall not be entitled to any other compensation or benefits (including, without
limitation, accelerated vesting of stock options and unvested Stock Awards) from
the Company, except to the extent provided under the applicable stock option
agreement(s), Company benefit plans or as may be required by law (for example,
under COBRA).

(e) Conditions to Receive Severance Package. Except for the Accrued Obligations,
the applicable provisions of the Option Plan and his equity award agreements,
and other payments to which Executive may be entitled by law, the severance
payments, continued benefits, continued vesting, vesting acceleration and the
ability to exercise stock options described in this Section 5 will be provided
to Executive if the following conditions are satisfied: (i) Executive complies
with all surviving provisions of the Confidential Information Agreement, and any
other confidentiality or proprietary rights agreement signed by Executive and
the non-competition provisions set forth herein; and (ii) Executive executes and
delivers to the Company, and does not revoke, a full general release, in a form
acceptable to the Company, releasing all claims, known or unknown, that
Executive may have against the Company, and any subsidiary or related entity,
their officers, directors, employees and agents, arising out of or any way
related to Executive’s employment or termination of employment with the Company.

(f) Cause. For purposes of this Agreement, “Cause” means Executive’s employment
with the Company is terminated after a majority of the Board has found any of
the following to exist: (i) that Executive has been convicted of a felony in
connection with the performance of his obligations to the Company or which
adversely affects the Executive’s ability to perform such obligations; (ii) a
breach of any duty of loyalty owed to the Company by Executive, or the
usurpation of any Company corporate opportunity by Executive, that has a
material detrimental effect on the Company’s reputation or business; (iii) the
commission by the Executive of an intentional act of fraud or embezzlement which
was intended to and results in loss, damage or injury to the Company, whether
directly or indirectly; (iii) a material disclosure of the Company’s
confidential or proprietary information by the Executive which violates the
terms of the Confidential Information Agreement; or (iv) Executive’s continued
substantial willful nonperformance (except by reason of Disability) of any
material obligations under this Agreement after Executive has received a written
demand for performance by the Board and has failed to cure such nonperformance
within fifteen (15) business days of receiving such notice. Other than for a
termination pursuant to Section 5(f)(i), Executive shall receive

 

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notice and an opportunity to be heard before the Board with Executive’s own
attorney before any termination for Cause is deemed effective. Notwithstanding
anything to the contrary, the Board may immediately place Executive on
administrative leave (with full pay and benefits to the extent legally
permissible) and suspend all access to Company information, employees and
business should Executive wish to avail himself of his opportunity to be heard
before the Board prior to the Board’s termination for Cause. If Executive avails
himself of his opportunity to be heard before the Board, and then fails to make
himself available to the Board within five (5) business days of such request to
be heard, the Board may thereafter cancel the administrative leave and terminate
Executive for Cause.

(g) Change of Control. For the purposes of this Agreement, a “Change of Control”
means the occurrence of any of the following events, but only to the extent such
event constitutes a “change in control event” for purposes of Section 409A:
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under said Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by
the Company’s then outstanding voting securities; or (ii) a change in the
composition of the Board occurring within a one-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors (“Incumbent
Directors” will mean directors who either (A) are members of the Board as of the
Effective Date, or (B) are elected, or nominated for election, to the Board with
the affirmative votes of at least a majority of the Board at the time of such
election or nomination (but will not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election. of directors to the Company)); or (iii) the date of the
consummation of a merger or consolidation of the Company with any other
corporation that has been approved by the stockholders of the Company, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iv) the date of
the consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets.

(h) Disabled. For purposes of this Agreement, “Disabled” means Executive being
unable to perform the principal functions of his duties due to a medically
certifiable physical or mental impairment, but only if such inability has lasted
or is reasonably expected to last for at least six months. Whether Executive is
Disabled will be determined by a third party administrator of the Company’s
long-term disability program.

(i) Good Reason. For purposes of this Agreement, “Good Reason” means (i) without
the Executive’s consent, a significant reduction of the Executive’s duties,
position, reporting status, or responsibilities relative to the Executive’s
duties, position, reporting status, or responsibilities in effect immediately
prior to such reduction, or the removal of the Executive from such position,
duties and responsibilities or change in reporting status, unless the Executive
is provided with comparable duties, position and responsibilities or reporting
status; also a reduction in duties, position, reporting status or
responsibilities by virtue of the Company being acquired and made part of a
larger entity will constitute “Good Reason” unless the Executive remains in his
position as Chief Executive Officer of a publicly traded company that conducts
substantially the same core operations, business and activities as were
conducted by the Company prior to any such acquisition or

 

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similar corporate transaction; (ii) without the Executive’s consent, a
substantial reduction, by the Board of the Executive’s Base Salary as in effect
immediately prior to such reduction (unless such reduction is part of an overall
Company effort that effects similarly situated senior executives of the
Company); (iii) without the Executive’s consent, the requirement that Executive
relocate his principal place of employment more than fifty (50) miles from the
current location of the Company’s principal executive offices; (iv) a material
breach by the Company of this Agreement; and (iv) failure of Executive to be
nominated as a Board member. Executive will not resign for Good Reason without
first providing the Company with written notice of the acts or omissions
constituting the grounds for “Good Reason” within ninety (90) days of the
initial existence of the grounds for “Good Reason” and, if such grounds are
susceptible to cure, a reasonable cure period of not less than thirty (30) days
following the date of such notice. Any resignation for Good Reason must occur
within two years of the initial existence of the grounds constituting Good
Reason.

(j) Severance Period. For purposes of this Agreement, “Severance Period” means
the period beginning on the date of Executive’s termination of employment with
the Company and ending on the date eighteen (18) months later for all reasons
other than a termination following a Change of Control or for Good Reason.
“Severance Period” for a termination following a Change of Control or for a
termination by the Executive for Good Reason means the period beginning on the
date of Executive’s termination of employment with the Company and ending on the
date twenty-four (24) months later.

6. Confidential Information. Executive agrees to continue to comply with any
agreement Executive has entered into with the Company regarding confidential
information and/or invention assignment (the “Confidential Information
Agreement”).

7. Assignment. This Agreement will be binding upon and inure to the benefit of
(a) the heirs, executors and legal representatives of Executive upon Executive’s
death. None of the rights of Executive to receive any form of compensation
payable pursuant to this Agreement may be assigned or transferred except by
will, trust, or the laws of descent and distribution. Any other attempted
assignment, transfer, conveyance or other disposition of Executive’s right to
compensation or other benefits will be null and void.

8. Indemnification. Subject to applicable law, Executive will be provided
indemnification but on terms no less favorable than provided to any other
Company executive officer and subject to the terms of any separate written
indemnification agreement as well as the Company’s charter.

9. Notices. All notices, requests, demands and other communications called for
hereunder will be in writing and will be deemed given (i) on the date of
delivery if delivered personally, (ii) one (1) day after being sent by a well
established commercial overnight service, or (iii) four (4) days after being
mailed by registered or certified mail, return receipt requested, prepaid and
addressed to the parties or their successors at the following addresses, or at
such other addresses as the parties may later designate in writing:

If to the Company:

Nuance Communications, Inc.

One Wayside Road

Burlington, MA 01803

Attn: Senior Vice President — Human Resources

If to Executive:

at the last residential address known by the Company.

 

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10. Severability. In the event that any provision hereof becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void, this
Agreement will continue in full force and effect without said provision.

11. Original Agreement. Executive previously entered into an employment
agreement with the Company on August 11, 2003, as amended from time to time (the
“Original Agreement”). Executive and the Company agree that this Agreement will
supersede and replace the Original Agreement and any of it amendments in their
entirety.

12. Non-Competition and Non-Solicitation. If Executive’s employment with the
Company terminates pursuant to Sections 5(a), 5(b), or 5(c) of this Agreement,
for a period beginning on the Effective Date and ending 18 months after the
Executive ceases to be employed by the Company (or 24 months following
termination of Executive’s employment if such termination occurs within twelve
months following a Change of Control of the Company or Executive terminates for
Good Reason) (the “Non-Competition Period”) Executive, directly or indirectly,
whether as employee, owner, sole proprietor, partner, director, member,
consultant, agent, founder, co-venturer or otherwise, will: (i) not engage,
participate or invest in a company whose primary business is voice recognition
or natural language processing; (ii) not engage, participate or invest in a
large Information Technology (“IT”) company, such as Microsoft or IBM, in a
position in which his principal involvement would be in the business of speech
recognition software; (iii) not solicit, induce or influence any person to leave
employment with the Company; (iv) not directly or indirectly solicit business
from any of the Company’s customers and users on behalf of any company defined
in Section 12(i) or (ii) above. Nothing in this Agreement shall prohibit the
Executive from owning (as a passive investment): (a) not more than two percent
of any class of publicly traded securities of any entity or (b) not more than
five percent of any class of non-publicly traded securities of any entity.

Notwithstanding the foregoing, if Executive’s employment with the Company
terminates pursuant to Section 5(d) of this Agreement, and not pursuant to
Sections 5(a), 5(b), or 5(c) of this Agreement, the Non-Competition Period will
be limited to twelve (12) months. Executive agrees that nothing in this
Section 12 shall affect his continuing obligations under the Confidential
Information Agreement.

13. Non Disparagement. Following the date Executive ceases to be employed by the
Company, Executive will not disparage in any way the Company, its Officers,
directors, employees, investors, shareholders, administrators, affiliates,
divisions, subsidiaries, predecessor or successor corporations, or assigns, and
will refrain from any defamation, libel or slander of any of those parties, and
any tortious interference with the contracts, relationships and prospective
economic advantage of any of those parties. Likewise, following the date
Executive ceases to be employed by the Company, its officers, directors,
employees, administrators, and affiliates, will not disparage, except as
otherwise required by law, in any way the Executive, and will refrain from any
defamation, libel or slander of the Executive, and, subject to provisions of
Section 12 of

 

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this Agreement, will refrain from any tortious interference with the contracts,
relationships and prospective economic advantage of the Executive.

14. Entire Agreement. This Agreement, together with the Confidential Information
Agreement and the Company’s organizational documents, represents the entire
agreement and understanding between the Company and Executive concerning the
subject matter herein and Executive’s employment relationship with the Company,
and supersedes and replaces any and all prior or contemporaneous agreements and
understandings whether written or oral between the Executive and the Company.

15. Arbitration and Equitable Relief.

(a) Except as provided in Section 15(d) below, Executive and the Company agree
that to the extent permitted by law, any dispute or controversy arising out of,
relating to, or in connection with this Agreement, or the interpretation,
validity, construction, performance, breach, or termination thereof will be
settled by arbitration to be held in either (at the Executive’s election which
must be made within one day of notice of any such action) San Francisco,
California, or Boston, Massachusetts, in accordance with the procedures then in
effect of the Judicial Arbitration & Mediation Services, Inc. (“JAMS”) (the
“Rules”). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator’s decision in any court having jurisdiction.

(b) The arbitrator and/or any state or federal court will apply Massachusetts
law to the merits of any dispute or claim, without reference to rules of
conflict of law. Executive hereby agrees that he will not challenge the
enforceability of the non-competition clause as set forth herein based solely
upon the fact that Executive has a residence in California. Executive hereby
expressly consents to the personal jurisdiction of the state and federal courts
located in either California or Massachusetts (at the Executive’s election which
must be made within one day of notice of any such action) for any action or
proceeding arising from or relating to this Agreement and/or relating to any
arbitration in which the parties are participants.

(c) The Company will pay the direct costs and expenses of the arbitration. The
Company will also reimburse Executive’s fees and expenses as incurred monthly,
including reasonable attorneys’ fees in connection with any dispute arising out
of this agreement, provided Executive prevails on at least one material issue in
such dispute, or provided an arbitrator does not determine that Executive’s
legal positions were frivolous or without legal foundation. In the event
Executive does not so prevail or in the event of such determination, Executive
will repay to the Company any amounts previously reimbursed by it, and Executive
will reimburse the Company for its fees and expenses, including reasonable
attorneys’ fees, incurred in connection with the dispute.

(d) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 15, WHICH DISCUSSES ARBITRATION.
EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO THE
EXTENT PERMITTED BY LAW, TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING
TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY,
CONSTRUCTION, PERFORMANCE, BREACH, OR TERMINATION THEREOF TO BINDING
ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF
EXECUTIVE’S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES
RELATING TO ALL ASPECTS

 

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OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED TO, THE
FOLLOWING CLAIMS:

ANY AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT,
BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING,
BOTH EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL
DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION;

ANY AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE
FAIR LABOR STANDARDS ACT, AND ANY LAW OF THE STATE OF CALIFORNIA; AND

ANY AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

16. No Oral Modification, Cancellation or Discharge. This Agreement may be
changed or terminated only in writing (signed by Executive and the Company).

17. Withholding. The Company is authorized to withhold, or cause to be withheld,
from any payment or benefit under this Agreement the full amount of any
applicable withholding taxes.

18. Governing Law. This Agreement will be governed by the laws of the State of
Massachusetts (with the exception of its conflict of laws provisions).

19. Acknowledgment. Executive acknowledges that he has had the opportunity to
discuss this matter with and obtain advice from his private attorney, has had
sufficient time to, and has carefully read and fully understands all the
provisions of this Agreement, and is knowingly and voluntarily entering into
this Agreement.

20. Attorneys’ Fees. Executive shall be reimbursed his reasonable attorneys’
fees incurred with respect to the negotiation of this Agreement.

21. Code Section 409A.

(a) Notwithstanding anything to the contrary in this Agreement, no Deferred
Compensation Separation Benefits (as defined below) will become payable under
this Agreement until Executive has a “separation from service” within the
meaning of Section 409A of the Code, and any proposed or final regulations and
guidance promulgated thereunder (“Section 409A”). Further, if Executive is a
“specified employee” within the meaning of Section 409A at the time of
Executive’s termination (other than due to death), and the severance payable to
Executive, if any, pursuant to this Agreement, when considered together with any
other severance payments or separation benefits, are considered deferred
compensation under Section 409A (together, the “Deferred Compensation Separation
Benefits”), such Deferred Compensation Separation Payments that are otherwise
payable within the first six (6) months

 

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following Executive’s termination of employment will become payable on the first
payroll date that occurs on or after the date six (6) months and one (1) day
following the date of Executive’s termination of employment. All subsequent
Deferred Compensation Separation Benefits, if any, will be payable in accordance
with the payment schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, if Executive dies following his termination but
prior to the six (6) month anniversary of his termination, then any payments
delayed in accordance with this paragraph will be payable in a lump sum as soon
as administratively practicable after the date of Executive’s death and all
other Deferred Compensation Separation Benefits will be payable in accordance
with the payment schedule applicable to each payment or benefit. Each payment
and benefit payable under this Agreement is intended to constitute separate
payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

(b) Any amount paid under this Agreement that satisfies the requirements of the
“short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations shall not constitute Deferred Compensation Separation Benefits for
purposes of Section 21(a) above.

(c) Any amount paid under this Agreement that qualifies as a payment made as a
result of an involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the
Section 409A Limit (as defined below) shall not constitute Deferred Compensation
Separation Benefits for purposes of Section 21(a) above. For purposes of this
Section 21(c), “Section 409A Limit” will mean the lesser of two (2) times:
(1) Executive’s annualized compensation based upon the annual rate of pay paid
to Executive during the Company’s taxable year preceding the Company’s taxable
year of Executive’s termination of employment as determined under Treasury
Regulation 1.409A-1(b)(9)(iii)(A)(1); or (ii) the maximum amount that may be
taken into account under a qualified plan pursuant to Section 401(a)(17) of the
Code for the year in which Executive’s employment is terminated.

The foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A, and
any ambiguities herein will be interpreted to so comply. The Company and
Executive agree to work together in good faith to consider amendments to this
Agreement and to take such reasonable actions which are necessary, appropriate
or desirable to avoid imposition of any additional tax or income recognition
prior to actual payment to Executive under Section 409A.

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below:

 

 

EXECUTIVE     /s/ Paul A. Ricci     Date    November 11, 2011

Paul A. Ricci

Chairman and Chief Executive Officer

   

 

 

COMPANY     /s/ Robert Frankenberg     Date    November 11, 2011

Robert Frankenberg

Chairman of the Compensation Committee of

The Board of Directors