Exhibit 10.31

AMENDED AND RESTATED

EXECUTIVE EMPLOYMENT AGREEMENT

eLoyalty Corporation (the “Company”), and Christopher J. Danson, an individual
(“Employee”), enter into this Amended and Restated Employment Agreement
(“Agreement”) as of September 8, 2008.

WHEREAS, the Company desires to continue to employ Employee to provide personal
services to the Company and to provide Employee with certain compensation and
benefits in return for his services; and

WHEREAS, Employee wishes to continue to be employed by the Company and to
provide personal services to the Company in return for certain compensation and
benefits.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, it is hereby agreed by and between the parties hereto as follows:

1. Duties. The Company shall continue to employ Employee as its Vice President,
Delivery, and Employee accepts such employment upon the terms and conditions
herein. Employee shall have such responsibilities, duties and authority in all
material respects as are currently assigned to Employee and such other
responsibilities, duties and authority as the President & Chief Executive
Officer may reasonably designate and are customarily associated with his
position. During the term of his employment with the Company, Employee shall
perform faithfully the duties assigned to him to the best of his ability, and
Employee shall devote his full and undivided business time and attention to the
transaction of the Company’s business.

2. Outside Activities.

(a) Non-Company Activities. Except in conformity with the requirements with the
Company’s then-effective Code of Ethical Business Conduct, Employee will not
during the term of this Agreement undertake or engage (other than as a passive
investor) in any other employment, occupation or business enterprise, whether as
an agent, partner, proprietor, officer, director, employee, consultant,
contractor or otherwise, whether during or outside the business hours of the
Company. Employee may engage in civic and not-for-profit activities so long as
such activities do not interfere with the performance of his duties hereunder.

(b) No Adverse Interests. Except as permitted by Paragraph 2(c), during his
employment Employee agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest which is known or should be
known by him to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise.

(c) Non-Competition. During the term of his employment by the Company, except on
behalf of the Company, Employee will not directly or indirectly, whether as a
stockholder, agent, partner, proprietor, officer, director, employee,
consultant, contractor, or in any capacity whatsoever, engage in, become
financially interested in, be employed by or have any business connection with
any other person, corporation, firm, partnership or other entity whatsoever
known by him to compete directly with the Company, anywhere

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throughout the world, in any line of business engaged in (or planned to be
engaged in) by the Company; provided, however, that anything above to the
contrary notwithstanding, Employee may own, as a passive investor, public
securities of any competitor corporation, so long as his direct holdings in any
one such corporation shall not in the aggregate constitute more than one percent
(1%) of the voting stock of such corporation.

3. Term Of Employment; Termination.

(a) At-Will Relationship. Employee’s employment relationship is at-will. Either
Employee or the Company may terminate the employment relationship at any time,
for any reason or no reason, with or without Cause or advance notice.

(b) Termination By The Company Without Cause; Termination By Employee With Good
Reason.

(i) Cause Definition. For purposes of this Agreement, “Cause” shall mean any of
the following: (A) conviction, including a plea of guilty or no contest, of any
felony or any crime involving moral turpitude or dishonesty; (B) fraud upon the
Company (or an affiliate), embezzlement or misappropriation of corporate funds;
(C) willful acts of dishonesty materially harmful to the Company; (D) activities
materially harmful to the Company’s reputation; (E) Employee’s willful
misconduct, willful refusal to perform his duties, or substantial willful
disregard of his duties, provided that the Company first provides Employee with
written notice of such conduct and thirty (30) days to cure such conduct, if
such conduct is reasonably susceptible to cure; or (E) material breach causing
material harm to the Company of this Agreement, any other agreement with the
Company, any policy of the Company, or any statutory duty or common law duty of
loyalty owed to the Company; provided, no act or omission on Employee’s part
shall be considered “willful” unless it is done by the Employee without
reasonable belief that the Employee’s action was in the best interests of the
Company.

(ii) Good Reason Definition. For the purposes of this Agreement, “Good Reason”
shall mean: (A) a reduction of Employee’s base salary below the amount set forth
in Paragraph 4 of this Agreement, or a reduction in the “Target Bonus
Percentage” defined in Paragraph 5 of this Agreement, unless such reduction is
shared proportionally by the three most highly-salaried officers of the Company,
in addition to Employee; (B) an involuntary relocation of Employee’s place of
work to any location outside of the metropolitan area in which his primary
office is located immediately prior to the relocation, excluding temporary
periods of thirty (30) days or less and ordinary course business travel; (C) a
significant diminution by the Company in Employee’s position (including offices,
titles and reporting relationships), authority, duties or responsibilities,
(excluding diminutions resulting in the ordinary course from the Company
becoming pursuant to a Change of Control of (x) part of a larger organization in
which Employee directly reports to the Chief Executive Officer of such
organization; or (y) a subsidiary or equivalent separate functional business
unit of a larger organization); (D) a material breach by the Company of this
Agreement; or (E) failure by the Company to assign this Agreement to a successor
upon a Change of Control. No Good Reason shall exist where: (1) Employee
consents to the event that forms the basis for the Good Reason resignation;
(2) Employee does not provide the Company’s President and Chief Executive
Officer with written notice describing in detail the Good Reason within thirty
(30) days of its occurrence; or (3) the Company cures the Good Reason within
thirty (30) days of its receipt of such notice, if such conduct is reasonably
susceptible to cure.

 

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(iii) Severance Benefits. In the event that Employee’s employment is terminated
without Cause by the Company or terminated by Employee with Good Reason,
Employee shall receive the following as his sole and exclusive severance
benefits (collectively, the “Severance Benefits”):

(1) Severance Pay. Employee will receive a lump sum payment, within seven
(7) days following the effective date of termination, equal to twelve
(12) months of his then current base salary, less standard payroll deductions
and withholdings.

(2) Severance Bonus. Employee will be paid a bonus (the “Severance Bonus”),
within seven (7) days following the effective date of termination, equal to 100%
of the average of (A) the annual bonus he was paid for year immediately
preceding the termination and (B) his target bonus under the Company’s
then-current bonus plan if any, less standard payroll deductions and
withholdings.

(3) Severance Health Premium Reimbursements. If Employee timely elects to
continue his Company-provided group health insurance coverage pursuant to the
federal COBRA law, the Company will reimburse Employee for the cost of such
COBRA premiums to continue health insurance coverage at the same level of
coverage for Employee and his dependents (if applicable) in effect as of the
termination date, through the end of twelve (12) months or until such time as
Employee qualifies for health insurance benefits through a new employer,
whichever occurs first (“Severance Health Premium Benefits”). Employee shall
notify the Company in writing of such new employment not later than five
(5) business days after securing it.

(4) Severance Vesting. The vesting of Employee’s restricted stock, stock option
and other equity grants that Employee has then received or may in the future
receive from the Company, shall be accelerated so that, as of the date of the
termination, such restricted stock and stock option grants shall vest as to the
number of shares that would have vested had Employee provided an additional
twelve (12) months of continuous service to the Company, provided, however, that
if Employee is terminated without cause within six (6) months following a Change
in Control, Employee terminates his employment for Good Reason within six
(6) months following a Change in Control, or Employee terminates his employment
for the Good Reason described in clause (E) of Section 3(b)(ii), then such
restricted stock and stock option grants shall vest as to the number of shares
that would have vested had Employee provided an additional twenty-four
(24) months of continuous service to the Company.

(iv) Severance Conditions. As a condition of and prior to the receipt of all or
any of the Severance Benefits, Employee must execute and allow to become
effective a general release of claims in the form attached hereto as Exhibit A
within sixty (60) days of termination and to comply with the terms of this
Agreement (the “Severance Conditions”). Upon any termination of Employee’s
employment by the Company without Cause or by Employee for Good Reason, the
Company and its affiliates (by and through their respective directors and senior
executive officers) and Executive agree not to disparage the other party.

 

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(c) Termination for Cause; Voluntary or Mutual Termination.

(i) No Severance. In the event Employee’s employment is terminated by the
Company at any time for Cause, or Employee terminates his employment without
Good Reason, or the parties mutually terminate their employment relationship,
Employee will not be entitled to any Severance Benefits, pay in lieu of notice,
or any other severance, compensation, benefits, equity, acceleration, or any
other amounts, with the exception of any benefit to which Employee has a vested
right under a written benefit plan.

(ii) Resignation. Employee may voluntarily terminate his employment with the
Company at any time, without liability therefore. Employee agrees to use good
faith to give the Company reasonable notice of any such voluntary termination.
Upon receipt of any termination notice from Employee, the Company, at its
election, may require Employee to resign his employment prior to the occurrence
of any requested termination date.

(d) Termination for Death or Disability.

(i) Termination. Employee’s employment will terminate upon his death or
Disability.

(ii) Disability Definition. For the purposes of this Agreement, “Disability”
shall have the meaning set forth in the Company’s then current long term
disability benefit program or, if no such program is then in effect, shall mean
a permanent disability rendering Employee unable to perform his duties for the
Company for ninety (90) consecutive days or one hundred eighty (180) days in any
twelve (12) month period, which determination shall be made after the period of
disability, unless an earlier determination can be made, by an independent
physician appointed by the Board.

(iii) Death or Disability Benefit. Following the death or Disability of Employee
while employed by the Company, the Company will provide Employee (or, in the
case of death, Employee’s estate) a lump sum amount payable within thirty
(30) days thereafter, equal to: (A) Employee’s salary for twelve (12) months;
(B) an amount equal to 100% of the average of (x) the annual bonus he was paid
for the year immediately preceding the termination and (y) his target bonus
under the Company’s then-current bonus plan if any, less standard payroll
deductions and withholdings; plus (C) the cost of such COBRA premiums to
continue health insurance coverage at the same level of coverage for Employee
and his dependents (if applicable) in effect as of the termination date, through
the end of twelve (12) months. All restricted stock and stock option grants that
Employee has then received from the Company or may in the future receive from
the Company, shall be vested as to half of the unvested shares (or such greater
amount, if any, as is provided for in the agreement for the applicable grant),
and all such stock options shall, notwithstanding any lesser period, if any,
provided for in the agreement for the applicable grant, be exercisable for one
(1) year following such termination (but not exceeding the term of such option).

(iv) Severance Conditions. As a condition of and prior to the receipt of all or
any of the Severance provided for death or Disability, Employee (or, in the case
of death, Employee’s estate) must execute and allow to become effective a
general release of claims in the form attached hereto as Exhibit A within sixty
(60) days of termination and to comply with the terms of this Agreement (the
“Severance Conditions”). Upon any termination of Employee’s employment for death
or Disability, the Company and its affiliates (by and through their respective
directors and senior executive officers) and Executive (or, in the case of
death, Employee’s estate) agree not to disparage the other party.

 

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(e) No Mitigation. In no event shall Employee be obligated to seek other
employment or take any other action by way of mitigation of the severance
amounts payable to the Employee under Paragraph 3 of this Agreement, and such
amounts (other than as provided at Paragraph 3(b)(iii)(3)) shall not be reduced
whether or not the Employee obtains other employment.

(f) Accrued Obligations. Not later than ten (10) days after termination of
Employee’s employment, the Company shall pay Employee (“Accrued Obligations”):
(i) his accrued and unpaid base salary at the rate in effect at the time of
notice of termination; (ii) any previous year’s earned but unpaid bonus and
other earned and unpaid incentive cash compensation; and (iii) accrued and
unused vacation time, unpaid expense reimbursements and other unpaid cash
entitlements earned by Employee as of the date of termination pursuant to the
terms of the applicable Company plan or program.

4. Salary. For services rendered hereunder, the Company shall pay Employee a
base salary at the per annum rate of $300,000, less standard payroll deductions
and withholdings, and payable in accordance with the Company’s regular payroll
schedule. Employee’s base salary (as well as his eligibility for incentive
equity grants) shall be subject to annual review and his base salary may, at the
discretion of the Company’s Board of Directors, be increased from time to time.

5. Bonuses. Subject to the requirements set forth below, the Company may elect
to pay Employee bonuses in its sole discretion. Employee will be offered the
opportunity to participate in the Company’s then-current bonus plan, and,
subject to and in accordance with the terms and conditions of such plan and this
paragraph, upon achievement of all target bonus objectives set by the Board of
Directors and/or the Chief Executive Officer for the Company and for Employee,
shall receive a cash bonus equal to 100% (“Target Bonus Percentage”) of his base
salary, less standard payroll deductions and withholding as are applicable to
similarly situated employees. The Company shall have the sole discretion to
change or eliminate bonus plans or programs at any time (provided, however, that
after the bonus plan and target objectives have been established by the Board
and/or the Chief Executive Officer for a given year, neither the Board nor the
Chief Executive Officer shall later materially change the bonus plan or target
objectives for such year to Employee’s detriment without Employee’s consent), to
determine whether performance criteria set forth pursuant to the bonus plan for
a year have been achieved, and to determine (in accordance with this paragraph
and such performance criteria and bonus plan) the amount of any bonus earned by
Employee, if any. Bonuses are intended to retain valuable Company employees, and
if Employee is not employed, for any reason on the last day of the bonus year,
he will not have earned the bonus and, except as expressly provided herein with
respect to the Severance Bonus, no partial or pro-rata bonus will be paid. Any
bonus paid pursuant to this Paragraph 5 shall be paid net of standard payroll
deductions and withholdings. The target payment date for any bonus measured on
the basis of a calendar year shall be between January 1 and March 15 of the
calendar year following the end of the performance period; provided, however,
that such bonus shall be paid no later than March 15 of such calendar year
following the end of the performance period. The payment date for any bonus
measured on the basis of a performance period other than the calendar year shall
be no later than 2-1/2 months following the end of the Company’s fiscal year.

6. Employee Benefits. Employee shall be entitled to participate in such employee
benefit plans, including the Company’s 401(k) plan, life insurance, and medical
benefits plans, and shall receive all other fringe benefits, as the Company may
make available generally to its senior executive employees generally, for which
Employee is eligible under the terms and conditions of such plans, in each case
subject to the requirements, rules and regulations from time to time applicable
thereto. Details about these benefits are set forth in summary plan descriptions
and other materials.

 

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7. Change of Control. A Change in Control shall have the meaning set forth in
Section 6.8(b) of the Company’s 1999 Stock Incentive Plan.

8. Parachute Tax. Notwithstanding anything in the foregoing to the contrary, if
any of the payments to Employee (prior to any reduction below) provided for in
this Agreement, together with any other payments which Employee has the right to
receive from the Company or any corporation which is a member of an “affiliated
group” as defined in Section 1504(a) of the Internal Revenue Code of 1986, as
amended (“Code”), without regard to Section 1504(b) of the Code, of which the
Company is a member (the “Payments”) would constitute a “parachute payment” (as
defined in Section 280G(b)(2) of the Code), and if the Safe Harbor Amount is
greater than the Taxed Amount, then the total amount of such Payments shall be
reduced to the Safe Harbor Amount. The “Safe Harbor Amount” is the largest
portion of the Payments that would result in no portion of the Payments being
subject to the excise tax set forth at Section 4999 of the Code (“Excise Tax”).
The “Taxed Amount” is the total amount of the Payments (prior to any reduction,
above) notwithstanding that all or some portion of the Payments may be subject
to the Excise Tax. Solely for the purpose of comparing which of the Safe Harbor
Amount and the Taxed Amount is greater, the determination of each such amount,
shall be made on an after-tax basis, taking into account all applicable federal,
state and local employment taxes, income taxes, and the Excise Tax (all of which
shall be computed at the highest applicable marginal rate). If a reduction of
the Payments to the Safe Harbor Amount is necessary, then the reduction shall
occur in the following order: reduction of cash payments; cancellation of
accelerated vesting of stock awards; reduction of employee benefits. In the
event that acceleration of vesting of stock award compensation is to be reduced,
such acceleration of vesting shall be cancelled in the reverse order of the date
of grant of the Employee’s participant’s stock awards.

9. Business Expenses. The Company shall reimburse Employee for all reasonable
and necessary business expenses incurred by Employee in performing Employee’s
duties that are submitted in compliance with the Company’s then-current policy
on such business expense reimbursement. Employee shall provide the Company with
supporting documentation sufficient to satisfy reporting requirements of such
policy and the Internal Revenue Service. The Company’s determinations as to
reasonableness and necessity shall be final.

10. Proprietary Information and Inventions; Non-Competition and
Non-Solicitation. Employee acknowledges that the successful development,
marketing, sale and performance of the Company’s professional services and
products require substantial time and expense. Such efforts generate for the
Company valuable private, confidential, and proprietary information of the
Company and its clients (whether current, former, or prospective), business
partners, vendors, suppliers, and licensors (“Confidential Information”),
including without limitation any and all (a) trade secrets, (b) financial
information and pricing, (c) business strategies, plans, and proposals,
(d) information relating to clients, including the terms of the Company’s
agreements with clients, the discussions, negotiations, and proposals related to
any such agreement, and the names of clients or prospective clients, (e) human
resources information, including employee lists and personal employee
information, and (f) technical information, including research and development,
methodologies, training materials, software, documents, models, source code,
designs, flowcharts and listings and any and all notes, analyses, compilations,
studies, in each case in whatever form, whether oral, written, graphic,
recorded, photographic,

 

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machine readable or otherwise, and whether or not marked or otherwise labeled
“confidential” or specifically indicated as being confidential and/or
proprietary in nature. The term “Confidential Information” also includes all
notes, analyses, compilations, studies, interpretations or other materials to
the extent such materials contain or are based on other Confidential
Information. Employee acknowledges that during his employment, he will obtain
knowledge of such Confidential Information. Employee agrees to undertake the
following obligations, which he acknowledges to be reasonably designed to
protect the Company’s legitimate business interests (including its Confidential
Information and its relationships with customers and other third parties)
without unnecessarily or unreasonably restricting Employee’s post-employment
opportunities:

(a) Confidentiality. During the term of employment and at all times thereafter,
Employee (i) shall treat all Confidential Information as highly confidential,
(ii) shall not access or attempt to access any Confidential Information or use
any Confidential Information except as is necessary to carry out Employee’s
duties as an employee of the Company, (iii) shall not make copies of documents
containing Confidential Information except as is necessary to carry out
Employee’s duties as an employee of the Company, (iv) shall not reverse
engineer, disassemble, decompile, translate, or attempt to discover any
software, algorithms, or underlying ideas which embody Confidential Information,
(v) shall not disclose, and will take all reasonable and necessary steps to
prevent the disclosure of, any Confidential Information to any third party, or
any other employee, agent, or representative of the Company, as applicable,
except as is necessary to carry out Employee’s duties as an employee of the
Company, and (vi) shall not use any Confidential information in any manner that
may cause injury or loss, or may be calculated to cause injury or loss, whether
directly or indirectly, to the Company or its clients, business partners,
vendors, suppliers, and licensors.

(b) Proprietary Information. During the term of employment with the Company,
Employee shall disclose immediately to the Company all ideas, inventions, and
business plans that Employee makes, conceives, discovers, develops, or reduces
to practice at any time during the course of Employee’s employment with the
Company, either alone or jointly with others, including but not limited to any
including, but not limited to, any inventions, ideas, improvements, discoveries,
methods, developments, designs, software, processes, products, and procedures
(whether or not protectable upon application by patent, copyright, trademark,
trade secret, or other proprietary rights) (collectively, “Work Product”), that
(i) relate directly or indirectly to the Company’s business or the business of
any client or supplier of the Company or any of the products or services being
developed, manufactured, sold, or otherwise provided by the Company or that may
be used in relation therewith, or (ii) result from any tasks assigned to
Employee by the Company, or (iii) result from the use of the premises or
personal property (whether tangible or intangible) owned, leased, licensed, or
otherwise contracted for by the Company. Employee agrees that any Work Product
shall be the exclusive property of the Company and, if subject to copyright,
shall be “work made for hire” under the meaning of the U.S. Copyright Act of
1976, as amended (the “Act”). If and to the extent the Work Product is found as
a matter of law not to be “work made for hire” within the meaning of the Act,
Employee hereby expressly assigns to the Company or its subsidiaries, as
appropriate, its successors, assign, or nominees, Employee’s entire right,
title, and interest in and to any Work Product, and all copies thereof and all
intellectual property rights therein without further consideration, free from
any claim, lien for balance due, or rights of retention thereto on the part of
Employee. Employee shall communicate promptly and disclose to the Company, in
such form as the Company requests, all information, details, and data pertaining
to the Work Product. Whether during the term of this Agreement or after,
Employee will, at the Company’s request and expense (including reimbursement

 

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of Employee’s expenses and, if Employee is no longer in the employ of the
Company, reasonable per diem compensation to Employee), fully cooperate with the
Company and its authorized agents in securing, enforcing, and otherwise
protecting throughout the world the Company’s interests in such Work Product,
including, without limitation, by (A) executing such documents evidencing the
Company’s ownership and Employee’s assignment of the foregoing rights, as may be
deemed necessary by the Company to grant or evidence such ownership and rights
and (B) assisting in defending any opposition proceedings, petitions for
revocation, or applications for similar revocation in respect of any such
rights.

(c) Non-Competition. Without limiting the obligations of Paragraph 10(a),
without the prior written consent of the President and Chief Executive Officer
or the authorized designee thereof, Employee shall not in any capacity, whether
for himself or as an officer, director, partner, employee, agent of independent
contractor of any person, firm, corporation or other entity: (i) for a period of
twelve (12) months following termination of his employment with the Company and
all affiliates for any reason performed services of the type performed by
Employee during the term of employment, or any services substantially similar
thereto, for any Prohibited Client (as defined below) in any country in which
the Company has performed services (whether or not such services were performed
in such country for the Prohibited Client) or sold products during the preceding
three (3) years. The term “Prohibited Client” shall mean any client or
prospective client of the Company to or for whom Employee directly or indirectly
performed services, or prospect to whom Employee submitted, or assisted or
participated in any way in the submission, of a proposal, during the two
(2) year period preceding termination of Employee’s employment with the Company.

(d) Non-Solicitation. While employed by the Company and during the twelve
(12) month period immediately following Employee’s termination of employment for
any reason, Employee shall not directly or indirectly hire, solicit, encourage,
or otherwise induce or assist in the inducement away from the Company of any
Company customer, client, contractor, consultant, or other person or party with
whom the Company has a contractual relationship, any Prohibited Client, or any
Company employee (either away from the Company’s employ or from the faithful
discharge of such employee’s contractual, statutory and fiduciary obligations to
serve the Company’s interests with undivided loyalty).

(e) Return Of Materials. Upon termination of the term of employment for any
reason or upon the Company’s earlier request, Employee shall deliver to the
Company all Confidential Information and other materials in his/her possession
or delivered to him by the Company, including but not limited to computer
programs, files, notes, records, memoranda, reports, lists, drawings, sketches,
specifications, data, charts, and other documents, materials and things
(“Materials”), whether or not containing Confidential Information, it being
agreed that all Materials shall be and remain the sole and exclusive property of
the Company. After return, Employee shall keep no copies, in any form of media,
of any Materials or Confidential Information.

(f) Reasonable Alteration. In the event that a court or other adjudicative body
should decline to enforce the provisions of any part of this Paragraph 13,
whether because of scope, duration or otherwise, Employee and the Company agree
that the provisions shall be modified to restrict Employee’s competition with
the Company to the maximum extent enforceable under applicable law.

 

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11. Remedies. Employee recognizes and agrees that a breach of any or all of the
provisions of Paragraph 10 will constitute immediate and irreparable harm to the
Company’s business advantage, including but not limited to the Company’s
valuable business relations, for which damages cannot be readily calculated and
for which damages are an inadequate remedy. Accordingly, Employee acknowledges
that the Company shall therefore be entitled to an order enjoining any further
breaches by the Employee, without the necessity of posting a bond.

12. Assistance in Litigation. Employee shall upon reasonable notice and without
compulsion of law (e.g., subpoena), furnish accurate and complete information
and other assistance to the Company as the Company may reasonably require in
connection with any litigation, proceeding or dispute to which the Company is,
or may become, a party, or in which it may otherwise become involved, either
during or after Employee’s employment; provided, if such assistance shall occur
after termination of Employee’s employment, the Company shall reimburse Employee
for his reasonable expenses incurred in connection with such assistance,
including, without limitation, as relevant transportation, meals and lodging,
and shall also pay Employee a consulting fee of $200 per hour, as compensation
for his inconvenience and the disruption of his other endeavors.

13. Indemnification. Employee’s rights to indemnification will be as provided in
the Indemnification Agreement between Employee and the Company, effective as of
the effective date hereof.

14. Successors and Assigns. This Agreement is intended to bind and inure to the
benefit of, and be enforceable by, Employee and the Company, and their
respective successors, assigns, heirs, executors and administrators. Employee
acknowledges that the services to be rendered pursuant to this Agreement are
unique and personal. Accordingly, Employee may not assign any of his rights or
delegate any of his duties or obligations under this Agreement. The Company may
assign its rights, duties or obligations under this Agreement to a subsidiary or
affiliated company of the Company or purchaser or transferee of a majority of
the Company’s outstanding capital stock or a purchaser of all, or substantially
all, of the assets of the Company; provided, however, that such assignee shall
be adequately capitalized and able to fulfill its financial obligations
hereunder.

15. Notices. All notices required by this Agreement shall be in writing. Notices
intended for the Company shall be sent by certified mail or nationally
recognized overnight courier service, addressed to it at 150 Field Drive, Suite
250, Lake Forest, Illinois 60045, or its current principal office, and notices
intended for Employee shall be either delivered personally to Employee or sent
by certified mail or nationally recognized overnight courier service addressed
to Employee at his address as listed on the Company’s payroll. Notices sent by
certified mail in accordance with the foregoing shall be deemed given three
(3) business days following delivery to the United States Postal Service,
postage prepaid, and notices sent by overnight courier service in accordance
with the foregoing shall be deemed given one (1) business day following delivery
to such courier, delivery fees for overnight delivery prepaid.

16. Entire Agreement. This Agreement constitutes the complete, final, and
exclusive embodiment of the entire agreement between Employee and the Company
with regard to the subject matter hereof and supersedes all prior agreements or
understandings whether written or oral, including without limitation, the
Employment Agreement dated as of December 17, 2004, between Employee and the
Company. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in a written instrument signed by Employee and a duly authorized
officer or director of the Company.

 

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17. Waiver. If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.

18. Applicable Law. This Agreement, and all questions concerning the
construction, validity and interpretation of this Agreement, shall be governed
by and construed in accordance with the laws of the State of Illinois as applied
to contracts made and to be performed entirely within the State of Illinois.

19. Waiver Of Trial By Jury. THE PARTIES HERETO, AFTER CONSULTING (OR HAVING HAD
AN OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE, KNOWINGLY AND
VOLUNTARILY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, INCLUDING ANY LITIGATION REGARDING THE ENFORCEMENT
OF THIS AGREEMENT OR ANY RELATED AGREEMENT.

20. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, and such invalid, illegal or
unenforceable provision will be reformed, construed and enforced in such
jurisdiction so as to render it valid, legal, and enforceable consistent with
the general intent of the parties insofar as possible.

21. Right To Work. As required by law, this Agreement is subject to satisfactory
proof of Employee’s right to work in the United States.

22. Section 409A. The provisions of this Agreement are intended either (i) to be
exempt from Section 409A of the Code under the short-term deferral exception,
the separation pay exception, or such other exceptions that may be available
under Section 409A of the Code and applicable authority or guidance promulgated
thereunder or (ii) to comply with Section 409A of the Code, and shall be
administered in a manner consistent with such intent. Notwithstanding any
provision to the contrary, to the extent Employee is considered a specified
employee under Section 409A of the Code and would be entitled during the six
(6) month period beginning on his date of termination to a payment that is not
otherwise excluded under Section 409A of the Code, such payment will not be made
to Employee until the earlier of the six (6) month anniversary of his date of
termination or his death. For purposes of Section 409A, each payment under this
Agreement (including, but not limited to, those in Section 3(b)) shall be
considered a separate payment.

23. Attorneys’ Fees. If the Company refuses to provide the Severance Benefits
described in Paragraph 3(b)(iii) after a written demand by Employee and Employee
substantially prevails in any dispute involving such Severance Benefits, then
the Company shall pay or reimburse Employee for all reasonable legal fees and
expenses incurred in such dispute.

 

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EMPLOYEE ACKNOWLEDGES THAT HE HAS READ, UNDERSTOOD AND ACCEPTS THE PROVISIONS OF
THIS AGREEMENT.

 

eLoyalty Corporation (“Company”)     Christopher J. Danson (“Employee”) By:  
Steven H. Shapiro     Christopher J. Danson Title:   V.P. Gen. Counsel &
Corporate Secretary     Vice President Date:   9/8/08     Date:   9/8/08

 

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