Exhibit 10.5
 
ACCO BRANDS CORPORATION
 
2011 AMENDED AND RESTATED INCENTIVE PLAN
20__ – 20__ PERFORMANCE STOCK UNIT AWARD AGREEMENT
 
THIS AGREEMENT is made, entered into and effective this __________, 20__ (the
“Grant Date”) by and between ACCO Brands Corporation, a Delaware corporation
(collectively with all Subsidiaries, the “Company”) and _________ (“Grantee”).
 
WHEREAS, Grantee is a Key Employee of the Company and in compensation for
Grantee’s services and Grantee’s agreement to certain employment and
post-employment covenants, the Board deems it advisable to grant to Grantee an
Award of Performance Stock Units representing shares of the Company’s Common
Stock, pursuant to the ACCO Brands Corporation 2011 Amended and Restated
Incentive Plan (“Plan”), which may be earned and vested by Grantee upon
Grantee’s continuous service and the satisfaction of performance objectives as
set forth herein.
 
NOW THEREFORE, subject to the terms and conditions set forth herein:
 
1.  Plan Governs; Capitalized Terms. This Agreement is made pursuant to the
Plan, and the terms of the Plan are incorporated into this Agreement, except as
otherwise specifically stated herein. Capitalized terms used in this Agreement
that are not defined in this Agreement shall have the meanings as used or
defined in the Plan. References in this Agreement to any specific Plan provision
shall not be construed as limiting the applicability of any other Plan
provision.
 
2.  Award of Performance Stock Units. The Company hereby grants to Grantee on
the Grant Date an Award of Performance Stock Units at Target, or such lesser or
greater number of Performance Stock Units, as may be earned upon the attainment
of applicable performance objectives set forth in Schedule I attached hereto and
made a part hereof during the 20__, 20__ and 20__ fiscal years (each fiscal year
a “Performance Period”) as follows:
 
Performance Period
Number of Performance Stock Units That May Be Earned At Target
20__
  _______________
20__
  ________________
20__
  _________________

Each Performance Stock Unit constitutes an unfunded and unsecured promise of the
Company to deliver (or cause to be delivered) to Grantee, subject to the terms
and conditions of this Agreement, one (1) share of Common Stock (“Share”).  Each
 
 
 
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Performance Stock Unit shall be earned and vested in accordance with Section 3
and shall be payable to Grantee in accordance with Section 4. The Company shall
hold the Performance Stock Units in book-entry form.  Grantee shall have no
direct or secured claim in any specific assets of the Company or the Shares that
may become issuable to Grantee under Section 4, and shall have the status of a
general unsecured creditor of the Company.  THIS AWARD IS CONDITIONED ON GRANTEE
SIGNING THIS AGREEMENT AND RETURNING IT TO THE COMPANY BY __________, 20__ AND
IS SUBJECT TO ALL TERMS, CONDITIONS AND PROVISIONS OF THE PLAN AND THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, CERTAIN COVENANTS SET FORTH ON
ATTACHMENT A HERETO THAT APPLY DURING, AND FOLLOWING A TERMINATION OF, GRANTEE’S
EMPLOYMENT FOR ANY REASON.  FOR PURPOSES OF ATTACHMENT A, GRANTEE’S SECTION 4.1
RESTRICTION SHALL BE FOR __ MONTHS AND GRANTEE’S SECTION 4.2 RESTRICTION SHALL
BE FOR __ MONTHS, EXCEPT AS GRANTEE AND THE CHIEF EXECUTIVE OFFICER (AND SHOULD
THE CHIEF EXECUTIVE OFFICER BE THE GRANTEE, THE COMPENSATION COMMITTEE OF THE
BOARD) MAY OTHERWISE AGREE IN WRITING.
 
3.    Vesting.
 
(a)  Generally. The Performance Periods set forth in Schedule I shall commence
on January 1 and end on December 31 of the 20__, 20__ and 20__ fiscal years,
respectively.  Subject to acceleration of the vesting of the Performance Stock
Units pursuant to Section 3(b) or 3(f), or the forfeiture and termination of the
Performance Stock Units pursuant to Sections 3(e) or 4(c), the Performance Stock
Units shall be wholly or partially earned and vested and become nonforfeitable
for a Performance Period to the extent of the attainment of the performance
objectives for such Performance Period set forth in Schedule I, provided that
Grantee has been continuously employed by the Company through December 31, 20__
(except as provided for a Separation from Service in Section 3(b), 3(c), 3(d),
3(f)(ii) and a Change in Control in Section 3(f)(i)).
 
(b)  Death; Disability.  Upon the death of Grantee while employed by the
Company, or Grantee’s separation from service from the Company and all members
of the Company controlled group (within the meaning of Treasury Regulation
Sections 1.409A-1(g) and (h)) (“Separation from Service”) due to his Disability,
in either such case before December 31, 20__, a number of Performance Stock
Units shall become earned and vested equal to the sum of:
 
(i)  the number of Performance Stock Units, if any, that have been earned, based
on the attainment of the applicable performance objectives set forth in Schedule
I, during such of the 20__ and 20__ Performance Periods as have been completed
on or prior to the date of Grantee’s death or Separation from Service; plus
 
(ii)  a number of Performance Stock Units equal to the product of (A) the
fraction of the Award the numerator of which is the number of days Grantee was
continuously employed from the first day of the Performance Period
 
 
 
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during which such death or Separation from Service occurs to the date of death
or Separation from Service and the denominator of which is 365 (or 366 if
occurring during the 20__ Performance Period)  (“Pro Rata Portion”) multiplied
by (B) the number of Performance Stock Units as would have become earned and
vested, based on the deemed attainment of a target-level of performance set
forth in Schedule I, for such of the incomplete Performance Period in which such
death or Separation from Service occurs.
 
Grantee shall forfeit any amount of the Award not becoming earned and vested
under this Section 3(b)(i) and 3(b)(ii) upon Grantee’s death or Separation from
Service, including for any Performance Period commencing after Grantee’s
Separation from Service.
 
(c)  Retirement. Upon Grantee’s Separation from Service due to his Retirement
before December 31, 20__, a number of Performance Stock Units shall become
earned and vested equal to the sum of:
 
(i)  the number of Performance Stock Units, if any, that have been earned, based
on the attainment of the applicable performance objectives set forth in Schedule
I, during such of the 20__ and 20__ Performance Periods as have been completed
on or prior to the date of Grantee’s Separation from Service; plus
 
(ii)  a number of Performance Stock Units, if any, equal to (A) the Pro Rata
Portion multiplied by (B) the number of Performance Stock Units that would have
become earned for the Performance Period in which such Separation from Service
occurs, in accordance with the attainment of the performance objectives set
forth in Schedule I, had Grantee remained continuously employed to the last day
of such Performance Period.
 
Grantee shall forfeit any Performance Stock Units not becoming earned and vested
under Section 3(c)(i) and 3(c)(ii)  upon Grantee’s Separation from Service,
including for any Performance Period commencing after Grantee’s Separation from
Service.
 
(d)  Involuntary Termination.  Upon Grantee’s involuntary Separation from
Service by the Company without Cause after June 30, 20__ and before December 31,
20__ , a number of Performance Stock Units shall become earned and vested equal
to the sum of:
 
(i)  the number of Performance Stock Units, if any, that have been earned, based
on the attainment of the applicable performance objectives set forth in Schedule
I, during each of the 20__ and 20__ Performance Periods; plus
 
(ii)  a number of Performance Stock Units, if any, equal to the product of (A)
the Pro Rata Portion multiplied by (B) the number of Performance Stock Units
that would have become earned for the 20__ Performance Period, in
 
 
 
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accordance with the attainment of the performance objectives set forth in
Schedule I, had Grantee remained continuously employed to December 31, 20__.
 
Grantee shall forfeit any Performance Stock Units not becoming earned and vested
under Section 3(d)(i) and 3(d)(ii) upon Grantee’s Separation from Service.
 
For purposes of this Agreement, “Cause” shall mean (x) a material breach by
Grantee of those duties and responsibilities that do not differ in any material
respect from Grantee’s duties and responsibilities during the ninety-day period
immediately prior to such Separation from Service, which breach is demonstrably
willful and deliberate on Grantee’s part, is committed in bad faith or without
reasonable belief that such breach is in the best interests of the Company and
is not remedied in a reasonable period of time after receipt of written notice
from the Committee specifying such breach, (y) the conviction of Grantee for a
felony, or (z) dishonesty or willful misconduct in connection with Grantee’s
employment or services resulting in material economic harm to the Company.
 
(e)  Other Terminations.  Upon a termination of Grantee’s employment for any
reason prior to December 31, 20__, other than as provided under Sections 3(b),
3(c), 3(d) or 3(f)(ii), all of the Performance Stock Units shall be immediately
forfeited.  Any Performance Stock Units forfeited under this Section 3 shall be
cancelled and shall terminate.
 
(f)  Change in Control; Divestiture.
 
(i)  Upon the occurrence of a Change in Control while Grantee is employed by the
Company and on or before December 31, 20__, a number of Performance Stock Units
shall become earned and vested equal to the sum of:
 
(1)  the number of Performance Stock Units, if any, that have been earned, based
on the attainment of the applicable performance objectives set forth in Schedule
I, during such of the 20__ and 20__ Performance Periods as have been completed
prior to the date of the Change in Control; plus
 
(2)  the number of Performance Stock Units that could have become earned, based
on the deemed attainment of a maximum-level of performance set forth in Schedule
I, for the Performance Period in which such Change in Control occurs and any
Performance Periods that had not yet commenced by the date of the Change in
Control.
 
Upon the Change in Control, Grantee shall forfeit any Performance Stock Units
not becoming earned and vested under Section 3(f)(i)(1) and 3(f)(i)(2).
 
(ii)  Upon the occurrence of a transaction, before December 31, 20__, by which
the Subsidiary that is Grantee’s principal employer ceases to be a Subsidiary of
the Company and Grantee’s employment with the Company and all
 
 
 
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other Subsidiaries ceases (“Divestiture”), a number of Performance Stock Units
shall become earned and vested equal to the sum of:
 
(1)  the number of Performance Stock Units, if any, that have been earned, based
on the attainment of the applicable performance objectives set forth in Schedule
I, during such of the 20__ and 20__ Performance Periods as have been completed
on or prior to the date of such Divestiture; plus
 
(2)  for the incomplete Performance Period in which such Divestiture occurs, a
number of Performance Stock Units equal to the product of (A) the fraction of
the Award the numerator of which is the number of days Grantee was continuously
employed from the first day of such Performance Period to the Divestiture Date
and the denominator of which is 365 (or 366 if occurring during the 20__
Performance Period) multiplied by (B) the number of Performance Stock Units that
would have become earned and vested, based on the deemed attainment of a
target-level of performance set forth in Schedule I, for such Performance
Period.
 
Upon such Divestiture, Grantee shall forfeit any Performance Stock Units not
becoming earned and vested under Section 3(f)(ii)(1) and 3(f)(ii)(2), including
for any Performance Period commencing after Grantee’s Separation from Service.
 
(g)  Payment on Vesting.  To the extent earned and vested, Performance Stock
Units shall be paid to Grantee as provided in Section 4 hereof.
 
4.  Delivery of Shares.
 
(a)  Issuance of Shares.  Subject to Sections 4(c) and 8(j)(ii), the Company (or
its successor) shall cause its transfer agent for Common Stock to register
shares in book-entry form in the name of Grantee (or, in the discretion of the
Committee, issue to Grantee a stock certificate) representing a number of Shares
equal to the number of Performance Stock Units then earned and vested pursuant
to Section 3 upon the attainment (or deemed attainment upon Grantee’s death,
Separation from Service due to Disability, the occurrence of a Change in
Control, or the occurrence of a Divestiture) of the performance objectives set
forth in Schedule I:
 
(i)  As soon as may be practicable after December 31, 20__, but not later than
March 15th, 20__, in any case other than as provided in Section 4(a)(ii) or
4(a)(iii);
 
(ii)  A soon as may be practicable after December 31 of the Performance Period
in which Grantee’s Separation from Service due to Retirement occurs (or
Grantee’s Separation from Service is due to Disability at time when Grantee was
eligible for Retirement) but not later than March 15 following such December 31;
and
 
 
 
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(iii)  Within 60 days following the occurrence of Grantee’s death, Separation
from Service due to Disability (except when Section 4(a)(ii) applies), a Change
in Control or a Divestiture.
 
Provided, in the event that the occurrence of a Change in Control is not a
change in the ownership or effective control of the Company or of a substantial
portion of the assets of the Company within the meaning of Treasury Regulation
Section 1.409A-3(i)(5), or a Divestiture is not a Separation from Service of
Grantee, such issuance of shares shall be postponed until the earliest to occur
of (1) such a change in the ownership or effective control of the Company or of
a substantial portion of the assets of the Company, (2) Grantee’s Separation
from Service (subject to Section 8(j)(ii)) or (3) the date for payment under
Section 4(a)(i).
 
(b)  Withholding Taxes. At the time Shares are issued to Grantee, or any earlier
such time in which income or employment taxes may become due and payable, the
Company shall satisfy the minimum statutory Federal, state and local withholding
tax obligation (including the FICA and Medicare tax obligation) required by law
with respect to the distribution of Shares (or other taxable event) by
withholding from Shares issuable to Grantee hereunder having an aggregate Fair
Market Value equal to the amount of such required withholding, unless Grantee
requests (and the Committee agrees) that the Company satisfy such obligation as
provided below.  In lieu of Share withholding, the Committee, if requested by
Grantee, may cause the Company to satisfy such withholding tax by withholding
cash compensation then accrued and payable to Grantee of such required
withholding amount or by permitting Grantee to tender a check or other payment
of cash to the Company of such required withholding amount.
 
(c)  Forfeiture Upon Breach of Covenant.  The provisions of Section 3 to the
contrary notwithstanding, any unissued shares issuable under this Section 4
respecting Grantee’s Performance Stock Units shall be immediately forfeited and
cancelled in the event of Grantee’s breach of any covenant set forth SECTION 3,
4.1 or 4.2 of Attachment A in addition to any other remedy set forth at SECTION
7 of Attachment A.
 
5.  No Transfer or Assignment of Performance Stock Units; Restrictions on
Sale.  Except as otherwise provided in this Agreement, the Performance Stock
Units and the rights and privileges conferred thereby shall not be sold, pledged
or otherwise transferred (whether by operation of law or otherwise) and shall
not be subject to sale under execution, attachment, levy or similar process
until the Shares represented by the Performance Stock Units are delivered to
Grantee or his designated representative. Grantee shall not sell any Shares,
after issuance pursuant to Section 4, at any time when applicable laws or
Company policies prohibit a sale. This restriction shall apply as long as
Grantee is an employee of the Company or an Affiliate (as defined in Attachment
A).
 
6.  Legality of Initial Issuance. No Shares shall be issued unless and until the
Company has determined that (a) any applicable listing requirement of any stock
exchange or other securities market on which the Common Stock is listed has been
 
 
 
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satisfied; and (b) all other applicable provisions of state or federal law have
been satisfied.
 
7.  Grantee Covenants.  In consideration of this Award, Grantee agrees to the
covenants, Company remedies for a breach thereof, and other provisions set forth
in Attachment A, attached hereto, incorporated into, and being a part of this
Agreement.
 
8.  Miscellaneous Provisions.
 
(a)  Rights as a Stockholder. Neither Grantee nor Grantee’s representative shall
have any rights as a stockholder with respect to any shares underlying the
Performance Stock Units until the date that the Company is obligated to deliver
such Shares to Grantee or Grantee’s representative.
 
(b)  Dividend Equivalents. As of each dividend date with respect to Shares, an
unvested dividend equivalent shall be awarded to Grantee in the dollar amount
equal to the amount of the dividend that would have been paid on the number of
Shares equal to the number of Performance Stock Units held by Grantee as of the
close of business on the record date for such dividend. Such dividend equivalent
amount shall be converted into a number of Performance Stock Units equal to the
number of whole and fractional Shares that could have been purchased at the
closing price on the dividend payment date with such dollar amount. In the case
of any dividend declared on Shares which is payable in Shares, Grantee shall be
awarded an unvested dividend equivalent of an additional number of Performance
Stock Units equal to the product of (i) the number of his Performance Stock
Units then held on the related dividend record date multiplied by the (ii) the
number of Shares (including any fraction thereof) distributable as a dividend on
a Share. All such dividend equivalents credited to Grantee shall be added to and
in all respects thereafter be treated as additional Performance Stock Units to
which such dividend equivalents relate hereunder.
 
(c)  No Retention Rights. Nothing in this Agreement shall confer upon Grantee
any right to continue in the employment or service of the Company for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Company or of Grantee, which rights are hereby expressly reserved
by each, to terminate his employment or service at any time and for any reason,
with or without cause.
 
(d)  Inconsistency. To the extent any terms and conditions herein conflict with
the terms and conditions of the Plan, the terms and conditions of the Plan shall
control.
 
(e)  Notices. Any notice required by the terms of this Agreement shall be given
in writing and shall be deemed effective upon personal delivery, upon deposit
with the United States Postal Service, by registered or certified mail, with
postage and fees prepaid or upon deposit with a reputable overnight courier.
Notice shall be addressed to the Company at its principal executive office and
to Grantee at the address that he most recently provided to the Company.
 
 
 
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(f)  Entire Agreement; Amendment; Waiver. This Agreement constitutes the entire
agreement between the parties hereto with regard to the subject matter hereof.
This Agreement supersedes any other agreements, representations or
understandings (whether oral or written and whether express or implied) which
relate to the subject matter hereof; provided, if Grantee is bound by any
restrictive covenant contained in a previously-executed agreement with the
Company or an Affiliate, such restrictions shall be read together with
Attachment A of this Agreement to provide the Company and its Affiliates with
the greatest amount of protection, and to impose on Grantee the greatest amount
of restriction, allowed by law. No alteration or modification of this Agreement
shall be valid except by a subsequent written instrument executed by the parties
hereto. No provision of this Agreement may be waived except by a writing
executed and delivered by the party sought to be charged. Any such written
waiver shall be effective only with respect to the event or circumstance
described therein and not with respect to any other event or circumstance,
unless such waiver expressly provides to the contrary.
 
(g)  Choice of Law; Venue;  Jury Trial Waiver. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Illinois, as such
laws are applied to contracts entered into and performed in such State, without
giving effect to the choice of law provisions thereof.  The Company and Grantee
stipulate and consent to personal jurisdiction and proper venue in the state or
federal courts of Cook County, Illinois and waive each such party’s right to
objection to an Illinois court’s jurisdiction and venue.   Grantee and the
Company hereby waive their right to jury trial on any legal dispute arising from
or relating to this Agreement, and consent to the submission of all issues of
fact and law arising from this Agreement to the judge of a court of competent
jurisdiction as otherwise provided for above.
 
(h)  Successors.
 
(i)  This Agreement is personal to Grantee and, except as otherwise provided in
Section 5 above, shall not be assignable by Grantee otherwise than by will or
the laws of descent and distribution, without the written consent of the
Company. This Agreement shall inure to the benefit of and be enforceable by
Grantee’s legal representatives.
 
(ii)  This Agreement shall inure to the benefit of and be binding upon the
Company and its Affiliates and the successors thereof.
 
(i)  Severability. If any provision of this Agreement for any reason should be
found by any court of competent jurisdiction to be invalid, illegal or
unenforceable, in whole or in part, such declaration shall not affect the
validity, legality or enforceability of any remaining provision or portion
thereof, which remaining provision or portion thereof shall remain in full force
and effect as if this Agreement had been adopted with the invalid, illegal or
unenforceable provision or portion thereof eliminated.
 
 
 
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(j)  Section 409A.
 
(i)  Anything herein to the contrary notwithstanding, this Agreement shall be
interpreted so as to comply with or satisfy an exemption from Internal Revenue
Code Section 409A and the regulations and guidance promulgated thereunder
(collectively, “Section 409A”).  The Committee may in good faith make the
minimum modifications to this Agreement as it may deem appropriate to comply
with Section 409A while to the maximum extent reasonably possible maintaining
the original intent and economic benefit to Grantee and the Company of the
applicable provision.
 
(ii)  To the extent required by Section 409A(a)(2)(B)(i), payment of Performance
Stock Units to Grantee, who is a “specified employee” that is due upon Grantee’s
Separation from Service (including upon Grantee’s Retirement or a Separation
from Service treated as a Retirement under Section 4(a)(ii)) shall be delayed
and paid in a lump sum within seven (7) days (and the Company shall have sole
discretion to determine the taxable year in which it is paid) after the earlier
of the date that is six (6) months after the date of such Separation from
Service or the date of Grantee’s death after such Separation from Service.  For
purposes hereof, whether Grantee is a “specified employee” shall be determined
in accordance with the default provisions of Treasury Regulation Section
1.409A-1(i), with the “identification date” to be December 31 and the “effective
date” to be the April 1 following the identification date (as such terms are
used under such regulation).
 
(k)  Headings; Interpretation. The headings, captions and arrangements utilized
in this Agreement shall not be construed to limit or modify the terms or meaning
of this Agreement.  Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter.
 
(l)  Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute but one and the same instrument.
 
[Signature Page Follows]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and
year first written above.
 

       
ACCO BRANDS CORPORATION
       
By:  
   
 
Name:  
         
Title:
                 
Grantee Name
               
Grantee Signature

 
 
 
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SCHEDULE I

Performance Objectives for the 20__, 20__ and 20__ Performance Periods

 
Percentage Of Award That May Be Earned Each Performance Period
Percentage of Award Earned at Performance Levels
Performance Objective
 
20__
33 1/3 %
 
50 %
(Threshold)
(i) [______________________];1 and
(ii) [_________________________________]
 
100%
(Target)
[_______________________]
150%
(Maximum)
[_______________________]
     
20__
33 1/3 %
50 %
(Threshold)
 
 
20__ performance objectives to be determined by the Committee by _________, 20__
and provided to Grantee, at which time, this Schedule I shall be deemed modified
accordingly.
100%
(Target)
150%
(Maximum)
       
20__
33 1/3 %
50 %
(Threshold)
 
20__ performance objectives to be determined by the Committee by __________,
20__ and provided to Grantee, at which time, this Schedule I shall be deemed
modified accordingly.
100%
(Target)
150%
(Maximum)

Provided, the number of Performance Stock Units earned during each Performance
Period shall be interpolated on a linear basis for the attainment of performance
objectives for such Performance Period between Threshold and Target and between
Target and Maximum.

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1 Insert applicable objectives where bracketed.
 
 
 
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ATTACHMENT A
 
Grantee Covenants
 
SECTION 1     Position of Special Trust and Confidence.
 
1.1  The Company is placing Grantee in a special position of trust and
confidence.  As a result of this Agreement and Grantee’s position with the
Company, Grantee will receive Confidential Information (defined below) related
to his position, authorization to communicate and develop goodwill with Company
customers, and/or specialized training related to the Company’s
business.  Grantee agrees to use these advantages of employment to further the
business of the Company and not to knowingly cause harm to the business of the
Company.  The Company’s agreement to provide Grantee with these benefits, and
the Award hereunder, gives rise to an interest in reasonable restrictions on
Grantee’s competitive and post-employment conduct.
 
1.2  Grantee shall dedicate his full working time and efforts to the business of
the Company and shall not undertake or prepare to undertake any conflicting
business activities while employed with the Company.  These duties supplement
and do not replace or diminish the common law duties Grantee would ordinarily
have to the Company as the employer.
 
SECTION 2     Consideration.  In exchange for Grantee’s promises and obligations
herein, the Company is granting Grantee the Award hereunder. The Company also
agrees to provide Grantee with portions of its Confidential Information,
authorization to communicate and develop goodwill with the Company customers,
and/or specialized training related to the Company’s business.  Grantee
understands and agrees that the foregoing promises and benefits have material
value and benefit to the Company, above and beyond any continuation of Company
employment, and that Grantee would not be entitled to such consideration unless
he signs and agrees to be bound by this Attachment A.  The Company agrees to
provide Grantee the consideration described in this SECTION 2 only in exchange
for his compliance with all the terms of this Attachment A.
 
SECTION 3     Confidentiality and Business Interests.
 
3.1  Grantee agrees to keep secret and confidential and neither use nor
disclose, by any means, either during or after a termination of his employment
for any reason, any Confidential Information except as provided below or
required in his employment with, or authorized in writing by, the
Company.  Grantee agrees to keep confidential and not disclose or use, either
during or after a termination of his employment for any reason, any confidential
information or trade secrets of others which Grantee receives during the course
of his employment with the Company for so long as and to the same extent as the
Company is obligated to retain such information or trade secrets in confidence.
 
3.2  The obligations under this SECTION 3 shall not apply to Confidential
Information to the extent that it:  (a) is or becomes publicly known by means
other than
 
 
 
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Grantee’s failure to perform his obligations under this Attachment A; (b) was
known to Grantee prior to disclosure to Grantee by or on behalf of the Company
and Grantee; or (c) is received by Grantee in good faith from a third party (not
an Affiliate) which has no obligation of confidentiality to the Company with
respect thereto.  Notwithstanding anything contained herein to the contrary,
Confidential Information shall not lose its protected status under this
Attachment A if it becomes generally known to the public or to other persons
through improper means.  The Company’s confidential exchange of Confidential
Information with a third party for business purposes shall not remove it from
protection under this Attachment A.
 
3.3  If disclosure of Confidential Information is compelled by law, Grantee
shall give the Company as much written notice as possible under the
circumstances, shall refrain from use or disclosure for as long as the law
allows, and shall cooperate with the Company to protect such information,
including taking every reasonable step necessary to protect against unnecessary
disclosure.
 
3.4  Grantee agrees not to disclose to the Company nor to utilize in Grantee’s
work for the Company any confidential information or trade secrets of others
known to Grantee and obtained prior to Grantee’s employment by the Company
(including prior employers).
 
3.5  Grantee shall deliver to the Company promptly upon the end of Grantee’s
employment all written and other materials which constitute or contain
Confidential Information or which are the property of the Company (regardless of
media), and shall not remove, erase, destroy, impede the Company’s access to, or
take any such written and other materials.  Grantee shall preserve records on
the Company customers, prospects, vendors, suppliers, and other business
relationships, and shall not knowingly use these records to harm the Company’s
business interests.  Upon termination of Grantee’s employment, Grantee shall
return all such records, and any copies (tangible and intangible) to the
Company.  The Company is only authorizing Grantee to access and use the
Company’s computers, email, or related computer systems to pursue matters that
are consistent with the Company’s business interests.  Access or use of such
systems to pursue personal business interests apart from the Company, to compete
or to prepare to compete, or to otherwise knowingly undermine the Company’s
interests (such as, by way of example, removing, erasing, impeding the Company’s
access to, or destroying its records or programs) is strictly prohibited and
outside the scope of Grantee’s authorized use of the Company’s systems.
 
SECTION 4     Non-Interference Covenants. Grantee agrees that the following
covenants are (a) ancillary to the other enforceable agreements contained in
this Attachment A, and (b) reasonable and necessary to protect the Company’s
legitimate business interests.
 
4.1  Restriction on Interfering with Employee Relationships.  Grantee agrees
that for the period of time, set forth as the “SECTION 4.1 Restriction” in
Section 2 of the Agreement, following the end of his employment with the Company
for any reason, Grantee shall not interfere with the Company’s business
relationship with any Company employee, by soliciting or communicating with such
an employee to induce or encourage
 
 
 
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him to leave the Company’s employ (regardless of who initiates the
communication), by helping another person or entity evaluate a Company employee
as an employment candidate, or by otherwise helping any person or entity hire an
employee away from the Company.
 
4.2  Restriction on Interfering with Customer Relationships. Grantee agrees that
for the period of time, set forth as the “SECTION 4.2 Restriction” in Section 2
of the Agreement, following the end of his employment with the Company for any
reason, Grantee shall not interfere with the Company’s business relationships
with a Covered Customer, by: (a) participating in, supervising, or managing (as
an employee, consultant, contractor, officer, owner, director, or otherwise) any
Competing Activities for, on behalf of, or with respect to a Covered Customer;
or (b) soliciting or communicating (regardless of who initiates the
communication) with a Covered Customer to induce or encourage the Covered
Customer to:  (i) stop or reduce doing business with the Company, or (ii) to buy
a Conflicting Product or Service.
 
4.3  Notice and Survival of Restrictions. 
 
(a)  Before accepting new employment, Grantee shall advise every future employer
of the restrictions in this Attachment A.  Grantee agrees that the Company may
advise a future employer or prospective employer of this Attachment A and its
position on the potential application of this Attachment A.
 
 
(b)  This Attachment A’s post-employment obligations shall survive the
termination of Grantee’s employment with the Company for any reason.  If Grantee
violates one of the post-employment restrictions in this Attachment A on which
there is a specific time limitation, the time period for that restriction shall
be extended by one day for each day Grantee violates it, up to a maximum
extension equal to the length of time prescribed for the restriction, so as to
give the Company the full benefit of the bargained-for length of forbearance.
 
(c)  It is the intention of the Parties that, if any court construes any
provision or clause of this Attachment A, or any portion thereof, to be illegal,
void or unenforceable, because of the duration of such provision, the scope or
the subject matter covered thereby, such court shall reduce the duration, scope,
or subject matter of such provision, and, in its reduced form, such provision
shall then be enforceable and shall be enforced.
 
(d)  If Grantee becomes employed with an Affiliate without entering into a new
nondisclosure, nonsolicitation, noncompetition agreement that is substantially
the same as this Attachment A, the Affiliate shall be regarded as the Company
for all purposes under this Attachment A, and shall be entitled to the same
protections and enforcement rights as the Company.
 
4.4  California Modification (California Residents Only).  To the extent that
Grantee is a resident of California and subject to its laws: (a)  the
restriction in SECTION 4.2(a) shall not apply; (b) the restriction in SECTION
4.2(b) shall be limited
 
 
 
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so that it only applies where Grantee is aided by the use or disclosure of
Confidential Information; (c) the restriction in SECTION 4.1 is deemed rewritten
to provide as follows:  For a period of two (2) years immediately following the
termination of Grantee’s employment with the Company for any reason, Grantee
shall not, either directly or indirectly, solicit any of the Company’s
employees, with whom Grantee worked at any time during his employment with the
Company, to leave their employment with the Company or to alter their
relationship with the Company to the Company’s detriment; and (d) the jury trial
waiver in Section 7(e) of the Agreement shall not apply.
 
SECTION 5     Definitions.  For purposes of the Agreement, the following terms
shall have the meanings assigned to them below:
 
5.1  “Affiliate” means the Company’s successors in interest, affiliates (as
defined in Rule 12b-2 under Section 12 of the Securities and Exchange Act),
subsidiaries, parents, purchasers, and assignees (collectively “Affiliates”).
 
5.2  “Competing Activities” are any activities or services undertaken on behalf
of a Competitor that are the same or similar in function or purpose to those
Grantee performed for the Company in the two (2) year period preceding the end
of Grantee’s employment with the Company, or that are otherwise likely to result
in the use or disclosure of Confidential Information. Competing Activities are
understood to exclude: activities on behalf of an independently operated
subsidiary, division, or unit of a diversified corporation or similar business
that has common ownership with a competitor so long as the independently
operated business unit does not involve a Conflicting Product or Service; and, a
passive and non-controlling ownership interest in a competitor through ownership
of less than 2% of the stock in a publicly traded company.
 
5.3  “Confidential Information” includes but is not limited to any technical or
business information, know-how or trade secrets, patentable or not, in any form,
including but not limited to data; diagrams; business, marketing or sales plans;
notes; drawings; models; prototypes; specifications; manuals; memoranda;
reports; customer or vendor information; pricing or cost information; and
computer programs, which are furnished to Grantee by the Company or which
Grantee procures or prepares, alone or with others, in the course of his
employment with the Company.
 
5.4  “Conflicting Product or Service” is a product or service that is the same
or similar in function or purpose to a Company product or service, such that it
would replace or compete with:  (a) a product or service the Company provides to
its customers; or (b) a product or service that is under development or planning
by the Company but not yet provided to customers and regarding which Grantee was
provided Confidential Information in the course of employment.  Conflicting
Products or Services do not include a product or service of the Company if the
Company is no longer in the business of providing such product or service to its
customers at the relevant time of enforcement.
 
5.5  “Covered Customer” is a Company customer (natural person or entity) that
Grantee had business-related contact or dealings with, or received Confidential
Information about, in the two (2) year period preceding the end of Grantee’s
employment
 
 
 
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with the Company.  References to the end of Grantee’s employment in this
Attachment A refer to the end, whether by resignation or termination, and
without regard for the reason employment ended.
 
5.6  “Competitor” is any person or entity engaged in the business of providing a
Conflicting Product or Service.
 
5.7  Section references in this Attachment A are to sections of this
Attachment A.
 
SECTION 6     Notices.  While employed by the Company, and for two (2) years
thereafter, Grantee shall:  (a) give the Company written notice at least thirty
(30) days prior to going to work for a Competitor; (b) provide the Company with
sufficient information about his new position to enable the Company to determine
if Grantee’s services in the new position would likely lead to a violation of
this Attachment A; and (c) within thirty (30) days of any request made by the
Company to do so, participate in a mediation or in-person conference to discuss
and/or resolve any issues raised by Grantee’s new position.  Grantee shall be
responsible for all consequential damages caused by failure to give the Company
notice as provided in this SECTION 6.
 
SECTION 7     Remedies.  If Grantee breaches or threatens to breach this
Attachment A, the Company may recover:  (a) an order of specific performance or
declaratory relief; (b) injunctive relief by temporary restraining order,
temporary injunction, and/or permanent injunction; (c) damages; (d) attorney's
fees and costs incurred in obtaining relief; and (e) any other legal or
equitable relief or remedy allowed by law.  One Thousand Dollars ($1,000.00) is
the agreed amount for the bond to be posted if an injunction is sought by the
Company to enforce the restrictions in this Attachment A on Grantee.
 
SECTION 8     Return of Consideration.  Grantee specifically recognizes and
agrees that the covenants set forth in this Attachment A are material and
important terms of this Agreement, and Grantee further agrees that should all or
any part or application of SECTION 4.2 be held or found invalid or unenforceable
for any reason whatsoever by a court of competent jurisdiction in an action
between Grantee and the Company (despite, and after application of, any
applicable rights to reformation that could add or renew enforceability), the
Company shall be entitled to receive from Grantee the cash equivalent of the
Market Value of all Shares paid to Grantee pursuant to the terms of this
Agreement, which Market Value shall be determined as of the date of payment to
Grantee pursuant to Section 4(a) of this Agreement. The return of consideration
provided for in this SECTION 8 is in addition to the remedies for breach
provided for in SECTION 7.
 

 
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