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August 7, 2008

Mr. Jeremy Lechtzin

Re: Terms of Employment

Dear Jeremy:

It gives me great pleasure to confirm the terms by which The Knot, Inc. will
continue your employment under the new title Senior Vice President, General
Counsel and Secretary, reporting to the Chief Executive Officer. Upon your
designation by the Board of Directors, you will serve as an executive officer of
The Knot.
 
The terms of this agreement will be effective upon approval of the Compensation
Committee of the Board of Directors. This agreement supersedes the terms
contained in your offer of employment dated April 26, 2007.
 
Compensation Terms
 
Base Salary
 
Your annualized salary rate is $235,000 (“Base Salary”), which will be paid
semi-monthly, on the 15th and on the last workday of the month. With respect to
your Base Salary for 2009 and thereafter, the Compensation Committee shall
review your performance and Base Salary annually for potential increases. Your
Base Salary will be subject to withholding of income, social security and
employment taxes in accordance with The Knot’s normal practices.
 
Incentive Bonus
 
For 2008, you will be eligible to receive a cash bonus at the discretion of the
Chief Executive Officer. With respect to 2009 and thereafter, you will be
eligible to earn an annual cash incentive bonus expressed as a percentage of
Base Salary. Each year, your target and maximum bonus opportunities will be set
by the Compensation Committee. The amount of your actual bonus will be
determined according to your achievement of certain performance criteria
established by the Compensation Committee. The incentive bonus will be
conditioned upon the other terms and conditions of the incentive compensation
program for executive officers, as may be in effect from time to time, and is
payable within thirty (30) days following the completion of The Knot’s annual
audit and approval by the Compensation Committee. The incentive bonus is not
guaranteed and is completely discretionary; you may receive an incentive bonus
in one year but not the next.
 
Restricted Stock Grant
 
You will receive a restricted stock grant of 25,000 shares, which will vest over
a four-year term, with the first 25% of the grant vesting on the first
anniversary of the grant date, and the balance of the grant vesting in equal
annual installments thereafter. The restricted stock grant will be made as soon
as possible following the effective date of this agreement, and will be subject
to the standard terms and conditions of The Knot’s 1999 Stock Incentive Plan and
a restricted stock agreement between you and The Knot. Your restricted stock
agreement will provide that if The Knot is acquired by merger, asset sale or
sale of more than 50% of its voting securities by the stockholders (in each case
in accordance with the definition of “change in control” under the Stock
Incentive Plan), in addition to those shares of restricted stock that have
previously vested before such change in control in accordance with the regular
vesting schedule, an amount of shares of restricted stock shall vest upon such
event equal to the greater of (1) the shares of restricted stock that would
otherwise have vested during the one year period following the change in
control, and (2) 50% of the shares of restricted stock that are not vested on
the date of the change in control.
 
 
 

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Mr. Jeremy Lechtzin
August 7, 2008
Page 2
 
Other Compensation
 
You will be eligible to participate in future incentive compensation programs
for executive officers, if and when such programs are established by the
Compensation Committee of the Board of Directors, at a level commensurate with
your position at the time awards are granted and on the same general terms and
conditions as apply to the other executive officers of The Knot. Without
limiting the foregoing, your participation in future equity grant programs made
available to executive officers will not be reduced as compared to other
executive officers because of your restricted stock grant made pursuant to this
agreement. In addition, in no event will the terms of equity awards granted to
you (including your restricted stock grant made pursuant to this agreement) with
respect to accelerated vesting upon a “change in control” be less favorable than
the terms made available to any other executive officer, and The Knot will cause
any award to be modified if and as necessary to carry out this provision.
 
Severance
 
If your employment is involuntarily terminated without cause by The Knot or a
successor entity, or if you resign for “Good Reason,” you shall receive a
lump-sum payment equal to your annualized Base Salary, at your rate of pay in
effect immediately prior to such termination or resignation, and for 12 months
after such termination or resignation receive all benefits (other than vesting
of any equity award) that were associated with your employment immediately prior
to such termination or resignation (to the extent and at such levels that these
benefits remain available to employees of The Knot generally during such
12-month period). The Knot shall pay the lump-sum payment in connection with an
involuntary termination without cause upon such termination, and the lump-sum
payment in connection with a Good Reason resignation within 10 business days of
the end of the Cure Period, as defined below.
 
An involuntary termination “without cause” shall mean a termination of
employment other than for death, disability, termination for Cause or any
resignation by you other than a resignation for Good Reason. “Cause” shall mean
(1) your willful failure to perform the principal elements of your duties to The
Knot or any of its subsidiaries, which failure is not cured within 20 days
following written notice to you specifying the conduct to be cured, (2) your
conviction of, or plea of nolo contendere to, a felony (regardless of the nature
of the felony) or any other crime involving dishonesty, fraud, or moral
turpitude, (3) your gross negligence or willful misconduct (including but not
limited to acts of fraud, criminal activity or professional misconduct) in
connection with the performance of your duties and responsibilities to The Knot
or any of its subsidiaries, (4) your failure to substantially comply with the
rules and policies of The Knot or any of its subsidiaries governing employee
conduct or with the lawful directives of the Board of Directors of The Knot, or
(5) your breach of any non-disclosure, non-solicitation, non-competition or
other restrictive covenant obligations to The Knot or any of its subsidiaries.
“Good Reason” shall mean (1) any reduction of your Base Salary, (2) the
relocation of your principal place of business outside of New York City, or (3)
the material diminution of your responsibilities or authority, any reduction of
your title or any change in the reporting structure set forth in the first
paragraph hereof, provided, however, that no Good Reason shall exist if you have
not given written notice to The Knot within ninety (90) days of the initial
existence of the Good Reason condition(s) and until The Knot has had thirty (30)
days to cure such event (the “Cure Period”) after the date on which you give The
Knot written notice specifying such event in specific detail before such event
permits you to terminate your employment for Good Reason.
 
 
 

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Mr. Jeremy Lechtzin
August 7, 2008
Page 3
 
Benefits and Other Terms
 
Benefits and Expenses
 
You will continue to participate in The Knot benefits program as in effect on
the date hereof. You will be eligible for 15 vacation days per year. A full
description of your benefits is contained in official plan documents that are
available to you. Please be advised that The Knot reserves the right to amend,
change and terminate its policies, programs and employee benefit plans at any
time during your employment.
 
At-Will Employment
 
Please understand that your employment will be “at will,” meaning that either
you or The Knot may terminate the relationship at any time, with or without
cause or notice. Please also note that The Knot reserves the right to revise,
supplement, or rescind any of its policies, practices, and procedures (including
those described in the Employee Handbook) as it deems appropriate in its sole
and absolute discretion.
 

Compliance With Section 409A of the Internal Revenue Code
 
The intent of the parties is that payments and benefits under this agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations and guidance promulgated thereunder (collectively,
“Section 409A”), and, accordingly, to the maximum extent permitted, this
agreement shall be interpreted to be in compliance therewith. If you notify The
Knot (with specificity as to the reason therefor) that you believe that any
provision of this agreement (or of any award of compensation, including equity
compensation or benefits) would cause you to incur any additional tax or
interest under Section 409A and The Knot concurs with such belief or The Knot
(without any obligation whatsoever to do so) independently makes such
determination, The Knot shall, after consulting with you, reform such provision
to try to comply with Section 409A through good faith modifications to the
minimum extent reasonably appropriate to conform with Section 409A. To the
extent that any provision hereof is modified in order to comply with Section
409A, such modification shall be made in good faith and shall, to the maximum
extent reasonably possible, maintain the original intent and economic benefit to
you and The Knot of the applicable provision without violating the provisions of
Section 409A.
 
A termination of employment shall not be deemed to have occurred for purposes of
any provision of this agreement providing for the payment of any amounts or
benefits upon or following a termination of employment unless such termination
is also a “separation from service” within the meaning of Section 409A and, for
purposes of any such provision of this agreement, references to a “termination,”
“termination of employment” or like terms shall mean “separation from service.”
If you are deemed on the date of termination to be a “specified employee” within
the meaning of that term under Section 409A(a)(2)(B) of the Code, then with
regard to any payment or the provision of any benefit that is specified as
subject to this Section or that is otherwise considered deferred compensation
under Section 409A payable on account of a “separation from service,” such
payment or benefit shall be made or provided at the date which is the earlier of
(A) the expiration of the six (6)-month period measured from the date of such
“separation from service” and (B) the date of your death (the “Delay Period”).
Upon the expiration of the Delay Period, all payments and benefits delayed
pursuant to this Section (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be paid or
reimbursed to you in a lump sum, and any remaining payments and benefits due
under this agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein. For purposes of this agreement, the
term “Separation Pay Limit” shall mean two (2) times the lesser of (A) your
annualized compensation based on your annual rate of pay for your taxable year
preceding the taxable year in which you have a “separation from service,” and
(B) the maximum amount that may be taken into account under a tax qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which you incur a
“separation from service.”
 
 
 

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Mr. Jeremy Lechtzin
August 7, 2008
Page 4
 
All expenses or other reimbursements under this agreement shall be made on or
prior to the last day of the taxable year following the taxable year in which
such expenses were incurred by you (provided that if any such reimbursements
constitute taxable income to you, such reimbursements shall be paid no later
than March 15th of the calendar year following the calendar year in which the
expenses to be reimbursed were incurred), and no such reimbursement or expenses
eligible for reimbursement in any taxable year shall in any way affect the
expenses eligible for reimbursement in any other taxable year.
 
In the event that it is determined that any payment or distribution of any type
to or for your benefit, whether paid or payable or distributed or distributable,
pursuant to the terms of this agreement would be subject to the additional tax
and interest imposed by Section 409A, or any interest or penalties with respect
to such additional tax (such additional tax, together with any such interest or
penalties, are collectively referred to as the “409A Tax”), then you shall be
entitled to receive an additional payment (a “409A Tax Restoration Payment”) in
an amount that shall fund the payment by you of any 409A Tax as well as all
income taxes imposed on the 409A Tax Restoration Payment, any 409A Tax imposed
on the 409A Tax Restoration Payment and any interest or penalties imposed with
respect to taxes on the 409A Tax Restoration Payment or any 409A Tax.
 
*  *  *  *  *
 
 
 

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Mr. Jeremy Lechtzin
August 7, 2008
Page 5

Please indicate your acceptance of these terms by returning the original signed
and dated version of this agreement to my attention.
 
Sincerely,

/s/ DAVID LIU

David Liu
Chief Executive Officer

By signing, dating and returning this agreement, you accept our terms of
employment.

/s/ JEREMY LECHTZIN
8/7/08
Jeremy Lechtzin
Date

 
 

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