Exhibit 10.1

Employment Agreement as of July 1, 2007 between EH Europe GmbH Löwenstrasse 32
8001 Zurich referred to as: “Employer” and Raymond R. Kubis referred to as:
“Executive” concerning Employment as Managing Director

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1 Function, Scope of Employment and Duties

 

1.1 Executive is employed for the position and function of the Managing Director
of Employer and as President of EnerSys’ operations in Europe, the Middle East
and Africa (“EnerSys Europe”). EnerSys is a Delaware corporation with worldwide
headquarters located in Reading, Pennsylvania, USA (“EnerSys”). Executive’s
functional title shall be “President EnerSys Europe.”

 

1.2 The duties and responsibilities of Executive include in particular:

 

  a) overall and daily management and direction of Employer and EnerSys’
operations in Europe, the Middle East and Africa;

 

  b) implementation of the business policies as determined by EnerSys Management
(the “Management”) to realize the purpose of the business of Employer and
EnerSys’ operations in Europe, the Middle East and Africa; and

 

  c) regular reporting to the Management with regard to the course of business
and occurrences outside the ordinary course of business.

 

1.3 Executive shall take on the duties and obligations that are usually involved
with his function in accordance with (i) the terms and conditions of this
Agreement, (ii) the articles of association of Employer, (iii) the law and
(iv) the instructions and directives of the quota-holders of Employer and the
Management. Such directives are, in particular, considered to be the Operating
Agreement, the business policies as well as directives and instructions of
EnerSys.

 

1.4 Executive shall directly report to the Chief Executive Officer of EnerSys.

 

1.5 Executive shall carefully perform the work within his responsibility and
devote all of his efforts for work and working time to Employer and EnerSys. He
shall spend the time which is required for the careful performance of his duties
and obligations without being restricted by business working hours.

2 Exclusivity

 

2.1 During the term of this Agreement, any engagement of Executive in any other
or additional employment, occupation or consulting activity, including, but not
limited to, activities as advisor, employee, member of a board of directors as
well as the exercise of a public office or a function in a professional
association, is subject to the prior approval of the Management.

 

2.2 Executive shall not directly or indirectly invest, contribute or participate
in any company which competes with Employer or any subsidiary or affiliate of
EnerSys during the term of his employment. This Section 2.2 shall not be
violated, however, by Executive’s investments of up to USD 100,000 in the
aggregate in one or several publicly traded companies that engage in a Competing
Business (as defined in Section 13.3).

 

2.3 Place of work is Zurich. Executive shall travel as required for the
fulfillment of his duties and obligations hereunder.

 

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3 Start of Work, Employment Term

 

3.1 This Agreement is made with effect as of July 1, 2007 (the “Effective
Date”), and replaces the Managing Directorship Agreement between Executive and
Hawker Belgium S.A. dated 8 January 2002 (as amended on 1 April 2007) and the
Directorship Agreement between Executive and EnerSys Inc. dated 8 January 2002
(collectively, the “Prior Agreements”). Commencement of work is on the Effective
Date. As of the Effective Date, the Prior Agreements shall terminate, and none
of the parties thereto shall have any rights or obligations thereunder other
than those rights and obligations that accrued prior to the Effective Date and
those that expressly survive termination.

 

3.2 This Agreement shall continue for an indefinite term from the Effective Date
unless terminated by either Party with notice. The amount of notice required by
the terminating party (whether the terminating party is the Employer or the
Executive) shall be amount of notice that an employer is required to give an
employee under applicable Swiss law.

4 Emolument

 

4.1 Executive shall be entitled to an annual fixed gross emolument of CHF
545,500 (the “Base Renumeration”). The Base Remuneration shall be split into two
(2) amounts: (a) CHF 400,000 of which shall be payable in Switzerland, after
deduction of Executive’s withholding taxes, as applicable under applicable laws
and regulations, in twelve monthly gross installments of CHF 33,333; and (b) CHF
145,500 of which shall be payable in the United States, after deduction of
Executive’s contributions to social security, medicare and 401(k), in twelve
monthly gross installments of USD 9,926. Any emolument paid for a period of less
than a full month shall be prorated based on the actual number of days elapsed.

 

4.2 During his employment hereunder, Executive will be entitled to a bonus of up
to 60% of the Base Remuneration as provided in the EnerSys Management Incentive
Plan, as amended from time to time (the “MIP”). Such amount shall be payable in
Switzerland in Swiss Francs, less any contributions or deductions required under
applicable law.

 

4.3 The above emolument compensates for the entire working time necessary for
carrying out and performing the duties and obligations of Executive’s position
and function.

 

4.4 Executive will be able to participate in EnerSys 2006 Equity Incentive Plan
and any successor plan thereto (the “EIP”) on the same basis as other senior
managers of the EnerSys group. Executive acknowledges that all awards granted
under the EIP to Executive, if any, are at the sole discretion of the Board of
Directors of EnerSys.

5 Allowances

 

5.1 In addition to his Base Remuneration and the bonus to which he is entitled,
Executive shall receive the following allowances:

 

  a) Relocation Costs: Employer shall bear the reasonable costs for the
relocation of Executive from Belgium to Switzerland.

 

  b) Company Car: Employer will provide or bear the costs of one automobile and
reasonable operating expenses for business and personal use for the duration of
Executive’s employment in accordance with Employer’s policy as in effect from
time to time.

 

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  c) Home Leave: Employer will reimburse Executive and his immediate family (to
include children through the age of 25) for the actual cost incurred of two
direct round trip air flights (business class in the case of Executive and his
spouse; coach class in the case of Executive’s children) between Zurich and
either Chicago or Miami during each year of employment. Executive will be
responsible for living and other expenses during any home leave.

 

  d) School Fees: For the duration of the employment hereunder, Employer will
reimburse Executive for tuition paid for Executive’s child attending
international school. In its sole discretion, Employer may directly pay such
tuition to the appropriate international school. Executive acknowledges that his
child has 2 years remaining in school.

 

  e) Tax Preparation: For the duration of the employment hereunder, Employer
will provide or bear the costs of tax preparation and consultancy services up to
a maximum amount of CHF 15,000 per annum. Upon termination of the employment for
any reason other than voluntary resignation by Executive, Employer shall pay one
half of the costs of the tax preparation services for the year of termination.

 

  f) Housing: For the duration of the employment hereunder, Employer will pay
Executive a housing allowance in the amount of CHF 5,880 per month.

 

  g) Cost of Living Adjustment: For the duration of the employment hereunder,
Employer will pay Executive a cost of living supplement equal to sixteen percent
(16%) of the Base Remuneration, payable in 12 equal monthly payment. Such amount
is currently CHF 87,200 or CHF 7,273 per month and is subject to changes in the
Base Remuneration.

 

  h) Income Tax Protection. Except as provided in Section 17, Employer shall not
be obligated to gross up for taxes any individual benefit paid to Executive.
However, Employer will indemnify Executive for all taxes paid in excess of 30%
of Executive’s total compensation hereunder, up to a maximum of CHF 915,000. For
purposes of this Clause h), (i) taxes shall include any and all Swiss wealth
taxes applicable to Executive but shall exclude (A) all US state income tax
applicable to Executive, and (B) taxes on income derived by Executive from
sources other than that payable hereunder, and (ii) for clarity purposes, the
phrase “total compensation hereunder” shall mean all compensation payable under
clauses 4.1, 4.2, and 5.1 a), b), c), d), e), f), g) and i).

 

  i) Miscellaneous. Employer will provide or bear the costs of a mobile phone
and laptop computer with mobile internet connection and reasonable operating
expenses for business and personal use for the duration of Executive’s
employment in accordance with Employer’s policy as in effect from time to time.

6 Expenses

Employer shall compensate Executive for all expenses arising out of the
performance of his duties under this Agreement which are adequately supported by
documentation and consistent with the policies of Employer in effect from time
to time.

7 Social Security Contributions/Insurances

 

7.1 For the duration of the employment hereunder, Employer shall provide
Executive, his spouse and his daughter Marcia (until Marcia completes
International School), with reasonable health and dental insurance in
Switzerland. In addition, Executive, at his sole expense, may participate in the
EnerSys’ US based health care program.

 

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7.2 Employer will insure Executive against occupational and non-occupational
accidents. All costs of such insurance will be exclusively borne by Employer.

 

7.3 Executive’s contributions to the U.S. social security program shall be
deducted from the Base Remuneration and bonus and possible other payments.

 

7.4 For the duration of his employment, Executive shall be entitled to
participate in the EnerSys 401k Plan under the same terms and conditions
applicable to other senior managers of EnerSys in effect from time to time.

8 Vacation

 

8.1 Executive shall be entitled to 25 days vacation per calendar year. Executive
shall determine the timing of vacation in accordance with his duties.

9 Disability to Work

 

9.1 Information of Employer

Executive shall immediately inform Employer if he is unable to work and let
Employer know the estimated duration of and the reasons for his inability to
work. In the event of illness, Executive shall upon request provide Employer
with a medical certificate on his inability to work and the estimated duration
of it.

 

9.2 Continued Payment of Salary

Subject to Section 16.4, if Executive is unable to perform his work due to
illness, accident or any other cause through no fault of his own, Employer shall
continue to pay the agreed Base Remuneration for a maximum period of 6 months;
provided, however, that each such amount shall be reduced (but not below zero)
by any salary payments or other amounts by third parties for the said period,
particularly under accident or health or medical insurance policies taken out by
Employer, shall be on account of Employer’s salary payment obligation.

10 Director’s Liability Insurance

Employer will arrange insurance coverage for Executive against directors’ and
officers’ liability arising out of his activities under this Agreement under the
insurance policy of EnerSys.

11 Intellectual Property Rights

 

11.1 All inventions, designs, creations, data, findings, works,
computer-programs, marks, methods, documents and the like which Executive solely
or jointly with others, makes, conceives or contributes to while performing his
tasks and activities hereunder (referred to collectively as the “Results”)
belong exclusively to Employer regardless of whether or not Results are
protected under applicable laws and regulations. To the extent Employer is not
entitled to the rights to Results on the basis of Art. 332 para. 1 CO Executive
assigns and transfers any rights to and in connection with Results to Employer.
Employer is free to exploit, modify and use such Results at its own discretion.
Subject only to Art. 332 para. 4 CO, Executive is not entitled to any additional
remuneration for the Results he has made, conceived or contributed to.

 

11.2 During and after the term of his employment, if reasonably required,
Executive will support Employer in the process of patenting inventions or
registering other intellectual property rights he made or contributed to during
his employment hereunder.

 

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12 Confidentiality / Company Property

 

12.1 Executive acknowledges that all information and knowledge obtained or
developed as a result of, or in connection with, his employment hereunder and
which is directly or indirectly related to Employer or other companies within
EnerSys, their activities, products, software, techniques, technology and
procedures as well as all related intellectual property rights are extremely
valuable and confidential. All such information and rights shall vest and remain
with Employer or the related company within EnerSys, and Executive shall, upon
request and the expense of Employer, promptly make all disclosures, execute all
instruments and papers and perform all acts reasonably necessary to vest and
confirm in Employer or the related company within EnerSys, fully and completely,
all rights created or contemplated by this Section.

 

12.2 Executive agrees and undertakes not to disclose, publish or make available
to any third party, during his employment and at any time after the termination
thereof, any such knowledge or information without the prior written consent of
Employer; provided, however, that this Section 12.2 shall not apply to
information and knowledge that is in the public domain, unless such information
or knowledge is in the public domain as a result of action by Executive in
violation of this provision.

 

12.3 Furthermore, Executive shall be bound, both during this employment
hereunder and afterwards not to perform or take part in any act of unfair
competition.

 

12.4 Executive must keep in safe custody any commercial and technical documents
and equipment of Employer and EnerSys and shall return it to Employer when
requested, at the latest at the end of this Agreement, and without keeping any
copies. Wherever copies cannot be surrendered to Employer (e.g. digital copies,
data carriers or the like) such copies must be destroyed at the time of request
to surrender even if destruction of copies has not been specifically requested
by Employer.

13 Prohibition to Compete and to Solicit

 

13.1 Due to the fact that in his function Executive has access to the clientele
and to the manufacturing and business secrets of Employer and EnerSys, he
undertakes, during the term of this Agreement and for two (2) years after its
termination, to refrain from engaging in any Competing Business (as hereinafter
defined) in Switzerland, the European Union and any other country or territory
in which Employer or EnerSys have business activities at the date of termination
of the employment or had such in the twelve months preceding the termination of
the employment, and not to solicit employees of Employer or any other company of
EnerSys for his own business or the business of any third parties.

 

13.2 In particular, Executive undertakes:

 

  •  

not to participate, directly or indirectly, financially or otherwise, in any
Competing Business; it being agreed, however, that this Section 13 shall not be
violated by Executive’s investment of up to USD 100,000 in the aggregate in one
or several publicly traded companies that engage in a Competing Business;

 

  •  

not to be active, fully or partially, for or in a Competing Business, be it as a
director, officer, partner, employee, representative, agent, adviser or
otherwise;

 

  •  

not to directly or indirectly establish a Competing Business;

 

  •  

not to directly or indirectly solicit or employ any person who is, or was during
the then most recent twelve month period, an employer, officer or director,
representative or agent of Employer or any other EnerSys company or in any other
way enter into an agreement with such persons for the benefit of himself or a
third party.

 

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13.3 For the purpose of this Agreement a Competing Business means a business or
enterprise (other than Employer or any company within EnerSys) that is engaged
in any or all of the manufacture, importing, development, distribution,
marketing or sale of:

 

  a) motive-power batteries and chargers (including, without limitation,
batteries and chargers for industrial forklifts trucks, golf carts, floor
sweepers and other materials handling equipment); and/or

 

  b) stationary batteries and chargers (including, without limitation, standby
batteries and power supply equipment for wireless and wireline
telecommunications applications, such as central telephone exchanges, microwave
relay stations, and switchgear and other uninterruptible power supplies); and/or

 

  c) any Aerospace and Defense product or other product Employer or EnerSys is
now or at the time of termination makes or is researching, acquiring or
developing.

Competing Business also includes the design, engineering, installation or
service of stationary and DC power systems, and any consulting and/or turnkey
services relating thereto.

14 Infringement of Non-Compete and Non-Solicitation Provision

 

14.1 Executive is aware and acknowledges that a violation of the obligations as
set out in Section 13 may seriously damage Employer and EnerSys. If Executive
violates the obligations, Employer therefore has the right to forbid Executive
to start or continue activities which are contrary to his non-competition
obligation, and may, in particular, force Executive to abandon the new
occupation (specific performance, “Realexekution”). Furthermore, the two years
non-compete period shall be extended by the time of any period of
non-compliance.

 

14.2 Employer has the right to claim for any damage that has been caused by
violations of these obligations.

 

14.3 Payment of damages does not release Executive from his obligations of
non-competition and non-solicitation as set out in Section 13.

15 Data Protection

 

15.1 Executive acknowledges and agrees that Employer may store, transfer, change
and destroy all of his personal data in connection with this Agreement. He
particularly acknowledges and agrees that Employer has the right to transfer any
of his data to other companies of EnerSys in Switzerland or abroad, including,
but not limited to, the US.

16 Termination Payments

 

16.1 Termination by Employer without Cause / by Executive for Good Reasons

 

16.1.1 General

Subject to Sections 16.1.2; 16.1.3 and 16.4, if the employment is terminated by
Employer without Cause (as defined below) or if Executive terminates the
employment for Good Reason (as defined below), Employer shall, subject to
Executive executing a general release of claims against Employer and its
affiliates (including, without limitation, EnerSys and its direct and indirect
subsidiaries) in a form reasonably acceptable to the Employer, pay to Executive
the following amount (the “Termination Payments”):

 

 

a)

For a period equal to two years from the date of termination (or, if less than
two years remain until Executive’s 65th birthday, for the period from the date
of termination until the Executive’s 65th birthday) (the “Payment Period”),
Employer shall continue to pay Executive the Base Remuneration (as defined in
Section 4.1 above), at the rate in effect on the date of such termination, at
such intervals as the same would have been paid had Executive remained in
service of Employer.

 

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  b) For the fiscal year in which such termination occurs (the “Termination
Year”) and for each whole fiscal year following the Termination Year included in
the Payment Period, Employer shall pay Executive an amount equal to the average
of the bonus paid to Executive pursuant to Section 4.2 above for the two fiscal
years preceding the Termination Year (including, if applicable, the bonus earned
under the agreements referred to in Section 3.1 above), which amount shall be
payable at the time annual bonuses are paid to EnerSys executives.

 

  c) For the partial fiscal year, if any, immediately preceding the end of the
Payment Period, Employer shall pay Executive a Pro Rata Portion (as defined in
Section 16.5 below), through and including the last day of the Payment Period,
of the amount provided for in paragraph (b) above for the whole fiscal years
included in the Payment Period. Such Pro Rata Portion shall be payable at the
time all bonuses are paid to EnerSys executives generally, but in any event no
later than 75 days following the end of the fiscal year in which the Payment
Period ends.

 

  d) During the Payment Period, Executive and his beneficiaries shall remain
eligible to participate, on the same terms and conditions as apply from time to
time to the EnerSys’ executive officers generally, in all employee welfare
benefit plans or programs (including health, disability and life insurance
programs but excluding any vacation and severance programs); provided, however,
that this obligation on part of Employer shall cease at such time Executive
becomes eligible to participate in comparable programs for another company; and
provided, further, that Employer reserves the right to alter or discontinue
specific benefit plans or programs as long as Employer continues to provide
substantially similar benefits to Executive in accordance with this
Section 16.1.1d).

 

  e) Employer will reimburse Executive for documented reasonable costs of
relocating him and his family and the entire reasonable personal effects to a
single location in the United States, but only if such costs are incurred within
nine months after the date of termination and only to the extent that another
company does not directly or indirectly bear such relocation costs on his
behalf.

Except as set forth in the MIP and the applicable award agreement thereunder,
Executive shall have no further right to receive any other compensation or
benefits from Employer or any company of EnerSys after termination of this
Agreement. Executive’s rights following termination of this Agreement in any
awards under the MIP will be exclusively determined in accordance with the MIP
and the applicable award agreement.

16.1.2 Conditions Applicable to Termination Payments

If, during the Payment Period, Executive starts to be engaged in a Competing
Business (as defined in Section 13.3) and/or breaches any of its obligations
under Section 11 to 14 above, Employer may, upon written notice to Executive,
cease to make any further Termination Payments.

 

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16.1.3 Death during the Payment Period

In the event of Executive’s death during the Payment Period, the Termination
Payments shall continue to be made during the remainder of the Payment Period to
the beneficiary designated in writing for this purpose by Executive or, if no
such beneficiary is specifically designated, to Executive’s estate.

 

16.2 Termination for Cause; Voluntary Resignation

If the Employment Agreement is terminated by Employer for Cause or if Executive
voluntarily terminates other than for Good Reason, Executive shall not be
entitled to receive any portion of the Termination Payment. Executive shall have
no right to receive any other compensation or benefits from Employer or any
other company of EnerSys except as set forth in the MIP and the applicable award
agreement thereon.

 

16.2.1 Cause

Termination for “Cause” shall mean termination of the employment because of any
of the following:

 

  a) any reason entitling Employer to terminate the Agreement without notice
pursuant to Art. 337 et seq. of the Swiss Code of Obligations (“CO”);

 

  b) commission of any felony or other crime involving moral turpitude;

 

  c) knowing and intentional fraud;

 

  d) any act or omission that is material injurious to the financial condition
or business reputation of, or is otherwise materially injurious to, Employer or
any other subsidiary or affiliate of EnerSys, unless Executive believed in good
faith that he was acting in the best interest of Employer and EnerSys; and/or

 

  e) willful and continue failure or refusal of Executive to substantially
perform the duties required of him as a director other than by reason of
physical or mental incapacity;

provided, however, that, except for cases in which Employer is entitled to
terminate the Agreement without notice pursuant to Art. 337 et seq. CO, if any
such Cause relates to Executive’s obligations under this Agreement, such
termination shall not constitute Cause unless Employer shall have given
Executive notice of its intention to terminate and of the ground for such
termination within 90 days of such event, and Executive has not, within 20 days
following receipt of such notice cured such Cause to the reasonable satisfaction
of Employer, and Employer terminates this Agreement to the next possible
termination date.

 

16.2.2 Good Reason

For the purpose of this Agreement, “Good Reason” shall mean any of the following
(without Executive’s prior written consent):

 

  a) any reason entitling Executive to terminate the Agreement without notice
pursuant to Art. 337 et seq. CO;

 

  b) any decrease in Executive rate of Base Remuneration (as defined above)
other than in connection with repatriation to the United States;

 

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  c) a material diminution of the authority, responsibilities or positions of
Executive from those set-forth above;

 

  d) Employer requiring Executive to relocate from Zurich, Switzerland except,
with 90 days prior notice and an undertaking to pay reasonable relocation
expense, to another location in Western Europe;

provided, however, that, except for cases in which Executive is entitled to
terminate this Agreement pursuant Art. 337 et seq. CO, none of the foregoing
events or conditions shall constitute Good Reason, unless (i) Executive gives
Employer written notice of his objection to such event or condition within 90
days of the occurrence of such event or condition, (ii) Employer does not
correct or cure such event or condition within 20 days within its receipt of
such notice and (iii) Executive terminates his employment to the next possible
termination date.

 

16.3 Mitigation and Offset

Executive shall not be required to mitigate the amount of any payment provided
for in Section 16.1 by providing services to any third party, but the amount of
any payment provided for in Section 16.1 (other than any amount that hat accrued
through to Executive’s date of termination) shall be reduced, (but not below
zero) by (i) any compensation earned (including amounts deferred) from a
subsequent employer and (ii) any appreciation realized or accrued on equity or
equity-linked securities of a subsequent employer by Executive, in both such
cases as a result of providing services (whether as an employee, consultant,
advisor, independent contractor, founder, partner, shareholder, option holder,
warrant holder or board member or in any other capacity) to any party or entity
during the Payment Period. Executive shall promptly notify Employer in writing
of any such arrangement during the Payment Period and will cooperate fully with
Employer in determining the amount of any reduction on amounts otherwise payable
under Section 16.1.

 

16.4 Death and Disability

 

16.4.1 In the event the employment hereunder is terminated as a result of
Executive’s death or Disability, Employer shall pay to Executive (or his estate,
as applicable) (i) the Base Remuneration through the date of termination and
(ii) a Pro Rata Portion (through and including the date of termination) of the
bonus to which Executive would be entitled pursuant to this Agreement during the
year in which the employment was terminated, payable at the time bonuses are
generally paid to EnerSys executives, provided, however, that each such amount
shall be reduced (but not below zero) by any salary payments or other amounts by
third parties for the said period, particularly under accident or health or
medical insurance policies taken out by Employer, shall be on account of
Employer’s salary payment obligation.

 

16.4.2 For the purpose of this Section, disability means a physical or mental
disability or infirmity of Executive, as determined by a physician of recognized
standing selected by Employer, that prevents (or, in the opinion of such
physician, is reasonably expected to prevent) the normal performance of
Executive’s duties for a continuous period of 180 days, or for 180 days during
any 12-month period.

 

16.5 Pro Rata Amounts

Whenever this Agreement calls for payment of a “Pro Rata Portion” or a
referenced amount, such a pro rata amount shall be calculated on the basis of
(i) the number of days in the partial fiscal year up to and including the day as
of which the amount is to be calculated, divided by (ii) 365.

 

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17 Certain Additional Payments by Employer

 

17.1 Gross-Up Payments

In the event it shall be determined that any payment or distribution by Employer
to or for the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 17 (a “Payment”) would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) (such
excise tax being referred to as the “Excise Tax”), then Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

 

17.2 Gross-Up Payment Calculation

Subject to the provisions of Section 17.3, all determinations required to be
made under this Section 17, including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Employer’s
independent certified public accountants (the “Accounting Firm”). All fees and
expenses of the Accounting Firm shall be borne solely by Employer. Any Gross-Up
Payment, as determined pursuant to this Section 17, shall be paid by Employer to
Executive within five days of the receipt of the Accounting Firm’s
determination. Any determination by the Accounting Firm shall be binding upon
Employer and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by Employer should have been made (“Underpayment”), consistent
with the calculations required to be made hereunder. In the event that Employer
exhausts its remedies pursuant to Section 17.3 and Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by Employer to or for the benefit of
Executive.

 

17.3 Claim by the IRS

Executive shall notify Employer in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by Employer of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no
later than ten business days after Executive is informed in writing of such
claim and shall apprize Employer of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which he
gives such notice to Employer (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If Employer notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:

 

  a) give Employer any information reasonably requested by Employer relating to
such claim;

 

  b) take such action in connection with contesting such claim as Employer shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by Employer;

 

  c) cooperate with Employer in good faith in order effectively to contest such
claim; and

 

  d) permit Employer to participate in any proceedings relating to such claim;

 

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provided, however, that Employer shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 17.3, Employer shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as Employer shall determine;
provided, however, that if Employer directs Executive to pay such claim and sue
for a refund, Employer shall advance the amount of such payment to Executive, on
an interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance, and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, Employer’s control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and Executive
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.

 

17.4 Entitlement to Refund

If, after the receipt by Executive of an amount advanced by Employer pursuant to
Section 17.3, Executive becomes entitled to receive any refund with respect to
such claim, Executive shall promptly pay to Employer the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by Employer
pursuant to Section 17.3, a determination is made that Executive shall not be
entitled to any refund with respect to such claim and Employer does not notify
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.

18 Amendments to Agreement, Applicable Law, Jurisdiction

 

18.1 Any amendments or additions to this Agreement must be in writing.

 

18.2 Should any one or more provisions of this Agreement be or become invalid,
the other provisions shall not be affected. Invalid provisions shall be
substituted with provisions which are most closely in line with the intended
purpose.

 

18.3 This Agreement shall be governed by the internal laws of Switzerland.

 

18.4 Any disputes arising out of this Agreement shall be submitted to the courts
at the domicile or seat of the defendant or at the place where Executive usually
carries out his work.

 

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Employer:

 

                        , this                         

 

EH Europe GmbH      

 

   

 

  Name:       Name:    

 

Executive:                         , this                         

 

Raymond R. Kubis

 

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