Exhibit 10.19

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

(Daniel H. Schulman)

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) dated as of
January 1, 2008 (the “Commencement Date”) by and between Virgin Mobile USA, Inc.
(the “Company”) and Daniel H. Schulman (the “Executive”).

WHEREAS, the Executive has been employed by the Company pursuant to the terms of
an Amended and Restated Employment Agreement, dated as of August 1, 2005 (the
“Original Agreement”); and

WHEREAS, the Company and the Executive desire to amend and restate the Original
Agreement in its entirety.

NOW THEREFORE, in consideration of the premises and mutual covenants herein and
for other good and valuable consideration, the parties agree to amend and
restate the Original Agreement in its entirety as follows:

1. Term of Employment. Executive shall be employed by the Company hereunder for
a period commencing as of the Commencement Date and ending upon termination of
Executive’s employment pursuant to Section 9 of this Agreement (the “Employment
Term”).

2. Position.

(a) During the Employment Term, Executive shall serve as the Company’s Chief
Executive Officer and shall serve as a member of the Company’s Board of
Directors (the “Board”). As Chief Executive Officer, Executive shall have full
authority for the day to day operations of the business, subject to Board
oversight and prior approval of the Board for major transactions and financial
commitments and such other duties, consistent with Executive’s position, as
shall be determined from time to time by the Board. Executive shall have
exclusive authority with regard to the hiring and firing of all employees (other
than himself) and consultants; provided that (i) Executive shall consult with
the Board with regard to the hiring and firing of senior executives and
(ii) following consultation with Executive, the Board shall retain the right to
unilaterally terminate the employment of any such employee or consultant for
cause. Notwithstanding the foregoing, Executive’s authorities and duties shall
in all cases be subject to the fiscal policy, annual plans and budgets, as
determined from time to time by the Board.

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(b) During the Employment Term, Executive will devote Executive’s full business
time and efforts to the performance of Executive’s duties hereunder and will not
engage in any other business, profession or occupation for compensation or
otherwise which would materially conflict or interfere with the rendition of
such services either directly or indirectly, without the prior written consent
of the Board; provided that nothing herein shall preclude Executive (i) from
continuing to serve on any board of directors, advisory committees or boards of
trustees of those business corporations and/or charitable organizations listed
on Schedule I hereto, (ii) from being involved in charitable, professional and
political support activities, (iii) from managing his personal and family
investments and (iv) subject to the prior approval of the Board, from accepting
appointment to any additional boards of directors or advisory committees of any
business corporation, provided, in each case, and in the aggregate, that such
activities do not materially conflict or interfere with the performance of
Executive’s duties hereunder or conflict or interfere with Section 10.

(c) The principal place of Executive’s employment hereunder (and the Company’s
executive offices) shall be in Northern or Central New Jersey or New York City,
New York subject to such travel as may be reasonably necessary in connection
with Executive’s performance of his duties to the Company.

3. Base Salary. Effective as of the Commencement Date and continuing for the
duration of the Employment Term, the Company shall pay Executive a base salary
at the annual rate of $750,000, payable in regular installments in accordance
with the Company’s usual payment practices. Executive’s base salary shall be
reviewed annually by the Board and shall be subject to such increases, if any,
as may be determined from time to time in the sole discretion of the Board. Once
increased, the Executive’s base salary shall not be reduced. Executive’s annual
base salary, as in effect from time to time, is hereinafter referred to as the
“Base Salary.” Notwithstanding the foregoing, effective as of February 15, 2008
and for the remainder of 2008 only, solely for the purposes of the payment of
Base Salary pursuant to this Section 3 and calculation of the Semi-Annual
Bonuses (as defined below) pursuant to Section 4 (and not for determining
amounts based on Base Salary or Semi-Annual Bonus (e.g., severance payments)),
Executive’s Base Salary shall be paid at the annual rate of $600,000. For the
avoidance of doubt, beginning January 1, 2009, the Company shall pay Executive a
base salary at an annual rate of no less than $750,000.

4. Semi-Annual Bonus. With respect to the fiscal year ending December 31, 2008
and with respect to each fiscal year thereafter during the Employment Term,
Executive shall be eligible to earn a semi-annual target bonus award (a
“Semi-Annual Bonus”) of one hundred twenty percent (120%) of Executive’s Base
Salary during such semi-annual period (the “Target Bonus”), based upon, and
subject to, the achievement of reasonable semi-annual performance objectives
established in good faith by the Board after consultation with the Executive
within the period required under Internal Revenue Code Section 162(m) (“Section
162(m)”) for each semi-annual period during the term of Executive’s employment.
The semi-

 

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annual periods shall be January 1st through June 30th (the “First Semi-Annual
Period”) and July 1st through December 31st (the “Second Semi-Annual Period”).
The Semi-Annual Bonus for the First Semi-Annual Period, if any, shall be paid to
Executive during the calendar year in which the First Semi-Annual Period ends
and the Semi-Annual Bonus for the Second Semi-Annual Period, if any, shall be
paid to Executive in the calendar year immediately following the end of the
applicable calendar year in which the Second Semi-Annual Period ends and prior
to two and one half (2.5) months (i.e., no later than the first March 15th)
after the end of the applicable calendar year.

5. Mid-Term Incentive. With respect to the fiscal year ending December 31, 2008,
Executive shall be eligible to receive a mid-term incentive award (the
“Incentive Award”) in the amount of $700,000 pursuant to the terms of the
Company’s Mid-term Incentive Bonus Plan, based upon, and subject to, the
achievement of reasonable performance objectives established in good faith by
the Board after consultation with the Executive within the time period permitted
by Section 162(m). For each period thereafter for which the Company establishes
a mid-term or equivalent bonus, Executive shall be entitled to participate
therein at a level commensurate with his position. Any such bonus shall be paid
by March 15th of the calendar year following the fiscal year in which the
measuring period ends. The bonus under this Section 5 shall be referred to as
the “Mid-Term Bonus”.

6. Equity Arrangements.

(a) Existing Equity Awards. Except as otherwise provided in this Agreement, any
equity awards previously granted to Executive and outstanding on the
Commencement Date shall continue to be governed by their respective existing
terms and conditions.

(b) Restricted Stock Units.

(i) Grant. As of March 13, 2008, Executive shall be granted an aggregate of
400,000 restricted stock units of the Company (the “Restricted Stock Units”),
subject to the terms and conditions of the Virgin Mobile USA, Inc. 2007 Omnibus
Incentive Compensation Plan and an applicable restricted stock unit award
agreement (the “RSU Award Agreement”), which shall contain the terms and
provisions set forth in clauses (ii) and (iii) below.

(ii) Vesting. Subject to Executive’s continued employment with the Company as of
the last day of each fiscal year for 2008, 2009 or 2010, as applicable (with any
termination of employment after the end of a fiscal year being irrelevant to
vesting), the Restricted Stock Units shall vest upon the certification provided
below, if at all, as follows:

 

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(A) 2008 Vesting Opportunity. One-third of the Restricted Stock Units shall
become vested if the Company’s net earnings per share growth for fiscal year
2008 meets or exceeds the target set by the Compensation Committee and set forth
in the RSU Award Agreement, as certified by the Board in good faith as soon as
practicable following the receipt by the Company of its audited financial
statements for fiscal year 2008 (but in no event later than December 31, 2009).

(B) 2009 Vesting Opportunity. One-third of the Restricted Stock Units shall
become vested if the Company’s net earnings per share for fiscal year 2009 meets
or exceeds the target set by the Compensation Committee and set forth in the RSU
Award Agreement, as certified by the Board in good faith as soon as practicable
following the receipt by the Company of its audited financial statements for
fiscal year 2009 (but in no event later than December 31, 2010). If no
Restricted Stock Units vest pursuant to Section 6(b)(ii)(A), an additional
one-third of the Restricted Stock Units shall become vested as of the date of
such certification, if the cumulative earnings per share for 2008 and 2009 meets
or exceeds the sum of the targets set by the Compensation Committee for 2008 and
2009 and set forth in the RSU Award Agreement, as certified by the Board, in
good faith as soon as practicable following the receipt by the Company of its
audited financial statements for fiscal year 2009 (but in no event later than
December 31, 2010), by reference to the Company’s audited financial statements
for fiscal years 2008 and 2009.

(C) 2010 Vesting Opportunity. One-third of the Restricted Stock Units shall
become vested if the Company’s net earnings per share growth for fiscal year
2010 meets or exceeds the target set by the Compensation Committee and set forth
in the RSU Award Agreement, as certified by the Board in good faith as soon as
practicable following the receipt by the Company of its audited financial
statements for fiscal year 2010 (but in no event later than December 31, 2011).
If either or both of the Restricted Stock Units tranches described above do not
vest pursuant to Sections 6(b)(ii)(A) and 6(b)(ii)(B), an additional one-third
or two-thirds, as the case may be, of the Restricted Stock Units shall become
vested as of the date of such certification, if the cumulative earnings per
share for 2010 and the year(s) in which the Restricted Stock Units have not
vested meets or exceeds the sum of the targets set by the Compensation Committee
for the respective years as certified by the Board in good faith as soon as
practicable following the receipt by the Company of its audited financial
statements for fiscal year 2010 (but in no event later than December 31, 2011),
by reference to the Company’s audited financial statements for fiscal years
2008, 2009 and 2010.

 

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In the event that the Company (i) engages in a corporate transaction that could
reasonably be expected to have a material impact on the Company’s earnings per
share for a fiscal year or (ii) implements an action that is reasonably expected
to reduce earnings per share in a current year but provide benefits in future
years, the Company shall equitably adjust the performance vesting target amounts
described above to prevent dilution or enlargement of Executive’s benefits under
this Agreement in such manner as it reasonably determines.

(iii) Issuance of Shares. Upon the vesting of Restricted Stock Units, the shares
of Company Class A common stock subject to such Restricted Stock Units shall be
issued to Executive (provided, that such issuance is otherwise in accordance
with federal and state securities laws) as soon as practicable thereafter, but
in any case within the calendar year in which such vesting is certified.
Notwithstanding the foregoing, any issuance of shares shall be subject to
Section 16 hereof.

(c) Accelerated Vesting.

(i) Termination of Employment by Reason of Death, Disability, the Company
without Cause or by Executive for Good Reason. In the event Executive’s
employment is terminated by reason of death, Disability, the Company without
Cause or if Executive resigns for Good Reason (except as otherwise provided in
Section 6(c)(ii) or (iii)), an additional number of Restricted Stock Units,
equity awards granted to Executive in 2007 (“2007 Equity Awards”) and any other
equity awards granted to Executive during the Employment Term (“Other Employment
Term Awards”) will become vested such that the number of shares (including those
previously vested) of each of the Restricted Stock Units, 2007 Equity Awards and
Other Employment Term Awards will equal the total number of shares of the grant
of each of the Restricted Stock Units, 2007 Equity Awards and Other Employment
Term Awards subject to such grant, as the case may be, multiplied by a fraction,
the numerator of which equals the number of months from the date of grant
through the date of termination, plus twelve, and the denominator of which
equals the number of months in all vesting periods applicable to such grants;
provided that, if any grant provides for greater vesting upon termination of
employment than the foregoing, then such greater vesting shall apply.

(ii) Change in Control. In the event that either (x) Executive is still employed
with the Company six (6) months following a “Change in Control” (as such term is
defined below) or (y) within six (6) months following a Change in Control
Executive’s employment is terminated by reason of death, Disability, the Company
without Cause or if Executive resigns for Good Reason (except as otherwise
provided in Section 6(c)(iii)), all unvested Restricted Stock Units, 2007 Equity
Awards and Other Employment Term Awards then held by Executive shall fully vest,
as the case may be, upon the occurrence of such six (6) month anniversary or
such termination of employment. Notwithstanding anything herein to the contrary,
if within six (6) months prior to a Change in Control and in anticipation of
such Change in Control (i) Executive is terminated by the Company without Cause,
or (ii) Executive

 

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terminates employment for Good Reason, all unvested Restricted Stock Units, 2007
Equity Awards and Other Employment Term Awards then held by Executive shall
fully vest as of the date of such termination.

(iii) Termination Pursuant to a Mutually Agreed Succession Plan. If Executive’s
employment is terminated pursuant to the terms of a mutually agreed (by
Executive and the Board) succession plan with respect to the position of Chief
Executive Officer as described in Section 9(d), all unvested Restricted Stock
Units, 2007 Equity Awards and Other Employment Term Awards then held by
Executive shall vest as of the date of termination.

(d) Post-Termination Option Exercise Period. In the event that either
(x) Executive’s employment is terminated by the Company without Cause or for
Disability, (y) Executive resigns for Good Reason or Executive’s employment is
terminated as a result of death or (z) Executive’s employment is terminated
pursuant to the terms of a mutually agreed succession plan with respect to the
position of Chief Executive Officer (as described in Section 9(d)), Executive
shall be entitled to receive an extension of the period of time to exercise
vested stock options held by Executive on the date of such termination through
the twenty-four (24) month period following such termination date (i.e., vested
stock options that are not exercised will expire on the earlier of the end of
such twenty-four (24) month period or the expiration date of the stock option);
provided, however, if Executive (x) breaches any of his obligations under
Section 10 (which remains uncured for ten (10) days following written notice
from the Company of such breach) or (y) materially breaches during the one
(1) year period following Executive’s termination of employment with the
Company, the confidentiality restriction set forth in Section 11(a) (including
any willful breach or disclosure of material confidential information or other
disclosure which could reasonably be expected to result in material harm to the
Company), any extension shall cease to apply and the Executive may thereafter
only exercise such options during the original exercise period.

(e) Forfeiture. Notwithstanding anything herein to the contrary, if Executive
(x) breaches any of his obligations under Section 10 (which remains uncured for
ten (10) days following written notice from the Company of such breach) or
(y) materially breaches, during the one (1) year period following Executive’s
termination of employment with the Company, the confidentiality restrictions set
forth in Section 11(a) (including any willful breach or disclosure of material
confidential information or other disclosure which could reasonably be expected
to result in material harm to the Company), then (i) all unvested Restricted
Stock Units then held by Executive shall be automatically forfeited as of the
date of such breach and (ii) with respect to shares of Company Class A common
stock issued to Executive either upon the lapse of restrictions relating to
Restricted Stock Units within the lesser of the one-year period preceding such
breach or the period of time elapsed from the date of termination through the
date of such breach or upon the exercise of vested stock options held by
Executive and exercised during the period beginning on termination of
Executive’s employment and ending on the first anniversary of such termination,
Executive shall pay to the Company the after-tax value of such shares

 

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received by the Executive (as determined by the market price of the shares of
Company Class A common stock as of the date of the lapse of such restrictions or
the date of exercise of such vested stock options).

(f) Change in Control. For purposes of this Agreement, “Change in Control” shall
mean an event satisfying the requirements of Treas. Reg. Section 1.409A-3(i)(5)
and which is one of the following: (i) the sale or disposition, in one or a
series of related transactions, of all or substantially all of the assets of the
Company to any “person” or “group” (as such terms are defined in Sections
13(d)(3) and 14(d)(2) of the Exchange Act of 1934 (the “Exchange Act”), (ii) any
person or group is or becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of
the total voting power of the Company or (iii) any merger or other corporate
transaction after which the outstanding shares of the Company immediately prior
thereto represent less than fifty percent (50%) of the voting power (in the
election of directors) of the shares in the surviving entity immediately
thereafter.

7. Employee Benefits. During the Employment Term, Executive shall be entitled to
participate in the Company’s employee benefit plans and payroll practices (other
than bonus and incentive plans) as in effect from time to time (collectively
“Employee Benefits”), on the same basis as those benefits are generally made
available to other senior executives of the Company; provided that for the
Employment Term, Executive will be provided with a minimum of $2 million of life
insurance death benefit protection, long-term disability protection of at least
sixty-five (65%) of Executive’s Base Salary and four (4) weeks per year of
vacation.

8. Business Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive’s duties hereunder shall
be reimbursed by the Company in accordance with Company policies. All taxable
payments and reimbursements related to expenses paid pursuant to this Section 8
shall be paid in accordance with Section 16(c) hereof.

9. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either party at any time and for any reason. Notwithstanding any
other provision of this Agreement, the provisions of this Section 9 shall
exclusively govern Executive’s rights upon termination of employment with the
Company and its Affiliates.

(a) By the Company For Cause or By Executive Resignation Without Good Reason.

(i) The Employment Term and Executive’s employment hereunder may be terminated
by the Company for Cause and shall terminate automatically upon

 

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Executive’s resignation without Good Reason; provided that Executive will be
required to give the Company at least thirty (30) days advance written notice of
a resignation without Good Reason.

(ii) For purposes of this Agreement, “Cause” shall mean, during the Employment
Term: (i) Executive’s willful misconduct or gross negligence with regard to the
Company that has a material adverse effect on Company; (ii) Executive’s willful
failure to attempt to follow proper legal written direction of the Board within
five (5) business days after written notice by the Board that failure to attempt
to follow such direction shall be grounds for termination; (iii) Executive’s
willful continuous failure to attempt in good faith to perform Executive’s
duties hereunder (other than a result of incapacity due to physical or mental
illness) within ten (10) days after delivery of a written demand for substantial
performance by the Board; (iv) Executive’s conviction of or plea of guilty or no
contest to a felony (other than a traffic violation) or misdemeanor involving
fraud or theft with respect to Company or Company customer businesses or assets;
or (v) Executive’s breach of the provisions of Section 10 or 11(a) of this
Agreement which breach is not cured within fifteen (15) business days after
Executive’s receipt of written notice thereof from the Company. No act or
failure to act (other than the events described in clause (ii) above) will be
considered to be “willful” if undertaken (or omitted to be done) in good faith
and with a reasonable belief that such action or inaction was in the best
interests of the Company. No termination shall be for Cause unless the Notice of
Termination (as defined below) is accompanied (or followed) by a resolution
adopted by two-thirds of the full Board (excluding Executive or other employee
directors) at a meeting at which (or following a meeting at which) Executive
(and, if Executive elects, his counsel) are permitted to appear and respond to
the charges and of which Executive has been given at least ten (10) days written
notice with reasonably specificity as to the alleged Cause event.

(iii) If Executive’s employment is terminated by the Company for Cause, or if
Executive resigns without Good Reason, Executive shall be entitled to receive:

(A) the Base Salary, and any accrued but unused and unpaid vacation, through the
date of termination;

(B) any Semi-Annual Bonus and Mid-Term Bonus earned, but unpaid, as of the date
of termination for the immediately preceding fiscal year, paid in accordance
with Section 4 and Section 5, respectively (except to the extent payment is
otherwise deferred pursuant to any applicable deferred compensation arrangement
with the Company);

(C) reimbursement, within sixty (60) days following submission by Executive to
the Company of appropriate supporting documentation, for any unreimbursed
business expenses properly incurred by

 

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Executive in accordance with Company policy prior to the date of Executive’s
termination; provided claims for such reimbursement (accompanied by appropriate
supporting documentation) are submitted to the Company within ninety (90) days
following the date of Executive’s termination of employment;

(D) such Employee Benefits, if any, as to which Executive may be entitled under
the employee benefit plans of the Company, to the extent such employee benefit
plans expressly provide for the continuation of such Employee Benefits following
termination of employment (the amounts described in clauses (A) through
(E) hereof being referred to as the “Accrued Rights”); and

(E) any equity rights expressly applicable following such a termination of
employment pursuant to Section 6 of this Agreement and any applicable equity
plans and award agreements.

Following such termination of Executive’s employment by the Company for Cause or
resignation by Executive without Good Reason, except as set forth in Sections
9(a)(iii), 13 and 16 and Executive’s rights with regard to indemnification and
directors and officers liability insurance, Executive shall have no further
rights to any compensation or any other benefits under this Agreement.

(b) Disability or Death.

(i) The Employment Term and Executive’s employment hereunder shall terminate
upon Executive’s death and may be terminated by the Company if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six
(6) consecutive months or for an aggregate of one hundred eighty (180) days in
any twelve (12) month period to perform Executive’s material duties (such
incapacity is hereinafter referred to as “Disability”). Any question as to the
existence of the Disability of Executive as to which Executive and the Company
cannot agree shall be determined in writing by a qualified independent physician
mutually acceptable to Executive and the Company. If Executive and the Company
cannot agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the
Company and Executive shall be final and conclusive for all purposes of the
Agreement. Notwithstanding the foregoing, in the event that as a result of
absence because of mental and physical incapacity Executive incurs a “separation
from service” within the meaning of such term under Internal Revenue Code
Section 409A and the Regulations thereunder (“Section 409A”), Executive shall on
such date automatically be terminated from employment because of Disability.

 

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(ii) Upon termination of Executive’s employment hereunder for either Disability
or death, Executive or Executive’s estate (as the case may be) shall be entitled
to receive the payments and benefits described under Section 9(c)(iii), subject
to the terms and conditions set forth therein.

Following Executive’s termination of employment due to death or Disability,
except as set forth in Sections 9(b)(ii), 13 and 16 and Executive’s rights with
regard to indemnification and directors and officers liability insurance,
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.

(c) By the Company Without Cause or Resignation by Executive for Good Reason.

(i) The Employment Term and Executive’s employment hereunder may be terminated
by the Company without Cause or by Executive’s resignation for Good Reason.

(ii) For purposes of this Agreement, “Good Reason” shall mean, during the
Employment Term (A) any diminution in Executive’s title; (B) any material
adverse diminution in Executive’s duties or responsibilities such that they are
materially inconsistent with Executive’s position (except for diminution due to
Executive’s disability or temporary illness or other absence), (C) relocation of
Executive office to a location outside of Northern or Central New Jersey or New
York City, New York; (D) failure to maintain Executive as a director (other than
by reason of removal for Cause or due to Executive’s death, Disability or
resignation); or (E) failure of the Company to timely pay Executive any of the
compensation set forth in Sections 3, 4, 5 or 6 of the Agreement; provided that
no such event(s) shall constitute “Good Reason” unless the Company shall have
failed to cure such event(s) within twenty (20) days after receipt by the
Company from Executive of written notice describing in detail such events. In
addition, a resignation by Executive for any reason during the thirty (30) day
period commencing on the date that is six (6) months after a Change in Control
shall be deemed to constitute Good Reason. Notwithstanding anything herein to
the contrary, Executive’s resignation from employment pursuant to the terms of a
mutually agreed succession plan with respect to the position of Chief Executive
Officer as described in Section 9(d) shall not constitute “Good Reason.”

(iii) If Executive’s employment is terminated by the Company without Cause or if
Executive resigns for Good Reason, Executive shall be entitled to receive:

(A) the Accrued Rights;

 

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(B) subject to Section 16 hereof, a lump sum cash payment equal to two times the
sum of (a) Executive’s Base Salary in effect as of the date of termination plus
(b) the Target Bonus amount for the year in which such termination occurs, paid
twenty (20) days following Executive’s termination of employment;

(C) a pro rata portion of the actual Semi-Annual Bonus for the year of
termination and any Mid-Term Bonuses for any uncompleted measuring period that
Executive would have been entitled to receive pursuant to Section 4 and
Section 5 hereof, respectively, based on actual Company performance for the
respective measurement period and upon the percentage of the measuring period
that shall have elapsed through the date of termination of Executive’s
employment, payable when such Semi-Annual Bonus or Mid-Term Bonus, as the case
may be, would have otherwise been payable had Executive’s employment not
terminated; and

(D) any equity rights expressly applicable following such termination of
employment pursuant to Section 6 of this Agreement and any applicable equity
plans and award agreements;

provided that the aggregate amount described in Section 9(c)(iii)(B) shall be in
lieu of (and Executive shall not be eligible for) any other cash severance or
termination benefits which would be payable to Executive under any other plans,
programs or arrangements of the Company or its Affiliates; and provided,
further, that, without prejudice to the Company’s other remedies at law or in
equity, if Executive (x) breaches any of his obligations under Section 10 (which
remains uncured for ten (10) days following written notice from the Company of
such breach) or (y) materially breaches, during the one year period following
Executive’s termination of employment with the Company, the confidentiality
restrictions set forth in Section 11(a) (including any willful breach or
disclosure of material confidential information or other disclosure which could
reasonably be expected to result in material harm to the Company), Executive
shall cease to be eligible for the benefits in Section 9(c)(iii)(B) above and
Executive hereby agrees to promptly repay to the Company all amounts paid to him
under Section 9(c)(iii)(B).

Following Executive’s termination of employment by the Company without Cause
(other than by reason of Executive’s death or Disability) or by Executive’s
resignation for Good Reason, except as set forth in Sections 9(c)(iii), 13 and
16 and Executive’s rights with regard to indemnification and directors and
officers liability insurance, Executive shall have no further rights to any
compensation or any other benefits under this Agreement.

 

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(d) Mutually Agreed Succession Plan.

(i) The Employment Term and Executive’s employment hereunder may be terminated
pursuant to the terms of a succession plan with respect to the position of Chief
Executive Officer duly adopted in good faith by two-thirds of the full Board
(excluding Executive or other employee directors) and consented to in writing by
Executive (which Executive may do or not do in his sole discretion), prior to
the occurrence of any of the events constituting Good Reason as set forth in
Section 9(c)(iii) hereof.

(ii) If Executive’s employment is terminated pursuant to the terms of a mutually
agreed succession plan with respect to the position of Chief Executive Officer
as set forth in Section 9(d)(i) above, notwithstanding anything herein to the
contrary Executive shall be entitled to receive:

(A) the Accrued Rights;

(B) subject to Section 16 hereof, a lump sum cash payment equal to the sum of
(a) Executive’s Base Salary in effect as of the date of termination plus (b) the
Target Bonus amount for the year in which such termination occurs, paid twenty
(20) days following Executive’s termination of employment;

(C) a pro rata portion of the actual Semi-Annual Bonus for the year of
termination and any Mid-Term Bonuses for any uncompleted measuring period that
Executive would have been entitled to receive pursuant to Section 4 and
Section 5, respectively, based on actual Company performance for the respective
measurement period and upon the percentage of the measuring period that shall
have elapsed through the date of termination of Executive’s employment, payable
when such Annual Bonus or Mid-Term Bonus, as the case may be, would have
otherwise been payable had Executive’s employment not terminated; and

(D) any equity rights expressly applicable following such termination of
employment pursuant to Section 6 of this Agreement and any applicable equity
plans and award agreements;

provided that the aggregate amount described in Section 9(d)(ii)(B) shall be in
lieu of (and Executive shall not be eligible for) any other cash severance or
termination benefits which would be payable to Executive under any other plans,
programs or arrangements of the Company or its Affiliates; and provided,
further, that, without prejudice to the Company’s other remedies at law or in
equity, if Executive (x) breaches any of his obligations under Section 10 (which
remains uncured for ten (10) days following written notice from the Company of
such

 

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breach) or (y) materially breaches, during the one year period following
Executive’s termination of employment with the Company, the confidentiality
restrictions set forth in Section 11(a) (including any willful breach or
disclosure of material confidential information or other disclosure which could
reasonably be expected to result in material harm to the Company), Executive
shall cease to be eligible for the benefits in Section 9(d)(ii)(B) above and
Executive hereby agrees to promptly repay to the Company all amounts paid to him
under Section 9(d)(ii)(B).

Following Executive’s termination of employment pursuant to a mutually agreed
succession plan with respect to the position of Chief Executive Officer, except
as set forth in Sections 9(d)(ii), 13 and 16 and Executive’s rights with regard
to indemnification and directors and officers liability insurance, Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

(e) Notice of Termination. Any purported termination of employment by the
Company or by Executive (other than due to Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 15(h) hereof. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.

(f) Board/Committee Resignation. Upon termination of Executive’s employment for
any reason, Executive agrees to resign without additional compensation, as of
the date of such termination and to the extent applicable, from the Board (and
any committees thereof) and the Board of Directors (and any committees thereof)
of any of the Company’s Affiliates.

10. Non-Competition.

(a) Executive acknowledges and recognizes the highly competitive nature of the
businesses of the Company and its Affiliates and accordingly agrees as follows:

(i) During the Employment Term and, for a period of one (1) year following the
date Executive ceases to be employed by the Company (the “Restricted Period”),
Executive will not directly or indirectly:

(A) engage in or participate in a Competitive Business (as defined below). For
purposes of this Agreement, “Competitive Business”

 

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shall mean any entity, person or business, or any division, business unit or
segment, that is primarily engaged in, devotes substantial resources to, or
generates more than fifteen percent (15%) of its revenue from, (i) the wireless
youth telecommunications business (pre- or post-paid) or (ii) any other business
that competes with the wireless telecommunications business of the Company or
its subsidiaries as in effect upon the date of Executive’s termination of
employment (or (x) any other material line of business of the Company or its
subsidiaries as of the date of termination of Executive’s employment or
(y) businesses which the Company or its subsidiaries have specific plans to
conduct as material lines of business during the Restricted Period and as to
which Executive is aware of such planning) (the “Company Business”) in the
United States or any other geographical area where the Company manufactures,
produces, sells, leases, rents, licenses or otherwise provides its products or
services;

(B) enter the employ of, or render any services to, any entity, person or
business, or any division, business unit or segment who or which is a
Competitive Business or which has an Affiliate that is engaged in a Competitive
Business; provided that, notwithstanding the foregoing, it is agreed it shall
not be a breach of Section 10(a)(i)(A) or (B) for Executive to provide services
to an entity or person, that is not itself a Competitive Business, but either
(I) has a division, business unit or segment that is a Competitive Business or
(II) has an Affiliate that (x) is a Competitive Business or (y) has a division,
business unit or segment that is a Competitive Business, so long as Executive
demonstrates to the Company’s reasonable satisfaction that Executive does not
and will not, directly or indirectly, provide services or advice to such
division, business unit or segment, or such Affiliate (or its division, business
unit or segment) that is the Competitive Business, provided that for this
purpose services or advice shall be deemed not to include services or advice
that is unrelated to the operations, management, strategic planning or marketing
activities of any aspect of the business of such division, business unit or
segment or such Affiliate (or its division, business unit or segment) that is
competitive with the Company Business;

(C) acquire a financial interest in, or otherwise become actively involved with,
any Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant; or

(D) interfere with, or attempt to interfere with, business relationships
(whether formed before, on or after the date of this Agreement) between the
Company or any of its Affiliates and customers, clients, suppliers, partners,
members or investors of the Company or its Affiliates existing as of the date of
Executive’s termination of employment. For the avoidance of doubt, the

 

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foregoing restriction with respect to ultimate consumers of the Company’s
business shall mean solely that Executive shall not, directly or indirectly,
target, in particular, the Company’s ultimate consumers.

(ii) Notwithstanding anything to the contrary in this Agreement, Executive may,
directly or indirectly own, solely as an investment (or in connection with
employment or retention), securities of any person engaged in a Competitive
Business, which are publicly traded on a national or regional stock exchange or
on the over-the-counter market if Executive (i) is not a controlling person of,
or a member of a group which controls, such person and (ii) does not, directly
or indirectly, own three percent (3%) or more of any class of securities of such
person.

(iii) During the Restricted Period, Executive will not, whether on Executive’s
own behalf or on behalf of or in conjunction with any person, company, business
entity or other organization whatsoever, directly or indirectly:

(A) solicit or encourage any employee of the Company or its Affiliates (other
than his secretary and administrative assistant) to leave the employment of the
Company or its Affiliates; provided the foregoing shall not be violated by
general advertising for employees or undirected activities of search firms; or

(B) hire any person who was employed by the Company or its Affiliates as of the
date of Executive’s termination of employment with the Company or who left the
employment of the Company or its Affiliates coincident with, or within six
(6) months prior to or after, the termination of Executive’s employment with the
Company (other than his secretary and administrative assistant); provided that
the foregoing shall not limit any entity with which Executive is associated from
hiring any person so long as Executive is not, directly or indirectly, involved
in the hiring process.

(iv) During the Restricted Period, Executive will not, directly or indirectly,
solicit or encourage to cease to work with the Company or its Affiliates any
consultant then under contract with the Company or its Affiliates.

(b) It is expressly understood and agreed that although Executive and the
Company consider the restrictions contained in this Section 10 to be reasonable,
if a final judicial determination is made by a court of competent jurisdiction
that the time or territory or any other restriction contained in this Agreement
is an unenforceable restriction against Executive, the provisions of this
Agreement shall not be rendered void but shall be deemed amended to apply as

 

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to such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

11. Confidentiality; Inventions.

(a) Confidentiality. Executive will not at any time (whether during or after
Executive’s employment with the Company), (i) except as required by law (or as
Executive reasonably determines in good faith during the Employment Term is
necessary in the conduct of the business and in the best interests of the
Company), disclose or provide to any third party or (ii) use for Executive’s own
benefit, purposes or account or the benefit, purposes or account of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company and any of
its subsidiaries or Affiliates, in each case, any trade secrets, know-how,
software developments, inventions, formulae, technology, designs and drawings,
or any Company property or confidential information relating to research,
operations, finances, current and proposed products and services, vendors,
customers, advertising, costs, marketing, trading, investment, sales activities,
promotion, manufacturing processes, or the business and affairs of the Company
generally, or of any subsidiary or Affiliate of the Company (“Confidential
Information”) without the prior written authorization of the Board; provided
that the foregoing shall not apply to information which is not unique to the
Company or which is generally known to the industry or the public, in each case,
other than as a result of Executive’s breach of this covenant or the wrongful
acts of others who were under confidentiality obligations as to the item or
items involved and such obligation is known to Executive. Except as required by
law, Executive will not disclose to anyone, other than his immediate family and
legal or financial advisors, the existence or contents of this Agreement;
provided that Executive may disclose to any prospective future employer the
provisions of Sections 10 and 11 of this Agreement provided they are advised of
the need to maintain the confidentiality of such terms. Executive agrees that
upon termination of Executive’s employment with the Company for any reason, he
will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in any
way relating to the business of the Company, its Affiliates and subsidiaries,
except that he may retain only those portions of personal notes, notebooks and
diaries that do not contain Confidential Information.

(b) Prior Inventions. To the fullest extent permissible by law, Executive hereby
grants the Company a non-exclusive royalty-free, irrevocable, perpetual,
worldwide license under all rights, if any, owned by Executive in any
inventions, works of authorship, developments and other intellectual property
(“Inventions”) that were created or contributed to by Executive either solely or
jointly with others prior to Executive’s employment with the Company
(collectively referred to as “Prior Inventions”) to make, have made, copy,
modify, distribute, use and sell works of authorship, products, services,
processes and machines and to otherwise operate the Company’s current and future
business.

 

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(c) Ownership of Inventions. Executive agrees that Executive will promptly make
full written disclosure to the Company, and Executive hereby assigns to the
Company, or its designee, all of Executive’s right, title, and interest in and
to any and all Inventions, whether or not patentable, which Executive may solely
or jointly conceive or develop or reduce to practice, or cause to be conceived
or developed or reduced to practice, during the period of time Executive is in
the employ of the Company (collectively referred to as “Company Inventions”).
Executive further acknowledges that all original works of authorship that are
created or contributed to by Executive (solely or jointly with others) within
the scope of and during the period of Executive’s employment with the Company
are to be deemed “works made for hire,” as that term is defined in the United
States Copyright Act (17 U.S.C. Section 101), and the Company will own all
right, title and interest in such works, including all copyright and all
intellectual property therein shall be the sole property of the Company or its
designee for all territories of the world in perpetuity, including any and all
copyright registrations, copyright applications and all other copyrightable
materials, including any renewals and extensions thereof, and in and to all
works based upon, derived from, or incorporating the works covered by such
copyrights and in and to all income, royalties, damages, claims, and payments
now or hereinafter due or payable with respect thereto, and in all causes of
action, either in law or in equity for past, present or future infringement
based on said copyrights, and in and to all rights corresponding to the
foregoing throughout the world. To the extent any of such works are deemed not
to be “works made for hire,” Executive hereby assigns the copyright and all
other intellectual property rights in such works to the Company.

(d) Contracts with the United States. Executive agrees to execute any licenses
or assignments as with regard to Company Inventions as reasonably required by
any contract between the Company and the United States or any of its agencies.

(e) Maintenance of Records. Executive agrees to keep and maintain adequate and
current written records of all Company Inventions made by Executive (solely or
jointly with others) during the term and within the scope of Executive’s
employment with the Company. The records will be in the form of notes, sketches,
drawings, and any other format that may be specified by the Company. The records
will be available to and remain the sole property and intellectual property of
the Company at all times.

(f) Further Assurances. Executive covenants to take all reasonably requested
actions and execute all reasonable requested documents to assist the Company, or
its designee, at the Company’s expense (but without further remuneration), in
every way to secure the Company’s above rights in the Prior Inventions and
Company Inventions and any copyrights, patents, mask work rights or other
intellectual property rights relating thereto in any and all countries, and to
pursue any patents or registrations with respect thereto. Section 11 shall

 

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survive the termination of this Agreement and Executive’s employment. If the
Company is unable for any reason to secure Executive’s signature on any document
for this purpose, then Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Executive’s agent and
attorney in fact, to act for and in Executive’s behalf and stead to execute any
documents and to do all other lawfully permitted acts in connection with the
foregoing.

12. Specific Performance. Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of
Section 10 or Section 11 would be inadequate and the Company would suffer
irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.

13. 280G Gross-Up. Attachment A hereto set forth Executive’s rights with regard
to a gross-up of the excise tax, if any, incurred under Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), and shall survive any
termination of Executive’s employment.

14. Disputes.

Any dispute with regard to the enforcement of this Agreement or any matter
relating to the employment of Executive by the Company including but not limited
to disputes relating to claims of employment discrimination, alleged torts or
any violation of law other than the seeking of injunctive relief to preserve the
status quo pending arbitration in accordance with applicable law under
Section 12 hereof, shall be exclusively resolved by a single arbitrator at an
arbitration to be conducted in New York City before, and pursuant to the
National Rules for the Resolution of Employment Disputes rules of the American
Arbitration Association (“AAA”) with the arbitrator applying the substantive law
of the State of New York as provided for under Section 15(a) hereof. The AAA
shall provide the parties hereto with lists for the selection of arbitrators
composed entirely of arbitrators who are members of the National Academy of
Arbitrators and who have prior experience in the arbitration of disputes between
employers and senior executives. The determination of the arbitrator shall be
final and binding on the parties hereto and judgment therein may be entered in
any court of competent jurisdiction. Each party shall pay its own attorneys fees
and disbursements and other costs of the arbitration, subject to Section 15(m)
of this Agreement; provided that if the arbitrator determines that overall
Executive has prevailed in the arbitration, Executive shall be entitled as part
of the award to reimbursement by the Company for the reasonable fees and
disbursements of counsel actually incurred by Executive in connection with such
arbitration proceeding. If the foregoing proviso is applicable, the Company
shall within sixty (60) days of the award pay Executive such amount, subject to
an obligation of the Executive to repay if judgment on such portion of the award
is not upheld by the ultimate decider of fact.

 

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15. Miscellaneous.

(a) Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to conflicts of laws principles thereof. Any suit, action or proceeding related
to this Agreement, or any judgment entered by any court related to this
Agreement, may be brought only in any court of competent jurisdiction in the
State of New York, and the parties hereby submit to the exclusive jurisdiction
of such courts. The parties (and any Affiliates of the Company or beneficiary or
permitted transferee of Executive, or any successor to the Company or the
Company’s Affiliate) irrevocably waive any objections which they may now or
hereafter have to the laying of venue of any suit, action or proceeding brought
in any court of competent jurisdiction in the State of New York, and hereby
irrevocably waive any claim that any such action, suit or proceeding has been
brought in an inconvenient forum.

(b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter herein
other than those expressly set forth herein. This Agreement may not be altered,
modified, or amended except by written instrument signed by the parties hereto.

(c) No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party’s rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.

(d) Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

(e) Assignment. This Agreement shall not be assignable by Executive. This
Agreement may be assigned by the Company only to a person or entity which is a
successor in interest to substantially all of the business operations of the
Company, and provided that such assignee promptly delivers to Executive a
written assumption of the obligations hereunder. Upon such assignment, the
rights and obligations of the Company hereunder shall become the rights and
obligations of such successor person or entity.

 

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(f) Mitigation/No Set Off/Beneficiary. Executive shall have no obligation to
mitigate any amounts due him under Section 9 and any such amounts shall not be
reduced by amounts earned by Executive for subsequent employment. The Company’s
obligation to pay Executive the amounts provided and to make the arrangements
provided hereunder shall not be subject to set off, counterclaim or recoupment.
In the event Executive dies after termination of employment, but prior to the
payment of any amounts due under Section 9, such amounts shall be paid to
Executive’s estate or designated beneficiary.

(g) Successors; Binding Agreement. This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributes, devises and legatees.

(h) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or overnight courier or
three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below Agreement, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.

If to the Company:

Virgin Mobile USA, Inc.

10 Independence Blvd.

Warren, NJ 07059

Attention: General Counsel

Telecopy: (908) 607-4078

Confirmation: (908) 607-4017

Or such other address at which the Company’s principal executive offices are
relocated.

If to Executive:

To the most recent address of Executive set forth in the personnel records of
the Company.

(i) Executive Representation. Executive hereby represents to the Company that
the execution and delivery of this Agreement by Executive and the Company and
the performance by Executive of Executive’s duties hereunder, shall not
constitute a breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound. The Company acknowledges that Executive is subject to certain
confidentiality and nonsolicitation obligations with regard to his prior
employer

 

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(pursuant to the Amended and Restated Employment Agreement by and between
Priceline.com Incorporated and Daniel H. Schulman, dated December 20, 2000) and
agrees not to require Executive to violate such obligations, and Executive
agrees to fulfill his confidentiality and nonsolicitation obligations. Executive
hereby represents that he has previously disclosed to the Company in writing all
competition, solicitation and confidentiality covenants to which he is subject.

(j) Prior Agreements. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company
and/or its Affiliates regarding the terms and conditions of Executive’s
employment with the Company.

(k) Cooperation. Executive shall provide his reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or
proceeding) which relates to events occurring during Executive’s employment
hereunder. This provision shall survive any termination of this Agreement.

(l) Withholding Taxes. The Company may withhold from any amounts payable under
this Agreement such Federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation. With respect to any tax
withholdings that become due in connection with the vesting of Executive’s
Restricted Units or Restricted Stock Units, Executive shall be entitled to
satisfy the tax withholding requirements thereon by having the Company withhold
a portion of such Units or Restricted Stock Units (as the case may be) equal to
the statutory minimum required withholding amounts.

(m) Legal Fees. The Company shall pay the reasonable legal fees (based only upon
actual time charges and disbursements of counsel) incurred by Executive in
negotiating and entering into this Agreement. Any reimbursement that is treated
as taxable income shall be paid to Executive promptly and in accordance with
Section 16(c) hereof.

(n) Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

16. Compliance with IRC Section 409A.

(a) The intent of the parties is that payments and benefits under this Agreement
comply with Internal Revenue Code Section 409A and the regulations and guidance
promulgated thereunder (“Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement shall be interpreted to be in compliance therewith. If
Executive notifies the

 

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Company (with specificity as to the reason therefor) that Executive believes
that any provision of this Agreement (or of any award of compensation, including
equity compensation or benefits) would cause Executive to incur any additional
tax or interest under Section 409A and the Company concurs with such belief or
the Company (without any obligation whatsoever to do so) independently makes
such determination, the Company shall, after consulting with Executive, promptly
reform such provision to attempt 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 timely made in good faith
and shall, to the maximum extent reasonably possible, maintain the original
intent and economic benefit to Executive and the Company of the applicable
provision without violating the provisions of Section 409A. From time to time,
the Company shall review its plans, programs and payroll practices with respect
to Section 409A, and, if it determines in good faith that a revision or
modification of any such plan, program or payroll practices is necessary to
comply with Section 409A, it shall promptly undertake such revision or
modification.

(b) 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 Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B), then with regard to any payment or the provision of any
benefit that is specified herein as subject to this Section or is otherwise
considered “deferred compensation” under Section 409A (whether under this
Agreement, any other plan, program, payroll practice or any equity grant) and is
due upon Executive’s separation from service, such payment or benefit shall not
be made or provided until 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” of the Executive, and (B) the date of Executive’s death (the “Delay
Period”) and this Agreement and each such plan, program, payroll practice or
equity grant shall hereby be deemed amended accordingly. Upon the expiration of
the Delay Period, all payments and benefits delayed pursuant to this
Section 16(b) (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
Executive 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.

(c) All expenses or other reimbursements paid pursuant to Sections 8(a) and
15(m) hereof that are taxable income to the Executive shall in no event be paid
later than the end of the calendar year next following the calendar year in
which Executive incurs such expense or pays such related tax. With regard to any
provision herein that provides for reimbursement of costs and expenses or
in-kind benefits, except as permitted by Section 409A, (i) the right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for

 

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another benefit, (ii) the amount of expenses eligible for reimbursement, of
in-kind benefits, provided during any taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in any other
taxable year, provided that the foregoing clause (ii) shall not be violated
without regard to expenses reimbursed under any arrangement covered by Internal
Revenue Code Section 105(b) solely because such expenses are subject to a limit
related to the period the arrangement is in effect and (iii) such payments shall
be made on or before the last day of Executive’s taxable year following the
taxable year in which the expense occurred. Any tax gross-up shall be made no
later than the end of the calendar year next following the calendar year in
which the Executive remits the related tax.

(d) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within thirty
(30) days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of the Company.

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

DANIEL H. SCHULMAN     VIRGIN MOBILE USA, INC.

/S/    DANIEL H. SCHULMAN

    By:  

/S/    JOHN D. FEEHAN JR.

    Name:   John D. Feehan Jr.     Title:   Chief Financial Officer

 

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SCHEDULE I

Symantec

Rutgers, the State University of New Jersey, Board of Trustees

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ATTACHMENT A

280G Gross-Up

(a) In the event that the Executive shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the “nature of
compensation” (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the “Code”) or any person
Affiliated with the Company or such person) as a result of such change in
ownership or effective control (collectively the “Company Payments”), and if
such Company Payments will be subject to the tax imposed by Section 4999 of the
Code (or any successor provision thereto), or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, collectively, the “Excise Tax”), then the
Company shall pay to, or to the applicable taxing authority on behalf of,
Executive an additional payment (a “Gross-Up Payment”) in an amount equal to the
lesser of (i) $5,000,000 and (ii) the amount necessary such that after payment
by Executive of all federal, state and local 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 payments made by the Company to Executive under
this subsection (a), Executive retains an amount of the payments made by the
Company to Executive under this subsection (a) equal to the Excise Tax imposed
upon the Company Payments.

(b) For purposes of determining whether any of the Company Payments and Gross-up
Payments (collectively the “Total Payments”) will be subject to the Excise Tax
and the amount of such Excise Tax, (x) the Total Payments shall be treated as
“parachute payments” within the meaning of Section 280G(b)(2) of the Code, and
all “parachute payments” in excess of the “base amount” (as defined under Code
Section 280G(b)(3) of the Code) shall be treated as subject to the Excise Tax,
unless and except to the extent that, in the opinion of the Company’s
independent certified public accountants appointed prior to any change in
ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected by
such accountants (the “Accountants”) such Total Payments (in whole or in part)
either do not constitute “parachute payments,” represent reasonable compensation
for services actually rendered within the meaning of Section 280G(b)(4) of the
Code in excess of the “base amount” or are otherwise not subject to the Excise
Tax, and (y) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.

(c) For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay U.S. federal income taxes at the highest
marginal rate of U.S. federal income taxation in the calendar year in which the
Gross-up Payment is to be made and

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state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive’s residence for the calendar year in which
the Company Payment is to be made, net of the maximum reduction in U.S. federal
income taxes which could be obtained from deduction of such state and local
taxes if paid in such year. In the event that the Excise Tax is subsequently
determined by the Internal Revenue Service to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, the Executive shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the prior Gross-up Payment
attributable to such reduction (plus the portion of the Gross-up Payment
attributable to the Excise Tax and U.S. federal, state and local income tax
imposed on the portion of the Gross-up Payment being repaid by the Executive if
such repayment results in a reduction in Excise Tax or a U.S. federal, state and
local income tax deduction), plus interest on the amount of such repayment at
the rate provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing, in the event any portion of the Gross-up Payment to be refunded to
the Company has been paid to any U.S. federal, state and local tax authority,
repayment thereof (and related amounts) if requested by the Company, Executive
shall, subject to paragraph (e) below, cooperate with the Company in pursuing a
refund or credit of such portion from the Internal Revenue Service or applicable
taxing authority and Executive shall not be required to repay such amounts to
the Company until actual refund or credit of such portion has been made to the
Executive, and interest payable to the Company shall not exceed the interest
received or credited to the Executive by such tax authority for the period it
held such portion. The Executive and the Company shall mutually agree upon the
course of action to be pursued (and the method of allocating the expense
thereof) if the Executive’s claim for refund or credit is denied.

In the event that the Excise Tax is later determined by the Accountant or the
Internal Revenue Service to exceed the amount taken into account hereunder at
the time the Gross-up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest or penalties payable with respect to such excess)
at the time that the amount of such excess is finally determined.

(d) The Gross-up Payment or portion thereof provided for in subsection (c) above
shall be paid not later than the thirtieth (30th) day following an event
occurring which subjects the Executive to the Excise Tax; provided, however,
that if the amount of such Gross-up Payment or portion thereof cannot be finally
determined on or before such day, the Company shall pay to, or to the applicable
taxing authority on behalf of, the Executive on such day an estimate, as
determined in good faith by the Accountant, of the minimum amount of such
payments and shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code), subject to further
payments pursuant to subsection (c) hereof, as soon as the amount thereof can
reasonably be determined, but in no event later than the ninetieth day after the
occurrence of the event subjecting the Executive to the Excise Tax. In the event
that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth (5th) day after demand by the Company
(together with interest at the rate provided in Section 1274(b)(2)(B) of the
Code).

 

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(e) In the event of any controversy with the Internal Revenue Service (or other
taxing authority) with regard to the Excise Tax, the Executive shall permit the
Company to control issues related to the Excise Tax (at its expense), but the
Executive shall control any other issues. In the event the issues are
interrelated, the Executive and the Company shall in good faith cooperate so as
not to jeopardize resolution of either issue. In the event of any conference
with any taxing authority as to the Excise Tax or associated income taxes, the
Executive shall permit the representative of the Company to accompany the
Executive, and the Executive and the Executive’s representative shall cooperate
with the Company and its representative.

(f) The Company shall be responsible for all charges of the Accountant.

(g) The Company and the Executive shall promptly deliver to each other copies of
any written communications, and summaries of any verbal communications, with any
taxing authority regarding the Excise Tax covered by this Attachment A.

(h) If any obligation by Executive to repay any amount would be a violation of
the Sarbanes-Oxley Act of 2002, such obligation to repay shall be null and void
and Executive shall be entitled to retain such amounts.

 

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