Exhibit 10.14
 
 EMPLOYMENT AGREEMENT     Timothy J. Lorello
 Agreement Employee Company st Effective Date
    1. Employment. Senior Vice President, Sales
& Chief Marketing Officer leading the Commercial Sales and Marketing organizations, including the day-to-day activities,
goal-setting for product and market development and sales targets, public relations, strategic
planning, performance monitoring, personnel and fiscal management, strategic planning and quality
control of all functions.
 2. Duties and Responsibilities
 6.
    
    Compensation and Benefits.
 3.1
    
    Base Salary.During Employees employment under this Agreement, Company shall pay or
cause to be paid to Employee a base salary at an




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annual rate of not less than $289,387,
payable in cash in equal periodic installments not less frequent than the periodic
installments in effect for
salaries of Company employees of the same level as Employee (the Base Salary). The
Base Salary may be subject to increases pursuant to reviews by the Board of Directors,
where applicable, or a committee appointed by the Board of Directors, at such times as
salary reviews are conducted generally for Company employees of the same level as
Employee, but in no event less frequent than annually.
 3.2
    
    Incentive Compensation.During Employees employment under this Agreement, Company
shall cause Employee to be eligible to participate in each bonus or incentive compensation
plan, program or policy maintained by Company from time to time, in whole or in part, for
employees of Employees level (Bonus Plan). Employees target and maximum compensation
under, and the performance goals and all other terms of participation in, each Bonus Plan
shall be determined solely by Company or by such person or administrative body as provided
in the Bonus Plan. Said incentive compensation is not guaranteed and is contingent upon
Employee and Company achieving deliverables or goals agreed upon. Said incentive
compensation shall not be considered earned by Employee until Company has allocated
payment to be made to Employee for any performance period. Payment under any Bonus Plan
shall be made, if at all, by no later than March 15th of the year after the year
in which the incentive compensation is earned.3.3
    
    Incentive Stock Compensation.During Employees employment with Company, Employee will
be eligible to participate in stock incentive plans maintained by Company, and has
received, and may receive in the future, awards of restricted or unrestricted stock, stock
units, stock options and other stock-based awards (collectively, Incentive Stock Awards).
Recognizing the unique position held by Executive and in consideration for the mutual
promises contained in this Employment Agreement and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, Company and
Executive agree that certain restrictions on the sale of common stock of the Company by
Executive that was or may be issued under an Incentive Stock Award are in the best interest
of the Company. In this regard, Executive agrees that, unless advance written permission
is provided to Executive by the Chief Executive Officer of the Company to sell more shares
than would otherwise be permitted under this Agreement, during the Term Executive shall
abide by the following limitations on the sale or other disposition of shares of common
stock of the Company issued or issuable to him under Incentive Stock Awards:
 (g)
    
    In any given calendar year, Executive shall not sell or otherwise
dispose of a number of shares of common stock of the Company acquired under
Incentive Stock Awards in excess of the product of (i) ten percent (10%) times
(ii) the sum of (A) the number of shares of common stock of the Company to which
Executive holds title, determined as of




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the date immediately before the proposed
sale or disposition date, that were issued pursuant to an Incentive Stock Award,
plus (B) seventy percent (70%) of the number of shares of common stock of the
Company for which Incentive Stock Awards are exercisable determined as of the date
immediately before the proposed sale or disposition date.
 (h)
    
    In any given calendar quarter, Executive shall not sell or
otherwise dispose of a number of shares of common stock of the Company acquired
under Incentive Stock Awards in excess of the product of (i) two and one-half
percent (2.5%) times (ii) the sum of (A) the number of shares of common stock of
the Company to which Executive holds title, determined as of the date immediately
before the proposed sale or disposition date, that were issued pursuant to an
Incentive Stock Award, plus (B) seventy percent (70%) of the number of shares of
common stock of the Company for which Incentive Stock Awards are exercisable
determined as of the date immediately before the proposed sale or disposition
date.
 Employee understands and agrees that the restrictions set forth above shall apply to any
award agreement evidencing an Incentive Stock Award (collectively, Stock Agreements)
previously entered into between Employee and Company or which may be entered into
between Employee and Company after the date of this Agreement and that this Section 3.3
shall be incorporated in any such Stock Agreements as if fully stated therein.Other than the restriction set forth herein, the specific terms and conditions of any
Incentive Stock Awards shall be set out in an award agreement between Employee and
Company, and shall contain a provision for accelerated vesting of options in the event
of a Change in Control (as defined in Section 5.4.3).The grant of Incentive Stock Awards shall not be construed to constitute or to be
evidence of a commitment or guarantee to renew this Agreement or to employ or retain
Employee for any period of time inconsistent with Sections 4 and 5 of this Agreement.Any violation of the restrictions set forth in this Section 3.3 shall be grounds for
dismissal for Good Cause pursuant to Section 5.2.1.3.4
    
    Benefits.During employment under this Agreement, Employee shall be entitled to:
(A) participation in such employee retirement and welfare benefit plans, programs, policies
and arrangements as maintained by Company from time to time, in whole or in part, for
employees of Employees level, including but not limited to Companys employee stock
ownership plan, and its health, disability, life insurance and sickness and accident
insurance plans; and (B) paid vacation, holidays, leave of absence, leave for illness,
funeral leave and temporary disability leave in accordance with the policies of Company;
and (C) perquisites as from time to time provided by Company to employees




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of Employees
level.3.5
    
    Expenses.During Employees employment under this Agreement, Company shall reimburse
Employee for ordinary and reasonable out-of-pocket expenses incurred by Employee in the
performance of duties hereunder, provided that Employee shall account to Company for such
expenses in accordance with the employee business expense policies and practices of
Company.3.6
    
    Effect of Termination.Upon termination of employment for any reason, Employee shall
no longer be entitled to participation in any benefits programs, including the period when
severance is payable under the Agreement.
 4. Term of Employment. Term Initial Term Renewal
Term
 5.
    
    Termination of Employment.
 5.1
    
    Dismissal Without Good Cause and Resignation for Good Reason.
 5.1.1
    
    Dismissal Without Good Cause.Company may terminate Employees employment
under this Agreement without Good Cause (as defined in Section 5.1.4) at any time by
giving notice thereof to Employee at least 30 days before the effective date of such
termination. Upon such termination, Employee shall be entitled to such compensation
as provided in Section 5.1.3.5.1.2
    
    Resignation for Good Reason.Employee may terminate employment under this
Agreement for Good Reason (as defined in Section 5.1.5) at any time by written notice
thereof to Company at least 30 days before the effective date of such termination.
Such notice shall specify in reasonable detail the Good Reason based upon which
Employee intends to terminate employment. Upon such termination, Employee shall be
entitled to such compensation as provided in Section 5.1.3.5.1.3
    
    Severance Pay upon Dismissal Without Good Cause or Resignation for Good
Reason.If Employees employment under this Agreement is terminated by Company
without Good Cause or by Employee for Good Reason, Employee shall be entitled to the
sum of the following, payable in equal periodic installments the same as Base Salary
was received during the term of Employees employment as provided in Section 3.1




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herein, which installments shall commence within 60 days after the last
day of employment:
 (A)
    
    Base Salary, at the rate in effect immediately before the
date of termination, for the greater of (i) the period from the day after the
last day of employment hereunder through the last day of the Term, or
(ii) six months; and(B)
    
    The amount earned by Employee under the annual Bonus Plan
if at the time of termination Company has allocated payment to be made to
Employee under the terms of the Bonus Plan for any performance period.
Employee will not be eligible to receive payment under the Bonus Plan for any
performance period if Employee is terminated prior to a decision by Company
as to the payment due to Employee, if any, under the terms of the Bonus Plan.
If no such decision by Company is made or necessary, Employee will not be
eligible to receive any payments under the Bonus Plan if Employee is not
employed at the time bonus payments are made to employees;
 so long as Employee (1) executes and delivers to Company, before such sum becomes
payable, a general release, in form and substance acceptable to Company, by which
Employee releases Company from all claims arising from Employees employment by
Company or termination of employment therefrom, in consideration for such payment,
and (2) Employee shall not be in breach of any of the provisions of Section 7 at
any time during the effectiveness thereof. In no event will any payment be made
before the release becomes effective upon expiration of any applicable withdrawal
period.5.1.4
    
    Definition of Good Cause.Good Cause means:
 (A)
    
    Employees willful gross misconduct, willful gross neglect,
willful malfeasance or gross negligence in carrying out the duties hereunder,
or willful breach of this Agreement (other than an inadvertent or
nonrecurring breach cured and corrected by Employee within 30 days after
notice thereof by Company). Under this provision, willful breach shall
include, but not be limited to, insubordination, serious dereliction of
fiduciary obligation, chronic abuse by Employee of alcohol or narcotics, a
violation of any material Company rule, regulation or policy, or a serious
violation of any law governing the workplace. It is provided further that no
act or failure to act shall be considered willful if Employee reasonably
believed in good faith that such act or failure to act was in, or not opposed
to, the best interests of Company and its affiliates;(B)
    
    Any act or conduct of dishonesty to Company by Employee




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involving fraud and embezzlement; or(C)
    
    Employees conviction, including a plea of guilty or nolo
contendere, of a felony involving theft or moral turpitude, other than a
felony predicated on Employees vicarious liability (for purposes of this
Agreement, vicarious liability means Employees liability based on acts of
Company for which Employee is charged solely as a result of Employees
offices with Company and in which Employee was not directly involved or did
not have prior knowledge of such acts).
 5.1.5
    
    Definition of Good Reason.Good Reason means, without Employees
consent, any of the following conditions:
 (A)
    
    Any change in Employees title or position that constitutes
a material diminution in authority as compared to the authority of Employees
title or position as of the Effective Date, or any substantial diminution in
Employees duties and responsibilities (other than a change due to Employees
Disability), provided that no diminution of title, position, duties or
responsibilities shall be deemed to occur solely because Company becomes a
subsidiary of another corporation or because there has been a change in the
reporting hierarchy incident thereto involving Employee;(B)
    
    Any requirement by Company that Employee involuntarily
physically relocate from Employees work location as of the Effective Date to
another work location more than 75 miles away; or(C)
    
    Any material breach by Company of its obligations under
this Agreement;
 so long as Employee notifies Company within 90 days after the existence of any
such condition and Company fails to cure and correct such condition within 30 days
after receipt of such notice. Notwithstanding the foregoing, Good Reason shall
not exist unless the termination of employment occurs no later than two years
following the initial existence of any condition provided in this Section 5.1.5.
 5.2
    
    Dismissal for Good Cause, Resignation Without Good Reason and Termination upon Death or
Disability.
 5.2.1
    
    Dismissal for Good Cause.Company may terminate Employees employment
under this Agreement for Good Cause by (A) giving notice thereof to Employee
specifying in reasonable detail the Good Cause based upon which Company intends to
terminate his employment; (B) if Good Cause exists under 5.1.4(A) only, after at
least 30 days after such notice, providing Employee an opportunity to be heard at a
meeting with the CEO and the Board of Directors; and (C) thereafter, effectuating
such termination by a majority vote of the Board of Directors. For Good




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Cause
terminations under Sections 5.1.4(B) & (C), Company may
terminate Employees employment immediately under this Agreement upon notice
thereof to Employee. The effect of such termination is provided in Section 5.2.4.5.2.2
    
    Resignation Without Good Reason.Employee may terminate employment
hereunder at any time without Good Reason by notice thereof to Company at least 30
days before the effective date of such termination. The effect of such termination is
provided in Section 5.2.4.5.2.3
    
    Termination upon Death or Disability.This Agreement shall terminate
automatically upon Employees death. If Company determines in good faith that
Employee has a Disability (as defined in this Section 5.2.3), Company may terminate
employment under this Agreement by notifying Employee thereof at least 30 days before
the effective date of termination. For purposes of this Agreement, Disability
means any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a continuous
period of not less than six months and which renders Employee unable to perform the
material duties under this Agreement. If there is any dispute between the
parties as to Employees Disability, Company shall select or approve a physician
whose determination as to Employees Disability shall bind the parties hereto. The
effect of a termination due to Employees death or Disability is provided in Section
5.2.4.5.2.4
    
    Effect of Dismissal for Good Cause, Resignation Without Good Reason, or
Termination upon Death or Disability.If Employees employment under this Agreement
is terminated by Company for Good Cause, by Employee without Good Reason, or due to
Employees death or Disability as provided in this Agreement, all obligations of
Company under this Agreement shall terminate, except as provided in Section 5.6.
 5.3
    
    Termination by Mutual Consent.Company and Employee may terminate Employees
employment under this Agreement at any time and for any reason upon the mutual consent of
both parties, effective as of such date as agreed upon by the parties. Upon such
termination, except as provided in Section 5.6 or as agreed to by the parties in connection
with their mutual consent to terminate Employees employment, all obligations of Company
hereunder shall terminate.5.4
    
    Termination After a Change in Control.
 5.4.1
    
    Termination Events Triggering Compensation.Company shall pay or cause to
be paid to Employee such compensation as provided in Section 5.4.2, if Employees
employment under this Agreement is terminated by Company without Good Cause or by
Employee for Good




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Reason coincident with or within 12 months after a Change in
Control (as defined in Section 5.4.3).
 5.4.2
    
    Compensation upon Termination.If Employees employment hereunder is
terminated as provided in Section 5.4.1, Company shall pay or cause to be paid to
Employee in a cash lump sum within 30 days after the date of termination, one times
the annual Base Salary at the greater of (A) the rate in effect immediately before
the date of termination or (B) the rate in effect immediately before the Change in
Control; so long as Employee (i) executes and delivers to Company, before such sum
becomes payable, a general release, in form and substance acceptable to Company, by
which Employee releases Company from all claims arising from Employees employment by
Company or termination of employment therefrom, in consideration for such payment,
and (ii) Employee shall not be in breach of any of the provisions of Section 7 at any
time during the effectiveness thereof. In no event will any payment be made before
the release becomes effective upon expiration of any applicable withdrawal period.5.4.3
    
    Definition of Change in Control.A Change in Control means the
earliest to occur of any of the following events, construed in accordance with
Section 409A of the Internal Revenue Code of 1986, as amended (the Code):
 (A)
    
    Any one person or more than one person acting as a group
(as defined in section 409A of the Code) other than Company, its
subsidiaries, any employee benefit plan of Company, or an underwriter
temporarily holding securities pursuant to an offering of such securities,
acquires ownership of stock of Company that, together with stock held by such
person or group, constitutes more than 50 percent of the total fair market
value or total voting power of the stock of Company;(B)
    
    Any one person or more than one person acting as a group
(as defined in section 409A of the Code), other than any subsidiary or parent
of Company, acquires, or has acquired during the 12-month period ending on
the date of the most recent acquisition by such person or group, assets from
Company that have a total gross fair market value of eighty-five percent or
more of the total gross fair market value of all of the assets of Company
immediately before such acquisition or acquisitions. For this purpose, gross
fair market value means the value of the assets of Company, or the value of
the assets being disposed of, determined without regard to any liabilities
associated with such assets; or(C)
    
    Any merger, consolidation or reorganization involving
Company immediately after which either (i) a majority of the directors of the
surviving entity is not comprised of persons who were directors of Company
immediately prior to such transaction and whose




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appointment or election is
not endorsed or approved by a majority of the directors of Company before the
transaction or (ii) persons who hold more than a majority of the total voting
power
represented by outstanding voting securities of the surviving entity are not
persons who held outstanding voting securities of Company immediately prior
to such transaction.
 5.5
    
    Duplication of Severance Pay.Employee is entitled to receive the payment under both
Section 5.1 and Section 5.4. Employee hereby irrevocably waives the right to receive
benefits under any severance or similar plan or policy of Company if Employee is entitled
to receive a payment under Section 5.1 and/or 5.4, provided that if the value of such
benefits exceeds the amount payable to Employee under Section 5.1 and/or 5.4, Employee may
elect to receive such benefits in lieu of the payment under Section 5.1 and/or 5.4.5.6
    
    Payment of Base Salary upon Termination.Upon a termination of Employees employment
under this Agreement for any reason, Company shall pay or cause to be paid to Employee the
increment of Base Salary earned but unpaid in the payroll period immediately preceding the
date of termination, payable in cash on or before the day on which Employee would have been
paid such amount if Employees employment hereunder had not been terminated, but in no
event later than the date as required by law.5.7
    
    No Duty to Mitigate.Employee shall not be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to Employee under any of the
provisions of this Agreement, and such amounts shall not be reduced whether or not Employee
obtains other employment.5.8
    
    Expiration of the Agreement.If the Agreement expires at the end of the Initial Term
or any Renewal Term after proper advance notice by either party of the intent not to renew,
the Agreement shall expire and Employee shall not be entitled to the payment of severance
pay pursuant to any provision of this Section 5 above.
 6.
    
    Ownership of Work Product.
 6.1
    
    Company shall own all Work Product (as defined in Section 6.5). To the extent
permitted by law, All Work Product shall be considered work made for hire by Employee and
owned by Company.6.2
    
    If any of the Work Product may not, by operation of law, be considered work made for
hire by Employee for Company (or if ownership of all right, title and interest of the
intellectual property rights therein shall not otherwise vest exclusively in Company),
Employee agrees to assign, and upon creation thereof automatically assigns, without further
consideration, the ownership of all trade secrets, U.S. and international copyrights,
patentable inventions, and




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other intellectual property rights therein to Company, its
successors and assigns.6.3
    
    Company, it successors and assigns, shall have the right to obtain and hold in its or
their own name copyrights, registrations, and any other protection
available in the foregoing.6.4
    
    Employee agrees to perform upon the reasonable request of Company, during or after
Employees employment, such further acts as may be necessary or desirable to transfer,
perfect and defend Companys ownership of the Work Product. When requested, Employee will
 (A)
    
    execute, acknowledge and deliver any requested affidavits and documents of
assignment and conveyance;(B)
    
    obtain and aid in the enforcement of copyrights (and, if applicable,
patents) with respect to the Work Product in any countries;(C)
    
    provide testimony in connection with any proceeding affecting the right,
title or interest of Company in any Work Product; and(D)
    
    perform any other acts deemed necessary or desirable to carry out the
purposes of this Agreement.
 Company shall reimburse all reasonable out-of-pocket expenses incurred by Employee at
Companys request in connection with the foregoing, including (unless Employee is
otherwise being compensated at the time) a reasonable per diem or hourly fee for services
rendered following termination of Employees employment.6.5
    
    For purposes hereof, Work Product shall mean all intellectual property rights,
including all trade secrets, U.S. and international copyrights, patentable inventions,
discoveries and improvements, and other intellectual property rights, in any programming,
documentation, technology or other work product that relates to the business and interests
of Company and that Employee conceives, develops, or delivers to Company at any time during
the term of Employees employment. Work Product shall also include all intellectual
property rights in any programming, documentation, technology or other work product that is
now contained in any of the products or systems (including development and support systems)
of Company to the extent Employee conceived, developed or delivered such Work Product to
Company prior to the date of this Agreement while Employee was engaged as an independent
contractor or employee of Company. Employee hereby irrevocably relinquishes for the
benefit of Company and its assigns any moral rights in the Work Product recognized by
applicable law.
 10.
    
    Restrictive Covenants.
 7.1
    
    Competition.During the Term and, if Employees employment under this




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Agreement is terminated by Company or by Employee for any reason, for the greater of,
(A) any period of time in which Employee continues to receive compensation of any kind
from Company and continuing for a period of six months after said payment(s) cease, or
(B) one year after the Term, Employee shall not: (i) own, manage, operate, join,
control or
participate in the ownership, management, operation or control of a Competitor (as
defined in Section 7.5); (ii) become a director, officer, employee, consultant or
lender of, or be compensated by, a Competitor; or (iii) solicit any client of
Company on behalf of or for the benefit of a Competitor. Notwithstanding the
foregoing, Employee may own up to 1% of a publicly-traded Competitor.
 7.2
    
    Confidential Information.Employee shall at all times hold in a fiduciary
capacity for the benefit of Company all secret, confidential or proprietary
information, knowledge or data relating to Company, and all of its businesses, which
shall have been obtained by Employee during employment by Company and which shall not
be or become public knowledge (other than by acts by Employee or Employees
representatives in violation of this Agreement) including, but not limited to,
information regarding clients and agents of Company (Confidential Information).
During Employees employment with Company under this Agreement and after the
termination of such employment, Employee shall not, without the prior written consent
of Company, communicate or divulge any Confidential Information to any Person (as
defined in Section 7.5.3) other than Company and those designated by it or use any
Confidential Information except for the benefit of Company, provided that Employee may
make disclosures to comply with the law or legal process. Immediately upon termination
of Employees employment with Company at any time and for any reason, Employee shall
return to Company all Confidential Information, including, but not limited to, any and
all copies, reproductions, notes or extracts of Confidential Information.7.3
    
    Solicitation of Employees.During the Term and, if Employees employment under
this Agreement is terminated by Company or by Employee for any reason, for the greater
of, (A) any period of time in which Employee continues to receive compensation of any
kind from Company and continuing for a period of six months after said payment(s)
cease, or (B) one year after the Term,, Employee shall not: (i) solicit, participate in
or promote the solicitation of any person who was employed by Company at any time
during the three-month period prior to Employees termination of employment under this
Agreement to leave the employ of Company; or (ii) on behalf of Employee or any other
Person, hire, employ or engage any such person. Employee further agrees that, during
such time, if an employee of Company contacts Employee about prospective employment,
Employee will inform such employee that Employee cannot discuss the matter further
without informing Company.




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7.4
    
    Remedies for Breach.Employee agrees that damages in the event of any breach
of Sections 7.1 through 7.3 by Employee would be difficult to ascertain. Employee
therefore agrees that, notwithstanding anything in this Agreement to the contrary,
including but not limited to the provisions of Section 14, Company, in addition to and
without limiting any other remedy or right it may have, shall have the right to an
injunction or other equitable relief in any court of competent jurisdiction, enjoining
any such
breach. Employee hereby waives any and all defenses Employee may have on the ground
of lack of jurisdiction or competence of the court to grant such an injunction or
other equitable relief. Employee also agrees that a bond shall not be required by
Company in obtaining an injunction. The existence of this right shall not preclude
any other rights and remedies at law or in equity that Company may have. The
provisions of Section 7 shall survive the termination of this Agreement. The
existence of a claim or cause of action of any kind by Employee against Company
shall not constitute a defense to the enforcement by Company of the rights provided
in this Section 7 and shall not be a defense in any injunction proceeding.7.5
    
    Definitions.
 7.5.1
    
    Competitor.For purposes of Section 7, Competitor means
any Person which sells goods or provides services which are directly
competitive with those sold or provided by a business that (i) is being
conducted by Company at the relevant time and (ii) was being conducted by
Company at any time during the Term.7.5.2
    
    Company.For purposes of Section 7, Company means
TeleCommunication Systems, Inc., and its subsidiaries and affiliates.7.5.3
    
    Person.For purposes of Section 7, Person means any
individual or entity, including but not limited to any corporation, trust, sole
proprietorship, joint venture or partnership.
 7.6
    
    Survival of Section 7.Employee agrees that the noncompetition agreements,
nondisclosure agreements and non-employment agreements in this Section 7 each
constitute separate agreements independently supported by good and adequate
consideration and, notwithstanding anything in this Agreement to the contrary, shall be
severable from the other provisions of, and shall survive, this Agreement.
 8. Notices.




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9.
    
    Taxes.
 9.1
    
    Withholding Taxes.Company shall have the right, to the extent permitted by
law, to withhold from any payment of any kind due to Employee under this Agreement to
satisfy the tax withholding obligations of Company under applicable law.9.2
    
    Adjustment Relating to Tax on Excess Parachute Payments.9.2.1. Adjustment.Notwithstanding anything in this Agreement to the contrary, in
the event Companys Law or Accounting Firm (as defined in Section 9.2.2) determines
that any portion of the cash compensation payable under this Agreement (such portion
of compensation, the Agreement Payment), and the portions, if any, of other
payments or distributions in the nature of compensation by Company to or for the
benefit of Employee (including, but not limited to, the value of the acceleration in
vesting or exercisability of stock options) whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement (the Agreement Payment,
together with such portions of other payments and distributions, the Payments),
would cause any portion of the Payments to be subject to the excise tax imposed by
section 4999, or any successor provision, of the Code (the portion subject to excise
tax, the Parachute Payment), the Agreement Payment shall be reduced to an amount
not less than zero which shall not cause any portion of the Payments to constitute a
Parachute Payment, provided that no such reduction shall be made if the Payments,
after the reduction and after the application of Federal income tax at the highest
rate applicable to individual taxpayers, would not be greater than the present value
(determined in accordance with section 280G, or any successor provision, of the
Code) of the Payments before the reduction but after the application of (i) excise
tax under section 4999 of the Code and (ii) Federal income tax at the highest rate
applicable to individual taxpayers.9.2.2 Determination.All determinations required to be made under this Section 9.2,
including the assumptions to be utilized in arriving at such determination, shall be
made by such nationally recognized law firm (including DLA Piper LLP (US)) or
accounting firm (including Ernst & Young LP) as selected by Company (the Law or
Accounting Firm), which shall provide detailed supporting calculations to both
Company and Employee (i) within 15 business days after receipt by Company of a
notice from Employee that Employee may have a Parachute Payment, or (ii) at such
earlier time as may be requested by Company. The Law or Accounting Firm may employ
and rely upon the opinions of actuarial or accounting professionals to the extent it
deems necessary or advisable. In the event that the Law or Accounting Firm
determines, for any reason, that it is unable to perform such services, or declines
to do so, Company shall select another nationally recognized law or accounting firm
to make




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the determinations required under this Section (which law or accounting firm
shall then be referred to as the Law or Accounting Firm hereunder). All fees and
expenses of the Law or Accounting Firm shall be borne solely by Company. Any
determination by the Law or Accounting Firm shall be binding upon Company and
Employee.
 10. Successors and Assigns.
 11. Entire Agreement.
 12. Amendment and Waiver.
 13. Governing Law and Severability.
 14. Arbitration.




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15.
    
    Section 409A Compliance.
 15.1
    
    This Agreement is intended to comply with, or otherwise be exempt from,
section 409A of the Code.15.2
    
    Company shall undertake to administer, interpret, and construe this Agreement
in a manner that does not result in the imposition on Employee of any additional tax,
penalty, or interest under section 409A of the Code.15.3
    
    If Company determines in good faith that any provision of this Agreement would
cause Employee to incur an additional tax, penalty, or interest under section 409A of
the Code, Company and Employee shall use reasonable efforts to reform such provision,
if possible, in a mutually agreeable fashion to maintain to the maximum extent
practicable the original intent of the applicable provision without violating the
provisions of section 409A of the Code.15.4
    
    The preceding provisions, however, shall not be construed as a guarantee by
Company of any particular tax effect to Employee under this Agreement. Company shall
not be liable to Employee for any payment made under this Agreement, at the direction
or with the consent of Employee, that is determined to result in an additional tax,
penalty, or interest under section 409A of the Code, nor for reporting in good faith
any payment made under this Agreement as an amount includible in gross income under
section 409A of the Code.15.5
    
    For purposes of section 409A of the Code, the right to a series of installment
payments under this Agreement shall be treated as a right to a series of separate
payments.15.6
    
    With respect to any reimbursement of expenses of, or any provision of in-kind
benefits to, Employee, as specified under this Agreement, such reimbursement of
expenses or provision of in-kind benefits shall be subject to the following conditions:
(i) the expenses eligible for reimbursement or the




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amount of in-kind benefits provided
in one taxable year shall not affect the expenses eligible for reimbursement or the
amount of in-kind benefits provided in any other taxable year, except for any medical
reimbursement arrangement providing for the reimbursement of expenses referred to in
section 105(b) of the Code; (ii) the reimbursement of an eligible expense shall be made
no later than the end of the year after the year in which such expense was incurred;
and (iii) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.15.7
    
    If a payment obligation under this Agreement arises on account of Employees
separation from service while Employee is a specified
employee (as each such term is defined under section 409A of the Code and
determined in good faith by Company), any payment of deferred compensation (as
defined under Treasury Regulation section 1.409A-e 1.409A-1(b)(3) through (b)(12))
that is scheduled to be paid within six months after such separation from service
shall accrue with interest and shall be paid within 15 days after the end of the
six-month period beginning on the date of such separation from service or, if
earlier, within 15 days after the appointment of the personal representative or
executor of Employees estate following the death of the Employee. For purposes of
the preceding sentence, interest shall accrue at the prime rate of interest
published in the northeast edition of The Wall Street Journalon the date of
Employees separation from service.
 [Signatures appear on following page]




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th
 WITNESS/ATTEST
    
    
    
    TELECOMMUNICATION SYSTEMS, INC./s/ Bruce A. White
    
    
    
    By:
    
    /s/ Richard A. YoungTitle: Exec. VP & COOEMPLOYEE/s/ Bruce A. White
    
    
    
    /s/ Timothy J. LorelloTimothy J. Lorello




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##### 



WITNESS/ATTEST
    
    
    
    TELECOMMUNICATION SYSTEMS, INC./s/ Bruce A. White
    
    
    
    By:
    

/s/ Richard A. YoungTitle: Exec. VP & COOEMPLOYEE/s/ Bruce A. White
    
    
    
    /s/ Timothy J. Lorello