adverse effect on the performance of Executive’s duties and responsibilities or the exercise ofExecutive’s powers under this Employment Agreement. Executive shall not serve on any other boardsof directors and shall not provide services (whether as an employee or independent contractor) toany for-profit organization on or after the date the Executive signs this Employment Agreementabsent the written consent of the Chairman of the Compensation Committee of the Company’s Board ofDirectors.§3. COMPENSATION AND BENEFITS     3.1. Base Salary. Executive’s initial base salary shall be $250,000.00 per year, whichbase salary shall be payable in accordance with the Company’s standard payroll practices andpolicies for senior executives and shall be subject to such withholdings as required by law oras otherwise permissible under such practices or policies. Executive’s base salary shall besubject to annual review and periodic increases (but not decreases), if any, as determined by theCompensation Committee of the Company’s Board of Directors or, at the discretion of suchBoard of Directors, the Board of Directors as a whole.     3.2. Annual Bonus. Executive during the Term shall be eligible to receive an annualbonus each year, and such bonus, if any, shall be set by the Compensation Committee of theCompany’s Board of Directors or, at the discretion of such Board of Directors, the Board ofDirectors as a whole. Each such bonus shall be reasonable in light of the contribution made byExecutive for such year in relation to the contributions made and bonuses paid other seniorCompany executives for such year.     3.3. Stock Options and Restricted Stock. Executive shall be eligible for grants ofoptions to purchase stock of the Company and restricted stock grants when and as recommendedby the Compensation Committee of the Company’s Board of Directors or, at the discretion ofsuch Board of Directors, the Board of Directors as a whole. The number of shares subject toeach such stock option grant or restricted stock grant shall be reasonable in light of thecontribution made, or expected to be made, by Executive for the period for which such grant ismade in relation to the number of shares subject to stock option grants and restricted stockgrantsmade to other senior Company executives based on the contributions made, or expected to bemade, by such other senior Company executives for such period.     3.4. Employee Benefit Plans, Programs and Policies. Executive shall be eligible toparticipate in the employee benefit plans, programs and policies maintained by the Company forsimilarly situated senior executives in accordance with the terms and conditions of suchplans, programs and policies as in effect from time to time.     3.5. Vacation and Other Similar Benefits. Executive shall be entitled to vacation timeto be credited and taken in accordance with the Company’s policy from time to time in effectfor senior executives. Such vacation time shall not be carried over year to year, and shall not bepaid out upon termination of employment, or upon expiration of this Employment Agreement.     3.6. Business Expenses. Executive shall have a right to be reimbursed for Executive’sreasonable and appropriate business expenses which Executive actually incurs in connectionwith the performance of Executive’s duties and responsibilities under this EmploymentAgreement in accordance with the Company’s expense reimbursement policies and proceduresfor its senior executives.§ 4. TERMINATION OF EMPLOYMENT
-2-

 
     4.1. General. The Company shall have the right to terminate Executive’s employmentat any time, and Executive shall have the right to resign at any time. However, anynon-renewal by the Company of this Employment Agreement pursuant to § 1.1 shall constitute a terminationof Executive’s employment under § 4 of this Employment Agreement. Any non-renewal by theExecutive of this Employment Agreement pursuant to § 1.1 shall not constitute a resignation byExecutive under § 4 of this Employment Agreement.     4.2.Termination By The Company Other Than For Death, Cause Or Disability Or ByExecutive For Good Reason.     (a) Before a Change in Control. If the Company terminates Executive’semployment other than for Death, Cause (as defined in § 4.2(c)) or a Disability (asdefined in § 4.2(d)) before the Effective Date (as defined in§ 4.2(e)(1)) of a Changein Control (as defined in § 4.2(e)(2)) or Executive resigns for Good Reason (as defined in§ 4.2(f)) before such Effective Date, the Company (in lieu of any severance pay underany severance pay plans, programs or policies) shall (subject to applicablewithholdings):     (1) pay to Executive a lump sum amount equal to the product of (x)multiplied by (y), where (x) equals the sum of (A) and (B), with (A) equal to theExecutive’s annual base salary as in effect on the date the Executive’semployment terminates and (B) equal to the amount of the Executive’s mostrecently paid annual bonus, and (y) equals one (1);     (2) with respect to options to purchase Company stock which aregranted to Executive before or after the date the Company signs this EmploymentAgreement, accelerate Executive’s right to exercise 100% of such still-outstanding options so that Executive has the right to exercise 100% of suchstill-outstanding options on the date Executive’s employment terminates, subject tothe terms of the plan under which the options were granted;     (3) pay to the Executive a lump sum amount equal to the product of(x) multiplied by (y), where (x) equals two times the Company’s monthlycontribution on behalf of Executive under the plans, programs and policiesdescribed in § 3.4 which provide healthcare, life insurance and accidentaldeath and dismemberment coverage to Executive immediately before Executive’semployment terminates, and (y) equals eighteen (18); and     (4) make one or, if necessary, more than one Gross Up Payment (asdescribed in and paid in accordance with §4.2(g)) to Executive, if applicable.     (b) After a Change of Control. If Executive resigns for Good Reason withinone hundred eighty days (180) prior to, or eighteen (18) months following, theEffective Date of a Change in Control or the Company terminates Executive’s employment (otherthan for Cause or a Disability) within one hundred eighty (180) days prior to, oreighteen (18) months following, the Effective Date of a Change of Control, the Company (in lieuof any severance pay under any severance pay plans, programs or policies) shall(subject to applicable withholdings):     (1) pay to Executive a lump sum amount equal to the product of (x)multiplied by (y), where (x) equals the sum of (A) and (B), with (A) equal to theExecutive’s annual base salary as in effect on the date the Executive’s
-3-

 
employment terminates and (B) equal to the amount of the Executive’s mostrecently paid annual bonus, and (y) equals two (2);     (2) (a) with respect to options to purchase Company stock which aregranted to Executive before or after the date the Company signs this EmploymentAgreement, accelerate Executive’s right to exercise 100% of such still-outstanding options so that Executive has the right to exercise 100% of suchstill-outstanding options on the date Executive’s employment terminates, subject to theterms of the plan under which the options were granted; and          (b) treat Executive as if Executive had remained employed by the Company until the endof the three (3) year period which starts on the date Executive’s employment terminates forthe sole purpose that the time period over which Executive has the right to exercise suchoptions shall be the same as if there had been no termination of Executive’s employmentuntil the end of such three (3) year period;     (3) with respect to shares of restricted stock which are granted toexecutive after the date the Company signs this Employment Agreement and arestill outstanding, deem any conditions applicable to such grant to have beensatisfied in full;     (4) pay to the Executive a lump sum amount equal to the product of(x) multiplied by (y), where (x) equals two times the Company’s monthlycontribution on behalf of Executive under the plans, programs and policiesdescribed in §3.4 which provide healthcare, life insurance and accidental deathand dismemberment coverage to Executive immediately before Executive’semployment terminates, and (y) equals eighteen (18); and     (5) make one or, if necessary, more than one, Gross Up Payment (asdescribed in and paid in accordance with § 4.2(g)) to Executive, if applicable.     (c) Cause. The term “Cause” as used in this Employment Agreement shall (subjectto § 4.2(c)(4)) mean:     (1) Executive is convicted of, pleads guilty to, or confesses orotherwise admits to any felony or any act of fraud, misappropriation orembezzlement;     (2) There is any act or omission by Executive involving malfeasanceor gross negligence in the performance of Executive’s duties and responsibilitiesunder § 2 or the exercise of Executive’s powers under § 2 to the materialdetriment of the Company; or     (3) (A) Executive breaches any of the provisions of § 5 or (B)Executive violates any provision of any code of conduct adopted by the Companywhich applies to Executive and any other Company employees if the consequenceof such violation for any employee subject to such code of conduct ordinarilywould be a termination of his or her employment by the Company; provided,however.
-4-

 
     (4) No such act or omission or event shall be treated as “Cause” under §4.2(c)(2) and § 4.2(c)(3) and this Employment Agreement unless (A) Executive has beenprovided a detailed, written statement of the basis for the Company’s belief that such actor omission or event constitutes “Cause” and an opportunity to meet with the Company’sBoard of Directors (together with Executive’s counsel if Executive chooses to haveExecutive’s counsel present at such meeting) after Executive has had a reasonable period inwhich to review such statement and, if the act or omission or event is one which can becured by Executive, Executive has had at least a thirty (30) day period to take correctiveaction and (B) the Company’s Board of Directors after such meeting (if Executive exercisesExecutive’s right to have a meeting) and after the end of such thirty (30) day correctionperiod (if applicable) determines reasonably and in good faith and by the affirmative voteof at least a majority or, after the Effective Date of a Change in Control, at leastthree-fourths of the members of such Board of Directors then in office at a meeting calledand held for such purpose that “Cause” does exist under this Employment Agreement;provided, however, if Executive is a member of such Board of Directors, Executive shallhave no right to participate in such vote, and the number of members needed to constitute amajority of, or three-fourths of, whichever is applicable, the members of such Board ofDirectors shall be determined without counting Executive as a member of such Board ofDirectors; furtherprovided,     (d) Disability. The term “Disability” as used in this Employment Agreementmeans any physical or mental condition which renders Executive unable even withreasonable accommodation by the Company to perform the essential functions ofExecutive’s job for at least a consecutive one hundred and eighty (180) day period andwhich makes Executive eligible to receive benefits under the Company’s long-termdisability plan as of the date that Executive’s employment terminates.     (e) Effective Date and Change in Control.     (1) The term “Effective Date” as used in this Employment Agreementmeans either the date which includes the “closing” (as such term is commonlyunderstood in the United States) of the transaction which makes a Change inControl effective if the Change in Control is made effective through a transactionwhich has such a “closing” or the earliest date a Change in Control is reported inaccordance with any applicable law, regulation, rule or common practice aseffective to any government or any agency of any government or to any exchangeor market in which the Company effects any trades if the Change in Control ismade effective other than through a transaction which has such a “closing.”     (2) The term “Change in Control” as used in this EmploymentAgreement means the occurrence of any of the following events:     (A) any “person” (as that term is used in Sections 13(d) and 14(d)(2) ofthe Securities Exchange Act of 1934), is or becomes the beneficial owner (asdefined in Rule 13d-3 under the 1934 Act), directly or indirectly, of securitiesrepresenting 30% or more of the combined voting power of the then outstandingsecurities of the Company eligible to
-5-

 
vote for the election of the members of the Company’s Board of Directors unless (1) suchperson is the Company or any subsidiary of the Company, (2) such person is an employee benefit plan(or a trust which is a part of such a plan) which provides benefits exclusively to, or on behalfof, employees or former employees of the Company or a subsidiary of the Company, (3) such person isan underwriter temporarily holding such securities pursuant to an offering of such securities, (4)such person is Executive, an entity controlled by Executive or a group which includes Executive or(5) such person acquired such securities in a Non-Qualifying Transaction (as defined in §4.2(e)(2)(D));     (B) during any period of two consecutive years or lessbeginning after the closing date of the initial public offering of thecommon stock of the Company, individuals who at the beginning of suchperiod constitute the Board of Directors of the Company cease, for anyreason, to constitute at least a majority of such Board of Directors, unlessthe election or nomination for election of each new director was approvedby at least two-thirds of the directors then still in office who were directorsat the beginning of the period (either by a specific vote of such directors orby the approval of the Company proxy statement in which each suchindividual is named as a nominee for a director without written objectionto such nomination by such directors); provided, however, that noindividual initially elected or nominated as a director of the Company as aresult of an actual or threatened election contest with respect to directorsor as a result of any other actual or threatened solicitation of proxies orconsents by or on behalf of any person other than the Board of Directorsof the Company shall be deemed to be approved;     (C) the shareholders of the Company approve anyreorganization, merger, consolidation or share exchange as a result ofwhich the common stock of the Company shall be changed, converted orexchanged into or for securities of another corporation (other than amerger with a wholly owned subsidiary of the Company) or anydissolution or liquidation of the Company or any sale or the disposition of50% or more of the assets or business of the Company, or     (D) the shareholders of the Company approve anyreorganization, merger, consolidation or share exchange or similar form ofcorporate transaction involving the Company unless (1) the persons whowere the beneficial owners of the outstanding securities eligible to vote forthe election of the members of the Company’s Board of Directorsimmediately before the consummation of such transaction hold more than60% of the voting power of the securities eligible to vote for the membersof the board of directors of the successor or survivor corporation in suchtransaction immediately following the consummation of such transactionand (2) the number of the securities of such successor or survivorcorporation representing the voting power described in § 4.2(e)(2)(D)(l)held by the persons described in § 4.2(e)(2)(D)(l) immediately following
-6-

 
the consummation of such transaction is beneficially owned by each such person insubstantially the same proportion that each such person had beneficially owned theoutstanding securities eligible to vote for the election of the members of theCompany’s Board of Directors immediately before the consummation of suchtransaction, provided (3) the percentage described in § 4.2(e)(2)(D)(l) of thesecurities of the successor or survivor corporation and the number described in §4.2(e)(2)(D)(2) of the securities of the successor or survivor corporation shall bedetermined exclusively by reference to the securities of the successor or survivorcorporation which result from the beneficial ownership of shares of common stock ofthe Company by the persons described in § 4.2(e)(2)(D)(l) immediately before theconsummation of such transaction (any transaction which satisfies all of thecriteria specified in (1), (2) and (3) above shall be deemed to be a“Non-Qualifying Transaction”);Notwithstanding the foregoing, the initial public offering of the common stock of theCompany shall in no event constitute a Change in Control under this Employment Agreement.     (f) Good Reason. The term “Good Reason” as used in this EmploymentAgreement shall (subject to § 4.2(f)(6)) mean:     (1) there is a material reduction or, after the Effective Date of aChange in Control, any reduction in Executive’s base salary under § 3.1 or thereis a material reduction in Executive’s opportunity to receive any annual bonus andstock option grants without Executive’s express written consent;     (2) there is a material reduction in the scope, importance or prestige ofExecutive’s duties, responsibilities or powers at the Company or Executive’sreporting relationships with respect to who reports to Executive and whomExecutive reports to at the Company without Executive’s express written consent;     (3) the Company transfers Executive’s primary work site fromExecutive’s primary work site on the date the Company signs this EmploymentAgreement or, if Executive subsequently consents in writing to such a transferunder this Employment Agreement, from the primary work site which was thesubject of such consent, to a new primary work site which is more than 30 miles(measured along a straight line) from Executive’s then current primary work siteunless such new primary work site is closer (measured along a straight line) toExecutive’s primary residence than Executive’s then current primary work site;     (4) the Company after the Effective Date of a Change in Controlchanges Executive’s job title or fails to continue to make available to Executivethe same or substantially equivalent plans, programs and policies pursuant to § 3.4as made available before such Effective Date absent Executive’s express writtenconsent;
-7-

 
     (5) there is a material breach or, after the Effective Date of a Changein Control, any breach of this Employment Agreement by the Company;provided, however,     (6) No such act or omission shall be treated as “Good Reason” underthis Agreement unless:     (A) (1) Executive delivers to the Compensation Committee of theCompany’s Board of Directors a detailed, written statement of the basisfor Executive’s belief that such act or omission constitutes Good Reason,(2) Executive delivers such statement before the later of (a) the end of theninety (90) day period which starts on the date there is an act or omissionwhich forms the basis for Executive’s belief that Good Reasonexists or (b) the end of the period mutually agreed upon for purposes of this§ 4.2(f)(6)(a)(2)(B) in writing by Executive and the Chairman of the Company’sBoard of Directors, (3) Executive gives such Board of Directors a thirty (30) dayperiod after the delivery of such statement to cure the basis for such belief and(4) Executive actually submits Executive’s written resignation to the Chairman ofthe Company’s Board of Directors during the sixty (60) day period which beginsimmediately after the end of such thirty (30) day period if Executive reasonablyand in good faith determines that Good Reason continues to exist after the end ofsuch thirty (30) day period; or     (B) the Company states in writing to Executive that Executivehas the right to treat any such act or omission as Good Reason under thisEmployment Agreement and Executive resigns during the sixty (60) dayperiod which starts on the date such statement is actually delivered toExecutive; and     (7) If Executive consents in writing to any reduction described in§ 4.2(f)(l) or § 4.2(f)(2), to any transfer described in § 4.2(f)(3) or to any change orfailure described in § 4.2(f)(4) in lieu of exercising Executive’s right to resign for GoodReason and delivers such consent to the Chairman of the Company’s Board of Directors, thedate such consent is so delivered thereafter shall be treated under this definition as theEffective Date of a Change in Control for purposes of determining whether Executivesubsequently has Good Reason under this Employment Agreement to resign as a result of anysuch subsequent reduction, transfer or change or failure.     (g) Gross Up Payment. The term “Gross Up Payment” as used in this EmploymentAgreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (1)100% of any excise tax described in this §4.2(g), (2) 100% of any federal, state and local incometax and social security and other employment tax on the payment made to pay such excise tax as wellas any additional taxes on such payment and (3) 100% of any interest or penalties assessed by theInternal Revenue Service on Executive which are related to the timely payment of such excise tax(unless such interest or penalties are attributable to Executive’s willful misconduct or grossnegligence with respect to such timely payment). A Gross Up Payment shall be made by the Company
-8-

 
promptly after either the Company or the Company’s independent accountants determinethat any payments and benefits called for under this Employment Agreement together with anyother payments and benefits made available to Executive by the Company and any other personwill result in Executive’s being subject to an excise tax under § 4999 of the InternalRevenue Code of 1986, as amended (which shall be referred to in this § 4.2(g) as the “Code”)or such an excise tax is assessed against Executive as a result of any such payments andother benefits if Executive takes such action (other than waiving Executive’s right to anypayments or benefits in excess of the payments or benefits which Executive has expresslyagreed to waive under this § 4.2(g)) as the Company reasonably requests under thecircumstances to mitigate or challenge such excise tax; provided, however,if the Company or the Company’s independent accountants make the determination described inthis § 4.2(g) and, further, determine that Executive will not be subject to any such excisetax if Executive waives Executive’s right to receive a part of such payments or benefits andsuch part does not exceed $25,000, Executive shall irrevocably waive Executive’s right toreceive such part if an independent accountant or lawyer retained by Executive and paid bythe Company agrees with the determination made by the Company or the Company’s independentaccountants with respect to the effect of such reduction in payments or benefits. Anydeterminations under this §4.2(g) shall be made in accordance with § 280G of the Code andany applicable related regulations (whether proposed, temporary or final) and any relatedInternal Revenue Service rulings and any related case law and, if the Company reasonablyrequests that Executive take action to mitigate or challenge, or to mitigate and challenge,any such tax or assessment (other than waiving Executive’s right to any payments or benefitsin excess of the payments or benefits which Executive has expresslyagreed to waive under this §4.2(g)) and Executive complies with such request, the Company shall provide Executivewith such information and such expert advice and assistance from the Company’s independentaccountants, lawyers and other advisors as Executive may reasonably request and shall payfor all expenses incurred in effecting such compliance and any related fines, penalties,interest and other assessments.     4.3. Termination By The Company For Cause or By Executive Other Than For GoodReason. If the Company terminates Executive’s employment for Cause or Executiveresignsother than for Good Reason, the Company’s only obligation to Executive under this EmploymentAgreement shall (subject to applicable withholdings) be to pay Executive’s base salary andannual bonus, if any, which were due and payable on the date Executive’s employmentterminated and to reimburse Executive for expenses Executive had already incurred and whichwould have otherwise been reimbursed but for such termination of employment.     4.4. Termination for Disability or Death.     (a) General. The Companyshall have the right to terminate Executive’s           employment on or after the date Executive has a Disability, and Executive's employment           shall terminate at Executive's death.     (b) BaseSalary and Bonus. If Executive’s employment terminates under this           §4.4, the Company’s only obligation under this Employment Agreement shall (subject to           applicable withholdings) be (1) to pay Executive or, if Executive dies, Executive’s       estate the base salary and annual bonus, if any, which were due and payable on the date           Executive’s employment terminated and (2) to reimburse Executive or, if Executive dies,
-9-

 
Executive’s estate for any expenses which Executive had already incurred and whichwould have otherwise been reimbursed but for such termination of employment.     4.5. Benefits at Termination of Employment. Executive upon Executive’stermination of employment shall have the right to receive any benefits payable under the Company’semployee benefit plans, programs and policies which Executive otherwise has a nonforfeitable rightto receive under the terms of such plans, programs and policies independent of Executive’s rightsunder this Employment Agreement; however, if a payment is made to Executive under § 4.2(a) or §4.2(b), such payment shall be in lieu of any severance pay under any severance pay plan, program orpolicy.§5. COVENANTS BY EXECUTIVE     5.1. Company Property.     (a) General. Executive upon the termination of Executive’s employment for anyreason or, if earlier, upon the Company’s request shall promptly return all Property (asdefined in § 5.1(b)) which had been entrusted or made available to Executive by the Companyand, if any copy of any such Property was made by, or for, Executive, each and every copy ofsuch Property.     (b) Property. The term “Property” means records, files, memoranda, tapes,computer disks, reports, price lists, customer lists, drawings, plans, sketches, keys,computer hardware and software, cellular telephones, credit cards, access cards,identification cards, personal data assistants and the like, company cars and other tangiblepersonal property of any kind or description.     5.2. Trade Secrets.     (a) General. Executive agrees that Executive will hold in a fiduciary capacityfor the benefit of the Company and each of its affiliates, and will not directly orindirectly use or disclose to any person not authorized by the Company, any TradeSecret (as defined in § 5.2(b)) of the Company or its affiliates that Executive may haveacquired (whether or not developed or compiled by Executive and whether or not Executive isauthorized to have access to such information) during the term of, and in the course of, oras a result of Executive’s employment by the Company or its affiliates for so long as suchinformation remains a Trade Secret.     (b) Trade Secret. The term “Trade Secret” for purposes of this EmploymentAgreement means information, including, but not limited to, technical or nontechnical data,a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing,a process, financial data, financial plans, product plans, or a list of actual or potentialcustomers or suppliers that (1) derives economic value, actual or potential, from not beinggenerally known to, and not being generally readily ascertainable by proper means by, otherpersons who can obtain economic value from its disclosure or use and (2) is the subject ofreasonable efforts by the Company and its affiliates to maintain its secrecy.     (c) Additional Rights. This § 5.2 is intended to provide rights to theCompany and its affiliates which are in addition to, not in lieu of, those rights theCompany and its affiliates have under the common law or applicable statutes for theprotection of trade secrets.
-10-

 
     5.3. Confidential Information.     (a) General. Executive while employed under this Employment Agreement andthereafter during the Restricted Period (as defined in § 5.4) shall hold in a fiduciarycapacity for the benefit of the Company and its affiliates, and shall not directly orindirectly use or disclose to any person not authorized by the Company, any ConfidentialInformation (as defined in § 5.3(b)) of the Company or its affiliates that Executive mayhave acquired (whether or not developed or compiled by Executive and whether or notExecutive is authorized to have access to such information) during the term of, and in thecourse of, or as a result of Executive’s employment by the Company or its affiliates.     (b) Confidential Information. The term “Confidential Information” for purposesof this Employment Agreement means any secret, confidential or proprietary informationpossessed by the Company or its affiliates relating to their businesses, including, withoutlimitation, customer lists, details of client or consultant contracts, current andanticipated customer requirements, pricing policies, price lists, market studies, businessplans, operational methods, marketing plans or strategies, product development techniques orflaws, computer software programs (including object codes and source codes), data anddocumentation, base technologies, systems, structures and architectures, inventions andideas, past, current and planned research and development, compilations, devices, methods,techniques, processes, future business plans, licensing strategies, advertising campaigns,financial information and data, business acquisition plans and new personnel acquisitionplans (not otherwise included in the definition of a Trade Secret under this EmploymentAgreement) that has not become generally available to the public by the act of one who hasthe right to disclose such information without violating any right of the Company or itsaffiliates.     (c) Additional Rights. This § 5.3 is intended to provide rights to theCompany and its affiliates which are in addition to, not in lieu of, those rights theCompany and its affiliates have under the common law or applicable statutes for theprotection of confidential information.     5.4. Restricted Period. The term “Restricted Period” for purposes of this EmploymentAgreement shall mean the one-year period following termination of Executive’s employment.     5.5. Nonsolicitation of Customers or Employees.     (a) Customers. Executive, while employed under this Employment Agreement andthereafter during the Restricted Period, shall not, on Executive’s own behalf or on behalfof any person, firm partnership, association, corporation or business organization, entityor enterprise, call on or solicit for the purpose of competing with the Company or itsaffiliates any customers of the Company or its affiliates with whom Executive had contact,knowledge, or association at any time during Executive’s employment with the Company or itsaffiliates, or with respect to the Restricted Period, at any time during the twelve (12)month period immediately preceding the beginning of the Restricted Period.     (b) Employees. Executive, while employed under this Employment Agreement andthereafter during the Restricted Period, shall not, either directly or indirectly, call on,solicit or attempt to induce any other officer, employee or independent
-11-

 
contractor of the Company or its affiliates with whom Executive had contact, knowledge of,or association at any time during Executive’s employment with the Company or itsaffiliates, or with respect to the Restricted Period, at any time during the twelve (12)month period immediately preceding the beginning of the Restricted Period, to terminate hisor her employment or business relationship with the Company or its or its affiliates andshall not assist any other person or entity in such a solicitation.     5.6. Intellectual Property Rights. Executive hereby unconditionally and irrevocablyassigns to the Company all of Executive’s right, title and interest in any ideas, inventions,trademarks, copyrights, developments and improvements that Executive conceives, alone or withothers, during the Term, whether or not conceived during working hours, which are within the scopeof the Company’s business operations or relate to any of the Company’s work, projects or researchactivities, all of which shall be referred to as “Intellectual Property,” and Executive shallassist the Company, at the Company’s expense, in obtaining patents, copyright and trademarkregistrations for Intellectual Property, execute and deliver all documents and do any and allthings necessary and proper on Executive’s part to obtain such patents and copyright and trademarkregistrations and execute specific assignments and other documents for such Intellectual Propertyas may be considered necessary or appropriate by the Company at any timeduring Executive’s employment. This § 5.6 shall not apply to any invention that Executivedevelops entirely on Executive’s own time without using the Company’s equipment, supplies,facilities or trade secret or confidential information. Executive agrees not placeIntellectual Property in the public domain or disclose any inventions to third parties withoutthe prior written consent of the Company.     5.7. Non-Compete. Executive and the Company agree that (a) the Company is engaged inthe family entertainment resort business featuring indoor waterparks, which shall be referred to asthe “Business,” (b) the Business can be conducted anywhere, (c) the Business can be and isavailable to any person or entity with access to sufficient capital, (d) the Business consequentlyhas no geographic boundary or limitation and will have none during the Term, (e) Executive is, andis expected to continue to be during the Term, intimately involved in the Business wherever itoperates, and (f) this § 5.7 is intended to provide fair and reasonable protection to the Companyin light of the unique circumstances of the Business. Executive therefore agrees that Executiveshall not during the Term and for the one (1) year period which starts on the date Executive’semployment terminates under this Employment Agreement compete with the Company within fifty (50)miles of a location where the Company conducts its Business or is planning to conduct its Business;provided, however, Executive may own up to five percent (5%) of the stock of a publicly tradedcompany that engages in such competitive business so long as Executive is only a passive investorand is not actively involved in such company in any way.     5.8. Reasonable and Continuing Obligations. Executive agrees that Executive’sobligations under this § 5 are obligations which will continue beyond the date Executive’semployment terminates and that such obligations are reasonable and necessary to protect theCompany’s legitimate business interests. The Company in addition shall have the right to take suchother action as the Company deems necessary or appropriate to compel compliance with the provisionsof this § 5.     5.9. Remedy for Breach. Executive agrees that the remedies at law of the Company forany actual or threatened breach by Executive of the covenants in this § 5 would be inadequate
-12-

 
and that the Company shall be entitled to specific performance of the covenants in this § 5,including entry of an exparte, temporary restraining order in state or federal court, preliminaryand permanent injunctive relief against activities in violation of this § 5, or both, or otherappropriate judicial remedy, writ or order, in addition to any damages and legal expenses which theCompany may be legally entitled to recover. Executive acknowledges and agrees that the covenants inthis § 5 shall be construed as agreements independent of any other provision of this or any otheragreement between the Company and Executive, and that the existence of any claim or cause of actionby Executive against the Company, whether predicated upon this Employment Agreement or any otheragreement, shall not constitute a defense to the enforcement by the Company of such covenants.§ 6. MISCELLANEOUS     6.1. Notices. Notices and all other communications shall be in writing and shall bedeemed to have been duly given when personally delivered or when mailed by United States registeredor certified mail. Notices to the Company shall be sent to 122 West Washington Avenue,10th Floor, Madison, Wisconsin 53703, Attention: General Counsel. Notices andcommunications to Executive shall be sent to the address Executive most recently provided to theCompany.     6.2. No Waiver. Except for the notice described in § 6.1, no failure by either theCompany or Executive at any time to give notice of any breach by the other of, or to requirecompliance with, any condition or provision of this Employment Agreement shall be deemed a waiverof any provisions or conditions of this Employment Agreement.     6.3. Choice of Law and Courts. This Employment Agreement shall be governed by Delawarelaw (except to the extent that its choice of law provisions would call for the application of thelaw of another jurisdiction), and (subject to § 6.8) any action that may be brought by either theCompany or Executive involving the enforcement of this Employment Agreement or any rights, duties,or obligations under this Employment Agreement, shall be brought exclusively in the state orfederal courts sitting in Delaware, and Executive consents and waives any objection to personaljurisdiction and venue in these courts for any such action.     6.4. Assignment and Binding Effect. This Employment Agreement shall be binding uponand inure to the benefit of the Company and any successor to all or substantially all of thebusiness or assets of the Company. In the event the IPO Closing Date does not occur on or prior toMarch 31, 2005, this Employment Agreement shall become void and shall cease to have any force oreffect.     The Company may assign this Employment Agreement to any affiliate or successor, and no suchassignment shall be treated as a termination of Executive’s employment under this EmploymentAgreement. Executive’s rights and obligations under this Employment Agreement are personal andshall not be assigned or transferred. Any such assignment or attempted assignment by Executiveshall be null, void, and of no legal effect.     6.5. Other Agreements. This Employment Agreement replaces and merges any and allprevious agreements and understandings regarding all the terms and conditions of Executive’semployment relationship with the Company, and this Employment Agreement constitutes the entireagreement of the Company and Executive with respect to such terms and conditions.
-13-

 
     6.6. Amendment. Except as provided in § 6.7, no amendment or modification to thisEmployment Agreement shall be effective unless it is in writing and signed by the Company and byExecutive.     6.7. Severability. If any provision of this Employment Agreement shall be foundinvalid or unenforceable, in whole or in part, then such provision shall be deemed to be modifiedor restricted to the extent and in the manner necessary to render such provision valid andenforceable, or shall be deemed excised from this Employment Agreement, as may be required underapplicable law, and this Employment Agreement shall be construed and enforced to the maximum extentpermitted by applicable law, as if such provision had been originally incorporated in thisEmployment Agreement as so modified or restricted, or as if such provision had not been originallyincorporated in this Employment Agreement, as the case may be.     6.8 Arbitration. The Company shall have the right to obtain an injunction or otherequitable relief arising out of the Executive’s breach of the provisions of § 5 of this EmploymentAgreement. However, any other controversy or claim arising out of or relating to this EmploymentAgreement or any alleged breach of this Employment Agreement shall be settled by bindingarbitration in Delaware in accordance with the rules of the American Arbitration Association thenapplicable to employment-related disputes and any judgment upon any award, which may include anaward of damages, may be entered in the highest state or federal court having jurisdiction oversuch award. In the event of the termination of Executive’s employment, Executive’s sole remedyshall be arbitration under this § 6.8 and any award of damages shall be limited to recovery of lostcompensation and benefits provided for in this Employment Agreement. No punitive damages may beawarded to Executive. The Company and Executive shall split equally all reasonable fees of thearbitrator.     6.9 Executive’s Legal Fees and Expenses. The Company shall (a) reimburse Executive forall reasonable costs incurred by Executive in bringing a proceeding to enforce the terms of thisEmployment Agreement, including without limitation all reasonable costs of investigation andreasonable attorneys fees and expenses and (b) make a payment to or on behalf of Executive whichshall be sufficient to pay 100% of any federal, state and local income tax on the reimbursement andpayments made to Executive under this § 6.9. Further, the Company shall make one or more Gross-UpPayments under § 4.2(g) if the Excise Tax under § 4.2(g) is applicable to any amounts paid underthis § 6.9.     6.10 Release. As a condition to the Company’s making any payments to Executive afterExecutive’s termination of employment under this Employment Agreement (other than the compensationearned before such termination and the benefits due under the Company’s employee benefit planswithout regard to the terms of this Employment Agreement), Executive or, if Executive is deceased,Executive’s estate shall execute a release in the form of the release attached to this EmploymentAgreement as Exhibit A, or in such other form as is acceptable to the Company and Executive.     6.11 Counterparts. This Employment Agreement may be executed in counterparts, each ofwhich will be deemed an original, but all of which together will constitute one and the sameEmployment Agreement.     6.12 Headings; References. The headings and captions used in this Employment Agreementare used for convenience only and are not to be considered in construing or interpreting thisEmployment Agreement. Any reference to a section (§) shall be to a section (§)
-14-

 
of this Employment Agreement absent an express statement to the contrary in this EmploymentAgreement.
-15-

 
IN WITNESS WHEREOF, the Company and Executive have executedthis Employment Agreement in multiple originals to be effective on the IPOClosing Date.      GREAT WOLF RESORTS, INC.