(c) **Health and Welfare Benefits**. Employee shall be entitled toparticipate in the benefit plans and programs offered from time to time for executiveemployees, such as those set forth in the manual for executive employees that coversEmployer’s executives, such benefits to include but not be limited to personal timeoff, holidays, dental and vision insurance coverage and participation in Employer’s401(k) Plan. All benefit plans are subject to the terms and conditions contained inthe applicable plan and program documents as such documents may be amended from timeto time. (d) **Equity Awards**. Employee will be granted a stock option to purchase200,000 shares of Employer’s common stock under the Employer’s stock incentive plan onthe Effective Date with an exercise price per share equal to the fair market value ofEmployer’s common stock on the date of grant as determined by the CompensationCommittee. Such stock option will vest and become exercisable at the rate of 25% peryear during Employee’s employment with Employer over a four-year period commencing onthe date of grant and ending on the fourth anniversary of the date of grant. Employeemay receive additional equity awards during the term of this Agreement as deemedappropriate by the Compensation Committee. (e) **Automobile Allowance**. Employer shall pay to Employee an automobileallowance in an amount equal to $1,000 per month, payable in accordance withEmployer’s customary payroll practices. (f) **Purchase of Employer Products**. Employee shall be eligible to receiveeach month during the term of this Agreement up to $1,000 of Employer products offeredfor sale to third parties, as selected by Employee, the value of which will be basedon employee pricing as set forth in Employer’s policies and guidelines regardingpurchases of Employer’s products by employees. (g) **Club Dues**. Employer will reimburse Employee each month during theterm of this Agreement an amount equal to 50% of his ClubCorp Dallas Fort WorthSociety monthly dues. Employer’s reimbursement obligation applies only to Employee’smonthly base dues and business use expenses and does not include any additionalmonthly expenses incurred by, or charged to, Employee as personal expenditures. (h) **Vacation and Personal Time Off**. Employee shall be entitled to 20days of vacation and personal time off (“PTO”) per year to be accrued in accordancewith Employer’s vacation policy and personal time off policy in effect from time totime. (i) **Agreement Review**. Employer will reimburse Employee for legal feesincurred by Employee during the term of this Agreement in connection with the reviewof this Agreement, including any supplements and/or amendments thereto, by Employee’slegal counsel in an amount not exceeding $2,000 in any calendar year, supported byproper documentation submitted by Employee to Employer.Section 4. **Best Efforts of Employee**. Employee agrees to perform all of the dutiespursuant to the express and implicit terms of this Agreement to the reasonable satisfaction of theBoard. Employee further agrees to perform such duties faithfully and to the best of his ability,talent, and experience.Section 5. **Place of Employment**. Employee shall render such duties at 2301 Crown Court,Irving, Texas 75038 and at such other places as Employer shall in good faith require or as theinterest, needs, business, or opportunity of Employer shall require.
 
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Section 6. **Non-Competition with Employer during Employment**. Employee shall devote all histime, attention, knowledge, and skills solely to the business and interest of Employer, andEmployer shall be entitled to all of the benefits and profits arising from the work of Employee.Employee shall not, during hisemployment under this Agreement, perform services for or be interested directly or indirectly, inany manner, as partner, officer, director, shareholder, advisor, consultant, employee, or in anyother capacity in any other business similar to Employer’s business, any allied trade, or anybusiness offering a competing or alternative product or service. However, nothing contained in thissection shall prevent or limit Employee from continuing to receive the benefits of relationshipspreviously described to Employer or investing in the capital stock or other securities of anycorporation whose stock or securities are publicly owned and traded on any public exchange, norshall anything contained in this Section 6 prevent or limit Employee from investing in real estate.Section 7. **Confidentiality and Nondisclosure**. Employer promises to disclose to Employeeand Employee acknowledges that in and as a result of his employment by Employer, he will receive,be making use of, acquiring, and/or adding to confidential information of a special and uniquenature and value relating to such matters as Employer’s trade secrets and proprietary andconfidential business information, including but not limited to, its unique business methods andstrategies, processes, product and design development, programs and programming codes, pricingmethods, operating techniques and practices, operating and production costs, corporate financialinformation, customer requirements, customer and supplier information, potential customer lists andmarketing techniques, systems, procedures, manuals, confidential reports, the equipment and methodsused and preferred by its customers and the fees paid by them, and compilations of information,records, and specifications (all of which are referred to collectively herein as “ConfidentialMatters”). Employee further agrees that if a third party (e.g., vendors, customers andmanufacturers) contracts with Employer, the information obtained or received from a third partyincluding, but not limited to, its patents, copyrights, proprietary information, trade secrets,systems, product development, procedures, manuals, and confidential reports will be treated in thesame manner and subject to the same protection as other Confidential Matters.Employee acknowledges that Employer does not voluntarily disclose Confidential Matters, butrather takes precautions to prevent their dissemination except pursuant to suitable confidentialitysafeguards. Employee further acknowledges that Confidential Matters (1) are secret and not knownin the industry; (2) have been and will be entrusted to Employee because Employee is a fiduciary ofEmployer; (3) have been and will be developed by Employer and/or Employee for and on behalf ofEmployer through substantial expenditures of time, effort, and money and are and will be used inEmployer’s business; (4) give Employer an opportunity to obtain an advantage over competitors whodo not know or use the Confidential Matters; and (5) are of such value and nature as to make itreasonable and necessary for Employee and Employer to protect and preserve the confidentiality andsecrecy of the Confidential Matters.Employee acknowledges and agrees that the Confidential Matters are valuable, special, andunique assets of Employer, the disclosure of which could cause substantial injury and loss ofprofits and good will to Employer. The Confidential Matters to be prepared or compiled by Employeeand/or Employer or furnished to Employee prior to or during Employee’s term as an employee ofEmployer shall be the sole and exclusive property of Employer. Upon the separation of Employee’semployment with Employer, all documents and things related to Confidential Matters shall bereturned to Employer as soon as practicable and none shall be retained by Employee, including anycopies.As a condition of employment and continued employment, Employee shall keep confidential allsuch confidential and proprietary information that Employee learns or acquires as a result of hisemployment with Employer, and shall not at any time except as necessary to conduct the business ofEmployer, directly or indirectly make known, divulge, use, furnish, or reveal to any person, firm,company, corporation, or anyone else any of the Confidential Matters or any knowledge orinformation with respect thereto, or otherwise use such information for any purpose whatsoever.Employee promises that Employee will take all steps necessary to safeguard all Confidential Mattersand to prevent their use, disclosure, or dissemination to any other person or entity except asnecessary to conduct the business of Employer.Employee further agrees that in the event Employee is subpoenaed, served with any legalprocess or notice, or otherwise requested to produce or divulge, directly or indirectly, anyConfidential Matters by any entity, agency, or person in any formal or informal proceeding,including, but not limited to, any interview, deposition, administrative or judicial hearing,and/or trial, upon Employee’s receipt of such subpoena, process, notice, or request, Employee shallimmediately notify and deliver a copy of the subpoena, process,notice, or request to the Board. Employee further irrevocably nominates, constitutes, andappoints Employer (specifically including any attorney retained by Employer) as Employee’s true andlawful attorney-in-fact, to act in Employee’s name, place, and stead to do and perform any actwhich Employee might perform, including to institute, prosecute, defend, quash, compromise, settle,arbitrate, release, and dispose of any and all legal, equitable, or administrative hearings,actions, suits, attachments, subpoenas, claims, levies, or other proceedings, or otherwise engagein or defend any and all litigation in connection with or relating to any request to disclose,directly or indirectly, any Confidential Matters; provided, however, that Employer shall be underno obligation to act as Employee’s attorney-in-fact and may decline to do so upon written notice toEmployee.
 
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Section 8. **Term**. This Agreement, amending and restating the existing employmentagreement between the parties hereto, shall be effective for an initial term of four (4) yearsbeginning on January 1, 2009 and ending on December 31, 2012. This Agreement shall beautomatically renewed for an additional two-year period upon expiration of its initial term andeach subsequent term thereafter, unless either Employer or Employee gives written notice to theother party at least ninety (90) days prior to the last day of the then current term of theAgreement.Section 9. **Termination of Employment**. (a) **Non-renewal of Agreement by Employer**. If Employer elects not torenew employment under this Agreement pursuant to the terms of Section 8, Employee,unless otherwise requested by Employer, shall continue to render services, and shallbe paid compensation as provided in this Agreement, through the last day of thecurrent term of the Agreement. In addition, if (i) at the time Employer elects not torenew Employee’s employment under this Agreement, Employee is willing and able toexecute a new agreement containing terms and conditions substantially similar to thosein this Agreement and to continue to provide services to Employer substantiallysimilar to the services provided at the time Employer elects not to renew and(ii) Employee executes a general release in the form and at the time requested byEmployer (the “Release”), Employee shall be paid an amount equal to twelve months ofhis base salary as in effect at the time of his termination of employment payable insubstantially equal payments for a period of twelve (12) months as severance payfollowing the date of termination payable in accordance with Employer’s customarypayroll practices and commencing, unless otherwise required by Section 10(b), on thefirst payroll date of Employer following the expiration of the applicable statutoryperiods for considering and revoking the Release, determined without regard to whenEmployee executes the Release (the “Release Date”) and previously accrued, unused PTOpaid in a single lump sum payment on the first payroll date of Employer following theRelease Date. The amounts paid shall be reduced by all amounts withheld and deductedpursuant to Section 20. No benefits, bonuses, PTO, or other forms of compensation,except for the severance payments, will be paid to or accrued by Employee during theseverance payment period. Notwithstanding the foregoing provisions, if Employer andEmployee agree to continue Employee’s employment on a consulting basis following theEmployer’s non-renewal of this Agreement, Employee will not be entitled to theseverance pay referred to in this Section 9(a). Payments under this Section 9(a)shall cease if during the term of the payments Employee violates the provisions ofSection 7 or Section 13. (b) **Non-renewal of Agreement by Employee**. If Employee elects to resignprior to the expiration of the then current term of this Agreement pursuant to theterms of Section 8, Employee shall continue to render services, unless otherwiserequested by Employer, through the last day of the current term of the Agreement. IfEmployee complies with this requirement, he shall be paid his monthly base salary asprovided in this Agreement through the last day of his employment, plus any accrued,unused PTO or additional compensation that may have otherwise accrued during thecurrent term of this Agreement paid in a single lump sum payment as part of Employee’sfinal payroll check, and anyannual incentive bonus earned by Employee for his final year of employment will bepaid as provided in Section 3(b).
 
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 (c) **Termination by Employer for Cause**. Employer may immediatelyterminate the employment of Employee under this Agreement for “Cause” (as definedbelow) at any time by giving written notice of termination to Employee withoutprejudice to any other remedy to which Employer may be entitled either at law or inequity under this Agreement. In this case, Employee will be paid his base salary upto the date of his termination of employment and shall not be entitled to any othercompensation or benefits under this Agreement.For purposes of this Agreement, “Cause” shall mean, in each case, as reasonablydetermined by the Board: (i) conviction of, or entry of a pleading of guilty or nocontest by, Employee with respect to a felony or any lesser crime of which fraud ordishonesty is a material element, (ii) Employee’s willful and continued failure toperform his duties with Employer, or a failure to follow the lawful direction ofthe Board after the Board delivers a written demand for performance and Employeeneglects to cure such a failure to the reasonable satisfaction of the Board within60 days after receipt of the demand, (iii) Employee’s failure to comply withapplicable laws with respect to the execution of Employer’s business operations orhis material breach of Sections 6 or 7 of this Agreement, (iv) Employee’s theft,fraud, embezzlement, dishonesty, or similar conduct which has resulted or isreasonably likely to result in material damage to Employer or any of its affiliatesor subsidiaries, or (v) Employee’s habitual intoxication or continued abuse ofillegal drugs which interferes with Employee’s ability to perform his assignedduties and responsibilities. (d) **Termination by Employee for Good Reason**. Employee may terminate hisemployment under this Agreement for “Good Reason” (as defined below) at any time bygiving written notice of termination to Employer without prejudice to any other remedyto which Employee may be entitled either at law or in equity under this Agreement. Inthis case, if Employee executes a Release, Employee shall be paid an amount equal tothe greater of (i) his monthly base salary through the last day of the initial term orrenewal term then in effect, plus an amount equal to his accrued, unused PTO or(ii) his monthly base salary for a period of twelve (12) months, increased by twoweeks for each “Year of Service” (as defined in Section 9(h)) performed by Employeeprior to his termination date, as severance pay following the date of terminationpayable, in each case, for a period of twelve (12) months in accordance withEmployer’s customary payroll practices and commencing, unless otherwise required bySection 10(b), on the first payroll date of Employer following the Release Date, plusan amount equal to his accrued, unused PTO paid in a single lump sum payment on thefirst payroll date of Employer following the Release Date. In addition, if at the endof the year in which employee terminates employment, the employee would have receiveda bonus as described in Exhibit A or the then current bonus program adopted by theCompensation Committee, Employee will be paid a pro rata share of the bonus for thefull months of actual employment in that year payable as provided in Section 3(b). Anyunvested stock options awarded during the term of employment shall immediately vest asof the date of termination. The amounts paid shall be reduced by all amounts withheldand deducted pursuant to Section 20. No benefits, bonuses, PTO, or other forms ofcompensation, except for the severance payments and pro rata bonus payment, if any,will be paid to or accrued by Employee for this six-month severance payment period.Payments under this Section 9(d) shall cease if during the term of the paymentsEmployee violates the provisions of Section 7 or Section13.For purposes of this Agreement, the term “Good Reason” shall mean: (i) a materialbreach by Employer of this Agreement which breach is not cured within 30 days afterthe Board’s receipt of written notice of such non-compliance from Employee; or(ii) amaterial diminution of Employee’s authority, duties, or responsibilities as ineffect immediately after the Effective Date of this Agreement; provided, howeverthat Employee must provide notice to Employer of the condition described in clauses(i) or (ii) above, as applicable, within ninety (90) days of the initial existenceof the condition, upon the notice of which Employer shall have a thirty (30) dayperiod during which it may remedy the condition.
 
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 (e) **Termination Following a Change of Control**. If during the one-yearperiod following the effective date of a “Change of Control” (as defined below),Employer terminates Employee’s employment under this Agreement for any reason otherthan Cause or Employee terminates his employment under this Agreement for Good Reasonand, in either case, Employee executes a Release, Employee shall be paid an amountequal to the greater of (i) his monthly base salary through the last day of theinitial term or renewal term then in effect, plus an amount equal to his accrued,unused PTO or (ii) his monthly base salary for a period of twelve (12) months,increased by two weeks for each “Year of Service” (as defined in Section 9(h))performed by Employee prior to his termination date, as severance pay following thedate of termination payable, in each case, in accordance with Employer’s customarypayroll practices and commencing, unless otherwise required by Section 10(b), on thefirst payroll date of Employer following the Release Date, plus an amount equal to hisaccrued, unused PTO paid in a single lump sum payment on the first payroll date ofEmployer following the Release Date. Any unvested stock options awarded during theterm of employment shall immediately vest as of the date of termination. The amountspaid shall be reduced by all amounts withheld and deducted pursuant to Section 20. Inaddition, if at the end of the year in which employment is terminated, Employee wouldhave received a bonus as described in Exhibit A or the then current bonus programadopted by the Compensation Committee, Employee will be paid a pro rata share of suchbonus for the full months of actual employment in that year payable as provided inSection 3(b). No benefits, bonuses, PTO, or other forms of compensation, except forthe severance payments and pro rata bonus payment, if any, will be paid to Employee oraccrued during the severance period. Payments under this Section 9(e) shall cease ifduring the term of the payments Employee violates the provisions of Section 7 orSection 13.Employer and Employee intend that no portion of the compensation required by thisSection 9(e), either alone or together with other payments or benefits, either cashor non-cash, that Employee has the right to receive from Employer, including, butnot limited to, accelerated vesting or payment of any deferred compensation,options, stock appreciation rights or any benefits payable to Employee under anyplan for the benefit of employees, be deemed to constitute an “excess parachutepayment” as defined in Section 280G of the Code and as a result, notwithstandingany other provision of this Section 9(e) to the contrary, the compensation payableunder this Section 9(e) shall be reduced to the amount necessary to an amount (orto no amount) to prevent such compensation from being considered an excessparachute payment.For purposes of this Agreement, the term “Change of Control” shall mean: (i) any “person” (as such term is used in Sections 13(d) and14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),other than Clinton H. Howard, becomes the “beneficial owner” (as defined inRule 13d-3 under the Exchange Act), directly or indirectly, of securities ofEmployer representing fifty percent (50%) or more of the combined voting powerof Employer’s then outstanding securities; (ii) as a result of, or in connection with, any tender offer orexchange offer, merger, or other business combination (a “Transaction”), thepersons who were directors of Employer immediately before the Transaction(except for any person whoseinitial election as a director occurs as the result of an actual orthreatened election contest, within the meaning of Rule 14a-11 under theExchange Act, or other actual or threatened solicitation of proxies orcontests by or on behalf of a person other than the Board) shall cease toconstitute a majority of the Board of Directors (the “Board”) of Employeror any successor to Employer;
 
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 (iii) Employer is reorganized, merged or consolidated with anothercorporation and as a result of the reorganization, merger or consolidationless than fifty percent (50%) of the outstanding voting securities of thesurviving or resulting corporation shall then be owned in the aggregate by theformer stockholders of Employer; or (iv) Employer sells or disposes of eighty percent (80%) or more ofits assets to any person, other corporation, or other legal entity notcontrolled by Employer;provided, however, that an event described in clauses (i), (ii),(iii) and (iv) shall be treated as a Change of Control for purposes of thisAgreement only if the event would be treated as a change in the ownership oreffective control of Employer, or in the ownership of a substantial portion of theassets of Employer under Section 409(A)(a)(2)(v) of the Code and providedfurther, however that if an event described in clauses (i), (ii), (iii)or (iv) occurs and in connection with any such event Employer ceases to be publiclytraded, the event shall not be treated as a Change of Control for purposes of thisAgreement. (f) **Death of Employee**. This Agreement shall be deemed terminated as ofthe date of Employee’s death. In this case, Employer shall pay to employee’s estateEmployee’s monthly base salary as provided in this Agreement up to the date oftermination, plus Employee’s accrued, unused PTO payable, in each case, in accordancewith Employer’s customary payroll practices. (g) **Disability of Employee**. Should Employee be unable to perform hisduties under this Agreement by reason of inability to perform the essential functionsof the position for a period of six (6) months, as determined by the Board in its solediscretion, Employer shall have the right to terminate this Agreement upon writtennotice to Employee. During the six-month period that Employee fails to perform hisduties as a result of his inability to perform the essential functions of theposition, Employer will continue to pay Employee Employee’s monthly base salary basedon its customary payroll practices, reduced by any disability payments received byEmployee from a disability program made available by Employer, and Employee shall betreated as on a bona fide leave of absence. On the date of Employee’s termination ofemployment, Employee shall be paid his accrued, unused PTO. The amounts paid shall bereduced by all amounts withheld and deducted pursuant to Section 20. (h) **Early Termination by Employer**. Should Employer terminate theemployment of Employee prior to the end of the initial term or any renewal term ineffect, other than by reason of Cause, death or disability, or during the twelve-monthperiod following a Change of Control, and Employee executes a Release, Employee shallbe paid an amount equal to the greater of (i) his monthly base salary through the lastday of the initial term or renewal term then in effect, plus an amount equal to hisaccrued, unused PTO or (ii) his monthly base salary for a period of twelve (12)months, increased by two weeks for each “Year of Service” (as defined in Section 9(h)below) performed by Employee prior to his termination date, as severance pay followingthe date of termination payable, in each case, in substantially equal payments for aperiod of twelve (12) months in accordance with Employer’s customary payroll practicesand commencing, unless otherwise required by Section 10(b), on the first payroll dateof Employer following the Release Date, plus an amount equal to his accrued, unusedPTO paid in a single sum payment on the first payroll date of Employer following theRelease Date. In addition, ifat the end of the year in which employment is terminated, Employee would havereceived a bonus as described in Exhibit A or the then current bonus programadopted by the Compensation Committee, Employee will be paid a pro rata share ofsuch bonus for the full months of actual employment in that year payable asprovided in Section 3(b). The amounts paid shall be reduced by all amounts withheldand deducted pursuant to Section 20. No benefits, bonuses, PTO, or other forms ofcompensation, except for the severance payments and pro rata bonus payment, if any,will be paid to Employee or accrued for any time beyond the last day of the initialterm or renewal term of this Agreement. Payments under this Section 9(g) shallcease if during the term of the payments Employee violates the provisions ofSections 7 or 13.
 
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For purposes of this Agreement, the term “Year of Service” shall mean each fullyear Employee is employed by Employer prior to his last day of actual employmentunder this Agreement. In determining an Employee’s Years of Service, all fractionsof a year worked shall be aggregated to determine whether an additional Year ofService will be credited. (i) **Early Termination by Employee**. Should Employee terminate hisemployment prior to the end of the initial term or any renewal term in effect, otherthan for Good Reason, death or disability, Employee shall be paid his monthly basesalary and unused, accrued PTO up to the last day of employment, and shall not beentitled to any other compensation or benefits under this Agreement, including anyincentive bonus.Section 10. **Additional Termination Provisions**. (a) **Separation from Service**. Notwithstanding anything to the contrary inthis Agreement, with respect to any amounts payable to the Employee under thisAgreement in connection with a termination of the Employee’s employment that would beconsidered “non-qualified deferred compensation” under Section 409A of the Code, in noevent shall a termination of employment be considered to have occurred under thisAgreement unless such termination constitutes the Employee’s “separation from service”with the Employer as such term is defined in Treasury Regulation Section 1.409A-1(h)and any successor provision thereto (“Separation from Service”). (b) **Section 409A Compliance**. Notwithstanding anything contained in thisAgreement to the Contrary, to the maximum extent permitted by applicable law, theseverance payments payable to the Employee pursuant to Section 9 shall be made inreliance upon Treasury Regulation Section 1.409A-1(b)(9)(iii) (relating to separationpay plans) or Treasury Regulation Section 1.409A-1(b)(4) (relating to short-termdeferrals). However, to the extent any such payments are treated as “non-qualifieddeferred compensation” subject to Section 409A of the Code, and if the Employee isdeemed at the time of his Separation from Service to be a “specified employee” forpurposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayedcommencement of any portion of the benefits to which the Employee is entitled underthis Agreement is required in order to avoid a prohibited payment under Section409A(a)(2)(B)(i) of the Code, such portion of the Employee’s termination benefitsshall not be provided to the Employee prior to the earlier of (i) the expiration ofthe six-month period measured from the date of the Employee’s Separation from Serviceor (ii) the date of the Employee’s death. Upon the earlier of such dates, allpayments deferred pursuant to this Section 10(b) shall be paid in a lump sum to theEmployee. The determination of whether the Employee is a “specified employee” forpurposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation fromService shall made by the Employer in accordance with the terms of Section 409A of theCode and applicable guidance thereunder (including without limitation TreasuryRegulation Section 1.409A-1(i) and any successor provision thereto).
 
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Section 11. **Section 409A; Separate Payments**. This Agreement is intended to be written,administered, interpreted and construed in a manner such that no payment or benefits provided underthe Agreement become subject to (a) the gross income inclusion set forth within Section409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section409A(a)(1)(B) of the Code (collectively, “Section 409A Penalties”), including, where appropriate,the construction of defined terms to have meanings that would not cause the imposition of Section409A Penalties. In no event shall the Employer be required to provide a tax gross-up payment tothe Employee or otherwise reimburse the Employee with respect to Section 409A Penalties. Forpurposes of Section 409A of the Code (including, without limitation, for purposes of TreasuryRegulation Section 1.409A-2(b)(2)(iii)), each payment that the Employee may be eligible to receiveunder this Agreement shall be treated as a separate and distinct payment and shall not collectivelybe treated as a single payment.Section 12. **In-kind Benefits and Reimbursements**. Notwithstanding anything to thecontrary in this Agreement, in-kind benefits and reimbursements provided under this Agreementduring any tax year of Employee shall not affect in-kind benefits or reimbursements to be providedin any other tax year of Employee and are not subject to liquidation or exchange for anotherbenefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests mustbe timely submitted by employee and, if timely submitted, reimbursement payments shall be made toEmployee as soon as administratively practicable following such submission, but in no event laterthan the last day of Employee’s tax year following the taxable year in which the expense wasincurred. This paragraph shall apply only to in-kind benefits and reimbursements that would resultin taxable compensation income to Employee.Section 13. **Post Employment Non-Compete**. As a material inducement for receiving, thetrade secrets and confidential and proprietary information described in paragraph 1, Employeeagrees that during the term of his employment and for a period of **twelve (12) months**after theseparation date of Employee’s employment with Employer, for whatever reason: (a) Employee shall not, directly or indirectly, without written approval of thePresident, solicit or induce, or attempt to solicit or induce, any current customer(defined as all customers of Employer within the 12 months preceding Employee’sseparation of employment) or employee of Employer to alter, leave or cease theirrelationship with Employer, for any reason whatsoever, (b) Employee shall not, directly or indirectly, without written approval of thePresident, accept employment from or provide competitive services or assistance to anycurrent customer of Employer with whom Employee has had any contact during hisemployment with Employer; and (c) Employee shall not solicit or attempt to solicit Employer’s current customerswith whom Employee has had any contact during his employment with Employer to purchaseservices or products that are competitive with those marketed, offered for sale and/orunder any stage of development by Employer as of the date of Employee’s separationfrom Employer.Notwithstanding the foregoing provisions, Employer shall not unreasonably restrict Employee’sability to serve on boards of directors of other companies.
 
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Section 14. **Indemnity**. Employer shall indemnify Employee and hold Employee harmless forany acts or decisions made by Employee in good faith and that were reasonably believed to be in thebest interest of Employer while performing services for Employer. Employer will use its reasonablebest efforts, to maintain Director and Officer insurance coverage in an amount no less than$1,000,000 for Employee under an insurance policy covering the officers and directors of Employeragainst lawsuits. Employer shall pay all reasonable expenses, including attorney’s fees, actuallyand necessarily incurred by Employee in connection with any appeal thereon, including the cost ofcourt settlements. Notwithstanding the preceding sentence, (i) the obligations of Employer shallbe subject to the condition that the Board shall not have determined based on advice from its legalcounsel that Employee would not be permitted to be indemnifiedunder applicable law, and (ii) the obligation of Employer to make an expense or fee advancepursuant to this Section 14 shall be subject to the condition that, if, when and to the extent thatthe Board determines that Employee would not be permitted to be so indemnified under applicablelaw, Employer shall be entitled to be reimbursed by Employee (who hereby agrees to reimburseEmployer) for all such amounts theretofore paid (it being understood and agreed that the foregoingagreement by Employee shall be deemed to satisfy any requirement that Employee provide Employerwith an undertaking to repay any advancement of fees or expenses if it is ultimately determinedthat Employee is not entitled to indemnification under applicable law); provided, however, that ifEmployee has commenced or thereafter commences legal proceedings in a court of competentjurisdiction to secure a determination that Employee should be indemnified under applicable law,any determination made by the Board that Employee would not be permitted to be indemnified underapplicable law shall not be binding and Employee shall not be required to reimburse Employer forany expense advance until a final judicial determination is made with respect thereto (as to whichall rights of appeal therefrom have been exhausted or have lapsed). This undertaking by Employeeto repay such expense advance shall be unsecured and interest-free.Section 15. **Effect of Partial Invalidity**. The invalidity of any portion of thisAgreement shall not affect the validity of any other provision. In the event that any provision ofthis Agreement is held to be invalid, the parties agree that the remaining provisions shall remainin full force and effect.Section 16. **Entire Agreement**. This Agreement contains the complete Agreement between theparties and shall supersede all other agreements, either oral or written, between the parties. Theparties stipulate that neither of them has made any representations except as are specifically setforth in this Agreement and each of the parties acknowledges that they have relied on their ownjudgment in entering into this Agreement.Section 17. **Successors and Assigns; Survival of Rights and Obligations**. (a) **Binding Agreement; Employee’s Personal Agreement**. This Agreementshall be binding upon and inure to the benefit of Employee’s and his heirs and legalrepresentatives and Employer and its successors and assigns. Employee’s rights andobligations under this Agreement are personal and may not be assigned or transferredin whole or in part by Employee (except that his rights may be transferred upon hisdeath by will, trust, or the laws of intestacy). (b) **Employer’s Successor**. Employer will require any successor to all orsubstantially all of the business and assets of Employer (whether direct or indirect,by purchase, merger, consolidation or otherwise) to expressly assume and agree toperform this Agreement in the same manner and to the same extent that Employer wouldbe required to perform it if no such succession had taken place; except that no suchassumption and agreement will be required if the successor is bound by operation oflaw to perform this Agreement. In this Agreement, “Employer” shall include anysuccessor to Employer’s business and assets that assumes and agrees to perform thisAgreement (either by agreement or by operation of law). (c) **Survival**. The respective rights and obligations of Employer andEmployee under this Agreement (including Sections 7, 9, 10, 11, 12, 13, 14 and 17shall survive the expiration or termination of the Agreement to the extent necessaryto give full effect to those rights and obligations.Section 18. **Notices**. All notices, requests, demands, and other communications shall bein writing and shall be given by registered or certified mail, postage prepaid, to the addressesshown on the first page of this Agreement, or to such subsequent addresses as the parties shall sodesignate in writing.
 
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Section 19. **Dispute Resolution**. (a) **Arbitration**. The exclusive remedy or method of resolving alldisputes or questions arising out of or relating to this Agreement (including itsexpiration or termination) or the expiration or termination of Employee’s employmenthereunder (“Disputes”) shall be arbitration held in Dallas, Texas. Nevertheless,although disputes or questions arising out of or relating to Sections 6, 7 and 13shall be subject to arbitration, Employer shall not be precluded from also seeking andobtaining injunctive relief from any court of proper jurisdiction to enforce orprotect its rights under Sections 6, 7 and 13. Any arbitration may be requested orinitiated by a party to the Dispute by written notice to the other party or parties tothe Dispute specifying the subject of the requested arbitration and proposing the nameof an arbitrator (“Arbitration Notice”). (b) **Arbitrators**. Arbitration shall be before a single arbitrator agreedupon by Employer and Employee (collectively, the “Parties”). If the Parties areunable to agree upon the selection of an arbitrator, then the Parties shall requestthat the American Arbitration Association in Dallas, Texas appoint an arbitrator. (c) **Award and Costs**. The arbitration proceeding shall be conducted inaccordance with the Commercial Arbitration Rules of the American ArbitrationAssociation. A determination or award made or approved by at least two of thearbitrators shall be the valid and binding action of the arbitrators. The costs ofarbitration (exclusive of the expense of a party to the Dispute in obtaining andpresenting evidence and attending the arbitration and of the fees and expenses oflegal counsel to a party to the dispute, all of which shall be borne by that party tothe Dispute) shall be borne by Employer if Employee receives substantially the reliefsought by him in the arbitration, whether by settlement, award, or judgment;otherwise, the costs shall be borne one-half by Employer and one-half by Employee.The arbitration determination or award shall be final and conclusive on the parties tothe Dispute, and judgment upon such award may be entered and enforced in any court ofcompetent jurisdiction.Section 20. **Tax Withholding**. Employer shall be entitled to deduct and withhold frompayments made under this Agreement all amounts required to satisfy its withholding obligations withrespect to income, employment and any other applicable taxes.Section 21. **Attorney’s Fees**. If any arbitration proceeding or any action for injunctiveor declaratory relief is brought to enforce or interpret the provisions of this Agreement,attorney’s fees shall be borne by Employer if Employee is the prevailing party (or receivessubstantially the relief sought by Employee), otherwise each party will be responsible for its ownattorney’s fees.Section 22. **Additional Obligations**. During and after the term of this Agreement, Employeeshall, upon reasonable notice from Employer, furnish Employer with such information as may be inEmployee’s possession, and cooperate with Employer as may reasonably be requested by Employer, inconnection with any legal or governmental proceedings in which Employer or any of its affiliates isor may become a party. The Company shall reimburse Employee for his reasonable expenses infulfilling his obligations under this Section 22 promptly, but in no event later than the last dayof the calendar year following the calendar year in which Employee incurs the expense.Section 23. **Amendment**. Any modification, amendment or change of this Agreement will beeffective only if it is in a writing signed by both parties.Section 24. **Governing Law; Interpretation**. This Agreement, and all transactionscontemplated by this Agreement, shall be governed by, construed, and enforced in accordance withthe laws of the State of Texas. This Agreement shall be construed and interpreted by the Board andsuch determination shall be final, binding and conclusive on all parties.
 
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Section 25. **Headings**. The titles to the Sections and the paragraphs of this Agreement aresolely for the convenience of the parties and shall not affect in any way the meaning orinterpretation of this Agreement.***[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]***IN WITNESS WHEREOF, the parties have executed this Agreement on this 31st  dayof December, 2008.         EMPLOYEE:   EMPLOYER:               RBC Life Sciences           /s/ John W. Price (Signature)   By: /s/ Clinton H. Howard (Signature)       John W. Price     Clinton H. Howard        Chief Executive Officer  
 
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**EXHIBIT A**CASH INCENTIVE BONUSIn 2009, Employee shall participate in the annual bonus plan (the “Plan”) adopted by theCompensation Committee on or before December 31, 2008. A summary of the Plan is set forth below.In addition to bonuses earned under the Plan, Employee shall be eligible for additional bonuses atthe discretion of Employer’s Board. Employee must be employed on December 31, 2009 in order toreceive the bonus, unless otherwise provided under Section 9. The bonus for 2009 will be paidbetween January 1, 2010 and March 15, 2010.Plan Summary