exv10w2






Exhibit 10.2




CHANGE OF CONTROL AGREEMENT




     THIS CHANGE OF CONTROL AGREEMENT (the “Agreement”), dated as of [                     ___], 2008,
is entered into by and among Altra Holdings, Inc., a Delaware corporation (“Holdings”),
Altra Industrial Motion, Inc., a Delaware corporation and wholly-owned subsidiary of Holdings (the
“Company”), and [                    ] (the “Executive”).



     WHEREAS, Executive is a skilled and dedicated employee who has important management
responsibilities and talents that benefit Holdings, the Company and its Subsidiaries. Holdings and
the Company believe that their respective best interests will be served if Executive is encouraged
to remain with the Company or its Subsidiaries. Holdings and the Company have determined that
Executive’s ability to perform Executive’s responsibilities and utilize Executive’s talents for the
benefit of Holdings, the Company and its Subsidiaries, and the Company’s ability to retain
Executive as an employee, will be significantly enhanced if Executive is provided with fair and
reasonable protection from the risks of a change in control of Holdings or the Company.



     Accordingly, Holdings, the Company and Executive agree as follows:



          1. Defined Terms.




     Unless otherwise indicated, capitalized terms used in this Agreement which are defined in
Schedule A shall have the meanings set forth in Schedule A.



          2. Effective Date; Term.




     This Agreement shall be effective as of [                     , 2008] (the “Effective Date”) and
shall remain in effect until [                    , 2009] (the “Term”); provided,
however, that commencing with first (1st) anniversary date and on each
anniversary thereof (each an “Extension Date”), the Term shall be automatically extended
for an additional one-year period, unless the Company or Executive provides the other party hereto
at least 90 days’ prior written notice before the applicable Extension Date that the Term shall not
be so extended. Notwithstanding the foregoing, this Agreement shall, if in effect on the date of a
Change of Control, remain in effect for twenty-four (24) months following the Change of Control.



          3. Change of Control Benefits.




     If Executive’s employment with the Company and its Subsidiaries is terminated at any time upon
or within the twenty-four (24) months immediately following a Change of Control by the Company and
its Subsidiaries without Cause or by Executive for Good Reason (the effective date of either such
termination hereafter referred to as the “Termination Date”), Executive shall be entitled
to, and Holdings and the Company shall be required to provide, subject to Executive’s execution of
an effective general release (i.e., not revoked) in favor of Holdings and the Company in the form
attached hereto as Exhibit A (the “Release”) and the Executive’s compliance with
the restrictive covenants attached hereto as Exhibit B, the payments and benefits provided
hereafter in this Section 3 and as set forth in this Agreement. If Executive’s employment by the
Company and any of its Subsidiaries is terminated within



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ninety (90) days prior to a Change of Control by the Company without Cause in connection with or in
anticipation of such Change of Control at the request of, or upon the initiative of, the buyer in
the Change of Control transaction (an “Anticipatory Termination”), Executive shall be
entitled to, and Holdings and the Company shall be required to provide, subject to Executive’s
execution of the Release, the benefits provided hereafter in this Section 3 and as otherwise set
forth in this Agreement (but only if an anticipated Change of Control actually occurs during the
Term) and Executive’s Termination Date shall be deemed to have occurred immediately following the
Change of Control. If Executive is terminated for any other reason (e.g., for Cause, due to death
or Total Disability, or resignation without Good Reason), the Company shall have no obligation to
make any payments under this Agreement.



     Notice of termination without Cause or resignation for Good Reason shall be given in
accordance with Section 10, and shall indicate the specific termination provision hereunder relied
upon, the relevant facts and circumstances and the Termination Date.




     (a) Severance Payments. Subject to execution of the Release, and the
provisions of Section 5 (relating to parachute payments) and Section 8 (in the case that
Executive is a “specified employee”), within the period commencing on the Termination Date
and ending on the later of (i) 15 business days after the Termination Date and (ii) the day
following the end the revocation period under the Release (the “Payment Period”),
the Company shall pay Executive a cash lump sum equal to [___times (___x)] the Executive’s
Base Salary then in effect immediately prior to the event set forth in the notice of
termination giving rise to the Termination Date plus an amount equal to [___times
(___x)] the Executive’s target Bonus amount for the year of termination.




     (b) Continuation of Active Employee Benefits. For [___(___)] months
following the Termination Date (the “Welfare Continuation Period”), the Company
shall provide Executive and Executive’s spouse and dependents (each as defined under the
applicable program) with medical and dental insurance coverages at the same benefit level as
provided to similarly situated active employees of the Company during the Welfare
Continuation Period, for which the Company will reimburse Executive during the Welfare
Continuation Period or, if shorter, the period of actual COBRA continuation coverage
received by Executive during the Welfare Continuation Period, for the total amount of the
monthly COBRA medical and dental insurance premiums paid by Executive for such continued
benefits (thereby reducing such premium obligations to zero); provided,
however, that if Executive becomes employed by a new employer that offers any
medical and/or dental, continuing medical and/or dental coverage from the Company shall
cease, regardless of the Welfare Continuation Period.




     (c) Payment of Earned But Unpaid Amounts. Within the Payment Period, the
Company shall pay Executive any unpaid Base Salary and/or Bonus through the Termination
Date. For the avoidance of doubt, Executive shall be entitled to a pro-rated Bonus for the
year of termination. In addition, Executive shall be entitled to prompt reimbursement of
any unreimbursed expenses properly incurred by Executive in accordance with Company policies
prior to the Termination Date.



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     (d) Equity Incentive Awards. Any time periods, conditions or contingencies
relating to the exercise or realization of, or lapse of restrictions under, any outstanding
equity incentive award then held by Executive shall be automatically accelerated or waived
effective as of the Termination Date.



          4. Mitigation.




     Executive shall not be required to mitigate damages or the amount of any payment provided for
under this Agreement by seeking other employment or otherwise, and, subject to Section 3(b),
compensation or benefits earned from such employment or otherwise shall not reduce the amounts
otherwise payable under this Agreement.



          5. Gross-up Payments.




     If the Executive becomes subject to the excise tax imposed by Code Section 4999 (the
“Parachute Excise Tax”) with respect to any payment(s), benefit(s) or distribution(s)
received by, or payable to or for the benefit of, Executive (or otherwise) in connection with, or
by reason of, any Change in Control or any change in ownership or effective control of the Company
(as determined under IRC Section 280G), the Company and the Executive agree that the Company shall
pay to the Executive a tax gross-up payment so that after payment by the Executive of all federal,
state and local excise, income, employment, Medicare and any other taxes (including any related
penalties and interest) resulting from the payment of the parachute payments and the tax gross-up
payments to the Executive by the Company, the Executive retains on an after-tax basis an amount
equal to the amount that the Executive would have retained if he had not been subject to the
Parachute Excise Tax.



          6. Arbitration.




     All disputes and controversies arising under or in connection with this Agreement shall be
settled by arbitration conducted before one arbitrator sitting in Suffolk County, Massachusetts, or
such other location agreed by the parties hereto, in accordance with the rules for expedited
resolution of employment disputes of the American Arbitration Association then in effect. The
determination of the arbitrator shall be made within thirty days following the close of the hearing
on any dispute or controversy and shall be final and binding on the parties. Judgment may be
entered on the award of the arbitrator in any court having proper jurisdiction. Each party shall
pay its own costs and expenses in connection with any arbitration relating to the interpretation or
enforcement of any provision of this Agreement.



          7. Assignment.




     Except as otherwise provided herein, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by Holdings, the Company and Executive and their respective heirs,
legal representatives, successors and assigns. If Holdings or the Company shall be merged into or
consolidated with another entity, the provisions of this Agreement shall be binding upon and inure
to the benefit of the entity surviving such merger or resulting from such consolidation. Holdings
and the Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of



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the business or assets of Holdings or the Company, by operation of law or agreement, expressly to
assume and agree to perform this Agreement in the same manner and to the same extent that Holdings
and the Company would be required to perform it if no such succession had taken place. The
provisions of this Section 7 shall continue to apply to each subsequent employer of Executive
hereunder in the event of any subsequent merger, consolidation or transfer of assets of such
subsequent employer.



          8. Withholding and Deferral.




     Notwithstanding any other provision of this Agreement, Holdings and the Company may, to the
extent required by law, withhold applicable federal, state and local income and other taxes from
any payments due to Executive hereunder. Notwithstanding any other provision of this Agreement or
certain compensation and benefit plans of Holdings, the Company or its Subsidiaries, the Company
shall from time to time compile a list of “specified employees” as defined in, and pursuant to,
Reg. Section 1.409A-1(i) of the Code or any successor regulation. Notwithstanding any other
provision herein, if the Executive is a specified employee on the Termination Date, no payment of
compensation under this Agreement (other than a payment that the Company determines is not subject
to, or is subject to an exception from, Section 409A of the Code) shall be made to the Executive
before the date that is six months after the Termination Date of employment, unless the Company
determines that there is no reasonable basis for believing that making such payment would cause
Executive to suffer any adverse tax consequences pursuant to Section 409A of the Code. If any
payment to Executive is delayed pursuant to the immediately preceding sentence, such payment
instead shall be made on the first business day following the expiration of the six-month period
referred to in that sentence; provided that any such payment may be made upon Executive’s
death if the death occurs before the date that is six months after the Termination Date. In
addition, if any payment to Executive is delayed pursuant to this Section 8, the Executive shall be
entitled to receive interest on any delayed amounts, calculated at the annualized rate of the prime
rate, published in the Wall Street Journal on the date the payments under this Agreement would
otherwise be due, minus one (1) percentage point.



          9. Applicable Law.




     This Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without regard to conflicts of laws principles thereof.



          10. Notice.




     Any notice provided for in this Agreement must be in writing and must be either personally
delivered, mailed by first class mail (postage prepaid and return receipt requested), sent by
reputable overnight courier service (charges prepaid), or faxed to the recipient at the address
below indicated or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.





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If to Holdings or the Company:



Altra Holdings, Inc.



Altra Industrial Motion, Inc.

14 Hayward Street

Quincy, MA 02171

Attention: Corporate Secretary




If to Executive:




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



     Any notice under this Agreement shall be deemed to have been given when personally delivered,
one business day after sent by reputable overnight courier service, five days after deposit in the
U.S. mail (or when actually received, if earlier), or at such time as it is transmitted via
facsimile, with receipt confirmed.



          11. Entire Agreement; Offset; Modification.





     (a) This Agreement constitutes the entire agreement between the parties and,
except as expressly provided herein, supersedes the provisions of all other prior
agreements (including any employment agreement that may be in effect at the time of
the Change of Control between Holdings, the Company and the Executive) expressly
concerning the effect of a termination of employment in connection with or following
a Change of Control on the relationship between Holdings, the Company and its
Affiliates and Executive.




     (b) This Agreement shall not interfere in any way with the right of Holdings or
the Company to reduce Executive’s compensation or other benefits or terminate
Executive’s employment, with or without Cause.




     (c) This Agreement may be changed only by a written agreement executed by
Holdings, the Company and Executive.



          12. Other Agreements.




     Notwithstanding anything herein to the contrary, in the event Executive has a separate
employment agreement or other agreement with the company, or is subject to a policy or plan with
the Company, that provides Executive with benefits or other payments in connection with a
severance, such Executive shall be entitled to receive benefits and payments under only one of this
change of control agreement or such other agreement or such other policy, whichever is most
favorable to the Executive at the time of such severance.



          13. Counterparts.




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



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* * *




     IN WITNESS WHEREOF, the parties have executed this Agreement on the                      day of
                                        , 2008.



	 	 	 	 	 
	 

	 	ALTRA HOLDINGS, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By:

Title:
	 	 
	 
	 	 	 	 
	 

	 	ALTRA INDUSTRIAL MOTION, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By:

Title:
	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	 

[Name]
	 	 







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Schedule A




CERTAIN DEFINITIONS



As used in this Agreement, and unless the context requires a different meaning, the following
terms, when capitalized, have the meaning indicated below:




     I. “Affiliate” means, with respect to any entity, any other corporation, organization,
association, partnership, sole proprietorship or other type of entity, whether incorporated or
unincorporated, directly or indirectly controlling or controlled by or under direct or indirect
common control with such entity.



     II. “Base Salary” means Executive’s annual rate of base salary in effect on the date
in question.



     III. “Board” means the board of directors of Holdings or the Company, as applicable.



     IV. “Bonus” means the amount payable to Executive under Holdings or the Company’s
applicable annual incentive bonus plan with respect to a fiscal year of such entity.



     V. “Cause” means (i) Executive’s material breach of the terms of any agreement between
Executive and Holdings or the Company; (ii) Executive’s willful failure or refusal to perform
material duties of his position; (iii) Executive’s willful insubordination or disregard of the
legal directives of the Board or the Chief Executive Officer which are not inconsistent with the
scope, ethics and nature of Executive’s duties and responsibilities; (iv) Executive’s engaging in
misconduct which has a material adverse impact on the reputation, business, business relationships
or financial condition of Holdings or the Company; (v) Executive’s commission of an act of fraud or
embezzlement against Holdings or the Company or any of their Subsidiaries; or (vi) any conviction
of, or plea of guilty or nolo contendere by, Executive with respect to a felony (other than a
traffic violation), a crime involving moral turpitude, fraud or misrepresentation; provided,
however, that Cause shall not be deemed to exist under any of clauses (i), (ii) or (iii) unless
Executive has been given reasonably detailed written notice of the grounds for such Cause and
Executive has not effected a cure within twenty (20) days of the date of receipt of such notice.



     VI. “Change of Control” means, and shall be deemed to have occurred when:




	 	(1)	 	any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) becomes the beneficial
owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of Holdings representing fifty percent
(50%) or more of the combined voting power of Holdings’ then-outstanding
securities; or
	 
	 	(2)	 	individuals who, on the Effective Date, constitute the Board of
Holdings (the “Incumbent Board”) cease for any reason over a period of one (1)
year to constitute a majority of the number of directors then




A-1









 






	 	 	 	serving on the Board; provided, however, that any new
director whose appointment or election by the Incumbent Board or a vote of
at least a majority of the directors then still in office who either were
directors on the Effective Date, or whose appointment, election or
nomination for election was previously so approved or recommended, shall be
considered as though such person were a member of the Incumbent Board; or
	 
	 	(3)	 	there is consummated a merger or consolidation of Holdings, the
Company or any Subsidiary with any other corporation (in one or a series of
related transactions), other than (A) a merger or consolidation that would
result in the voting securities of Holdings outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof) more than fifty percent (50%) of the combined
voting power of the securities of the Company or such surviving entity or any
parent thereof outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the combined voting power of the
Company’s then-outstanding securities; or
	 
	 	(4)	 	there is consummated one or more sales, leases, exchanges, or
other transfers (in one or a series of related transactions) of all or
substantially all of Holdings’ or the Company’s assets.





     VII. “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.



     VIII. “Code” means the Internal Revenue Code of 1986, as amended.



     IX. “Exchange Act” means the Securities Exchange Act of 1934, as amended.



     X. “Good Reason” means any of the following: (i) without Executive’s express consent,
any material change in Executive’s job title, any significant change in Executive’s reporting
relationships or a significant reduction of Executive’s duties, position or responsibilities
relative to Executive’s duties, position or responsibilities in effect immediately prior to such
reduction, or Executive’s removal from such position, duties and responsibilities, unless he is
provided with comparable duties, position and responsibilities; (ii) a material reduction by the
Company (other than a reduction on the same basis as other senior executives) in the kind or level
of employee benefits to which he is entitled immediately prior to such reduction with the result
that Executive’s overall benefits package is significantly reduced; (iii) a relocation of the
Executive’s principal work location to more than fifty (50) miles from the Executive’s current
principal work location; or (iv) the Company’s failure to



A-2









 







cause Executive’s employment agreement and its obligations thereunder to be expressly assumed
by the Company’s successor.



     XI. “Subsidiary” means a subsidiary corporation, as defined in Section 424(f) of the
Code (or any successor section thereto).



     XII. “Total Disability” means a determination by an independent competent medical authority
(selected by the Board) that Executive is unable to perform his duties under this Agreement and in
all reasonable medical likelihood such inability will continue for a period in excess of 120 days
(whether or not consecutive) in any 365 day period.



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Exhibit A



WAIVER AND RELEASE OF CLAIMS




     This RELEASE (“Release”) is dated as of                                          between Altra Holdings, Inc., a
Delaware corporation, Altra Industrial Motion, Inc., a Delaware corporation and wholly-owned
subsidiary of Holdings (collectively, the “Company”), and                      (the “Executive”).



     WHEREAS, the Company and the Executive previously entered into a Change of Control Agreement
dated                      ___, 2008 (the “CCA”); and



     WHEREAS, the Executive’s employment with the Company (has been) (will be) terminated effective
                    ; and



     WHEREAS, pursuant to Section 3 of the CCA, the Executive is entitled to certain compensation
and benefits upon such termination, contingent upon the execution of this Release;



     NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in
the CCA, the Company and the Executive agree as follows:



     1. The Executive, on behalf of his heirs, estate and beneficiaries, hereby waives all claims
against the Company, and any of its subsidiaries or affiliates, and each past or present officer,
director, agent, employee, shareholder, and insurer of any such entities, from liability for any
claims or damages the Executive may have against it or them relating as of the date this Release is
executed, whether known or unknown, including, but not limited to, any alleged violation of the Age
Discrimination in Employment Act, as amended, the Older Worker Benefits Protection Act; Title VII
of the Civil Rights of 1964, as amended; Sections 1981 through 1988 of Title 42 of the United
States Code; the Civil Rights Act of 1991; the Equal Pay Act; the Americans with Disabilities Act;
the Rehabilitation Act; the Family and Medical Leave Act; the Employee Retirement Income Security
Act of 1974, as amended; the Worker Adjustment and Retraining Notification Act; the Fair Credit
Reporting Act; the Occupational Safety and Health Act; the Uniformed Services Employment and
Reemployment Act; the Employee Polygraph Protection Act; the Immigration Reform Control Act; the
retaliation provisions of the Sarbanes-Oxley Act of 2002; [list applicable Massachusetts laws] (and
including any and all amendments to the above) and/or any other alleged violation of any federal,
state or local law, regulation or ordinance, and/or contract (including, but not limited to, the
CCA) or implied contract or tort law or public policy or whistleblower claim, having any bearing
whatsoever on the Executive’s employment by and the termination of employment with the Company,
including, but not limited to, any claim for wrongful discharge, back pay, vacation pay, sick pay,
bonus payment, attorneys’ fees, costs and/or future wage loss. This paragraph does not release any
claims that lawfully cannot be waived.



     Nothing in this Release is intended to preclude the Executive from filing a charge or
participating in any investigation or proceeding conducted by the Equal Employment



A-4









 







Opportunity Commission or state fair employment practices agency. The Executive agrees not to seek
or accept any money damages or any other relief upon the filing of any such administrative or
judicial charges or complaints.



     2. The Executive acknowledges and agrees that even though claims and facts in addition to
those now known or believed by him to exist may subsequently be discovered, it is his intention to
fully settle and release all claims he may have against the Company and the persons and entities
described above, whether known, unknown or suspected.



     3. The Executive relinquishes any right to future employment with the Company and the Company
shall have the right to refuse to re-employ the Executive, in each case without liability of the
Executive or the Company.



     4. The Company and the Executive acknowledge and agree that the release contained in Paragraph
1 does not, and shall not be construed to, release or limit the scope of any existing obligation of
the Company (i) to indemnify the Executive for his acts as an officer or director of Company in
accordance with Delaware law and the charter and bylaws of the Company, (ii) to the Executive and
his eligible, participating dependents or beneficiaries under any existing group welfare or
retirement plan of the Company in which the Executive and/or such dependents are participants, or
(iii) to satisfy all vested equity compensation obligations previously granted to the Executive.



     5. The Executive reaffirms his agreement to Section 3 of the CCA relating to restrictive
covenants.



     6. The Executive acknowledges that he has been provided at least twenty-one (21)1
days to review the Release and has been advised to review it with an attorney of his choice and at
his own expense. In the event the Executive elects to sign this Release prior to this twenty-one
(21) day period, he agrees that it is a knowing and voluntary waiver of his right to wait the full
twenty-one (21) days. The Executive further understands that he has seven (7) days after the
signing hereof to revoke it by so notifying the Company in writing, such notice to be received by
                     within the seven (7) day period. The Executive further acknowledges that he has
carefully read this Release and knows and understands its contents and its binding legal effect.
The Executive acknowledge that by signing this Release, he does so of his own free will and act and
that it is his intention that he be legally bound by its terms.



     7. This Release shall be construed and enforced in accordance with, and governed by, the laws
of the Commonwealth of Massachusetts, without regard to principles of conflict of laws. If any
clause of this Release should ever be determined to be unenforceable, it is agreed that this will
not affect the enforceability of any other clause or the remainder of this Release.





 




			
	1	 	Forty-five (45) days (throughout paragraph) if required
by law.




A-5









 










     IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.



	 	 	 	 	 
	 

	 	ALTRA HOLDINGS, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By:

Title:
	 	 
	 
	 	 	 	 
	 

	 	ALTRA INDUSTRIAL MOTION, INC.	 	 
	 
	 	 	 	 
	 

	 	 

By:

Title:
	 	 
	 
	 	 	 	 
	 

	 	EXECUTIVE	 	 
	 
	 	 	 	 
	 

	 	 

[Name]
	 	 







A-6









 








Exhibit B




RESTRICTIVE COVENANTS



1. Confidential Information. Executive acknowledges that the information, observations and
data (including without limitation trade secrets, know-how, research plans, business, accounting,
distribution and sales methods and systems, sales and profit figures and margins and other
technical or business information, business, marketing and sales plans and strategies, cost and
pricing structures, and information concerning acquisition opportunities and targets nationwide in
or reasonably related to any business or industry in which any of Holdings or the Company or their
respective Subsidiaries is engaged) disclosed or otherwise revealed to him, or discovered or
otherwise obtained by him or of which he becomes aware, directly or indirectly, while employed by
the Company or its Subsidiaries (including, in each case, those obtained prior to the date of this
Agreement) concerning the business or affairs of Holdings or the Company or any of their respective
Subsidiaries (collectively, “Confidential Information”) are the property of Holdings or the
Company or their respective Subsidiaries, as the case may be, and agrees that Holdings and Company
have a protectable interest in such Confidential Information. Therefore, Executive agrees that he
shall not (during his employment with the Company or at any time thereafter) disclose to any
unauthorized person or use for his own purposes any Confidential Information without the prior
written consent of the Board, unless and to the extent that the aforementioned matters: (a) become
or are generally known to and available for use by the public other than as a result of Executive’s
acts or omissions or (b) are required to be disclosed by judicial process or law (provided that
Executive shall give prompt advance written notice of such requirement to the Company to enable the
Company to seek an appropriate protective order or confidential treatment). Executive shall
deliver to the Company at the termination of the Employment Period, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documents and data (and copies thereof) which constitute Confidential
Information or Work Product (as defined below) which he may then possess or have under his control.



2. Work Product. Executive hereby assigns to the Company all right, title and interest in
and to all inventions, developments, methods, process, designs, analyses, reports and all similar
or related information (in each case whether or not patentable), all copyrightable works, all trade
secrets, confidential information and know-how, and all other intellectual property rights that
both (a) are conceived, reduced to practice, developed or made by Executive while employed by the
Company and its Subsidiaries and (b) either (i) relate to the Company’s or any of its Subsidiaries’
actual or anticipated business, research and development or existing or future products or
services, or (ii) are conceived, reduced to practice, developed or made using any of equipment,
supplies, facilities, assets or resources of the Company or any of its Subsidiaries (including but
not limited to, any intellectual property rights) (“Work Product”). Executive shall
promptly disclose such Work Product to the Board and perform all actions reasonably requested by
the Board (whether during or after the Employment Period) to establish and confirm the Company’s
ownership of the Work Product (including, without


 









 






limitation, executing and delivering assignments, consents, powers of attorney, applications and
other instruments).



3. Noncompetition. In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the Company and its
Subsidiaries he has become and shall become familiar with the Company’s trade secrets and with
other Confidential Information concerning the Company and its Subsidiaries and that his services
have been and shall be of special, unique and extraordinary value to the Company and its
Subsidiaries. Therefore, Executive agrees that, during the period of Executive’s employment with
the Company and for 12 months thereafter (the “Noncompete Period”), he shall not, without
prior written approval by the Board, directly or indirectly (whether for compensation or otherwise)
own or hold any interest in, manage, operate, control, consult with, render services for, or in any
manner participate in any business which competes in any material respect with the businesses of
the Company or its Subsidiaries conducted or proposed to be conducted during the Employment Period
(collectively, the “Business”), either as a general or limited partner, proprietor, common or
preferred shareholder, officer, director, agent, employee, consultant, trustee, affiliate or
otherwise. Executive acknowledges that the Company’s and its Subsidiaries’ businesses are planned
to be conducted nationally and internationally and agrees that the provisions in this Paragraph
3 shall operate in the market areas of the United States and outside the United States in which
the Company conducts or plans to conduct business on and prior to the Termination Date. Nothing in
this Paragraph 3 shall prohibit Executive from being a passive owner of not more than 2% of
the outstanding securities of any publicly traded company engaged in the Business, so long as
Executive has no active participation in the business of such company.



4. Non-Solicitation. During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee of the Company or
any Subsidiary to leave the employ of the Company or such Subsidiary, or in any way interfere with
the relationship between the Company or any Subsidiary and any employee thereof, (ii) solicit to
hire any person who was an employee of the Company or any Subsidiary at any time during the 12
months preceding the termination of the Employment Period or (iii) induce or attempt to induce any
customer, client, member, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary to cease doing business with the Company or such Subsidiary, or in
any way interfere with the relationship between any such customer, client, member, supplier,
licensee, licensor, franchisee or business relation and the Company or any Subsidiary (including,
without limitation, making any negative statements or communications about the Company or its
Subsidiaries).



5. Enforcement. If, at the time of enforcement of any of Paragraphs 1 through
4, a court of competent jurisdiction shall hold that the period, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the parties hereto agree that the
maximum period, scope or area reasonable under such circumstances shall be substituted for the
stated period, scope or area and that the court shall be allowed and directed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted by applicable
law. The parties hereto acknowledge and agree that Executive’s services are unique and he has
access to Confidential Information and Work Product, that the provisions of Paragraphs 1
through 4 are necessary, reasonable and appropriate for the protection of the legitimate


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business interests of Holdings and the Company and their respective Subsidiaries, that irreparable
injury will result to Holdings and the Company and their respective Subsidiaries if Executive
breaches any of the provisions of Paragraphs 1 through 4 and that money damages
would not be an adequate remedy for any breach by Executive of this Agreement and that neither
Holdings nor the Company will have any adequate remedy at law for any such breach. Therefore, in
the event of a breach or threatened breach of this Agreement, Holdings or the Company or any of
their successors or assigns, in addition to other rights and remedies existing in their favor,
shall be entitled to specific performance and/or immediate injunctive or other equitable relief
from any court of competent jurisdiction in order to enforce or prevent any violations of the
provisions hereof (without the necessity of showing actual money damages, or posting a bond or
other security). Nothing contained herein shall be construed as prohibiting Holdings or the
Company or any of their successors or assigns from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages.



6. Executive’s Representations and Acknowledgements. Executive hereby represents and
warrants to Holdings and the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by
which he is bound, (ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other Person, (iii) Executive shall not
use any confidential information or trade secrets of any third party in connection with the
performance of his duties hereunder, and (iv) this Agreement constitutes the valid and binding
obligation of Executive, enforceable against Executive in accordance with its terms. Executive
hereby acknowledges and represents that he has consulted with independent legal counsel regarding
his rights and obligations under this Agreement and that he fully understands the terms and
conditions contained herein and intends for such terms and conditions to be binding on and
enforceable against Executive. Executive acknowledges and agrees that the provisions of
Paragraphs 1 through 4 are in consideration of: (i) Executive’s employment by the
Company; and (ii) additional good and valuable consideration as set forth in this Agreement, the
receipt and sufficiency of which are hereby acknowledged. Executive expressly agrees and
acknowledges that the restrictions contained in Paragraphs 1 through 4 do not
preclude Executive from earning a livelihood, nor do they unreasonably impose limitations on
Executive’s ability to earn a living. In addition, Executive agrees and acknowledges that the
potential harm to the Company of its non-enforcement outweighs any harm to Executive of its
enforcement by injunction or otherwise. Executive acknowledges that he has carefully read this
Agreement and has given careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the reasonable and proper protection of
the Confidential Information. Executive expressly acknowledges and agrees that each and every
restraint imposed by this Agreement is reasonable with respect to subject matter, time period and
geographical area





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