4. Bonus Opportunity. With respect to each full fiscal year during the Employment TermExecutive shall be eligible to earn an annual performance bonus of up to 100% of Executive’s BaseSalary (the “Target Bonus”) under the Company’s Annual Executive Incentive Plan (“AIP”), though atthe sole discretion of the Company’s Compensation Committee Executive may be entitled to an annualperformance bonus in excess of the Target Bonus pursuant to the AIP. Any bonuses awarded under theAIP shall be payable at the time and in the manner specified in the AIP. A copy of the 2008Executive Annual Incentive Plan and the Executive’s AIP Participation Agreement for 2008 isattached as Exhibit A hereto. Executive will also be paid a one-time signing bonus of$25,000 payable in accordance with the Company’s ordinary payroll practices.     5. Equity Arrangements.          5.1 Subject to the approval of the Compensation Committee of the Board (the “CompensationCommittee”), Executive shall be awarded an initial grant of 495,000 options to purchase shares ofCommon Stock of the Company (the “Initial Time-Based Option Grant”), subject to the vestingschedule and the other terms and conditions set forth in a stock option agreement between Executiveand the Company in the form substantially similar to Exhibit B1 attached hereto. TheInitial Time-Based Option Grant shall vest 25% on the one-year anniversary of the Effective Dateand 1/48 monthly thereafter.          5.2 Subject to the approval of the Compensation Committee, Executive shall be awarded aninitial grant of 99,924 options to purchase shares of Common Stock of the Company (the “InitialPerformance-Based Option Grant”), subject to the vesting schedule and the other terms andconditions set forth in a stock option agreement between Executive and the Company in the formsubstantially similar to Exhibit B2 attached hereto. The Initial Performance-Based OptionGrant stock option agreement shall provide for vesting based upon the trading value of theCompany’s Common Stock.          5.3 Subject to the approval of the Compensation Committee, Executive shall be awarded aninitial grant of 50,000 shares of restricted Common Stock of the Company at a per share purchaseprice of $0.001 (the “Initial Time-Based Restricted Stock Award” and, together with the InitialTime-Based Option Grant and the Initial Performance-Based Option Grant, the “Initial Awards”),subject to the vesting schedule, repurchase right and the other terms and conditions set forth in arestricted stock agreement between Executive and the Company in the form substantially similar toExhibit B3 attached hereto. The Initial Time-Based Restricted Stock Award restricted stockagreement will provide that the percentage of the restricted stock that the Company will beentitled to repurchase shall begin at 100 percent and decrease by 25 percent after one (1) yearfrom the Effective Date, with a subsequent decrease by 25 percent each anniversary thereafter, suchthat the right of repurchase shall be reduced to zero percent by the fourth anniversary of theEffective Date. Executive’s current equity award of 27,538 shares for Executive’s service on theBoard is not affected by the Initial Awards.          5.4 Beginning with the Fiscal Year 2010 compensation cycle, during the Employment Term,Executive shall be entitled to participate in the Company’s equity arrangements as in effect fromtime to time on the same basis as those equity arrangements are generally made available to othersenior executives of the Company.
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     6. Employee Benefits.          6.1 During the Employment Term, Executive shall be entitled to participate in the Company’semployee benefit plans as in effect from time to time (collectively “Employee Benefits”), on thesame basis as those benefits are generally made available to other senior executives of theCompany. Executive shall be eligible to accrue up to 20 days of paid time off (“PTO”) per calendaryear, pro-rated for partial years of service, in accordance with the Company’s policy on PTOaccrual and use applicable to senior executives. In addition, Executive shall be entitled toreceive the Company-paid supplemental death benefits set forth in Exhibit C. The Companyfurther agrees to take commercially reasonable efforts to increase Executive’s coverage under theCompany’s long-term disability plan, directly or through the use of a supplemental policy, to a nontaxable monthly benefit of $28,000, provided, however, that the premium for such coverage does notexceed an amount five times the amount of the Company’s current premium.          6.2 Executive shall use his commercially reasonable efforts to relocate and establish hisprincipal residence within sixty (60) miles of the Company’s headquarters located at 9770 PatuxentWoods Drive, Columbia, Maryland 21046, as soon as reasonably practicable, provided,however, that if Executive is unable to sell his current principal residence within three (3)months of the Effective Date without incurring a substantial loss, upon approval by theCompensation Committee the Company shall provide to the Executive, at the Company’s expense, ashort-term corporate apartment until he is able to sell his residence, for a period up to one (1)year. The Company shall provide to Executive a payment of up to 50% of the Selling Cost ofExecutive’s current principal residence, not to exceed $100,000 (the “Selling Cost Payment”). TheSelling Cost Payment vests monthly over a four-year period. If, during the four-year vestingperiod, Executive terminates his employment without Good Reason (as defined below) or if Executiveis terminated for Cause (as defined below), Executive shall reimburse the Company the amount of theunvested portion of the Selling Cost Payment. For purposes of this Agreement, “Selling Cost” shallmean the actual and necessary selling costs which may include brokerage commission, titleinsurance, escrow fees, prepayment penalties, taxes, charges and fees fixed by a local authority toconsummate the sale of the residence and customary miscellaneous seller’s costs.          6.3 The Company shall also provide an additional $60,000 payment to off-set Executive’santicipated costs in relocating his principal residence (the “Relocation Payment”); provided,however, that any taxes payable with respect to the Relocation Payment shall be theresponsibility of Executive.     7. Business Expenses. During the Employment Term, reasonable business expensesincurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by theCompany in accordance with Company policies and practices applicable to senior executives.     8. Termination. The Employment Term and Executive’s employment hereunder may beterminated by either party at any time and for any reason. Executive’s rights upon termination ofemployment with the Company and its affiliates shall be governed by the Agreement.
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          8.1 By the Company For Cause, By Executive’s Resignation Without Good Reason or Upon Deathor Disability.               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Companyfor Cause (as defined below) or as a result of Executive’s Disability (as defined below), and shallterminate automatically upon Executive’s death or his resignation without Good Reason (as definedbelow).               (b) If Executive’s employment is terminated by the Company for Cause, or as a result ofExecutive’s Disability or death, or if Executive resigns without Good Reason (as defined below),Executive shall be entitled to receive:                    (i) the Base Salary through the date of termination;                    (ii) an amount representing any accrued, but unused PTO;                    (iii) any Target Bonus earned, but unpaid, as of the date of termination for the immediatelypreceding fiscal period, payable in accordance with the applicable AIP Participation Agreement;                    (iv) reimbursement for any unreimbursed business expenses properly incurred by Executive, ineach case, in accordance with Company policy on or prior to the date of Executive’s termination;provided claims for such reimbursement (accompanied by appropriate supportingdocumentation) are submitted to the Company within 90 days following the date of Executive’stermination of employment; and                    (v) such Employee Benefits, if any, as to which Executive may be entitled under the employeebenefit plans of the Company (the amounts described in clauses 8.1(b)(i) through (v) hereof,reduced by any amounts owed to the Company by Executive, being referred to as the “AccruedRights”).Following such termination of Executive’s employment by the Company for Cause, or on account ofExecutive’s Disability, upon Executive’s death, or by Executive without Good Reason, Executiveshall have no further rights to any compensation or any other benefits under this Agreement exceptas set forth in this Section 8.1.          8.2 By the Company Without Cause or Resignation by Executive for Good Reason.               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Companywithout Cause or by Executive’s resignation for Good Reason.               (b) If Executive’s employment is terminated by the Company without Cause (and other than byreason of death or Disability) or if Executive resigns for Good Reason, in either case other thanin the one month period prior to, or the 13 month period following a Change in Control (as definedbelow), Executive shall be entitled to receive:                    (i) the Accrued Rights; and
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                    (ii) subject to Executive’s (x) delivery of a valid and irrevocable general release of allclaims against the Company and its affiliates, substantially in the form attached hereto asExhibit D, as may be modified to take into account any changes in law or the underlyingcircumstances (the “General Release”), and (y) continued compliance, in all material respects, withthe restrictive covenants set forth in Sections 9 and 10 below):                         (A) continued payment of the Base Salary in accordance with the Company’s normal payrollpractices for a period of 12 months following the date of such termination; and                         (B) (i) subject to Executive’s continued co-payment of premiums in the same amount asExecutive paid immediately prior to termination, continued participation (to the extent permittedunder applicable law and the terms of such plan) for Executive and his then-eligible dependents inthe Company’s group health plan in which they were participating at the time of termination for thefirst 12 months following termination at the Company’s expense, or if such coverage is notpermitted by the terms of the Company’s group health plan as in effect at the relevant time,continuation coverage under the Consolidated Budget Omnibus Reconciliation Act of 1985, as amended(“COBRA”) and any state or local law of similar effect, at the same out-of-pocket cost to theExecutive as would have otherwise been applicable, for a period of 12 months, and (ii) followingsuch 12 month period the right to continuation coverage under COBRA and any state or local law ofsimilar effect;                         (C) the unvested stock options under the Initial Time-Based Option Grant shall accelerate andbecome vested; by twenty-five percent (25%) of the total shares originally under the InitialTime-Based Option Grant; and                         (D) the unvested restricted stock under the Initial Time-Based Restricted Stock Award shallaccelerate and become vested by twenty-five percent (25%) of the total shares originally under theInitial Time-Based Restricted Stock Award.The aggregate amount described in this Section 8.2 shall be reduced by the present value of anyother severance or termination benefits payable to Executive under any other plans, programs orarrangements of the Company or its affiliates. Following Executive’s termination of employment bythe Company without Cause (other than by reason of Executive’s death or Disability) or byExecutive’s resignation for Good Reason, except as set forth in this Section 8.2, Executive shallhave no further rights to any compensation or any other benefits under this Agreement.          8.3 By the Company Without Cause or Resignation by Executive for Good Reason in ConnectionWith a Change in Control.               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Companywithout Cause or by Executive’s resignation for Good Reason, in either case within one month priorto, or within 13 months following, the consummation of a Change in Control.               (b) If Executive’s employment is terminated by the Company without Cause (and other than byreason of death or Disability) or if Executive resigns for Good Reason,
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in either case in the one month period prior to or the 13 month period following theconsummation of a Change in Control, Executive shall be entitled to receive:                    (i) the Accrued Rights; and                    (ii) subject to Executive’s (i) delivery of a valid and irrevocable General Release in theform attached hereto as Exhibit D, and (ii) continued compliance, in all material respects,with the restrictive covenants set forth in Sections 9 and 10 below:                         (A) a single cash payment equal to Executive’s annual Base Salary and Target Bonus amount;                         (B) (i) subject to Executive’s continued co-payment of premiums in the same amount asExecutive paid immediately prior to termination, continued participation (to the extent permittedunder applicable law and the terms of such plan) for Executive and his then-eligible dependents inthe Company’s group health plan in which they were participating at the time of termination for thefirst 12 months following termination at the Company’s expense, or if such coverage is notpermitted by the terms of the Company’s group health plan as in effect at the relevant time,continuation coverage under the Consolidated Budget Omnibus Reconciliation Act of 1985, as amended(“COBRA”) and any state or local law of similar effect, at the same out-of-pocket cost to theExecutive as would have otherwise been applicable, for a period of 12 months, and (ii) followingsuch 12 month period the right to continuation coverage under COBRA and any state or local law ofsimilar effect;                         (C) the unvested stock options under the Initial Time-Based Option Grant shall accelerate andbecome fully vested; and                         (D) the unvested restricted stock under the Initial Time-Based Restricted Stock Award shallaccelerate and become fully vested.The aggregate amount described in this Section 8.3 shall be reduced by the present value of anyother severance or termination benefits payable to Executive under any other plans, programs orarrangements of the Company or its affiliates. Following Executive’s termination of employment bythe Company without Cause (other than by reason of Executive’s death or Disability) or byExecutive’s resignation for Good Reason, except as set forth in this Section 8.3, Executive shallhave no further rights to any compensation or any other benefits under this Agreement.          8.4 Definitions.               (a) For purposes of this Agreement, “Cause” shall mean (i) theft, fraud, material dishonestyor gross negligence in the conduct of the Company’s business, (ii) continuing neglect of theExecutive’s duties and responsibilities that has a material adverse effect on the Company, (iii)engaging in personal conduct that would constitute grounds for liability for sexual harassment ordiscrimination (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines or anyother applicable state or local regulatory body), (iv) conviction of, or plea of guilty or *nolocontendere*to, a felony (other than a violation of traffic or motor vehicle laws), or (v) willfuland continued material breach by the Executive of his or her
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“Assignment of Inventions, Non-Disclosure, Non-Solicitation and Non-Competition Agreement” orof any other employment-related agreements (including, without limitation, any employment agreementor offer letter) between the Executive and the Company that has a material adverse effect on theCompany; provided, however, that for purposes of the Plan, any purported termination of theExecutive’s employment shall be presumed to be other than for Cause, unless (A) the Company firstprovides written notice to the Executive which includes a copy of a resolution duly adopted by theBoard at a meeting of the Board called and held for the purpose of considering such terminationwhich finds “Cause” to exist and specifies the particulars of such conduct, and (B) the Executivehas been provided a period of at least thirty (30) days after receipt of the Company’s noticeduring which to cure, rescind or otherwise remedy the actions, events, or circumstances describedin the Company’s notice to the extent they are based on clauses (ii), (iii) or (v) above.               (b) For purposes of this Agreement, “Disabled” or “Disability” shall have the meaning setforth in the Company’s long-term disability plan applicable to senior executives.               (c) For purposes of this Agreement, “Good Reason” shall mean (i) a material decrease in theExecutive’s Base Salary, (ii) a material reduction or material adverse change in the Executive’sauthority, duties, title or, job responsibilities, or reporting structure, (iii) a geographicrelocation of the Executive without his or her consent more than thirty (30) miles from the currentlocation of his or her office as of the date hereof), or (iv) a willful and continued materialbreach by the Company of this Agreement or the “Assignment of Inventions, Non-Disclosure,Non-Solicitation and Non-Competition Agreement” that has a material adverse effect on theExecutive; provided, however, that any proposed termination of employment by the Executive shall bepresumed to be other than for Good Reason, unless the Executive first provides written notice tothe Company within ninety (90) days following the effective date of such event, and the Company hasbeen provided a period of at least thirty (30) days after receipt of the Executive’s notice duringwhich to cure, rescind or otherwise remedy the actions, events, or circumstances described in suchnotice. The Executive’s termination of employment shall not be considered to be for Good Reasonunless it occurs no more than one hundred and twenty (120) days following the initial occurrence ofthe purported Good Reason event(s) as described above.               (d) For purposes of this Agreement, “Change in Control” shall mean (A) the direct or indirectacquisition by any person or related group of persons (other than an acquisition from or by theCompany or by a Company sponsored employee benefit plan or by a person that directly or indirectlycontrols, is controlled by, or is under common control with, the Company) of beneficial ownership(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “ExchangeAct)) of securities possessing more than fifty percent (50%) of the total combined voting power ofthe Company’s outstanding securities pursuant to a tender or exchange offer made directly to theCompany’s stockholders which a majority of the Continuing Directors who are not Affiliates orAssociates of the offeror do not recommend such stockholders accept; (B) a change in thecomposition of the Board over a period of twelve (12) months or less such that a majority of theBoard members (rounded up to the next whole number) ceases, by reason of one or more contestedelections for Board membership, to be comprised of individuals who are Continuing Directors; (C) amerger or consolidation in which the Company is not the surviving entity, except for a transactionthe principal purpose of which
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is to change the state in which the Company is incorporated; (D) the sale, transfer or otherdisposition of all or substantially all of the assets of the Company; (E) the complete liquidationor dissolution of the Company; (F) any reverse merger or series of related transactions culminatingin a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) inwhich the Company is the surviving entity but (i) the shares of the Company’s common stockoutstanding immediately prior to such merger are converted or exchanged by virtue of the mergerinto other property, whether in the form of securities, cash or otherwise, or (ii) in whichsecurities possessing more than fifty percent (50%) of the total combined voting power of theCompany’s outstanding securities are transferred to a person or persons different from those whoheld such securities immediately prior to such merger or the initial transaction culminating insuch merger, and excluding any such transaction or series of related transactions that the Companydetermines shall not be a Change in Control; or (G) acquisition in a single or series of relatedtransactions by any person or related group of persons (other than the Company or by aCompany-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combinedvoting power of the Company’s outstanding securities. As used herein, “Continuing Directors” meansmembers of the Board who either (i) have been Board members continuously for a period of at leasttwelve (12) months or (ii) have been Board members for less than twelve (12) months and wereelected or nominated for election as Board members by at least a majority of the Board membersdescribed in clause (i) who were still in office at the time such election or nomination wasapproved by the Board. As used herein, “Affiliate” and “Associate” shall have the respectivemeanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act. Notwithstandingthe foregoing, no payment of amounts subject to Section 409A of the Internal Revenue Code of 1986,as amended (the “Code’) shall be triggered by any Change of Control that does not constitute a“change in the ownership or effective control, or in the ownership of a substantial portion of theassets,” each as defined in Section 409A of the Code and its related Treasury regulations.          8.5 No Mitigation or Offset. The amount of any payment or benefit provided for inSection 8 shall not be reduced, offset or subject to recovery by the Company or any of itssubsidiaries or affiliates by reason of any compensation earned by Executive as the result ofemployment by another employer after Executive’s employment with the Company terminates for anyreason. In addition, Executive shall be under no obligation to seek other employment or to take anyother actions to mitigate the amounts payable under Section 8.          8.6 Section 4999               (a) In the event of a Change in Control, or other event constituting a change in the ownershipor effective control of the Company or ownership of a substantial portion of the assets of theCompany described in Section 280G(b)(2)(A)(i) of the Code, the Company, at its sole expense, shallcause its independent auditors promptly to review all payments, accelerations, distributions andbenefits that have been made to or provided to, and are to be made, or may be made, to or providedto, the Executive under this Agreement, and any other agreement or plan benefiting the Executive(collectively the “Original Payments”), to determine the applicability of Section 4999 of the Codeto the Executive in connection with such event (other than under this Section 8.6(a)). If theCompany’s independent auditors determine that the Original Payments are subject to excise taxesunder Section 4999 of the Code (the “Excise Tax”), then:
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                    (i) If (A) the aggregate Original Payments exceed an amount (the “Parachute Threshold”) equalto two hundred ninety nine percent (299%) of the Executive’s “base amount,” as defined in Section280G(b)(3) of the Code, and (B) such excess is equal to four and six-tenths percent (4.6%) of theParachute Threshold or less, the Original Payments shall be reduced to an aggregate amount that istwo hundred ninety-nine percent (299%) of the Executive’s “base amount”; or                    (ii) If (A) the aggregate Original Payments exceed the Parachute Threshold, and (B) suchexcess is equal to more than four and six-tenths percent (4.6%) of the Parachute Threshold, then anadditional amount shall be paid to the Executive (the “Gross-Up Amount”) such that the net proceedsof the Gross-Up Amount to the Executive, after deduction of the Excise Tax (including interest andpenalties) and any federal, state and local income taxes and employment taxes (including interestand penalties) upon the Gross-Up Amount, shall be equal to the Excise Tax on the Original Payments.               (b) The Company’s independent auditors will perform the calculations in conformity with theforegoing provisions and will provide the Executive with a copy of their calculations. The intentof the parties is that, except as set forth in Section 8.6(a)(i), the Company shall be solelyresponsible for, and shall pay, any Excise Tax on the Original Payments and Gross-Up Amount and anyincome and employment taxes (including, without limitation, penalties and interest) imposed on anyGross-Up Amount payable hereunder.               (c) If no determination by the Company’s independent auditors is made prior to the time theExecutive is required to file a tax return reflecting Excise Taxes on any portion of the OriginalPayments, the Executive will be entitled to receive a Gross-Up Amount calculated on the basis ofthe Excise Tax that the Executive reports in such tax return, within thirty (30) days after thefiling of such tax return. The Executive agrees that, for the purposes of the foregoing sentence,the Executive is not required to file a tax return until the Executive has obtained the maximumnumber and length of filing extensions available, and Executive shall have provided a copy of therelevant portions of such tax return to the Company not less than ten (10) days prior to filingsuch tax return. If, subsequent to the Executive’s filing of such tax return but within onehundred eighty (180) days thereafter, the Company’s independent auditors determine that theaggregate Original Payments should be reduced pursuant to Section 8.6(a)(i), the Executive shallreimburse the Company the amount of such reduction, promptly file an amended tax return reflectingsuch reduction, and promptly take any steps reasonably required to obtain a refund of any ExciseTax paid with respect to the Original Payments.               (d) If any tax authority finally determines that a greater Excise Tax should be imposed uponthe Original Payments or the Gross-Up Amount than is determined by the Company’s independentauditors or reflected in the Executive’s tax returns, the Executive shall be entitled to receive anadditional Gross-Up Amount calculated on the basis of the additional amount of Excise Taxdetermined to be payable by such tax authority (including related penalties and interest) from theCompany within thirty (30) days after such determination. The Executive shall cooperate with theCompany as it may reasonably request to permit the Company (at its sole expense) to contest thedetermination of such taxing authority in order to minimize the amount payable under this Section8.6.
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               (e) If any tax authority finally determines the Excise Tax payable by the Executive to be lessthan the amount taken into account hereunder in calculating the Gross-Up Amount, the Executiveshall repay to the Company, within thirty (30) days after the Executive’s receipt of a tax refundresulting from that determination, to the extent of such refund, the portion of the Gross-Up Amountattributable to such reduction (including the refunded portion of Gross-Up Amount attributable tothe Excise Tax and federal, state and local income and employment taxes imposed on the Gross-UpAmount being repaid, less any additional income tax resulting from receipt of such refund).               (f) Notwithstanding the foregoing, if on the date of the Executive’s termination, theExecutive is a “specified employee” within the meaning of Section 409A of the Code and any OriginalPayments are made on account of the Executive’s termination of employment, any Gross-Up Amount thatwould otherwise be due under this Section 8.6 and that would constitute deferred compensationwithin the first six (6) months following the Executive’s termination of employment shall insteadbe subject to the six (6) month delay to the extent required by Section 11.8 below.               (g) The Executive’s receipt of a Gross-Up Amount for Excise Tax due in one taxable year shallnot affect the Executive’s eligibility for a Gross-Up Amount for Excise Tax due in another taxableyear. The Executive’s rights under this Section 8.6 are not subject to liquidation or exchange foranother benefit.          8.7 Board/Committee Resignation. Upon termination of Executive’s employment for anyreason, Executive agrees to resign, as of the date of such termination and to the extentapplicable, from all positions he holds with the Company or its affiliates, including any positionon the Board (and any committees thereof).     9. Proprietary Information, Inventions, and Non-Competition Agreement. As a conditionto his employment with the Company, Executive shall execute and comply with the Company’s EmployeeProprietary Information, Inventions, and Non-Competition Agreement, in the form attached hereto asExhibit E.     10. Specific Performance. Executive acknowledges and agrees that the Company’sremedies at law for a breach or threatened breach of any of the provisions of Section 9 or theEmployee Proprietary Information, Inventions, and Non-Competition Agreement would be inadequate andthe Company would suffer irreparable damages as a result of such breach or threatened breach. Inrecognition of this fact, Executive agrees that, in the event of such a breach or threatenedbreach, in addition to any remedies at law, the Company, without posting any bond, shall beentitled to cease making any payments or providing any benefit otherwise required by this Agreementand obtain equitable relief in the form of specific performance, temporary restraining order,temporary or permanent injunction or any other equitable remedy which may then be available.     11. Miscellaneous.          11.1 Governing Law; Jurisdiction. This Agreement shall be governed by and construedin accordance with the laws of the State of Delaware, without regard to conflicts of lawsprinciples thereof. Any and all disputes between the parties which may arise pursuant to
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this Agreement shall be heard and determined before an appropriate state or federal courtserving Howard County, Maryland. The parties acknowledge that such courts have jurisdiction tointerpret and enforce the provisions of this Agreement, and the parties consent to, and waive anyand all objections that they may have as to, personal jurisdiction and/or venue in such courts.          11.2 Expenses. In the event of any dispute between the Company and Executive as tothe interpretation, terms, validity or enforceability of (including any dispute about the amount ofany payment pursuant to) this Agreement, the prevailing party shall be entitled to recover from thenon-prevailing party any and all of such prevailing party’s costs and expenses incurred inconnection with any such dispute, including reasonable attorneys’ fees.          11.3 Entire Agreement; Amendments. This Agreement, together with the Exhibits hereto,contains the entire understanding of the parties with respect to the employment of Executive by theCompany. There are no restrictions, agreements, promises, warranties, covenants or undertakingsbetween the parties with respect to the subject matter herein other than those expressly set forthherein. This Agreement may not be altered, modified, or amended except by written instrument signedby the parties hereto.          11.4 No Waiver. The failure of a party to insist upon strict adherence to any term ofthis Agreement on any occasion shall not be considered a waiver of such party’s rights or deprivesuch party of the right thereafter to insist upon strict adherence to that term or any other termof this Agreement.          11.5 Severability. In the event that any one or more of the provisions of thisAgreement shall be or become invalid, illegal or unenforceable in any respect, the validity,legality and enforceability of the remaining provisions of this Agreement shall not be affectedthereby.          11.6 Assignment. This Agreement and all of Executive’s rights and duties hereunder,shall not be assignable or delegable by Executive; except to the extent permitted by the Company inwriting. Any purported assignment or delegation by Executive in violation of the foregoing shall benull and void *ab initio*and of no force and effect. This Agreement may be assigned by the Companyto a person or entity which is a successor in interest to substantially all of the businessoperations of the Company. Upon such assignment, the rights and obligations of the Companyhereunder shall become the rights and obligations of such successor person or entity.          11.7 Set Off. The Company’s obligation to pay Executive the amounts provided for inSection 8 hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed byExecutive to the Company or its affiliates.          11.8 Compliance with IRC Section 409A. Notwithstanding any other provision of thisAgreement whatsoever, the Company shall have the right, after consulting with and securing theapproval of Executive, to provide for the application and effects of Section 409A of the Code(relating to deferred compensation arrangements) and any related regulatory or administrativeguidance issued by the Internal Revenue Service such that the severance and other benefits providedunder this Agreement shall not trigger the additional tax, interest, and any related penaltiesimposed by Section 409A(l)(B) of the Code. Further, if at the time of
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Executive’s termination of employment with the Company Executive is a “specified employee” asdefined in Section 409A of the Code and the deferral of the commencement of any payments orbenefits otherwise payable hereunder as a result of such termination of employment is necessary inorder to prevent any accelerated or additional tax under Section 409A of the Code, then the Companywill defer the commencement of the payment of any such payments or benefits hereunder (without anyreduction in such payments or benefits ultimately paid or provided to Executive) until the datethat is six months following Executive’s termination of employment with the Company (or theearliest date as is permitted under Section 409A of the Code without the imposition of anyaccelerated or additional tax). The Company shall consult with Executive in good faith regardingthe implementation of the provisions of this Section 11.8; provided that neither the Company norany of its employees or representatives shall have any liability to Executive with respect tothereto.          11.9 Successors; Binding Agreement. This Agreement shall inure to the benefit of andbe binding upon personal or legal representatives, executors, administrators, successors, assigns,agents, affiliates, heirs, distributees, devisees and legatees. The Company shall require anysuccessor to all or substantially all of the assets or business of the Company to agree to assumethe Agreement.          11.10 Notice. For the purpose of this Agreement, notices and all other communicationsprovided for in the Agreement shall be in writing and shall be deemed to have been duly given whendelivered by hand or overnight courier or three days after it has been mailed by United Statesregistered mail, return receipt requested, postage prepaid, addressed to the respective addressesset forth below in this Agreement, or to such other address as either party may have furnished tothe other in writing in accordance herewith, except that notice of change of address shall beeffective only upon receipt.          If to the Company:          Sourcefire, Inc.