linscottemploymentagreem






                                                                                                         EMPLOYMENT AGREEMENT         THIS  EMPLOYMENT  AGREEMENT  (“Agreement”)  is  entered  into effective as  of  November 15, 2019, by  and  between Brian  Linscott (“Employee”)  and Harte Hanks,  Inc. (the  “Company”).                                    RECITALS         WHEREAS,  the  Company  desires  to  employ Employee,  and Employee desires  to  be  employed by the Company, on the terms set forth in this Agreement.                                  AGREEMENTS         NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of  which are hereby acknowledged, the parties hereto agree as follows:      1.    Employment Term.  Subject to the terms and conditions set forth herein, the Company  hereby agrees to employ Employee, and Employee hereby agrees to accept employment with the  Company, to be effective on January 6, 2020 (the “Effective Date”).  Employee’s employment  with  the  Company  shall  continue until  terminated  in  accordance  with  the  provisions  set  forth  below.  The period of Employee’s employment with the Company as set forth in this Section 1 is  referred to herein as the “Employment Term.”        2. Employment Duties.               (a)     During  the Employment Term, Employee shall  be  the Chief Operating      Officer of the Company and shall perform such duties and responsibilities for the Company      as are customarily associated with such position or as may be assigned to Employee, from      time to time, by the Chief Executive Officer of the Company (the “CEO”) and/or the Board      of Directors of the Company (the “Board”).  Employee shall report to the CEO. In addition      to serving as the Chief Operating Officer of the Company, Employee agrees to serve without      additional  compensation,  if  elected  or  appointed  thereto,  in  one  or more  offices  or  as  a      member of the board of directors or board of managers of any of the Company’s Subsidiaries      and/or affiliates.             (b)     Employee will devote substantially all of Employee’s business time, and        Employee will devote his best efforts, to the performance of Employee’s duties hereunder        and will not engage in any other business, profession or occupation for compensation or        otherwise  which  would  conflict  or  interfere  with  the  rendition  of  such  services  either        directly or indirectly, without the prior written consent of the Board. Notwithstanding the        foregoing, during the Employment Term, it shall not be a violation of this Agreement for        Employee to (i) serve on corporate, civic or charitable boards or committees, provided that        service on any corporate board or committee shall be subject to the prior approval of the        Board,  (ii)  deliver  lectures  or  fulfill  speaking  engagements, (iii)  manage  personal        investments, and (iv) serve on the board of directors of and provide services to the entities        set  forth  on Annex  1  hereof,  in  each  case so  long  as  such  activities  do  not  materially        interfere with the performance of Employee’s responsibilities hereunder.                                         1  43938.00000 





 






       (c)   Employee shall perform services at the Company’s various offices, from his   home office in Chicago, IL, and at such other place or places as the Employee’s duties and   responsibilities may require. The Employee understands and agrees that he may be required   to travel in connection with the performance of his duties.       3. Base Salary.  During Employee’s employment hereunder, the Company shall pay  Employee a base salary (“Base Salary”) at the annual rate of $330,000, payable in regular  installments in accordance with the Company’s payment practices as in effect from time to  time,  but  in  no  event  less  frequently  than  twice  a  month.  The  Company will  consider  increases in Base Salary from time to time in a manner consistent with the consideration  given to other similarly-situated executives.       4. Bonuses.         (a) With  respect  to  each  full  calendar  year  of  employment  hereunder beginning  in  calendar year 2020, Employee will be eligible to earn an annual bonus award (an “Annual  Bonus”) with a target Annual Bonus opportunity of 75% of Employee’s Base Salary and a  maximum bonus opportunity of 150% of Employee’s Base Salary, subject to the terms,  conditions and performance goals established by the Board; provided, however, that the  Board may award Employee with additional bonus amounts for outstanding achievement.  Any amount of the Annual Bonus that becomes payable will be paid two-thirds in cash and  one-third in fully-vested Shares (as defined below) granted under the Harte Hanks 2013  Omnibus Incentive Plan (as amended, the “Equity Plan”) as soon as reasonably practicable  following the Board or its designee’s certification of performance, but in no event later than  the 15th day of the third month following the end of the year in which the amount is earned.   The  number  of  Shares  to  be granted under  this  Section  4(a) for  a  given  year will  be  determined by (1) multiplying the cash value of the applicable portion of the Annual Bonus  by 1.10 (the “Equity Value”) and (2) dividing the Equity Value by the average closing price  of a Share on the applicable stock exchange during the 30 days immediately preceding and  including the grant date; provided, however, that if such grant would cause the total number  of Shares granted to Employee in any fiscal year to exceed applicable Equity Plan limits,  such excess amount will be payable in cash.       (b) Employee  will  receive  a  one-time  sign  on  bonus  of  $37,500,  less  applicable  withholding, in consideration for his entry into this Agreement, payable in his first- regularly  scheduled paycheck.        5. Equity.          (a) As soon as reasonably practicable following the Effective Date, the Company will  grant Employee equity-based awards under the Equity Plan (the “Initial Grants”), subject to  the terms and conditions of the applicable award agreements and Board approval of the  Initial Grants.  The Initial Grants will consist of (i) a grant of 50,000 performance-based  restricted stock units that vests on the later of the first anniversary of the date that the Board  approves the Initial Grants and the first business day following the date that the Performance  Condition set forth on Exhibit A hereto is met, in each case subject to Employee’s continued  service as an employee through the applicable vesting date and (ii) an option to purchase  50,000 shares of the Company’s common stock (each, a “Share”) that vests ratably on the                                   2                





 






first three anniversaries of the grant date and has an exercise price equal to the per Share  price on the date of grant.  Employee will be eligible to receive additional equity awards in  future years, consistent with the Company’s regular equity award and review practices.       (b) In addition to the Initial Grants, subject to the terms and conditions of the applicable  award agreement and Board approval, Employee will receive a grant of 14,150 restricted  stock units that vest on the grant date; provided, however, that the number of units will be  subject to reduction in the event that such a grant would cause the total number of Shares  granted to Employee in  the 2019 fiscal year to exceed applicable Equity Plan limits, in  which case, such excess units will be granted to Employee in the next fiscal year in which  such grant would not cause the total Shares granted to Employee (subject to Employee’s  continued employment) in such fiscal year to exceed applicable Equity Plan limits.       6. Benefits.  Employee shall be eligible during the Employment Term to participate  in such employee benefit plans and programs that are maintained from time to time for  senior executives of the Company, to the extent that Employee (and Employee’s spouse and  dependents, as the case may be) meet(s) the applicable eligibility requirements; provided  that Employee will be entitled to healthcare coverage beginning on February 1, 2020.  The  Company does not promise the adoption or continuance of any particular plan or program  during the Employment Term, and Employee’s (and Employee’s spouse’s and dependents’)  participation  in  any  such  plan  or  program  shall  be  subject  to  the  provisions,  rules,  regulations and laws applicable thereto.  Employee will be entitled to four (4) weeks of  vacation in accordance with the Company’s vacation policy as in effect from time to time.         7. Expense  Reimbursement.  Employee shall  be  entitled  to  reimbursement  for  ordinary  and  reasonable  out  of  pocket  documented  business  expenses  which Employee  incurs in connection with performing Employee’s duties under this Agreement, including  travel, lodging and meal expenses in accordance with the Company’s travel and expense  reimbursement policies applicable to other senior Employees of the Company as in effect  from  time  to  time  and  approved  by  the  Board, provided, however, (x) Employee must  comply fully with such travel and expense reimbursement policies and (y) the Company  will not reimburse executive officers for mileage for use of personal vehicles.        8. Termination of Employment.  Employee’s employment with the Company pursuant  to this Agreement:          (a)   shall terminate upon Employee’s death or Employee becoming Permanently   Disabled (as determined pursuant to Section 9(e) hereof), and may be terminated at any   time by Employee for any reason (or no reason), including, without limitation, for Good   Reason, or by the Company, for any reason (or no reason), including, without limitation,   without Cause.  Any termination of Employee’s employment pursuant to the preceding   sentence is referred to herein as an “Employee Termination”;           (b)   shall  terminate  on  the  following  date:  (i) if  terminated  as  a  result  of   Employee’s resignation, with or without Good Reason, on the date specified in a written   notice delivered by Employee to the Company, the effective date of such resignation to be   no less than thirty (30) days from the date such notice is delivered to the Company, which   notice period may be waived by the Company in its sole discretion; (ii) if terminated as a                                   3                





 






result of death, on the date of death; (iii) if terminated as a result of Employee becoming  Permanently Disabled, on the date as of which Employee is determined to be Permanently  Disabled as defined in Section 9(e); and (iv) if terminated by the Company, on the date  specified in a written notice delivered by the Company to Employee.      9. Definitions.  As used in this Agreement:         (a)   “Cause” shall mean:                (i)   Employee’s violation  of  any  material  written  policy  of  the        Company;               (ii)  Employee’s failure to (x) obey the lawful orders of the Board, (y)        timely respond to Board inquiries, or (z) provide the Board with timely updates        regarding material Company business;               (iii) Employee’s gross  negligence  in  the  performance  of,  or  willful        disregard of, Employee’s obligations to the Company;               (iv)  the breach of any of Employee’s obligations under this Agreement,        restrictive covenants agreement (if any), or any other material agreement entered        into with the Company;               (v)   the  commission  of  an  act  by Employee constituting  financial        dishonesty against the Company;               (vi)  Employee’s indictment or other criminal charge for, or conviction        of or entering a plea of guilty or nolo contendere to, a crime constituting a felony;        or                 (vii)  the  commission  of  any  act  of  dishonesty  or  moral  turpitude  by        Employee which is, or is reasonably likely to be, detrimental to the Company.         For  the  purposes  of  this  definition,  “Company”  shall  include  any  affiliate  or        Subsidiary of the Company and any entity with whom Employee holds a position        at  the  request  of  the  Company. The  Company  may  terminate  Employee’s        employment for Cause under this Agreement following issuance to Employee of        written  notice  of  the  circumstances  the  Company  believes  constitute  Cause;        provided, that if the basis for termination is curable, including, without limitation,        Section  9(a)(i),  Section  9(a)(ii),  Section  9(a)(iii),  and  Section  (9)(a)(iv),  then        Employee shall have thirty (30) days after receipt of such written notice to cure        such basis, and if not cured, the Company may terminate Employee’s employment        for Cause.   If, within thirty (30) days  subsequent  to  Employee’s termination of        employment for any reason other than by the Company for Cause, the Company        determines  that Employee’s employment could  have been terminated  for Cause        under  circumstances  that  could  not  be  cured, Employee’s employment  will  be        deemed to have been terminated for Cause for all purposes, and Employee will be        required  to  disgorge  to  the  Company  all  amounts  received  pursuant  to  this                                   4                





 






      Agreement or otherwise on account of such termination that would not have been        payable to Employee had such termination been by the Company for Cause.         (b)   “Change of Control” shall have the meaning set forth in the Equity Plan as  in effect on the date hereof.         (c)   “Change of Control Period” shall mean the period commencing 6 months  prior to a Change of Control and ending on the first anniversary of the Change of Control.          (d)    “Good Reason” shall mean, without Employee’s consent,                (i)   a material diminution in Employee’s duties or position;               (ii)  Employee’s  Base  Salary  is  materially  reduced,  other  than  in        connection with a region-wide or Company-wide pay cut/furlough program;               (iii) the  Company’s  material  breach  of its  obligations  under this        Agreement; or               (iv)  the Company requires that Employee relocate to a location outside        of the Chicago Metropolitan area.          provided, however, that no termination by Employee for Good Reason for any of        the foregoing reasons shall be effective unless and until (A) Employee has given        the Company written notice of the reasons for the termination for Good Reason no        more  than  thirty  (30)  calendar  days  following  the  initial  existence  of  the        condition(s) that constitute(s) Good Reason, and has given the Company at least        thirty (30) calendar days in which to remedy such condition(s), (B) the Company        has  failed  to  remedy  the  same,  and  (C) Employee  actually  terminates  his        employment within thirty (30) calendar days after the expiration of the  remedy        period without remedy of the Good Reason by the Company.         (e)   “Permanently  Disabled”  shall  mean  (i)  Employee  becomes  eligible  to  receive benefits under any long-term disability plan paid for the Company on behalf of  Employee or (ii) if by reason of injury or illness (including mental illness) Employee shall  be unable to perform the essential functions of his position for ninety (90) consecutive days  or one hundred twenty (120) days, whether or not consecutive, in a twelve (12) month  period.          (f)  “Person” shall mean an individual, an entity, a partnership, a corporation, a  limited  liability  company  or  limited  partnership,  an  association,  a  trust,  a  joint  stock  company, a trust, a joint venture, an unincorporated organization, or the United States of  America or any other nation, any state or other political subdivision thereof, any entity  exercising  Employee,  legislative,  judicial,  regulatory  or  administrative  functions  of  government.         (g)    “Subsidiary”  shall  mean  with  respect  to  any  Person,  any  corporation,  partnership, limited liability company, association or other business entity of which (i) if a                                   5                





 






 corporation, a majority of the total voting power of shares of stock entitled (without regard   to the occurrence of any contingency) to vote in the election of directors, managers or   trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or   one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a   partnership, limited liability company, association or other business entity, a majority of   the  partnership  or  other  similar  ownership  interest  thereof  is  at  the  time  owned  or   controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person   or a combination thereof.  For the purposes hereof, a Person or Persons shall be deemed to   have a majority ownership interest in a partnership, limited liability company, association   or  other  business  entity  if  such  Person  or  Persons  shall  be  allocated  a majority  of   partnership, limited liability company, association or other business entity gains or losses   or shall be or control or have the right to appoint, as the case may be, the managing director,   manager, board of advisors, of a company or other governing body of such partnership,   limited  liability  company,  association  or  other  business  entity  by  means  of  ownership   interest, agreement or otherwise.         10. Payments by Virtue of Termination of Employment.  Upon the occurrence of an  Employee Termination:          (a)   if  an Employee Termination  shall  result  from Employee’s  employment   being terminated by the Company without Cause or from Employee’s resignation for Good   Reason, in each case other than during a Change of Control Period, Employee shall be   entitled to:                 (i)   Employee’s unpaid and accrued Base Salary accrued to the effective         date of such termination, payable in accordance with the Company’s regular payroll         practices as in effect from time to time; plus                 (ii)  payment  for  accrued  and  unused  vacation  days  accrued  to  the         effective date of such termination (in accordance with applicable Company policy         or to the extent required by law); plus                (iii) any unpaid expense reimbursement Employee is entitled to pursuant         to Section 7 of this Agreement; plus                 (iv)  any  vested  payment  or benefit  arising  from  Employee’s         participation in, or benefits under, any qualified employee benefit plans, programs,         or  arrangements  under  Section 6 (other  than  severance  plans,  programs,  or         arrangements), which amounts shall be payable in accordance with the terms and         conditions of such employee benefit plans, programs, or arrangements (the amounts         provided for under Subsections 10(a)(i), (ii), (iii) and (iv), together the “Accrued         Amounts”); plus, subject to Section 11(a):                 (v)   as  severance  pay  (“Severance  Pay”), Employee will  continue  to         receive his then Base Salary for a period of twelve (12) months, payable in equal         installments in accordance with the Company’s regular payroll practices as in effect         from time to time; provided, that the first installment of the Severance Pay shall be         made on the next regularly scheduled payroll date of the Company following the                                   6                





 






      sixtieth  (60th)  day  after  the  effective  date  of Employee’s  termination  and  shall        include payment of any amounts that would otherwise be due prior thereto; plus                (vi)  the  Company  will  provide  continued  coverage  under  its  health        insurance  plans  (“Health  Benefits  Continuation”)  to Employee for  a  period  of        twelve (12) months, subject to Employee continuing to make premium payments at        the current applicable employee rate for such coverage; provided, however, that if        the Health Benefits Continuation is not permitted to be provided under the terms of        the Company’s health insurance plans (as in effect from time to time following the        date of Employee Termination), and applicable law, the Company may provide the        Health  Benefits  Continuation  pursuant  to  the  Consolidated  Omnibus  Budget        Reconciliation Act of 1985 by paying an amount equal to the employer’s portion        of  premium  contributions  for  active  employees,  with Employee paying  the        premium  payments  at  the  current  applicable  employee  rate  for  such  coverage;        provided, further, that in any event the coverage provided pursuant to this Section        10(a)(vi)  shall be  counted  towards  the  Company’s  satisfaction  of  its  COBRA        obligations to Employee (clauses (v) and (vi) hereof, collectively, the “Severance        Package”);                        (b)   if an Employee Termination shall result from Employee’s resignation (other  than  for  Good  Reason), Employee’s  death  or  Permanent  Disability or Employee’s  discharge for Cause, Employee shall be entitled only to the Accrued Amounts.         (c)   if  an  Employee  Termination  shall  result  from  Employee’s  employment  being terminated by the Company without Cause or from Employee’s resignation for Good  Reason, in each case during a Change of Control Period, then, subject to Section 11(a),  Employee shall be entitled to the Severance Package, provided that the Severance Pay will  be for a period of eighteen (18) months.      11.      Release of Claims.          (a)   All payments and benefits due to Employee under Sections 10(a) and 10(c)  above, except for the Accrued Amounts, shall be expressly conditioned on, and shall be  payable or continued only if, Employee (or, to the extent applicable, Employee’s personal  representative) delivers to the Company and does not revoke within the Revocation Period  (as defined therein) a customary separation agreement that contains a general release of all  claims.   Such agreement  and general  release  shall  be  executed  and  delivered  to  the  Company  in  accordance  with Section  17(a) within the  time  period  specified  therein.   Failure to timely execute and return such release or the revocation thereof shall be a waiver  of Employee’s  right,  if  any,  to  the  Severance Package.   In  addition,  the  Company’s  obligation  in  respect  of  the  Severance Package,  shall  be  expressly  conditioned  upon  Employee’s continuing compliance with the obligations under Sections 12, 13, and 15 of  this Agreement and the Restrictive Agreements (as defined below).          (b)   Employee hereby acknowledges and agrees that, other than the payments  described in Section 10, upon the effective date of any Employee Termination, Employee  shall not be entitled to any other severance or payments of any kind under any Company                                  7                





 






 benefit  plan,  severance  policy  generally  available  to  the  Company’s  employees  or   otherwise and further, that the treatment of any equity awards granted by the Company to   Employee shall be governed by the terms thereof.       12. Resignation as an Officer and Director.  Upon the effective date of any Employee  Termination, Employee shall be deemed to have resigned, to the extent applicable, as an  officer  of  the  Company,  as  a  member  of  the  board  of  directors  or  similar  body  of  any  Subsidiary  of  the  Company  and  as  a  fiduciary  of  any  Company  benefit  plan.   On  or  immediately following the effective date of any such Employee Termination, Employee  shall  confirm  the  foregoing  by  submitting  to  the  Company  written  confirmation  of  Employee’s resignation(s).         13. Return of Company Property.  Within (a) ten (10) days following the effective date  of an Employee Termination for any reason other than death or Permanent Disability, or  (b) a  reasonable  period  of  time  following  an Employee Termination  due  to  death  or  Permanent  Disability, Employee or Employee’s  personal  representative  shall  return  all  property of the Company in Employee’s possession, custody or control, including but not  limited to all Company-owned computer equipment (hardware and software), telephones,  facsimile machines, cell phones, tablet computer and other communication devices, credit  cards,  office  keys,  security  access  cards,  badges,  identification  cards  and  all  copies  (including  drafts)  of  any  documentation  or  information  (however  stored)  relating  to  the  business of the Company and its Subsidiaries and affiliates, the Company’s customers and  clients or any prospective customers and clients.  Anything to the contrary notwithstanding,  Employee shall be entitled to retain (i) personal papers and other materials of a personal  nature; provided, that such papers or materials do not include Non-Public Information (as  defined in any Restrictive Agreement), (ii) information showing Employee’s compensation  or relating to reimbursement of expenses, and (iii) copies of plans, programs and agreements  relating  to Employee’s  employment,  or  termination  thereof,  with  the  Company which  Employee received in his capacity as a participant.       14. Confidentiality, Non-Solicit and Non-Competition. Employee will enter into and  be subject to a Confidentiality/Non-Disclosure Agreement and a Non-Solicitation and Non- Compete Agreement, each in substantially the form attached hereto as Exhibits B and C (the  “Restrictive Agreements”), which, for the avoidance of doubt, may be revised as required  by law to ensure enforceability.         15. Cooperation.  From and after an Employee Termination, Employee shall provide  Employee’s reasonable cooperation in connection with any legal action or proceeding (or  any  appeal  from  any  action  or  proceeding)  which  relates  to  events  occurring  during  Employee’s employment hereunder, provided, that the Company shall reimburse Employee  for Employee’s reasonable costs and expenses incurred in connection therewith, and such  cooperation shall not unreasonably burden Employee or unreasonably interfere with any  subsequent employment that Employee may undertake.      16. Whistleblower.  Nothing  in  this  Agreement or  the  Restrictive  Agreements will  preclude, prohibit or restrict Employee from (a) communicating with, any federal, state or  local  administrative  or  regulatory  agency  or  authority,  including  but  not  limited  to  the  Securities and Exchange Commission (the “SEC”); (b) participating or cooperating in any                                   8                





 






     investigation conducted by any governmental agency or authority; or (c) filing a charge of       discrimination with the United States Equal Employment Opportunity Commission or any       other federal state or local administrative agency or regulatory authority.  Nothing in this       Agreement, or  any other agreement between the parties,  prohibits  or is  intended in  any       manner to prohibit, Employee from (A) reporting a possible violation of federal or other       applicable law or regulation to any governmental agency or entity, including but not limited       to the Department of Justice, the SEC, the U.S. Congress, and any governmental agency       Inspector General, or (B) making other disclosures that are protected under whistleblower       provisions of federal law or regulation.  This Agreement does not limit Employee’s right to       receive  an  award  (including,  without  limitation,  a  monetary  reward)  for  information       provided to the SEC.  Employee does not need the prior authorization of anyone at the       Company to make any such reports or disclosures, and Employee is not required to notify       the  Company  that Employee has  made  such  reports  or  disclosures.   Nothing  in  this       Agreement or any other agreement or policy of the Company is intended to interfere with       or restrain the immunity provided under 18 U.S.C. §1833(b).  Employee cannot be held       criminally or civilly liable under any federal or state trade secret law for the disclosure of a       trade secret that is made (i) (A) in confidence to federal, state or local government officials,       directly or indirectly, or to an attorney, and (B) for the purpose of reporting or investigating       a suspected violation of law; (ii) in a complaint or other document filed in a lawsuit or other       proceeding, if filed under seal; or (iii) in connection with a lawsuit alleging retaliation for       reporting a suspected violation of law, if filed under seal and does not disclose the trade       secret,  except  pursuant  to  a  court  order.   The  foregoing  provisions  regarding  protected       disclosures  are  intended  to  comply  with  all  applicable  laws.   If  any  laws  are  adopted,       amended or repealed after the execution of this Agreement, this Section 16 shall be deemed       to be amended to reflect the same.                      17. Miscellaneous.                  (a)   Notices.  Any notice required or permitted to be given under this Agreement        shall be in  writing  and shall be deemed to  have  been duly  given (i) when delivered in        person, (ii) upon receipt when mailed by first class certified or registered mail, postage        prepaid,  (iii) one  (1)  business  day  after  being  sent  by  overnight  courier,  or  (iv) upon        confirmation of receipt by facsimile, addressed to the parties at their respective addresses        specified below:         if to Company, to:         Robert T. Wyman        Corporate Counsel        2 Executive Drive        Chelmsford, Massachusetts 01824           with a copy (which shall not constitute notice) to:                                          9   





 






Manan (Mike) Shah  Milbank LLP  55 Hudson Yards  New York, NY 10001-2163    if to Employee, to Employee’s most recent address on file with the Company   with a copy (which shall not constitute notice) to:   James L. Komie  Howard & Howard Attorneys PLLC  200 S. Michigan Ave., Ste. 1100  Chicago, IL 60604                 Any party to this Agreement may change his or its address for notices by notice  given pursuant to this Section 17(a).         (b)   This Agreement shall be binding upon and inure to the benefit of the parties  hereto and their respective heirs, representatives, executors, administrators, distributees,  devisees,  legatees,  successors  and,  solely  with  respect  to  the  Company,  its  assigns,  including without limitation any successor in interest to the Company who acquires all or  substantially all of the Company’s assets.         (c)   In the event of any Employee Termination, Employee shall be under no  obligation to seek other employment or otherwise mitigate the obligations of the Company  under  this  Agreement  and  no  such  substitute  employment  or  mitigation  shall  affect  Employee’s right to receive severance and other benefits hereunder.         (d)   The Company’s obligation to pay Employee the amounts, and to make the  arrangements, provided hereunder shall be subject to set off or recoupment of any amounts  loaned or advanced to Employee by the Company or any Subsidiary of the Company that  are supported by reasonable documentation; provided, that any such set off or recoupment  shall, in each case, be applied to the next dollars due to Employee from the Company during  the applicable period.         (e)   Except as expressly set forth herein, this Agreement, together with any other  agreement entered into between the Company and Employee on the date hereof, contains  the entire agreement between the parties with respect to the subject matter hereof, and this  Agreement supersedes all other agreements and drafts hereof, oral or written, between the  parties  hereto  with  respect  to  the  subject  matter  hereof.   No  promises,  statements,  understandings,  representations  or  warranties  of  any  kind,  whether  oral  or  in  writing,  express or implied, have been made to Employee by any Person to induce Employee to  enter into this Agreement other than the express terms set forth herein, and Employee is  not relying upon any promises, statements, understandings, representations, or warranties  other than those expressly set forth in this Agreement.                                    10                





 






      (f)   No change or modification of this Agreement shall be valid unless the same  shall be in writing and signed by all of the parties hereto.  No waiver of any provisions of  this Agreement shall be valid unless in writing and signed by the party charged with such  waiver.  No waiver of any of the provisions of this Agreement shall be deemed, or shall  constitute, a waiver of any other provision, whether or not similar, nor shall any waiver  constitute a continuing waiver, unless so provided in the waiver.         (g)   If any provision of this Agreement (or portion thereof) shall, for any reason,  be held invalid or unenforceable, such provision (or portion thereof) shall be ineffective  only to the extent of such invalidity or unenforceability, and the remaining provisions of  this Agreement (or portions thereof) shall nevertheless be valid, enforceable and of full  force and effect.  If any court of competent jurisdiction or arbitrator finds that any provision  contained in this Agreement is invalid or unenforceable, then the parties hereto agree that  such invalid or unenforceable provision shall be deemed modified so that it shall be valid  and enforceable to the greatest extent permissible under law, and if such provision cannot  be  modified  so  as  to  make  it  enforceable  or  valid,  such  finding  shall  not  affect  the  enforceability or validity of any of the other provisions contained herein.         (h)   This Agreement may be executed in identical counterparts, both of which  shall  be  considered  one  and  the  same  agreement  and  shall  become  effective  when  counterparts have been signed by each party and delivered to the other party.  In the event  that any signature is delivered by facsimile transmission or by an e-mail which contains a  portable document format (.pdf) file of an executed signature page, such signature page  shall create a valid and binding obligation of the party executing (or on whose behalf such  signature is executed) with the same force and effect as if such signature page were an  original thereof.         (i)   The section or paragraph headings or titles herein are for convenience of  reference only and shall not be deemed a part of this Agreement.  The parties have jointly  participated in the drafting of this Agreement, and the rule of construction that a contract  shall  be  construed  against  the  drafter  shall  not  be  applied.   The  terms  “including,”  “includes,” “include” and words of like import shall be construed broadly as if followed  by the words “without limitation.”  The terms “herein,” “hereunder,” “hereof” and words  of like import refer to this entire Agreement instead of just the provision in which they are  found.           (j)   Notwithstanding anything to the contrary in this Agreement:               (i)   The parties agree that this Agreement shall be interpreted to comply        with or be exempt from Section 409A of the Internal Revenue Code of 1986, as        amended or replaced, and the regulations and authoritative guidance promulgated        thereunder  to  the  extent  applicable  (collectively  “Code  Section  409A”),  and  all        provisions of this Agreement shall be construed in a manner consistent with the        requirements for avoiding taxes or penalties under Code Section 409A.  In no event        whatsoever will the Company be liable for any additional tax, interest or penalties        that may be imposed on Employee under Code Section 409A or any damages for        failing to comply with Code Section 409A.                                   11                





 






            (ii)  A termination of employment shall not be deemed to have occurred        for purposes of any provision of this Agreement providing for the payment of any        amounts or benefits considered “nonqualified deferred compensation” under Code        Section  409A  upon  or  following  a  termination  of  employment  unless  such        termination is also a “separation from service” within the meaning of Code Section        409A and, for purposes of any such provision of this Agreement, references to a        “termination,” “termination of employment” or like terms shall mean “separation        from service.”  If Employee is deemed on the date of termination to be a “specified        employee” within the meaning of that term under Code Section 409A(a)(2)(B), then        with  regard  to  any  payment  or  the  provision  of  any  benefit  that  is  considered        nonqualified deferred compensation under Code Section 409A payable on account        of a “separation from service,” such payment or benefit shall be made or provided        at the date which is the earlier of (A) the expiration of the six (6)-month period        measured from the date of such “separation from service” of Employee, and (B) the        date  of Employee’s  death  (either  such  period,  the  “Delay  Period”).   Upon  the        expiration of the Delay Period, all payments and benefits delayed pursuant to this        Section 17(j)(ii) (whether they would have otherwise been payable in a single sum        or in installments in the absence of such delay) shall be paid or reimbursed on the        first business day following the expiration of the Delay Period to Employee in a        lump sum, and any remaining payments and benefits due under this Agreement        shall be paid or provided in accordance with the normal payment dates specified        for them herein.               (iii) With regard to any provision herein that provides for reimbursement        of  costs  and  expenses  or  in-kind  benefits,  except  as  permitted  by  Code        Section 409A,  (A) the  right  to  reimbursement  or  in-kind  benefits  shall  not  be        subject to liquidation or exchange for another benefit, (B) the amount of expenses        eligible for reimbursement, or in-kind benefits, provided during any taxable year        shall not affect the expenses eligible for reimbursement, or in-kind benefits, to be        provided  in  any  other  taxable  year,  provided, that  this  clause  (B)  shall  not  be        violated with regard to expenses reimbursed under any arrangement covered by        Internal Revenue Code Section 105(b) solely because such expenses are subject to        a limit related to the period the arrangement is in effect and (C) such payments shall        be made on or before the last day of Employee’s taxable year following the taxable        year in which the expense occurred.               (iv)  For purposes of Code Section 409A, Employee’s right to receive        any installment payments pursuant to this Agreement shall be treated as a right to        receive a series of separate and distinct payments.  Whenever a payment under this        Agreement specifies a payment period with reference to a number of days (e.g.,        “payment shall be made within thirty (30) days following the date of termination”),        the  actual  date  of  payment  within  the  specified  period  shall  be  within  the  sole        discretion of the Company.         (k)   This Agreement and any and all claims arising out of, under, pursuant to, or  in  any  way  related  to  this  Agreement,  including  but  not  limited  to  any  and  all  claims  (whether sounding in contract or tort) as to this Agreement’s scope, validity, enforcement,                                   12                





 






interpretation, construction, and effect shall be governed by the laws of the State of New  York (without regard to any conflict of laws rule which might result in the application of  the laws of any other jurisdiction).         (l)   The  Company  may  withhold  from  any  amounts  payable  under  this  Agreement such federal, state and local taxes as may be required to be withheld pursuant  to any applicable law or regulation.         (m)   Notwithstanding  anything  that  may  be  expressed  or  implied  in  this  Agreement, Employee covenants, agrees and acknowledges that this Agreement may only  be enforced against the Company.  All claims or causes of action (whether in contract, tort  or otherwise) arising out of or relating to this Agreement (including without limitation the  negotiation,  execution  or  performance  of  this  Agreement  and  any  representation  or  warranty made in or in connection with this Agreement or as an inducement to enter into  this  Agreement)  may  be  made  only  against  the  Company,  and  no  one  other  than  the  Company  (including  without  limitation  any  person  negotiating  or  executing  this  Agreement on behalf of the Company) shall have any liability or obligation with respect to  same.         (n)   Notwithstanding anything in this Agreement to the contrary, if any payment  or  distribution Employee would  receive  pursuant  to  this Agreement or  otherwise  (“Payment”) would (i) constitute a “parachute payment” within the meaning of Section  280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by  Section 4999 of the Code (the “Excise Tax”), then such Payment shall be delivered as to  such lesser extent which would result in no portion of such Payment being subject to the  Excise Tax.  The accounting firm engaged by the Company for general audit purposes as  of the day prior to the effective date of the change in control shall perform the foregoing  calculation.  The Company shall bear all expenses with respect to the determinations by  such accounting firm required to be made hereunder.  Any good faith determinations of the  accounting firm made hereunder shall be final, binding and conclusive upon the Company  and Employee.  Any reduction in payments and/or benefits pursuant to this paragraph will  occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated  vesting of equity awards other than stock options; (3) cancellation of accelerated vesting  of stock options; and (4) reduction of other benefits payable to Employee.         (o)   Employee represents,  warrants  and covenants  that (i) that Employee has  read and understands this Agreement, is fully aware of its legal effect, has not acted in  reliance  upon  any  representations  or  promises  made  by  the  Company  other  than  those  contained in writing herein, and has entered into this Agreement freely based on his own  judgment,  (ii) Employee has  the  full  right,  authority  and  capacity  to  enter  into  this  Agreement and perform Employee’s obligations hereunder, (iii) Employee is not bound by  any  agreement  that  conflicts  with  or  prevents  or  restricts  the  full  performance  of  Employee’s  duties  and  obligations  to  the  Company  hereunder  during  or  after  the  Employment Term, and (iv) the execution and delivery of this Agreement shall not result  in any breach or violation of, or a default under, any existing obligation, commitment or  agreement to which Employee is subject. Employee represents that he has informed his  employer as of the date hereof (the “Former Employer”) that he will be working for the  Company, described the scope of his duties hereunder and confirms that his employment                                  13                





 






with  the  Company  will  not  violate  any  agreements  or  obligations  with  the  Former  Employer.  The Company reserves the right to contact the Former Employer if it has any  concerns  regarding  any  non-competition,  confidentiality  or  other  obligations  Employee  may have and to terminate Employee’s employment for Cause if the Company determines  that the representations and warranties in this section are false.           (p) The covenants and obligations of the Company under Sections 7, 10 (to the  extent the Severance Package is payable), and 17 hereof and the covenants and obligations  of Employee under Sections 12, 13, 15, and 17, hereof and in the Restrictive Agreements  (as set forth therein), shall continue and survive any Employee Termination or Employee’s  ceasing to be an officer or employee of the Company or any termination of this Agreement.                            [signature page follows]                                    14                





 












 






                                      Exhibit A                                                                                    The Performance Condition means maintaining a closing price of $6 or greater per Share for 30  consecutive days following the grant date of the Initial Grants, subject to the terms and conditions  provided in the Company’s Restricted Stock Unit Award Agreement, and to Employee’s continued  service as an employee through the vesting date.                                                                       #4827-6397-6050v1 





 






                Exhibit B   Attached                                             - 17 -                 





 






Exhibit C   Attached             - 18 -