**Exhibit 10.22****EMPLOYMENT AGREEMENT**     EMPLOYMENT AGREEMENT (this “Agreement”), effective as of December 30, 2006 by and between USISERVICES CORPORATION, a Delaware corporation (“**Company**”), and JEFFREY JONES (“**Executive**”). Companyand Executive are referred to hereinafter as the “**Parties**”.RECITALS:     WHEREAS, the Company is a wholly-owned subsidiary of USI Holdings Corporation, a Delawarecorporation (“USI”);     WHEREAS, Executive is presently employed by the Company pursuant to an Employment Agreementeffective as of December 1, 2002, as amended by a First Amendment to Employment Agreement dated asof February 22, 2004 (collectively, the “**Prior Agreement**”);     WHEREAS, the Parties wish to supersede and restate the Prior Agreement in its entirety, as setforth herein; and     WHEREAS, the Company desires to employ the Executive on the terms and subject to theconditions set forth herein, and Executive is willing to accept such employment on such terms andconditions; and     WHEREAS, by virtue of such employment, Executive will have access to Confidential Informationof the USI Companies; and     WHEREAS, Executive acknowledges and agrees that the Company (on behalf of itself and the USICompanies) has a reasonable, necessary and legitimate business interest in protecting its own andthe USI Companies’ Confidential Information, Client Accounts, relationships with Active ProspectiveClients, Goodwill and ongoing business, and that the terms and conditions set forth below arereasonable and necessary in order to protect these legitimate business interests.     NOW THEREFORE, in consideration of the representations, warranties, covenants, and agreementscontained herein, and for other good and valuable consideration, the receipt and adequacy of whichare conclusively acknowledged, the Parties, intending to become legally bound, agree as follows:AGREEMENT:**1. DEFINITIONS**     1.1 ***Specific Definitions***. Capitalized terms not defined elsewhere herein shall have thefollowing meanings ascribed to them:     “**Active Prospective Acquisition**” means any business or enterprise engaged in providing USIBusiness, (i) with which a specified Person (or any of its agents) had engaged in negotiations(whether or not successfully) within the 24 months preceding a specified date, regarding theacquisition of, sale of assets by, or merger or joint venture with, such business or enterprise or(ii) which had been identified by a specified Person (or any of its agents) in the business recordsof such specified Person within the 24 months preceding a specified date, and actively consideredas a candidate, for possible acquisition, merger, sale of assets or joint venture.     “**Active Prospective Client**” means any Person, or a group of Persons, (i) who or which had beenidentified with reasonable particularity by a specified Person (or any of its agents) in thebusiness records of such specified Person within the 24 months preceding a specified date, withreasonable particularity as a possible client or customer of such specified Person, or (ii) to whomor which a specified Person (or any of its agents) had communicated in the business records of suchspecified Person within the 24 months preceding a specified date, in writing or otherwise, withrespect to the provision of any services that such specified Person provides in the conduct of itsbusiness.     “**Change of Control**” means the occurrence of any of the following:     (i) any transaction, or series of related transactions (including any merger orconsolidation), the result of which is that any “person” or “group” (as such terms are defined forpurposes of the Securities Exchange Act of 1934, as amended),

 
becomes the “beneficial owner” (as so defined in Rule 13-d3 under such Act, except that a Personshall be deemed to have “beneficial ownership” of all securities that such Person has the right toacquire, whether such right is currently exercisable or is exercisable only upon the occurrence ofa subsequent condition), directly or indirectly, of 50% or more of USI’s aggregate outstandingvoting stock (measured by voting power rather than number of shares);     (ii) USI consolidates with, or merges with or into, any Person, or any Person consolidateswith or merges with or into USI, in any such event pursuant to a transaction in which any of theoutstanding voting stock of USI is converted into or exchanged for cash, securities or otherproperty, other than any such transaction where the voting stock of USI outstanding immediatelyprior to such transaction is converted into or exchanged for voting stock of the surviving ortransferee Person constituting 50% or more (immediately after giving effect to such conversion orexchange) of the aggregate outstanding shares of such voting stock of such surviving or transfereePerson or     (iii) substantially all of USI’s assets or earnings power is sold in any transaction or seriesof related transactions.     “**Client Account**” means the account of any client (including, without limitation, any retailinsurance agent or broker, individual insured, association and any member thereof, and anyinsurance carrier or other entity to the extent third party administration claims processing orunderwriting is performed by such specified Person for such carrier or other entity) who or whichis serviced, as of a specified date, by a specified Person in connection with such specifiedPerson’s business, regardless of whether such services are provided by, or through the licenses of,such specified Person or any shareholder, employee or agent of such specified Person.     “**Confidential Information**” means all information that has actual or potential economic valueto the Company or to the USI Companies from not being generally known to the public or to otherpersons who can obtain economic value from its disclosure or use. Confidential Information willinclude, among other things, any and all information disclosed to Executive or known by Executiveas a consequence of his employment by the USI Companies (whether under the Prior Agreement or thisAgreement) that is not already generally available to the public (unless such information hasentered the public domain and become available to the public through fault on the part of the Partyto be charged hereunder), including, without limitation, in respect of the Company’s or any USICompany’s businesses, finances, operations, business programs, officers, directors, partners, jointventures, employees, contractors, vendors, suppliers, processes, procedures manuals, computerprograms, sales, services, research projects, data, accounts, billing methods, pricing, sales,statistical data, business methods, systems, plans, internal affairs, legal affairs, potential orexisting reorganization plans, Active Prospective Clients, clients, Client Accounts, transactionswith clients, any and all information entrusted to the Company or any USI Company by any thirdparty on a confidential basis, and any and all information defined as “Trade Secrets” under theUniform Trade Secrets Act, or which can otherwise be considered a trade secret under applicabletrade secrets law. Confidential Information may be contained in written materials, handwrittennotes, oral communications, tape recordings, the unwritten knowledge of employees, and/or any othertangible medium of expression, including but not limited to electronically stored information, harddisk or soft disk drive mechanisms. The Parties agree that Confidential Information includes,without limitation, the following: (i) any information or documentation relating to the USI Companies’sales, marketing, cross-sell, compensation, incentive, or personnel strategiesand programs.  (ii) the identity of and key contacts at any client whose accountconstituted a Client Account of any USI Company at any time, as well as theidentity of any Active Prospective Client of any such entity;  (iii) the identities of markets or companies from which insurancecoverages or other commitments, benefits or services for clients are obtained;  (iv) the types of consulting, third-party administration, employeecommunication, investment management, managed care, human resource and otherservices, and insurance coverages, provided or to be provided specifically toany such client or Active Prospective Client of any USI Company, and theinternal corporate policies relating thereto;  (v) the specific insurance policies purchased by or for such clientsor Active Prospective Clients of any USI Company;

 
 (vi) the expiration dates, commission rates, fees, premiums and otherterms and conditions of such policies and the service cost burden with respectto each such client and Active Prospective Client of a USI Company;  (vii) the risk specifications and other characteristics, and claimsloss histories of such clients or Active Prospective Clients;  (viii) USI Companies’ operations manuals, prospecting manuals and guidelines, pricingpolicies and related information, marketing manuals and plans, and businessstrategies, techniques and methodologies;  (ix) USI Companies’ financial information, including but not limitedto, information set forth in internal records, files and ledgers, orincorporated in profit and loss statements, fiscal reports and business plans;  (x) Active Prospective Acquisitions of the Company or another USICompany and all financial data, pricing terms, information memoranda and duediligence reports relating thereto;  (xi) inventions, discoveries, devices, algorithms, computer hardwareand computer software (including any source code, object code, documentation,diagrams, flow charts, know-how, methods or techniques associated with thedevelopment or use of the foregoing computer software);  (xii) all internal memoranda and other office records, includingelectronic and data processing files and records; and  (xiii) any other information constituting a trade secret under the governing tradesecrets law.     “**Goodwill**” means the expectation of continued patronage from Client Accounts and new patronagefrom Active Prospective Clients.     “**Person**” means an individual, a partnership, a corporation, an association, a joint stockcompany, a trust, a joint venture, an unincorporated organization, a limited liability company, ora governmental entity (or any department, agency, or political subdivision thereof).     “**USI Business**” means the businesses provided by any of the USI Companies (including, withoutlimitation, the providing of (i) insurance agency and brokerage, and related insurance services,including, without limitation, risk management and loss control, cost containment, analysis of lossexposures and designs, catastrophic case management, loss reserves and rate reviews, performance ofcash flow studies, administration of risk funding and transfer techniques, captive companyformation, self-insurance consulting, reinsurance and excess stop loss (both specific andaggregate) placement, management of insurance programs (including programs with respect tomembership associations and congregations), third party administration, actuarial andadministrative services for pension and health plans, compensation programs and employeecommunications; (ii) managed care consulting services and related legal assistance; (iii) humanresource and employee compensation consulting services and related legal assistance; and (iv) anyinsurance or financial services relating to any of the foregoing).     “**USI Companies**” or “**USI Company**” means USI, its subsidiaries (including the Company), and anyentity under the control (as defined in Rule 12b-2 of the regulations promulgated under theSecurities Exchange Act of 1934, as amended, without regard to whether any party is a “registrant”under such Act) of USI, and any of their successors or assigns.     “**USI CRC**” means the USI Companies (i) comprising or included in the USI California Region;and/or (ii) to which Executive provides services on behalf of the Company hereunder.**2*****.*****POSITION, RESPONSIBILITIES AND TERM**     2.1. ***Executive’s Position.***On the terms and subject to the conditions set forth in thisAgreement, the Company shall employ Executive to serve as regional chief executive officer of theUSI California Region. Executive shall report to the Chief Executive Officer of USI, or hisdesignee (the “**USI CEO**”).

 
     2.2 ***Executive’s Responsibilities***. The Executive shall perform all duties customarilyattendant to the position of regional chief executive officer and shall perform such services andduties commensurate with such position as may from time to time be reasonably prescribed by the USICEO.     2.3 ***No Conflicts of Interest.***Executive agrees that throughout the period of his employmenthereunder, he will not (a) accept other employment; or (b) perform any activities or services whichwould (i) be inconsistent with this Agreement or the employment relationship between the Parties,or (ii) interfere with or present an actual or potential conflict of interest concerningExecutive’s employment with the Company; provided, that Executive shall be permitted toserve on the boards of directors of such other companies as the USI CEO shall approve (suchapproval to not be unreasonably withheld), and that Executive may make personal investments and mayact as a director and engage in other activities for any charitable, educational, or othernonprofit institution, as long as such investments and activities do not materially interfere withthe performance of Executive’s duties hereunder. Executive agrees to adhere to and comply with anyand all business practices and requirements of ethical conduct set forth in USI’s Code of BusinessConduct, the Company’s operating policies and procedures, its employee manual, or any similarpublication.     2.4. ***Term.***Executive shall be employed hereunder commencing on December 30, 2006 and endingon the date on which employment is terminated in accordance with the provisions of Section 8 ofthis Agreement. The foregoing term of employment shall be referred to hereinafter as the “**Term**”.**3. ACCEPTANCE**     3.1 Executive hereby accepts such employment and agrees that throughout the period ofemployment hereunder, Executive will devote his full business time, attention, knowledge andskills faithfully, diligently and to the best of his ability, in the furtherance of the businessof the USI Companies.**4. COMPENSATION**     4.1. ***Base Salary***. As compensation for the services to be rendered by Executive hereunder, theCompany agrees to pay Executive, and Executive agrees to accept, a base salary (“**Base Salary**”)during employment hereunder at the annual rate of not less than three hundred fifty thousanddollars ($350,000); provided, however, that the USI CEO may determine to increasebut not decrease the Base Salary in such amount as the USI CEO may determine, subject to the terms,conditions, and approvals required by USI’s policies and procedures then in effect. The BaseSalary shall be payable in equal installments by the Company according to its normal payrollpractices.     4.2 ***Performance Bonus****.*As additional compensation for the services to be rendered byExecutive hereunder, Executive shall be eligible to receive from time to time during the Term, abonus under the USI Management Incentive Plan (the “**USI Plan**”) as may be amended from time to timeat the sole discretion of USI. At no time during the Term hereof will Executive’s “target” awardopportunity be any less than 70% of Executive’s then Base Salary. Any awards under the USI Planwill be determined by the USI CEO, subject to the terms, conditions and approvals required by USI’spolicies and procedures then in effect. By way of clarification, the “target” award opportunitypercentage set forth above shall not guarantee Executive payments of, or entitlement to, anyamount, even if targets are met. Such awards are dependent upon, among other things, the generalfinancial performance of USI, and any such award, if any, shall be in such amount as the USI CEOmay determine, and any decision of the USI CEO shall be in his sole and unreviewable discretion.Any award under the USI Plan will be paid to the Executive no later than 90 days following the endof the performance year.     4.3 ***Benefits.***In addition to such compensation, Executive shall be entitled to the benefitswhich are afforded generally, from time to time to similarly situated executive employees of theUSI Companies. Notwithstanding the foregoing, nothing contained in this Agreement shall requirethe USI Companies to establish, maintain or continue any of the group benefits plans already inexistence or hereafter adopted for the employees of the USI Companies, or restrict the right of theUSI Companies to amend, modify or terminate such group benefit plans in a manner which does notdiscriminate against Executive as compared to other executive employees of USI Companies.     4.4 ***Paid Time Off.***Executive shall be entitled to paid time off (consisting of vacation, sickdays and personal days) and holidays as are provided in general to similarly situated employees ofthe USI Companies, in accordance with usual practices and procedures. Without limiting theforegoing, unless otherwise required by law, Executive shall not be entitled to any additionalcompensation for any unused paid time off. Paid time off shall stop accruing once Executive hasaccumulated and not used the number of days to which he is entitled to in a year.

 
     4.5 ***Specific Allowances: Automobile; Club Dues.***The Company agrees to pay to Executiveduring the Term (a) $1000 per month, to be used exclusively by Executive for the retention (whetherby lease or otherwise), maintenance, insurance and care of an automobile to be used by Executive inthe discharge of his duties to Company. Other than as set forth in the preceding sentence, andother than for car rentals on business trips, Executive will not be reimbursed for mileage or anyother automobile related expenses. During the Term, Executive agrees to maintain auto liabilityinsurance coverage with respect to said automobile, at least in the amounts required from time totime by USI’s policies and procedures then in effect, but in no event less than $250,000 combinedsingle limit coverage or $250,000/500,000 bodily injury and $250,000 property damage liability; and(b) $1000 per month for club dues and other organizational memberships.     4.6 ***Signing Bonus***. Upon execution by the Parties hereof, as additional partial considerationfor the covenants and performance of the obligations of Executive herein, Executive shall beentitled to a one-time signing bonus in the amount of five hundred ninety-five thousand dollars($595,000) (the “**Signing Bonus**”); provided, however, that if Executive’s employment terminatesprior to the second anniversary of the date hereof pursuant to Sections 8.4 hereof, he shall,within thirty (30) days of the date of such termination, repay to the Company an amount equal tothe Signing Bonus plus the following components of the Relocation Package: moving expenses,temporary housing expenses, and real estate closing costs. Notwithstanding the foregoing, theParties expressly agree that Executive’s obligation to repay, or his repayment of, any amount tothe Company pursuant to this Section 4.6 shall not relieve Executive of any obligation or covenantof Executive hereunder, including, without limitation, his obligations and covenants contained inSections 6 and 7.**5. EXPENSES**     5.1 Without duplicating any payment set forth in Section 4.5, the Company shall reimburseExecutive, in accordance with Company policy, for all expenses reasonably and properly incurredby Executive in connection with the performance of Executive’s duties hereunder and the conductof the business of the Company, upon the submission to the Company (or its designee) ofappropriate vouchers therefor.     5.2 ***Relocation Package***. Executive shall be entitled to the relocation package setforth as Addendum A to this Agreement (the “**Relocation Package**”).**6. CONFIDENTIAL INFORMATION AND PROPERTY**     6.1. ***Property of the Company.***Executive acknowledges and agrees that all premiums,commissions, fees and other forms of compensation, and all Confidential Information of the USICompanies relating thereto, which Executive generates in the course of providing, directly orindirectly, any USI Business during the Term hereof (including such items resulting from orrelating to services provided by Executive to the USI Companies), shall be the sole property of theUSI Companies.     6.2. ***Confidentiality during Term.***During the Term hereof, Executive will not use, or discloseto any Person, any Confidential Information (determined as of any date during the Term hereof) ofany USI Company, except (a) in the normal course of business on behalf of such USI Company; (b)with the prior written consent of such USI Company; or (c) to the extent necessary to comply withlaw or the valid order of a court of competent jurisdiction, in which event Executive shall notifysuch USI Company as promptly as practicable (and, if possible, prior to the making of suchdisclosure). In addition, Executive will use reasonable efforts to prevent any such prohibited useor disclosure by any other person.     **6.3.*****Confidentiality following Term.***Following the Term hereof, Executive will not use, ordisclose to any Person, any Confidential Information (determined as of the date of termination ofExecutive’s employment with the Company) of any USI Company, except (a) with the prior writtenconsent of such USI Company; or (b) to the extent necessary to comply with law or the valid orderof a court of competent jurisdiction, in which event Executive shall notify such USI Company aspromptly as practicable (and, if possible, prior to the making of such disclosure). In addition,Executive will use reasonable efforts to prevent any such prohibited use or disclosure by any otherperson.**7. NON-SOLICITATION, NON-COMPETITION AND CONFLICTS OF INTEREST**     7.1. ***Non-Solicitation.***Executive understands and acknowledges that the identities,preferences, goals, needs and strategic plans of the clients and Active Prospective Clients of theCompany, the USI CRC, and the other USI

 
Companies, and each such Company’s plans and strategies to maintain and develop business fromits respective clients and Active Prospective Clients, constitute valuable trade secret andproprietary information of the USI Companies; that such information is hereby expressly identifiedto Executive as “Confidential Information” having independent economic value; that such informationis not available from public sources; and that the USI Companies (including Company) have expendedconsiderable time and effort to develop, compile and protect such Confidential Information.Executive therefore agrees that while Executive is providing services for the Company and at alltimes thereafter, Executive shall not, without express prior written approval of the Company, useany Confidential Information to directly or indirectly, solicit or attempt to solicit business fromany client or Active Prospective Client of any USI Company (determined as of the earlier of thedate of termination or the date of such act) for Executive’s own benefit or for the benefit of aCompany competitor doing business in the same market area in which Company conducts business.     7.2. ***Non-Competition.***In consideration of the payments and benefits to be received byExecutive under this Agreement and for other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged by Executive, Executive agrees that, during the Term,Executive will refrain from carrying on any business, directly or indirectly, which provides anyUSI Business, except (a) in the normal course of business on behalf of any USI Company during theterm of Executive’s employment under this Agreement; or (b) with the Company’s prior writtenconsent. The term “carrying on any business” shall mean to act as a sole proprietor, partner,member of a limited liability company, stockholder, officer, director, employee, manager, trustee,agent, advisor, joint venturer, or consultant of, with or to, any business, or otherwise to own,manage, operate, control or participate in the ownership, management, operation or control of, orengage in, any business. It is expressly agreed that this Section 7.2 is not intended to restrictor prohibit the ownership by Executive of stock or other securities of a publicly-held corporationin which Executive (i) does not possess beneficial ownership of more than 5% of the voting capitalstock of such corporation and/or (ii) does not participate in any management or advisory capacity.In addition, it is also agreed that this Section 7.2 shall not prohibit Executive from serving as adirector pursuant to the terms of Section 2.3 during the term of his employment under thisAgreement. It is the desire and intent of the parties that the provisions of this Section 7.2 shallbe enforced under the laws and public polices applied in each jurisdiction in which enforcement issought. Accordingly, if any particular provision of this Section 7.2 is adjudicated to be invalidor unenforceable or shall for any reason be held to be excessively broad as to duration, geographicscope, activity or subject, it shall be construed by limiting and reducing it, so as to beenforceable to the extent compatible with applicable laws and such provision shall be deemedmodified and amended to the extent necessary to render such provision enforceable in suchjurisdiction. If Executive challenges the enforceability of the provisions of this Section 7.2 inwhole or in part, then, without limiting any remedy available to the Company (including specificperformance of the covenants contained in Sections 6 and 7 hereof) Executive shall have forfeitedany right to any payments and benefits under this Agreement that he has not already received,without such forfeiture constituting an election of remedies on Executive’s part.     7.3 ***Non-Interference.***Executive agrees that, from and after the date that Executive ceasesemployment with Company, Executive shall not, directly or indirectly, interfere with the Company’sbusiness by: (a) revealing any Confidential Information; (b) inducing or attempting to influenceany employee of the Company or of any USI Company to end his or her employment; (c) inducing orattempting to induce a consultant, independent contractor, licensee or other third party to severany relationship with the Company or with any USI Company; (d) assisting any other person, firm orentity in the solicitation of any such employee, consultant, independent contractor, licensee orother third party while such employee, consultant, independent contractor, licensee or third partyis employed or engaged by the Company or by any USI Company; (e) soliciting, causing to besolicited, or knowingly accepting the disclosure of any Confidential Information for any purposewhatsoever or for any other party; or (f) disrupting or seeking to disrupt in any manner, directlyor indirectly, any contractual relationship then existing between any USI Company and any client.     7.4 ***Miscellaneous.***Without limiting the provisions of Section 18, in the event of anyassignment by the Company permitted under such section, the restrictive periods contained in thisSection 7 shall be determined by reference to the termination of Executive’s employment with anypermitted assignee of the Company.**8. TERMINATION**     8.1 ***Termination by the Company Without Cause.***Company shall have the right to terminateExecutive’s employment hereunder without Cause (as defined below) by giving Executive writtennotice to that effect. Any such termination of employment shall be effective on the date specifiedin such notice. In the event of such termination, the Company shall (a) pay Executive his unpaidBase Salary through the effective date of termination and any business expenses remaining unpaid onthe effective date of the termination for which Executive is entitled to be reimbursed underSections 4.5 and 5 of this Agreement; (b) pay Executive, for the period commencing on the datefollowing the date of termination and ending on the date which is twelve (12) months following theeffective date of termination, an amount per month equal to one-twelfth of the sum of (i) his thenBase Salary, plus (ii) an amount equal to Executive’s target bonus per Section 4.2 that
 

 
he would have otherwise received with respect to the year in which Executive’s terminationoccurred (but for such termination); and (c) either continue to provide Executive with medical anddental healthcare coverage under the plan in which Executive participates immediately prior to theeffective date of such termination (where Executive remains eligible to participate, and inaccordance with the terms thereof) or in the event Executive no longer remains eligible toparticipate under such medical and/or dental healthcare plan, to reimburse Executive for the amountof the premium Company would have paid for Executive’s medical and/or dental healthcare coveragehad Executive remained employed hereunder, in each case until the earlier of (i) the date which istwelve (12) months following the effective date of termination and (ii) the commencement ofExecutive’s coverage under another employer’s healthcare plan; provided, however,that without limiting any other remedy available hereunder, all payments described in the Section8.1 shall immediately terminate upon an arbitrator’s or judge’s determination that Executive hasbreached the provisions of Section 6 or 7 hereof.     8.2 ***Termination by the Company for Cause***. The Company shall have the right to terminate thisAgreement and Executive’s employment hereunder for Cause by giving Executive written notice to thateffect. Any such termination of employment shall be effective on the date specified in suchnotice. In the event of such termination, the Company shall pay to Executive (a) his unpaid BaseSalary through the effective date of the termination, and (b) any business expenses remainingunpaid on the effective date of the termination for which Executive is entitled to be reimbursedunder Section 5 of this Agreement. For the purpose of this Agreement, “**Cause**” shall mean (i)commission of a willful and material act of dishonesty in the course of Executive’s dutieshereunder, (ii) conviction by a court of competent jurisdiction of a crime constituting a felony orconviction in respect of any act involving fraud, dishonesty or moral turpitude, (iii) Executive’sperformance under the influence of controlled substances, or continued habitual intoxication,during working hours, after the Company shall have provided written notice to Executive and givenExecutive 30 days within which to commence rehabilitation with respect thereto, and Executive shallhave failed to commence such rehabilitation or continued to perform under the influence after suchrehabilitation, (iv) frequent or extended, and unjustifiable (not as a result of incapacity ordisability) absenteeism which shall not have been cured within 30 days after the Company shall haveadvised Executive in writing of its intention to terminate Executive’s employment in accordancewith the provisions of this Section 8.2, in the event such condition shall not have been cured, (v)Executive’s personal, willful and continuing misconduct or refusal to perform duties andresponsibilities described in Section 2 above, or to carry out directives of the USI CEO, which, ifcapable of being cured, shall not have been cured within 60 days after the Company shall haveadvised Executive in writing of its intention to terminate Executive’s employment in accordancewith the provision of this Section 8.2 or (vi) material non-compliance with the terms of thisAgreement, including but not limited to any breach of Section 6 or Section 7 of this Agreement.     8.3 ***Termination by Executive for Good Reason.***Executive shall have the right to terminatethis Agreement and his employment hereunder for “good reason,” if (a) there is a Change of Control,and, within two years following such Change of Control, Executive terminates his employmenthereunder due to the material diminution of his duties and responsibilities, as set forth herein,or (b) default by the Company in the payment of or otherwise failure by the Company to pay in atimely fashion after demand therefor any material sum due to the Executive pursuant to thisAgreement; provided that Executive shall give the Company prior written notice of the reasontherefore and a period of 30 days following receipt by the Company of such notice shall have lapsedand the matters which constitute or give rise to such “good reason” shall not have been cured oreliminated by the Company. In the event of such termination, Executive shall be entitled toreceive the same payments and benefits as would be provided under Section 8.1 in the event of atermination without Cause.     8.4 ***Termination by Executive.***Executive shall have the right to terminate this Agreement andhis employment hereunder by giving the Company not less than ninety (90) days notice. In theevent that such notice is given, the Company may require Executive to leave immediately. Thetermination of employment shall be effective on the earlier of ninety (90) days after issuance ofthe notice and the date specified in the notice. In the event of such termination, Executiveshall be entitled to receive the same payments and benefits as would be provided under Section 8.2in the event of a termination by the Company for Cause.     8.5 ***Death, Incapacitation or Disability.***          a. ***Death.***If Executive dies during his employment hereunder, this Agreement shall terminateupon the date of Executive’s death. In the event of any such termination, the Company shall pay toExecutive’s representative or his estate any unpaid Base Salary through the effective date oftermination and any business expenses remaining unpaid on the effective date of the termination forwhich Executive is entitled to be reimbursed under Sections 4.5 and 5 of this Agreement.          b. ***Incapacitation or Disability.***In the event that Executive is incapacitated or disabled byreason of illness or physical or mental disability from performing Executive’s duties hereunderwith or without reasonable accommodation
 

 
(which shall be deemed to have occurred (a) when Executive has become eligible for totaldisability benefits under the Company’s long-term group disability policy, if any, or, if no policyis then in effect, (b) when such incapacity or disability, as defined below, shall have existed foreither (i) one continuous period of six months or (ii) a total of seven months out of any twelveconsecutive months), the Company shall have the right to terminate Executive’s employment hereunderby giving thirty (30) days’ written notice to Executive to that effect. If Company terminatesExecutive pursuant to this paragraph, the termination of employment shall be effective on the datespecified in such notice but in no event shall that date be sooner than the date determined underclause (a), or if no long term disability policy is in effect then the date determined in clause(b). In the event of any such termination, the Company shall pay Executive any Base Salary due inaccordance with Section 4 herein up to the effective date of termination, and any business expensesremaining unpaid on the effective date of the termination for which Executive is entitled to bereimbursed under Sections 4.5 and 5 herein and any accrued but unpaid vacation benefits owed as ofthe date of termination. By way of clarification, nothing herein is intended to imply or statethat salary or other compensation is due Executive for the period Executive is absent from work dueto disability or incapacity. Except as specifically set forth in this Section 8.5 or otherwiserequired by law, Executive is not eligible for and will not be paid any Base Salary or othercompensation during any period in which Executive is not actively employed, including but notlimited to any period of incapacity, disability, or inability to perform his job duties with orwithout reasonable accommodation. During any such period, Executive shall be limited to disabilitybenefits, if any, to which Executive may be eligible. Notwithstanding the other provisions ofthis paragraph, in no event may Executive be terminated under this Section 8.5 earlier than anytime allowed under applicable law. For purposes of clause (b), an Executive “disability” shallmean a physical or mental impairment which renders Executive unable to perform the essentialfunctions of his position, even with reasonable accommodation which does not impose an unduehardship on the Company, and “incapacity” as in used clause (b) shall be limited only to suchdisability which substantially prevents the Company from availing itself of the services ofExecutive. The Company reserves the right, in good faith, to make this determination of incapacityor disability under clause (b) based upon information supplied by Executive and/or his medicalpersonnel, as well as information from medical personnel (or others) selected by the Company or itsinsurers.     8.6 ***Miscellaneous Termination Provisions.***Executive, upon termination or expiration ofemployment for any reason, hereby irrevocably promises to:          a. Return all property of the USI Companies in his possession or within his custody andcontrol wherever located immediately upon such termination.          b. Participate in an exit interview with a designated person or persons of Company ifrequested by Company.          c. Provide each new employer with a copy of this Agreement prior to taking a position withsuch new employer within two (2) years after his termination.          d. Subject to obligations under applicable laws and regulations, in the event of a terminationof this Agreement, neither party to this Agreement will publicly make any statements or commentsthat disparage the reputation of the other party, including in the case of the Company, any of itsemployees, senior officers or directors.**9. REMEDIES**     9.1. ***Equitable Relief***. Executive acknowledges that the services to be rendered by him are ofa special, unique and extraordinary character and that it would be extremely difficult orimpracticable to replace such services, that the material provisions of this Agreement are ofcrucial importance to the Company and that any damage caused by the breach of Sections 6 or 7 ofthis Agreement would result in irreparable harm to the business of the Company for which moneydamages alone would not be adequate compensation. Accordingly, Executive agrees that if heviolates Sections 6 or 7 of this Agreement, the Company shall, in addition to any other rights orremedies of the Company available at law, be entitled to equitable relief in any court of competentjurisdiction, including, without limitation, temporary injunction and permanent injunction.     9.2 ***Arbitration***. The Parties agree that any controversy, claim or dispute arising out of orrelating to Executive’s employment hereunder, or the termination of such employment, shall besettled by arbitration before a mutually selected arbitrator to be held in the State of Californiain accordance with the Commercial Arbitration Rules of the American Arbitration Association then ineffect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction, and theParties consent to the jurisdiction of the courts of the State of California for this purpose. Thearbitrator shall determine which Party or Parties shall be entitled to costs and expenses(including reasonable attorneys’ fees) resulting from such dispute or controversy. If suchcontroversy, claim or dispute involves a claim (including, without limitation, claims, arisingunder Section 6 or 7) for injunctive or other equitable relief, and suit or cross-claim for suchrelief is filed in a court of

 
competent jurisdiction, the litigation shall be bifurcated to the extent feasible, to the endthat all issues other than those injunctive or equitable issues required to be determined by thecourt shall be determined by arbitration as hereinabove required.**10. WITHHOLDING**     10.1 Each payment to Executive under this Agreement shall be reduced by any amounts required tobe withheld by the Company from time to time under applicable laws and regulations then ineffect.**11. EXECUTIVE’S REPRESENTATIONS AND WARRANTIES***.*     11.1 ***General.***Executive represents and warrants to the Company that the execution of thisAgreement and the performance of his duties as contemplated hereunder do not conflict with anyother agreement, law, rule, regulation, or court order by which he is bound***.***     11.2 ***No Impairment.***Executive represents and warrants that he is not subject to any agreementor contract that would preclude or impair, in any way, his ability to carry out his duties underthis Agreement for the Company.     11.3 ***No Confidential Information.***Executive has not removed from any prior employer anyconfidential information.     11.4 ***No Restrictive Agreements.***Executive represents and warrants that, Executive has notheretofore entered into, has not been and is currently not subject to the provisions of, anyemployment contract, sales and purchase agreement or other agreement (whether oral or written) ofany nature whatsoever with any other organization, individual or business entity, which preventsor restricts Executive from competing with, or soliciting the clients, customers, business oremployees (including, without limitation for the purposes of hiring such employees) of, such otherorganization, individual or business entity or any other entity for any period of time or withinany geographical area, whether heretofore expired or not (“**Pre-existing Agreements**”), other thansuch contracts or agreements as Executive has heretofore disclosed to Company in writing(“**DisclosedPre-existing Agreements**”).     11.5 ***Release of Claims***. Executive represents and warrants that he has no claim or dispute,whether known or unknown, with or against any USI Company pursuant to the Prior Agreement or hisemployment by the Company to date. Executive hereby knowingly and voluntarily releases and foreverdischarges the USI Companies and each of their respective officers, directors, employees, heirs,successors and assigns (the “**Released Parties**”) from any and all claims, controversies, actions,causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidateddamages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, orliabilities of any nature whatsoever in law and in equity, both past and present through the datehereof, whether known or unknown, suspected, or claimed against the Company or any of the ReleasedParties which he, his spouse, or any of his heirs, executors, administrators or assigns, may have,which arise out of or are connected with my employment with the USI Companies and/or the PriorAgreement.     11.6 ***Cooperation.***During the Term and thereafter, Executive shall cooperate with the Companyin any internal investigation or administrative, regulatory or judicial proceeding as reasonablyrequested by the Company (including, without limitation, Executive being available to the Companyupon reasonable notice for interviews and factual investigations, appearing at the Company’srequest to give testimony without requiring service of a subpoena or other legal process,volunteering to the Company all pertinent information and turning over to the Company all relevantdocuments which are or may come into Executive’s possession, all at times and on schedules that arereasonably consistent with Executive’s other permitted activities and commitments).**12. INTELLECTUAL PROPERTY AND OWNERSHIP OF BUSINESS**     12.1 ***Ownership of Records.***Executive agrees that all papers, documents, records, businessaccounts, generated by Executive during the conduct of such business or given to Executive duringand in the course of his employment with Company is the exclusive property of the Company and shallremain with the Company upon Executive’s termination.

 
     12.2 ***Intellectual Property.***Executive further agrees to assign without further considerationall intellectual property, including but not limited to inventions, discoveries or any materialproduced by him during the course of his employment hereunder (including modifications orrefinements of such materials) to the Company in their entirety. Such assignment and transfer is acomplete and total assignment and transfer of any right Executive may have in such intellectualproperty and includes any patent, copyright, trade or service mark or the right to obtain any suchpatent, copyright, trade or service mark, and any trade secret rights in such material. Thisprovision does not entitle Executive to any additional compensation, with such compensation, ifany, being entirely within the discretion of Company.**13. ENTIRE AGREEMENT; NO AMENDMENT**     13.1 No agreements or representations, oral or otherwise, express or implied, have been made byeither Party, with respect to Executive’s employment by any USI Company, that are not set forthexpressly in this Employment Agreement. This Agreement supersedes and cancels the PriorAgreement and any other prior agreement (other than agreements (which are not employmentagreements) executed pursuant to USI’s stock or option incentive plans, such as, by way ofexample, option agreements, registration rights agreements, lock-up agreements, shareholderagreements and restricted stock agreements), entered into between Executive and the Company (orany USI Company) or its predecessors relating to Executive’s employment by any USI Company,except that Executive shall remain liable for any breaches of any provisions relating torestrictive covenants (including non-solicitation, non-compete, non-hire) and confidentialitycontained in any such prior agreements (including the Prior Agreement). No amendment ormodification of this Agreement shall be valid or binding unless made in writing and signed bythe Party against whom enforcement thereof is sought.**14. NOTICES**     14.1 All notices, demands and requests of any kind which either Party may be required or maydesire to serve upon the other Party hereto in connection with this Agreement shall be deliveredonly by courier or other means of personal service, which provides written verification ofreceipt, or by registered or certified mail return receipt requested (each, a “Notice”). Anysuch Notice delivered by registered or certified mail shall be deposited in the United Statesmail with postage thereon fully prepaid or if by courier then deposited with the courier. AllNotices shall be addressed to the Parties to be served as follows:(a)   If to the Company, at:USI Services Corporation.