(e) any felony, or (vii) has used Company securities owned or controlled by Executiveas collateral for a securities margin account.     (f) **“Change in Duties”**shall mean:     (i) The occurrence, prior to the date that a Change of Control Period begins orafter the expiration of a Change of Control Period, of any one or more of thefollowing without the consent of Executive:     (1) a reduction in the rank of Executive’s title as an officer ofCompany from that previously applicable to Executive (it is specificallyagreed that any change in Executive’s position(s) or title(s) with Companyshall not constitute a Change in Duties under this clause unless the rank ofExecutive’s title as an officer is reduced in connection with such change(for example, a reduction in rank from vice president to assistant vicepresident));     (2) a reduction in Executive’s base salary; or     (3) a material diminution in employee benefits (including but notlimited to medical, dental, life insurance and long-term disability plans)and perquisites applicable to Executive from those substantially similar tothe employee benefits and perquisites provided by Company (including itssubsidiaries) to similarly situated executives; or     (ii) The occurrence, within a Change of Control Period, of any one or more ofthe following without the consent of Executive:     (1) a material reduction in the nature or scope of Executive’sauthorities or duties from those applicable to Executive immediately priorto the date on which a Change of Control Period begins;     (2) a reduction in Executive’s base salary from that provided toExecutive immediately prior to the date on which a Change of Control Periodbegins;     (3) a diminution in Executive’s eligibility to participate in bonus,stock option, incentive award and other compensation plans which provideopportunities to receive compensation which are the greater of (A) theopportunities provided by Company (including its subsidiaries) for similarlysituated executives or (B) the opportunities under any such plans underwhich Executive was participating immediately prior to the date on which aChange of Control Period begins;     (4) a material diminution in employee benefits (including but notlimited to medical, dental, life insurance and long-term disability plans)and perquisites applicable to Executive from the greater of (A) the employeebenefits and perquisites provided by Company (including its subsidiaries) tosimilarly situated executives or (B) the employee benefits and perquisitesto which Executive was entitled immediately prior to the date on which aChange of Control Period begins; or     (5) a change in the location of Executive’s principal place ofemployment by Company (including its subsidiaries) by more than 10 milesfrom the location where Executive was principally employed immediately priorto the date on which a Change of Control Period begins.     (g) **“Change of Control”**shall mean:     (i) a merger of Company with another entity, a consolidation involving Company,or the sale of all or substantially all of the assets of Company to another entityif, in any
 

 
     (ii) such case, (1) the holders of equity securities of Company immediatelyprior to such transaction or event do not beneficially own immediately after suchtransaction or event equity securities of the resulting entity entitled to 50% ormore of the votes then eligible to be cast in the election of directors generally(or comparable governing body) of the resulting entity in substantially the sameproportions that they owned the equity securities of Company immediately prior tosuch transaction or event or (2) the persons who were members of the Boardimmediately prior to such transaction or event shall not constitute at least amajority of the board of directors of the resulting entity immediately after suchtransaction or event;     (iii) the dissolution or liquidation of Company;     (iv) when any person or entity, including a “group” as contemplated by Section13(d)(3) of the Securities Exchange Act of 1934, acquires or gains ownership orcontrol (including, without limitation, power to vote) of more than 50% of thecombined voting power of the outstanding securities of Company; or     (v) as a result of or in connection with a contested election of directors, thepersons who were members of the Board immediately before such election shall ceaseto constitute a majority of the Board.For purposes of the preceding sentence, (1) “resulting entity” in the context of atransaction or event that is a merger, consolidation or sale of all or substantiallyall assets shall mean the surviving entity (or acquiring entity in the case of anasset sale) unless the surviving entity (or acquiring entity in the case of an assetsale) is a subsidiary of another entity and the holders of common stock of Companyreceive capital stock of such other entity in such transaction or event, in whichevent the resulting entity shall be such other entity, and (2) subsequent to theconsummation of a merger or consolidation that does not constitute a Change ofControl, the term “Company” shall refer to the resulting entity and the term “Board”shall refer to the board of directors (or comparable governing body) of theresulting entity.     (h) **“Change of Control Period”**shall mean, with respect to a Change of Control, thetwo-year period beginning on the date upon which such Change of Control occurs.     (i) **“Code”**shall mean the Internal Revenue Code of 1986, as amended.     (j) **“Compensation Committee”**shall mean the Compensation Committee of the Board.     (k) **“Disability”**shall mean that, as a result of Executive’s incapacity due to physicalor mental illness, Executive shall have been absent from the full-time performance ofExecutive’s duties for six consecutive months and Executive shall not have returned tofull-time performance of Executive’s duties within 30 days after written notice oftermination is given to Executive by Company (provided, however, that such notice may not begiven prior to 30 days before the expiration of such six-month period).     (l) **“Effective Date”**shall mean November 5, 2009.     (m) **“Involuntary Termination”**shall mean any termination of Executive’s employment withCompany which:     (i) does not result from a resignation by Executive (other than a resignationpursuant to clause (ii) of this Section 1.1(l)); or     (ii) results from a resignation by Executive on or before the date which is 60days after the date upon which Executive receives notice of a Change in Duties;
 

 
provided, however, the term **“Involuntary Termination”**shall not include a termination forCause or any termination as a result of death or Disability.     (n) **“Monthly Severance Amount”**shall mean an amount equal to one-twelfth of Executive’sAnnual Base Salary.     **1.2****Interpretations**. In this Agreement, unless a clear contrary intention appears, (a) the words “herein,”“hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole andnot to any particular Article, Section or other subdivision, (b) reference to any Article orSection, means such Article or Section hereof, (c) the words “including” (and with correlativemeaning “include”) means including, without limiting the generality of any description precedingsuch term, and (d) where any provision of this Agreement refers to action to be taken by eitherparty, or which such party is prohibited from taking, such provision shall be applicable whethersuch action is taken directly or indirectly by such party.**ARTICLE 2:****EMPLOYMENT AND DUTIES**     **2.1****Employment**. Effective as of the Effective Date and continuing for the period of time set forth inSection 3.1, Executive’s employment by Company shall be subject to the terms and conditions of thisAgreement.     2.2 Positions. From and after the Effective Date, (a) Executive shall serve as an officer of Company inthe position or positions determined by the Board and (b) Executive shall be employed by Company ora subsidiary or affiliate of Company. The Board may at any time and from time to time assignExecutive to a different position or positions with Company and cause Executive to be employed byCompany or any subsidiary or affiliate of Company; provided, however, that any such assignmentshall not impair any rights Executive may have under Section 3.3 as a result of such assignment.Subject to the provisions of the last sentence of Section 5.8, employment with a subsidiary oraffiliate of Company pursuant to the preceding sentence shall be considered as employment withCompany for purposes of this Agreement.     2.3 Duties and Services. Executive agrees to serve in the positions referred to in Section 2.2 and to performdiligently and to the best of Executive’s abilities the duties and services appertaining to suchoffices, as well as such additional duties and services appropriate to such offices which theparties mutually may agree upon from time to time. Executive’s employment shall also be subject tothe policies maintained and established by Company that are of general applicability to Company’sexecutive employees, as such policies may be amended from time to time.     2.4 Other Interests. Executive agrees, during the period of Executive’s employment by Company, to devotesubstantially all of Executive’s business time, energy and best efforts to the business and affairsof Company and its affiliates and not to engage, directly or indirectly, in any other business orbusinesses, whether or not similar to that of Company, except with the consent of the Board. Theforegoing notwithstanding, the parties recognize and agree that, subject to Section 1.1(d)(vii),Executive may engage in passive personal investment and charitable activities that do not conflictwith the business and affairs of Company or interfere with Executive’s performance of Executive’sduties hereunder, which shall be at the sole determination of the Board. As of the date of thisAgreement, the Board has approved the activities set forth on Attachment A to this Agreement.     2.5 Duty of Loyalty. Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty to act atall times in the best interests of Company. In keeping with such duty, Executive shall make fulldisclosure to Company of all business opportunities pertaining to Company’s business and shall notappropriate for Executive’s own benefit business opportunities concerning Company’s business.**ARTICLE 3:****TERM AND TERMINATION OF EMPLOYMENT**     3.1 Term. Unless sooner terminated pursuant to other provisions hereof, Company agrees to employ Executivefor the period beginning on the Effective Date and ending on the third anniversary of the EffectiveDate (the **“Initial Expiration Date”**); provided, however, that beginning on the Initial ExpirationDate, and on each anniversary of the Initial Expiration Date thereafter, if Executive’s employmentunder this Agreement has not been terminated pursuant to Section 3.2 or 3.3, then said term ofemployment shall automatically be extended for an
 

 
additional one-year period unless on orbefore the date that is 90 days prior to the first day of any such extension period either partyshall give written notice to the other that no such automatic extension shall occur.     **3.2****Company’s Right to Terminate**. Notwithstanding the provisions of Section 3.1, Company shall have the right to terminateExecutive’s employment under this Agreement at any time for any of the following reasons:     (a) upon Executive’s death;     (b) upon Executive’s Disability;     (c) for Cause; or     (d) at any time, for any other reason whatsoever, in the sole discretion of the Board.     3.3 Executive’s Right to Terminate. Notwithstanding the provisions of Section 3.1 Executive shall have the right to terminateExecutive’s employment under this Agreement for any of the following reasons:     (a) as a result of a Change in Duties; provided, however, that prior to Executive’stermination as a result of a Change in Duties, Executive must give written notice to Companyof the specific occurrence that resulted in the Change in Duties and such occurrence mustremain uncorrected for 10 days following such written notice; or     (b) at any time for any other reason whatsoever, in the sole discretion of Executive.     3.4 Notice of Termination. If Company desires to terminate Executive’s employment hereunder at any time prior toexpiration of the term of employment as provided in Section 3.1, it shall do so by giving writtennotice to Executive that it has elected to terminate Executive’s employment hereunder and statingthe effective date and reason for such termination, provided that no such action shall alter oramend any other provisions hereof or rights arising hereunder. If Executive desires to terminateExecutive’s employment hereunder at any time prior to expiration of the term of employment asprovided in Section 3.1, Executive shall do so by giving a 60-day written notice to Company thatExecutive has elected to terminate Executive’s employment hereunder and stating the effective dateand reason for such termination; provided, however, that (a) no such action shall alter or amendany other provisions hereof or rights arising hereunder and (b) Company may accelerate Executive’selected effective date of termination to any date of Company’s choice from and after its receipt ofsuch notice, and such action by Company shall not change the basis for Executive’s termination norbe construed or interpreted as a termination of Executive’s employment by Company for any reasonwhatsoever.     3.5 Deemed Resignations. Any termination of Executive’s employment shall constitute an automatic resignation ofExecutive as an officer of Company and each affiliate of Company, and an automatic resignation ofExecutive from the Board (if applicable) and from the board of directors or similar governing bodyof any affiliate of Company and from the board of directors or similar governing body of anycorporation, limited liability company or other entity in which Company or any affiliate holds anequity interest (including any retirement or other benefit plan of Company or any affiliate ofCompany) and with respect to which board or similar governing body Executive serves as Company’s orsuch affiliate’s designee or other representative.**ARTICLE 4:****COMPENSATION AND BENEFITS**     4.1 Base Salary. During the period of this Agreement, Executive shall receive a minimum base salary of$265,000 per annum. Executive’s base salary may, in the sole discretion of the CompensationCommittee, be increased, but not decreased, effective as of any date determined by the CompensationCommittee. Executive’s base salary shall be paid in equal installments in accordance withCompany’s standard policy regarding payment of compensation to executives but no less frequentlythan monthly.
 

 
     4.2 Bonuses. Executive shall be eligible to participate in Company’s annual cash incentive plan asapproved from time to time by the Board or the Compensation Committee in amounts to be determinedby the Compensation Committee based upon criteria established by the Compensation Committee.     4.3 Other Perquisites. During Executive’s employment hereunder, Executive shall be afforded the following benefitsas incidences of Executive’s employment:     (a) **Business and Entertainment Expenses**— Subject to Company’s standard policies andprocedures with respect to expense reimbursement as applied to its executive employeesgenerally, Company shall reimburse Executive for, or pay on behalf of Executive, reasonableand appropriate expenses incurred by Executive for business related purposes, including duesand fees to industry and professional organizations and costs of entertainment and businessdevelopment.     (b) **Other Company Benefits**— Executive and, to the extent applicable, Executive’sspouse, dependents and beneficiaries, shall be allowed to participate in all benefits, plansand programs, including improvements or modifications of the same, which are now, or mayhereafter be, available to other executive employees of Company. Such benefits, plans andprograms shall include, without limitation, any profit sharing plan, thrift plan, healthinsurance or health care plan, life insurance, disability insurance, pension plan,supplemental retirement plan, vacation and sick leave plan, and the like which may bemaintained by Company. Company shall not, however, by reason of this paragraph be obligatedto institute, maintain, or refrain from changing, amending, or discontinuing, any suchbenefit plan or program, so long as such changes are similarly applicable to executiveemployees generally.**ARTICLE 5:****EFFECT OF TERMINATION ON COMPENSATION; ADDITIONAL PAYMENTS**     5.1 Termination Other Than an Involuntary Termination. If Executive’semployment hereunder shall terminate upon expiration of the term provided inSection 3.1 because either party has provided the notice contemplated in such Section, or ifExecutive’s employment hereunder shall terminate for any other reason except those described inSections 5.2 and 5.3, then all compensation and all benefits to Executive hereunder shall continueto be provided until the date of such termination of employment and such compensation and benefitsshall terminate contemporaneously with such termination of employment; provided, however, that ifsuch termination of employment shall be for a reason encompassed by Section 3.2(a) or (b), then,subject to the provisions of Sections 5.6, 5.8 and, in the case of a termination encompassed bySection 3.2(b), Section 5.7, Company shall (a) pay Executive an aggregate amount equal toExecutive’s base salary at the annual rate in effect pursuant to Section 4.1 as of the date of suchtermination of employment, which aggregate amountshall be divided into 18 equal installments and one such installment shall be paid on the lastday of each month throughout the 18-month period commencing on the date of such termination ofemployment, and (b) pay Executive within 30 days after such termination of employment an amountequal to Executive’s target bonus pursuant to Section 4.2 for the year in which such termination ofemployment occurs multiplied by a fraction, the numerator of which is the number of days during theperiod beginning on the first day of the calendar year in which such termination of employmentoccurs and ending on the date of such termination of employment, and the denominator of which is365.     5.2 Involuntary Termination Other Than During a Change of Control Period. Subject tothe provisions of Sections 5.6, 5.7 and 5.8, if Executive’s employment byCompany or any subsidiary thereof or successor thereto shall be subject to an InvoluntaryTermination which occurs prior to the date that a Change of Control Period begins or after theexpiration of a Change of Control Period, then Company shall, as additional compensation forservices rendered to Company (including its subsidiaries), pay to Executive the following amountsand take the following actions:     (a) pay Executive the Monthly Severance Amount on the last day of each month throughoutthe 18-month period commencing on the date of such Involuntary Termination; and     (b) during the portion, if any, of the 12-month period commencing on the date of suchInvoluntary Termination that Executive is eligible to elect and elects to continue coveragefor himself and his eligible dependents under Company’s or a subsidiary’s group healthplans, as applicable, under the Consolidated Omnibus Budget Reconciliation Act of 1985, asamended, and/or Sections 601 through 608 of the Employee Retirement Income Security Act of1974, as amended, Company shall promptly reimburse
 

 
Executive on a monthly basis forthe difference between the amount Executive pays to effect and continue such coverage andthe employee contribution amount that active senior executive employees of Company pay forthe same or similar coverage under such group health plans.     **5.3****Involuntary Termination During a Change of Control Period**. Subject to the provisionsof Sections 5.6, 5.7 and 5.8, if Executive’s employment byCompany or any subsidiary thereof or successor thereto shall be subject to an InvoluntaryTermination during a Change of Control Period, then Company shall, as additional compensation forservices rendered to Company (including its subsidiaries), pay to Executive the following amountsand take the following actions:     (a) (i) if the Change of Control relating to such Change of Control Period constitutesa change in control event (as defined in Treasury regulation section 1.409A-3(i)(5)), payExecutive on or before the fifth day after the last day of Executive’s employment withCompany a lump sum cash payment in an amount equal to two times the sum of (A) Executive’sAnnual Base Salary plus (B) Executive’s Average Annual Bonus, or (ii) if the Change ofControl relating to such Change of Control Period does not constitute a change in controlevent (as defined in Treasury regulation section 1.409A-3(i)(5)), pay Executive an aggregateamount equal to two times the sum of (A) Executive’s Annual Base Salary plus (B) Executive’sAverage Annual Bonus, which aggregate amount shall be divided into 18 equal installments andone such installment shall be paid on the last day of each month throughout the 18-monthperiod commencing on the date of such Involuntary Termination;     (b) cause any and all outstanding options to purchase common stock of Company held byExecutive to be fully vested and to become immediately exercisable in full and cause any andall shares of restricted shares of Company’s common stock held by Executive to becomeimmediately nonforfeitable; and     (c) during the portion, if any, of the 18-month period commencing on the date of suchInvoluntary Termination that Executive is eligible to elect and elects to continue coveragefor himself and his eligible dependents under Company’s or a subsidiary’s group healthplans, as applicable, under the Consolidated Omnibus Budget Reconciliation Act of 1985, asamended, and/or Sections 601 through 608 of the Employee Retirement Income Security Act of1974, as amended, Company shall promptly reimburse Executive on a monthly basis for thedifference between the amount Executive pays to effect and continue such coverage and theemployee contribution amount that active senior executive employees of Company pay for thesame or similar coverage under such group health plans.     **5.4****Additional Payment upon certain Involuntary Terminations**. Company shall payExecutive, in addition to any compensation to which Executive may beentitled pursuant to Sections 5.2 or 5.3, the amount described in this Section 5.4 if:     (a) within the one-year period beginning on the Effective Date, Company enters into anagreement that could result in a Change of Control or a Change of Control occurs (any suchcircumstance being referred to herein as a “First-Year Event”); and     (b) Executive’s employment by Company or any subsidiary thereof or successor theretoshall be subject to an Involuntary Termination during the period beginning on the date ofthe First-Year Event and ending on (i) if a Change of Control occurs during the one-yearperiod beginning on the Effective Date, the first anniversary of the date of such Change ofControl, or (ii) if a Change of Control does not occur during the one-year period beginningon the Effective Date but during such period Company entered into an agreement that couldresult in a Change of Control, the first anniversary of the date upon which a Change ofControl occurs with respect to such agreement (or, if earlier, upon the termination of suchagreement without the consummation of a Change of Control).Subject to the provisions of Sections 5.6, 5.7 and 5.8, the amount described in this Section 5.4 is$500,000, which amount shall (x) be paid in a lump sum cash payment on or before the fifth dayafter the last day of Executive’s employment with Company if Executive’s Involuntary Terminationoccurs after a Change of Control that constitutes a change in control event (as defined in Treasuryregulation section 1.409A-3(i)(5)), or (y) be divided into 18 equal installments and one suchinstallment shall be paid on the last day of each month throughout the 18-month period
 

 
commencing on the date of such Involuntary Termination if Executive’s InvoluntaryTermination does not occur after a Change of Control that constitutes a change in control event (asdefined in Treasury regulation section 1.409A-3(i)(5)).     **5.5****Interest on Late Payments**. If any payment provided for in Section 5.2, 5.3 or 5.4 hereof is not made when due(applying the deferred payment date provided for in Section 5.8 as the due date, if applicable),then Company shall pay to Executive interest on the amount payable from the date that such paymentshould have been made under such Section until such payment is made, which interest shall becalculated at the prime rate of interest announced by JPMorgan Chase Bank (or any successorthereto) at its principal office in New York, and shall change when and as any such change in suchprime rate shall be announced by such bank.     5.6 Parachute Payments. Notwithstanding anything to the contrary in this Agreement, if Executive is a “disqualifiedindividual” (as defined in Section 280G(c) of the Code), and the benefits provided for in thisArticle, together with any other payments and benefits which Executive has the right to receivefrom Company and its affiliates, would constitute a “parachute payment” (as defined in Section280G(b)(2) of the Code), then the benefits provided hereunder (beginning with any benefit to bepaid in cash hereunder) shall be either (1) reduced (but not below zero) so that the present valueof such total amounts and benefits received by Executive from Company will be one dollar ($1.00)less than three times Executive’s “base amount” (as defined in Section 280G(b)(3) of the Code) andso that no portion of such amounts and benefits received by Executive shall be subject to theexcise tax imposed by Section 4999 of the Code or (2) paid in full, whichever produces the betternet after-tax position to Executive (taking into account any applicable excise tax under Section4999 of the Code and any other applicable taxes). The determination as to whether any suchreduction in the amount of the benefits provided hereunder is necessary shall be made by theCompensation Committee in good faith and in consultation with Executive and tax and legal advisorsof Company. If a reduced cash payment is made and through error or otherwise that payment, whenaggregated with other payments and benefits from Company (or its affiliates) used in determining ifa “parachute payment” exists, exceeds one dollar ($1.00) less than three times Executive’s baseamount, then Executive shall immediately repay such excess to Company upon notification that anoverpayment has been made. Nothing in this Section 5.6 shall require Company to be responsiblefor, or have any liability or obligation with respect to, Executive’s excise tax liabilities underSection 4999 of the Code.     5.7 Release and Full Settlement. As a condition to the receipt of any severance compensation and benefits under thisAgreement, Executive must first execute a release and agreement, in a form reasonably satisfactoryto Company, which (1) shall release and discharge Company and its affiliates, and their officers,directors, employees and agents from any and all claims or causes of action of any kind orcharacter, including but not limited to all claims or causes of action arising out of Executive’semployment with Company or its affiliates or the termination of such employment, and (2) must beeffective and irrevocable within 55 days after the termination of Executive’s employment. IfExecutive is entitled to and receives the benefits provided hereunder, performance of theobligations of Company hereunder will constitute full settlement of all claims that Executive mightotherwise assert against Company on account of Executive’s termination of employment.     **5.8****Payments Subject to Section 409A of the Code**. Notwithstanding the foregoing provisions of thisArticle 5, if the payment of any severancecompensation or severance benefits under this Agreement would be subject to additional taxes andinterest under Section 409A of the Code because the timing of such payment is not delayed asprovided in Section 409A(a)(2)(B) of the Code, then any such payments that Executive wouldotherwise be entitled to during the first six months following the date of Executive’s terminationof employment shall be accumulated and paid on the date that is six months after the date ofExecutive’s termination of employment (or if such payment date does not fall on a business day ofCompany, the next following business day of Company), or such earlier date upon which such amountcan be paid under Section 409A of the Code without being subject to such additional taxes andinterest. Executive hereby agrees to be bound by Company’s determination of its “specifiedemployees” (as such term is defined in Section 409A of the Code) in accordance with any of themethods permitted under the regulations issued under Section 409A of the Code. The provisions ofthis Section 5.8 shall also apply, to the extent required under Section 409A of the Code, to anypayment of the Monthly Severance Amount to Executive pursuant to Section 7.1(b). For the purposesof this Agreement, Executive shall be considered to have terminated employment with Company whenExecutive incurs a “separation from service” with Company within the meaning of Section409A(a)(2)(A)(i) of the Code and applicable administrative guidance issued thereunder; provided,however, that whether such a separation from service has occurred shall be determined based upon areasonably
 

 
anticipated permanent reduction in the level of bona fide services to beperformed to no more than 49% of the average level of bona fide services provided in theimmediately preceding 36 months.     5.9 Liquidated Damages. In light of the difficulties in estimating the damages for an early termination ofExecutive’s employment under this Agreement, Company and Executive hereby agree that the payments,if any, to be received by Executive pursuant to this Article 5 shall be received by Executive asliquidated damages.     5.10 Other Benefits. This Agreement governs the rights and obligations of Executive and Company with respect toExecutive’s base salary and certain perquisites of employment. Except as expressly providedherein, Executive’s rights and obligations both during the term of his employment and thereafterwith respect to stock options, restricted stock, incentive and deferred compensation, lifeinsurance policies insuring the life of Executive, and other benefits under the plans and programsmaintained by Company shall be governed by the separate agreements, plans and other documents andinstruments governing such matters.**ARTICLE 6:****PROTECTION OF CONFIDENTIAL INFORMATION**     **6.1****Disclosure to and Property of Company**. All information, designs,ideas, concepts, improvements, product developments, discoveriesand inventions, whether patentable or not, that are conceived, made, developed or acquired byExecutive, individually or in conjunction with others, during the period of Executive’s employmentby Company (whether during business hours or otherwise and whether on Company’s premises orotherwise) that relate to Company’s (or any of its affiliates’) business, trade secrets, productsor services (including, without limitation, all such information relating to corporateopportunities, product specification, compositions, manufacturing and distribution methods andprocesses, research, financial and sales data, pricing terms, evaluations, opinions,interpretations, acquisitions prospects, the identity of customers or their requirements, theidentity of key contacts within the customer’s organizations or within the organization ofacquisition prospects, marketing and merchandising techniques, business plans, computersoftware or programs, computer software and database technologies, prospective names andmarks) (collectively, “**Confidential Information**”) shall be disclosed to Company and are and shallbe the sole and exclusive property of Company (or its affiliates). Moreover, all documents,videotapes, written presentations, brochures, drawings, memoranda, notes, records, files,correspondence, manuals, models, specifications, computer programs, E-mail, voice mail, electronicdatabases, maps, drawings, architectural renditions, models and all other writings or materials ofany type embodying any of such information, ideas, concepts, improvements, discoveries, inventionsand other similar forms of expression (collectively, “**Work Product**”) are and shall be the sole andexclusive property of Company (or its affiliates). Upon Executive’s termination of employment withCompany, for any reason, Executive promptly shall deliver such Confidential Information and WorkProduct, and all copies thereof, to Company.     **6.2****Disclosure to Executive**. Company has and will disclose to Executive, or place Executive in a position to have accessto or develop, Confidential Information and Work Product of Company (or its affiliates); and/or hasand will entrust Executive with business opportunities of Company (or its affiliates); and/or hasand will place Executive in a position to develop business good will on behalf of Company (or itsaffiliates). Executive agrees to preserve and protect the confidentiality of all ConfidentialInformation or Work Product of Company (or its affiliates).     **6.3****No Unauthorized Use or Disclosure**. Executive agrees that he will not, at any time during or after Executive’s employment byCompany, make any unauthorized disclosure of, and will prevent the removal from Company premisesof, Confidential Information or Work Product of Company (or its affiliates), or make any usethereof, except in the carrying out of Executive’s responsibilities during the course ofExecutive’s employment with Company. Executive shall use commercially reasonable efforts to causeall persons or entities to whom any Confidential Information shall be disclosed by him hereunder toobserve the terms and conditions set forth herein as though each such person or entity was boundhereby. Executive shall have no obligation hereunder to keep confidential any ConfidentialInformation if and to the extent disclosure thereof is specifically required by law; provided,however, that in the event disclosure is required by applicable law, Executive shall provideCompany with prompt notice of such requirement prior to making any such disclosure, so that Companymay seek an appropriate protective order. At the request of Company at any time, Executive agreesto deliver to Company all Confidential Information that he may possess or control. Executiveagrees that all Confidential Information of Company (whether now or hereafter existing) conceived,discovered or made by him during the period of Executive’s employment by Company exclusivelybelongs to Company (and not to Executive), and Executive will promptly
 

 
disclose such Confidential Information to Company and perform all actions reasonably requested by Company toestablish and confirm such exclusive ownership. Affiliates of Company shall be third partybeneficiaries of Executive’s obligations under this Article 6. As a result of Executive’semployment by Company, Executive may also from time to time have access to, or knowledge of,Confidential Information or Work Product of third parties, such as customers, suppliers, partners,joint venturers, and the like, of Company and its affiliates. Executive also agrees to preserveand protect the confidentiality of such third party Confidential Information and Work Product tothe same extent, and on the same basis, as Company’s Confidential Information and Work Product.     **6.4****Ownership by Company**. If, during Executive’s employment by Company, Executive creates any work of authorshipfixed in any tangible medium of expression that is the subject matter of copyright (such asvideotapes, written presentations, or acquisitions, computer programs, E-mail, voice mail,electronic databases, drawings, maps, architectural renditions, models, manuals, brochures, or thelike) relating to Company’s business, products, or services, whether such work is created solely byExecutive or jointly with others (whether during business hours or otherwise and whether onCompany’s premises or otherwise), including any Work Product, Company shall be deemed the author ofsuch work if the work is prepared by Executive in the scope of Executive’s employment; or, if thework is not prepared by Executive within the scope of Executive’s employment but is speciallyordered by Company as a contribution to a collective work, as a part of a motion picture or otheraudiovisual work, as a translation, as a supplementary work, as a compilation, or as aninstructional text, then the work shall be considered to be work made for hire and Company shall bethe author of the work. If such work is neither prepared by Executive within the scope ofExecutive’s employment nor a work specially ordered that is deemed to be a work made for hire, thenExecutive hereby agrees to assign, and by these presents does assign, to Company all of Executive’sworldwide right, title, and interest in and to such work and all rights of copyright therein.     **6.5****Assistance by Executive**. During the period of Executive’s employment by Company and thereafter, Executive shall, atCompany’s expense, assist Company and its nominee, at any time, in the protection of Company’s (orits affiliates’) worldwide right, title and interest in and to Work Product and the execution ofall formal assignment documents requested by Company or its nominee and the execution of all lawfuloaths and applications for patents and registration of copyright in the United States and foreigncountries.     **6.6****Remedies**. Executive acknowledges that money damages would not be sufficient remedy for any breach ofthis Article 6 by Executive, and Company or its affiliates shall be entitled to enforce theprovisions of this Article 6 by terminating payments then owing to Executive under this Agreementor otherwise and to specific performance and injunctive relief as remedies for such breach or anythreatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of thisArticle 6 but shall be in addition to all remedies available at law or in equity, including therecovery of damages from Executive and his agents.**ARTICLE 7:****NON-COMPETITION AND RELATED OBLIGATIONS**     7.1 General. (a) As part of the consideration for Company’s employment of Executive and thecompensation and benefits that may be paid to Executive hereunder; to protect the trade secrets andConfidential Information of Company or its affiliates that have been and will in the future bedisclosed or entrusted to Executive, the business good will of Company or its affiliates that hasbeen and will in the future be developed in Executive, or the business opportunities that have beenand will in the future be disclosed or entrusted to Executive by Company or its affiliates; and asan additional incentive for Company to enter into this Agreement, Company and Executive agree tothe provisions of this Article 7. Except as provided in Section 7.1(b), Executive agrees thatduring Executive’s employment with Company and for a period of one year following the terminationof Executive’s employment with Company for any reason (the “**Non-Compete Period**”), Executive shallnot:     (i) directly or indirectly, either as principal, agent, independent contractor,consultant, director, officer, employee, employer, advisor, stockholder, partner or in anyother individual or representative capacity whatsoever, either for Executive’s own benefitor for the benefit of any other person or entity either (1) hire, contract or solicit, orattempt any of the foregoing with respect to hiring any employee of Company or itsaffiliates, or (2) induce or otherwise counsel, advise, or encourage any employee of Companyor its affiliates to leave the employment of Company or its affiliates; and
 

 
     (ii) within any geographic area or market where Company or any of its affiliatesare conducting any business or have, during the twelve months preceding the termination ofExecutive’s employment with Company, conducted such business, as applicable:     (1) directly or indirectly participate in the ownership, management, operationor control of, or be connected as an officer, employee, partner, director,contractor or otherwise with, or have any financial interest in or aid or assistanyone else in the conduct of, any business in any of the business territories inwhich Company is presently or from time-to-time conducting business that eitherconducts a business similar to that conducted by Company or its affiliates orprovides or sells a service or product that is the same, substantially similar to orotherwise competitive with the products and services provided or sold by Company orits affiliates (a “**Competitive Operation**”); provided, however, that this provisionshall not preclude Executive after the termination of Executive’s employment withCompany from (x) owning less than 2% of the equity securities of any publicly heldCompetitive Operation so long as Executive does not serve as an employee, officer,director or consultant to such business or (y) engaging in the practice of law,either at a law firm or with another entity, so long as (A) Executive satisfiesExecutive’s professional obligations to keep and not use the confidences andConfidential Information of Company and its affiliates and (B) Executive’sengagement does not include non-legal duties that are likely to assist a CompetitiveOperation;     (2) directly or indirectly, either as principal, agent, independent contractor,consultant, director, officer, employee, employer, advisor, stockholder, partner orin any other individual orrepresentative capacity whatsoever, either for Executive’s own benefit or forthe benefit of any other person or entity call upon, solicit, divert or take away,any customer or vendor of Company or its affiliates with whom Executive dealt,directly or indirectly, during Executive’s engagement with Company or itsaffiliates, in connection with a Competitive Operation; or     (3) call upon any prospective acquisition candidate on Executive’s own behalfor on behalf of any Competitive Operation, which candidate is a CompetitiveOperation or which candidate was, to Executive’s knowledge after due inquiry, eithercalled upon by Company or for which Company or any of its affiliates made anacquisition analysis, for the purpose of acquiring such entity.     (b) Notwithstanding the provisions of Section 7.1(a), if (i) Executive provides written noticeto Company pursuant to Section 3.4 that Executive will terminate employment with Company pursuantto a resignation by Executive that does not constitute an Involuntary Termination or (ii) eitherparty provides written notice to the other that the term of this Agreement shall not beautomatically extended as provided in Section 3.1, then, in any such case:     (1) for purposes of Sections 7.1(a)(ii)(1), the Non-Compete Period shall end on a dateselected by Company and set forth in a written notice provided by Company to Executive (the“**Non-Compete Notice**”); provided, however, that (1) the date selected by Company shall be awhole number of months (not in excess of 12) after the last day of Executive’s employmentwith Company and (2) Company shall pay to Executive the Monthly Severance Amount on the lastday of each month during the portion of the Non-Compete Period that is after the last day ofExecutive’s employment with Company; and     (2) for purposes of Sections 7.1(a)(i), 7.1(a)(ii)(2) and 7.1(a)(ii)(3), theNon-Compete period shall end on the date that is one year after the last day of Executive’semployment with Company.The Non-Compete Notice shall be delivered by Company to Executive within 10 days after receipt byCompany of Executive’s notice pursuant to Section 3.4 or on or before the date that is 45 daysprior to the expiration of the term of this Agreement under Section 3.1, as applicable. Executivehereby delegates to Company the right to select and determine in good faith the duration of theNon-Compete Period as provided in Section 7.1(b)(i).     7.2 Non-Disparagement. During Executive’s employment with Company and following any termination of employment withCompany, Executive and Company agree not to disparage, either orally or in
 

 
writing, Executive, Company, any of Company’s affiliates, business, products, services or practices, or anyof Company’s or its affiliates’ directors, officers, agents, representatives, stockholders, oremployees.     7.3 New Employer. Executive agrees that prior to accepting any new employment during the Non-Compete Period,Executive shall advise Company of the identity of the potential new employer. Company may servesuch new employer with notice of the non-competition restrictions set forth in this Article 7 andmay furnish such employer with a copy of this Agreement or the relevant portions thereof.     7.4 Remedies. Executive acknowledges that money damages would not be a sufficient remedy for any breachof this Article 7 by Executive, and Company or its affiliates shall be entitled to enforce theprovisions of this Article 7 by terminating payments then owing to Executive under this Agreementor otherwise and to specific performance and injunctive relief as remedies for such breach or anythreatened breach. Such remedies shall not be deemed the exclusive remedies for a breach of thisArticle 7 but shall be in addition to all remedies available at law or in equity, including therecovery of damages from Executive and his agents.     7.5 Reformation. Company and Executive agree that the foregoing restrictions are reasonable under thecircumstances and that any breach of the covenants contained in this Article 7 would causeirreparable injury to Company. Executiveunderstands that the foregoing restrictions may limit Executive’s ability to engage in certainbusinesses anywhere in the United States or such other geographic areas or markets in which Companyor any of its affiliates are conducting business or have, during the 12 months preceding thetermination of Executive’s employment, conducted such business, as applicable, during theNon-Compete Period, but acknowledges that Executive will receive sufficiently high remuneration andother benefits from Company to justify such restriction. Nevertheless, if any of the aforesaidrestrictions are found by a court of competent jurisdiction to be unreasonable, or overly broad asto geographic area or time, or otherwise unenforceable, the parties intend for the restrictionstherein set forth to be modified by the court making such determination so as to be reasonable andenforceable and, as so modified, to be fully enforced. By agreeing to this contractualmodification prospectively at this time, Company and Executive intend to make this provisionenforceable under the law or laws of all applicable States so that the entire agreement not tocompete and this Agreement as prospectively modified shall remain in full force and effect andshall not be rendered void or illegal. Such modification shall not affect the payments made toExecutive under this Agreement.**ARTICLE 8:****MISCELLANEOUS**     **8.1****Indemnification**. If Executive shall obtain any moneyjudgment or otherwise prevail with respect to anylitigation brought by Executive or Company to enforce or interpret any provision contained herein,Company, to the fullest extent permitted by applicable law, hereby indemnifies Executive for hisreasonable attorneys’ fees and disbursements incurred in such litigation and hereby agrees (i) topay in full all such fees and disbursements and (ii) to pay prejudgment interest on any moneyjudgment obtained by Executive from the earliest date that payment to him should have been madeunder this Agreement until such judgment shall have been paid in full, which interest shall becalculated at the prime rate of interest announced by JPMorgan Chase Bank (or any successorthereto) at its principal office in New York, and shall change when and as any such change in suchprime rate shall be announced by such bank. Any reimbursement of reasonable attorneys’ fees anddisbursements required under this Section 8.1 shall be made not later than the close of Executive’staxable year following the taxable year in which Executive incurs the expense; provided, however,that, upon Executive’s termination of employment with Company, in no event shall any additionalreimbursement be made prior to the date that is six months after the date of Executive’stermination of employment to the extent such payment delay is required under Section409A(a)(2)(B)(i) of the Code. In no event shall any reimbursement be made to Executive for suchfees and disbursements incurred after the later of (1) Executive’s death or (2) the date that is 10years after the date of Executive’s termination of employment with Company.     **8.2****Payment Obligations Absolute**. Except as specifically provided in Sections 6.6 and 7.4, Company’s obligation to pay (or causeone of its subsidiaries to pay) Executive the amounts and to make the arrangements provided hereinshall be absolute and unconditional and shall not be affected by any circumstances, including,without limitation, any set-off, counterclaim, recoupment, defense or other right which Company(including its subsidiaries) may have against him or anyone else. All amounts payable by Company(including its subsidiaries hereunder) shall be paid without notice or demand. Executive shall notbe obligated to seek other employment in mitigation of the amounts payable or arrangements madeunder any provision of this Agreement, and
 

 
the obtaining of any such other employment shallin no event effect any reduction of Company’s obligations to make (or cause to be made) thepayments and arrangements required to be made under this Agreement.     8.3 Notices. For purposes of this Agreement, notices and all other communications provided for hereinshall be in writing and shall be deemed to have been duly given when personally delivered or whenmailed by United States registered or certified mail, return receipt requested, postage prepaid,addressed as follows:     **If to Company to:** Concho Resources Inc.