2.3. Reporting. Executive will report to, and be subject to the direction of,Employer’s Chief Executive Officer or such other senior officer as Employer’s Board of Directors orChief Executive Officer may designate.2.4. Policies and Practices. The employment relationship between the Parties shall begoverned by the policies and practices established by Employer and its Board of Directors.Executive acknowledges that he has received and carefully read and understood Employer’s Code ofBusiness Conduct and other governing policies, which will govern the terms and conditions of hisemployment with Employer, along with this Agreement. In the event that the terms of this Agreementdiffer from or are in conflict with Employer’s policies or practices or Employer’s Code of BusinessConduct, this Agreement shall control.2.5. Location. Unless the Parties otherwise agree in writing, during the term of thisAgreement, Executive shall perform the services Executive is required to perform pursuant to thisAgreement at Employer’s principal executive offices, which currently are located in King ofPrussia, Pennsylvania; provided, however, that Employer may from time to time require Executive totravel temporarily to other locations in connection with Employer’s business.3. Compensation, Benefits and Expenses.3.1. Base Salary. Employer shall pay to Executive an annual base salary (“BaseSalary”) of Five Hundred Thousand Dollars ($500,000). Executive’s Base Salary will be payable inaccordance with Employer’s normal payroll practices, subject to payroll deductions and requiredwithholdings. The Base Salary shall be prorated for any partial year of employment on the basis ofa 365-day fiscal year. During the Term, Executive shall not be eligible for annual salaryadjustments.3.2. Annual Bonus. Executive shall be eligible to earn an annual bonus (“Bonus”)equal to 100% of his Base Salary (“Target”) under Employer’s Leadership Team Incentive Plan as setforth on the attached Exhibit A. The Target shall be prorated for any partial year of employmenton the basis of a 365-day fiscal year.3.3. Initial Stock Award. Upon commencement of the Term, Executive shall be granted,under Employer’s 2005 Equity Incentive Plan (the “2005 Plan”) a restricted stock unit award (the“Initial Stock Award”) having a fair market value of $2,500,000 on the later of the Start Date orthe date Employer’s Board of Directors or Compensation Committee approves the Initial Stock Award.The Initial Stock Award shall be governed by the terms and provisions of the 2005 Plan and shall besubject to similar restrictions as are contained in the stock awards granted to other executives ofEmployer and as are set forth in Executive’s Initial Stock Award agreement. The restricted stockunits (“RSUs”) subject to the Initial Stock Award will vest in accordance with the followingschedule; provided that the vesting will cease upon the termination of Executive’s continuousservice (as defined in the 2005 Plan) with Employer; and, provided, further, thatsuch vesting will be subject to acceleration as provided in Section 4.6hereof: twenty percent (20%) of the total number of RSUs subject to the Initial Stock Awardshall vest on each annual anniversary of the date of grant of the Initial Stock Award, with all ofthe RSUs subject to the Initial Stock Award becoming fully vested on the fifth annual anniversaryof the date of grant of the Initial Stock Award.
 
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3.4. Annual Stock Award. For each Term Year (excluding the First Term Year), Executiveshall be granted, under Employer’s 2010 Equity Incentive Plan (the “2010 Plan”), a restricted stockunit or other equity award (the “Annual Stock Award”). The Annual Stock Award shall representshares of Employer’s common stock equal to the lesser of (i) shares having a fair market value ofat least $500,000 on the date of grant, and (ii) 20,000 shares of Employer’s common stock. TheAnnual Stock Award shall be governed by the terms and provisions of the 2010 Plan and shall besubject to similar restrictions as are contained in the stock awards granted to other executives ofEmployer and as are set forth in Executive’s Annual Stock Award agreement. The Annual Stock Awardwill vest in accordance with the following schedule; provided that the vesting will cease upon thetermination of Executive’s continuous service (as defined in the 2010 Plan) with Employer; and,provided, further, that such vesting will be subject to acceleration as provided inSection 4.6 hereof: twenty-five percent (25%) of the Annual Stock Award shall vest within 90 daysbefore or after each annual anniversary of the date of grant of such Annual Stock Award, with eachAnnual Stock Award becoming fully vested within 90 days before or after the fourth annualanniversary of the date of grant of such Annual Stock Award as may be determined by Employer’sBoard of Directors or Compensation Committee.3.5. Long-Term Incentive Opportunity. Executive shall be eligible to earn long-termincentive compensation under the Global Marketing Services Value Appreciation Plan as summarized onthe attached Exhibit B. The Global Marketing Services Value Appreciation Plan will be issued underand be governed by the terms and provisions of the 2010 Plan and will be documented promptly afterthis Agreement is signed by both parties (as documented, the “Value Appreciation Plan”).3.6. Other Benefits. Executive shall be eligible to participate in any deferredcompensation, savings, health insurance, life insurance, group insurance, disability insurance,pension, retirement and other benefit plans or programs of Employer now existing, or establishedhereafter, and offered to similarly situated employees of Employer, subject to the terms andprovisions thereof. Executive acknowledges that Executive’s participation in the employee benefitplans or programs of Employer are subject to the terms and conditions of such plan or programs andthat Employer may change its plans or programs. Notwithstanding the foregoing, Executive shall notbe entitled to participate in any equity incentive, stock option, or bonus plans or programs ofEmployer now existing, or established hereafter, other than to the extent provided for in Section3.2 through Section 3.5 hereof.3.7. Personal Time-off. Executive will be eligible for paid personal time-off inaccordance with Employer’s policy as in effect from time to time.
 
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3.8. Expenses. Employer shall reimburse Executive for all actual, ordinary,necessary and reasonable expenses incurred by Executive in the course of his performance ofservices hereunder. Executive will properly account for all such expenses. Such reimbursementpayments shall be made promptly, but in no event later than December 31 of the calendar yearfollowing the year in which such expense was incurred.4. Termination. Executive’s employment with Employer shall be on an at-will basis, suchthat either party may terminate the employment relationship at any time, subject to the provisionsset forth in this Section 4.4.1. Termination by Death. If Executive dies, then this Agreement will terminateimmediately, and Executive’s rights to compensation and benefits hereunder will terminate as of thedate of death, except that Executive’s heirs, personal representatives or estate will be entitledto (i) payment, within sixty (60) days after Executive’s death, of any earned but unpaid portion ofExecutive’s Base Salary and any other benefits accrued by Executive pursuant to the benefit plansand programs of Employer up to the date of termination (collectively, the “Accrued Obligations”),(ii) any benefits which are to be continued or paid after the date of termination in accordancewith the terms of the benefit plans or programs of Employer, (iii) the portions of Executive’sInitial Stock Award and Annual Stock Awards that have vested in accordance with the terms of thoseawards and the 2005 Plan or the 2010 Plan, as applicable, as of the date of Executive’s termination(the “Vested Stock Awards”), (iv) the portions of the Value Appreciation Plan award that havevested in accordance with the terms of that plan due to the passage of time (the “Time Vested ValueAppreciation Award”) and (v) the portions of the Value Appreciation Plan award that have vested inaccordance with the terms of that plan due to the satisfaction of applicable performance goals, asof the date of Executive’s termination (the “Performance Vested Value Appreciation Award”).Anything in this Agreement or the Value Appreciation Plan to the contrary notwithstanding, iftermination occurs during the first twelve (12) months of the Term pursuant to this Section 4.1,Executive shall forfeit his entire award under the Value Appreciation Plan. In the event of atermination of Executive’s employment pursuant to this paragraph, any right that Executive’s estatemay have to compensation and benefits under this Agreement shall terminate, except that Executive’sestate shall be entitled to receive the payments and benefits payable as set forth in this Section4.1.
 
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4.2. Termination by Disability. If, as a result of disability (as defined inEmployer’s group long-term disability insurance policy then in force**)**, Executive is unable toperform the essential duties of his employment on a full-time basis, Executive will continue toreceive his Base Salary and the benefits and personal time-off provided for in Sections 3.1, 3.6and 3.7(to the extent Executive continues to be eligible therefor under the terms of such benefitplans or programs) for a period of one hundred eighty (180) days following the Onset of Disability(as defined in this Section 4.2). Any amounts due to Executive under this Section 4.2 will bereduced, dollar-for-dollar, by any amounts received by Executive in lieu of compensation under anydisability insurance policy or plan provided to Executive and paid for by Employer. If Executive’sinability to perform the essential duties of his employment on a full-time basiscontinues for more than one hundred eighty (180) days after the Onset of Disability or forperiods aggregating more than one hundred eighty (180) days during any twelve (12) month period,then Employer may, upon ten (10) days prior written notice to Executive, terminate Executive’semployment. In the event of a termination of Executive’s employment pursuant to this paragraph,Executive’s right to compensation and benefits under this Agreement shall terminate, except thatExecutive shall be entitled to (i) payment of the Accrued Obligations within sixty (60) days afterExecutive’s termination of employment, (ii) any benefits which are to be continued or paid afterthe date of termination in accordance with the terms of the benefit plans or programs of Employer,(iii) the Vested Stock Awards, (iv) the Time Vested Value Appreciation Award and (v) thePerformance Vested Value Appreciation Award. Anything in this Agreement or the ValueAppreciation Plan to the contrary notwithstanding, if termination occurs during the first twelve(12) months of the Term pursuant to this Section 4.2, Executive shall forfeit his entire awardunder the Value Appreciation Plan. “Onset of Disability” means the first day on which Executiveis unable to perform the essential duties of his employment on a full-time basis by reason of suchdisability.4.3. Termination for Cause. Employer may, at any time, upon written notice toExecutive, terminate Executive’s employment, and Executive’s rights to compensation and benefitshereunder, for Cause (as defined in this Section 4.3), except that Executive will be entitled to(i) payment of the Accrued Obligations within sixty (60) days after Executive’s termination ofemployment, (ii) any benefits which are to be continued or paid after the date of termination inaccordance with the terms of the benefit plans or programs of Employer, and (iii) the Vested StockAwards. Anything in this Agreement or the Value Appreciation Plan to the contrary notwithstanding,if Executive is terminated pursuant to this Section 4.3, Executive shall forfeit his entire awardunder the Value Appreciation Plan, including the Time Vested Value Appreciation Award and thePerformance Vested Value Appreciation Award.“Cause” will exist if Employer’s Board of Directors or Compensation Committee in good faithdetermines that (i) Executive is grossly negligent or engaged in willful misconduct in theperformance of his duties under this Agreement, (ii) Executive is convicted of, or enters a plea ofguilty or nolo contendere to, a crime constituting a felony or any criminal offense involvingfraud, dishonesty or moral turpitude under the laws of the United States or any state thereof otherthan an automobile offense, or (iii) Executive breaches, in a material respect, this Agreement orany written material agreement between Executive and Employer or violates, in a material respect,Employer’s Code of Business Conduct or any of Employer’s material policy statements.Notwithstanding the foregoing, Cause shall only exist after (A) Employer delivers written notice toExecutive of its intention to terminate for Cause within thirty (30) days after Employer has actualknowledge of the facts and circumstances upon which Employer seeks to rely as a basis for its rightto terminate for Cause, (B) such notice sets forth in reasonable detail such facts andcircumstances and (C) in the case of clauses (i) or (iii), Executive has failed to correct theacts, omissions or events set forth in Employer’s notice, if such acts, omissions or events arereasonably capable of being corrected, within thirty (30) days following delivery of Employer’swritten notice of its intention to terminate for Cause.
 
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4.4. Termination Without Cause. Employer may, upon thirty (30) days prior writtennotice to Executive, terminate Executive’s employment, and Executive’s rights to compensation andbenefits hereunder, for any reason or no reason. If Executive is terminated pursuant to thisSection 4.4 within the first twenty-four (24) months of the Term, Employer shall (i) continue topay to Executive his Base Salary in effect at the time of such termination, in accordance withEmployer’s normal payroll practices, for a period of twenty-four (24) months, (ii) pay toExecutive, at such time as bonuses are paid under Employer’s Leadership Team Incentive Plan, aportion of his Bonus, if any, for the year in which such termination occurs equal to the amount ofthat Bonus that is determined by Employer’s Compensation Committee to be earned for the yearmultiplied by a fraction in which the numerator is the number of days Executive was employed byEmployer during that year and the denominator is 365, (iii) the Vested Stock Awards, (iv) the TimeVested Value Appreciation Award, (v) the Performance Vested Value Appreciation Award, (vi)Executive shall be entitled to continue to receive health and dental benefits under Employer’shealth and dental plans for a period of eighteen (18) following the date of termination at thelevel in effect immediately prior to Executive’s date of termination, (vii) payment of the AccruedObligations within sixty (60) days following Executive’s termination of employment, and (viii) anybenefits which are to be continued or paid after the date of termination in accordance with theterms of the benefit plans or programs of Employer. If Executive is terminated pursuant to thisSection 4.4 after the first twenty-four (24) months of the Term, Employer shall pay or provide toExecutive the severance benefits set forth in the immediately preceding sentence, except that thetime periods set forth in clause (i) shall be reduced to twelve (12) months. Subject to theprovisions of Section 4.9, such severance payments shall commence with the first payroll periodfollowing the end of the maximum consideration and revocation period under the Release required bySection 4.8 of this Agreement.4.5. Resignation. Executive may, upon thirty (30) days prior written notice toEmployer, resign or terminate Executive’s employment with Employer, for any reason Executive deemsappropriate, in which case Executive will be entitled to (i) payment of the Accrued Obligationswithin sixty (60) days after Executive’s termination of employment,(ii) any benefits which are tobe continued or paid after the date of termination in accordance with the terms of the benefitplans or programs of Employer, (iii) the Vested Stock Awards, (iv) if, but only if, suchtermination occurs after the first thirty-six (36) months of the Term, the Time Vested ValueAppreciation Award, and (v) the Performance Vested Value Appreciation Award. Anything in thisAgreement or the Value Appreciation Plan to the contrary notwithstanding, if such terminationoccurs during the first thirty-six (36) months of the Term, Executive shall forfeit the Time VestedValue Appreciation Award.4.6. Termination By Employer Without Cause Following a Change in Control; Resignation byExecutive for Good Reason Following a Change in Control. If within ninety (90) days before orseven hundred thirty (730) days following a Change in Control (as defined below), Employerterminates Executive’s employment without Cause or, upon written notice to Employer, Executiveresigns for Good Reason (as defined below), then (i) Executive will be entitled to the paymentsand benefits described in Section 4.4 upon such termination orresignation, and (ii) notwithstanding any contrary provision contained in any of Executive’soutstanding Equity Awards (as defined below) or in any of Employer’s Equity Plans (as definedbelow), all Equity Awards held by Executive shall immediately become fully vested, all restrictionsset forth in such Equity Awards related to the passage of time and/or continued employment shallimmediately lapse, all option shares and other rights exercisable under such Equity Awards shallimmediately become fully exercisable, and Executive shall have continued exercisability of eachstock option and stock appreciation right held by Executive (if any) for the remaining term of eachsuch Equity Award.
 
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4.7. Definitions. For purposes of this Agreement, the following definitions shallapply:(a) “Change in Control,” means the occurrence, in a single transaction or in a series ofrelated transactions, of any one or more of the following events:(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities ofEmployer representing more than fifty percent (50%) of the combined voting power of Employer’s thenoutstanding securities other than by virtue of a merger, consolidation or similar transaction,covered by subsection (ii) below. Notwithstanding the foregoing, a Change in Control shall not bedeemed to occur (A) on account of the acquisition of securities of Employer from Employer by aninvestor, any Affiliate (as such term is defined in Rule 405 of the Securities Act of 1933, asamended) thereof or any other Exchange Act Person in a transaction or series of relatedtransactions the primary purpose of which is to obtain financing for Employer through the issuanceof equity securities or (B) solely because the level of Ownership held by any Exchange Act Person(the “Subject Person”) exceeds the designated percentage threshold of the outstanding votingsecurities as a result of a repurchase or other acquisition of voting securities by Employerreducing the number of shares outstanding, provided that if a Change in Control would occur (butfor the operation of this sentence) as a result of the acquisition of voting securities byEmployer, and after such share acquisition, the Subject Person becomes the Owner of any additionalvoting securities that, assuming the repurchase or other acquisition had not occurred, increasesthe percentage of the then outstanding voting securities Owned by the Subject Person over thedesignated percentage threshold, then a Change in Control shall be deemed to occur;(ii) there is consummated a merger, consolidation or similar transaction involving (directlyor indirectly) Employer and, immediately after the consummation of such merger, consolidation orsimilar transaction, the stockholders of Employer immediately prior thereto do not Own, directly orindirectly, either (A) outstanding voting securities representing more than fifty percent (50%) ofthe combined outstanding voting power of the surviving corporation, partnership, limited liabilitycompany or other entity (each an “Entity”) in such merger, consolidation or similar transaction or(B) more than fifty percent (50%) of the combined outstanding voting power of the parent of thesurviving Entity in such merger, consolidation or similar transaction, in each case insubstantially the same proportions as their Ownership of the outstanding voting securities ofEmployer immediately prior to such transaction;
 
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(iii) the stockholders of Employer approve or Employer’s Board of Directors approves a plan ofcomplete dissolution or liquidation of Employer, or a complete dissolution or liquidation ofEmployer shall otherwise occur;(iv) there is consummated a sale, lease, exclusive license or other disposition of all orsubstantially all of the consolidated assets of Employer and its subsidiaries, other than a sale,lease, license or other disposition of all or substantially all of the consolidated assets ofEmployer and its subsidiaries to an Entity, more than fifty percent (50%) of the combined votingpower of the voting securities of which are Owned by stockholders of Employer in substantially thesame proportions as their Ownership of the outstanding voting securities of Employer immediatelyprior to such sale, lease, license or other disposition; or(v) individuals who, on the date of this Agreement, are directors (the “Incumbent Board”)cease for any reason to constitute at least a majority of the directors; provided,however, that if the appointment or election (or nomination for election) of any newdirector was approved or recommended by a majority vote of the Incumbent Board, such new directorshall be considered a member of the Incumbent Board, unless such new director’s initial assumptionof office occurs as a result of or in connection with either an actual or threatened electioncontest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the SecuritiesExchange Act of 1934, as amended) or other actual or threatened solicitation of proxies or consentsby or on behalf of an Entity other than the Incumbent Board.(b) “Equity Award” means any stock option, restricted stock award, restricted stock unit orother equity incentive award of any type granted by Employer to Executive, whether granted before,on or after the date of this Agreement, as the same may be adjusted or converted as a result of anyrecapitalization, stock dividend, spin-off or similar event; provided, however, that Equity Awardshall not include the Value Appreciation Plan or any equity or equity incentive award or otheraward issued pursuant to that plan.(c) “Equity Plan” means any stock option plan, restricted stock plan or other equity incentiveor equity compensation plan of Employer; provided, however, that Equity Plan shall not include theValue Appreciation Plan.(d) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning ofSection 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include(i) Employer or any Affiliate, (ii) any employee benefit plan of Employer or any Affiliate or anytrustee or other fiduciary holding securities under an employee benefit plan of Employer or anyAffiliate, (iii) an underwriter temporarily holding securities pursuant to an offering of suchsecurities, (iv) an Entity Owned, directly or indirectly, by the stockholders of Employer insubstantially the same proportions as their Ownership of stock of Employer or (v) any naturalperson, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Securities ExchangeAct of 1934, as amended) that, as of the date of this Agreement, is the Owner, directly orindirectly, of securities of Employer representing more than fifty percent (50%) of the combinedvoting power of Employer’s then outstanding securities.
 
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(e) “Own,” “Owned,” “Owner,” “Ownership” means that in relation to certain securities, aperson or Entity, directly or indirectly, through any contract, arrangement, understanding,relationship or otherwise, has or shares voting power, which includes the power to vote or todirect the voting, with respect to such securities.(f) “Good Reason” means the occurrence of one or more of the following events or conditions,without Executive’s express prior written consent, provided that following the occurrence of anysuch event or condition, Executive shall have given Employer notice that he is resigning hisemployment with Employer due to the occurrence of such event or condition and Employer shall nothave corrected the situation within ten (10) days after Executive gives such notice:(i) a material reduction in Executive’s duties, positions, titles, offices, authority orresponsibilities relative to the duties, position, titles, offices, authority or responsibilitiesin effect immediately prior to the Change in Control; the assignment to Executive of any duties orresponsibilities that are substantially inconsistent with Executive’s duties, positions, titles,offices, authority or responsibilities as in effect immediately before the Change in Control; orany removal of Executive from or failure to reappoint or reelect Executive to any of suchpositions, titles or offices in effect immediately prior to the Change in Control; provided thatany of the foregoing that result solely from the fact that Employer is no longer a publicly tradedand listed company shall not by itself constitute Good Reason under this clause (i);(ii) a material reduction in Executive’s Base Salary as in effect immediately prior to theChange in Control;(iii) a material reduction in Executive’s bonus or other cash incentive compensationopportunity as in effect immediately prior to the Change in Control; a material reduction ormaterial negative change in Executive’s equity award or other long-term non-cash incentiveopportunities (the value of which is measured as of the date of grant using a reasonable valuationmethodology consistently applied); or a material reduction or material negative change inExecutive’s benefits other than Base Salary, bonus or other cash and non-cash incentivecompensation as in effect immediately prior to the Change in Control; provided that Good Reasonshall not exist under this clause (iii) if, after a Change in Control, Employer offers Executive arange of cash and non-cash bonus and incentive opportunities and other benefits which, taken as awhole, are comparable to the cash and non-cash bonus and incentive opportunities and other benefitsprovided to Executive immediately prior to the Change in Control;(iv) the failure of Employer to timely pay or provide to Executive any portion of Executive’scompensation or benefits then due to Executive;(v) a relocation of Executive’s principal place of employment that will result in an increaseof more than thirty (30) miles in Executive’s one-way commute as compared to Executive’s one-waycommute, prior to the Change in Control;
 
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(vi) any material breach by Employer of this Agreement or any material agreement betweenEmployer and Executive, including any indemnification agreement or agreement relating to any EquityAward; or(vii) the failure by Employer to obtain, before a Change in Control occurs, an agreement inwriting from any successors and assigns to all or substantially all of the business or assets ofEmployer to assume and agree to perform this Agreement unless otherwise assumed by such successorsand assigns by operation of law.4.8. Release. Notwithstanding the foregoing, Executive will not receive any of thepayments set forth under Section 4, unless upon Executive’s termination of employment Executivefurnishes Employer with an effective waiver and release of claims (the “Release***”***) in the formattached hereto as Exhibit “C” (or such other form of Release as may be required by Employer)within the time period set forth therein, but in no event later than forty-five (45) days followingtermination of Executive’s employment.4.9. Application of Section 409A. This Agreement shall be interpreted to avoid anypenalty sanctions under Section 409A of the Code. If any payment or benefit cannot be provided ormade at the time specified herein without incurring sanctions under Section 409A, then such benefitor payment shall be provided in full at the earliest time thereafter when such sanctions will notbe imposed. For purposes of Section 409A of the Code, all payments to be made upon a termination ofemployment under this Agreement may only be made upon a “separation from service” within themeaning of such term under Section 409A of the Code, each payment made under this Agreement shallbe treated as a separate payment and the right to a series of installment payments under thisAgreement is to be treated as a right to a series of separate payments. In no event shallExecutive, directly or indirectly, designate the calendar year of payment. All reimbursements andin-kind benefits provided under this Agreement shall be made or provided in accordance with therequirements of Section 409A, including, where applicable, the requirement that (i) anyreimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period oftime specified in this Agreement), (ii) the amount of expenses eligible for reimbursement, orin-kind benefits provided, during a calendar year may not affect the expenses eligible forreimbursement, or in-kind benefits to be provided, in any other calendar year, (iii) thereimbursement of an eligible expense will be made on or before the last day of the calendar yearfollowing the year in which the expense is incurred, and (iv) the right to reimbursement or in-kindbenefits is not subject to liquidation or exchange for another benefit. Benefits payable under thisAgreement will be subject to the distribution requirements of Section 409A(a)(2)(A) of the Code,including, without limitation, the requirement of Section 409A(a)(2)(B)(i) of the Code that paymentto Executive be delayed until six (6) months after separation from service if Executive is a“specified employee” within the meaning of the aforesaid Section of the Code at the time of suchseparation from service. If Executive dies during the postponement period prior to the payment ofpostponed amount, the amounts withheld on account of Section 409A of the Code shall be paid to thepersonal representative of Executive’s estate within sixty (60) days after the date of Executive’sdeath.
 
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4.10. Offset. To the extent permitted by law, Employer may deduct any amountsExecutive owes Employer at the time of Executive’s termination of employment from any severancepayments.4.11. Parachute Payments. Anything in this Agreement to the contrary notwithstanding,if any payment or benefit Executive would receive from Employer pursuant to this Agreement orotherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section4999 of the Code (the “Excise Tax**”**), then such Payment shall be equal to the Reduced Amount. The“Reduced Amount” shall be either (x) the largest portion of the Payment that would result in noportion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment,up to and including the total Payment, whichever amount, after taking into account all applicablefederal, state and local employment taxes, income taxes, and the Excise Tax (all computed at thehighest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of thegreater amount of the Payment notwithstanding that all or some portion of the Payment may besubject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments”is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the followingorder: reduction of cash payments; cancellation of accelerated vesting of Equity Awards; reductionof employee benefits. If acceleration of vesting of Equity Award compensation is to be reduced,such acceleration of vesting shall be cancelled in the reverse order of the date of grant ofExecutive’s Equity Awards.Employer shall appoint a nationally recognized independent accounting firm to make thedeterminations required hereunder, which accounting firm shall not then be serving as accountant orauditor for the individual, entity or group that effected the Change in Control. Employer shallbear all expenses with respect to the determinations by such accounting firm required to be madehereunder.The accounting firm engaged to make the determinations hereunder shall provide itscalculations, together with detailed supporting documentation, to Employer and Executive withinfifteen (15) calendar days after the date on which Executive’s right to a Payment is triggered (ifrequested at that time by Employer or Executive) or such other time as requested by Employer orExecutive. If the accounting firm determines that no Excise Tax is payable with respect to aPayment, either before or after the application of the Reduced Amount, it shall furnish Employerand Executive with an opinion reasonably acceptable to Executive that no Excise Tax will be imposedwith respect to such Payment. Employer shall be entitled to rely upon the accounting firm’sdeterminations, which shall be final and binding on all persons.5. Procedure Upon Termination. As a condition to receiving any benefits under thisAgreement, upon termination of his employment, Executive must promptly return to Employer alldocuments (including copies) and other materials and property belonging to Employer, or pertainingto its business, including without limitation client, customer and prospect lists, contracts,files, manuals, letters, reports and records in his possession or control, no matter from whom orin what manner acquired.
 
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6. Inventions. Executive will promptly and fully communicate to Employer, inwriting, all trade secrets, inventions, mask works, ideas, processes, formulas, source and objectcodes, data, programs, other works of authorship, know-how, improvements, discoveries,developments, designs and techniques (collectively referred to as “Inventions”), whether or notpatentable or registrable under copyright or similar statutes, which are made, conceived, reducedto practice or learned by Executive, whether alone or jointly with others, at any time during theterm of Executive’s employment with Employer, which relate to the business or operations of theBusiness or which relate to methods, designs, products or systems sold, leased, licensed or underdevelopment by the Business (such concepts, ideas and designs are referred to as “EmployerInventions”). Executive acknowledges that Employer owns all right, title and interest in and toany and all Employer Inventions (and all Proprietary Rights with respect thereto) and herebyassigns and agrees to assign in the future (when any such Inventions or Proprietary Rights arefirst reduced to practice or first fixed in a tangible medium, as applicable) to Employer (or tosuch third party as Employer may direct) all of Executive’s right, title and interest in and to anyand all Employer Inventions (and all Proprietary Rights with respect thereto). Executiveacknowledges that all original works of authorship which are made by Executive (solely or jointlywith others) within the scope of Executive’s employment and which are protectable by copyright are“works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101). Executivewill, at Employer’s expense, sign all documents and take such other actions as Employer mayreasonably request to confirm its ownership in Employer Inventions.“Proprietary Rights” means all trade secret, patent, copyright, mask work and otherintellectual property rights throughout the world.7. Nondisclosure. At all times during Executive’s employment with Employer andthereafter, except with the express prior written consent of an executive officer of Employer otherthan Executive or in connection with the proper performance of services under this Agreement,Executive will not, directly or indirectly, communicate, disclose or divulge to any Person, or usefor the benefit of any Person, any Proprietary Information or any Third Party Information.“Proprietary Information” means any and all confidential and/or proprietary knowledge, data orinformation of the Business or Employer or its other businesses, no matter when or how acquired.By way of illustration, but not limitation, Proprietary Information includes (i) trade secrets,inventions, mask works, ideas, processes, formulas, source and object codes, data, programs, otherworks of authorship, know-how, improvements, discoveries, developments, designs and techniques(collectively referred to as “Inventions”); (ii) the terms and details of contracts andarrangements with and proposals to clients of the Business or Employer’s other businesses(“Clients”) and prospective Clients; (iii) personal, financial and other information obtained fromClients’ customers (“Customers”); (iv) non-public pricing information, vendor prices, buying andpricing strategies and merchandise plans, including the terms of contracts and arrangements withvendors; (v) promotional, marketing and advertising strategies and plans, including the terms ofcontracts and arrangements relating to promotions, marketing and advertising; (vi) non-publicfinancial and statistical information relating to theBusiness or Employer or its other businesses, including budgets, financial and business forecasts,expansion plans and business strategies; and (vii) information regarding the skills andcompensation of other employees of the Business or Employer or its other businesses. For purposesof this Section 7, confidential information will not include any information which was known toExecutive prior to his employment by Employer, which is now known by the general public orgenerally in the industry, which becomes known by the general public or generally in the industryother than as a result of a breach of this Agreement by Executive or which is independentlyacquired by Executive.
 
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“Person” means any individual, sole proprietorship, joint venture, partnership, corporation,association, cooperative, trust, estate, government body, administrative agency, regulatoryauthority or other entity of any nature.“Third Party Information” means any and all confidential or proprietary data, knowledge andinformation received from third parties, including Clients, prospective Clients and Customers,subject to a duty on Employer’s part to maintain the confidentiality of such data, knowledge orinformation and to use it only for certain purposes.8. Non-Competition. Executive acknowledges that the Business is highly competitive.Accordingly, for the longer of (i) one (1) year after the date of the termination of Executive’semployment with Employer for any reason or (ii) the period of time with respect to which Employeris paying Executive severance or separation compensation (the “Restricted Period”), except withEmployer’s express prior written consent, Executive will not, directly or indirectly, in anycapacity, for the benefit of any Person:(a) Communicate with or solicit any Person who, as of or during the one (1) year prior to thetermination of Executive’s employment with Employer, was an employee, consultant, agent orrepresentative of Employer or any of its subsidiaries, or who, during the Restricted Period,becomes an employee, consultant, agent or representative of Employer or any of its subsidiaries, inany manner which interferes or might interfere with such Person’s relationship with Employer or anysuch subsidiary, or in an effort to obtain any such employee, consultant, agent or representativeas an employee, consultant, agent or representative of any other Person;(b) Communicate with or solicit any Person who, as of or during the one (1) year prior to thetermination of Executive’s employment with Employer, was a client, customer, or prospect of theBusiness, or who, during the Restricted Period, becomes a client, customer, or prospect of theBusiness, in any manner which interferes or which would be reasonably likely to interfere with suchPerson’s relationship with the Business, or in an effort to obtain any such a client, customer, orprospect as a client, customer, or prospect of any other Person which conducts a businesscompetitive with all or any material part of the Business ; or(c) Establish, own, manage, operate or control or invest in, or participate in theestablishment, ownership, management, operation or control of or investment in, or be a director,officer, employee, agent or representative of, or be a consultant to, any Person which conducts abusiness competitive with all or any material part of the Business; provided, however,that ownership by Executive, as a passive investment, of less than two percent (2%) of theoutstanding shares of capital stock of any corporation with one or more classes of its capitalstock listed on a national securities exchange shall not constitute a breach of this paragraph.
 
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9. Consideration and Enforcement of Covenants. Executive expressly acknowledges thatthe covenants contained in Sections 6, 7 and 8 of this Agreement (“Covenants”) are a material partof the consideration bargained for by Employer and, without the agreement of Executive to be boundby the Covenants, Employer would not have agreed to enter into this Agreement. Executiveacknowledges that any breach by Executive of any of the Covenants will result in irreparable injuryto Employer for which money damages could not adequately compensate. If there is such a breach,Employer will be entitled, in addition to all other rights and remedies which Employer may have atlaw or in equity, to have an injunction issued by any competent court enjoining and restrainingExecutive and all other Persons involved therein from continuing such breach. The existence of anyclaim or cause of action which Executive or any such other Person may have against Employer willnot constitute a defense or bar to the enforcement of any of the Covenants. If Employer mustresort to litigation to enforce any of the Covenants which has a fixed term, then such term will beextended for a period of time equal to the period during which a breach of such Covenant wasoccurring, beginning on the date of a final court order (without further right of appeal) holdingthat such a material breach occurred or, if later, the last day of the original fixed term of suchCovenant. If any portion of any Covenant or its application is construed to be invalid, illegal orunenforceable, then the other portions and their application will not be affected thereby and willbe enforceable without regard thereto. If any of the Covenants is determined to be unenforceablebecause of its scope, duration, geographical area or similar factor, then the court making suchdetermination will have the power to reduce or limit such scope, duration, area or other factor,and such Covenant will then be enforceable in its reduced or limited form. Any breach of theCovenants contained herein shall constitute a material breach of this Agreement and shalldischarge, to the extent not prohibited by applicable law, Employer from any and all of itsobligations to make payments or provide benefits under any provision of this Agreement includingSection 4 hereof.10. Clawback. In the event that Employer’s Board of Directors or CompensationCommittee determines in good faith that the earlier determination as to the valuation of theBusiness or the achievement of any performance targets applicable to the payment of Executive’sBonus or long-term incentive compensation or awards under the Value Appreciation Plan (“VAPCompensation”) under Section 3.2 or 3.5 hereof (the “Performance Targets”) was based on materiallyincorrect data, and that in fact the Performance Targets had not been achieved or had been achievedto a lesser extent than originally determined and any Bonus (or portion thereof) or VAPCompensation (or portion thereof) paid or issued would not have been paid or issued, given thecorrect data, then in each such instance, Executive shall, at the request of Employer’s Board ofDirectors or Compensation Committee, return or forfeit, as applicable, all or a portion (but nomore than one-hundred percent (100%) of any Bonus or VAP Compensation paid to Executive based onsuch incorrect data. The amount to be recovered from Executive shall be the amount determined byEmployer’s Board of Directors or Compensation Committee, by which the Bonus or VAP Compensationpaid or issued to Executive exceeded theamount that would have been paid or issued to Executive based on the correct data. AnyEmployer common stock that was issued in connection with VAP Compensation shall be forfeited andcancelled as provided by Employer’s Board of Directors or Compensation Committee. However, ifExecutive has disposed of such shares, the cash equivalent value of such shares on the dateEmployer calculated the number shares owed shall be paid by Executive to Employer upon notice fromEmployer as provided by Employer’s Board of Directors or Compensation Committee.
 
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In the event that Employer’s Board of Directors or Compensation Committee determines thatExecutive has, during the Term, committed an act or omission that would have constituted Causeunder this Agreement, Employer’s Board of Directors or Compensation Committee, whether or notExecutive was terminated because of such act or omission, may require Executive to return orforfeit, as applicable, any Bonus or VAP Compensation paid to Executive pursuant to Sections 3.2 or3.5 hereof. Any Employer common stock that was issued in connection with VAP Compensation shall beforfeited and cancelled as provided by Employer’s Board of Directors or Compensation Committee. IfExecutive has disposed of shares issued to him in connection with VAP Compensation, the cashequivalent value of such shares on the date Employer calculated the number shares owed shall bepaid by Executive to Employer upon notice from Employer as provided by Employer’s Board ofDirectors or Compensation Committee.11. No Mitigation. Executive shall not be required to mitigate the amount of anypayments and/or benefits under this Agreement by seeking other employment or otherwise. Thepayments and/or benefits to be provided pursuant to Section 4 hereof shall not be reduced by anycompensation or benefits payable or provided to Executive as a result of employment by anotheremployer after the date of termination or otherwise[, except as set forth in Section 4.4 above].The specific arrangements referred to in this Agreement are not intended to exclude any otherpayments and/or benefits which may be available to Executive upon a termination of employment withEmployer pursuant to any other agreement between Employer and Executive.12. Survival of Obligations. Notwithstanding anything to the contrary containedherein, Section 3.8, Section 4.8 through Section 4.11, Section 5 through Section 20, Section 22 andSection 23 of this Agreement shall survive any termination of this Agreement and the termination ofthe Term. Payments and benefits owed to Executive under Section 4 hereof shall survive thetermination of this Agreement to the extent provided for in Section 4.13. Applicable Law. This Agreement will be governed by and construed in accordancewith the substantive laws (and not the choice of laws rules) of the Commonwealth of Pennsylvaniaapplicable to contracts made and to be performed entirely therein. Each of the parties irrevocablyconsents to service of process by certified mail, return receipt requested, postage prepaid, to theaddress at which such party is to receive notice in accordance herewith. Each of the partiesirrevocably consents to the jurisdiction of the state courts in Montgomery County, Pennsylvania andthe federal courts in the Eastern District of Pennsylvania in any and all actions between theparties arising hereunder.
 
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14. Notices. All notices, consents or other communications required or permitted tobe given under this Agreement must be in writing and will be deemed to have been duly given (i)when delivered personally, (ii) three (3) business days after being mailed by first class certifiedmail, return receipt requested, postage prepaid, or (iii) one (1) business day after being sent bya nationally recognized express courier service designated for next day delivery, postage ordelivery charges prepaid, to the parties at their respective addresses stated on the first page ofthis Agreement. Notices may also be given by prepaid telegram, facsimile or electronic mail andwill be effective on the date transmitted if confirmed within twenty-four (24) hours thereafter bya signed original sent in the manner provided in the preceding sentence or if actual receipt isacknowledged by the addressee. Either party may change its address for notice and the address towhich copies must be sent by giving notice of the new address to the other party in accordance withthis Section 14, provided that any such change of address notice will not be effective unless anduntil received.15. Prior Agreements. Executive represents to Employer (i) that there are norestrictions, agreements or understandings whatsoever to which Executive is a party which wouldprevent or make unlawful his execution of this Agreement or his employment hereunder, (ii) thatExecutive’s execution of this Agreement and Executive’s employment hereunder do not constitute abreach of any contract, agreement or understanding, oral or written, to which Executive is a partyor which Executive is bound, and (iii) that Executive has full legal right and capacity to executethis Agreement and to enter into employment by Employer.16. Parties in Interest. This Agreement is for the personal services of Executiveand will not be assignable by either party without the express prior written consent of the otherparty;provided, however, that Employer shall require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of thebusiness or assets of Employer to assume and agree to perform this Agreement in the same manner andto the same extent that Employer would be required to perform if no such succession had takenplace; provided, further, that no such assumption or agreement by such successor shall relieveEmployer of any of its obligations under this Agreement. Subject to the provisions of Section 4 andthis Section 16, this Agreement will inure to the benefit of and bind each of the parties heretoand the successors and assigns of Employer and the personal representatives, estate and heirs ofExecutive. Because of the unique and personal nature of Executive’s duties under this Agreement,neither this Agreement nor any rights or obligations under this Agreement shall be assignable byExecutive.17. Trade Secrets Of Others. It is the understanding of both Employer and Executivethat Executive shall not divulge to Employer and/or its subsidiaries any confidential informationor trade secrets belonging to others, including Executive’s former employers, nor shall Employerand/or its affiliates seek to elicit from Executive any such information. Consistent with theforegoing, Executive shall not provide to Employer and/or its affiliates, and Employer and/or itsaffiliates shall not request, any documents or copies of documents containing such information.
 
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18. Advertising Waiver. Executive agrees to permit Employer and/or its affiliates,and persons or other organizations authorized by Employer and/or its affiliates, to use, publishand distribute advertising or sales promotional literature concerning the products and/or servicesof Employer and/or its affiliates, or the machinery and equipment used in the provision thereof, inwhich Executive’s name and/or pictures of Executive taken in the course of Executive’s provision ofservices to Employer and/or its affiliates, appear. Executive hereby waives and releases any claimor right Executive may otherwise have arising out of such use, publication or distribution.19. Entire Understanding. This Agreement sets forth the entire understanding of theparties hereto with respect to the subject matter hereof and supersedes all prior andcontemporaneous, oral or written, express or implied, agreements and understandings.20. Amendment and Waiver. This Agreement may not be amended, modified or terminatedunless in writing and signed by Executive and a duly authorized representative of Employer otherthan Executive. No waiver with respect to this Agreement will be enforceable unless in writing andsigned by the party against which enforcement is sought (which, in the case of Employer, must be aduly authorized representative of Employer other than Executive). Neither the failure nor anydelay on the part of either party to exercise any right, remedy, power or privilege under thisAgreement will operate as a waiver thereof, nor will any single or partial exercise of any right,remedy, power or privilege preclude any other or further exercise of the same or of any otherright, remedy, power or privilege, nor will any waiver of any right, remedy, power or privilegewith respect to any occurrence be construed as a waiver of such right, remedy, power or privilegewith respect to any other occurrence.21. Counterparts. This Agreement may be executed in two counterparts, each of whichshall be deemed an original, all of which together shall contribute one and the same instrument.22. Severability. The finding by a court of competent jurisdiction of theunenforceability, invalidity or illegality of any provision of this Agreement shall not render anyother provision of this Agreement unenforceable, invalid or illegal. Such court shall have theauthority to modify or replace the invalid or unenforceable term or provision with a valid andenforceable term or provision which most accurately represents the Parties’ intention with respectto the invalid or unenforceable term or provision.23. Section Headings, Interpretation, Construction. Any headings preceding the textof any of the Sections or Subsections of this Agreement are inserted for convenience of referenceonly, and will neither constitute a part of this Agreement nor affect its construction, meaning, oreffect. This Agreement has been drafted by legal counsel representing Employer, but Executive hasbeen encouraged to consult with, and has consulted with, Executive’s own independent counsel andtax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Partyand its counsel has reviewed and revised, or had an opportunity to review and revise, thisAgreement, and that any rule of construction to the effect that any ambiguities are tobe resolved against the drafting party shall not be employed in the interpretation of thisAgreement.
 
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IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the datefirst stated above.       GSI COMMERCE, INC.           By: /s/ Michael G. Rubin /s/ Chris Saridakis     Michael G. Rubin  Chris Saridakis    Chairman and Chief Executive Officer    
 
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**EXHIBIT A**