Document:

Exhibit
10.8

 

 

DATED 9 May 2006

TRANSACTION NETWORK SERVICES (UK) LIMITED

- and -

RAYMOND LOW

SERVICE
AGREEMENT

 

SALANS

Millennium
Bridge House

2 Lambeth
Hill

London  EC4V 4AJ

Tel:  020 7429 6000

Fax:  020 7429 6001

Ref:
BIM/PJM/0109644.5

::odma\pcdocs\london\286767\6

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THIS
AGREEMENT is made on the 9th day of May 2006

BETWEEN:

(1)                                  TRANSACTION NETWORK SERVICES (UK)
LIMITED (registered in England and Wales with number 2952557) whose
registered office is at Sheffield Airport Business Park, Europa Link, Sheffield,
S9 1XU  (the “Company”);
and

(2)                                 RAYMOND
LOW of Huthwaite Bank Farm, Old Mill Lane, Thurgoland, Sheffield, S35 7EG
(the “Executive”).

IT IS AGREED as follows:

1                                          Definitions
and Interpretation

1.1                                 In
this Agreement and the Schedule:

“AIP”
means TNS’ Annual Incentive Plan in place from time to time.

“Appointment” means the
appointment of the Executive and his employment under this Agreement;

“Benefits” means all
the benefits provided to the Executive under this Agreement as set out in
Clause 7, and any other contractual benefit to which he is entitled during the
Appointment. For the avoidance of doubt, the term “Benefits” does not include
Share Schemes;

“Board” means the
directors of the Company present at a duly convened and quorate meeting of the
directors or of a committee of the directors duly appointed for the purpose in
question;

“ERA” means the Employment Rights Act
1996 (as amended)

“Group” means the Company
and the Group Companies from time to time and each or any of them;

“Group
Company” means any parent undertaking of the Company
and any subsidiary undertaking of the Company or any such parent undertaking
and any other undertaking which is a company having an ordinary share capital
(as defined in Section 832 of the Income and Corporation Taxes Act 1988)
of which not less than 20% is owned directly or indirectly by the Company or
any parent undertaking of the Company or any subsidiary undertaking of the
Company or any such parent undertaking, applying the provisions of
Section 838 of the Income and Corporation Taxes Act 1988 in the
determination of ownership. For the avoidance of doubt this definition of Group
Company includes TNS and the Parent;

“Intellectual Property”
means letters patent, trade marks (whether registered or unregistered),
designs, utility models, copyright (including design copyright), applications
for any of the foregoing, and the right to apply for them in any part of the
world, discoveries, creations, inventions or improvements upon or additions to
any invention, confidential information, know-how, technical specifications,
data, concepts, ideas, techniques, innovations, developments, methods,
processes, programs, analyses, drawings, reports, memoranda, marketing plans
and any research effort relating to any of the above-mentioned, moral rights
and similar rights in any country;

“LTIP”
means the Parent’s Long-Term Incentive Plan in place from time to time;

“Parent”
means TNS, Inc., a Delaware corporation;

“Recognised Investment Exchange”
means an investment exchange recognised by the Financial Services Authority
pursuant to the Financial Services and Markets Act 2000;

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“Sensitive Data”
means personal data consisting of information as to racial or ethnic origin,
political opinions, religious beliefs or other beliefs of a similar nature,
membership of a trade union (within the meaning of the Trade Union and Labour
Relations (Consolidation) Act 1992); physical or mental health or condition;
sexual life; the commission or alleged commission of any offence or any
proceedings for any offence committed or alleged to have been committed,
including the disposal of such proceedings or the sentence of any court in such
proceedings;

“Share Scheme” means
the AIP, the LTIP and any other share option or share incentive scheme which
may be established from time to time by the Group;

“Termination Date”
means the date upon which the Appointment terminates for any reason (whether
lawfully or otherwise);

“TNS”
means Transaction Network Services, Inc., a Delaware corporation;

“Undertaking”, “parent undertaking”
and “subsidiary undertaking”
respectively shall have the meanings given to those terms under Sections 258
and 259 of the Companies Act 1985; and

“Working Day” means a day
other than a Saturday, Sunday or bank or other public holiday in England.

1.2                                 References
in this Agreement to a person include a body corporate and an unincorporated
association of persons and references to a company include any body corporate.

1.3                                 References
in this Agreement to a statutory provision include any statutory modification
or re-enactment of it for the time being in force.

1.4                                 Words
in this Agreement denoting the singular shall include the plural and vice versa
and the masculine gender shall include the feminine and neuter and vice versa.

1.5                                 Sub-Clauses
1.1 to 1.4 apply unless the contrary intention appears.

1.6                                 The
headings in this Agreement do not affect its interpretation.

1.7                                 Where
appropriate, references to the Executive include his personal representatives.

1.8                                 Reference
in this Agreement to any Clause, Sub-Clause or Schedule is to a clause or
sub-clause of or schedule to this Agreement.

1.9                                 References to the
Company or any Group Company include its successors in business if the
succession occurred or occurs after the Termination Date.

1.10                           Schedule
One shall have effect for the purpose of providing the Executive with
additional information required by the Employment Rights Act 1996.

2                                          APPOINTMENT AND DURATION

2.1                                 The
Company will employ the Executive and the Executive will serve the Company as
President, International Services Division and the Executive shall hold office
as a director of the Company for the period and on the terms and conditions set
out in this Agreement.

2.2                                 The
Appointment commenced on 1 January 2006 and will continue unless and until
terminated by either party giving to the other not less than 6 months’ notice in writing.

2.3                                 Notwithstanding
Clause 2.2, the Appointment will automatically terminate on the day on which
the Executive attains the age of 65.

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2.4                                 For the purposes of
the ERA, the Executive’s period of continuous employment began on 21
January 1994.

2.5                                 The Company may at any
time terminate the Appointment lawfully with immediate effect (whether or not
any notice has been given under Clause 2.2) by paying to the Executive a sum
equivalent to the Base Salary and the value of the Benefits in respect of that
part of the notice in Clause 2.2 which the Company has not given to the
Executive, less any appropriate tax and other statutory deductions (“the PILON”). The PILON shall be paid in 6
equal monthly instalments, the first instalment becoming payable one calendar
month after the Termination Date.

2.6                                 In the event that the
Executive breaches all or any of his obligations under Clause 15 hereunder,
such instalments of the PILON as have already been paid to the Executive and
which relate to the period in which the Executive is so in breach, shall
immediately become repayable by the Executive to the Company and the Company
shall not be obliged to make any further payments to the Executive under Clause
2.5. For the avoidance of doubt, the provisions of this Clause 2.6 shall be
without prejudice to the right of the Company and/or any Group Company to apply
to the High Court of Justice in England or to any other appropriate Court or
Tribunal for an injunction or other appropriate interim or final relief in
respect of any breach by the Executive of Clause 15 or any other term of this
Agreement.

2.7                                 If the Executive is
paid a PILON he will not be entitled to any payment in respect of holiday which
he would otherwise have accrued during the notice period under Clause 2.2.

2.8                                 At any time after
notice has been given by either party under Clause 2.2, the Company shall have
the right to require the Executive:

2.8.1                          to stay away from any or all
premises of the Group; and/or

2.8.2                          to undertake no work or
undertake different duties; and/or

2.8.3                          not to have any business
contact with all or any of the Group’s directors, agents, bankers, advisers,
employees, customers, clients, distributors, licensees and suppliers,

(“Garden
Leave”) PROVIDED THAT the Executive shall be entitled to
receive the Base Salary and value of the Benefits during Garden Leave. At all
times during Garden Leave, the Executive shall continue to be bound by the same
obligations as were owed to the Company prior to the commencement of Garden
Leave.

3                                          EXECUTIVE’S
DUTIES

3.1                                 During
the Appointment the Executive shall:

3.1.1                          use his best endeavours at
all times to promote and protect the interests of the Company.

3.1.2                        diligently and faithfully
perform such duties and exercise such powers as may from time to time be
assigned to or vested in him in relation to his position within the Company by
the Board.

3.1.3                        comply with all lawful
instructions of the Board. If the Board so decides the Executive shall accept
office in or perform duties for any Group Company in addition to those duties
that he is required to perform for the Company.

3.1.4                        unless on holiday or prevented
by ill-health or accident devote the whole of his time during normal business
hours to the duties of the Appointment and such additional time as is necessary
for the proper fulfilment of those duties.

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4                                          HOURS
OF WORK

4.1                                 The Employee shall
work such hours as are reasonably necessary for the full and proper performance
of his duties under this Agreement. There are no normal hours of work.

4.2                                 The Executive may be
required on some occasions to work for more than 48 hours a week and by
entering into this Agreement he accepts that the 48 hour limit on the working
week stipulated in the Working Time Regulations 1998 will not apply to him. The
Executive must give three months’ written notice to the Company if he wishes to
change this.

5                                          PLACE
OF WORK

5.1                                 Subject to reasonable
business travel requirements, the Executive shall generally perform his duties
from the Company’s head office, which at the date of this Agreement is located
at Sheffield Airport Business Park, Europa Link, Sheffield, S9 1XU. The Company
reserves the right from time to time to require the Executive to change his
normal place of work to such other place or places, within a 30 mile radius of
Sheffield (“the Sheffield Area”)
as it may reasonable decide. The Company shall not, without his prior written
consent, require the Executive to base himself permanently outside the Sheffield
Area.

5.2                                 The
Executive will undertake such travel as may be necessary for the proper
performance of his duties.

6                                          SALARY
AND BONUSES

6.1                                 The
Company will pay to the Executive the sum of £208,372.50 (“Base Salary”) per
annum subject to the appropriate deductions for income tax, employee’s national
insurance contributions and such other deductions as may be required by law
from time to time. The Base Salary will accrue from day to day during the
continuance of the Appointment, shall be payable by equal monthly instalments
in arrears and is inclusive of any fees receivable by the Executive as a
director of any Group Company.

6.2                                 The
Base Salary shall be subject to an annual review by the remuneration committee
of the Board (the “Committee”)
with effect from and including 1 January 2007. The Committee shall not be
obliged to make or recommend any increase and the award of an increase shall
not guarantee or imply or create any expectation of any subsequent increase.
The Company shall not reduce the Executive’s salary without his prior written
consent.

6.3                                 The
Executive shall be eligible to participate in the AIP, in accordance with its
terms as may be determined and amended by the board of directors of TNS (“the TNS Board”) from time to time. The
Executive’s target annual award opportunity under the AIP shall be 50% of the
Base Salary (“the AIP Annual Target”)
and shall be subject, in accordance with the terms of the AIP, to an annual cap
equal to 2 times the AIP Annual Target. Actual awards will be determined by the
TNS Board in its absolute discretion and will be based on the achievement of
specified performance objectives as determined by the TNS Board in its absolute
discretion. Any award made to the Executive under the AIP shall not guarantee
or imply or create any expectation of any subsequent award or amount of award.
The Executive’s participation in the AIP may be withdrawn at any time, as the
Executive has no contractual entitlement to it. To qualify for the payment of
any award under the AIP, the Executive must be in the Company’s employment and
not under notice (whether given by the Company or by the Executive) or
suspension at the time that such an award is payable.

6.4                                 The
Executive shall be eligible to participate in the LTIP, in accordance with its
terms as may be determined and amended by the board of directors of the Parent (“the Parent Board”) from time to time. The
Executive’s target annual award opportunity under the LTIP shall be 170% of the
Base Salary (“the LTIP Annual Target”)
and shall be subject, in accordance with the terms of the LTIP, to an annual
cap equal to 2 times the LTIP Annual Target. Actual awards will be comprised of
a combination of long-term incentive vehicles, as determined by the Parent
Board in its absolute discretion. Any award made to the Executive under the
LTIP shall not guarantee or imply or create any expectation of any subsequent
award or amount of 

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award. The Executive’s
participation in the LTIP may be withdrawn at any time, as the Executive has no
contractual entitlement to it. To qualify for the payment of any award under
the LTIP, the Executive must be in the Company’s employment and not under
notice (whether given by the Company or by the Executive) or suspension at the
time that such an award is payable.

 

6.5                                 The Executive shall be
entitled to reimbursement of all reasonable and necessary business-related
expenses he incurs in performing his duties, in accordance with and to the
extent permitted by the Company’s policies in effect from time to time.

7                                          BENEFITS

7.1                                 During
the Appointment, the Company shall make an annual contribution of 13% of Base Salary (by
equal monthly instalments) to such personal pension plan of the Executive as he
shall nominate (subject to any maximum imposed by HM Revenue &
Customs) (“the Contribution”). The
Executive shall be solely responsible for the administration and costs of any
such pension plan. The Contribution shall be subject to an annual review by the
Committee with effect from and including 1 January 2007. The Committee
shall not be obliged to make or recommend any increase and the award of an
increase shall not guarantee or imply or create any expectation of any
subsequent increase. Save as may be required by law, the Company shall not
reduce the Contribution without the Executive’s prior written consent.

7.2                                 During
the Appointment the Company shall, provided and for so long as such cover is
available on reasonable terms, pay:-

7.2.1                        the cost of membership for the
Executive and his spouse or partner and dependent children of the Executive
under the age of 24 of private medical, vision and dental insurance schemes;
and

7.2.2                        the premiums necessary to
provide the Executive with permanent health insurance by an insurance company
chosen by the Company during the continuance of the Appointment; and

7.2.3                        the cost of providing the
Executive with life assurance cover whereby the sum assured is equal to four
times the amount of the Base Salary at the time of his death or, if less, four
times the permitted maximum as specified from time to time for the purposes of
section 590C of the Income and Corporation Taxes Act 1988.

7.3                                 In
relation to the insured benefits referred to in Clause 7.2 the obligations of
the Company are limited to paying the costs or premiums as provided and to
operating the relevant scheme in accordance with the terms and conditions of
any policy, rules or other contract constituting the scheme. The Company
does not guarantee the Executive payment of benefits under any such scheme nor
will it reimburse the Executive if the relevant scheme does not make any
payment to the Executive nor will it indemnify or compensate the Executive in
respect of any loss, which the Executive may incur in relation thereto.

7.4                                 The
Executive shall be entitled to a car allowance of £850 per month subject to
such deductions as may be required by law.

7.5                                 The
Company will pay for the Executive to have an annual health check.

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7.6                                 In
respect of business travel, the Executive shall be entitled:

7.6.1                      to travel by
air on business class at all times save when the Executive is required to fly
for more than 14 hours in which case he shall be entitled to travel First
Class;

7.6.2        to
travel by first class rail within the United Kingdom; and

7.6.3        to
maintain membership for access to two airline hospitality lounges.

7.7                                 The
Company shall provide and bear the costs of one mobile telephone and one mobile
e-mail device for the Executive’s use in connection with the Group’s business.
The mobile telephone and mobile e-mail device will remain the property of the Company
and must be returned on the termination of the Appointment for whatever reason.

7.8                                 In
addition to any other benefits specifically set out herein, the Executive shall
also be eligible to participate in all other employee benefit plans and
programs offered by the Company to its senior executives generally, in
accordance with the terms of those plans and programs, and as such benefits may
be amended or terminated from time to time by the Company.

7.9                                 The
Executive will be entitled to reimbursement of:

7.9.1        the monthly membership fees;

7.9.2        any periodic assessments; and

7.9.3                        any initiation fees (provided
that the said initiation fees shall be approved by the Board and the Executive
shall not be entitled to this benefit to the extent provided by the Company to
the Executive at any time prior to the execution of this Agreement)

associated with
maintaining membership at one private club (golf or other) and family
membership of one gym.

7.10                           The Company reserves the
right to terminate its participation in any of the schemes relating to the
Benefits, or to substitute other schemes or alter the benefits available to the
Executive.

8                                          MEDICAL
AND SICKNESS

8.1                                 The
Company may at any time require the Executive to be examined by a registered
medical practitioner nominated by the Company at the Company’s sole expense and
the Executive shall submit to such examination. The Executive consents to the
medical practitioner disclosing the results of the examination to the Company
to the extent that such results (in the reasonable opinion of the medical
practitioner) are relevant in any way to the Executive’s performance of his
duties under this Agreement and the Executive will provide the Company with
such formal consents as may be necessary for this purpose.

8.2                                 The
Executive will be paid in full during any period or periods of absence from
work due to sickness or injury not exceeding in aggregate 130 Working Days in
any period of 12 months and thereafter such remuneration, if any, as the Board
shall in its sole discretion determine provided that such remuneration shall
never be less than the proceeds received by the Company in respect of the
Executive under any permanent health insurance scheme or policy referred to
under Clause 7.2.2 (after paying pension contributions if applicable). If
entitlement to be paid in full pursuant to this Clause has, by reason the
period of absence from work, ceased the Executive shall not again become
entitled to payment whilst absent by reason of sickness or injury (other than
in accordance with any permanent health insurance scheme or policy referred to
under Clause 7.2.2) until the Executive has returned to a work for a continuous
period of not less than three months. 
For the avoidance of doubt, the Executive shall not be entitled to payment
by the Company in addition to any benefits he receives under any permanent
health insurance policy referred to in Clause 7.2.2.

8.3                                 The
Executive’s salary during any period of absence due to sickness or injury will
be inclusive of any statutory sick pay to which he may be entitled and the
Company may deduct from his salary the amount of any social security benefits
he may be entitled to receive.

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8.4                                 Payment
under this Clause is conditional on the Executive complying with the Company’s
rules from time to time in force on notification and evidence of absence.

9                                          HOLIDAYS

9.1                                 In
addition to public holidays, the Executive is entitled to 25 Working Days paid
holiday in each complete calendar year at times agreed with the Board. Only 5
days of accrued holiday entitlement for one calendar year may be carried over
and taken in the next holiday year unless otherwise agreed by the Board.
Failure to take accrued holiday at the appropriate time will lead to forfeiture
without any entitlement to payment in lieu of it.

9.2                                 The
Company reserves the right to require the Executive to take any outstanding
holiday during any period of notice of termination of the Appointment (whether
given by the Company or the Executive) or to make a payment in lieu of that
outstanding holiday.

9.3                                 The
entitlement to holiday (and on termination of the Appointment to holiday pay in
lieu of holiday) accrues at the rate of 2.08 days per complete calendar month
worked. If the Executive has on termination of the Appointment exceeded, in the
calendar year in which the Appointment terminates, his entitlement to paid
holiday any sum overpaid shall be treated as a debt due to the Company and the
Company shall be entitled to deduct such sum from amounts otherwise due to the
Executive.

10                                    CODES OF CONDUCT

The Executive
shall comply with all applicable codes of conduct from time to time adopted by
the Board and with all applicable rules and regulations of any relevant
regulatory body. The Executive consents to the Company disclosing such
information relating to the terms of employment of the Executive or any
benefits provided to him as may be required to be disclosed by law or by any
regulatory body or as it may be recommended to disclose by any applicable code
of conduct or practice relating to corporate governance.

11                                    CONFIDENTIAL
INFORMATION

11.1                           The
Executive shall not during the Appointment (except in the proper performance of
his duties or with the express written consent of the Board) nor at any time
(without limit) after the termination of the Appointment (howsoever occurring),
directly or indirectly:

11.1.1     use
for his own purposes or those of any other person, firm or corporation; or

11.1.2                disclose to any
person, firm or corporation; any trade secrets or confidential information
relating to, in the possession of or belonging to the Company and/or any Group
Company including but not limited to any such information relating to
customers, suppliers, licensees, customer or supplier or licensee lists or
requirements, price lists or pricing structures, marketing and sales
information, business plans or dealings, software, codes and programs,
employees, workers or officers, financial information and plans, designs,
formulae, product lines, research activities, any document marked
“confidential” or “secret” or any information which the Executive has been told
is confidential or secret or which might reasonably be expected to be regarded
as confidential or secret by the Group or any information which has (to the
Executive’s knowledge) been given to the Group in confidence by customers,
suppliers, licensees or any other person.

11.2                           The
Executive shall not make or copy any record relating to the business of the
Company and/or any Group Company, otherwise than for the purpose of performing
his duties under this Agreement.

11.3                           During
the Appointment, the Executive will not improperly use or disclose any
confidential information or trade secrets of any former employer or any other
person to whom the Executive has an obligation of confidentiality, and will not
bring onto the Group’s premises any unpublished documents or any property
belonging to a former employer or any other 

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person to whom the
Executive has an obligation of confidentiality unless consented to in writing
by the former employer or person.

 

11.4                           The
Executive will use in the performance of his duties only information which is:

11.4.1                  common knowledge in the industry or
is otherwise legally in the public domain;

11.4.2                  otherwise provided or developed by
the Group; or

11.4.3                  in the case of materials, property or
information belonging to any former employer or other person to whom the
Executive has an obligation of confidentiality, approved for such use in
writing by such former employer or person.

11.5                           The
obligations contained in this Clause shall cease to apply to any trade secret
or confidential information which may (otherwise than through default of the
Executive or through any other unauthorised disclosure) become available to the
public generally.

11.6                           This
Clause does not apply to secret or confidential information which the Executive
is ordered to disclose by a court of competent jurisdiction or which the
Executive is by law entitled to disclose notwithstanding the terms of Clauses
11.1 and/or 11.3.

11.7                           The Executive acknowledges
that all books, notes, memoranda, records, lists of customers, licensees,
suppliers and/or employees, correspondence, documents, computer and other discs
and tapes, data listings, codes, designs and drawings and other documents and
material whatsoever (whether made or created by the Executive or otherwise)
relating to the business of the Group (and any copies thereof):

11.7.1                  shall be and remain the property of
the Company or the relevant Group Company; and

11.7.2                  shall be handed over by the Executive
to the Company or to the relevant Group Company on demand and in any event on
the termination of the Appointment and, on request by the Board, the Executive
shall certify that all such property has been handed over.

12                                    RESTRICTIONS
DURING APPOINTMENT

12.1                           During
the Appointment, the Executive shall not hold or accept any appointment to any
office or employment in relation to any body, whether corporate or not (other
than a Group Company) or directly or indirectly be engaged, concerned or
interested in any other business except:

12.1.1                  as holder or beneficial owner (for
investment purposes only) of any class of securities in a company if those
securities are listed on or dealt in on a Recognised Investment Exchange
provided that the Executive together with his spouse and children neither hold
nor are beneficially interested in aggregate in more than 3% of the securities
of that class; or

12.1.2                  with the consent in writing of the
Board which may be given subject to any terms which the Board requires.

13                                    TERMINATION OF APPOINTMENT

13.1                           Notwithstanding
any other provisions of this Agreement, the Company may terminate the
Appointment summarily by serving written notice, and the Executive shall not be
entitled to any further payment from the Company (except such sums as shall
have accrued at the date of service of such notice), if the Executive:

 9

13.1.1                  is guilty of any serious or (after
having received a written warning from the Board) repeated breach of his
obligations under this Agreement; or

13.1.2                  is guilty of (i) serious
misconduct, (ii) serious negligence or (iii) any other conduct which
materially harms or in the reasonable opinion of the Board is likely materially
to harm the interests of the Group; or

13.1.3                  is convicted of an offence (other
than a road traffic offence for which a non-custodial penalty is imposed); or

13.1.4                  becomes bankrupt or makes any
arrangement or composition with his creditors; or

13.1.5                  is disqualified from being a director
of any company by reason of an order made by any competent court,

provided always
that where any such breach by the Executive is clearly capable of remedy, the
Company shall not terminate the Appointment pursuant to this Clause unless and
until it has given to the Executive at least 28 days’ written notice of the
breach requiring him to remedy the same and he has failed to do so.

13.2                           The Company may suspend the
Executive from his employment on full pay at any time for a reasonable period
in order to investigate any matter in which the Executive is implicated or
involved (whether directly or indirectly) and to conduct any related
disciplinary proceedings.

13.3                           If the
Executive is prevented by ill-health, injury or other incapacity from
performing his duties under this Agreement and he has been so incapacitated for
a period or periods aggregating 130 Working Days in the preceding 12 months the
Company may terminate the Appointment by not less than three months’ prior
written notice to that effect given at any time while the Executive is so
incapacitated provided that the Company may withdraw any such notice if during
the currency of the notice the Executive returns to full-time duties and
provides a medical practitioner’s certificate to the effect that he is fit to
work and that no recurrence of his incapacity can reasonably be anticipated
within the following 12 months.

13.4                           On the
termination of the Appointment for any reason (whether lawfully or otherwise)
or upon the Company having exercised its rights under Clause 2.8, the Executive
shall:

13.4.1                  at the request of the Company resign
all directorships and other offices held by him in the Group (without prejudice
to the rights of any party arising out of this Agreement or the termination of
the Appointment) and from all other appointments or offices which he may hold
as nominee or representative of the Group and relinquish all and any
authorities and powers of signature and all similar rights and powers
(including in particular but without limitation any authorities, rights and/or
powers of signature over or in respect of any bank, deposit or similar account
operated by or in the name of the Company and/or any Group Company) which he
may hold for or on behalf of the Company and/or any Group Company and should
the Executive fail to sign any deed or document or do any act or thing required
of him to comply with this Sub-Clause 13.4.1 the Company is irrevocably
authorised to appoint some person in his name or on his behalf to sign any deed
or document and do any act or thing necessary or requisite to give effect
thereto; and

13.4.2                  immediately deliver to the Company
all property in his possession or custody or under his control belonging to the
Group including (but not limited to) business cards, credit and charge cards,
security and computer passes, original and copy documents or other media on
which information is held in his possession relating to the business or affairs
of the Group.

13.5                           With
effect from the Termination Date, all the rights and obligations of the parties
under this Agreement will cease except for those which are expressed to
continue after the Appointment terminates and except in relation to any breach
of any provision of this Agreement on or before that date. Termination of the
Appointment will not prejudice any accrued rights of the 

 10
 

Company or the Executive.

13.6                           The Company will continue to
pay the Executive his Base Salary and, subject to Clause 13.9, provide him with
the Benefits on a month by month basis during any part of the Restricted Period
in which the Executive is not otherwise being paid pursuant to Clause 2.5 PROVIDED THAT the Executive abides by his
obligations under Clause 15 and PROVIDED THAT
the Executive enters into a settlement agreement in substantially
equivalent terms to those set out at Schedule Two,

13.7                           In the event that the
Company terminates the Appointment without cause (i.e. without a reason or
reasons entitling it to terminate the Appointment immediately pursuant to
Clause 13.1 or 13.14) or where the Executive terminates the Appointment for
Good Reason, then PROVIDED THAT
the Executive enters into a settlement agreement in substantially equivalent
terms to those set out at Schedule Two, the Executive may elect at the end of
the Restricted Period on a month by month basis up to and including the End
Date, to continue to be bound by the restrictions set out in Clause 15 in
consideration of which election, the Company will continue to pay to the
Executive his Base Salary and, subject to Clause 13.9,  provide him with the Benefits on a month by
month basis for the same period in which the Executive continues to so elect.

13.8                           The Company may, at its sole
discretion, decide to offer the Executive the opportunity to continue the
arrangement set out in Clause 13.7 for a further period of 12 months after the
End Date.

13.9                           Where the provisions of any
of Clauses 13.6 and 13.7 apply and in the event that the plans relating to the
Benefits do not permit continued participation by the Executive after the
Termination Date, the Executive will instead be entitled to a lump sum payment
from the Company (less such deductions as may be required by law) equivalent to
the cost to the Executive of purchasing and continuing all such Benefit
programs SUBJECT TO the production
by the Executive to the Company of satisfactory documentary evidence of such
cost.

13.10                     In the event that the Executive
breaches any of the restrictions under Clause 15 during the Restricted Period
or at any time during which he has elected pursuant to Clause 13.7 to continue
to be bound by the restrictions set out in Clause 15, such payments as have
been made by the Company pursuant to Clauses 13.6 and/or 13.7 and which relate
to the period in which the Executive is so in breach, shall immediately become
repayable by the Executive to the Company and the Company shall not be obliged
to make any further payment under Clauses 13.6 and/or 13.7. For the avoidance
of doubt, the provisions of this Clause 13.10 shall be without prejudice to the
right of the Company and/or any Group Company to apply to the High Court of
Justice in England or to any other appropriate Court or Tribunal for an
injunction or other appropriate interim or final relief in respect of any
breach by the Executive of this Clause 13, Clause 15 or any other term of this
Agreement.

13.11                     In the event that the Company is
found by a court of competent jurisdiction to be in breach any of its
obligations under this Clause 13 or any other provision of this Agreement, the
Company will indemnify the Executive for all reasonable legal costs incurred by
him in order to obtain any remedy for such a breach.

13.12                        
For the avoidance of doubt and subject to Clause 13.8, the aggregate value of
the sums paid to the Executive pursuant to Clause 2 and this Clause 13 (with
the exception of Clause 13.11) shall not exceed 200% of the value of the
Executive’s Base Salary and entitlement to Benefits as at the Termination Date.

13.13                        In
this Clause 13:

“End Date”
means the last day of the two-year period immediately following the Termination
Date.

 11
 

“Good Reason”
means where (i) the Executive is assigned duties substantially
inconsistent with his responsibilities set out in Clause 3.1 or a substantial
adverse alteration is made to the nature or status of such responsibilities;
(ii) the Executive is demoted; (iii) the Company reduces the
Executive’s Base Salary as in effect on the date hereof or as the same may be
increased from time to time; (iv) in breach of this Agreement, the Company
materially reduces the aggregate value to the Executive of the Benefits, other
than in connection with a reduction in benefits generally to senior executives
of the Group; or (v) the Company requires the Executive to change his
normal place of work to a place outside England and Wales

“Restricted
Period” means the relevant period during which the Executive
is restricted in each of the provisions of Clause 15.

13.14                   The Executive’s employment shall
terminate upon his death in which event the Company shall have no further
obligation to the Executive or his estate other than the payment of accrued but
unpaid Base Salary, pro-rated awards under the AIP and LTIP (calculated and
paid when such awards are paid to other employees generally), accrued holiday
pay and Benefits as at the date of termination, unless otherwise required by
law or by the rules of any applicable scheme.

14                                    TERMINATION
OF DIRECTORSHIP

14.1                           The Appointment shall
terminate automatically if the Executive ceases to be a director of the Company
and in that event the Executive shall have no claim for damages against the
Company unless he shall so cease:

14.1.1                  by reason of his not being re-elected
as a director of the Company at the annual general meeting of the Company held
next after the Commencement Date; or

14.1.2                  by reason of his not being re-elected
as a director of the Company at any annual general meeting of the Company at
which he is to retire by rotation; or

14.1.3                  by virtue of a resolution passed by
members of the Company in general meeting to remove him as a director; and,

in
any such case, at the time of such failure to re-elect or of such removal the
Company shall not be otherwise entitled to terminate the Appointment without
notice under this Agreement.

15                                    PROTECTIVE
COVENANTS

15.1                           The
Executive understands and acknowledges that his very senior position with the
Company and the Group gives him:

15.1.1                  access to and the benefit of trade
secrets and confidential information which is vital to the continued success of
the Company and the Group; and/or

15.1.2                  influence over and connection with
the Company’s customers, clients, suppliers, licensees, distributors, agents,
employees and directors and those of the Group with whom the Executive has
dealings or contact.

15.2                           The
Executive acknowledges and confirms that he agrees, having had the opportunity
to take legal advice thereon, that the provisions appearing in Clauses 15.4 to
15.6 are reasonable in their application to
him and necessary but no more than sufficient to protect the interests
of the Company and the Group.

15.3                           Each of
the restrictions in this Clause 15 shall be enforceable independently of each
of the others and its validity shall not be affected if any of the others is
invalid.  In the event that any
restriction contained in Clauses 15.4 to 15.6 shall be found to be void, but
would be valid if some part of the relevant provision were deleted, the relevant provision shall apply with such
modifications as may be necessary to make it valid and effective.

 12
 

15.4                           The
Executive covenants with the Company that he will not without the prior written
consent of the Board for a period of 6 months immediately after the Termination
Date be concerned in any Relevant Business. For this purpose, the Executive
will be concerned in a Relevant Business if:

15.4.1                  he carries it on as principal or
agent; or

15.4.2                  he is a partner, director, employee,
secondee, consultant or agent in, of or to any person who carries on the
Relevant Business; or

15.4.3                  he has any direct or indirect
financial interest (as shareholder or otherwise) in any person who carries on
the Relevant Business; or

15.4.4                  he is a partner, director, employee,
secondee, consultant or agent in, of or to any person who has a direct or indirect
financial interest (as shareholder or otherwise) in any person who carries on
the Relevant Business,

disregarding any financial interest of a person in
securities which are listed or dealt in on any Recognised Investment Exchange
if that person, the Executive and any person connected with him (within the
meaning of Section 839 of the Income and Corporation Taxes Act 1988) are
interested in securities which amount to less than 3% of the issued securities
of that class and which, in all circumstances, carry less than 3% of the voting
rights (if any) attaching to the issued securities of that class.

15.5                           The Executive covenants with
the Company that he will not directly or indirectly on his own account or on
behalf of or in conjunction with any other person for a period of 12 months
after the Termination Date:

15.5.1                  in competition with the Group:

15.5.1.1                                canvass
or solicit business or custom for Services from any person who was at any time
during the Relevant Period a Client;

15.5.1.2                                accept
or facilitate the acceptance of orders or instructions for Services from or
have any business dealings with any Client in connection with the provision of
Services to any Client;

15.5.2                  other than with the prior written
consent of the Company, induce or entice or attempt to induce or entice away
from the Group any Key Employee (whether or not this would be a breach of
contract by the Key Employee);

15.5.3                  other than with the prior written
consent of the Company, employ, engage or retain the services of any Key
Employee;

15.5.4                  interfere or seek to interfere with
the continuance of supplies to the Group (or
the terms relating to such supplies) from any suppliers who have been
supplying goods, materials or services to the Group at any time during the Relevant Period;

15.5.5                  for the purposes of any Relevant
Business induce or attempt to induce any person who is a licensee of the Group
and who was a licensee of the Group at any time during the Relevant Period to
cease to be a licensee of the Group; or

15.5.6                  acquire or attempt to acquire an
interest in any business with which the Group has entered into substantive
negotiations or has requested and received confidential information relating to
the acquisition of such business or any part of such business by the Group at
any time during the two-year period immediately preceding the Termination Date.

15.6                           The Executive covenants with
the Company that he will not at any time use nor (in so far as he can
reasonably do so) allow to be used (except by the Company and/or any Group 

 13
 

Company) any trade name or domain name used by the Group at the
Termination Date or any other name calculated or likely to be confused with
such a trade name or domain name.

15.7                           The period of any restraint
on the Executive’s activities after the termination of the Appointment imposed
pursuant to Clauses 15.4 to 15.6 shall be reduced by any period of Garden Leave
served by the Executive.

15.8                           In this Clause 15:

“Client” means
a customer or client of the Group with whom the Executive had material dealings
or of whose dealings with the Group the Executive had material knowledge in the
course of his employment at any time during the Relevant Period.

“Key
Employee” means any director of the Group or any employee of
the Group who is employed on the Termination Date or who was so employed at any
time during the three months immediately preceding the Termination Date, in an
executive, managerial, or senior sales or technical capacity and with whom the
Executive had material dealings during the course of his employment at any time
during the Relevant Period.

“Relevant
Business” means any business which is in competition with, or
is planning to enter into competition with, any business carried on by the
Group and which was carried on by the Group on the Termination Date and

(i)             in which the Executive was
materially involved; or

(ii)                                     of
which the Executive had material knowledge

in the course of his
employment at any time during the Relevant Period.

“Relevant Period” means the period of 12 months ending on the
Termination Date.

“Services”
means services the same as or of a type similar to those being provided or
dealt in by the Group on the Termination Date, and with the provision of which
services the Executive and/or any person reporting to him was involved to a
material extent in the course of his employment during the Relevant Period.

16                                    INTELLECTUAL
PROPERTY

16.1                           The
parties foresee that the Executive may make, discover or create Intellectual
Property in the course of his duties under this Agreement and agree that in this
respect the Executive has a special obligation to further the interests of the
Company.

16.2                           Subject
to the provisions of the Patents Act 1977 and the Copyright, Designs and
Patents Act 1988 if at any time during the Appointment the Executive makes or
discovers or participates in the making or discovery of any Intellectual
Property relating to or capable of being used in the business for the time
being carried on by the Company and/or any Group Company full details of the
Intellectual Property shall immediately be communicated in writing by him to
the Company and shall be the absolute property of the Company. At the request
and expense of the Company the Executive shall give and supply all such
information data, drawings and assistance as may be requisite to enable the
Group to exploit the Intellectual Property to the best advantage and shall
execute all documents and do all things which may be necessary or desirable for
obtaining patent or other protection for the Intellectual Property in such
parts of the world as may be specified by the Company and for vesting the same
in the Company or as it may direct.

16.3                           The
Executive irrevocably appoints the Company to be his attorney in his name and
on his behalf to sign, execute or do any such instrument or thing and generally
to use his name for the purpose of giving to the Company (or its nominee) the
full benefit of the provisions of this Clause and in favour of any third party
a certificate in writing signed by any director or the secretary of the Company
that any instrument or act falls within the authority conferred by this 

 14
 

Clause shall be conclusive evidence that such
is the case.

16.4                           If in
any case, Intellectual Property is not the property of the Company the Company
shall subject to the provisions of the Patents Act 1977 have the right to
acquire for itself or its nominee the Executive’s rights in the Intellectual
Property within 3 months after disclosure pursuant to Clause 16.2 on fair and
reasonable terms to be agreed or settled by a single arbitrator appointed by
agreement between the parties or failing agreement by the Director General for
the time being of the Chartered Institute of Arbitrators.

16.5                           Rights
and obligations under this Clause shall continue in force after termination of
the Appointment in respect of Intellectual Property made during the Executive’s
employment under this Agreement and shall be binding upon his representatives.

17                                    INDEMNITY

The Company shall indemnify the Executive against any
losses or expenses which the Executive sustains or incurs in or about the
discharge of the office of director of the Company or as director of any other
Group Company where such office is held or duties are performed at the request
of or in accordance with the directions of the Board excepting always any
liability avoided by section 310 of the Companies Act 1985 provided that this
indemnity shall not in any event extend to fraud or deliberate misconduct by
the Executive.

18                                    GENERAL

18.1                           As from
the Commencement Date all other agreements or arrangements between the
Executive and the Company or any other Group Company relating to the employment
of the Executive will cease to have effect. Accordingly, any remuneration or
other benefit paid or provided to or for the Executive under any other
agreements or arrangements in respect of any periods since that date are deemed
to have been received by the Executive on account of the relevant amounts
payable or benefits to be provided to him under this Agreement.

18.2                           The
Executive warrants to the Company that by entering into this Agreement and
performing his duties under it he will not be in breach of any contract or
other obligation binding on him.

18.3                           If
during the Appointment the Executive is granted participation in a Share
Scheme, any extinction or curtailment of any rights or benefits under the Share
Scheme by reason of any transfer, suspension or termination of his Appointment,
howsoever arising, shall not form part of any claim for damages for breach of
this Agreement or compensation for unfair dismissal and the effect of any such
transfer, suspension or termination on the Executive’s rights or benefits under
the Share Scheme shall be determined in accordance with the rules, terms and
condition of the Share Scheme and not in accordance with the provisions (other
than this Clause) of this Agreement.

18.4                           Where
the Executive alleges that the Company has committed a breach of this Agreement
which is clearly capable of remedy, the Executive shall not accept such a
breach unless and until he has given to the Company at least 28 days’ written
notice of the breach requiring it to remedy the same and it has failed to do
so.

18.5                           The
Company shall be entitled at any time to deduct from the Executive’s
remuneration hereunder any sum due from him to the Company including but not
limited to any outstanding loans, advances, overpayment of salary or bonus and
in respect of holiday pay made in excess of the Appointee’s entitlement.

 15
 

19                                    EXECUTIVE’S
INFORMATION

19.1                           The Executive consents to
the Group retaining and/or processing both electronically and manually the data
(including Sensitive Data) it collects which relates to him in connection with
the Appointment, for the purposes of the administration and management of the
Group’s employees and business and for compliance with applicable procedures,
laws and regulations or for the purpose of any potential sale or transfer of
any shares or business of the Company including in the event of a proposed sale
or transfer disclosure of such data to any proposed purchaser or its advisers
in confidence  and to the transfer,
storage and processing by the Company and any Group Company of such data
outside the European Economic Area. This data shall be retained and processed
in accordance with the Data Protection Act 1998.

19.2                           The Executive agrees that
the Company may monitor his use of the Group’s office equipment, including
computers, telephones and telecommunication systems.

20                                    NOTICES

20.1                           Any
notice to be given in accordance with this Agreement shall be duly served if,
in the case of the Company, it is handed to a director of the Company (other
then the Executive) or delivered by hand or sent by first class or equivalent
post, airmail or facsimile to the Company at its registered office for the time
being and if, in the case of the Executive, it is handed to him or sent by
first class or equivalent post, airmail or facsimile to his usual or last known
place of residence.

20.2                           Any
notice to be given in accordance with this Agreement will be deemed to have
been served:

20.2.1      if
handed to a director or the Executive, at the time of delivery;

20.2.2      if
posted, at 10:00 am on the second Working Day after it was posted; or

20.2.3                  if sent by
facsimile, at the expiration of two hours after the time of despatch, if
despatched before 3.00 p.m. on any Working Day, and in any other case at
10.00 a.m. on the Working Day following the date of despatch.

20.3                           In
proving service it will be sufficient to prove that delivery was made or that
the envelope containing the formal communication was properly addressed and
posted as a pre-paid first class or airmail letter or that the facsimile
message was properly addressed and despatched as the case may be.

21                                    GOVERNING
LAW, JURISDICTION AND ARBITRATION

21.1                           The construction,
interpretation and performance of this Agreement are governed by English law.

21.2                           The parties hereby submit to
the non-exclusive jurisdiction of the English Courts.

21.3                           In the event of any
difference or dispute arising between the parties out of or in connection with
this Agreement, the parties shall negotiate in good faith to resolve such
difference or dispute by agreement but if no such agreement has been reached
within 14 days after the difference or dispute was first notified by one party
to the other in writing (“the Final Date”),
the said difference or dispute shall be referred to a single arbitrator to be
agreed upon by the parties or in default of agreement within 14 days after the
Final Date to be nominated by the Director General for the time being of the
Chartered Institution of Arbitrators in accordance with the Arbitration Act
1996 or any statutory modification or re-enactment of it for the time being in
force.

 16
 

21.4                           Clause
21.3 above shall be without prejudice to the right of the Company and/or any
Group Company to apply to the High Court of Justice in England or to any other
appropriate Court or Tribunal for an injunction or other appropriate interim or
final relief if it reasonably considers that it will suffer irreparable harm
before any interim or conservatory measure could be taken or that no adequate
remedy would be available in an arbitration under Clause 21.3 above and the
parties irrevocably submit to the non-exclusive jurisdiction of the High Court
of Justice in England for this purpose.

22                                    THIRD
PARTY RIGHTS

A person who is
not a party to this Agreement (other than any Group Company) may not enforce
any of its terms under the Contracts (Rights of Third Parties) Act 1999. The
parties reserve the right to rescind or vary the contract made by this
Agreement without the consent of any of the Group Companies other than the
Company.

21            COUNTERPARTS

This Agreement may
be executed in one or more counterparts, each of which and together will
constitute one and the same agreement.

AS WITNESS the hands of the
Executive and of the duly authorised representative of the Company on the date
which appears first on page 1.

	
  SIGNED by

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  for and on
  behalf of the above-named

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  TRANSACTION
  NETWORK SERVICES

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  (UK)
  LIMITED in the presence of:

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  	
  /s/ John J. McDonnell, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Director

  	
  /s/ John J. McDonnell III

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SIGNED by the
  above-named

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  RAYMOND
  LOW

  	
  )

  	
   

  	
   

  	
   

  	
   

  
	
  in the presence
  of:

  	
  )

  	
  /s/ Raymond Low

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Samantha Campbell

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness Name

  	
  Samantha Campbell

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness Address

  	
  22 Burncross Groll

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Burncross,
  Sheffield

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  S35 1RB

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Occupation:

  	
  HR Manager

  	
   

  	
   

  	
   

  	
   

  
							

 

 

 17Exhibit 10.1
 
AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT
 

This
Amended and Restated Change of Control Agreement (the “Agreement”) is made and
entered into effective as of December 15, 2005, by and between Patty Gray
(the “Employee”) and Conceptus, Inc., a Delaware corporation (the “Company”).

 

RECITALS
 

A.            It
is expected that another company or other entity may from time to time
consider the possibility of acquiring the Company or that a change of control may otherwise
occur, with or without the approval of the Company’s Board of Directors (the “Board”).
The Board recognizes that such consideration can be a distraction to the
Employee, an executive officer or director-level employee of the Company, and
can cause the Employee to consider alternative employment opportunities. The
Board has determined that it is in the best interests of the Company and its
stockholders to assure that the Company will have the continued dedication and
objectivity of the Employee, notwithstanding the possibility, threat or occurrence
of a Change of Control (as defined below) of the Company.

 

B.            The
Board believes that it is in the best interests of the Company and its
stockholders to provide the Employee with an incentive to continue his or her
employment with the Company.

 

C.            The
Board believes that it is imperative to provide the Employee with certain
benefits upon a Change of Control and, under certain circumstances, upon
termination of the Employee’s employment in connection with a Change of
Control, which benefits are intended to provide the Employee with financial
security and provide sufficient income and encouragement to the Employee to
remain with the Company notwithstanding the possibility of a Change of Control.

 

D.            To
accomplish the foregoing objectives, the Board of Directors has directed the
Company, upon execution of this Agreement by the Employee, to agree to the
terms provided in this Agreement.

 

E.             Certain
capitalized terms used in the Agreement are defined in Section 4 below.

 

AGREEMENT

 

In
consideration of the mutual covenants contained in this Agreement, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:

 

1.             AT-WILL
EMPLOYMENT. The Company and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under applicable law.
If the Employee’s employment terminates for any reason, including (without
limitation) any termination prior to a Change of Control, the Employee shall
not be entitled to any payments or 

 

 

benefits, other than as
required under applicable law or as provided by this Agreement, or as may otherwise
be available in accordance with the terms of the Company’s then existing
employee plans and written policies in effect at the time of termination. The
terms of this Agreement shall terminate upon the earliest of (i) the date
on which Employee ceases to be employed as an executive officer or
director-level employee of the Company; (ii) the date that all obligations
of the parties hereunder have been satisfied, or (iii) two (2) years
after a Change of Control. A termination of the terms of this Agreement
pursuant to the preceding sentence shall be effective for all purposes, except
that such termination shall not affect the payment or provision of compensation
or benefits on account of a termination of employment occurring prior to the
termination of the terms of this Agreement.

 

2.             STOCK
OPTIONS.

 

(a)           HOSTILE
TAKEOVER. Subject to Sections 5 and 6 below, in the event of a Hostile Takeover
and regardless of whether the Employee’s employment with the Company is
terminated in connection with the Hostile Takeover, each stock option granted
for the Company’s securities (collectively the “Options”) and each share of
restricted stock of the Company held by the Employee shall become fully vested
and/or immediately exercisable, as applicable, immediately prior to the
consummation of the transaction and with respect to the Options shall be
exercisable to the extent so vested in accordance with the provisions of the
Company’s stock option agreement and stock option plan pursuant to which such
Options were granted.

 

(b)           CHANGE
OF CONTROL. Subject to Sections 5 and 6 below, in the event of a Change of
Control and regardless of whether the Employee’s employment with the Company is
terminated in connection with the Change of Control, each Option and share of
restricted Company Stock held by the Employee shall become vested and/or
immediately exercisable immediately prior to the consummation of the
transaction as to fifty percent (50%) of the Option and restricted shares that
have not otherwise vested as of such date. The Option and restricted shares
that remain unvested as of the effective date of the transaction shall
thereafter vest at the same rate (that is, the same number of shares shall vest
during each vesting period) that was in effect prior to the Change of Control,
and shall accordingly vest over a period that is one-half of the total vesting
period that would otherwise be then remaining under the terms of the option or
restricted stock agreement pursuant to which each such Option or restricted
stock was granted, subject to any acceleration based on the subsequent
attainment of performance targets.

 

3.             CHANGE
OF CONTROL.

 

(a)           TERMINATION
FOLLOWING A CHANGE OF CONTROL. Subject to Sections 5 and 6 below, if the
Employee’s employment with the Company is terminated at any time within two (2) years
after a Change of Control, then the Employee shall be entitled to receive
severance benefits as follows:

 

(i)            VOLUNTARY
RESIGNATION. If the Employee voluntarily resigns from the Company (other than
as an Involuntary Termination (as defined below) or if the Company terminates
the Employee’s employment for Cause (as defined below)), then the 

 

2

 

Employee shall not be
entitled to receive severance payments under this Agreement. The Employee’s
benefits will be terminated under the Company’s then existing benefit plans and
policies in accordance with such plans and policies in effect on the date of
termination or as otherwise determined by the Board of Directors of the
Company.

 

(ii)           INVOLUNTARY
TERMINATION. If the Employee’s employment terminates as a result of an
Involuntary Termination other than for Cause, the Employee shall be entitled to
receive the following benefits: (i) severance payments during the period
from the date of the Employee’s termination until the date 12 months after the
effective date of the termination (the “Severance Period”) equal to the salary
which the Employee was receiving immediately prior to the change of control,
which payments shall be paid during the Severance Period in accordance with the
Company’s standard payroll practices; (ii) monthly severance payments
during the Severance Period equal to 1/12th of the Employee’s “target bonus”
(as defined below) for the fiscal year in which the termination occurs (or the
most recent fiscal year for which a cash target bonus was determined if a cash
target bonus has not yet been determined for the fiscal year in which the
termination occurs); (iii) continuation of all health and life insurance
benefits through the end of the Severance Period substantially identical to
those to which the Employee was entitled immediately prior to the termination,
or to those being offered to officers of the Company, or a successor
corporation, if the Company’s benefit programs are changed during the Severance
Period; (iv) full and immediate vesting of each unvested Option and share
of restricted Company stock held by the Employee on the date of termination so
that each such option shall be exercisable in full and each share of restricted
stock shall be fully vested on the termination date in accordance with the
provisions of the option and/or restricted stock agreement, as applicable, and
plan pursuant to which such stock awards were granted; and (v) outplacement
services with a total value not to exceed $15,000. For purposes of this
Agreement, the term “target bonus” shall mean a cash bonus equal to the
Employee’s base salary in effect immediately prior to the change of control
multiplied by that percentage of such base salary that is prescribed by the
Company under its Officer Incentive Plan as the percentage of such base salary
payable to the Employee as a cash bonus if the Company pays bonuses at
one-hundred percent (100%) of its operating plan.

 

(iii)          INVOLUNTARY
TERMINATION FOR CAUSE. If the Employee’s employment is terminated for Cause,
then the Employee shall not be entitled to receive severance payments under
this Agreement. The Employee’s benefits will be terminated under the Company’s
then existing benefit plans and policies in accordance with such plans and
policies in effect on the date of termination.

 

(b)           TERMINATION
APART FROM A CHANGE OF CONTROL. In the event the Employee’s employment
terminates for any reason, either prior to the occurrence of a Change of
Control or after the two year period following the effective date of a Change
of Control, then the Employee shall not be entitled to receive any severance
payments under this Agreement. The Employee’s benefits will be terminated under
the terms of the Company’s then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of termination or
as otherwise determined by the Board of Directors of the Company. Notwithstanding
anything contained in this Agreement to the contrary, if the Employee’s
employment is terminated prior to a Change of Control (other than a termination
for Cause) and it is determined 

 

3

 

that such termination (i) was
at the request of a third party who has indicated an intention or taken steps
reasonably calculated to effect a Hostile Takeover or Change of Control and who
subsequently effectuates a Hostile Takeover or Change of Control (a “Third
Party”) or (ii) otherwise occurred in connection with, or in anticipation
of, a Hostile Takeover or Change of Control which actually occurs, then, for
all purposes of this Agreement, the date of a Hostile Takeover or Change of
Control with respect to the Employee shall mean the date immediately prior to
the date of such termination of the Employee’s employment, and the Employee
shall be entitled to payments and benefits commencing as of such date.

 

4.             DEFINITION
OF TERMS. The following terms referred to in this Agreement shall have the
following meanings:

 

(a)           CHANGE
OF CONTROL. “Change of Control” shall mean the occurrence of any of the
following events:

 

(i)            OWNERSHIP.
Any “Person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Act”) in one or more related
transactions is or becomes the “Beneficial Owner” (as defined in Rule 13d-3
under the Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s outstanding voting securities without regard to whether the
Board has approved such acquisition(s).

 

(ii)           MERGER/SALE
OF ASSETS. A merger or consolidation of the Company whether or not approved by
the Board of Directors of the Company, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets.

 

(iii)          CHANGE
IN BOARD COMPOSITION. A change in the composition of the Board of Directors of
the Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are
directors of the Company as of December 15, 2005 or (B) are elected,
or nominated for election, to the Board of Directors of the Company with the
affirmative votes of at least a majority of the Incumbent Directors at the time
of such election or nomination (but shall not include an individual whose
election or nomination is in connection with an actual or threatened proxy
contest relating to the election of directors to the Company).

 

(b)           CAUSE.
“Cause” shall mean (i) gross negligence or willful misconduct in the
performance of the Employee’s duties to the Company where such gross negligence
or willful misconduct has resulted or is likely to result in substantial and
material damage to the Company or its subsidiaries, (ii) repeated
unexplained or unjustified absence from the Company, (iii) a material and
willful violation of any federal or state law; (iv) commission of any act
of fraud 

 

4

 

with respect to the
Company; or (v) conviction of a felony or a crime involving moral
turpitude causing material harm to the standing and reputation of the Company,
in each case as determined in good faith by the Board of Directors of the
Company.

 

(c)           HOSTILE
TAKEOVER. “Hostile Takeover” shall mean any transaction (or one or more related
transactions) pursuant to which any “Person” (as such term is used in Sections
13(d) and 14(d) of the Act) is or becomes the “Beneficial Owner” (as
defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s outstanding voting securities without
regard to whether the Board has approved such acquisition(s).

 

(d)           INVOLUNTARY
TERMINATION. “Involuntary Termination” means any termination by the Company
other than for Cause and the Employee’s voluntary termination, upon 30 days
prior written notice to the Company, following (i) any reduction of the
Employee’s base compensation, bonus opportunity or benefits (other than equity
or equity related benefits or reductions made in connection with a general
decrease in base salaries, bonus opportunities or benefits, as applicable for
most similarly situated executives of the successor corporation); (ii) the
Employee’s refusal to relocate to a location more than 50 miles from the
Company’s current location; (iii) any action by the Company that results
in a diminution in the Employee’s authority, duties and responsibilities; (iv) a
material breach by the Company of any of its obligations hereunder and (v) any
failure by a successor to assume and perform the Company’s obligations
hereunder.

 

5.             LIMITATION
ON PAYMENTS. To the extent that any of the payments or benefits provided for in
this Agreement or otherwise to the Employee (collectively the “Payments”)
constitute “parachute payments” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and, but for this Section 5,
would be subject to the excise tax imposed by Section 4999 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 Payments that
would result in no portion of the Payments being subject to the Excise Tax or
(y) the largest portion, up to and including the total, of the Payments,
whichever amount, after taking into account all applicable federal, state and
local employment taxes, income taxes, and the Excise Tax (all computed at the
highest applicable marginal rate), results in the Employee’s receipt, on an
after-tax basis, of the greater amount of the Payments notwithstanding that all
or some portion of the Payment may be subject 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 following order unless the Employee elects in writing a different order
(provided, however, that such election shall be subject to Company approval if
made on or after the effective date of the event that triggers the Payment):
reduction of cash payments; cancellation of accelerated vesting of stock
options and restricted stock; reduction of employee benefits. In the event that
acceleration of vesting of stock compensation is to be reduced, such
acceleration of vesting shall be cancelled in the reverse order of the date of
grant of the Employee’s stock options and restricted stock (i.e., earliest
granted stock awards cancelled last) unless the Employee elects in writing a
different order for cancellation.

 

5

 

The accounting
firm engaged by the Company for general audit purposes as of the day prior to
the effective date of the Hostile Takeover or Change of Control shall perform the
foregoing calculations. If the accounting firm so engaged by the Company is
serving as accountant or auditor for the individual, entity or group effecting
the Hostile Takeover or Change of Control, the Company shall appoint a
nationally recognized accounting firm to make the determinations required
hereunder. The Company shall bear all expenses with respect to the
determinations by such accounting firm required to be made hereunder.

 

The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Employee
and the Company within fifteen (15) calendar days after the date on which the
Employee’s right to a Payment is triggered (if requested at that time by the
Employee or the Company) or such other time as requested by the Employee or the
Company. If the accounting firm determines that no Excise Tax is payable with
respect to the Payments, either before or after the application of the Reduced
Amount, it shall furnish the Employee and the Company with an opinion
reasonably acceptable to the Employee that no Excise Tax will be imposed with
respect to such Payment. Any good faith determinations of the accounting firm
made hereunder shall be final, binding and conclusive upon the Employee and the
Company.

 

6.             SUCCESSORS.
Any successor to the Company (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise) to all or
substantially all of the Company’s business and/or assets shall assume the
obligations under this Agreement and agree expressly to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence
of a succession. The terms of this Agreement and all of the Employee’s rights
hereunder shall inure to the benefit of, and be enforceable by, the Employee’s
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.

 

7.             NOTICE.
Notices and all other communications contemplated by this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered
or when mailed by U.S. registered or certified mail, return receipt requested
and postage prepaid. Mailed notices to the Employee shall be addressed to the
Employee at the home address which the Employee most recently communicated to
the Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.

 

8.             MISCELLANEOUS
PROVISIONS.

 

(a)           NO
DUTY TO MITIGATE. The Employee shall not be required to mitigate the amount of
any payment contemplated by this Agreement (whether by seeking new employment
or in any other manner), nor, except as otherwise provided in this Agreement,
shall any such payment be reduced by any earnings that the Employee may receive
from any other source.

 

(b)           WAIVER.
No provision of this Agreement shall be modified, waived or discharged unless
the modification, waiver or discharge is agreed to in writing and signed by the
Employee and by an authorized officer of the Company (other than the Employee).
No waiver by either party of any breach of, or of compliance with, any
condition or provision of this 

 

6

 

Agreement by the other
party shall be considered a waiver of any other condition or provision or of
the same condition or provision at another time.

 

(c)           WHOLE
AGREEMENT. No agreements, representations or understandings (whether oral or
written and whether express or implied) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter hereof. This Agreement supersedes any agreement of the same
title or concerning similar subject matter dated prior to the date of this
Agreement, and by execution of this Agreement both parties agree that any such
predecessor agreement shall be deemed null and void.

 

(d)           CHOICE
OF LAW. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of California without
reference to conflict of laws provisions.

 

(e)           SEVERABILITY.
If any term or provision of this Agreement or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions of
this Agreement or the application of such terms and provisions to circumstances
other than those as to which it is held invalid or unenforceable, and a
suitable and equitable term or provision shall be substituted therefor to carry
out, insofar as may be valid and enforceable, the intent and purpose of
the invalid or unenforceable term or provision.

 

(f)            ARBITRATION.

 

(i)            Except as
provided below, any controversy or dispute which establishes a legal or
equitable cause of action (“Claim”) between the Employee and the Company
arising out of, or relating to Employee’s employment and/or this Agreement
shall be submitted to final and binding arbitration as the sole and exclusive
remedy for such controversy or dispute. It is the parties’ intent that issues of
arbitrability of any dispute shall be decided by the Arbitrator.

 

(ii)           Regardless
of whether the Federal Arbitration Act would apply by operation of law,
Employee and Company agree that the right and duty to resolve any controversy
or dispute by arbitration shall be governed exclusively by the Federal
Arbitration Act, as amended, and arbitration shall take place according to the
applicable rules of the American Arbitration Association (“AAA”)] in
effect as of the date the demand for arbitration is filed. If for any reason
the Federal Arbitration Act is found not to apply or govern, this agreement to
arbitrate shall be governed by applicable state law.

 

(iii)          The
arbitration shall take place before one arbitrator. Such arbitrator shall be
provided through the AAA by mutual agreement of the parties to the arbitration;
provided that, absent such agreement, the arbitrator shall be selected in
accordance with the rules of AAA then in effect. In either event, such
arbitrator may not have any preexisting, direct or indirect relationship
with any party to the arbitration.

 

(iv)          The
arbitration shall be held at the office of AAA nearest the Company facility to
which Employee was assigned prior to the dispute; provided, however, if such
office is 

 

7

 

outside the state in which Employee resides, Employee may cause
the arbitration to be held within Employee’s state of residence at a place
mutually convenient to the parties thereto and arbitrator.

 

(v)           The costs
of arbitration to be
paid shall not include any costs unique to arbitration, nor exceed the amount
such person would have had to pay in court costs had the matter been pursued in
court. The Company shall be responsible for all other cost payable to AAA in
connection with the arbitration, including the cost and fees of the arbitrator.
The arbitrator shall make such orders with respect to attorneys’ fees and other
costs and expenses related to the arbitration as provided by applicable law.

 

(vi)          The award
or decision of the arbitrator shall be rendered in writing; shall be final and
binding on the parties; and may be enforced by judgment or order of a
court of competent
jurisdiction.

 

(vii)         The
arbitrator shall have no authority to amend or modify the terms and conditions
of this Agreement, it being expressly understood and agreed that the arbitrator
shall have all such powers as a court would have, sitting without a jury, to
determine the validity and enforceability of any of the provisions hereof.

 

(viii)        Notwithstanding
this Section (f), the Company and the Employee shall have the right to
seek from a court of competent jurisdiction provisional non-monetary remedies
including, but not limited to, temporary restraining orders or preliminary
injunctions before, during or after arbitration to the extent such remedies are
not available through arbitration or cannot be obtained in a timely fashion
through arbitration. The Company and the Employee need not await the outcome of
the arbitration before seeking provisional remedies. Seeking any such remedies
shall not be deemed to be a waiver of such person’s right to compel
arbitration.

 

(g)           LEGAL
FEES AND EXPENSES. The parties shall each bear their own expenses, legal fees
and other fees incurred in connection with this Agreement.

 

(h)           NO
ASSIGNMENT OF BENEFITS. The rights of any person to payments or benefits under
this Agreement shall not be made subject to option or assignment, either by
voluntary or involuntary assignment or by operation of law, including (without
limitation) bankruptcy, garnishment, attachment or other creditor’s process,
and any action in violation of this subsection (h) shall be void.

 

(i)            EMPLOYMENT
TAXES. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.

 

(j)            ASSIGNMENT
BY COMPANY. The Company may assign its rights under this Agreement to an
affiliate, and an affiliate may assign its rights under this Agreement to
another affiliate of the Company or to the Company; provided, however, that no
assignment shall be made if the net worth of the assignee is less than the net
worth of the Company at the time of assignment. In the case of any such
assignment, the term “Company” when used in a section of this Agreement
shall mean the corporation that actually employs the Employee.

 

8

 

(k)           COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together will constitute one and the same
instrument.

 

9

 

IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.

 

 

	
  CONCEPTUS, INC.

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ Mark M.
  Sieczkarek

  	
   

  	
  By:

  	
  /S/ Patricia
  Gray

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title: President
  and CEO

  	
   

  
							

 

10

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