Document:

Exhibit 10.1  

Settlement Agreement  

by and between 

Tyco Electronics AMP GmbH

Ampèrestraße 12 - 14

64625 Bensheim,

Federal Republic of Germany 

—hereinafter
"GmbH" 

and

Tyco Electronics Logistics AG

Ampèrestraße 3

9323 Steinach

Switzerland 

—hereinafter
"AG"— 

and 

Tyco International Ltd.

90 Pitts Bay Road

Pembroke, HM 08

Bermuda 

—hereinafter
"Limited"— 

and

Herrn Dr. Jürgen W. Gromer

Im Tiefen Weg 44

64628 Bensheim-Auenbach

Federal Republic of Germany 

—hereinafter
"Dr. Gromer"— 

 

	Preamble
	

A.	
 	

Between GmbH and Dr. Gromer a Managing Director Service Relationship was entered into by Service Agreement dated December 2, 1982. Based on Dr. Gromer's retirement effective on 31 December 2007, Dr. Gromer and GmbH agree
that the appointment of Dr. Gromer as managing director as well as the service relationship of Dr. Gromer with GmbH will terminate with effect from December 31, 2007, as indicated in the notice from GmbH to Dr. Gromer dated
5 April 2007.
	

B.	
 	

At the same time a service relationship as member of the board between AG and Dr. Gromer exists based on the employment agreement dated October 1, 1999. Based on Dr. Gromer's retirement effective 31 December 2007,
Dr. Gromer and AG agree that Dr. Gromer's service relationship with AG will terminate with effect from 31 December 2007, as indicated in the notice from AG to Dr. Gromer dated 5 April 2007.
	

 	
 	

The parties agree as follows with immediate effect, i. e. prior to the termination of the notice period, in order to settle the service relationships:
	

1.	
 	
Termination of Service Relationships	
 	

 
	

1.1	
 	

The parties agree that the managing director service relationship between GmbH and Dr. Gromer will terminate by December 31, 2007.
	

1.2	
 	

At the same time the service relationship of Dr. Gromer and AG will also terminate by December 31, 2007.
	

1.3	
 	

Between the date of this Agreement and December 31, 2007, Dr. Gromer will provide advisory services to GmbH and AG and work on special projects as requested by the Chief Executive Officer, Tyco Electronics (hereinafter "CEO"), at such times
as mutually agreed between Dr. Gromer and the CEO. A separate employment agreement between GmbH or AG or any other company of the Limited group is not created thereby.
	

1.4	
 	

For at least the remainder of the calendar year and thereafter until otherwise notified by the CEO, Dr. Gromer is authorized to continue to maintain GmbH's membership and to continue to serve as GmbH's representative in the American Chamber of
Commerce in Germany. It is expected that Dr. Gromer will continue to represent GmbH as long as he continues to be a member of the Board of Tyco Electronics and as directed by the CEO.
	

2.	
 	
Calculation of Salary, Expenses	
 	

 
	

2.1	
 	

Until the termination of the service relationship with GmbH pursuant to Section 1.1, GmbH will calculate the monthly salary of Dr. Gromer based on his current annual base salary rate of EUR 279,939.00 gross in due course and will pay
the net amounts resulting from such calculation as usual to the bank account of Dr. Gromer.
	

 	
 	

The bonus claim of Dr Gromer against GmbH for the 2007 fiscal year shall be determined at the end of the 2007 fiscal year based on the actual AIP payout level and the net amount resulting there from will be paid to Dr Gromer at the same time as
2007 fiscal year bonuses are paid to executives of GmbH. In addition, Dr. Gromer will be eligible to receive a prorated bonus payment for the 2008 fiscal year based on his period of employment in the 2008 fiscal year, and such bonus will be
determined at the end of the 2008 fiscal year in accordance with the applicable terms of the bonus plan and will be paid to Dr Gromer at the same time as 2008 fiscal year bonuses are paid to other executives of GmbH.
	 	 	 	 	 	 	 

2

 

	

 	
 	

Potentially open expense claims against GmbH shall be claimed by Dr. Gromer until December 31, 2007. GmbH will reimburse the relevant expenses to Dr. Gromer under consideration of the applicable regulations of GmbH.
	

2.2	
 	

Section 2.1 shall apply mutatis mutandi with regard to the service agreement between Dr Gromer and AG, except that the monthly base salary paid to Dr. Gromer by AG will be based on his annual
base salary rate from AG of EUR 559,872 gross.
	

3.	
 	
Compensation	
 	

 
	

3.1	
 	

Dr. Gromer shall receive a compensation amounting to in total EUR 1,119,744.00 gross by GmbH, which shall be paid under consideration of the applicable tax regulations to Dr. Gromer within 30 days following the termination of the
service relationships. GmbH is entitled to set off the sum of the compensation according to no. 10.4 of this agreement versus this compensation.
	

3.2	
 	

Dr. Gromer shall receive a compensation amounting to in total EUR 2,339,488.00 gross by AG, which shall be paid under consideration of the applicable tax regulations to Dr. Gromer within 30 days following the termination of the
service relationships.
	

3.3	
 	

It is agreed between the parties that by payment of the compensations pursuant to Sections 3.1 and 3.2 all claims that Dr. Gromer has against GmbH, AG and/or Limited with respect to severance, termination indemnities, retention payments
(including any claim for retention payments under the retention award plan pursuant to the letter of Limited dated March 22, 2006), or similar payments, whether payable under a company plan or other arrangement or by local statute, are fully
settled.
	

4.	
 	
Reference Letter	
 	

 
	

 	
 	

Dr. Gromer will receive by AG as well as GmbH a benevolent and qualified reference letter upon the effective termination of the service relationships pursuant to Section 1.
	

5.	
 	
Other Benefits	
 	

 
	

 	
 	

Until termination of the Service Relationship with GmbH pursuant to Section 1.1, Dr Gromer shall continue to receive the employer contributions to the German social security scheme, including the contributions to his health insurance, if
any.
	

6.	
 	
Vacation	
 	

 
	

6.1	
 	

Within 30 days following the termination of the service relationships, Dr. Gromer will receive compensation for two months of unused vacation, one-third of which to be paid by GmbH and the other two-thirds to be paid by AG.
	

6.2	
 	

By that payment any and all claims for vacation are fulfilled either by granting time off or paid out. Dr. Gromer has no vacation claims against either GmbH, AG or any other Limited entity.
	

7.	
 	
Return of Items and Documents	
 	

 
	

7.1	
 	

To the extent that this is not already happened, Dr. Gromer undertakes to return all items of AG or GmbH or other companies of the Limited group which are still in his possession, to AG or GmbH at its seat, until December 31,
2007.
	 	 	 	 	 	 	 

3

 

	

7.2	
 	

Until at the latest December 31, 2007 Dr. Gromer shall return all company files and other physical or electronic documents and information of AG or GmbH as well as any other companies of the Limited group, which are still in his possession
to AG or GmbH. Dr. Gromer shall irrevocably delete through acknowledged methods all electronic files and documents as well as information on own data carriers following the return of one physical copy thereof to the relevant company.
	

7.3	
 	

To the extent possible, Dr. Gromer shall be free to fulfill the lease agreement for his company car and to purchase the company car from the leasing company.
	

7.4	
 	

Dr. Gromer undertakes to acknowledge the full fulfillment of the obligation in this Section 7 in writing, potentially also by declaration in lieu of oath.
	

8.	
 	
Confidentiality	
 	

 
	

8.1	
 	

Notwithstanding other further regulations contained in the service relationships of Dr. Gromer with AG or GmbH, Dr. Gromer shall, also following the termination of the service agreements, remain obligated to maintain strictest secrecy
concerning all issues relating to AG, GmbH as well as the Limited group, especially business and company secrets, unless the disclosure is required by law. In the case of such disclosure being required by law, Dr. Gromer is obligated to notify
the relevant company immediately.
	

9.	
 	
Occupational Pensions with GmbH	
 	

 
	

 	
 	

Any vested claims to occupational pensions of Dr. Gromer against GmbH from his service relationship with GmbH will be notified to him by GmbH immediately following the termination of the service relationship and remain unaffected by this
settlement agreement.
	

10.	
 	
Non Competition Agreement with GmbH	
 	

 
	

 	
 	

The post contractual prohibition of competition pursuant to the additional agreement between GmbH and Dr. Gromer dated October 2, 1986, is mutually amended as follows:
	

10.1	
 	

For a period of 24 months following the termination of the service relationship pursuant to Section 1.1, Dr. Gromer undertakes vis-à-vis GmbH to obey a post contractual prohibition
of competition with the following content:
	

 	
 	

(a)	
 	

For the duration of the post contractual prohibition of competition, Dr. Gromer shall refrain from working in an independent, dependant or other manner for any business which is in direct or indirect competition with GmbH or is affiliated with
such undertaking. At the same time and for the duration of the post contractual prohibition of competition, Dr. Gromer is prohibited from founding, acquiring or holding shares in such competing business. A shareholding of a publicly traded
corporation in such amount not allowing Dr. Gromer to exert any influence on business decisions of such corporation remains, however, possible.
	

 	
 	

(b)	
 	

For the duration of the post contractual prohibition of competition, Dr. Gromer shall also be prohibited to offer services to Customers of GmbH for either himself or any other third party, which correspond to the services of GmbH. "Customers" in
the sense of this Section (b) shall be all customers of GmbH, who were in a contractual relationship with GmbH in the past 24 months prior to the termination of the service relationship pursuant to Section 1.1.
	 	 	 	 	 	 	 

4

 

	

 	
 	

(c)	
 	

In addition, Dr. Gromer shall be prohibited, for the duration of the post contractual restriction of competition, to actively solicit employees of GmbH for either himself or any third party.
	

10.2	
 	

The post contractual prohibitions of competition in Sections 10.1(a) through (c) shall apply mutatis mutandi for AG and those companies of Limited that are part of the Tyco Electronics Business segment.
As of the date that TEL becomes a separate publicly-traded company, the restriction of competition applies mutatis mutandi for the companies of TEL-group.
	

10.3	
 	

With regard to location the post contractual prohibitions of competition in Sections 10.1(a) through 10.1(c) shall apply for those countries, in which GmbH, AG and the other companies referred to in Section 10.2 carries out business or
plans to carry out business upon the termination pursuant to Section 1.1.
	

10.4	
 	

In consideration of the post contractual prohibition of competition, Dr. Gromer shall receive from GmbH a compensation amounting to 50% of the last base compensation received for his service relationship with GmbH for each month in which the
post contractual prohibition of competition is in effect. As opposed to paying such compensation on a monthly basis during the post contractual prohibition period, GmbH agrees to pay such compensation in a lump sum payment which shall be part of the
compensation payable in accordance with Section 3.1.
	

10.5	
 	

To the extent that nothing different is agreed upon in 10.1 to 10.4 Sections 74 et. seq. of the German Commercial Code shall apply mutatis mutandi.
	

11.	
 	
Fair Behavior	
 	

 
	

 	
 	

The parties agree that any declarations concerning the reasons of this settlement agreement and the departure of Dr. Gromer from the services to Limited group vis-à-vis any third party worldwide will only be given after agreement between
all parties and that the parties will refrain from any negative comment concerning any other party.
	

12.	
 	
Stock Options	
 	

 
	

 	
 	

Dr. Gromer has been awarded stock options, restricted stock units and performance shares by Limited. Dr. Gromer's rights and obligations with respect to these awards will be governed exclusively by the applicable award agreements issued
with respect to such awards.
	

13.	
 	
Severability of Claims of Dr. Gromer	
 	

 
	

 	
 	

The parties agree, that the Dr. Gromer's claims vis-à-vis the other parties under this settlement agreement shall only relate to such party (GmbH, AG or Limited), which is explicitly named
and that no further claims against the other unnamed party shall be created thereby.
	

14.	
 	
Settlement of Claims	
 	

 
	

14.1	
 	

With the signing of this settlement agreement all claims of Dr. Gromer from and in relation with his service relationships with AG or GmbH, regardless on what basis or whether known or unknown, are full and finally settled.
	

14.2	
 	

At the same time Dr. Gromer declares to have no further claims against any company of the Limited group. Especially Dr. Gromer will not claim against any company of the Limited group to have claims from a service or employment relationship.
He declares that following the termination of the service relationships with AG and GmbH pursuant to Section 1 he shall be in no employment or service relationship whatsoever with any Tyco company and have no claims to compensation against
such.
	 	 	 	 	 	 	 

5

 

	

14.3	
 	

Claims which are mentioned in this service agreement remain unaffected by this Section.
	

15.	
 	
Choice of Law	
 	

 
	

15.1	
 	

To the extent that this settlement agreement regulates the relationship of Dr. Gromer with GmbH, this settlement agreement shall be governed by German law.
	

15.2	
 	

To the extent that this settlement agreement regulates the relationship of Dr. Gromer with AG, this settlement agreement shall be governed by Swiss law.
	

15.3	
 	

To the extent that this settlement agreement regulates the relationship of Dr. Gromer with Limited, this settlement agreement shall be governed by Bermuda law.
	

16.	
 	
Miscellaneous	
 	

 
	

16.1	
 	

This contract contains all regulations concerning the settlement of the service relationships of Dr. Gromer as well as claims from and in relation with the service agreements vis-à-vis AG, GmbH and Limited as well as any other company of
the Limited group. There are no oral or other side agreements. Amendments and additions to this contract, including this requirement of written from, require and agreement in writing in order to be effective.
	

16.2	
 	

Should any of the Sections of this agreement be or become invalid or unenforceable the validity of the remainder of this settlement agreement remains unaffected thereby. Instead of the invalid or unenforceable Section such Section is to be agreed
upon, which is as close as possible to the economic interests of all parties.

6

 

	,	 	April 10, 2007
	
	 	

	Ort/Place	 	Datum/Date
	

/s/  HENNING JENSEN      
 Tyco Electronics AMP GmbH
	

,	
 	

April 10, 2007
	
	 	

	Ort/Place	 	Datum/Date
	

/s/  JURG FRISCHKNECHT      
 Tyco Electronics Logistics AG
	

,	
 	

April 10, 2007
	
	 	

	Ort/Place	 	Datum/Date
	

/s/  LAURIE SIEGEL      
 Tyco International Ltd.
	

,	
 	

April 10, 2007
	
	 	

	Ort/Place	 	Datum/Date
	

/s/  DR. JÜRGEN W. GROMER      
 Dr. Jürgen W. Gromer

7Exhibit 10.12

 

[Execution Copy]

 

EMPLOYMENT AGREEMENT

(Jeff Clarke; President and Chief Executive
Officer)

 

EMPLOYMENT
AGREEMENT (the “Agreement”) dated September 26, 2006 by and between TDS
Investor (Bermuda) Ltd. (the “Company”) and Jeff Clarke (the “Executive”).

 

The
Company desires to employ Executive and to enter into an agreement embodying
the terms of such employment;

 

Executive
desires to accept such employment and enter into such an agreement;

 

In
consideration of the premises and mutual covenants herein and for other good
and valuable consideration, the parties agree as follows:

 

1.     Term of
Employment. Subject to the provisions of Section 8 of this Agreement,
Executive shall continue to be employed by the Company for a period commencing
on the date of this Agreement and ending on September 26, 2009 (the “Employment
Term”) on the terms and subject to the conditions set forth in this Agreement;
provided, however, that commencing with September 26, 2009 and on each
September 26 thereafter (each an “Extension Date”), the Employment Term
shall be automatically extended for an additional one-year period, unless the
Company or Executive provides the other party hereto 120 days prior written
notice before the next Extension Date that the Employment Term shall not be so
extended.

 

2.     Position.

 

(a)   During the Employment Term,
Executive shall serve as the Company’s President and Chief Executive Officer. In
such position, Executive shall have such duties and authority as shall be
determined from time to time by the Board of Directors of the Company (the “Board”).
If requested, Executive shall also serve as a member of the Board without
additional compensation.

 

(b)   During the Employment Term,
Executive will devote Executive’s full business time and best efforts to the
performance of Executive’s duties hereunder and will not engage in any other
business, profession or occupation for compensation or otherwise which would
conflict or interfere with the rendition of such services either directly or
indirectly, without the prior written consent of the Board; provided
that nothing herein shall preclude Executive, subject to the prior approval of
the Board, from accepting appointment to or continuing to serve on any board of
directors or trustees of any business corporation or any charitable
organization; provided in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of Executive’s
duties hereunder or conflict with Section 9.

 

3.     Base
Salary. During the Employment Term, the Company shall pay Executive a base
salary at the annual rate of $1,000,000, payable in regular installments in
accordance with the Company’s usual payment practices. Executive shall be
entitled to such increases in Executive’s base salary, if any, as may be
determined from time to time in the sole

 

 

discretion of the Board. Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to as the “Base
Salary.”

 

4.     Annual
Bonus. With respect to each full fiscal year during the Employment Term,
Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”)
of up to one hundred and fifty percent (150%) of Executive’s Base Salary (the “Target”)
based upon the achievement of an annual EBITDA target established by the Board
within the first three months of each fiscal year during the Employment Term. As
the Annual Bonus award is subject to the attainment of performance criteria, it
may be paid, to the extent earned or not earned, at below target levels, and
above target levels (with a maximum of 350% of the above referenced target
level). The Annual Bonus, if any, shall be paid to Executive within two and
one-half (2.5) months after the end of the applicable fiscal year. Notwithstanding
the foregoing, Executive’s Annual Bonus for fiscal year 2006 shall be at least
Target.

 

5.     Restricted
Cash Award. Executive is hereby awarded a restricted cash award of
$2,100,000 (the “Restricted Cash Award”). Subject to the provisions of Section
8 hereof, 20% of the Restricted Cash Award granted in this Section 5 shall vest
on each of March 31, 2007, June 30, 2007, September 30, 2007, December 31, 2007
and March 31, 2008 and automatically become payable (with interest accruing at
4.75% per annum from the date of this Agreement) within 30 days of such
vesting. The Restricted Cash Award represents an unfunded, unsecured promise to
pay the amount subject to such award.

 

6.     Employee
Benefits. During the Employment Term, Executive shall be entitled to
participate in the Company’s employee benefit plans (other than annual bonus
and incentive plans) as in effect from time to time (collectively “Employee
Benefits”), on the same basis as those benefits are generally made available to
other senior executives of the Company.

 

7.     Business
Expenses. During the Employment Term, reasonable business expenses incurred
by Executive in the performance of Executive’s duties hereunder shall be
reimbursed by the Company in accordance with Company policies.

 

8.     Termination.
The Employment Term and Executive’s employment hereunder may be terminated by
either party at any time and for any reason; provided that Executive will be
required to give the Company at least 30 days advance written notice of any
resignation of Executive’s employment. Notwithstanding any other provision of
this Agreement, the provisions of this Section 8 shall exclusively govern
Executive’s rights upon termination of employment with the Company and its
affiliates.

 

(a)   By the Company For Cause or By
Executive Other Than as a Result of a Constructive Termination.

 

(i)  The Employment Term and
Executive’s employment hereunder may be terminated by the Company for Cause (as
defined below) and shall terminate automatically upon Executive’s resignation
other than as a result of a Constructive Termination (as defined in Section
8(c)); provided that Executive will be required to give the Company at least 30
days advance written notice of a resignation other than as a result of a
Constructive Termination.

 

2

 

(ii)  For purposes of this Agreement,
“Cause” means
(A) Executive’s willful failure to substantially perform his duties as an
employee of the Company or any subsidiary (other than any such failure
resulting from incapacity due to physical or mental illness), (B) any act of
fraud, misappropriation, dishonesty, embezzlement or similar conduct against
the Company or any subsidiary, (C) Executive’s conviction of or plea of “no
contest” to a felony or any crime involving moral turpitude (which conviction,
due to the passage of time or otherwise, is not subject to further appeal), (D)
Executive’s gross negligence in the performance of his duties, (E) Executive
purposefully or knowingly makes (or has been found to have made) a false
certification to the Company pertaining to its financial statements, (F) by
reason of any court or administrative order, arbitration award or other ruling,
Executive’s ability to fully perform his duties as President and Chief
Executive Officer or as a member of the Board is materially impaired or
(G) Executive’s breach of the provisions of Sections 9 or 10 of
this Agreement (excluding a breach of Section 10(a) by a statement made by
Executive in good faith in Executive’s employment capacity). In the event that the
Company asserts that grounds exist for Termination for Cause, unless such
grounds are egregious and have caused the Company plain material harm, the
Company shall so notify Executive and within no less than 5 days, nor more than
15 days, afford Executive a hearing before the Board or, if the Company is
publicly traded, a committee consisting of the independent directors of the
Board, at the Board’s option, regarding any disputed facts. The Board or the
committee of the Board, as the case may be, shall make a determination
regarding the existence of Cause upon completion of any such hearing; provided,
however, that any determination that Cause exists shall require an affirmative
resolution of the Board of Directors of the Company or the designated committee
of the Board acted upon in accordance with applicable Company By-laws and, if
the Company is publicly traded, concurred in by at least a majority of the
independent directors (if any) of the Board. Notwithstanding the foregoing, the
Company shall be entitled to immediately and unilaterally restrict or suspend
Executive’s duties pending determination of the existence of Cause.

 

(iii)  If Executive’s employment is
terminated by the Company for Cause, or if Executive resigns other than as a
result of a Constructive Termination, Executive shall be entitled to receive:

 

(A)   the Base Salary through the
date of termination;

 

(B)   any Annual Bonus earned, but
unpaid, as of the date of termination for the immediately preceding fiscal
year, paid in accordance with Section 4 (except to the extent payment is
otherwise deferred pursuant to any applicable deferred compensation arrangement
with the Company);

 

(C)   reimbursement, within 60 days
following submission by Executive to the Company of appropriate supporting
documentation) for any unreimbursed business expenses properly incurred by
Executive in accordance with Company policy prior to the date of Executive’s
termination; provided claims for such reimbursement (accompanied by appropriate
supporting documentation) are

 

3

 

submitted to
the Company within 90 days following the date of Executive’s termination of
employment; and

 

(D)   such Employee Benefits, if
any, as to which Executive may be entitled under the employee benefit plans of
the Company (the amounts described in clauses (A) through (D) hereof being
referred to as the “Accrued Rights”).

 

Following
such termination of Executive’s employment by the Company for Cause or
resignation by Executive other than as a result of a Constructive Termination,
except as set forth in this Section 8(a)(iii), 
Executive shall have no further rights to any compensation or any other
benefits under this Agreement.

 

(b)   Disability
or Death.

 

(i)  The Employment Term and
Executive’s employment hereunder shall terminate upon Executive’s death and may
be terminated by the Company if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of nine (9) consecutive
months or for an aggregate of twelve (12) months in any eighteen (18)
consecutive month period to perform Executive’s duties (such incapacity is
hereinafter referred to as “Disability”). Any question as to the existence of
the Disability of Executive as to which Executive and the Company cannot agree
shall be determined in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the Company cannot
agree as to a qualified independent physician, each shall appoint such a
physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to
the Company and Executive shall be final and conclusive for all purposes of the
Agreement and any other agreement between any Company and Executive that
incorporates the definition of “Disability”.

 

(ii)  Upon termination of Executive’s
employment hereunder for either Disability or death, Executive or Executive’s
estate (as the case may be) shall be entitled to receive:

 

(A)   the Accrued Rights;

 

(B)   a pro rata portion of any
Annual Bonus, if any, that Executive would have been entitled to receive
pursuant to Section 4 hereof in such year based upon the percentage of the
fiscal year that shall have elapsed through the date of Executive’s termination
of employment, payable when such Annual Bonus would have otherwise been payable
to Executive pursuant to Section 4 had Executive’s employment not terminated;

 

(C)   full and immediate vesting of the Restricted
Cash Award granted pursuant to Section 5 of this Agreement; and

 

4

 

(D)   vesting of any equity-based awards then held by Executive with respect
to the Company or its affiliates as, and to the extent, described in the
definitive documentation related to such awards.

 

Following
Executive’s termination of employment due to death or Disability, except as set
forth in this Section 8(b)(ii), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.

 

(c)   By the Company Without Cause or
Resignation by Executive as a Result of Constructive Termination.

 

(i)  The Employment Term and
Executive’s employment hereunder may be terminated by the Company without Cause
or by Executive’s as a result of a Constructive Termination.

 

(ii)  For purposes of this
Agreement, a “Constructive Termination” shall be deemed to have occurred upon
(A) any material failure of the Company or its affiliates to fulfill its
obligations under this Agreement (including without limitation a reduction to
the Base Salary, as increased from time to time) or any agreement pursuant to
which Executive holds or is granted equity in the Company or its affiliates,
(B) the failure to nominate Executive for election to the Board, (C) a failure
of Executive to be elected or re-elected to membership on the Board resulting
from the failure of the Company’s majority stockholder (so long as such a
majority stockholder exists) to vote shares (other than with respect to shares
acquired in a public offering) entitled to vote for the election of directors
of the Company held by them in favor of election of Executive as a member of
the Board, (D) the failure of any successor to the business operations of the
Company to assume the obligations of the Company under this Agreement, (E) the
primary business office for Executive being relocated to any location which is
more than 30 miles from the city limits of Parsippany, New Jersey, New York,
New York or Chicago, Illinois, (G) the Company’s election not to renew the
initial Employment Term or any subsequent extension thereof (except as a result
of Executive’s reaching retirement age, as determined by Company policy) or (F)
a material and sustained diminution to Executive’s duties and responsibilities;
provided that any of the events described in clauses (A) through (F) of
this Section 8(c)(ii) shall constitute a Constructive Termination only if
the Company fails to cure such event within 30 days after receipt from
Executive of written notice of the event which constitutes a Constructive
Termination; provided, further, that a “Constructive Termination”
shall cease to exist for an event on the 60th day following the
later of its occurrence or Executive’s knowledge thereof, unless Executive has
given the Company written notice thereof prior to such date.

 

(iii)  If Executive’s employment is
terminated by the Company without Cause (other than by reason of death or
Disability) or if Executive resigns as a result of a Constructive Termination,
Executive shall be entitled to receive:

 

(A)   the Accrued Rights;

 

5

 

(B)   a pro rata portion of any
Annual Bonus, if any, that Executive would have been entitled to receive
pursuant to Section 4 hereof in such year based upon the percentage of the
fiscal year that shall have elapsed through the date of Executive’s termination
of employment, payable when such Annual Bonus would have otherwise been payable
to Executive pursuant to Section 4 had Executive’s employment not terminated;

 

(C)   subject to Executive’s
continued compliance with the provisions of Sections 9 and 10, (x) an amount equal to 299% multiplied by the sum
of (i) Executive’s Base Salary and (ii) Executive’s Target Bonus, payable
within 60 days of the applicable termination date;  provided that
the aggregate amount described in this clause (C) shall be reduced by the
present value of any other cash severance benefits payable to Executive under
any other severance plans, programs or arrangements of the Company or its
affiliates;

 

(D)   full and immediate vesting of the Restricted Cash Award granted
pursuant to Section 5 of this Agreement; and

 

(E)   vesting of any equity-based awards then held by Executive with respect
to the Company or its affiliates as, and to the extent, described in the
definitive documentation related to such awards.

 

Following
Executive’s termination of employment by the Company without Cause (other than
by reason of Executive’s death or Disability) or by Executive’s resignation as
a result of a Constructive Termination, except as set forth in this Section
8(c) (iii), Executive shall have no further rights to any compensation or any
other benefits under this Agreement.

 

(d)   Expiration of Employment Term.

 

(i)  Election Not to Extend
the Employment Term. In the event either party elects not to extend the
Employment Term pursuant to Section 1, unless Executive’s employment is earlier
terminated pursuant to paragraphs (a), (b) or (c) of this Section 8,
Executive’s termination of employment hereunder (whether or not Executive
continues as an employee of the Company thereafter) shall be deemed to occur on
the close of business on the day immediately preceding the next scheduled
Extension Date and Executive shall be entitled to receive the Accrued Rights. Following
such termination of Executive’s employment hereunder as a result of either
party’s election not to extend the Employment Term, except as set forth in this
Section 8(d)(i), Executive shall have no further rights to any
compensation or any other benefits under this Agreement.

 

(ii)  Continued Employment Beyond
the Expiration of the Employment Term. Unless the parties otherwise agree
in writing, continuation of Executive’s employment with the Company beyond the
expiration of the Employment Term shall be deemed an employment at-will and
shall not be deemed to extend any of the provisions of this Agreement and
Executive’s employment may thereafter be terminated at will by either Executive
or the Company; provided that the provisions 

 

6

 

of Sections 9,
10 and 11 of this Agreement shall survive any termination of this Agreement or
Executive’s termination of employment hereunder.

 

(e)   Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive’s death)
shall be communicated by written Notice of Termination to the other party
hereto in accordance with Section 13 (i) hereof. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so indicated.

 

(f)   Board/Committee
Resignation. Upon termination of Executive’s employment for any reason,
Executive agrees to resign, as of the date of such termination and to the
extent applicable, from the Board (and any committees thereof) and the Board of
Directors (and any committees thereof) of any of the Company’s affiliates.

 

9.     Non-Competition.

 

(a)   From
the date hereof while employed by the Company and for a two-year period
following the date Executive ceases to be employed by the Company (the “Restricted
Period”), irrespective of the cause, manner or time of any termination,
Executive shall not use his status with the Company or any of its affiliates to
obtain loans, goods or services from another organization on terms that would
not be available to him in the absence of his relationship to the Company or
any of its affiliates.

 

(b)   During
the Restricted Period, Executive shall not make any statements or perform any
acts intended to or which may have the effect of advancing the interest of any
Competitors of the Company or any of its affiliates or in any way injuring the
interests of the Company or any of its affiliates and the Company and its
affiliates shall not make or authorize any person to make any statement that
would in any way injure the personal or business reputation or interests of
Executive; provided however, that, subject to Section 10, nothing herein shall
preclude the Company and its affiliates or Executive from giving truthful
testimony under oath in response to a subpoena or other lawful process or truthful
answers in response to questions from a government investigation; provided,
further, however, that nothing herein shall prohibit the Company and its
affiliates from disclosing the fact of any termination of Executive’s
employment or the circumstances for such a termination. For purposes of this
Section 9(b), the term “Competitor” means any enterprise or business that is
engaged in, or has plans to engage in, at any time during the Restricted
Period, any activity that competes with the businesses conducted during or at
the termination of Executive’s employment, or then proposed to be conducted, by
the Company and its affiliates in a manner that is or would be material in
relation to the businesses of the Company or the prospects for the businesses
of the Company (in each case, within 100 miles of any geographical area where
the Company or its affiliates manufactures, produces, sells, leases, rents,
licenses or otherwise provides its products or services). During the Restricted
Period, Executive, without prior express written approval by the Board, shall
not (A) engage in, or directly or indirectly (whether for compensation or
otherwise) manage, operate, or control, or join

 

7

 

or participate in the management, operation
or control of a Competitor, in any capacity (whether as an employee, officer,
director, partner, consultant, agent, advisor, or otherwise) or (B) develop,
expand or promote, or assist in the development, expansion or promotion of, any
division of an enterprise or the business intended to become a Competitor at
any time after the end of the Restricted Period or (C) own or hold a
Proprietary Interest in, or directly furnish any capital to, any Competitor of
the Company. Executive acknowledges that the Company’s and its affiliates
businesses are conducted nationally and internationally and agrees that the
provisions in the foregoing sentence shall operate throughout the United States
and the world (subject to the definition of “Competitor”).

 

(c)   During
the Restricted Period, Executive, without express prior written approval from
the Board, shall not solicit any members or the then current clients of the
Company or any of its affiliates for any existing business of the Company or
any of its affiliates or discuss with any employee of the Company or any of its
affiliates information or operations of any business intended to compete with
the Company or any of its affiliates.

 

(d)   During
the Restricted Period, Executive shall not interfere with the employees or
affairs of the Company or any of its affiliates or solicit or induce any person
who is an employee of the Company or any of its affiliates to terminate any
relationship such person may have with the Company or any of its affiliates,
nor shall Executive during such period directly or indirectly engage, employ or
compensate, or cause or permit any person with which Executive may be
affiliated, to engage, employ or compensate, any employee of the Company or any
of its affiliates.

 

(e)   For
the purposes of this Agreement, “Proprietary Interest” means any legal,
equitable or other ownership, whether through stock holding or otherwise, of an
interest in a business, firm or entity; provided, that ownership of less than
5% of any class of equity interest in a publicly held company shall not be
deemed a Proprietary Interest.

 

(f)   The
period of time during which the provisions of this Section 9 shall be in effect
shall be extended by the length of time during which Executive is in breach of
the terms hereof as determined by any court of competent jurisdiction on the
Company’s application for injunctive relief.

 

(g)   Executive agrees that the
restrictions contained in this Section 9 are an essential element of the
compensation Executive is granted hereunder and but for Executive’s agreement
to comply with such restrictions, the Company would not have entered into this
Agreement.

 

(h)   It is expressly understood and
agreed that although Executive and the Company consider the restrictions
contained in this Section 9 to be reasonable, if a final judicial determination
is made by a court of competent jurisdiction that the time or territory or any
other restriction contained in this Agreement is an unenforceable restriction
against Executive, the provisions of this Agreement shall not be rendered void
but shall be deemed amended to apply as to such maximum time and territory and
to such

 

8

 

maximum extent as such court may judicially
determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in this Agreement
is unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein.

 

10.   Confidentiality;
Intellectual Property.

 

(a)   Confidentiality.

 

(i)  Executive will not at any
time (whether during or after Executive’s employment with the Company) (x)
retain or use for the benefit, purposes or account of Executive or any other
person; or (y) disclose, divulge, reveal, communicate, share, transfer or
provide access to any person outside the Company (other than its professional
advisers who are bound by confidentiality obligations), any non-public,
proprietary or confidential information —including without limitation trade
secrets, know-how, research and development, software, databases, inventions,
processes, formulae, technology, designs and other intellectual property,
information concerning finances, investments, profits, pricing, costs,
products, services, vendors, customers, clients, partners, investors,
personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals — concerning the
past, current or future business, activities and operations of the Company, its
subsidiaries or affiliates and/or any third party that has disclosed or
provided any of same to the Company on a confidential basis (“Confidential
Information”) without the prior written authorization of the Board.

 

(ii)  “Confidential Information”
shall not include any information that is (a) generally known to the industry
or the public other than as a result of Executive’s breach of this covenant or
any breach of other confidentiality obligations by third parties; (b) made
legitimately available to Executive by a third party without breach of any
confidentiality obligation; or (c) required by law to be disclosed; provided
that Executive shall give prompt written notice to the Company of such
requirement, disclose no more information than is so required, and cooperate,
at the Company’s cost, with any attempts by the Company to obtain a protective
order or similar treatment.

 

(iii)  Except as required by law,
Executive will not disclose to anyone, other than Executive’s immediate family
and legal or financial advisors, the existence or contents of this Agreement
(unless this Agreement shall be publicly available as a result of a regulatory
filing made by the Company or its affiliates); provided that Executive
may disclose to any prospective future employer the provisions of Sections 9
and 10 of this Agreement provided they agree to maintain the confidentiality of
such terms.

 

(iv)  Upon termination of Executive’s
employment with the Company for any reason, Executive shall (x) cease and not
thereafter commence use of any Confidential Information or intellectual
property (including without limitation, any

 

9

 

patent,
invention, copyright, trade secret, trademark, trade name, logo, domain name or
other source indicator) owned or used by the Company, its subsidiaries or
affiliates; (y) immediately destroy, delete, or return to the Company, at the
Company’s option, all originals and copies in any form or medium (including
memoranda, books, papers, plans, computer files, letters and other data) in
Executive’s possession or control (including any of the foregoing stored or
located in Executive’s office, home, laptop or other computer, whether or not
Company property) that contain Confidential Information or otherwise relate to
the business of the Company, its affiliates and subsidiaries, except that
Executive may retain only those portions of any personal notes, notebooks and
diaries that do not contain any Confidential Information; and (z) notify and
fully cooperate with the Company regarding the delivery or destruction of any
other Confidential Information of which Executive is or becomes aware.

 

(b)   Intellectual
Property.

 

(i)  If Executive has created,
invented, designed, developed, contributed to or improved any works of
authorship, inventions, intellectual property, materials, documents or other
work product (including without limitation, research, reports, software, databases,
systems, applications, presentations, textual works, content, or audiovisual
materials) (“Works”), either alone or with third parties, prior to Executive’s
employment by the Company, that are relevant to or implicated by such
employment (“Prior Works”), Executive hereby grants the Company a perpetual,
non-exclusive, royalty-free, worldwide, assignable, sublicensable license under
all rights and intellectual property rights (including rights under patent,
industrial property, copyright, trademark, trade secret, unfair competition and
related laws) therein for all purposes in connection with the Company’s current
and future business.

 

(ii)  If Executive creates, invents,
designs, develops, contributes to or improves any Works, either alone or with third
parties, at any time during Executive’s employment by the Company and within
the scope of such employment and/or with the use of any the Company resources (“Company
Works”), Executive shall promptly and fully disclose same to the Company and
hereby irrevocably assigns, transfers and conveys, to the maximum extent
permitted by applicable law, all rights and intellectual property rights
therein (including rights under patent, industrial property, copyright,
trademark, trade secret, unfair competition and related laws) to the Company to
the extent ownership of any such rights does not vest originally in the
Company.

 

(iii)  Executive agrees to keep and
maintain adequate and current written records (in the form of notes, sketches,
drawings, and any other form or media requested by the Company) of all Company
Works. The records will be available to and remain the sole property and
intellectual property of the Company at all times.

 

(iv)  Executive shall take all
requested actions and execute all requested documents (including any licenses
or assignments required by a government contract) at the Company’s expense (but
without further remuneration) to assist the Company

 

10

 

in validating,
maintaining, protecting, enforcing, perfecting, recording, patenting or
registering any of the Company’s rights in the Prior Works and Company Works. If
the Company is unable for any other reason to secure Executive’s signature on
any document for this purpose, then Executive hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Executive’s
agent and attorney in fact, to act for and in Executive’s behalf and stead to
execute any documents and to do all other lawfully permitted acts in connection
with the foregoing.

 

(v)  Executive shall not improperly
use for the benefit of, bring to any premises of, divulge, disclose,
communicate, reveal, transfer or provide access to, or share with the Company
any confidential, proprietary or non-public information or intellectual
property relating to a former employer or other third party without the prior
written permission of such third party. Executive hereby indemnifies, holds
harmless and agrees to defend the Company and its officers, directors,
partners, employees, agents and representatives from any breach of the
foregoing covenant. Executive shall comply with all relevant policies and
guidelines of the Company, including regarding the protection of confidential
information and intellectual property and potential conflicts of interest. Executive
acknowledges that the Company may amend any such policies and guidelines from
time to time, and that Executive remains at all times bound by their most
current version.

 

(vi)  The provisions of Section 9 and
10 shall survive the termination of Executive’s employment for any reason.

 

11.   Specific
Performance. Executive acknowledges and agrees that the Company’s remedies
at law for a breach or threatened breach of any of the provisions of
Sections 9 or 10 would be inadequate and the Company would suffer
irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to cease making any payments or providing
any benefit otherwise required by this Agreement and obtain equitable relief in
the form of specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.

 

12.   Excess Parachute Excise Tax Payments. 

 

(a)   If
it is determined (as hereafter provided) that any payment or distribution by
the Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan,
program or arrangement, including without limitation any stock option, stock
appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a “Payment”),
would be subject to the excise tax imposed by Section 4999 of the Code (or any
successor provision thereto) by reason of being “contingent on a change in
ownership or control” of the Company, within the meaning of Section 280G of the
Code (or any successor provision thereto) or to any similar tax imposed by
state or local law, or

 

11

 

any interest or penalties with respect to
such excise tax (such tax or taxes, together with any such interest and
penalties, are hereafter collectively referred to as the “Excise Tax”), then
Executive shall be entitled to receive an additional payment or payments (a “Gross-Up
Payment”) in an amount such that, after payment by Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments; provided, however, if
Executive’s Payment is, when calculated on a net-after-tax basis, less than
$50,000 in excess of the amount of the Payment which could be paid to Executive
under Section 280G of the Code without causing the imposition of the Excise
Tax, then  the Payment shall be limited to the
largest amount payable (as described above) without resulting in the imposition
of any Excise Tax (such amount, the “Capped Amount”).

 

(b)   Subject
to the provisions of Section 12(a) hereof, all determinations required to be
made under this Section 12, including whether an Excise Tax is payable by
Executive and the amount of such Excise Tax and whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by the
nationally recognized firm of certified public accountants (the “Accounting
Firm”) used by the Company prior to the Change in Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall be a nationally
recognized firm of certified public accountants selected by Executive). The
Accounting Firm shall be directed by the Company or Executive to submit its
preliminary determination and detailed supporting calculations to both the
Company and Executive within 15 calendar days after the Termination Date, if
applicable, and any other such time or times as may be requested by the Company
or Executive. If the Accounting Firm determines that any Excise Tax is payable
by Executive and that the criteria for reducing the Payment to the Capped
Amount (as described in Section 12(a) above) is met, then the Company shall
reduce the Payment by the amount which, based on the Accounting Firm’s
determination and calculations, would provide Executive with the Capped Amount,
and pay to Executive such reduced Payment. If the Accounting Firm determines
that an Excise Tax is payable, without reduction pursuant to Section 12(a),
above, the Company shall pay the required Gross-Up Payment to, or for the
benefit of, Executive within five business days after receipt of such
determination and calculations. If the Accounting Firm determines that no
Excise Tax is payable by Executive, it shall, at the same time as it makes such
determination, furnish Executive with an opinion that he has substantial
authority not to report any Excise Tax on his/her federal, state, local income
or other tax return. Any determination by the Accounting Firm as to the amount
of the Gross-Up Payment shall be binding upon the Company and Executive absent
a contrary determination by the Internal Revenue Services or a court of
competent jurisdiction; provided, however, that no such
determination shall eliminate or reduce the Company’s obligation to provide any
Gross-Up Payment that shall be due as a result of such contrary determination. As
a result of the uncertainty in the application of Section 4999 of the Code (or
any successor provision thereto) and the possibility of similar uncertainty
regarding  state or local tax law at the
time of any determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (an “Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue its
remedies pursuant to Section 12(a)

 

12

 

hereof and Executive thereafter is required
to make a payment of any Excise Tax, Executive shall direct the Accounting Firm
to determine the amount of the Underpayment that has occurred and to submit its
determination and detailed supporting calculations to both the Company and
Executive as promptly as possible. Any such Underpayment shall be promptly paid
by the Company to, or for the benefit of, Executive within five business days
after receipt of such determination and calculations.

 

(c)   The
Company and Executive shall each provide the Accounting Firm access to and
copies of any books, records and documents in the possession of the Company or
Executive, as the case may be, reasonably requested by the Accounting Firm, and
otherwise cooperate with the Accounting Firm in connection with the preparation
and issuance of the determination contemplated by Section 12(a) hereof.

 

(d)   The
federal, state and local income or other tax returns filed by Executive (or any
filing made by a consolidated tax group which includes the Company) shall be
prepared and filed on a consistent basis with the determination of the
Accounting Firm with respect to the Excise Tax payable by Executive. Executive
shall make proper payment of the amount of any Excise Tax, and at the request
of the Company, provide to the Company true and correct copies (with any
amendments) of his/her federal income tax return as filed with the Internal
Revenue Service and corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other documents reasonably
requested by the Company, evidencing such payment. If prior to the filing of
Executive’s federal income tax return, or corresponding state or local tax
return, if relevant, the Accounting Firm determines that the amount of the
Gross-Up Payment should be reduced, Executive shall within five business days
pay to the Company the amount of such reduction.

 

(e)   The
fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by Sections 12(b) and (d)
hereof shall be borne by the Company. If such fees and expenses are initially
advanced by Executive, the Company shall reimburse Executive the full amount of
such fees and expenses within five business days after receipt from Executive
of a statement therefor and reasonable evidence of his/her payment thereof.

 

(f)   In
the event that the Internal Revenue Service claims that any payment or benefit
received under this Agreement constitutes an “excess parachute payment,” within
the meaning of Section 280G(b)(1) of the Code, Executive shall notify the
Company in writing of such claim. Such notification shall be given as soon as
practicable but no later than 10 business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30 day period following the date
on which Executive gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is due).
If the Company notifies Executive in writing prior to the expiration of such
period that it desires to contest such claim, Executive shall (i) give the
Company any information reasonably requested by the Company relating to such
claim; (ii) take such action in connection with contesting such claim as the
Company shall reasonably

 

13

 

request in writing from time to time,
including without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company and reasonably
satisfactory to Executive; (iii) cooperate with the Company in good faith in
order to effectively contest such claim; and (iv) permit the Company to participate
in any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and expenses (including,
but not limited to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection with such contest and
shall indemnify and hold Executive harmless, on an after-tax basis, for and
against any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of
costs and expenses.

 

(g)   The
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct Executive to
pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to Executive on an interest-free basis, and shall
indemnify and hold Executive harmless, on an after-tax basis, from any Excise
Tax or other tax (including interest and penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that if Executive
is required to extend the statute of limitations to enable the Company to
contest such claim, Executive may limit this extension solely to such contested
amount. The Company’s control of the contest shall be limited to issues with
respect to which a corporate deduction would be disallowed pursuant to Section
280G of the Code and Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any
other taxing authority. In addition, no position may be taken nor any final
resolution be agreed to by the Company without Executive’s consent if such
position or resolution could reasonably be expected to adversely affect
Executive (including any other tax position of Executive unrelated to matters
covered hereby).

 

(h)   If,
after the receipt by Executive of an amount advanced by the Company in
connection with the contest of the Excise Tax claim, Executive becomes entitled
to receive any refund with respect to such claim, Executive shall promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto); provided, however,
if the amount of that refund exceeds the amount advanced by the Company or it
is otherwise determined for any reason that additional amounts could be paid to
the Named Executive without incurring any Excise Tax, any such amount will be
promptly paid by the Company to the named Executive. If, after the receipt by
Executive of an amount advanced by the Company in connection with an Excise Tax
claim, a determination is made that Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify Executive in
writing of its intent to contest the denial of such refund prior to the
expiration of 30 days after

 

14

 

such determination, such advance shall be
forgiven and shall not be required to be repaid and shall be deemed to be in
consideration for services rendered after the date of the Termination.

 

13.   Miscellaneous.

 

(a)   Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof.

 

(b)   Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of Executive
by the Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject
matter herein other than those expressly set forth herein. This Agreement may
not be altered, modified, or amended except by written instrument signed by the
parties hereto.

 

(c)   No Waiver. The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall not be considered a waiver of such party’s rights or deprive such party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.

 

(d)   Severability. In the event that any one or
more of the provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.

 

(e)   Assignment. This Agreement, and all of
Executive’s rights and duties hereunder, shall not be assignable or delegable
by Executive. Any purported assignment or delegation by Executive in violation
of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned
by the Company to a person or entity which is an affiliate or a successor in
interest to substantially all of the business operations of the Company. Upon
such assignment, the rights and obligations of the Company hereunder shall
become the rights and obligations of such affiliate or successor person or
entity.

 

(f)   Set Off; No Mitigation. The Company’s obligation to
pay Executive the amounts provided and to make the arrangements provided
hereunder shall be subject to set-off, counterclaim or recoupment of amounts
owed by Executive to the Company or its affiliates. Executive shall not be
required to mitigate the amount of any payment provided for pursuant to this
Agreement by seeking other employment, taking into account the provisions of
Section 9 of this Agreement.

 

(g)   Compliance
with IRC Section 409A. Notwithstanding
anything herein to the contrary, (i) if at the time of Executive’s termination
of employment with the Company Executive is a “specified employee” as defined
in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)
and the deferral of the commencement of any payments or benefits otherwise
payable hereunder as a result of such termination of

 

15

 

employment is necessary in order to prevent any accelerated or
additional tax under Section 409A of the Code, then the Company will defer the
commencement of the payment of any such payments or benefits hereunder (without
any reduction in such payments or benefits ultimately paid or provided to
Executive) until the date that is six months following Executive’s termination
of employment with the Company (or the earliest date as is permitted under
Section 409A of the Code) and (ii) if any other payments of money or other
benefits due to Executive hereunder could cause the application of an
accelerated or additional tax under Section 409A of the Code, such payments or
other benefits shall be deferred if deferral will make such payment or other
benefits compliant under Section 409A of the Code, or otherwise such payment or
other benefits shall be restructured, to the extent possible, in a manner,
determined by the Board, that does not cause such an accelerated or additional
tax. The Company shall consult with Executive in good faith regarding the
implementation of the provisions of this Section 13(g); provided that neither
the Company nor any of its employees or representatives shall have any
liability to Executive with respect to thereto.

 

(h)   Successors; Binding Agreement. This Agreement shall inure to
the benefit of and be binding upon personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

(i)   Notice. For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
by hand or overnight courier or three days after it has been mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below in this Agreement, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.

 

If to the
Company, addressed to:

 

Travelport
Inc.

9 West 57th Street

New York, NY  10019

Attention:  Eric Bock, General Counsel

Fax:  (212) 413-1922

 

with a copy
which shall not constitute notice to:

 

The Blackstone
Group

345 Park Avenue

New York, New York 10154

Attention: Chip Schorr

Fax: (212) 583 5712

 

16

 

with a copy
which shall not constitute notice to:

 

Simpson
Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attention:  William Curbow and Greg
Grogan

Fax:  (212) 455-2502

 

If to
Executive, to the address set forth on the signature page of this Agreement or
at the current address listed in the Partnership’s records.

 

(j)   Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive’s duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.

 

(k)   Prior Agreements. This Agreement supersedes all
prior agreements and understandings (including verbal agreements) between
Executive and the Company and/or its affiliates regarding the terms and
conditions of Executive’s employment with the Company and/or its affiliates
including, without limitation, the Employment Agreement between Cendant Travel
Distribution Services Group, Inc. and Executive dated April 17, 2006
(collectively, the “Prior Agreements”). The Prior Agreement is hereby
terminated.

 

(l)   Cooperation. Executive shall provide
Executive’s reasonable cooperation in connection with any action or proceeding
(or any appeal from any action or proceeding) which relates to events occurring
during Executive’s employment hereunder. This provision shall survive any
termination of this Agreement.

 

(m)   Withholding Taxes. The Company may withhold from
any amounts payable under this Agreement such Federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or regulation.

 

(n)   Counterparts. This Agreement may be signed
in counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

 

(o)   Arbitration.
Except as otherwise provided in Section 11 of this Agreement, any controversy,
dispute, or claim arising out of, in connection with, or in relation to, the
interpretation, performance or breach of this Agreement, including, without
limitation, the validity, scope, and enforceability of this section, may at the
election of any party, be solely and finally settled by arbitration conducted
in New York, New York, by and in accordance with the then existing rules for
commercial arbitration of the American Arbitration Association, or any
successor organization and with the Expedited Procedures thereof (collectively,
the “Rules”). Each of the parties hereto agrees that such arbitration shall be
conducted by a single arbitrator selected in accordance with the Rules;
provided that such arbitrator shall be experienced in deciding cases concerning
the

 

17

 

matter which is the subject of the dispute. Any
of the parties may demand arbitration by written notice to the other and to the
Arbitrator set forth in this Section 11(o) (“Demand for Arbitration”). Each of
the parties agrees that if possible, the award shall be made in writing no more
than 30 days following the end of the proceeding. Any award rendered by the
arbitrator(s) shall be final and binding and judgment may be entered on it in any
court of competent jurisdiction. Each of the parties hereto agrees to treat as
confidential the results of any arbitration (including, without limitation, any
findings of fact and/or law made by the arbitrator) and not to disclose such
results to any unauthorized person. The parties intend that this agreement to
arbitrate be valid, enforceable and irrevocable. In the event of any
arbitration with regard to this Agreement, each party shall pay its own legal
fees and expenses, provided, however, that the parties agree to share the cost
of the Arbitrator’s fees.

 

(p)   Shareholder
Approval. This Agreement shall be subject to, and shall only be effective
following, the approval of the Company’s shareholders as of the date hereof who
owned, as of the date hereof, more than 75% of the voting power of all
outstanding stock of the Company, determined and obtained in a manner
consistent with the methodology described in proposed Treasury Regulation
Section 1.280G-1.

 

(q)   Public
Corporation. Executive represents that, as of the date of the filing of the
particular financial statement or other public filing referred to below, he had
no knowledge of any accounting irregularity with respect to, or any material
misstatement or omission contained in, any financial statement or other public
filing made by any publicly-traded corporation on whose board of directors
Executive served as of such date (each such corporation being referred to as a “Public
Corporation”).

 

18

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Agreement as of the day and year first above written.

 

 

	
   

  	
  TDS INVESTOR (BERMUDA) LTD.

  
	
   

  	
   

  
	
   

  	
  /s/ Eric Bock

  	
   

  
	
   

  	
  By:

  	
  Eric Bock

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
  and General Counsel

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ Jeff Clarke

  	
   

  
	
   

  	
  Jeff Clarke

  
				

 

 

[Signature Page to Employment Agreement]

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