Document:

exv10w3

 

Exhibit 10.3

THIRD AMENDMENT TO

EXECUTIVE EMPLOYMENT AGREEMENT

          THIS THIRD AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT (this “Third Amendment”) is made
effective as of the 1st day of January, 2007, by and between OLD LINE BANK, a Maryland-chartered
commercial bank (the “Bank” or “Employer”) and CHRISTINE RUSH (the “Employee”). This Third
Amendment amends in certain respects that certain Executive Employment Agreement dated March 31,
2003, between the Bank and Employee, as amended by that certain First Amendment to Executive
Employment Agreement dated December 31, 2004 and Second Amendment to Employment Agreement dated as
of December 30, 2005 (collectively the “Original Agreement”).

1.      Capitalized Terms. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Original Agreement.

2.      Amendments. The Original Agreement is hereby amended by deleting the first sentence of
Section 3(A) in its entirety and replacing said sentence with the following:

     “The Employee’s salary under this Agreement shall be $145,000 per annum, payable on a
bi-weekly basis.”

All of the provisions of the Original Agreement are incorporated herein by reference and shall
remain and continue in full force and effect as amended by this Third Amendment.

3.      Counterparts. This Amendment may be executed in any number of counterparts, each of
which shall be considered an original for all purposes but all of which shall together constitute
one and the same instrument.

 

 

          IN WITNESS WHEREOF, the parties hereto have duly executed this Third Amendment, under seal, as
of January ___, 2007, effective as of January 1, 2007.

	 	 	 	 	 	 	 
	WITNESS/ATTEST:	 	OLD LINE BANK	 	 
	 
	 	 	 	 	 	 
	 /s/
James W. Cornelsen

	 	By:
	 	/s/ Charles A. Bongar, Jr.
	 	(SEAL)
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Charles A. Bongar, Jr.	 	 
	 

	 	Title:
	 	Chairman of Compensation Committee	 	 
	 WITNESS:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ James W. Cornelsen	 	/s/ Christine Rush	 	(SEAL)
	 	 	 	 	 
	 	 	CHRISTINE RUSH	 	 

2<PAGE>

                                                                    Exhibit 10.1

                               Retention Agreement

     THIS AGREEMENT by and between Applix, Inc., a Massachusetts corporation
(the "Company"), and [__________] (the "Employee") is made as of _________, 2007
(the "Effective Date").

     WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders, and

     WHEREAS, the Company recognizes that the possibility of a termination
without cause or for good reason may also result in the departure or distraction
of the Employee to the detriment of the Company and its stockholders, and

     WHEREAS, the Board of Directors of the Company (the "Board") has determined
that appropriate steps should be taken to reinforce and encourage the continued
employment and dedication of the Company's key personnel without distraction
from the possibility of a termination upon change in control of the Company and
related events and circumstances, or a termination without cause or for good
reason.

     NOW, THEREFORE, as an inducement for and in consideration of the Employee
remaining in its employ, the Company agrees that the Employee shall receive the
severance benefits set forth in this Agreement in the event the Employee's
employment with the Company is terminated under the circumstances described
below:

     1. Key Definitions.

     As used herein, the following terms shall have the following respective
meanings:

          1.1 "Change in Control" means an event or occurrence that is set forth
in any one or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such subsection) and that also
constitutes a "change of control" within the meaning of Section 409A of the
United States Internal Revenue Code of 1986, as amended, and the guidance issued
thereunder ("Section 409A"):

               (a) the acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (i) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the Company or an underwriter or agent of the
Company), (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any corporation

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controlled by the Company, or (iv) any acquisition by any corporation pursuant
to a transaction which complies with clauses (i) and (ii) of subsection (c) of
this Section 1.1; or

               (b) such time as the Continuing Directors (as defined below) do
not constitute a majority of the Board (or, if applicable, the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

               (c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in
one or a series of transactions (a "Business Combination"), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 30% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination).

          1.2 "Change in Control Date" means the first date during the Term (as
defined in Section 2) on which a Change in Control occurs. Anything in this
Agreement to the contrary notwithstanding, if (a) a Change in Control occurs,
(b) the Employee's employment with the Company is terminated prior to the date
on which the Change in Control occurs, and (c) it is reasonably demonstrated by
the Employee that such termination of employment (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control or (ii) otherwise arose in connection with or in anticipation of a
Change in Control, then for all purposes of this Agreement the "Change in
Control Date" shall mean the date immediately prior to the date of such
termination of employment.

          1.3 "Cause" means:

               (a) the Employee's willful and continued failure to substantially
perform his or her reasonable assigned duties as an employee of the Company
(other than any such failure resulting from incapacity due to physical or mental
illness or any failure after the Employee gives notice of termination for Good
Reason), which failure is not cured within 30 days after a written demand for

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substantial performance is received by the Employee from the Board which
specifically identifies the manner in which the Board believes the Employee has
not substantially performed the Employee's duties; or

               (b) the Employee's willful engagement in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Company.

     For purposes of this Section 1.3, no act or failure to act by the Employee
shall be considered "willful" unless it is done, or omitted to be done, in bad
faith and without reasonable belief that the Employee's action or omission was
in the best interests of the Company.

          1.4 "Good Reason" means the occurrence, without the Employee's written
consent, of any of the events or circumstances set forth in clauses (a) through
(f) below. Notwithstanding the occurrence of any such event or circumstance,
such occurrence shall not be deemed to constitute Good Reason if, prior to the
Date of Termination specified in the Notice of Termination (each as defined in
Section 3.2(a)) given by the Employee in respect thereof, such event or
circumstance has been fully corrected and the Employee has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Employee).

               (a) the assignment to the Employee of duties inconsistent in any
material respect with the Employee's position (including status, offices, titles
and reporting requirements), authority or responsibilities in effect, in the
case of termination pursuant to Section 4.1 below, immediately prior to the
earliest to occur of (i) the Change in Control Date, (ii) the date of the
execution by the Company of the initial written agreement or instrument
providing for the Change in Control or (iii) the date of the adoption by the
Board of a resolution providing for the Change in Control or, in the case of
termination pursuant to Section 4.2 below, six months prior to the Date of
Termination (in each case, the earliest to occur of such dates referred to
herein as the "Measurement Date"), or any other action or omission by the
Company which results in a material diminution in such position, authority or
responsibilities; provided, however, that if the Employee terminates his
employment for Good Reason pursuant to this paragraph, he must provide to the
Company or the acquiring entity (if applicable), during the two month period
following the Change in Control Date, such cooperation as the Company or
acquiring entity (if applicable) may reasonably request with respect to
transition matters, which cooperation shall not entail a commitment by the
Employee of more than 20 hours per week;

               (b) a reduction in the Employee's annual base salary as in effect
on the Change in Control Date or, in the case of termination pursuant to Section
4.2 below, a reduction of more than 10% in the Employee's annual base salary as
in effect on the date six months prior to the Date of Termination, or, in either
case, as the same was or may be increased thereafter from time to time;

               (c) the failure by the Company to (i) continue in effect any
material compensation or benefit plan or program (including without limitation
any life insurance, medical, health and accident or disability plan and any
vacation or automobile program or policy) (a "Benefit Plan") in which the
Employee participates or which is applicable to the Employee immediately prior
to the Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan or
program, (ii) continue the Employee's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Employee's
participation relative to other participants, than the basis existing
immediately prior to the Measurement Date or (iii) award cash bonuses to the
Employee in amounts and in a manner substantially consistent with past practice
in light of the Company's financial performance;

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<PAGE>

               (d) a change by the Company in the location at which the Employee
performs his or her principal duties for the Company to a new location that is
both (i) outside a radius of 35 miles from the Employee's principal residence
immediately prior to the Measurement Date and (ii) more than 20 miles from the
location at which the Employee performed his or her principal duties for the
Company immediately prior to the Measurement Date; or a requirement by the
Company that the Employee travel on Company business to a substantially greater
extent than required immediately prior to the Measurement Date;

               (e) any failure of the Company to pay or provide to the Employee
any portion of the Employee's compensation or benefits due under any Benefit
Plan within seven days of the date such compensation or benefits are due, or any
material breach by the Company of this Agreement or any employment agreement
with the Employee.

     For purposes of this Agreement, any good faith determination of "Good
Reason" made by the Employee following a Change in Control shall be conclusive,
binding and final. The Employee's right to terminate his or her employment for
Good Reason shall not be affected by his or her incapacity due to physical or
mental illness.

          1.5 "Disability" means the Employee's absence from the full-time
performance of the Employee's duties with the Company for 180 consecutive
calendar days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Employee or the Employee's legal
representative.

     2. Term of Agreement. This Agreement, and all rights and obligations of the
parties hereunder, shall take effect upon the Effective Date and shall expire
upon the first to occur of (a) the expiration of the Term (as defined below) if
neither a Change in Control nor a termination pursuant to Section 4.2 has
occurred during the Term or (b) the fulfillment by the Company of all of its
obligations under Sections 4 and 5.2. "Term" shall mean the period commencing as
of the Effective Date and continuing in effect through December 31, 2009;
provided, however, that commencing on January 1, 2010 and each January 1
thereafter, the Term shall be automatically extended for one additional year
unless, not later than 90 days prior to the scheduled expiration of the Term (or
any extension thereof), the Company shall have given the Employee written notice
that the Term will not be extended. Notwithstanding anything else to the
contrary in this Agreement, any provision of this Agreement which provides the
Employee with payment rights not previously held by the Employee shall be
effective with respect to a voluntary termination (including a termination for
Good Reason) only if (x) the date of such termination occurs after the earlier
of (i) the date that is at least 12 months and one day after the date of this
Agreement or (ii) the first date upon which said provisions may be effective
with respect to such termination without causing payments or benefits hereunder
to constitute nonqualified deferred compensation subject to Section 409A, and
(y) the Employee remains continually employed by the Company prior to such
termination date.

     3. Employment Status; Notice of Termination of Employment.

          3.1 Not an Employment Contract. The Employee acknowledges that this
Agreement does not constitute a contract of employment or impose on the Company
any obligation to retain the Employee as an employee and that this Agreement
does not prevent the Employee from terminating employment at any time.

          3.2 Notice of Termination of Employment.

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<PAGE>

               (a) Any termination of the Employee's employment by the Company
or by the Employee (other than due to the death of the Employee) shall be
communicated by a written notice to the other party hereto (the "Notice of
Termination"), given in accordance with Section 7. Any Notice of Termination
shall: (i) indicate the specific termination provision (if any) of this
Agreement relied upon by the party giving such notice, (ii) to the extent
applicable, set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Employee's employment under the
provision so indicated and (iii) specify the Date of Termination (as defined
below). The effective date of an employment termination (the "Date of
Termination") shall be the close of business on the date specified in the Notice
of Termination (which date may not be less than 15 days or more than 120 days
after the date of delivery of such Notice of Termination), in the case of a
termination other than one due to the Employee's death, or the date of the
Employee's death, as the case may be.

               (b) The failure by the Employee or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Employee or the
Company, respectively, hereunder or preclude the Employee or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Employee's or the Company's rights hereunder.

               (c) Any Notice of Termination for Cause given by the Company must
be given within 90 days of the occurrence of the event(s) or circumstance(s)
which constitute(s) Cause.

     4. Benefits to Employee.

          4.1 Compensation upon Termination after a Change in Control. If a
Change in Control Date occurs during the Term and the Employee's employment with
the Company is terminated by the Company (other than for Cause, Disability or
death) or by the Employee for Good Reason within 12 months following the Change
in Control Date, then the Employee shall be entitled to the following benefits,
subject to Section 4.6:

               (a) the Company shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination the sum of (i) the Employee's base
salary through the Date of Termination, (ii) any accrued bonus which the
Employee is entitled to receive as of the Date of Termination, (iii) the amount
of any compensation previously deferred by the Employee (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not previously paid (the sum of the amounts described in clauses
(i), (ii), and (iii) shall be hereinafter referred to as the "Accrued
Obligations");

               (b) for [CEO: 18; Other Officers: 12] months after the Date of
Termination, the Company shall continue to pay to the Employee, in accordance
with its normal payroll practices, compensation at an annual rate equal to the
sum of (i) his or her highest annual base salary during the three-year period
prior to the Date of Termination plus (ii) the Employee's target bonus for the
year during which the termination occurs; and

               (c) for [CEO: 18; Other Officers: 12] months after the Date of
Termination, the Company shall continue to provide to the Employee medical and
dental benefits on substantially the same terms as were provided to the Employee
on the Date of Termination; provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive a particular type of
benefits (e.g., health insurance benefits) from such employer on terms at least
as favorable to the Employee and his or her family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Employee and his or her family.

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          4.2 Compensation upon Termination other than after a Change in
Control. Except as set forth in Section 4.1 above, in which case the terms of
Section 4.1 shall apply, if the Employee's employment with the Company is
terminated by the Company (other than for Cause, Disability or death) or by the
Employee for Good Reason, then the Employee shall be entitled to the following
benefits, subject to Section 4.6:

               (a) the Company shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination the Accrued Obligations;

               (b) for [CEO: 18; Other Officers: 12] months after the Date of
Termination, the Company shall continue to pay to the Employee, in accordance
with its normal payroll practices, compensation at an annual rate equal to his
or her highest annual base salary during the three-year period prior to the Date
of Termination; and

               (c) for [CEO: 18; Other Officers: 12] months after the Date of
Termination, the Company shall continue to provide to the Employee medical and
dental benefits on substantially the same terms as were provided to the Employee
on the Date of Termination; provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive a particular type of
benefits (e.g., health insurance benefits) from such employer on terms at least
as favorable to the Employee and his or her family as those being provided by
the Company, then the Company shall no longer be required to provide those
particular benefits to the Employee and his or her family.

          4.3 Resignation without Good Reason; Termination for Cause or for
Death or Disability. If, at any time, the Employee voluntarily terminates his or
her employment with the Company, excluding a termination for Good Reason, or the
Employee's employment with the Company is terminated by the Company for Cause or
by reason of the Employee's death or Disability, then the Company shall pay the
Employee (or his or her estate, if applicable), in a lump sum in cash within 30
days after the Date of Termination, the Accrued Obligations.

          4.4 Stock Acceleration.

               (a) Upon a Change of Control. If a Change in Control occurs
during the Term, then, effective immediately prior to the Change in Control, (i)
each outstanding option to purchase shares of Common Stock of the Company held
by the Employee shall become immediately exercisable in full and (b) all
outstanding restricted shares of Common Stock held by the Employee shall become
fully vested and no longer be subject to a right of repurchase by or risk of
forfeiture to the Company. This benefit accrues to the Employee irrespective of
whether an employment termination occurs.

               (b) Upon Termination without Cause or for Good Reason. Except as
set forth in Section 4.4(a) above, in which case the terms of Section 4.4(a)
shall apply, if the Employee's employment is terminated during the Term by the
Company without Cause or by the Employee for Good Reason, then, (i) with respect
to any restricted stock held by the Employee on the Date of Termination, the
vesting of such restricted stock shall accelerate by [CEO: 18; Other Officers:
12] months and (ii) with respect to each outstanding option to purchase shares
of Common Stock of the Company held by the Employee on the Date of Termination,
(A) the vesting of each such option shall accelerate by [CEO: 18; Other
Officers: 12] months and (B) the vested portion of such option shall remain
exercisable during the Extension Period (as defined below).

The "Extension Period" means the period following the Date of Termination and
ending on the later of (x) the 15th day of the third month following the date in
which the option would otherwise have expired if it had not been extended, (y)
December 31 of the calendar year in which the option would otherwise have

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expired if it had not been extended, or (z) the last date to which the option
could be extended without subjecting it to the application of Section 409A as
nonqualified compensation but in no event later than [CEO: 18; Other Officers:
12] months after the Date of Termination.

          4.5 Taxes.

               (a) Notwithstanding any other provision of this Agreement, except
as set forth in Section 4.5(b), in the event that the Company undergoes a
"Change in Ownership or Control" (as defined below), the Company shall not be
obligated to provide to the Employee a portion of any "Contingent Compensation
Payments" (as defined below) that the Employee would otherwise be entitled to
receive to the extent necessary to eliminate any "excess parachute payments" (as
defined in Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended
(the "Code")) for the Employee. For purposes of this Section 4.5, the Contingent
Compensation Payments so eliminated shall be referred to as the "Eliminated
Payments" and the aggregate amount (determined in accordance with Treasury
Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the
Contingent Compensation Payments so eliminated shall be referred to as the
"Eliminated Amount."

               (b) Notwithstanding the provisions of Section 4.5(a), no such
reduction in Contingent Compensation Payments shall be made if (i) the
Eliminated Amount (computed without regard to this sentence) exceeds (ii) 110%
of the aggregate present value (determined in accordance with Treasury
Regulation Section 1.280G-1, Q/A-31 and Q/A-32 or any successor provisions) of
the amount of any additional taxes that would be incurred by the Employee if the
Eliminated Payments (determined without regard to this sentence) were paid to
him or her (including, state and federal income taxes on the Eliminated
Payments, the excise tax imposed by Section 4999 of the Code payable with
respect to all of the Contingent Compensation Payments in excess of the
Employee's "base amount" (as defined in Section 280G(b)(3) of the Code), and any
withholding taxes). The override of such reduction in Contingent Compensation
Payments pursuant to this Section 4.5(b) shall be referred to as a "Section
4.5(b) Override." For purpose of this paragraph, if any federal or state income
taxes would be attributable to the receipt of any Eliminated Payment, the amount
of such taxes shall be computed by multiplying the amount of the Eliminated
Payment by the maximum combined federal and state income tax rate provided by
law.

               (c) For purposes of this Section 4.5 the following terms shall
have the following respective meanings:

                    (i) "Change in Ownership or Control" shall mean a change in
the ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in accordance with
Section 280G(b)(2) of the Code.

                    (ii) "Contingent Compensation Payment" shall mean any
payment (or benefit) in the nature of compensation that is made or made
available (under this Agreement or otherwise) to a "disqualified individual" (as
defined in Section 280G(c) of the Code) and that is contingent (within the
meaning of Section 280G(b)(2)(A)(i) of the Code) on a Change in Ownership or
Control of the Company.

               (d) Any payments or other benefits otherwise due to the Employee
following a Change in Ownership or Control that could reasonably be
characterized (as determined by the Company) as Contingent Compensation Payments
(the "Potential Payments") shall not be made until the dates provided for in
this Section 4.5(d). Within 30 days after each date on which the Employee first
becomes entitled to receive (whether or not then due) a Contingent Compensation
Payment relating to such Change in Ownership or Control, the Company shall
determine and notify the Employee (with

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reasonable detail regarding the basis for its determinations) (i) which
Potential Payments constitute Contingent Compensation Payments, (ii) the
Eliminated Amount and (iii) whether the Section 4.5(b) Override is applicable.
Within 30 days after delivery of such notice to the Employee, the Employee shall
deliver a response to the Company (the "Employee Response") stating either (A)
that he or she agrees with the Company's determination pursuant to the preceding
sentence, in which case he or she shall indicate, if applicable, which
Contingent Compensation Payments, or portions thereof (the aggregate amount of
which, determined in accordance with Treasury Regulation Section 1.280G-1,
Q/A-30 or any successor provision, shall be equal to the Eliminated Amount),
shall be treated as Eliminated Payments or (B) that he or she disagrees with
such determination, in which case he or she shall set forth (i) which Potential
Payments should be characterized as Contingent Compensation Payments, (ii) the
Eliminated Amount, (iii) whether the Section 4.5(b) Override is applicable, and
(iv) which (if any) Contingent Compensation Payments, or portions thereof (the
aggregate amount of which, determined in accordance with Treasury Regulation
Section 1.280G-1, Q/A-30 or any successor provision, shall be equal to the
Eliminated Amount, if any), shall be treated as Eliminated Payments. In the
event that the Employee fails to deliver an Employee Response on or before the
required date, the Company's initial determination shall be final and the
Contingent Compensation Payments that shall be treated as Eliminated Payments
shall be determined by the Company in its absolute discretion. If the Employee
states in the Employee Response that he or she agrees with the Company's
determination, the Company shall make the Potential Payments to the Employee
within three business days following delivery to the Company of the Employee
Response (except for any Potential Payments which are not due to be made until
after such date, which Potential Payments shall be made on the date on which
they are due). If the Employee states in the Employee Response that he or she
disagrees with the Company's determination, then, for a period of 60 days
following delivery of the Employee Response, the Employee and the Company shall
use good faith efforts to resolve such dispute. If such dispute is not resolved
within such 60-day period, such dispute shall be settled exclusively by
arbitration in Boston, Massachusetts, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. The Company shall, within
three business days following delivery to the Company of the Employee Response,
make to the Employee those Potential Payments as to which there is no dispute
between the Company and the Employee regarding whether they should be made
(except for any such Potential Payments which are not due to be made until after
such date, which Potential Payments shall be made on the date on which they are
due). The balance of the Potential Payments shall be made within three business
days following the resolution of such dispute. Subject to the limitations
contained in Sections 4.5(a) and (b) hereof, the amount of any payments to be
made to the Employee following the resolution of such dispute shall be increased
by amount of the accrued interest thereon computed at the prime rate announced
from time to time by Silicon Valley Bank, compounded monthly from the date that
such payments originally were due.

               (e) The provisions of this Section 4.5 are intended to apply to
any and all payments or benefits available to the Employee under this Agreement
or any other agreement or plan of the Company under which the Employee receives
Contingent Compensation Payments.

          4.6 Section 409A.

               (a) The Company and the Employee intend that this Agreement and
any deferral of compensation pursuant to its terms comply with the requirements
of Section 409A so that any payments hereunder are not subject to the taxes and
interest imposed by such section. Accordingly, the parties agree that:

                    (i) No payments that may be made pursuant to this Agreement
that constitute "nonqualified deferred compensation" within the meaning of
Section 409A may be accelerated

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or deferred by the Company or by the Employee to the extent that such
acceleration or deferral would cause the payment to be subject to tax or
interest under Section 409A.

                    (ii) Notwithstanding anything else to the contrary in this
Agreement, in the event the Employee is a "specified employee" within the
meaning of Section 409A:

                         (1) to the extent that the Employee would otherwise be
entitled under this Agreement to any payment during the six months beginning on
the date of the Employee's termination of employment that constitutes
nonqualified deferred compensation under Section 409A, such payment will be paid
to the Employee within ten (10) business days following the earlier of the
Employee's death or the date that is six months after the date of such
termination; and

                         (2) to the extent that the Employee would otherwise be
entitled under this Agreement to any benefit (other than a payment) during the
six months beginning on the date of the Employee's termination of employment
that constitutes nonqualified deferred compensation under Section 409A, (i) such
benefit will be delayed until the date that is six months after the date of such
termination and the applicable period for such benefit will be reduced by six
months, (ii) the Company will pay to the Employee within ten (10) business days
following the date that is six months after the date of such termination a lump
sum cash payment equal to the lowest cost that the Employee would incur on an
after-tax basis to obtain such benefit for him (including family or dependent
coverage, if applicable) on an individual basis during such six month period.

               (b) The Company and the Employee further agree to make such
revisions to this Agreement as may be required to conform the provisions of this
Agreement to the requirements of Section 409A. In any event, the Company makes
no representation or warranty and shall have no liability to the Employee or any
other person if the payments and/or benefits under this Agreement are determined
to constitute deferred compensation subject to Section 409A but do not satisfy
the conditions of such section.

          4.7 Exclusive Severance Benefits. The making of the payments and the
provision of the benefits by the Company to the Employee under this Agreement
shall constitute the entire obligation of the Company to the Employee as a
result of the termination of his or her employment, and the Employee shall not
be entitled to additional payments or benefits as a result of such termination
of employment in connection under any other plan, program, policy, practice,
contract or agreement of the Company or its subsidiaries.

          4.8 Mitigation. The Employee shall not be required to mitigate the
amount of any payment or benefits provided for in this Section 4 by seeking
other employment or otherwise. Further, except as set forth in Section 4.1(c)
and Section 4.2(c), the amount of any payment or benefits provided for in this
Section 4 shall not be reduced by any compensation earned by the Employee as a
result of employment by another employer.

          4.9 Release. The obligation of the Company to make the payments and
provide the benefits to the Employee under clauses (b) and (c) of Section 4.1 or
clauses (b) and (c) of Section 4.2 is conditioned upon the Employee signing a
release of claims in a form reasonably requested by the Company (the "Employee
Release"), within such period of time as the Company may specify following the
Date of Termination, and upon the Employee Release becoming effective in
accordance with its terms. The Company shall not be obligated to make any
payments to the Employee under Section 4.1(b) or Section 4.2(b) until the
Employee Release has become effective; provided that at such time as the
Employee Release becomes effective, the Company shall promptly pay to the
Employee any payments

                                        9

<PAGE>

that would otherwise have been made to the Employee between the Date of
Termination and date on which the Employee Release becomes effective.

          4.10 Non-Competition, Non-Solicitation and Non-Disparagement
Covenants. In consideration of the payments and other benefits to be provided to
the Employee pursuant to this Agreement, the Employee hereby covenants and
agrees as follows:

               (a) While the Employee is employed by the Company and for a
period of [CEO: 18; Other Officers: 12] months after the termination or
cessation of such employment for any reason,

                    (i) the Employee shall not, directly or indirectly, as an
individual proprietor, partner, stockholder, officer, employee, director, joint
venture, investor, lender, consultant, or in any other capacity whatsoever
(other than as the holder of not more than one percent of the combined voting
power of the outstanding stock of a publicly held company), engage in or be
affiliated with any business that is competitive with the business of the
Company, including but not limited to any business or enterprise that develops,
manufactures, markets, licenses, sells or provides any product or service that
competes with any product or service developed, manufactured, marketed,
licensed, sold or provided, or planned to be developed, manufactured, marketed,
licensed, sold or provided, by the Company while the Employee was employed by
the Company; and

                    (ii) the Employee shall not, either alone or in association
with others (A) solicit, or permit any organization directly or indirectly
controlled by the Employee to solicit, any employee of the Company to leave the
employ of the Company, (B) solicit for employment, hire or engage as an
independent contractor, or permit any organization directly or indirectly
controlled by the Employee to solicit for employment, hire or engage as an
independent contractor, any person who was employed by the Company at the time
of the termination or cessation of the Employee's employment with the Company;
provided, that this clause (B) shall not apply to the solicitation, hiring or
engagement of any individual whose employment with the Company has been
terminated for a period of six months or longer, or (C) make any public
disparaging statements concerning the Company or the Company's officers,
directors, employees, attorneys, agents, or contracting parties, or its business
or operations; provided, that this clause (C) shall not in any way prevent the
Employee from disclosing any information to his or her attorneys or in response
to a lawful subpoena or court order requiring disclosure of information.

               (b) If any restriction set forth in this Section 4.10 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.

               (c) The restrictions contained in this Section 4.10 are necessary
for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for such purpose. The Employee
agrees that any breach of this Section 4.10 is likely to cause the Company
substantial and irrevocable damage that is difficult to measure. Therefore, in
the event of any such breach or threatened breach, the Employee agrees that the
Company, in addition to such other remedies which may be available, shall have
the right to obtain an injunction from a court restraining such a breach or
threatened breach and the right to specific performance of the provisions of
this Agreement and the Employee hereby waives the adequacy of a remedy at law as
a defense to such relief.

               (d) The Employee hereby acknowledges and agrees that the
Company's obligations under this Agreement constitute valid and sufficient
consideration for the non-competition,

                                       10

<PAGE>

non-solicitation and non-disparagement obligations of the Employee under this
Section 4.10(b). The terms of this Section 4.10 supercede any other
non-competition, non-solicitation and non-disparagement agreements or covenants
between the Company and the Employee.

     5. Disputes.

          5.1 Settlement of Disputes; Arbitration. All claims by the Employee
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Employee in writing and shall set
forth the specific reasons for the denial and the specific provisions of this
Agreement relied upon. The Board shall afford a reasonable opportunity to the
Employee for a review of the decision denying a claim. Any further dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Boston, Massachusetts, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.

          5.2 Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal, accounting and other fees and expenses which
the Employee may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by the Company, the Employee or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Employee regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.

     6. Successors.

          6.1 Successor to Company. This Agreement shall be binding upon the
Company and its successors and assigns (including the resulting or acquiring
company in a Business Combination). In the event of a Business Combination (and
provided that, in the case of a Business Combination structured as the sale or
other disposition of all or substantially all of the assets of the Company, the
Employee accepts employment with the Acquiring Corporation effective on or about
the Change in Control Date), all references in this Agreement to the Company
shall instead be deemed to refer to the Acquiring Corporation.

          6.2 Successor to Employee. This Agreement 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. If the Employee should die while any amount would still be payable to
the Employee or his or her family hereunder if the Employee had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Employee's estate.

     7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii) prepaid via a reputable
nationwide overnight courier service, in each case addressed to the Company, at
289 Turnpike Road, Westboro, Massachusetts 01581, and to the Employee at the
address set forth below his or her name on the signature page hereto (or to such
other address as either the Company or the Employee may have furnished to the
other in writing in accordance herewith). Any such notice, instruction or
communication shall be deemed to have been delivered five business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service. Either party may give any notice, instruction or
other

                                       11

<PAGE>

communication hereunder using any other means, but no such notice, instruction
or other communication shall be deemed to have been duly delivered unless and
until it actually is received by the party for whom it is intended.

     8. Miscellaneous.

          8.1 Employment by Subsidiary. For purposes of this Agreement, the
Employee's employment with the Company shall not be deemed to have terminated
solely as a result of the Employee continuing to be employed by a wholly-owned
subsidiary of the Company.

          8.2 Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.

          8.3 Injunctive Relief. The Company and the Employee agree that any
breach of this Agreement by the Company is likely to cause the Employee
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Employee
shall have the right to specific performance and injunctive relief.

          8.4 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.

          8.5 Waivers. No waiver by the Employee at any time of any breach of,
or compliance with, any provision of this Agreement to be performed by the
Company shall be deemed a waiver of that or any other provision at any
subsequent time.

          8.6 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.

          8.7 Tax Withholding. Any payments provided for hereunder shall be paid
net of any applicable tax withholding required under federal, state or local
law.

          8.8 Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements (including but not limited to any stock option
acceleration agreement between the Company and the Employee), promises,
covenants, arrangements, communications, representations or warranties, whether
oral or written, by any officer, employee or representative of any party hereto
in respect of the subject matter contained herein; and any prior agreement of
the parties hereto in respect of the subject matter contained herein including
without limitation [identify any offer letter or other agreement, or provision
thereof, with the Employee containing severance provisions] between the Company
and the Employee dated __________, 200_, is hereby terminated and cancelled.
Notwithstanding the foregoing, in the event that this Agreement is terminated as
a result of (a) the expiration of the Term prior to the occurrence of a Change
in Control or (b) the termination of the Employee's employment by the Company
prior to the Change in Control Date, any stock option acceleration agreement
shall not be superseded and shall continue in full force and effect in
accordance with its terms.

          8.9 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.

                                       12

<PAGE>

          8.10 Employee's Acknowledgements. The Employee acknowledges that he or
she: (a) has read this Agreement; (b) has been represented in the preparation,
negotiation, and execution of this Agreement by legal counsel of the Employee's
own choice or has voluntarily declined to seek such counsel; (c) understands the
terms and consequences of this Agreement; and (d) understands that the law firm
of WilmerHale is acting as counsel to the Company in connection with the
transactions contemplated by this Agreement, and is not acting as counsel for
the Employee.

                  [Remainder of page intentionally left blank.]

                                       13

<PAGE>

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

                                        Applix, Inc.

                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------

                                        [Employee's Name]

                                        ----------------------------------------
                                        Address:
                                                 -------------------------------

                                        ----------------------------------------

                                       14

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