Document:

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is executed as of this 1st day of May, 2008, by and between Roy W. Olivier (“Executive”) and ARI Network Services, Inc. (the “Company”).

RECITALS

The Company desires to continue to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein.

As a result of Executive’s employment with the Company, Executive will have access to and be entrusted with valuable information about the Company’s business and customers, including trade secrets and confidential information.

The Parties believe it is in their best interests to make provision for certain aspects of their relationship during and after the period in which Executive is employed by the Company.

NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Company and Executive (collectively, “Parties” and individually, “Party”), the Parties agree as follows:

ARTICLE I

EMPLOYMENT

1.1

Position and Duties.  Executive is currently employed as Vice President (“VP”) of Global Sales and Marketing of the Company.  Upon the execution hereof, Executive shall assume the position of President and Chief Executive Officer (“CEO”) of the Company and shall be subject to the authority of, and shall report to, the Board of Directors of the Company (the “Board”).  Executive’s duties and responsibilities as President and CEO shall include all those customarily attendant to the position of President and CEO and as may be assigned from time to time by the Board, as well as any duties and responsibilities relating to the transition of duties attendant to the position of VP of Global Sales and Marketing reasonably assigned to Executive by the Board.  Executive acknowledges and agrees that the change of Executive’s position from VP of Global Sales and Marketing to President and CEO shall not be treated as Good Reason under this Agreement or Executive’s Change of Control Agreement, dated September 13, 2006 and amended as of the date hereof (“COC Agreement”).  At all times, Executive shall devote Executive’s entire business time, attention and energies exclusively to the business interests of the Company while employed by the Company, except as otherwise specifically approved in writing by or on behalf of the Board.  Effective upon the execution hereof, the Board shall appoint Executive to serve as a director of the Company until the next annual meeting of the shareholders of the Company.  Thereafter, during the Employment Term and any Renewal Term, upon each expiration of Executive’s term as a director, the Board shall nominate Executive as a nominee for director of the Company and shall use its best efforts to encourage the shareholders to elect Executive as a director of the Company.

1.2

Term of Employment.  The Company employs Executive, and Executive accepts employment by the Company, for a three (3) year term commencing on the date hereof (“Employment Term”), subject to earlier termination as hereinafter set forth in Article III. Following the expiration of the Employment Term, this Agreement shall be automatically renewed for successive one (1) year periods (collectively, “Renewal Terms”; individually, “Renewal Term”) unless, at least thirty (30) business days prior to the commencement of the third (3rd) year of the Employment Term or the current Renewal Term, either the Board or Executive, as the case may be, provides the other with a written notice of intention not to renew, in which case this Agreement shall terminate effective as of the end of the Employment Term or said Renewal Term, as applicable, or as otherwise agreed upon by Executive and the Board.  If this Agreement is renewed, the terms and conditions of this Agreement during such Renewal Term shall be the same as the terms and conditions in effect immediately prior to such renewal, subject to any such changes or modifications as mutually may be agreed between the Board and Executive as evidenced in a written instrument signed by both the Company and Executive.

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1

Base Salary.  During the Employment Term and any Renewal Term, the Company shall pay Executive an annual salary of Two Hundred Thousand Dollars ($200,000) (“Base Salary”), payable in accordance with the normal payroll practices and schedule of the Company.  Notwithstanding the foregoing, the Base Salary shall be subject to annual review by the Compensation Committee of the Board (the “Compensation Committee”) and, beginning on the first anniversary of the date hereof, shall be subject to annual adjustment based on the recommendation of the Compensation Committee if approved by the full Board.

2.2

Bonuses.  During the Employment Term and any Renewal Term, Executive will continue to be eligible to participate in the Company’s Management Incentive Bonus Plan on substantially the same terms as he currently participates or any successor plans for senior executives (“Bonus Plan”), the specifics of which are determined by the Compensation Committee and approved by the full Board.  For purposes of clarification, the Parties acknowledge and agree that (a) upon the execution hereof, the fourth (4th) quarter metrics for the current fiscal year under the current Bonus Plan shall apply, and (b) under such current Bonus Plan, the annualized bonus amount which Executive would be eligible to receive if one hundred percent (100%) of such Bonus Plan targets were met would be One Hundred Twenty-Five Thousand Dollars ($125,000).  In the event that the Board terminates or modifies in any material way the long-term incentive compensation component or any other component of the Bonus Plan, Executive shall receive the same treatment as other similarly situated executive employees.

2.3

Equity.  

(a)

Grant of Options.  Simultaneous with the execution hereof, Executive will be granted options to purchase up to three hundred thousand (300,000) shares of the Company’s common stock pursuant to the terms and conditions of an Award Agreement between the Company and Executive 

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in the form of the Company’s standard Award Agreement.  Such options shall be subject to the terms and conditions of such Award Agreement, including, without limitation, with respect to vesting and forfeiture.

(b)

Future Options.  During the Employment Term and any Renewal Term, Executive also shall be eligible to participate in stock option plans and grants, if any, that are offered to senior executive/officer employees of the Company.

2.4

Perquisites, Benefits and Other Compensation.  During the Employment Term and any Renewal Term and subject to the express provisions of this Article II, Executive will be entitled to receive perquisites and benefits provided by the Company to its senior executive employees, subject to the eligibility criteria related to such perquisites and benefits, and to such changes, additions, or deletions to such perquisites and benefits as the Company may make from time to time, as well as such other perquisites or benefits as may be specified from time to time at the sole discretion of the Board.

ARTICLE III

TERMINATION

 

3.1

Termination Not In Connection With A Change In Control.

(a)

Termination Without Cause.  Subject to Paragraph 3.2, below, the Board may terminate Executive’s employment and all of the Company’s obligations under this Agreement at any time without Cause (defined below).

(b)

Termination For Cause.  Subject to Paragraph 3.2, below, the Board may terminate Executive’s employment and all of the Company’s obligations under this Agreement at any time for Cause (defined below) by giving written notice to Executive stating the basis for such termination, effective immediately upon giving such notice or at such other time thereafter as the Board may designate.  “Cause” shall mean any of the following:  (1) Executive has breached this Agreement in a material way, including, without limitation, a breach of the provisions of Article X, below, or has breached in a material way the fiduciary duty he owes to the Company or any other obligation or duty he owes to the Company under this Agreement, which breach remains uncured, if subject to cure, to the reasonable satisfaction of  the Board for thirty (30) calendar days after Executive receives written notice thereof from the Board; (2) Executive has committed gross negligence or willful misconduct in the performance of Executive’s duties for the Company; (3) Executive has failed in a material way to follow reasonable instructions from the Board, consistent with this Agreement, concerning the operations or business of the Company, which failure remains uncured, if subject to cure, to the reasonable satisfaction of the Board for thirty (30) calendar days after 

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Executive receives written notice thereof from the Board; (4) Executive has committed a crime the circumstances of which substantially relate to Executive’s employment duties with the Company; (5) Executive has misappropriated or embezzled funds or property of the Company or engaged in any material act of dishonesty; and (6) Executive has attempted to obtain a personal profit from any transaction in which the Executive knows or reasonably should know the Company has an interest, and which constitutes a corporate opportunity of the Company, or which is adverse to the interests of the Company, unless the transaction was approved in writing by the Board after full disclosure of all details relating to such transaction.  

(c)

Termination by Death or Disability.  Subject to Paragraph 3.2, below, Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective immediately and without any notice being necessary, upon Executive’s death or a determination of Disability of Executive.  For purposes of this Agreement, “Disability” means the inability of Executive, due to a physical or mental impairment, to perform the essential functions of Executive’s job with the Company, with or without a reasonable accommodation, for ninety (90) consecutive business days or one hundred twenty (120) business days in the aggregate during any 365-day period.  A determination of Disability shall be made by the Board, which may, at its sole discretion, consult with a physician or physicians satisfactory to the Board, and Executive shall cooperate with any efforts to make such determination.  Any such determination shall be conclusive and binding on the Parties.  Any determination of Disability under this Paragraph 3.1I is not intended to alter any benefits any Party may be entitled to receive under any long-term disability insurance policy carried by either the Company or Executive with respect to Executive, which benefits shall be governed solely by the terms of any such insurance policy.

(d)

Termination by Retirement.  Subject to Paragraph 3.2, below, Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective upon Executive’s retirement in accordance with the Company’s retirement plan or policy should a retirement plan or policy for senior executives of the Company be adopted.

(e)

Termination by Resignation.  Subject to Paragraph 3.2, below, Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective immediately upon Executive’s provision of thirty (30) days’ prior written notice to the Board of resignation from employment with the Company or at such other time as may be mutually agreed between the Parties following the provision of such notice. 

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(f)

Termination for Good Reason.  Subject to Section 3.2, below, Executive may terminate his employment under this Agreement for Good Reason (defined below).  A termination shall only be for Good Reason if: (1) within ninety (90) calendar days of the initial existence of Good Reason, Executive provides written notice of Good Reason to the Board; (2) the Company does not remedy said Good Reason within thirty (30) calendar days of its receipt of such notice; and (3) Executive terminates his employment effective any time after the expiration of such 30-day remedy period prior to the date that is two (2) years after the initial existence of Good Reason, or if sooner, during the Employment Term or Renewal Term, as applicable.  “Good Reason” shall mean the occurrence of any of the following without the written consent of Executive: (a) the Company has breached this Agreement in a material way, which breach remains uncured, if subject to cure, for thirty (30) calendar days after the Board receives written notice thereof from Executive; (b) a material diminution in Executive’s Base Salary; (c) a material diminution in Executive’s authority, duties, or responsibilities; or (d) a material change in the geographic location at which Executive must perform his services, provided such new location is more than fifty (50) miles from the location where Executive is required to perform services prior to the change.

3.2

Rights Upon Termination Not In Connection With A Change In Control.

(a)

Paragraph 3.1(a), Paragraph 3.1(c) and Paragraph 3.1(f) Termination.  If Executive’s employment is terminated pursuant to Paragraph 3.1(a), Paragraph 3.1(c), or Paragraph 3.1(f), above, Executive or Executive’s estate shall have no further rights against the Company hereunder, except for the right to receive the following: (1) any unpaid Base Salary with respect to the period prior to the effective date of termination; (2) any earned but unpaid bonus due to Executive as of the effective date of termination; (3) with respect to a termination pursuant to Paragraph 3.1(a) or Paragraph 3.1(f), above, Executive’s Base Salary, at the rate in effect at the time of termination, for one (1) year following the effective date of termination; (4) with respect to a termination pursuant to Paragraph 3.1(a) or Paragraph 3.1(f), above, a bonus for the remainder of the Employment Term or current Renewal Term, as the case may be, which bonus shall be equal to (A) the product of (i) the average of Executive’s annual bonus received pursuant to the Company’s Bonus Plan for the three fiscal years of the Company ending prior to the effective date of termination, multiplied by (ii) a fraction, the numerator of which is the actual number of days Executive was employed by the Company during the Employment Term or current Renewal Term and the denominator of which is the total number of days in the Employment Term or current Renewal Term, less (B) any payment previously made by the Company, if any, with respect to the current year’s Management Incentive Bonus; and (5) with respect to a termination pursuant to Paragraph 3.1(a) or Paragraph 3.1(f), above, acceleration of all 

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outstanding unvested options held by Executive as of the effective date of termination.  Payment of the amounts specified in (3) and (4), above, shall be made in equal monthly installments based on the remainder of the Employment Term or current Renewal Term; provided, however, that if the end of the Employment Term or current Renewal Term is later than September 15 of the calendar year following the calendar year of the effective date of termination, all remaining monthly installments shall be paid to Executive in a lump sum on September 15 of the calendar year following the calendar year of the effective date of termination. Notwithstanding the foregoing, the payment and receipt of the benefits specified in (3), (4) and (5) are contingent upon Executive’s execution of a written severance agreement (in a form satisfactory to the Board) containing, among other things, a general release of claims against the Company, except if this Agreement is terminated due to the death of Executive.

(b)

Paragraph 1.2, Paragraph 3.1(b) and Paragraph 3.1(e) Terminations.  If Executive’s employment is terminated pursuant to Paragraph 3.1(b), above, Executive resigns pursuant to Paragraph 3.1(e), above, or if either the Company (at the direction of the Board) or Executive fails to renew this Agreement pursuant to Paragraph 1.2, above, Executive shall have no further rights against the Company hereunder, except for the right to receive: (1) any unpaid Base Salary with respect to the period prior to the effective date of termination; and (2) any earned but unpaid bonus due to Executive as of the effective date of termination. 

(c)

Paragraph 3.1(d) Termination.  If Executive retires pursuant to Paragraph 3.1(d), above, Executive shall have no further rights against the Company hereunder, except for the right to receive: (1) any unpaid Base Salary with respect to the period prior to the effective date of termination; (2) any earned but unpaid bonus due to Executive as of the effective date of termination; and (3) any additional benefits provided for under the Company’s retirement plan or policy for senior executives, if any.

3.3

Termination In Connection With A Change In Control.  Should Executive’s employment be terminated upon the occurrence of or within two (2) years of a  “Change in Control”, as defined in Executive’s COC Agreement, the terms of such termination shall be governed exclusively by the COC Agreement and Executive shall not be entitled to receive any of the benefits provided for under this Article III.  

ARTICLE IV

CONFIDENTIALITY

4.1

Confidentiality Obligations.  Executive will not, during the Employment Term and any Renewal Term, directly or indirectly use or disclose any Confidential Information or Trade Secrets except in the interest and for the benefit of the Company.  After the end, for whatever reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Trade Secrets.  For a period of two (2) years following the end, for 

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whatever reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Confidential Information.  Executive further agrees not to use or 

disclose at any time information received by the Company from others except in accordance with the Company’s contractual or other legal obligations; the Company’s Customers are third party beneficiaries of this promise. 

4.2

Definitions.

(a) 

Trade Secret.  The term “Trade Secret” has that meaning set forth under applicable law.  The term includes, but is not limited to, all computer source code created by or for the Company.

(b)

Confidential Information.  The term “Confidential Information” means all non-Trade Secret or proprietary information of the Company which has value to the Company and which is not known to the public or the Company’s competitors, generally.  Confidential Information includes, but is not limited to: (i) inventions, product specifications, information about products under development, research, development or business plans, production know-how and processes, manufacturing techniques, operational methods, equipment design and layout, test results, financial information, customer lists, information about orders and transactions with customers, sales and marketing strategies, plans and techniques, pricing strategies, information relating to sources of materials and production costs, purchasing and accounting information, personnel information and all business records; (ii) information which is marked or otherwise designated as confidential or proprietary by the Company; and (iii) information received by the Company from others which the Company has an obligation to treat as confidential.

(c)

Exclusions.  Notwithstanding the foregoing, the terms “Trade Secret” and “Confidential Information” shall not include, and the obligations set forth in this Agreement shall not apply to, any information which: (i) can be demonstrated by Executive to have been known by him prior to his employment by the Company; (ii) is or becomes generally available to the public through no act or omission of Executive; (iii) is obtained by Executive in good faith from a third party who discloses such information to Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating to the information disclosed; or (iv) is independently developed by Executive outside the scope of his employment without use of Confidential Information or Trade Secrets.

ARTICLE V

NON-COMPETITION

5.1

Restrictions on Competition During Employment.  During the Employment Term and any Renewal Term, Executive shall not directly or indirectly compete against the Company, 

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or directly or indirectly divert or attempt to divert Customers’ business from the Company anywhere the Company does or is taking steps to do business.

5.2

Post-Employment Non-Solicitation of Restricted Customers.  For two (2) years following termination of Executive’s employment with the Company, for whatever reason, Executive agrees not to directly or indirectly solicit or attempt to solicit any business from any Restricted Customer in any manner which competes with the services or products offered by the Company in the twelve (12) months preceding termination of Executive’s employment with the Company, or to directly or indirectly divert or attempt to divert any Restricted Customer’s business from the Company.

5.3

Post-Employment Restricted Services Obligation.  For two (2) years following termination of Executive’s employment with the Company, for whatever reason, Executive agrees not to provide Restricted Services to any Competitor.  During such two (2) year period, Executive also will not provide any Competitor with any advice or counsel concerning the provision of Restricted Services.

5.4

Definitions.

(a)

Customer.  The term “Customer” means any individual or entity for whom/which the Company has provided services or products or made a written or formal proposal to perform services or provide products.

(b)

Restricted Customer.   The term “Restricted Customer” means any individual or entity (i) for whom/which the Company provided services or products, and (ii) with whom/which Executive had contact on behalf of the Company or about whom/which Executive acquired non-public information in connection with his employment by the Company during the twenty-four (24) months preceding the end, for whatever reason, of Executive’s employment with the Company; provided, however, that the term “Restricted Customer” shall not include any individual or entity whom/which, through no direct or indirect act or omission of Executive, has terminated its business relationship with the Company.

(c)

Restricted Services.  The term “Restricted Services” means services of any kind or character comparable to those Executive provided to the Company during the twelve (12) months preceding the termination of Executive’s employment with the Company relating to: (i) providing electronic parts catalogs for manufacturers and/or to their dealers and distributors, via compact discs and/or on-line, related to manufactured equipment and their components in the following industry segments: outdoor power (i.e., commercial lawn care); power sports (i.e., motorcycles, snowmobiles, all terrain vehicles); marine (i.e., boats, personal water crafts); recreation vehicles; floor maintenance; auto/truck after-care; agriculture; and construction; (ii) providing on-line, direct mail, electronic mail or other marketing services to equipment manufacturers, distributors and dealers, in the aforementioned industry segments, aimed at helping them market 

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their equipment and related products; and (iii) providing F&I (finance and insurance-type products) and services for dealerships, in the aforementioned industry segments, using an outsourced center approach, where the center performs the primary selling role on behalf of and in conjunction with each dealership, directly to their customers via on-line and telephone interaction.

(d)

Competitor.  The term “Competitor” shall include the following businesses: Snap-on Business Solutions; Dominion Enterprises; 50 Below; Channel Blade; and Enigma, and such businesses’ affiliates, successors and assigns, provided that such businesses are engaged in: (i) providing electronic parts catalogs for manufacturers and/or to their dealers and distributors, via compact discs and/or on-line, related to manufactured equipment and their components in the following industry segments: outdoor power (i.e., commercial lawn care); power sports (i.e., motorcycles, snowmobiles, all terrain vehicles); marine (i.e., boats, personal water crafts); recreation vehicles; floor maintenance; auto/truck after-care; agriculture; and construction; (ii) providing on-line, direct mail, electronic mail or other marketing services to equipment manufacturers, distributors and dealers, in the aforementioned industry segments, aimed at helping them market their equipment and related products; and (iii) providing F&I (finance and insurance-type) products and services for dealerships, in the aforementioned industry segments, using an outsourced center approach, where the center performs the primary selling role on behalf of and in conjunction with each dealership, directly to their customers via on-line and telephone interaction, at the time of Executive’s termination, for whatever reason. 

ARTICLE VI

BUSINESS IDEA RIGHTS

6.1

Assignment.  The Company will own, and Executive hereby assigns to the Company and agrees to assign to the Company, all rights in all Business Ideas which Executive originates or develops whether alone or working with others while Executive is employed by the Company.  All Business Ideas which are or form the basis for copyrightable works are hereby assigned to the Company and/or shall be assigned to the Company or shall be considered “works for hire” as that term is defined by United States Copyright Law. 

6.2

Definition of Business Ideas.  The term “Business Ideas” means all ideas, designs, modifications, formulations, specifications, concepts, know-how, trade secrets, discoveries, inventions, data, software, developments and copyrightable works, whether or not patentable or registrable, which Executive originates or develops, either alone or jointly with others, while Executive is employed by the Company and which are: (i) related to any business known to Executive to be engaged in or contemplated by the Company; (ii) originated or developed during Executive’s working hours; or (iii) originated or developed in whole or in substantial part using materials, labor, facilities or equipment furnished by the Company.  

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6.3

Disclosure.  While employed by the Company, Executive will promptly disclose all Business Ideas to the Board. 

6.4

Execution of Documentation.  Executive, at any time during or after the Employment Term and any Renewal Term, will promptly execute all documents which the Company may reasonably require to perfect its patent, copyright and other rights to such Business Ideas throughout the world. 

ARTICLE VII

NON-SOLICITATION OF EMPLOYEES

During the Employment Term and any Renewal Term and for twelve (12) months thereafter, Executive shall not directly or indirectly encourage any Company employee to terminate his/her employment with the Company or solicit such an individual for employment outside the Company in any manner which would end or diminish that employee’s services to the Company. 

ARTICLE VIII

EXECUTIVE DISCLOSURES AND ACKNOWLEDGMENTS

8.1

Confidential Information of Others.  Executive warrants and represents to the Company that he is not subject to any employment, consulting or services agreement, or any restrictive covenants or agreements of any type, which would conflict or prohibit Executive from fully carrying out his duties as described under the terms of this Agreement.  Further, Executive warrants and represents to the Company that he has not and will not retain or use, for the benefit of the Company, any confidential information, records, trade secrets, or other property of a former employer.

8.2

Scope of Restrictions.  Executive acknowledges that during the course of his employment with the Company, he will gain knowledge of Confidential Information and Trade Secrets of the Company.  Executive acknowledges that the Confidential Information and Trade Secrets of the Company are necessarily shared with Executive on a routine basis in the course of performing his job duties and that the Company has a legitimate protectable interest in such Confidential Information and Trade Secrets, and in the goodwill and business prospects associated therewith.  Accordingly, Executive acknowledges that the scope of the restrictions contained in this Agreement are appropriate, necessary and reasonable for the protection of the Company’s business, goodwill and property rights, and that the restrictions imposed will not prevent him from earning a living in the event of, and after, the end, for whatever reason, of his employment with the Company.

8.3

Prospective Employers.  Executive agrees, during the term of any restriction contained in Articles IV, V, VI, VII and VIII of this Agreement, to disclose this Agreement to any entity which offers employment to Executive.  Executive further agrees that the Company may send a copy of this Agreement to, or otherwise make the provisions hereof known to, any of Executive’s potential employers.

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8.4

Third Party Beneficiaries.  Any Company affiliates are third party beneficiaries with respect to Executive’s performance of his duties under this Agreement and the undertakings and covenants contained in this Agreement and the Company and any of its affiliates enjoying the benefits thereof, may enforce this Agreement directly against Executive.  The terms Trade Secret and Confidential Information shall include materials and information of the Company’s affiliates to which Executive has access.

8.5

Survival.  The covenants set forth in Articles III, IV, V, VI, VII, VIII, and XI of this Agreement shall survive the termination of the Executive’s employment hereunder.

ARTICLE IX

RETURN OF RECORDS

Upon the end, for whatever reason, of his employment with the Company, or upon request by the Board at any time, Executive shall immediately return to the Board all documents, records and materials belonging and/or relating to the Company (except Executive’s own personnel and wage and benefit materials relating solely to Executive), and all copies of all such materials.  Upon the end, for whatever reason, of Executive’s employment with the Company, or upon request of the Board at any time, Executive further agrees to destroy such records maintained by him on his own computer equipment.

ARTICLE X

RELOCATION

The Parties acknowledge and agree that the successful performance of Executive’s duties and responsibilities hereunder is contingent upon Executive’s presence at the Company’s headquarters located in Milwaukee, Wisconsin on a consistent basis.  Accordingly, Executive hereby covenants and agrees to relocate his primary residence to the greater Milwaukee, Wisconsin area within nine (9) months of the date hereof.  For the avoidance of doubt, the Parties acknowledge and agree that as used herein the term “primary residence,” as it applies to Executive, shall have a meaning independent from Executive’s legal domicile.  In the event Executive completes such relocation within such nine (9) month period, the Company shall promptly reimburse Executive, after Executive’s delivery to the Board of a reasonably itemized invoice, for up to Thirty Thousand Dollars ($30,000) of Executive’s actual out-of-pocket moving expenses incurred in connection with such relocation.  In addition, during the period beginning on the date hereof and ending on the earlier of the date Executive completes such relocation or the nine (9) month anniversary of the date hereof, the Company shall continue to reimburse Executive for (a) Executive’s actual out-of-pocket airfare and rental car expenses incurred in connection with Executive’s commute between the greater Atlanta, Georgia area and the greater Milwaukee, Wisconsin area, and (b) up to One Thousand Dollars ($1,000) per calendar month of Executive’s actual out-of-pocket housing expenses (not to include meals and other incidentals), all in accordance with the Company’s applicable expense reimbursement policies.

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ARTICLE XI

INDEMNITY

11.1

Indemnification By Company.  To the extent permitted by applicable law, the Company shall indemnify Executive if Executive is, or is threatened to be, made a party to an action, suit or proceeding (other than by the Company) by reason of the fact that Executive is or was a director or officer of the Company, unless liability was incurred because Executive breached or failed to perform a duty that Executive owes to the Company and such breach or failure constitutes: (1) a willful failure to deal fairly with the Company or its shareholders in connection with a matter in which Executive has a material conflict of interest; (2) a violation of the criminal law, unless Executive had reasonable cause to believe that his conduct was lawful and Executive had no reasonable cause to believe such conduct was unlawful; (3) a transaction from which Executive derived an improper personal profit; or (4) willful misconduct.  

11.2

Indemnification By Executive.  Executive agrees to indemnify and hold harmless the Company against any and all losses, claims, damages, liabilities, costs, expenses (including reasonable attorneys’ fees and costs), judgments and settlements of amounts paid in connection with any threatened, pending or completed action, suit, claim, proceeding or investigation arising out of or pertaining to: (1) unlawful intentional acts committed by Executive in the conduct of the Company’s business; (2) any willful gross negligence committed by Executive other than in the conduct of the Company’s business; and (3) any tax deductions Executive may claim for expenses incurred or claim to have been incurred in connection with Executive’s duties hereunder.

11.3

Insurance.  Notwithstanding the foregoing, the indemnification provided for in this Article XI shall only apply to any costs or expenses incurred by indemnitees which are not covered by applicable liability insurance.  If this Article XI is interpreted to reduce insurance coverage to which an indemnitee would otherwise be entitled in the absence of this provision, this provision shall be deemed inoperative and not part of this Agreement.  This Article XI shall survive the termination of this Agreement.

ARTICLE XII

MISCELLANEOUS

12.1

Notice.  Any and all notices, consents, documents or communications provided for in this Agreement shall be given in writing and shall be personally delivered, mailed by registered or certified mail (return receipt requested), sent by courier (confirmed by receipt), or telefaxed (confirmed by telefax confirmation) and addressed as follows (or to such other address as the addressed Party may have substituted by notice pursuant to this Paragraph 12.1):

To the Company:

ARI Network Services, Inc.

Director of Human Resources

11425 West Lake Park Drive

Milwaukee, WI  53224-3025

Fax: +1 (414) 973-4618

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To Executive:

Roy W. Olivier

7900 North 107th Street, #5

Milwaukee, WI 53224

Such notice, consent, document or communication shall be deemed given upon personal delivery or receipt at the address of the Party stated above or at any other address specified by such Party to the other Party in writing, except that if delivery is refused or cannot be made for any reason, then such notice shall be deemed given on the third day after it is sent.

12.2

Entire Agreement; Amendment; Waiver.  This Agreement (including the COC Agreement and any documents referred to herein) sets forth the entire understanding of the Parties hereto with respect to the subject matter contemplated hereby.  Any and all previous agreements and understandings between or among the Parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement except as provided for in Paragraph 3.3.  This Agreement shall not be amended or modified except by a written instrument duly executed by each of the Parties hereto.  Any extension or waiver by any Party of any provision hereto shall be valid only if set forth in an instrument in writing signed on behalf of such Party.  For purposes of the foregoing two (2) sentences, the Parties acknowledge and agree that any such written instrument to be signed by the Company shall require the signature of a representative of the Company duly authorized by the Board to bind the Company to the terms of such written instrument.

12.3

Headings.  The headings of sections and paragraphs of this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of its provisions.

12.4

Assignability.  This Agreement is personal to the Executive, and the Executive may not assign or delegate any of the Executive’s rights or obligations hereunder without first obtaining the written consent of the Board.  The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by an assumption agreement in form and substance satisfactory to the Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.  If such succession or assignment does not take place, and if this Agreement is not otherwise binding on the Executive’s successors or assigns by operation of law, the Executive is entitled to compensation from the Company in the same amount and on the same terms as provided for in this Agreement.  This Agreement shall be binding on and inure to the benefit of each Party and such Party’s respective heirs, legal representatives, successors and assigns.  

12.5

Mitigation.  The Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise. 

12.6

Attorneys’ Fees.  Executive is entitled to reimbursement for reasonable legal expenses incurred in connection with drafting and negotiating this Agreement up to a cap of Ten Thousand and No/100 Dollars ($10,000.00).  Such reimbursement shall be paid within sixty (60) 

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days of Executive’s submission of relevant invoices and/or receipts to the Board, provided Executive submits such documentation to the Board within six (6) months of receiving such invoice.

12.7

Injunctive Relief.  The Parties agree that damages will be an inadequate remedy for breaches of this Agreement and in addition to damages and any other available relief, a court shall be empowered to grant injunctive relief.

12.8

Waiver of Breach.  The waiver by either Party of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either Party.

12.9

Severability.  If any court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then such invalidity or unenforceability shall have no effect on the other provisions hereof, which shall remain valid, binding and enforceable and in full force and effect, and, to the extent allowed by law, such invalid or unenforceable provision shall be construed in a manner so as to give the maximum valid and enforceable effect to the intent of the Parties expressed therein.

12.10

Consideration.  Execution of this Agreement is a condition of Executive’s employment with the Company and Executive’s employment and other benefits provided for herein by the Company constitutes the consideration for Executive’s undertakings hereunder.

12.11

Governing Law.  This Agreement shall in all respects be construed according to the laws of the State of Wisconsin, without regard to its conflict of laws principles. 

12.12

Authority to Bind the Company.  The Company represents and warrants that the undersigned representative of the Company has the authority of the Board to bind the Company to the terms of this Agreement.

14

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as of the date first written above.

EXECUTIVE:

/s/ Roy W. Olivier                                                 

Roy W. Olivier

ARI NETWORK SERVICES, INC.

By: /s/ Brian E. Dearing                                          

       Brian E. Dearing, Chief Executive Officer and

       Chairman of the Board

15exv10w1

 

E. I. du Pont de Nemours and Company 

Management Deferred Compensation Plan

(Effective January 1, 2008)

Article 1. Purpose. E. I. du Pont de Nemours and Company (“Company”) desires to provide
certain of its employees with an opportunity to accumulate additional retirement savings through
voluntary compensation deferral contributions to a plan intended to constitute a non-qualified
deferred compensation plan which, in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), is unfunded and
maintained by the Company primarily for the purpose of providing deferred compensation for a select
group of management or highly compensated employees. The Company intends that a participant’s
compensation deferrals, and the earnings thereon, will not be subject to federal income tax until
such amounts are paid or made available to the participant.

Article 2. Definitions 

     Section 2.01 “Account” means each account established on the books of account of
the Employer to reflect the balance of Plan benefits attributable to a Participant. An
Account shall be credited or debited, as applicable, with Deferral Contributions, Credited
Investment Return and Dividend Equivalent Units, and any payments made by the Employer to the
Participant or the Participant’s Beneficiary pursuant to this Plan. A Participant’s Account
shall be divided into Directed Investment Subaccounts, with respect to which he/she shall be
permitted to make Deemed Investment Elections, and Stock Unit Subaccounts, with respect to
which he/she shall not be permitted to make Deemed Investment Elections.

     Section 2.02 “Active Participant” means a Participant on whose behalf a current
Deferral Election is in effect.

     Section 2.03 “Administrator” means the Company.

     Section 2.04 “Affiliate” means any corporation, organization or entity which is
under common control with the Company or which is otherwise required to be aggregated with
the Company pursuant to paragraphs (b), (c), (m), or (o) of Section 414 of the Code.

     Section 2.05 “Base Salary” means the basic pay from the Employer (excluding LTI
Awards and STI Awards, distributions from nonqualified deferred compensation plans,
commissions, overtime, severance, fringe benefits, stock options and other equity awards,
relocation expenses, incentive payments, non-monetary awards, automobile and other

1

 

allowances (whether or not such allowances are included in the Employee’s gross income)
and other non-regular forms of compensation paid to a Participant for employment services
rendered). Base Salary shall be calculated before reduction for compensation voluntarily
deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of
any Employer and shall be calculated to include amounts not otherwise included in the
Participant’s gross income under Code Sections 125, 132, 402(e)(3), 402(h), or 403(b)
pursuant to plans or arrangements established by any Employer; provided, however, that all
such amounts will be included in Base Salary only to the extent that had there been no such
plan, the amount would have been payable in cash to the Employee. Notwithstanding anything in
this Plan to the contrary, Base Salary shall not include any amount paid pursuant to a
disability plan or pursuant to a disability insurance policy.

     Section 2.06 “Base Salary Deferral Eligible Employee” means any U.S.-based
employee of the Employer who is designated from time to time by the Employer as eligible to
defer the payment of Base Salary in accordance with Article 4 hereof.

     Section 2.07 “Beneficiary” means the person or persons designated as such
pursuant to Article 7 hereof.

     Section 2.08 “Change of Control” means an objectively determined event that
occurs with respect to the Company or the Employer for whom the Participant renders services
and which constitutes both a Change in Control for purposes of the Equity and Incentive Plan
and change in the ownership or effective control of the Company or Employer, as applicable,
or in the ownership of a substantial portion of the Company’s or Employer’s, as applicable,
assets for purposes of Code Section 409A.

     Section 2.09 “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations and rulings issued thereunder.

     Section 2.10 “Common Stock Unit” means a notional unit representing one share of
common stock of the Company.

     Section 2.11 “Credited Investment Return” means the hypothetical gain or loss
credited to a Participant’s Directed Investment Subaccounts pursuant to Article 5 hereof.

     Section 2.12 “Deemed Investment Election” means the selection by a Participant,
pursuant to Article 5 hereof, of Investment Options in which his/her Directed Investment
Subaccounts shall be deemed invested.

2

 

     Section 2.13 “Deferral Contributions” means the elective contributions made to
the Plan by a Participant pursuant to Article 4 hereof.

     Section 2.14 “Deferral Election” means an election, pursuant to Article 4
hereof, to defer receipt of Base Salary or STI Awards, or the settlement of LTI Awards.

     Section 2.15 “Directed Investment Subaccount” means that portion of a
Participant’s Account to which a Participant’s Deferral Contributions of Base Salary and STI
Awards, and Credited Investment Return and Dividend Equivalent Units attributable thereto,
will be allocated and with respect to which he/she may make Deemed Investment Elections in
accordance with Article 5 hereof. A Participant may maintain no more than five (5) Directed
Investment Subaccounts under this Plan.

     Section 2.16 “Dividend Equivalent Units” means additional Common Stock Units
credited to a Participant’s Account pursuant to Section 5.05.

     Section 2.17 “Dividend Payment Date” means each date on which the Company pays a
dividend on its common stock.

     Section 2.18 “Effective Date” means January 1, 2008. Notwithstanding the
foregoing to the contrary, provisions of this Plan related to the deferral of Base Salary and
LTI Awards shall not be effective until January 1, 2009.

     Section 2.19 “Eligible Employee” means any Base Salary Deferral Eligible
Employee, STI Deferral Eligible Employee or LTI Deferral Eligible Employee.

     Section 2.20 “Employer” means the Company and any Affiliate which, with the
consent of the Company, adopts this Plan.

     Section 2.21 “Equity and Incentive Plan” means the E.I. du Pont de Nemours and
Company Equity and Incentive Plan.

     Section 2.22 “Form of Payment” means either (i) a lump sum or (ii) annual
installments (for up to fifteen (15) years).

     Section 2.23 “Identification Date” means each December 31.

3

 

     Section 2.24 “Investment Options” means one or more alternatives designated from
time to time, pursuant to Section 5.01 hereof, for purposes of crediting earnings or losses
to Directed Investment Subaccounts.

     Section 2.25 “LTI Award” means an award of RSUs or PSUs.

     Section 2.26 “LTI Deferral Eligible Employee” means any U.S.-based employee of
the Employer who is designated from time to time by the Company as eligible to defer the
settlement of an LTI Award in accordance with Article 4 hereof.

     Section 2.27 “Participant” means any Eligible Employee who has elected to
participate in the Plan by completing the appropriate forms (including electronic forms)
prescribed by the Administrator for that purpose.

     Section 2.28 “Payment Event” means any one of the following:

     (a) Separation from Service

     (b) Specified date or fixed schedule of payments (provided that if a Participant who
has elected this option dies prior to the date payments would otherwise have commenced
hereunder, the applicable subaccount(s) shall automatically be paid to his/her
beneficiary as soon as practicable thereafter)

     (c) Earlier to occur of (a) or (b) above

     (d) Change of Control, if occurring prior to (a) or (b) above.

Notwithstanding the foregoing, a Participant may request that all or a portion of his/her
Account be distributed on account of an “unforeseeable emergency” as defined in Treasury
Regulation Section 1.409A-3(i)(3) and subject to the restrictions on such distributions
set forth therein.

     Section 2.29 “Plan” means the E.I du Pont de Nemours and Company Management
Deferred Compensation Plan.

     Section 2.30 “Plan Year” means the twelve (12) month period beginning January 1
and ending December 31.

     Section 2.31 “PSU” means a performance-based restricted stock unit granted under
the Equity and Incentive Plan.

4

 

     Section 2.32 “Qualified Leave” means military leave, sick leave, or other bona
fide leave of absence if the period of such leave does not exceed six months, or if longer,
so long as the individual retains a right to reemployment with the service recipient under an
applicable statute or by contract. A leave of absence constitutes a bona fide leave of
absence only if there is a reasonable expectation that the employee will return to perform
services for the employer. If the period of leave exceeds six months and the individual does
not retain a right to reemployment under an applicable statute or by contract, the employment
relationship is deemed to terminate on the first date immediately following such six-month
period.

     Section 2.33 “RSU” means a time-vested restricted stock unit granted under the
Equity and Incentive Plan.

     Section 2.34 “Section 16 Person” means any employee who is subject to the
reporting requirements of Section 16(a) or the liability provisions of Section 16(b) of the
Securities and Exchange Act of 1934, as amended.

     Section 2.35 “Separation from Service” means a “separation from service” as
defined in Treasury Regulation Section 1.409A-1(h).

     Section 2.36 “Similar Plan” means a plan required to be aggregated with this
Plan under Treasury Regulation 

Section 1.409A-1(c)(2)(i)(A).

     Section 2.37 “Specified Employee” means an officer of the Employer at any time
during the 12-month period ending on an Identification Date. If a Participant is a Specified
Employee as of an Identification Date, such Participant is treated as a Specified Employee
for the 12-month period beginning on the first day of the first month following the
Identification Date.

     Section 2.38 “STI Award” means a cash-based award under the Equity and Incentive
Plan.

     Section 2.39 “STI Deferral Eligible Employee” means any U.S.-based employee of
the Employer who is designated from time to time by the Employer as eligible to defer the
payment of an STI Award in accordance with Article 4 hereof.

     Section 2.40 “Stock Unit Subaccount” means that portion of a Participant’s
Account to which a Participant’s Deferral Contributions of LTI Awards, and Dividend
Equivalent Units attributable thereto, will be allocated

5

 

and with respect to which he/she may not make Deemed Investment Elections in accordance
with Article 5 hereof. A Participant may maintain no more than five (5) Stock Unit
Subaccounts under this Plan.

     Section 2.41 “Triggering Event” means, with respect to a Distribution
Subaccount, the Payment Event elected by a Participant pursuant to Section 4.03.

Article 3. Eligibility.

     Section 3.01 Procedure For and Effect of Admission. Each Eligible Employee who
desires to participate in this Plan shall complete such forms (including electronic forms)
and provide such data as is reasonably required by the Administrator. By becoming a
Participant, an Eligible Employee shall be deemed to have consented to the provisions of this
Plan and all amendments hereto.

     Section 3.02 Cessation of Participation. A Participant shall cease to be an
Active Participant on the earlier of:

     (a) The date on which the Plan terminates;

     (b) The date on which he/she ceases to be an Eligible Employee; or

     (c) The date on which he/she is permitted by the Administrator to terminate Deferral
Contributions to the Plan.

     A former Active Participant will be considered a Participant for all purposes, except
with respect to the right to make contributions, as long as he/she retains an Account.

Article 4. Deferral Elections

     Section 4.01 Annual Deferral Election.

6

 

     (a) Deferral Contributions of Base Salary. Prior to the last day of the
calendar year preceding the first day of a Plan Year, a Base Salary Deferral Eligible
Employee may elect, in a written or electronic notification to the Administrator, to
defer a percentage, not to exceed 60%, of his/her Base Salary payable with respect to
services performed during the Plan Year. Any election made pursuant to this section
shall remain in effect unless and until changed by the Participant; provided, however,
that with respect to Base Salary earned in any future taxable year, such election becomes
irrevocable on December 31 of the preceding calendar year.

     (b) Deferral Contributions of STI Awards. With respect to any STI Award, an
STI Deferral Eligible Employee may elect, in a written or electronic notification to the
Company on or before the sixth month prior to the last day of the performance period over
which the STI Award shall be determined, to defer a percentage, not to exceed 60%, of
such STI Award; provided, however, that such STI Deferral Eligible Employee performs
services continuously from the later of the beginning of the performance period or the
date the performance criteria are established through the date the election to defer is
made. Such election shall remain in effect unless and until changed by the Participant;
provided, however, that with respect to any STI Award earned during any future taxable
year, such election becomes irrevocable no later than six (6) months before the end of
the performance period over which the STI Award shall be determined.

     (c) Deferral Contributions of LTI Awards.

     (i) RSUs. On or before the last day of the calendar year preceding the
first day of a Plan Year, an LTI Deferral Eligible Employee may elect to defer the
settlement of RSUs granted during such Plan Year. Notwithstanding the foregoing, an LTI
Deferral Eligible Employee may elect to defer the settlement of RSUs that are subject to
a vesting period of at least 12 months, provided such election is made on or before the
thirtieth (30th) day after the LTI Deferral Eligible Employee is granted the RSUs and
further provided that the election is made at least 12 months in advance of the earliest
date on which the vesting period could expire. In the event that a timely election to
defer the settlement of RSUs may not be made pursuant to either of the foregoing
sentences of this paragraph, an LTI Deferral Eligible Employee may elect to defer the
settlement of RSUs provided such election is made at least 12 months in advance of the
date on which the restrictions on such RSUs lapse and further provided that such RSUs may
not be settled until the fifth anniversary of the date that the restrictions on the RSUs
lapsed. Notwithstanding the foregoing to the contrary, an LTI Deferral Eligible Employee
shall not be permitted to elect to defer the settlement of RSUs unless such election
complies with Code Section 409A. If a Participant elects to defer settlement of RSUs,
any restrictions on transferability

7

 

and/or events of forfeiture applicable to such RSUs under the Equity and Incentive
Plan or the Award Terms (as defined under the Equity and Incentive Plan) shall continue
in full force and effect. Upon expiration of all restrictions on transferability, the
appropriate number of Common Stock Units of the Company, including Dividend Equivalent
Units attributable thereto, shall be credited to the Participant’s applicable Stock Unit
Subaccount. Any election made pursuant to this Section shall remain in effect unless and
until changed by the Participant; provided, however, that with respect to RSUs granted in
any future taxable year, such election becomes irrevocable on or before the last day of
the calendar year preceding the Plan Year during which the RSUs are granted or, if later,
on or before the thirtieth (30th) day after the LTI Deferral Eligible Employee is granted
the RSUs and at least 12 months in advance of the earliest date on which the vesting
period could expire.

     (ii) PSUs. An LTI Deferral Eligible Employee may elect, in a written or
electronic notification to the Company on or before the sixth month prior to the last day
of the performance period over which the PSUs shall be determined, to defer the
settlement of such PSUs. Such election shall remain in effect unless and until changed
by the Participant; provided, however, that with respect to any PSUs earned during any
future taxable year, such election becomes irrevocable no later than six (6) months
before the end of the performance period over which the PSUs shall be determined.

     Section 4.02 Initial Eligibility.

     (a) Deferral Contributions of Base Salary. Notwithstanding the foregoing,
an employee who first becomes a Base Salary Deferral Eligible Employee during a Plan Year
may elect to defer a percentage, not to exceed 60%, of his/her Base Salary payable with
respect to services performed during that Plan Year, provided that such Base Salary
Deferral Eligible Employee has not previously become eligible to participate in this or
any Similar Plan. Such election must be made within 30 days after the date the employee
becomes a Base Salary Deferral Eligible Employee and shall apply to Base Salary earned
for services performed after the election is filed with the Administrator. Any election
made pursuant to this Section shall remain in effect unless and until changed by the
Participant; provided, however, that with respect to Base Salary earned in any future
taxable year, such election becomes irrevocable on December 31 of the preceding calendar
year.

     (b) Deferral Contributions of STI Awards. Notwithstanding the foregoing, an
employee who first becomes a STI Deferral Eligible Employee during a Plan Year, but after
the beginning of the performance period, may elect to defer up to 60% of the portion of
his/her STI Award payable with respect to services performed after the election, provided

8

 

that such STI Deferral Eligible Employee has not previously become eligible to
participate in this or any Similar Plan. For this purpose, an election will be deemed to
apply to the portion of an STI Award paid for services performed after the election if
the election applies to no more than an amount equal to the total amount of the STI Award
multiplied by the ratio of the number of days remaining in the performance period after
the election over the total number of days in the performance period. Any election made
pursuant to this Section shall remain in effect unless and until changed by the
Participant; provided, however, that with respect to any STI Award earned during any
future taxable year, such election becomes irrevocable no later than six (6) months
before the end of the period over which the STI Award shall be determined.

     Section 4.03 Initial Distribution Elections.

     (a) Directed Investment Subaccounts. A Participant may elect to establish
up to five (5) Directed Investment Subaccounts under his/her Account. At the time a
Participant establishes a Directed Investment Subaccount, he/she must also elect a
Payment Event and Form of Payment with respect to such subaccount. When making a
Deferral Election with respect to Base Salary or STI Awards, a Participant shall
designate: (i) to which Directed Investment Subaccounts amounts deferred pursuant to
that election, and Credited Investment Return and Dividend Equivalent Units attributable
thereto, shall be allocated; and (ii) how those amounts shall be allocated among the
designated Directed Investment Subaccounts. If a Participant fails to establish a
Directed Investment Subaccount or fails to designate the Directed Investment
Subaccount(s) to which his/her Deferral Contributions of Base Salary or STI Awards should
be allocated, such Deferral Contributions shall be allocated to the default Directed
Investment Subaccount established by the Administrator. The Payment Event with respect
to such default Directed Investment Subaccount shall be Separation of Service and the
Form of Payment shall be a lump sum.

     (b) Stock Unit Subaccount. A Participant may elect to establish up to five
(5) Stock Unit Subaccounts under his/her Account. At the time a Participant establishes
a Stock Unit Subaccount, he/she must also elect a Payment Event and Form of Payment with
respect to such subaccount. When making a Deferral Election with respect to LTI Awards,
a Participant shall designate: (i) to which Stock Unit Subaccounts amounts deferred
pursuant to that election, and Dividend Equivalent Units attributable thereto, shall be
allocated; and (ii) how those amounts shall be allocated among the designated Stock Unit
Subaccounts. If a Participant fails to establish a Stock Unit Subaccount or fails to
designate the Stock Unit Subaccount(s) to which his/her Deferral Contributions of LTI
Awards should be allocated, such Deferral Contributions shall be allocated to the default
Stock Unit Subaccount

9

 

established by the Administrator. The Payment Event with respect to such default
Stock Unit Subaccount shall be Separation of Service and the Form of Payment shall be a
lump sum.

     Section 4.04 Subsequent Distribution Elections. A Participant may subsequently
elect to change the Payment Event or Form of Payment elected with respect to one or more
Directed Investment Subaccounts or Stock Unit Subaccounts in accordance with procedures
established by the Administrator for such purpose; provided, however, that: (i) such
subsequent election may not take effect until at least 12 months after the date on which it
is made; (ii) the payment with respect to which such election is made must be deferred for a
period of not less than five (5) years from the date such payment would otherwise have been
made; and (iii) any subsequent election related to a payment at a specified time or in
accordance with a fixed schedule may not be made less than 12 months prior to the date of the
first scheduled payment.

Article 5. Investment of Accounts

     Section 5.01 Investment Options. The Administrator shall designate from time to
time one or more Investment Options in which a Participant’s Directed Investment Subaccounts
may be deemed invested. The Administrator shall have the sole discretion to determine the
number of Investment Options to be designated hereunder and the nature of the Investment
Options and may change or eliminate any of the Investment Options from time to time. In the
event of such change or elimination, the Administrator shall give each Participant timely
notice and opportunity to make a new election. No such change or elimination of any
Investment Options shall be considered to be an amendment to the Plan pursuant to Section
9.01.

     Section 5.02 Making Deemed Investment Elections. A Participant shall select one
or more Investment Options in which his/her Directed Investment Subaccounts shall be deemed
invested. Separate Deemed Investment Elections may be made with respect to each Directed
Investment Subaccount. Any such election shall be made by filing with the Administrator the
appropriate form prescribed for that purpose. The Administrator shall establish procedures
relating to Deemed Investment Elections. Deemed Investment Elections shall remain in affect
until changed by a Participant pursuant to Section 5.03.

     Section 5.03 Changes to Deemed Investment Elections. A Participant may request
a change to his/her Deemed Investment Elections for future amounts allocated to his/her
Directed Investment Subaccount and amounts already allocated to his/her Directed Investment
Subaccount. Any such change shall be made by filing with the Administrator the appropriate

10

 

form (including electronic forms) prescribed by the Administrator for that purpose. The
Administrator shall establish procedures relating to changes in Deemed Investment Elections,
which may include limiting the percentage, amount and frequency of such changes and
specifying the effective date for any such changes.

     Section 5.04 Crediting or Debiting of Investment Experience. Each Participant’s
Directed Investment Subaccount shall be credited or debited, as applicable, daily with the
amount which the Participant’s Directed Investment Subaccount would have earned or lost, as
applicable, if the amounts credited to such account had, in fact, been invested in accordance
with the Participant’s Deemed Investment Elections.

     Section 5.05 Dividend Equivalent Units. If dividends on the Company’s common
stock are paid during any period that a Participant holds Common Stock Units in one or more
of his/her Directed Investment Subaccounts or Stock Unit Subaccounts, as of the applicable
Dividend Payment Date, a number of additional Common Stock Units shall be credited to such
Directed Investment Subaccount(s) or Stock Unit Subaccount(s), as applicable. The number of
such additional Common Stock Units to be credited shall be determined by first multiplying:
(a) the total number of Common Stock Units, including fractional units, standing to the
Participant’s credit in such account on the day immediately preceding such Dividend Payment
Date (including all Dividend Equivalent Units credited to such account on all previous
Dividend Payment Dates); by (b) the per share dollar amount of the dividend paid on such
Dividend Payment Date; and then (c) dividing the resulting amount by the closing price of one
share of the Company’s common stock on such Dividend Payment Date.

Article 6. Payment of Accounts

     Section 6.01 Payment in General. Upon the occurrence of a Triggering Event that
is a Separation from Service or a Change of Control, the Employer shall, within 90 days
thereafter, commence payment of the applicable Distribution Subaccount(s) to the Participant,
or his/her Beneficiary, as applicable, in the Form of Payment elected by the Participant with
respect thereto. Upon the occurrence of a Triggering Event that is a specified date or a
fixed schedule of payments, the Employer shall commence payment of the applicable Subaccount
to the Participant on such specified date or in accordance with such fixed schedule of
payments. The amount of each payment made pursuant to this section shall be based upon the
fair market value of the Participant’s Account as of the latest practicable date preceding
the payment date and the number of remaining scheduled payments due.

11

 

     Section 6.02 Specified Employees. Notwithstanding Section 6.01, upon the
occurrence of a Triggering Event that is a Separation from Service (other than on account of
death), the Employer shall commence payment of the applicable Distribution Subaccount(s) to
the Participant in the Form of Payment elected by the Participant with respect thereto on the
later of: (1) the date that is six months and one day after such Triggering Event; or (2) the
date on which such payment was otherwise scheduled to commence.

     Section 6.03 Medium of Payments. Payments attributable to that portion of a
Participant’s Directed Investment Subaccount which is deemed to be invested in Common Stock
Units shall be paid in shares of the Company’s common stock for each whole unit and cash for
each fraction of a unit. Payments attributable to the remaining portion of a Participant’s
Directed Investment Subaccount shall be paid in cash. Payments attributable to a
Participant’s Stock Unit Subaccounts shall be delivered in shares of the Company’s common
stock for each whole unit and cash for each fraction of a unit.

Article 7. Beneficiary Designation

     Section 7.01 Right to Designate Beneficiary. The Participant will have the
right, at any time, to designate any person or persons as Beneficiary (both primary and
contingent) to whom payment under the Plan will be made in the event of the Participant’s
death. The Beneficiary designation will be effective when it is submitted in writing or
electronically to the Administrator during the Participant’s lifetime on a form prescribed by
the Administrator.

     Section 7.02 Cancellation/Revocation of Beneficiary Designation. The submission
of a new Beneficiary designation will cancel all prior Beneficiary designations.

     Section 7.03 Failure to Designate Beneficiary or Death of Beneficiary. If a
Participant fails to designate a Beneficiary as provided above, or if every person designated
as Beneficiary predeceases the Participant, then the Administrator will direct the
distribution of the benefits to the Participant’s estate. If a primary Beneficiary dies after
commencement the Participant’s death but prior to completion of benefits under this Plan, and
no contingent Beneficiary has been designated by the Participant, any remaining payments will
be paid to the Beneficiary’s estate.

Article 8. Plan Administration

     Section 8.01 Administrator’s Responsibilities. The Administrator is responsible
for the day to day administration of the Plan. The Administrator

12

 

may appoint other persons or entities to perform certain of its functions. Such
appointment shall be made and accepted by the appointee in writing and shall be effective
upon the written approval of the Company. The Administrator and any such appointee may
employ advisors and other persons necessary or convenient to help him/her carry out his/her
duties. The Administrator shall have the right to remove any such appointee from his/her
position. Any person, group of persons or entity may serve in more than one capacity.

     Section 8.02 Records and Accounts. All individual and group records relating to
Participants and Beneficiaries, and all other records necessary for the proper operation of
the Plan, shall be made available to the Employer and to each Participant and Beneficiary for
examination during business hours except that a Participant or Beneficiary shall examine only
such records as pertain exclusively to the examining Participant or Beneficiary and those
records and documents relating to all Participants generally.

     Section 8.03 Administrator’s Specific Powers and Duties. In addition to any
powers, rights and duties set forth elsewhere in the Plan, the Administrator shall have the
following powers and duties:

     (a) to adopt such rules and regulations consistent with the provisions of the Plan;

     (b) to enforce the Plan in accordance with its terms and any rules and regulations
it establishes;

     (c) to maintain records concerning the Plan sufficient to prepare reports, returns
and other information required by the Plan or by law;

     (d) to construe and interpret the Plan and to resolve all questions arising under
the Plan;

     (e) to direct the Employer to pay benefits under the Plan, and to give such other
directions and instructions as may be necessary for the proper administration of the
Plan;

     (f) to engage assistants and professional advisors.

     Section 8.04 Construction of the Plan. The Administrator shall have the sole
and absolute discretion to interpret the Plan and shall resolve all questions arising in the
administration, interpretation and application of the Plan. The Administrator shall correct
any defect, reconcile any inconsistency, or supply any omission with respect to this Plan.
All such corrections, reconciliations, interpretations and completions of Plan provisions
shall be final and binding upon the parties.

13

 

     Section 8.05 Employer’s Responsibility to Administrator. Each Employer shall
furnish the Administrator such data and information as it may require. The records of the
Employer shall be determinative of each Participant’s period of employment, termination of
employment and the reason therefor, leave of absence, reemployment, years of service,
personal data, and compensation reductions. Participants and their Beneficiaries shall
furnish to the Administrator such evidence, data, or information, and execute such documents,
as the Administrator requests.

     Section 8.06 Engagement of Assistants and Advisers; Plan Expenses. The
Administrator shall have the right to hire such professional assistants and consultants as
it, in its sole discretion, deems necessary or advisable, including, but not limited to:

     (a) investment managers and/or advisers;

     (b) accountants;

     (c) actuaries;

     (d) attorneys;

     (e) consultants; and

     (f) clerical and office personnel.

     Section 8.07 Liability. Neither the Administrator nor the Employer shall be
liable to any person for any action taken or omitted in connection with the administration of
this Plan unless attributable to its own fraud or willful misconduct; nor shall the Employer
be liable to any person for such action unless attributable to fraud or willful misconduct on
the part of a director, officer or employee of the Employer.

     Section 8.08 Payment of Expenses. If directed by the Company, expenses of the
Administrator incurred in the operation or administration of this Plan shall be charged
against the Participant’s Accounts to which the expense relates. If an expense is applicable
to more than one Participant’s Accounts, the expense shall be allocated among such
Participants’ Accounts in a non-discriminatory manner as determined by the Company.

     Section 8.09 Indemnity of Administrator. The Employer shall indemnify the
Administrator (including any individual who is a member of a committee serving as the
Administrator) or any individual who is a delegate of the Administrator against any and all
claims, loss, damage, expense or

14

 

liability arising from any action or failure to act, except when due to gross negligence
or willful misconduct.

Article 9. Amendment or Termination 

     Section 9.01 Amendment. The Board of Directors of the Company, or its delegate,
may amend the Plan at any time and from time to time and any amendment may have retroactive
effect, including, without limitation, amendments to the amount of contributions; provided,
however, that no amendment shall (i) reduce the value of a Participant’s Account or (ii)
change the form or timing of payment of an amount contributed prior to the date of amendment.

     Section 9.02 Termination. While the Plan is intended to be permanent, the Board
of Directors of the Company, or its delegate, may at any time terminate or partially
terminate the Plan, provided that upon such termination, except to the extent otherwise
permitted under Code Section 409A, all Accounts will be distributed in accordance with the
terms of the Plan as in effect on the date of termination. Written notice of such
termination or partial termination, setting forth the date and terms thereof, shall be given
to the Administrator.

Article 10. Miscellaneous

     Section 10.01 Section 16 Person. With respect to Section 16 Persons, the
Administrator may establish, in writing, such rules, regulations, policies or practices
hereunder which it deems, in its sole discretion, to be necessary and appropriate.

     Section 10.02 Claims Review. In any case in which a claim for Plan benefits of
a Participant or Beneficiary is denied or modified, the Administrator shall furnish written
notice to the claimant within 90 days (or within 180 days if additional information requested
by the Administrator necessitates an extension of the 90-day period), which notice shall:

15

 

     (a) State the specific reason or reasons for the denial or modification;

     (b) Provide specific reference to pertinent Plan provisions on which the denial or
modification is based;

     (c) Provide a description of any additional material or information necessary for
the Participant, his/her Beneficiary, or representative to perfect the claim and an
explanation of why such material or information is necessary; and

     (d) Explain the Plan’s claim review procedure as contained herein, including the
claimant’s right to bring a civil action under Section 502(a) of ERISA following an
adverse review determination.

     In the event a claim for Plan benefits is denied or modified, if the Participant,
his/her Beneficiary, or a representative of such Participant or Beneficiary desires to have
such denial or modification reviewed, he/she must, within 60 days following receipt of the
notice of such denial or modification, submit a written request for review by the
Administrator of its initial decision. In connection with such request, the Participant,
his/her Beneficiary, or the representative of such Participant or Beneficiary may review any
pertinent documents upon which such denial or modification was based and may submit issues
and comments in writing. Within 60 days following such request for review the Administrator
shall, after providing a full and fair review, render its final decision in writing to the
Participant, his/her beneficiary or the representative of such Participant or Beneficiary
stating specific reasons for such decision, making specific references to pertinent Plan
provisions upon which the decision is based and stating that the claimant is entitled to
receive, upon request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claim. If special circumstances require an
extension of such 60-day period, the Administrator’s decision shall be rendered as soon as
possible, but not later than 120 days after receipt of the request for review. If an
extension of time for review is required, written notice of the extension shall be furnished
to the Participant, Beneficiary, or the representative of such Participant or Beneficiary
prior to the commencement of the extension period.

     Section 10.03 Limitation of Participant’s Rights. Nothing in this Plan shall be
construed as conferring upon any Participant any right to continue in the employment of an
Employer, nor shall it interfere with the rights of an Employer to terminate the employment
of any Participant and/or take any personnel action affecting any Participant without regard
to the effect which such action may have upon such Participant as a recipient or prospective
recipient of benefits under the Plan.

16

 

     Section 10.04 Obligations to Employer. If a Participant becomes entitled to a
distribution of benefits under the Plan, and if at such time the Participant has outstanding
any debt, obligation, or other liability representing an amount owing to an Employer, then
such Employer may offset such amount owed to it against the amount of benefits otherwise
distributable. Such determination shall be made by the Administrator.

     Section 10.05 Nonalienation of Benefits. Except as expressly provided herein,
no Participant or Beneficiary shall have the power or right to transfer (otherwise than by
will or the laws of descent and distribution), alienate, or otherwise encumber the
Participant’s interest under the Plan. Any such attempted assignment shall be considered
null and void. The interest of any Participant or any beneficiary receiving payments
hereunder shall not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the Participant
or the Participant’s Beneficiary. An Employer’s obligations under this Plan are not
assignable or transferable except to (a) a business entity which acquires all or
substantially all of an Employer’s assets or (b) any business entity into which an Employer
may be merged or consolidated.

     Section 10.06 Unfunded Status of Plan. The Plan is intended to constitute an
“unfunded” plan of deferred compensation for Participants for tax and for purposes of Title I
of ERISA. The Plan constitutes a mere promise by the Employer to make benefit payments in
the future. Each Employer shall not be liable for any benefit payments to any other
Employer’s Eligible Employees who are Participant is this Plan. Benefits payable hereunder
shall be payable out of the general assets of the applicable Employer, and no segregation of
any assets whatsoever for such benefits shall be made. With respect to any payments not yet
made to a Participant, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of his/her Employer.

     Section 10.07 Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and effect without
regard to such unenforceable provision and shall be applied as though the unenforceable
provision were not contained in the Plan.

     Section 10.08 Gender, Singular & Plural. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of
the person or persons may require. As the context may require, the singular may be read as
the plural and the plural as the singular.

     Section 10.09 Notice. Any notice or filing required or permitted to be given to
the Administrator under the Plan shall be sufficient if in writing and

17

 

hand delivered, or sent by registered or certified mail, to the Administrator or to such
representatives as the Administrator may designate from time to time. Such notice shall be
deemed given as to the date of delivery or, if delivery is made by mail, as of the date shown
on the postmark on the receipt for registration or certification.

     Section 10.10 Governing Law. The Plan shall be governed and construed under the
laws of the State of Delaware to the extent not preempted by Federal law which shall
otherwise control.

     Section 10.11 Binding Terms. The provisions of the Plan shall be binding upon
and inure to the benefit of the parties hereto, their respective heirs, executors,
administrators and successors.

     Section 10.12 Headings. All headings preceding the text of the several Sections
hereof are inserted solely for reference and shall not constitute a part of this Plan, nor
affect its meaning, construction or effect.

     Section 10.13 Representations. The Employer does not represent or guarantee
that any particular federal or state income, payroll, personal property or other tax
consequence will result from participation in the Plan. A Participant should consult with
professional tax advisors to determine the tax consequences of his/her participation. In
addition, the Company does not represent or guarantee positive Credited Investment Return and
shall not be required to restore any negative Credited Investment Return.

     Section 10.14 Compliance with Section 409A. The Company intends that this Plan
provide for the deferral of compensation as permitted under Code Section 409A. If any
provision of this Plan is determined to be inconsistent with such intent, it shall be
severable and the balance of this Plan shall remain in full force and effect.

18

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