Document:

STOCK
PURCHASE AGREEMENT

     

    by
and among

     

    SOUTHPEAK
INTERACTIVE CORPORATION,

     

    AND

     

    THE
PURCHASER INDENTIFIED HEREIN

     

    As
of May 5, 2010

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    STOCK
PURCHASE AGREEMENT

     

    This
Stock Purchase Agreement (the “Agreement”) dated as
of May 5, 2010, by and among SouthPeak Interactive Corporation, a Delaware
corporation (“Company”), and the
purchasers whose names appear on the signature pages attached hereto (each an
“Purchaser”,
and collectively, the “Purchasers”).

     

    Whereas,
each Purchaser is a holder of one or more of the Company’s Class W warrants (the
“Class W
Warrants”) and/or Class Z warrants (the “Class Z Warrants,”
and with the Class W Warrants, the “Warrants”);

     

    Whereas,
the Warrants are exercisable at various strike prices that exceed the current
trading price of the Company’s common stock (the “Common Stock”);
and

     

    Whereas,
in order to enhance the liquidity of the Purchasers’ holdings and reduce the
number of Warrants outstanding, the Company and the Purchasers wish to cause the
Warrants to be converted into shares of Common Stock.

     

    Now,
Therefore, in consideration of the foregoing, and the representations,
warranties, and conditions set forth below, the parties hereto, intending to be
legally bound, hereby agree as follows:

     

    1.           Subscription.  Subject
to the terms and conditions hereof, the Company and each Purchaser, severally
and not jointly, agree as follows:

     

    (a)           Stock Purchase; Warrant
Conversion.  Each Purchaser hereby subscribes for the aggregate
number of shares of Common Stock set forth on the applicable signature page
attached hereto (the “Conversion
Shares”).  Each Conversion Share shall be issued in exchange
for that number and class of Warrants and amount of cash in accordance with the
following:

     

    (i)           one
Conversion Share for six Class Z Warrants and $0.15;

     

    (ii)          one
Conversion Share for twenty-five Class Z Warrants; or

     

    (iii)         one
Conversion Share for one hundred Class W Warrants and $0.25.

     

    (b)           Delivery.  The
Conversion Shares shall be issued in exchange for Warrants and cash at one or
more closings (each, a “Closing”) to be held
at such place and time as Company and the Purchasers participating in such
Closing may determine (the “Closing
Date”).  At each such Closing, the Company shall issue to each
of the Purchasers participating in such Closing a stock certificate representing
the number of Conversion Shares subscribed for by such Purchaser, against such
Purchaser’s tender of that number and class of Warrants held by such Purchaser
and payment of cash necessary to satisfy such Purchaser’s subscription for
Conversion Shares.  The tender of Warrants by any Purchaser may be
accomplished through (a) the delivery of physical certificates representing
Warrants, (b) electronic delivery using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System in accordance with the instructions set
forth on Exhibit
A, or (c) a combination of the delivery methods set forth in items (a)
and (b) above.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           Termination of Obligations
under Warrants.  Each Purchaser understands and agrees that all
obligations of the Company pursuant such Purchaser’s Warrants shall terminate
and shall be without any further force of effect upon the applicable
Closing.  Such obligations of the Company terminated, cancelled and
released upon the Closing include, without limitation, (i) any and all
obligations to issue shares of Common Stock upon exercise or conversion of such
Warrants, and (ii) any claims, obligations or other liabilities of the Company
which may have accrued or which may in the future have accrued, pursuant to such
Warrants.

     

    (d)           Lost
Warrants.  In the event that any Purchaser is unable to locate
or retrieve any Warrant and tender such Warrant at the Closing, such Purchaser
shall execute and deliver a lost instrument affidavit in a form provided by the
Company’s registrar and transfer agent certifying that such Warrant cannot be
located and indemnifying the Company and its registrar and transfer agent
against any claim or loss arising out of failure to tender such
Warrant.

     

    (e)           Company’s Right to Reject
Subscriptions and/or Terminate Offering.  Notwithstanding
anything in this Agreement or in any document or instrument delivered pursuant
hereto, the Company shall have the right in it sole discretion, upon notice to
each applicable Purchaser, at any time prior to the applicable Closing, to: (i)
reject such Purchaser’s subscription in whole or in part, and (ii) to terminate
the offering of Conversion Shares effected pursuant hereto.

     

    2.           Representation and
Warranties of the Company.  The Company hereby represents and
warrants to each Purchaser as of the Closing Date, the following:

     

    (a)           Organization and
Qualification.  The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own, lease and operate
its assets and properties and to carry on its business as it is now being or
currently planned by the Company to be conducted.  The Company is not
in violation of any of the provisions of its certificate of incorporation and
bylaws.

     

    (b)           Capitalization.  The
Company’s periodic reports on Form 10-Q and Form 10-K and current reports on
Form 8-K filed with the Securities and Exchange Commission (“SEC”) accurately
reflect its capitalization as of the dates indicated in such
reports.  The issued and outstanding capital stock of the Company
(i) has been duly and validly issued; (ii) is fully paid and
nonassessable; and (iii) was not issued in violation of any preemptive
rights or rights of first refusal or first offer.

     

    
      (c)           Authority Relative to this
Agreement.  The Company has full corporate power and authority
to: (i) execute, deliver and perform this Agreement, (ii) issue and sell
the Conversion Shares to the Purchasers hereunder, and (iii) carry out the
Company’s obligations hereunder and thereunder and, to consummate the
transactions contemplated hereby.  The execution and delivery of this
Agreement and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company, and no other corporate proceedings on the part of
the Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.  This Agreement has been duly and
validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by the other parties hereto,
constitutes the legal and binding obligation of the Company, enforceable against
it in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization or other similar Laws affecting the enforcement of
creditors’ rights generally and by general principles of
equity.

    

    
      
         

      

      
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    (d)           Valid Issuance of the
Conversion Shares.  The Conversion Shares to be issued to the
Purchasers hereunder, when issued, sold and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, will be duly and
validly issued, fully paid and non-assessable, free of restrictions on transfer
other than restrictions on transfer under this Agreement and applicable state
and federal securities laws, issued in compliance with applicable state and
federal securities laws, and will not be subject to any preemptive rights or
other similar rights.

     

    (e)           No Conflict; Required
Filings and Consents.

     

    (i)           The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company shall not (A) conflict with or
violate the Company’s certificate or incorporation or bylaws, (B) conflict with
or violate any law or any rule or regulation of the Over-the-Counter bulletin
board, (C) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or
materially impair the Company’s rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien on any of
the properties or assets of the Company pursuant to, any contracts to which the
Company is a party or by or to which any of the properties or assets of the
Company may be bound, subject or affected, or (D) result in the triggering,
acceleration or increase of any payment to any person pursuant to any contracts
to which the Company is a party or by or to which any of the properties or
assets of the Company may be bound, subject or affected, including any “change
in control” or similar provision thereof, except, with respect to clauses (B),
(C) or (D), for any such conflicts, violations, breaches, defaults, triggers,
accelerations, increases or other occurrences that would not, individually or in
the aggregate, have a Material Adverse Effect on the Company.

     

    (ii)           The
execution and delivery of this Agreement by the Company do not, and the
performance of its respective obligations hereunder will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic,
except (A) for applicable requirements, if any, of the Securities Act of
1933, as amended (the “Securities Act”), the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), state
securities and blue sky laws, and the rules and regulations thereunder, and
appropriate documents with the relevant authorities of other jurisdictions in
which the Company is qualified to do business, and (B) where the failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on the Company, or
prevent consummation of the transaction contemplated hereby or otherwise prevent
the parties hereto from performing their obligations under this
Agreement.

    
      
         

      

      
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    (iii)           “Material Adverse
Effect” means any change, event, violation, inaccuracy, circumstance or
effect, individually or when aggregated with other changes, events, violations,
inaccuracies, circumstances or effects, that is materially adverse to the
business, assets, revenues, financial condition, results of operations or
business prospects of an entity and its subsidiaries, taken as a whole, except
to the extent resulting from: (A) changes in general industry or economic
conditions, (B) adverse effects arising from the announcement or consummation of
the transactions contemplated hereby, or (C) changes to generally accepted
accounting principles that apply generally to the industry in which the entity
operates.

     

    (f)           Reporting Company
Status.  The Company is subject to the reporting requirements
of the Exchange Act and the Company has taken no action designed to, or which to
its knowledge is likely to, have the effect of, terminating the registration of
the Common Stock under the Exchange Act nor has the Company received any
notification that the SEC is contemplating terminating such
registration.  The Common Stock is traded on the Over-the-Counter
bulletin board and the Company has not received any notice regarding, and to the
Company’s knowledge there is no threat of, the termination or discontinuance of
the eligibility of the Common Stock for such trading.

     

    (g)           Exchange Act Filings;
Financial Statements.  The Company has filed all reports, forms
or other information required to be filed by it under the Securities Act and the
Exchange Act (the foregoing materials being collectively referred to herein as
the “SEC
Reports”), except as otherwise disclosed in any SEC
Reports.  Except as otherwise disclosed in any SEC Reports, as of
their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The financial statements of Company included in the
SEC Reports were prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of Company
and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the
case of unaudited statements, to normal, immaterial, year-end audit
adjustments.

     

    (h)           Offering
Exemption.  Assuming the truth and accuracy of the
representations and warranties contained in Section 3, the offer
and sale of the Conversion Shares as contemplated hereby and the issuance and
delivery to the Purchasers of the Conversion Shares are exempt from registration
under the Securities Act, and will be registered or qualified (or exempt from
registration or qualification) under applicable state securities and blue sky
laws, as currently in effect.

    
      
         

      

      
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    (i)           Brokers or
Finders.  Except for [____________], no person will have, as a
result of the transactions contemplated by this Agreement, any valid right,
interest or claim against or upon the Company for any commission, fee or other
compensation pursuant to any agreement, arrangement or understanding entered
into by or on behalf of the Company.

     

    3.           Representation and
Warranties of the Purchasers.  As of the Closing Date, each
Purchaser severally and not jointly hereby represents and warrants to the
Company that:

     

    (a)           Organization and
Qualification.  Such Purchaser, if such person is not an
individual, is a validly existing corporation, limited partnership or limited
liability company and has all requisite corporate, partnership or limited
liability company power and authority to invest in the purchase the Conversion
Shares pursuant to this Agreement.

     

    (b)           Authorization.  The
execution, delivery and performance by such Purchaser of this Agreement have
been duly authorized and each will constitute the legal, valid and binding
obligations of such Purchaser, enforceable against such Purchaser in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally.

     

    (c)           No Transfer or Assignment of
Securities or Claims.  Such Purchaser has not sold, assigned,
transferred or exercised any of the Warrants to be tendered by such Purchaser
hereunder, and has not transferred or assigned any claim, right or interest
associated therewith.

     

    (d)           Purchase Entirely for Own
Account.  The Conversion Shares will be acquired for investment
for such Purchaser’s own account, not as a nominee or agent, and not with a view
to the resale or distribution of any part thereof.  Such Purchaser’s
address is listed on the signature page executed by such Purchaser and attached
hereto. Such Purchaser is aware that the Company is issuing the Conversion
Shares pursuant to an exemption from registration under the Securities Act, and
will be qualified (or exempt from registration or qualification) under
applicable state securities and blue sky laws, as currently in
effect.  Such Purchaser is also aware that the Company is relying
upon, among other things, the representations and warranties of such Purchaser
contained in this Agreement for purposes of qualifying for such exemption from
registration under the Securities Act.

     

    (e)           Disclosure of
Information.  Such Purchaser has had an opportunity to receive
all information related to the Company requested by it and to ask questions of
and receive answers from the Company regarding its business and the terms and
conditions of the offering of the Conversion Shares.  Neither such
inquiries nor any other due diligence investigation conducted by such Purchaser
shall modify, limit or otherwise affect such Purchaser’s right to rely on the
representations and warranties of the Company contained in this
Agreement.

     

    (f)           Investment
Experience.  Such Purchaser acknowledges that it can bear the
economic risk and complete loss of its investment in the Conversion Shares and
has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment contemplated
hereby.

    
      
         

      

      
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    (g)           Accredited
Investor.  Such Purchaser is an accredited investor as defined
in Rule 501(a) of Regulation D, as amended, under the Securities
Act.

     

    (h)           Restricted Securities;
Legends.  Such Purchaser understands that the Conversion Shares
are characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the Securities Act only
in certain limited circumstances. Such Purchaser acknowledges that the
Conversion Shares will bear the following legend or similar legend as
applicable:

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”). SUCH SECURITIES MAY
NOT BE TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS
TO SUCH TRANSFER OR IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY, SUCH TRANSFER MAY BE MADE PURSUANT TO RULE 144.

     

    (i)           No General
Solicitation.  Such Purchaser did not learn of the investment
in the Conversion Shares as a result of any general solicitation or general
advertising.

     

    (j)           Prohibited
Transactions.  During the last thirty days prior to the date
hereof, neither such Purchaser nor any affiliate of such Purchaser which (i) had
knowledge of the transactions contemplated hereby, (ii) has or shares discretion
relating to such Purchaser’s investments or trading or information concerning
such Purchaser’s investments, including in respect of the Conversion Shares, or
(A) is subject to such Purchaser’s review or input concerning such affiliate’s
investments or trading (collectively, “Trading Affiliates”)
has, directly or indirectly, effected or agreed to effect any short sale,
whether or not against the box, established any “put equivalent position” (as
defined in Rule 16a-1(h) under the Exchange Act) with respect to the Common
Stock, granted any other right (including, without limitation, any put or call
option) with respect to the Common Stock or with respect to any security that
includes, relates to or derived any significant part of its value from the
Common Stock or otherwise sought to hedge its position in the Common Stock
(each, a “Prohibited
Transaction”).  Such Purchaser acknowledges that the
representations, warranties and covenants contained in this Section 3(j) are
being made for the benefit of the Purchasers as well as the Company and that
each of the other Purchasers shall have an independent right to assert any
claims against such Purchaser arising out of any breach or violation of the
provisions of this Section
3(j).

     

    (k)           Brokers or Finders.
Except for [____________], no person will have, as a result of the transactions
contemplated by this Agreement, any valid right, interest or claim against or
upon the Company or any Purchaser for any commission, fee or other compensation
pursuant to any agreement, arrangement or understanding entered into by or on
behalf of such Purchaser.

     

    
      
        
        

      

      
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    4.           General
Provisions.

     

    (a)           Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by commercial delivery service, or
mailed by registered or certified mail (return receipt requested) or sent via
facsimile (with confirmation of receipt), (i) if to a Purchaser, to such
Purchaser’s address set forth on the applicable signature page attached hereto,
or at such other address or facsimile number as such Purchaser shall have
furnished to the Company in writing; or (ii) if to the Company to SouthPeak
Interactive Corporation, 2900 Polo Parkway, Midlothian, Virginia 23113,
Attn:  Terry Phillips, with a copy (which shall not constitute notice)
to Greenberg Traurig, LLP, 1750 Tysons Boulevard, Suite 1200, McLean, Virginia
22102, Attn:  Mark Wishner, Esq., or at such other address as the
Company shall have furnished in writing to the Purchasers.

     

    (b)           Counterparts.  This
Agreement may be executed in one or more counterparts, including by facsimile
and/or PDF, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.

     

    (c)           Entire Agreement;
Nonassignability; Parties in Interest.  This Agreement and the
documents and instruments and other agreements specifically referred to herein
or delivered pursuant hereto, including the exhibits, (i) constitute the entire
agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, (ii) are not intended to
confer upon any other person any rights or remedies hereunder, and (iii) shall
not be assigned.  No representations, warranties, inducements,
promises or agreements, oral or written, by or among the parties not contained
herein shall be of any force of effect.

     

    (d)           Successors and
Assigns.  The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

     

    (e)           Amendments and
Waivers.  Any term of this Agreement may be amended, and the
observance of any term hereof may be waived (either generally or in a particular
instance), only with the written consent of the Company and the holders of a
majority of the Conversion Shares.

     

    (f)           Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without regard to the
laws that might otherwise govern under applicable principles of conflicts of
law.  Each of the parties hereto irrevocably consents to the exclusive
jurisdiction of any state or federal court located in Chesterfield County,
Virginia in connection with any matter based upon or arising out of this
Agreement or the matters contemplated herein, agrees that process may be served
upon them in any manner authorized by the laws of the Commonwealth of Virginia
for such persons and waives and covenants not to assert or plead any objection
which they might otherwise have to such jurisdiction and such
process.

    
      
         

      

      
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    (g)           Rules of
Construction.  The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.  References herein to “Dollars” or “$” shall refer to U.S.
dollars and all payments and all calculations of amount hereunder shall be made
in U.S. dollars.

     

    (h)           Separability of Agreements;
Severability of this Agreement.  The Company’s agreement with
each of the Purchasers is a separate agreement and the sale of Conversion Shares
to each of the Purchasers is a separate sale.  Unless otherwise
expressly provided herein, the rights of each Purchaser hereunder are several
rights, not rights jointly held with any of the other Purchasers.  Any
invalidity, illegality or limitation on the enforceability of the Agreement or
any part thereof, by any Purchaser whether arising by reason of the law of the
respective Purchaser’s domicile or otherwise, shall in no way affect or impair
the validity, legality or enforceability of this Agreement with respect to other
Purchasers.  If any provision of this Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     

    [Signature
Pages to Follow]

    
      
         

      

      
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    IN
WITNESS WHEREOF, the undersigned has caused this Stock Purchase Agreement to be
duly executed by an authorized signatory as of the date first indicated
above.

     

    
      
        
          
            
              
                
                  
                    
                      	
                              SOUTHPEAK
      INTERACTIVE CORPORATION

                            
	 
      	 
      	 
      
	
                              By:  

                            	 
      	 
      
	 
      	
                              Name:

                            	
                              Terry
      Phillips

                            
	 
      	
                              Title:

                            	
                              Chairman

                            

                    

                  

                

              

            

          

        

      

       

      
        [Company
signature page to Stock Purchase Agreement]

           

        
          
            
               

            

            
               

              
                

              

            

            
               

            

          

        

      

    

     

    IN
WITNESS WHEREOF, the undersigned has caused this Stock Purchase Agreement to be
duly executed by an authorized signatory as of the date first indicated
above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Name
      of Purchaser:

                                              	 
      	 	 
      	 
      
	 	 	 	 	 
	
                                                Signature:

                                              	 
      	 	 
      	 
      
	 	 	 	 	 
	
                                                Name
      of Signatory:

                                              	 
      	 	
                                                Title
      of Signatory:

                                              	 
      
	 	 	 	 	 
	
                                                SSN
      or EIN of Purchaser:

                                              	 
      	 	
                                                Address:

                                              	 
      
	 	 	 	 	 
	
                                                Facsimile
      Number for Notice:

                                              	 
      	 	 
      	 
      
	 	 	 	 	 
	
                                                Email
      Address for Notice:

                                              	 
      	 	 
      	 
      

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      Check the
box and complete the corresponding subscription information for each applicable
method of payment:

       

    

    
      
        
          
            
              
                
                  
                    
                      
                        	 	 
      	
                                Conversion

                                Shares

                                Subscribed For

                              	 
      	
                                Class W

                                Warrants

                                Tendered

                              	 
      	
                                Class Z

                                Warrants

                                Tendered

                              	 
      	
                                Cash
      Payment

                              	 
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	o	
                                one
      Conversion Share for six Class Z Warrants and $0.15

                              	 
      	
                                =

                              	
                                Not applicable

                              	
                                +

                              	 
      	
                                +

                              	 
      	 
	 	 
      	 
      	 
      	 
      	 
      	
                                (Number of

                                Conversion Shares

                                multiplied by six)

                              	 
      	
                                (Number of

                                Conversion Shares

                                multiplied by $0.15)

                              	 
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	o	
                                one
      Conversion Share for twenty-five Class Z Warrants

                              	 
      	
                                =

                              	
                                Not applicable

                              	
                                +

                              	 
      	
                                +

                              	
                                Not applicable

                              	 
	 	 
      	 
      	 
      	 
      	 
      	
                                (Number of

                                Conversion Shares

                                multiplied by twenty-

                                five)

                              	 
      	 
      	 
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	o	
                                one
      Conversion Share for one hundred Class W Warrants and
$0.25

                              	 
      	
                                =

                              	 
      	
                                +

                              	
                                Not applicable

                              	
                                +

                              	 
      	 
	 	 
      	 
      	 
      	
                                (Number of

                                Conversion Shares

                                multiplied by one

                                hundred)

                              	 
      	 
      	 
      	
                                (Number of

                                Conversion Shares

                                multiplied by $0.25)

                              	 
	 	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
	 	 
      	
                                Total Conversion

                                Shares

                                Subscribed For

                              	 
      	
                                Total Class W

                                Warrants

                                Tendered

                              	 
      	
                                Total Class Z

                                Warrants

                                Tendered

                              	 
      	
                                Total Cash

                                Payment

                              	 
	 	 
      	 
      	
                                =

                              	 
      	
                                +

                              	 
      	
                                +

                              	 
      	 

                      

                    

                  

                

              

            

          

        

      

    

     

    
      [Purchaser
signature page to Stock Purchase Agreement]

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

     

    DWAC Delivery
Instructions

     

    Purchasers
may deliver some or all of the Warrants to be tendered pursuant to the Agreement
electronically using the Depository Trust Company’s DWAC
(Deposit/Withdrawal At Custodian) System.  In order to transfer
Warrants to the Company using the DWAC System, a Purchaser must instruct its
broker to transfer uncertificated warrants to American Stock Transfer &
Trust Company, the Company’s registrar and transfer agent, via DWAC using
transfer agent code 2941.  There is a nominal cost associated with the
act of delivering securities through the DWAC System.  American Stock
Transfer & Trust Company typically charges the tendering broker $35, and the
broker may or may not pass this cost on to the transferring
Purchaser.

     

    The
Company’s point of contact at American Stock Transfer & Trust Company is Ms.
Grace Deer-Loiseau, (718) 921-8261.

    
      
         

      

      
        - 2
-a6278756ex101.htm

Exhibit 10.1

TERMINATION PROTECTION AGREEMENT

 

AGREEMENT effective May 5, 2010 between Thomas & Betts Corporation and its successors and assigns (the “Company”) and Peggy P. Gann (“Executive”).

 

WHEREAS, Executive has important management responsibilities and talents which benefit the Company and its affiliates; and

 

WHEREAS, the Company believes that its best interests are served if Executive is encouraged to remain with the Company and the Company has determined that Executive’s ability to perform Executive’s responsibilities and utilize Executive’s talents for the benefit of the Company, and the Company’s ability to retain Executive as an employee, will be significantly enhanced if Executive is provided with fair and reasonable protection from the risks associated with a change in ownership or control of the Company; and

 

WHEREAS, the Board has approved the terms and provisions of this Agreement at its meeting on May 5, 2010,

 

NOW, THEREFORE, the Company and Executive hereby agree as follows:

 

1. Defined Terms.

 

Unless otherwise indicated herein, capitalized terms used in this Agreement which are defined in Schedule A shall have the meanings set forth in Schedule A.

 

The Company and Executive both agree that the definition of “Change in Control” listed in Schedule A shall be used for Executive in any and all plans, programs or agreements in which Executive participates or to which Executive is a party in lieu of any similar definition used in such plans, programs or agreements; provided, however, that the definition of “Change in Control” listed in Schedule A shall not replace any such similar definition that serves as a “permissible payment event” (within the meaning of Treas. Reg. § 1.409A-3(a)) under any such plan, program or agreement.

 

2. Effective Date; Term.

 

This Agreement shall commence on May 5, 2010 (the “Effective Date”) and shall continue through December 31, 2013; provided, however, that the term of this Agreement shall automatically be extended for one additional year beyond December 31, 2013 and for successive one year periods thereafter, unless, not later than January 30 of the third calendar year preceding the year in which the term would otherwise automatically extend (e.g., 2011 for the 2014 calendar year, 2012 for the 2015 calendar year, etc.), the Company shall have given written notice to Executive that it does not wish to extend this Agreement for an additional year, in which event this Agreement shall continue to be effective until December 31 of the calendar year immediately preceding the calendar year in which the term would have otherwise automatically extended; provided, further, that, notwithstanding any such notice by the Company not to extend, if a Change in Control occurs during the original or any extended term of this Agreement, this Agreement shall remain in effect for a period of three (3) years after such Change in Control.

 

  

  

  

 

3. Change in Control Benefits.

 

Executive shall be entitled to the benefits provided under this Agreement if a Triggering Event occurs.  In the event that Executive’s employment is terminated as a result of death or Disability, Executive shall not be entitled to the benefits provided in this Section 3; however, Executive and/or Executive’s family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company under its plans, programs and policies relating to death and/or disability benefits as in effect at any time during the 90-day period immediately preceding the earlier of the Change in Control or the Termination Date.

 

	
(a)  

	
Severance Payment.  The Company shall pay Executive the aggregate of the following amounts in one lump sum on the Payment Date:

 

	
(i)  

	
to the extent not paid before the Payment Date in accordance with the Company’s ordinary payroll practices, Executive’s earned but unpaid base salary through the date of the Triggering Event at the rate in effect on the date of such Triggering Event, or if higher, at the highest rate in effect at any time within the 90-day period preceding the Change in Control;

 

	
(ii)  

	
to the extent not paid before the Payment Date in accordance with the terms of the Company’s bonus plan, any unpaid annual bonus payable to Executive in respect of the calendar year ending prior to the Triggering Event (but not less than the Average Bonus);

 

	
(iii)  

	
an amount determined by multiplying the Average Bonus by a fraction, the numerator of which is the number of days elapsed in the calendar year in which the Triggering Event occurs up to and including the date of such Triggering Event and the denominator of which is 365;

 

	
(iv)  

	
a lump sum amount, in cash, equal to three (3) times Executive’s Annual Compensation;

 

	
(v)  

	
any unpaid earned and/or accrued vacation, and

 

	
(vi)  

	
interest, for the period beginning on the date of the Triggering Event and ending on the Payment Date at a rate equal to one hundred twenty (120) percent of the monthly, compounded applicable federal rate, as in effect under Section 1274(d) of the Code for the month before the month in which the Triggering Event occurs.

 

Notwithstanding the foregoing, if the unpaid base salary or any portion thereof or the unpaid annual bonus or any portion thereof is subject to a deferral election or the bonus is subject to Section 409A of the Code, such amount shall be paid in accordance with the terms of such election and/or the terms of the plan pursuant to which such amount was deferred.

 

  

  

  

	
(b)  

	
Health Care Coverage.

 

	
(i)  

	
The Company shall provide medical, prescription drug and dental coverage at the Company’s expense to Executive and, if applicable, to Executive’s family members eligible for such coverage under the Thomas & Betts Welfare Benefit Plan, until the third anniversary of the Termination Date (the “Initial Coverage Period”).  The level of coverage to be provided hereunder shall in no event be less than the level of coverage provided immediately before the earlier of the Termination Date or the Change in Control.

 

	
(ii)  

	
The following provisions shall apply if the coverage is self-insured by the Company.  The fair market value of coverage for each month included in the Initial Coverage Period shall be deemed to consist of the related monthly premium as would be determined for purposes of COBRA under Section 4980B of the Code (the "Fair Market Value"). If the Delayed Payment Date applies, commencing with the month immediately following the month in which his Termination Date occurs and ending as of the last day of the month in which the Delayed Payment Date occurs (the "Direct Payment Period"), Executive shall be required to pay to the Company at the same time that COBRA premium payments are otherwise due for that month an amount equal to the monthly Fair Market Value. On the first day of the first month following the Delayed Payment Date, the Company shall reimburse Executive for the aggregate amount paid by him during the Direct Payment Period (the "Aggregate Premium Payment").  Effective with respect to the first month following the Direct Payment Period and continuing through the end of the Initial Coverage Period or during the entire Initial Coverage Period if the Delayed Payment Date does not apply, the Company shall cover Executive (and his family members, if applicable) at its sole expense each month, but the Fair Market Value of such coverage shall constitute imputed income to Executive.  The Company shall make tax gross-up payments with respect to such reimbursement for the Direct Payment Period and Company-paid coverage during the Initial Coverage Period including (A) Company payment of any required withholding with respect to the reimbursement and with respect to the Fair Market Value of the monthly Company-paid coverage plus the amount of additional withholding due each month as a result of the Company's payment of such initial withholding amount and (B) Company payment to Executive of an amount equal to any additional federal, state and local tax imposed on Executive with respect to income recognized by Executive pursuant to the foregoing payments, including the amount of additional tax imposed on Executive as a result of Company's payment of such initial tax.  The payment of such additional tax pursuant to (B) shall be made no later than the end of the taxable year following the taxable year in which Executive remits the related taxes.

 

	
(iii)  

	
Following the Initial Coverage Period and for a period of eighteen months thereafter, the Company shall permit Executive to elect to continue coverage at Executive’s expense by paying the monthly COBRA premium, as directed by the Company.  Notwithstanding the foregoing, the COBRA continuation period that is mandated by Section 4980B of the Code shall be deemed to have run concurrently with the Initial Coverage Period.

 

  

  

  

 

	
(iv)  

	
If Executive becomes employed by a new employer, the coverage provided by Company under this Section 3(b) shall terminate on the date Executive becomes eligible for the coverage provided by Executive’s new employer.

 

	
(v)  

	
For purposes of Section 409A of the Code, coverage provided hereunder during the period of time that Executive would be entitled to continuation coverage pursuant to COBRA is intended to qualify for the exception from “deferred compensation” as a medical benefit provided in accordance with Treas. Reg. § 1.409A-1(b)(9)(v)(B).  Any additional coverage hereunder shall be provided in accordance with the Reimbursement and In-Kind Benefit Rule and the tax gross-up payments shall be provided in accordance with Treas. Reg. §1.409A-3(i)(v).

 

	
(c)  

	
Other Welfare Benefits.  The Company shall provide disability, group term life and accidental death and dismemberment insurance at the Company’s expense to Executive until the third anniversary of his Termination Date.  The level of coverage to be provided shall be no less than the level of coverage provided immediately before the earlier of the Termination Date or the Change in Control.  To the extent that any such benefit is subject to Section 409A of the Code and to the Delayed Payment Date, Executive shall be responsible for the payment of all expenses, including, but not limited to, the cost of the premiums for such coverage until the Delayed Payment Date.  The Company shall reimburse Executive on the Delayed Payment Date for all such costs and expenses incurred prior to such Delayed Payment Date, provided proof of payment has been provided and shall assume the obligation to pay all future costs and expenses until the third anniversary of the Termination Date.  The Reimbursement and In-Kind Benefit Rule shall apply to amounts subject to Section 409A of the Code.

 

	
(d)  

	
Full Vesting of All Stock Options and Restricted Shares.  Notwithstanding any provision to the contrary in the Company’s equity incentive plans (the “Equity Plans”) or any award agreement under the Equity Plans, (i) any outstanding, unexercisable stock options or unvested restricted shares shall become fully exercisable and vested as of the Termination Date and (ii) all stock options, whether or not such stock options first become exercisable pursuant to this Agreement, shall remain exercisable until the earlier of (A) the tenth anniversary of the original date of grant or (B) the latest date upon which the option could have expired by its original terms under any circumstances; provided, however, that this sentence shall not restrict the Company’s ability to adjust or settle outstanding stock options pursuant to the terms of the Equity Plans, so long as Executive is treated in any such adjustment or settlement no less favorably than any other employee of the Company; and further provided that if Executive is, or ever has been, a “covered employee” (within the meaning of Section 162(m) of the Code), only a pro-rata portion of any unvested restricted shares that are intended to constitute “performance-based compensation” shall vest incident to an Anticipatory Termination Triggering Event, and solely if the related performance conditions are fully met in accordance with the certification required of the Company’s Compensation Committee by Section 162(m) of the Code.

 

  

  

  

 

	
(e)  

	
Additional SEIP Benefits.  Executive shall be entitled to receive employer supplemental amounts and vesting in accordance with the provisions of the Company’s Supplemental Executive Investment Plan.

 

	
(f)  

	
Outplacement Services.  The Company shall pay the reasonable expenses incurred with respect to executive outplacement services by any one qualified outplacement agency selected by Executive and reasonably satisfactory to the Company from the Termination Date until the first anniversary of the Termination Date; provided, however, that (i) such services are directly related to Executive’s Separation from Service, and (ii) the period during which they are covered and the payments made do not extend beyond the period described in Treas. Reg. § 1.409A-1(b)(9)(v)(E).

 

	
(g)  

	
Grantor Trust.  Within ninety (90) days following execution of this Agreement, the Company shall establish a grantor trust, known as a rabbi trust, which shall provide for the Company to make an irrevocable contribution to fully fund the cash payments provided for under this Agreement in the event of a Change in Control.  Notwithstanding the foregoing, such funding shall not be required if it would result in the imposition of additional tax under Section 409A(b)(5) of the Code.

 

4. Mitigation.

 

Executive shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, and compensation earned from such employment or otherwise shall not reduce the amounts otherwise payable under this Agreement.  No amounts payable under this Agreement shall be subject to reduction or offset in respect of any claims which the Company (or any other person or entity) may have against Executive.

 

5. Code Section 4999 Tax Gross-Up.

 

	
(a)  

	
In the event that any payment or benefit received or to be received by Executive pursuant to the terms of this Agreement (the “Contract Payments”) or otherwise in connection with Executive’s termination of employment or contingent upon a change in ownership or control pursuant to any plan or arrangement or other agreement with the Company (or any affiliate), (“Other Payments” and, together with the Contract Payments, the “Payments”) would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, as determined as provided below, the Company shall pay to Executive, at the time specified in Section 5(b) below, an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive, after deduction of the Excise Tax on the Payments and any federal, state and local income or other tax and excise tax upon the payment provided for by this Section 5(a), and any interest, penalties or additions to tax payable by Executive with respect thereto, shall be equal to the total value of the Payments at the time such Payments are to be made.  For purposes of determining whether any of the Payments will be subject to the Excise Tax and the amounts of such Excise Tax, (1) the total amount of the Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, except to the extent that, in the opinion of independent tax counsel selected by the Company’s independent auditors and reasonably acceptable to Executive (“Tax Counsel”), a Payment (in whole or in part) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, or such “excess parachute payments” (in whole or in part) are not subject to the Excise Tax, (2) the amount of the Payments that shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Payments or (B) the amount of “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code (after applying clause (1) hereof), and (3) the value of any non-cash benefits or any deferred payment or benefit shall be determined by Tax Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.  For purposes of this Section 5, any additional tax under Section 409A of the Code shall not be taken into account for purposes of determining the amount of any payment due to or on behalf of Executive.

 

  

  

  

 

	
(b)  

	
The Gross-Up Payments provided for in Section 5(a) hereof shall be made upon the earlier of (i) the payment to Executive of any Payment or (ii) the imposition upon Executive or payment by Executive of any Excise Tax, provided, however, if the Gross-Up Payment is subject to the Delayed Payment Date, the Gross-Up Payments shall be made on the Delayed Payment Date, if later.  In no event shall any amount due to Executive under this Section 5 be paid later than the end of the Executive’s taxable year following Executive’s taxable year in which such taxes are remitted.

 

	
(c)  

	
Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of a Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than 10 business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which Executive gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

 

(i) give the Company any information reasonably requested by the Company relating to such claim;

 

(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and reasonably satisfactory to Executive;

 

(iii) cooperate with the Company in good faith in order to effectively contest such claim; and

 

(iv) permit the Company to participate in any proceedings relating to such claim;

 

  

  

  

 

provided, however, that the Company shall bear and pay directly all costs and expenses (including, but not limited to, additional interest and penalties and related legal, consulting or other similar fees) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or other tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  All such costs and expenses incurred due to a tax audit or litigation addressing the existence of or amount of a tax liability under this Section 5 shall be paid by the Company within thirty (30) days of the date payment of such expenses is due or if such payment is subject to the Delayed Payment Date, on the Delayed Payment Date, if later, but in any event not later than (A) December 31 of the year following the year in which the taxes are remitted to the taxing authority, or (B) where as a result of such audit or litigation no taxes are remitted, December 31 of the year following the year in which the audit is complete or there is a final and nonappealable settlement or other resolution of the litigation.  Any Gross-Up Payment as a result of any Excise Tax or other tax (including interest and penalties with respect thereto) imposed shall be paid at the time of imposition of such Excise Tax or other tax or if such amount is subject to the Delayed Payment Date, on the Delayed Payment Date, if later.

(d)         The Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall reimburse the Executive the amount of the claimed tax within five (5) days of remittance of such amount to the Internal Revenue Service or, if such reimbursement is subject to the Delayed Payment Date, on the Delayed Payment Date, if later and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or other tax (including interest or penalties with respect thereto) imposed with respect to such reimbursement and such additional amount shall be paid at the time of imposition of such Excise Tax or other tax or if such amount is subject to the Delayed Payment Date, on the Delayed Payment Date, if later; and provided, further, that if Executive is required to extend the statute of limitations to enable the Company to contest such claim, Executive may limit this extension solely to such contested amount.  The Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.  In addition, no position may be taken nor any final resolution be agreed to by the Company without Executive’s consent if such position or resolution could reasonably be expected to adversely affect Executive (including any other tax position of Executive unrelated to the matters covered hereby).

(e)           As a result of any uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Company or the Tax Counsel hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its remedies and Executive thereafter is required to pay to the Internal Revenue Service an additional amount in respect of any Excise Tax, the Company or the Tax Counsel shall determine the amount of the Underpayment that has occurred and any such Underpayment shall promptly be paid by the Company to or for the benefit of Executive, subject, however, to the requirements of Section 5(b) regarding time of payment.

 

  

  

  

 

(f)           If, after the receipt by Executive of the Gross-Up Payment or an amount reimbursed by the Company under Section 5(d) in connection with the contest of an Excise Tax claim, Executive receives any refund with respect to such claim, Executive shall promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto).  If after the receipt by Executive of an amount reimbursed by the Company in connection with an Excise Tax claim, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest the denial of such refund prior to the expiration of 30 days after such determination, such reimbursement shall not be required to be repaid.

 

6. 409A Gross-Up Payment.

 

	
(a)  

	
Subject to the requirements stated in this Section 6, in the event that amounts hereunder become subject to the additional tax and interest under Section 409A of the Code (“409A additional tax”) as a result of a plan document failure or an operational failure caused solely by the action or inaction of the Company (and not at the request of Executive), the Company shall pay to Executive an amount equal to such 409A additional tax and any additional taxes imposed upon Executive due to the Company’s payment of such 409A additional tax (a “409A Gross-Up Payment”).  In no event, however, shall any amounts become payable under this Section 6 as a result of compensation required to be included in gross income by reason of Section 409A(b)(3) of the Code.  Subject to the notification requirements set forth in Section 6(b) in the event the 409A additional tax is not remitted by withholding, the 409A Gross-Up Payment shall be paid to Executive within five business days of the date such taxes are remitted to the applicable taxing authority, or, if the 409A Gross-Up Payment is subject to the Delayed Payment Date, on the Delayed Payment Date, if later.   In no event shall any amount due to Executive under this Section 6 be paid later than the end of Executive’s taxable year following Executive’s taxable year in which such taxes are remitted.

 

	
(b)  

	
Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the 409A Gross-Up Payment.  Such notification shall be given as soon as practicable but no later than (10) ten business days after Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid.  Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due).  If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, or if the Company notifies Executive at the time of payment of the 409A Gross-Up Payment under Section 6(a) that it desires to contest the application of the 409A additional tax (in either case, a “claim”), Executive shall (i) give the Company any information reasonably requested by the Company relating to such claim, (ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including ,without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, (iii) cooperate with the Company in good faith in order effectively to contest such claim, and (iv) permit the Company to participate in any proceeding relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses.  All such costs and expenses incurred due to a tax audit or litigation addressing the existence of or amount of a tax liability under this Section 6 shall be paid by the Company within thirty (30) days of the date payment of such expenses is due or, if such payment is subject to the Delayed Payment Date, on the Delayed Payment Date, if later, but in any event not later than (A) December 31 of the year following the year in which the taxes are remitted to the taxing authority, or (B) where as a result of such audit or litigation no taxes are remitted, December 31 of the year following the year in which the audit is complete or there is a final and nonappealable settlement or other resolution of the litigation.  Without limitation on the foregoing provisions of this Section 6(b), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim, and Executive shall prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount.  Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a 409A Gross-Up Payment would be payable hereunder, and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

 

  

  

  

 

	
(c)  

	
If Executive becomes entitled to receive one or more refunds of all or any part of the 409A additional tax with respect to which a 409A Gross-Up Payment was made, Executive shall pay the refund to the Company within five business days of the receipt of any such refund.

 

7. Employment Status; No Effect Prior to Change in Control; Termination for Cause.

 

	
(a)  

	
Executive and the Company acknowledge and agree that prior to a Change in Control, Executive’s employment is “at will” and may be terminated at any time, by the Company with or without Cause or by Executive with or without Good Reason, subject to applicable law.  In the event Executive’s employment is terminated for any reason prior to a Change in Control, other than an Anticipatory Termination Triggering Event, Executive shall have no rights to any payments or benefits under this Agreement and after any such termination, this Agreement shall be of no further force or effect.

 

	
(b)  

	
In the event Executive is terminated for Cause following a Change in Control, Executive shall have no rights to any payments or benefits under this Agreement.

 

  

  

  

 

8. Indemnification; Director’s and Officer’s Liability Insurance.

 

Until the sixth anniversary of the Termination Date and for so long thereafter as any claim for indemnification asserted on or prior to such date has not been fully adjudicated (the “Indemnification Period”), the Company shall indemnify, defend, and hold harmless Executive against all losses, damages, costs, expenses (including attorneys’ fees) or liabilities (including attorneys’ fees) with respect to bona fide claims regarding actions or omissions or alleged actions or omissions arising out of or relating to performance by Executive of services for, or in the capacity of Executive as director, officer or employee of, the Company or any affiliate of the Company which have occurred on or prior to the Termination Date to the same extent and on the same terms and conditions (including with respect to advancement of expenses) as permitted under applicable law and the Company’s certificate of incorporation and by-laws as in effect immediately prior to the earlier of the Termination Date or the Change in Control.  In addition, the Company shall maintain Director’s and Officer’s liability insurance (from an insurance company rated not less than A by A.M.  Best Company) and, if Executive served or has served as a fiduciary of any pension or benefit plan, ERISA fiduciary insurance, on behalf of Executive, at the level in effect immediately prior to the earlier of the Termination Date or the Change in Control, for the Indemnification Period.

 

9. Confidential Information.

 

Executive acknowledges that any confidentiality agreement entered into by Executive and the Company remains in full force and effect and survives the termination of his or her employment with the Company; provided that nothing contained in such agreement or this Section 9 shall prevent Executive from being employed by a competitor of any of the Company or utilizing Executive’s general skills, experience, and knowledge, including those developed while employed by any of the Company or its affiliates.

 

10. Disputes.

 

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Memphis, Tennessee or, at the option of Executive, in the county where Executive then resides, in accordance with the Rules of the American Arbitration Association then in effect, except that Executive may, at Executive’s option, bring that action in a court of competent jurisdiction, even if the Company has earlier instituted an action hereunder.  Judgment may be entered on an arbitrator’s award relating to this Agreement in any court having jurisdiction.

 

11. Costs of Proceedings.

 

The Company shall pay for all costs and expenses of Executive, at least monthly, including attorneys’ fees and disbursements, in connection with any legal proceeding (including arbitration), whether instituted by the Company or by Executive during Executive’s lifetime, relating to the interpretation or enforcement of any provision of this Agreement, except that if Executive instituted the proceeding and the judge, arbitrator or other individual presiding over the proceeding affirmatively finds that Executive instituted the proceeding in bad faith, then Executive shall be required to pay all costs and expenses of Executive, including attorney’s fees and disbursements, and shall not be entitled to reimbursement and shall reimburse the Company for any amounts previously paid by the Company to Executive for such costs and expenses.  The Reimbursement and In-Kind Benefit Rule shall apply and if any payment is subject to the Delayed Payment Date, it shall not be paid prior to the Delayed Payment Date.

 

  

  

  

 

12. Successors and Assigns.

 

Except as otherwise provided herein, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and Executive and their respective heirs, legal representatives, successors and assigns.  If the Company shall be merged into or consolidated with another entity, the provisions of this Agreement shall be binding upon and inure to the benefit of the entity surviving such merger or resulting from such consolidation.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to 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 had taken place.  The provisions of this Section 12 shall continue to apply to each subsequent employer of Executive in the event of any subsequent merger, consolidation or transfer of assets of such subsequent employer.

 

13. Withholding.

 

Notwithstanding the provisions of Sections 4, 5 and 6 hereof, the Company may, to the extent required by law, withhold applicable federal, state and local income and other taxes from any payments due to Executive hereunder.

 

14. Compliance with Code Section 409A.

 

This Agreement is intended to comply with the requirements of Section 409A of the Code and shall be construed and interpreted in accordance therewith in order to avoid the imposition of additional tax thereunder.

15. Applicable Law.

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Tennessee, without reference to principles of conflicts of law, applicable to contracts made and to be performed therein.

 

16. Entire Agreement.

 

This Agreement constitutes the entire agreement between the parties regarding severance benefits following a Change in Control and supersedes and overrides any prior agreement entered into between the Company and Executive regarding severance benefits following a Change in Control between the Company and Executive.  This Agreement may be changed only by a written agreement executed by the Company and Executive.

 

  

  

  

 

17. Notice.

 

Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, delivered by a nationally recognized overnight delivery service, or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company.  All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt.

 

18. Severability.

 

The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision hereof shall not affect the validity or enforceability of the other provisions hereof.

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the ____ day of _____________________, 2010.

 

	 	 
THOMAS & BETTS CORPORATION

	 
	 	 	 	 
	 	 
By:

	 
 

	 
	 	 
Name

	 	 
	 	 
Title

	 	 
	 	 	 	 
	 	Peggy P. Gann	 

 

  

  

  

 

SCHEDULE A

TO PEGGY P. GANN

TERMINATION PROTECTION AGREEMENT

CERTAIN DEFINITIONS

As used in this Agreement, and unless the context requires a different meaning, the following terms, when capitalized, have the meaning indicated:

 

“Annual Compensation” means the sum of (i) Executive’s annual rate of base salary in effect on the date of the Change in Control or, if higher, the Termination Date, (ii) the Average Bonus and (iii) Executive’s perquisite allowance for the calendar year immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs.

 

“Anticipatory Termination Triggering Event” means the Executive’s Separation from Service for a reason other than death or Disability before a Change in Control provided Executive’s employment is terminated by the Company or its affiliates without Cause and Executive reasonably demonstrates that such Separation from Service was at the request or suggestion of any individual or entity that is or was attempting to effectuate a Change in Control within the 12 months following such Separation from Service.

 

“Average Bonus” means the greater of the amount determined under (i) or (ii) where: (i) is (A) Executive’s target bonus for the calendar year immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs, or (B) if the amount described in clause (i)(A) is zero, Executive’s target bonus for the calendar year in which the earlier of the Termination Date or the Change in Control occurs; and (ii) the highest bonus paid or payable to Executive in respect of any of the five (5) calendar years (annualized with respect to any such calendar year for which Executive has been employed for only a portion thereof) immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs.  Notwithstanding the foregoing, if Executive is or ever has been a “covered employee” (within the meaning of Section 162(m) of the Code), the amount described in clause (i), above, shall cease to apply, and shall be replaced by the following: “(i) is (A)50% of Executive’s annual rate of base salary for the calendar year immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs, or (B) if the amount described in clause(i)(A) is zero, 50% of Executive’s annual rate of base salary for the calendar year in which the earlier of the Termination Date or the Change in Control occurs.

 

“Average Long Term Incentive Award” means the sum of (i) the average Black-Scholes value (as determined by the accountant employed by the Company immediately prior to the Change in Control) of the annual stock options granted to Executive during the three calendar years immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs and (ii) the average value of the annual restricted stock awards (determined by reference to the closing values of the restricted shares on the dates on which they were granted) granted to Executive during the three calendar years immediately prior to the calendar year in which the earlier of the Termination Date or the Change in Control occurs.

 

“Board” means the Company’s Board of Directors.

 

“Cause” shall mean Executive’s termination of employment due to:

 

  

  

  

 

(a) Executive’s conviction of, or plea of guilty or nolo contendere to, a felony; or

 

(b) the willful engaging by Executive in gross misconduct which is materially and demonstrably injurious to the Company.

 

For a termination of employment to be for Cause:  (i) Executive must receive a written notice which indicates in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Executive’s employment for Cause; (ii) Executive must be provided with an opportunity to be heard no earlier than 30 days following the receipt of such notice (during which notice period Executive has the opportunity to cure and has failed to cure or resolve the behavior in question); and (iii) there must be a good faith determination of Cause by at least three-quarters of the non-employee outside director members of the Board.

 

“Change in Control” For the purpose of this Agreement, a “Change in Control” shall, without limitation, be deemed to have occurred if:

 

(a) A third person, including a “group” as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the beneficial owner, directly or indirectly, of 25% or more of the combined voting power of the Company’s outstanding voting securities ordinarily having the right to vote for the election of directors of the Company; or

 

	
(b)  

	
Individuals who, as of the date hereof, constitute the Board cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least three-quarters of the directors comprising the Board as of the date hereof (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of directors of the Company) shall be, for purposes of this Agreement, considered as though such person were a member of the Board as of the date hereof; or

 

	
(c)  

	
The consummation of (i) any consolidation, share exchange, merger or amalgamation of the Company as a result of which the individuals and entities who were the respective beneficial owners of the outstanding common stock of the Company and the voting securities of the Company immediately prior to such consolidation, share exchange, merger or amalgamation do not beneficially own, immediately after such consolidation, share exchange, merger or amalgamation, directly or indirectly, 50% or more, respectively, of the common stock and combined voting power of the voting securities entitled to vote of the company resulting from such consolidation, share exchange, merger or amalgamation; or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all the assets or earning power of the Company; or

 

	
(d)  

	
The approval by the shareholders of a plan of complete liquidation or dissolution of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

  

  

  

 

“Company” means Thomas & Betts Corporation and its successors and assigns.

 

“Delayed Payment Date” means the first business day following the six-month anniversary of the Termination Date.  A payment or benefit shall not be subject to the Delayed Payment Date if (i) the payment or benefit is not subject to Section 409A of the Code, (ii) the payment event with respect to the payment or benefit, for purposes of Section 409A of the Code, is other than Separation from Service, or (iii) on the Termination Date, no stock of the Company (or any other entity considered a single employer with the Company under Treas. Reg. §1.409A-1(g) or any successor thereto) is publicly traded on an established securities market or otherwise.

 

“Disability” means total disability or permanent disability as determined under the Company’s long-term disability plan in which Executive participates, as it exists from time to time; provided, however, if Executive does not participate in the Company’s long-term disability plan, then “Disability” means an illness or injury which prevents Executive from performing his or her duties, as they existed immediately prior to the illness or injury, on a full time basis for 180 consecutive business days, and is determined to be total and permanent disability by a physician selected by the Company and acceptable to Executive or Executive’s legal representative.

 

“Good Reason” means any of the following actions, without Executive’s express prior written approval, other than due to Executive’s permanent disability or death:

 

	
(i)  

	
any reduction in Executive’s annual base salary;

 

	
(ii)  

	
any failure to pay Executive an annual bonus, in cash, at least equal to the Average Bonus;

 

	
(iii)  

	
any failure by the Company to grant Executive with long term incentives annually that are at least equal to the value of the Average Long Term Incentive Award, where the value of the long term incentives granted to Executive in any year are determined by the accountants employed by the Company immediately prior to the Change in Control using a valuation method consistent with the methodology used to value the Average Long Term Incentive Award;

 

	
(iv)  

	
Executive’s duties, titles, responsibilities or authority (including offices and reporting relationships) are diminished in comparison to the duties, titles and responsibilities or authority enjoyed by Executive immediately prior to the Change in Control, other than as a result of an insubstantial and inadvertent action which is remedied by the Company promptly after receipt of notice thereof by Executive;

 

	
(v)  

	
any material reduction in Executive’s and/or Executive’s family’s eligibility to participate and his/her/their level of benefit in each of the Company’s welfare benefit plans, including, without limitation, all medical, prescription, dental, disability, salary continuance, group life, accidental death and travel accident insurance plans and programs of the Company in comparison to the highest level of eligibility and level of benefit enjoyed by Executive and Executive’s family during the 90 day period preceding the Change in Control;

 

	
(vi)  

	
any material reduction, in the aggregate, in Executive’s ability to participate in all incentive, savings and retirement plans or programs applicable to other key executives (including the Company’s restricted stock and stock option plans), to a level less favorable to Executive than the highest level enjoyed by Executive in such plans or programs during the 90 day period preceding the Change in Control;

 

  

  

  

 

	
(vii)  

	
the Company’s requiring Executive to be based at any office or location which is located more than 35 miles from the location where Executive was based immediately prior to the Change in Control;

 

	
(viii)  

	
any material reduction of any fringe benefits, including any car allowance enjoyed by Executive during the ninety (90) day period immediately prior to the Change in Control;

 

	
(ix)  

	
any material reduction in the level of Executive’s entitlement to a particular office or office size or to particular furnishings or to secretarial or other assistance as enjoyed by Executive during the ninety (90) day period immediately prior to the Change in Control;

 

	
(x)  

	
any reduction in the level of Executive’s entitlement to paid vacation as enjoyed by Executive during the ninety (90) day period immediately prior to the Change in Control;

 

	
(xi)  

	
any termination of employment by Executive within the thirty-day period immediately following the twelve-month anniversary of the Change in Control; or

 

	
(xii)  

	
the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform the Agreement, as contemplated in Section 12 of this Agreement.

 

Executive’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any circumstances constituting Good Reason hereunder.  For purposes of the Agreement, any good faith determination of “Good Reason” made by Executive shall be conclusive.

 

“Payment Date” means (i) the Delayed Payment Date, if (A) the payment is subject to Section 409A of the Code, (B) the payment event for purposes of Section 409A of the Code is Separation from Service, and (C) on the Termination Date stock of the Company (or any other entity considered a single employer with the Company under Treas. Reg. §1.409A-1(g) or any successor thereto) is publicly traded on an established securities market or otherwise, or (ii) in any other case, the date that is ten (10) days after the Termination Date.

 

“Reimbursement and In-Kind Benefit Rule” means, with respect to in-kind benefits provided or expenses eligible for reimbursement which are subject to Section 409A of the Code, that (i) the benefits provided or the amount of expenses eligible for reimbursement during any calendar year shall not affect the benefits provided or expenses eligible for reimbursement in any other calendar year, except as otherwise provided in Treas. Reg. § 1.409A-3(i)(1)(iv)(B), and (ii) the reimbursement of an eligible expense shall be made as soon as practicable after Executive requests such reimbursement, but not later than the December 31 following the calendar year in which the expense was incurred and if the payment is subject to the Delayed Payment Date, not earlier than the Delayed Payment Date.

 

  

  

  

 

“Separation from Service” means Executive’s separation from service with the Company and its affiliates within the meaning of Treas. Reg. § 1.409A-1(h) or any successor thereto.

 

“Separation from Service Triggering Event” means the Executive’s Separation from Service for a reason other than death or Disability on the date of or within three years following a Change in Control provided Executive’s employment is terminated by the Company or its affiliates without Cause or by Executive for Good Reason.

 

“Termination Date” means the date of Executive’s Separation from Service.

 

“Triggering Event” means the earlier to occur of (i) a Separation from Service Triggering Event, or (ii) an Anticipatory Termination Triggering Event.

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