Document:

ex10_4.htm

    
      

    

    
      Exhibit
        10.4

       

      POMEROY
        IT SOLUTIONS, INC.

       

      SPECIAL
        CHANGE IN CONTROL BONUS AGREEMENT

       

      This
        SPECIAL CHANGE IN CONTROL BONUS AGREEMENT (this “Agreement”) is made and entered
        into as of this 11th day of
        December,
        2007, by and between Pomeroy IT Solutions, Inc., a Delaware corporation (the
        “Company”), and Keith Blachowiak – SVP, CIO of Business Technology, (the
“Employee”).

       

      WHEREAS,
        the Company and the Employee have agreed that it is in their respective best
        interests that (i) the ongoing services of the Employee be secured at this
        time;
        and (ii) the Employee fully devote his/her attention to maximizing the value
        of
        the Company and to managing the Company’s participation in any potential “Change
        in Control” relating to the Company.

       

      NOW,
        THEREFORE, for and in consideration of the premises and the mutual covenants
        and
        agreements herein contained, the Company and Employee hereby agree as
        follows:

       

      
        	
              	
                1.

              	
                Definitions.

              

      

       

      
        	
                 

              	
                (a)

              	
                For
                  purposes of this Agreement, “Change In Control”
                  shall mean the first to occur of any of the following
                  events:

              

      

       

      
        	
                 

              	
                (i)

              	
                any
                  “person” (as defined in Section 13(d) and 14(d) of the Securities Exchange
                  Act of 1934, as amended (the “Exchange Act”),
                  excluding for this purpose, (A) the Company or any subsidiary
                  of
                  the Company, or (B) any employee benefit plan of the Company or
                  any
                  subsidiary of the Company, or any person or entity organized, appointed
                  or
                  established by the Company for or pursuant to the terms of any
                  such plan,
                  which acquires beneficial ownership of voting securities of the
                  Company,
                  is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
                  Exchange Act), directly or indirectly of securities of the Company
                  representing more than fifty percent (50%) of the combined voting
                  power of
                  the Company’s then outstanding securities; provided, however, that no
                  Change In Control will be deemed to have occurred as a result of
                  a change
                  in ownership percentage resulting solely from an acquisition of
                  securities
                  by the Company; or

              

      

       

      
        	
                 

              	
                (ii)

              	
                persons
                  who, as of the Effective Date constitute the Board (the “Incumbent
                  Directors”) cease for any reason, including
                  without limitation, as a result of a tender offer, proxy contest,
                  merger
                  or similar transaction, to constitute at least a majority thereof,
                  provided that any person becoming a director of the Company subsequent
                  to
                  the Effective Date shall be considered an Incumbent Director if
                  such
                  person’s election or nomination for election was approved by a vote of
                  at
                  least fifty percent (50%) of the Incumbent Directors; but provided
                  further, that any such person whose initial assumption of office
                  is in
                  connection with an actual or threatened election contest relating
                  to the
                  election of members of the Board or other actual or threatened
                  solicitation of proxies or consents by or on behalf of a “person” (as
                  defined in Section 13(d) and 14(d) of the Exchange Act) other than
                  the
                  Board, including by reason of agreement intended to avoid or settle
                  any
                  such actual or threatened contest or solicitation, shall not be
                  considered
                  an Incumbent Director; or

              

      

       

      
        
          
          

        

        
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                (iii)

              	
                consummation
                  of a reorganization, merger or consolidation or sale or other disposition
                  of at least eighty percent (80%) of the assets of the Company (a
                  “Business Combination”), unless, in each case, following
                  such Business Combination, all or substantially all of the individuals
                  and
                  entities who were the beneficial owners of outstanding voting securities
                  of the Company immediately prior to such Business Combination beneficially
                  own, directly or indirectly, more than fifty percent (50%) of the
                  combined
                  voting power of the then outstanding voting securities entitled
                  to vote
                  generally in the election of directors of the Company resulting
                  from such
                  Business Combination (including, without limitation, a company
                  which, as a
                  result of such transaction, owns the Company or all or substantially
                  all
                  of the Company’s assets either directly or through one or more
                  subsidiaries) in substantially the same proportions as their ownership,
                  immediately prior to such Business Combination, of the outstanding
                  voting
                  securities of the Company; or

              

      

       

      
        	
                 

              	
                (iv)

              	
                approval
                  by the stockholders of the Company of a complete liquidation or
                  dissolution of the Company.

              

      

       

      
        	
                 

              	
                (b)

              	
                “Board”
                  shall mean the Board of Directors of the
                  Company.

              

      

       

      
        	
                 

              	
                (c)

              	
                “Disability”
                  shall have the meaning as set forth in the Employment Agreement
                  by and
                  between Employee and Company, or subsequent replacement there
                  of.

              

      

       

      
        	
                 

              	
                (d)

              	
                “Special
                  Change in Control Bonus Payment” shall mean
                  $235,000.00.

              

      

       

      
        	
                 

              	
                (e)

              	
                “Term”
                  shall have the meaning set forth in Section 2
                  below.

              

      

       

      
        
          
          

        

        
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                2.

              	
                Term
                  of Agreement; Duties.

              

      

       

      
        	
                 

              	
                (a)

              	
                Subject
                  to Section 4 below, this Agreement shall be effective on the date
                  hereof
                  and shall continue in effect through the first to occur of (i)
                  the  occurrence of a Change in Control or (ii) December 31, 2009
                  (the “Term”), unless extended by the President and Chief Executive Officer
                  and the Compensation Committee of the Board.  Upon expiration of
                  the Term, all obligations of the parties under this Agreement (except
                  obligations to pay money that exist as of the end of the Term and
                  any
                  obligation that by its terms survives the expiration of the Term)
                  shall
                  terminate and this Agreement shall have no further
                  effect.

              

      

       

      
        	
                 

              	
                (b)

              	
                The
                  Employee shall have such duties and obligations as are set forth
                  in the
                  Employment Agreement by and between Employee and
                  Company.

              

      

       

      
        	
                 

              	
                3.

              	
                Payment
                  of Special Change in Control Bonus Payment.  Subject to Section
                  4 and Section 14 below, the Company shall pay the Employee the
                  Special
                  Change in Control Bonus Payment within four (4) business days following
                  the occurrence of a Change in
                  Control.

              

      

       

      
        	
                 

              	
                4.

              	
                Termination
                  of Employment and Compensation upon
                  Termination.

              

      

       

      
        	
                 

              	
                (a)

              	
                In
                  the event of termination of the Employee’s employment during the Term due
                  to death,  Disability or by the Company without cause , as
                  defined in the Employment Agreement, Company shall pay to the Employee,
                  or
                  to his or her beneficiary in the event of death or disability,
                  the Special
                  Change in Control Bonus Payment if:

              

      

       

      
        	
                 

              	
                (i)

              	
                a
                  Change in Control occurs within 90 days of the date of such death,
                  Disability or termination of employment without cause;
                  or

              

      

       

      
        	
                 

              	
                (ii)

              	
                a
                  definitive agreement relating to a Change in Control has been executed
                  at
                  the effective date of such termination, and such agreement is subsequently
                  consummated by the parties; or

              

      

       

      
        	
                 

              	
                (iii)

              	
                a
                  definitive agreement relating to a Change in Control is subsequently
                  executed with a party with whom the Company has had substantive
                  negotiations regarding a Change in Control prior to the effective
                  date of
                  such termination, or with an affiliate of such party, and such
                  negotiations have not been interrupted for a material period of
                  time (90
                  days or more) prior to the date of a Change in Control, and such
                  agreement
                  is subsequently consummated by the parties.    For
                  purposes of this Section 4(a), the effective date of termination
                  of the
                  Employee’s employment with the Company shall be determined under his/her
                  Employment Agreement..

              

      

       

      
        
          
          

        

        
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                (b)

              	
                In
                  the event of a termination of the Employee’s employment during the Term
                  for any other reason, the Company shall have no obligation to pay
                  the
                  Employee any Special Change in Control Bonus
                  Payment.

              

      

       

      
        	
                 

              	
                (c)

              	
                If
                  the Employee’s employment by the Company is not terminated prior to the
                  expiration of the Term, then if a definitive agreement relating
                  to a
                  Change in Control has been executed prior to the expiration of
                  the Term or
                  if a definitive agreement relating to a Change in Control is subsequently
                  executed with a party with whom the Company has had substantive
                  negotiations regarding a Change in Control prior to the expiration
                  of the
                  Term, or with an affiliate of such party, and such negotiations
                  have not
                  been interrupted for a material period of time (90 days or more)
                  prior to
                  the date of execution of such definitive agreement, the Employee
                  shall be
                  entitled to the Special Change in Control Bonus Payment if the
                  transaction
                  contemplated by that definitive agreement is consummated after
                  the
                  expiration of the Term and Employee is employed by the Company
                  at such
                  time.

              

      

       

      
        	
                 

              	
                5.

              	
                Withholding
                  Taxes.  The Company shall withhold from any payment due to the
                  Employee hereunder (or his/her beneficiary or estate)  all taxes
                  which, by applicable federal, state, local or other law, the Company
                  is
                  required to withhold therefrom.

              

      

       

      
        	
                 

              	
                6.

              	
                Confidentiality.  The
                  Employee agrees that the terms of the Agreement, and all discussions
                  relating to this Agreement, are and shall remain confidential as
                  between
                  the parties, unless and to the extent, disclosure as required by
                  law or to
                  secure advice from a legal or tax
                  advisor.

              

      

       

      
        
          
          

        

        
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                7.

              	
                Successors
                  and Assigns: No Third-Party Beneficiaries.  This Agreement shall
                  inure to the benefit of and shall be binding upon the Company and
                  its
                  successors, assigns and legal representatives and the Employee,
                  his/her
                  heirs and legal representatives.  The Employee may not assign,
                  transfer, or otherwise dispose of the Agreement, or any of his/her
                  rights
                  or obligations hereunder other than his/her rights to payments
                  hereunder,
                  which may be transferred only by will or by the laws of descent
                  and
                  distribution), without the prior written consent of the Company,
                  and any
                  such attempted assignment, transfer or other disposition without
                  such
                  consent shall be null and void.  The Company shall be entitled
                  to assign this Agreement, without the prior written consent of
                  the
                  Employee, (i) in connection with the merger or consolidation of
                  the
                  Company with another unaffiliated corporation, or (ii) in connection
                  with
                  the sale of all or substantially all of the assets or business
                  operations
                  of the Company to another person or entity; provided, however,
                  that such
                  assignee expressly assumes all of the rights and obligations of
                  the
                  Company hereunder, and provided further that solely with respect
                  to any
                  obligations of the Company to make a Special Change in Control
                  Bonus
                  Payment, the Company shall remain liable with respect to such obligation
                  in the event of a default by such assignee.  After any such
                  assignment, the Agreement shall continue in full force and
                  effect.

              

      

       

      
        	
                 

              	
                8.

              	
                Entire
                  Agreement.  This Agreement sets forth the entire agreement
                  between the parties hereto with respect to the subject matter hereof,
                  and
                  supersedes all other agreements and understandings, written or
                  oral,
                  between the parties hereto with respect to the subject matter hereof;
                  provided, however, nothing in the Agreement is intended to affect
                  the
                  Employee’s rights to payments or benefits provided to the Employee under
                  his/her Employment Agreement and the Company’s equity based compensation
                  and/or welfare benefit plans.

              

      

       

      
        	
                 

              	
                9.

              	
                Waiver
                  and Amendments.  Any waiver, alteration, amendment or
                  modification of any of the terms of this Agreement shall be valid
                  only if
                  made in writing and signed by the parties hereto; provided however,
                  that
                  any such waiver, alteration, amendment or modification is consented
                  to on
                  the Company’s behalf by the President and Chief Executive Officer or the
                  Board.   No waiver by either of the parties hereto of their
                  rights hereunder shall be deemed to constitute a waiver with respect
                  to
                  any subsequent occurrences or transactions hereunder unless such
                  waiver
                  specifically states that it is to be construed as a continuing
                  waiver.

              

      

       

      
        
          
          

        

        
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                10.

              	
                Severability.
                  If any provision of this Agreement or the application of any provision
                  is
                  held invalid, unenforceable or otherwise illegal, the remainder
                  of this
                  Agreement and the application of such provision will not be affected,
                  and
                  the provision so held to be invalid, unenforceable or otherwise
                  illegal
                  will be reformed to the extent (and only to the extent) necessary
                  to make
                  it enforceable, valid or legal. To the extent any provisions held
                  to be
                  invalid, unenforceable or otherwise illegal cannot be reformed,
                  such
                  provisions are to be stricken herefrom and the remainder of this
                  Agreement
                  will be binding on the parties and their successors and assigns
                  as if such
                  invalid or illegal provisions were never included in this Agreement
                  from
                  the first instance.

              

      

       

      
        	
                 

              	
                11.

              	
                Governing
                  Law. This Agreement will be construed and enforced according to
                  the laws
                  of the Commonwealth of Kentucky, without giving effect to the conflict
                  of
                  laws principles thereof.

              

      

       

      
        	
                 

              	
                12.

              	
                Section
                  Headings.  The headings of the sections and subsections of this
                  Agreement are inserted for convenience only and shall be deemed
                  to
                  constitute a part hereof, affect the meaning or interpretation
                  hereof or
                  of any term or provision hereof.

              

      

       

      
        	
                 

              	
                13.

              	
                Obligations
                  Contingent on Performance.  The obligations of the Company
                  hereunder, including its obligation to make the payments provided
                  for
                  herein, are contingent upon the Employee’s performance of the Employee’s
                  obligations under his/her Employment
                  Agreement.

              

      

       

      
        	
                 

              	
                14.

              	
                Waiver
                  and Release.  The Employee acknowledges and agrees that any
                  payment made under this Agreement is contingent upon Employee delivering
                  to the Company at the time of such Change In Control a release
                  in the form
                  attached hereto as Exhibit A, and the expiration of all revocation
                  periods
                  related thereto.

              

      

       

      
        	
                 

              	
                15.

              	
                Counterparts.  This
                  Agreement may be executed in two or more counterparts, each of
                  which shall
                  be deemed to be an original but all of which together shall constitute
                  one
                  and the same instrument.  The execution of this Agreement may be
                  by actual or facsimile signature.

              

      

       

      
        	
                 

              	
                16.

              	
                Notices.  All
                  notices and other communications hereunder shall be in writing
                  and shall
                  be given by hand delivery to the other party or by registered or
                  certified
                  mail, return receipt requested, postage prepaid, addressed as
                  follows:

              

      

      
        
          
          

        

        
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                If
                  to the Employee:

              	
                Keith
                  Blachowiak

              

      

      150
        Hillside Drive

      Elma,
        NY  14059

      

      

      
        	
                If
                  to the Company:

              	
                Pomeroy
                  IT Solutions, Inc.

              

      

      1020
        Petersburg Road

      Hebron,
        Kentucky  41048

      Attention:  President
        and Chief Executive Officer

      

      

      
        	
                With
                  copy to:

              	
                Pomeroy
                  IT Solutions, Inc.

              

      

      1020
        Petersburg Road

      Hebron,
        Kentucky 41048

      Attention:  General
        Counsel

      
 

       

      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement of the date
        first
        written above.

       

      
        	
                Pomeroy
                  IT Solutions, Inc.

              	 	
                Employee

              	 
	 	 	 	 	 	 
	 	 	 	 
	
                By:

              	
                Keith
                  R. Coogan

              	 	
                By:

              	
                Keith
                  Blachowiak

              	 
	
                Title:

              	
                President/Chief
                  Executive Officer

              	 	
                Title;

              	
                SVP,
                  CIO Business Technology

              	 

      

       

       

       Page
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    Exhibit
      10.60

    AMENDED
      AND RESTATED

    SEPARATION
      AGREEMENT

    

    

    This
      Amended and Restated Separation Agreement (this
“Agreement”) is made and entered into as of the [__]
      day of [__________], 200_, by and between Electronic Clearing House, Inc.,
      a
      Nevada corporation (the “Company”) and [____________]
      (“Executive”) and supersedes and replaces that certain
      Separation Agreement, dated as of May 11, 2006, by and between the parties
      relating to the same subject matter and upon execution, such former Separation
      Agreement shall be null and void and of no further force and
      effect.

     

    RECITALS

     

    WHEREAS,
      Executive is employed by the Company as the [___________] of the Company;
      and

    

    WHEREAS,
      the Company considers it essential to its best interests and to the best
      interests of its stockholders to foster the continuous employment of its key
      personnel.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and promises herein
      contained and other good and valuable consideration, receipt and sufficiency
      of
      which are hereby acknowledged, the parties hereby agree as follows:

    

    1.           Definitions.

     

    a.           “Anticipated
      Annual Bonus” shall mean the highest possible annual bonus award
      to be received by Executive in a given fiscal year based upon and assuming
      the
      successful completion by each of the Company and Executive, as applicable,
      of
      performance criteria previously determined by the Board of Directors of the
      Company for such fiscal year.

     

    b.           “Change-in-Control”
      shall mean the consummation of (i) a merger, consolidation, plan of share
      exchange, or other reorganization involving the Company (a “Merger”) ,
      if more than 50% of the combined voting power (which voting power shall be
      calculated by assuming the conversion of all equity securities convertible
      (immediately or at some future time) into shares entitled to vote, but not
      assuming the exercise of any warrant or right to subscribe to or purchase those
      shares) of the continuing or surviving entity’s securities outstanding
      immediately after such merger, consolidation, plan of share exchange or other
      reorganization is owned, directly or indirectly, by persons who were not
      stockholders of the Company immediately prior to such merger, consolidation,
      plan of share exchange or other reorganization; provided, however,
      that in making the determination of ownership by the stockholders of the
      Company, immediately after the reorganization, equity securities which persons
      own immediately before the reorganization as stockholders of another party
      to
      the transaction shall be disregarded; (ii) the sale, lease, exchange, transfer
      or other disposition (in one transaction or a series of related transactions)
      of
      all or substantially all of the Company’s assets; or (iii) any Person (as
      defined below) shall have become the beneficial owner (within the meaning of
      Rule 13d-3 under the Exchange Act) directly or indirectly, of securities of
      the
      Company ordinarily having the right to vote for the election of directors
      representing 50% or more of the combined voting power of the then outstanding
      securities of the Company ordinarily having the right to vote for the election
      of directors;  and provided, further, that  an event shall
      constitute a Change-in-Control only if such event is a change in the ownership
      or effective control, or in the ownership of a substantial porion of the assets,
      within the meaning of Section 409A(a)(2)(A)(v) of the Code .

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

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

     

    d.           “Common
      Stock” means the common stock, $.01 par value of the
      Company.

     

    e.           “Exchange
      Act” means the Securities Exchange Act of 1934, as amended.
      References to a particular section of the Exchange Act include references to
      successor provisions.

     

    f.           “Involuntary
      Termination” shall mean Executive's cessation of the provision of
      services following (i) a material reduction in Executive's function, authority,
      duties, or responsibilities, without Executive's express written consent; (ii)
      a
      material reduction in salary or (iii) the Company’s material breach of this
      Agreement; provided, that, the Executive has provided notice to the
      Company of the existence of the conditions described above within 90 days of
      the
      initial discovery of the condition by Executive and, provided, further,
      that upon such notice, the Company has been provided a 30 day period during
      which it may remedy the condition.  If the condition is so remedied,
      any related cessation of the provision of services shall not be deemed an
“Involuntary Termination” hereunder.

     

    g.           “Options”
      shall mean options issued by the Company to the Executive to purchase Common
      Stock pursuant to the Company's Amended and Restated 2003 Incentive Stock Option
      Plan.

     

    h.           “Person”
      shall mean and include any individual, corporation, partnership, group,
      association or other “person”, as such term is used in Section 14(d) of the
      Exchange Act, other than the Company, any Subsidiary of the Company or any
      employee benefit plan(s) sponsored by the Company.

     

    i.           “Restricted
      Stock” shall mean shares of Common Stock acquired by Executive
      pursuant to, or outside of, the Company's Amended and Restated 2003 Incentive
      Stock Option Plan.

     

    j.           “Sales
      Commission Plan” shall mean a plan setting forth, for a given
      fiscal year, sales commission compensation payable to Executive based on
      performance criteria previously determined by the Board of Directors of the
      Company for such fiscal year.

     

    k.           “Subsidiary”
      means (a) any corporation of which more than 50% of the Voting Securities are
      at
      the time, directly or indirectly, owned by the Company, (b) any partnership
      or
      limited liability company in which the Company has a direct or indirect interest
      (whether in the form of voting power or participation in profits or capital
      contribution) of more than 50%, and (c) any other entity designated by the
      Board
      of Directors of the Company (“Board”) in which the
      Company has a direct or indirect interest.

     

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    l.           “Termination
      Date” shall mean the date in which Executive (i) is terminated by
      the Company without Cause, or (ii) ceases to provide services to the Company
      as
      a result of an Involuntary Termination with respect to Executive.

     

    m.           Termination
      for “Cause” shall mean termination by reason of: (i)
      any act or omission knowingly undertaken or omitted by Executive with the intent
      of causing damage to the Company or its affiliates, its properties, assets
      or
      business, or its stockholders, officers, directors or employees; (ii) any act
      of
      Executive involving a material personal profit to Executive, including, without
      limitation, any fraud, misappropriation or embezzlement, involving properties,
      assets or funds of the Company or any of its subsidiaries; (iii) Executive's
      consistent failure to perform his normal duties or any obligation under any
      provision of this Agreement, in either case, as directed by the Board; (iv)
      conviction of, or pleading nolo contendere to, (A) any crime or offense
      involving monies or other property of the Company; (B) any felony offense;
      or
      (C) any crime of moral turpitude; or (v) the chronic or habitual use or
      consumption of drugs or alcoholic beverages.

     

    n.           “Total
      Cash Compensation” shall mean an amount equal to the sum
      of Executive's annual base salary for the prior fiscal year including any bonus
      awards.

     

    o.           
      “Voting Securities” shall mean the issued and
      outstanding shares of Common Stock of the Company that are entitled to vote
      on a
      particular matter.

     

    2.           Vesting.
      Subject to the limitations of Section 5, in the event of a Change in Control,
      and provided that Executive is employed by the Company at the time of such
      Change in Control: (i) all of the outstanding Options shall become immediately
      vested and exercisable, and (ii) the entire unvested portion of any shares
      of
      Restricted Stock shall accelerate and immediately vest.

     

    3.           Payment
      of Bonus.  Subject to the limitations of Section 5, in the event
      of a Change in Control, and provided that Executive is employed by the Company
      at the time of such Change in Control, Executive shall be entitled to receive
      the following: (A) (i) in the event such Change in Control occurs in the first
      six (6) months of the Company’s then existing fiscal year, Executive shall
      receive a one time lump-sum cash payment equal to the product of Executive’s
      Anticipated Annual Bonus, multiplied by 0.50, or (ii)  in the event
      such Change in Control occurs during any period following the first six (6)
      months of the Company’s then existing fiscal year, Executive shall receive a one
      time lump-sum cash payment equal to a pro-rated portion of Executive’s
      Anticipated Annual Bonus, pro-rated based upon the number of months of service
      the Executive had provided in the then existing fiscal year (each a
“Bonus Payment”); and (B) in the event that Executive
      is entitled to receive commissions based on sales under any then existing Sales
      Commission Plan, Executive shall be entitled to receive any and all then earned
      sales commissions (“Sales Commission Payments”) for
      the remainder of the then existing fiscal year (notwithstanding when the Change
      in Control occurs).  Any Bonus Payment shall be payable by Company (or
      its corporate successor) to Executive within five (5) business days following
      the consummation of such Change in Control, and any Sales Commission Payments
      will be payable in accordance with the terms of the Sales Commission
      Plan.  The Company shall cause any successor/acquiring entity in such
      Change in Control to adopt the Sales Commission Plan.

     

    
      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    4.           Termination. 
      Subject to the limitations of Section 5, in the event that (i) a Change in
      Control occurs with respect to the Company (and provided that Executive is
      employed by the Company at the time of such Change in Control), and (ii) within
      a period of two (2) years following the closing of such Change in Control,
      Executive either (a) is terminated by the Company (or its corporate successor)
      without Cause, or (b) ceases to provide services to the Company (or its
      corporate successor) as a result of an Involuntary Termination with respect
      to
      Executive, then Executive shall be entitled to receive the following
      compensation:

     

    (i)           
      [__________ percent  (__%)] of the total amount of Executive's Total
      Cash Compensation; such payment to be made in a lump sum, payable by Company
      (or
      its corporate successor) to Executive within five (5) business days following
      the Termination Date; and

     

    (ii)    for
      a
      period of [**less than or equal to 2** (___) years] after the Termination Date,
      the Company (or its corporate successor) shall continue to make available to
      Executive medical benefits on a basis that is substantially similar (in benefits
      to Executive and costs to Company), in the aggregate, to the benefits that
      were
      available to the Executive immediately prior to the Change in
      Control.

    

    The
      parties intend that the compensation payable pursuant to subsection (i) above
      shall be treated as a short-term deferral as that term is used in section 409A
      of the Code and the regulations promulgated thereunder (collectively,
“section 409A”).

    

    5.           Statutory
      Limitations.

     

     

    a.     Notwithstanding
      any other provision of this Agreement, in the event the Company determines,
      based upon the advice of the tax advisors for the Company, that part or all
      of
      the consideration, compensation or benefits to be paid to Executive under this
      Agreement constitute "parachute payments" under Section 280G(b)(2) of the
      Internal Revenue Code of 1986, as amended, then, if the aggregate present value
      of such parachute payments, singularly or together with the aggregate present
      value of any consideration, compensation or benefits to be paid to Executive
      under any other plan, arrangement or agreement which constitute "parachute
      payments" (collectively, the "Parachute Amount")
      exceeds 2.99 times the Executive's "base amount," as defined in Section
      280G(b)(3) of the Code (the "Executive Base Amount"),
      the amounts constituting "parachute payments" which would otherwise be payable
      to or for the benefit of Executive shall be reduced to the extent necessary
      so
      that the Parachute Amount is equal to 2.99 times the Executive Base Amount
      (the
      "Reduced Amount");  provided, however, that
      Company shall pay to Executive the Parachute Amount without reduction if the
      Company determines that payment of the Parachute Amount would generate more
      after-tax income to Executive than the Reduced Amount..  In the event
      of a reduction of the payments that would otherwise be paid to Executive, then
      the Company may elect which and how much of any particular entitlement shall
      be
      eliminated or reduced and shall notify Executive promptly of such election;
      provided, however that the aggregate reduction shall be no more than as set
      forth in the preceding sentence of this Section 5(a).  Within ten (10)
      days following such election, the Company shall pay to Executive such amounts
      as
      are then due under this Agreement and shall pay to Executive in the future
      such
      amounts as become due under this Agreement.  As a result of the
      uncertainty in the application of Section 280G of the Code at the time of a
      determination hereunder, it is possible that payments will be made by the
      Company which should not have been made
      ("Overpayment") or that additional payments which are
      not made by the Company pursuant to this Section 5(a) should have been made
      ("Underpayment").  In the event of a final
      determination by the Internal Revenue Service, a final determination by a court
      of competent jurisdiction or a change in the provisions of the Code or
      regulations or tax law, that an Overpayment has been made, any such Overpayment
      shall be treated for all purposes as a loan to Executive which Executive shall
      repay to the Company together with interest at the applicable federal rate
      provided for in Section 7872(f)(2) of the Code.  In the event of a
      final determination by the Internal Revenue Service, a final determination
      by a
      court of competent jurisdiction or a change in the provisions of the Code or
      regulations or tax law pursuant to which an Underpayment arises under this
      Agreement, any such Underpayment shall be promptly paid by the Company to or
      for
      the benefit of Executive, together with interest at the applicable federal
      rate
      provided for in Section 7872(f)(2) of the Code.

     

    
      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    b.           If
      Officer is a “specified employee” within the meaning of Code
§ 409A(a)(2)(B)(i) and any payment required to be made pursuant to Section
      3 or 4 is subject to Code § 409A and not exempt from those requirements under
      any applicable regulations or other guidance of general applicability, then
      any
      such payment otherwise payable on account of Officer’s termination of employment
      during the period ending on the date that is six months after the Date of
      Termination shall be paid in a lump sum on the date that is six months after
      Officer’s Date of Termination  instead of the date on which it would
      otherwise be paid.

     

    

    6.           Termination
      of
      Agreement.                                                           In
      the event that Executive ceases to provide services to the Company (or its
      successor) for any reason, prior to a Change of Control, this Agreement shall
      terminate without further action by the Company or Executive, and shall
      thereafter be deemed null and void.

     

    7.           General
      Release and Waiver.  As a condition to any payment under this
      Agreement, in addition to the other requirements set forth herein, Executive
      shall enter into and deliver to the Company a general release and waiver in
      such
      form and containing such terms and conditions as the Board may
      require.

     

    8.           Executive
      Covenants.

     

    a.           For
      a period of one (1) year after the Termination Date (“Restricted
      Period”), Executive covenants not to, either directly or
      indirectly, for Executive or on behalf of or in conjunction with any other
      person, company, partnership, corporation, business, group, or other entity
      (each, a “Person”), solicit or attempt to solicit,
      recruit or attempt to recruit any employee, agent, or contract worker of the
      Company with whom Executive had contact during the course of [his or her]
      employment with the Company.

     

    
      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    b.           Executive
      further covenants and agrees that during the Restricted Period, Executive shall
      not, either directly or indirectly, for [himself or herself] or on behalf of
      or
      in conjunction with any other person or entity, (i) induce or attempt to induce
      any employee, officer or consultant of the Company to supply Confidential
      Information or Trade Secrets, as defined in Section 9 herein,  of the
      Company to any third person, firm or corporation, or (ii) induce or attempt
      to
      induce any Person who, as of the date of the inducement or attempted inducement
      or within twelve (12) months prior to that date, is or was a customer, supplier,
      vendor, licensee, licensor or other business relation of the Company, to cease
      doing business with the Company or in any way interfere with the relationship
      between any such customer, supplier, vendor, licensee, licensor or other
      business relation and the Company.

     

    c.           The
      covenants in this Section 8 are severable and separate, and the
      unenforceability of any specific covenant shall not affect the provisions of
      any
      other covenant.  If any provision of this Section
      8 relating to the time period, scope, or geographic
      areas of the restrictive covenants shall be declared by a court of competent
      jurisdiction to exceed the maximum time period, scope, or geographic area,
      as
      applicable, that such court deems reasonable and enforceable, then this
      Agreement shall automatically be considered to have been amended and revised
      to
      reflect such determination.

     

    d.           All
      of the covenants in this Section 8 shall be construed as an agreement
      independent of any other provisions in this Agreement, and the existence of
      any
      claim or cause of action Executive may have against the Company, whether
      predicated on this Agreement or otherwise, shall not constitute a defense to
      the
      enforcement by the Company of such covenants.

     

    e.           Executive
      has carefully read and considered the provisions of this Section 8 and,
      having done so, agrees that the restrictive covenants in this Section 8
      impose a fair and reasonable restraint on Executive and are reasonably required
      to protect the interests of the Company and its officers, directors, employees,
      and stockholders.

     

    9.    Trade
      Secrets and Confidential Information.

     

    a.           For
      purposes of this Section, “Confidential Information”
means any data or information (other than Trade
      Secrets) that is valuable to the
      Company (or, if owned by someone else, is valuable to that third party) and
      not
      generally known to the public or to competitors in the industry, including,
      but
      not limited to, any non-public information (regardless of whether in writing
      or
      retained as personal knowledge) pertaining to research and development; product
      costs and processes; stockholder information; pricing, cost, or profit factors;
      quality programs; annual budget and long-range business plans; marketing plans
      and methods; contracts and bids; and personnel.  “Trade
      Secret” means information including, but not limited to, any
      technical or nontechnical data, formula, pattern, compilation, program, device,
      method, technique, drawing, process, financial data, financial plan, product
      plan, list of actual or potential customers or suppliers or other information
      similar to any of the foregoing, which (i) derives economic value, actual or
      potential, from not being generally known to, and not being readily
      ascertainable by proper means by, other persons who can derive economic value
      from its disclosure or use and (ii) is the subject of efforts that are
      reasonable under the circumstances to maintain its secrecy.

     

    
      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    b.           Executive
      acknowledges that [he or she] has been employed by the Company in a confidential
      relationship wherein [he or she], in the course of his employment with the
      Company, has received and has had access to Confidential Information and Trade
      Secrets of the Company and accordingly, [he or she] is willing to enter into
      the
      covenants contained in Sections 9, 10, and 11 of this
      Agreement in order to provide the Company with what [he or she] considers to
      be
      reasonable protection for its interests.

     

    c.           Executive
      hereby agrees that, during the Restricted Period, [he or she] will hold in
      confidence all Confidential Information of the Company that came into [his
      or
      her] knowledge during [his or her] employment by the Company and will not
      disclose, publish or make use of such Confidential Information without the
      prior
      written consent of the Company.

     

    d.           Executive
      hereby agrees to hold in confidence all Trade Secrets of the Company that came
      into [his or her] knowledge during [his or her] employment by the Company and
      shall not disclose, publish, or make use of at any time after the Termination
      Date such Trade Secrets without the prior written consent of the Company for
      as
      long as the information remains a Trade Secret.

     

    e.           Notwithstanding
      the foregoing, the provisions of this Section will not apply to
      (i) Confidential Information or Trade Secrets that otherwise become
      generally known in the industry or to the public through no act of Executive
      or
      any person or entity acting by or on Executive's behalf, (ii) information
      independently developed by Executive without reference to the Company's
      Confidential Information or Trade Secrets, or (iii) disclosure of Confidential
      Information or Trade Secrets to the extent required to be disclosed by a court
      or governmental agency pursuant to a statute, regulation or valid order
      (provided that Executive first notifies the Company and gives it the opportunity
      to seek a protective order or to contest such required disclosure).

     

    f.           The
      parties agree that the restrictions stated in this Section 9 are in
      addition to and not in lieu of protections afforded to trade secrets and
      confidential information under applicable state law.  Nothing in this
      Agreement is intended to or shall be interpreted as diminishing or otherwise
      limiting the Company's rights under applicable state law to protect its trade
      secrets and confidential information.

     

    10.           Return
      of Company Property.  Upon the Termination Date or as promptly
      thereafter as is practicable, Executive shall deliver to the Company all
      correspondence, reports, records, designs, patents, business plans, financial
      statements, manuals, memoranda, customer lists, customer databases, charts,
      advertising materials, other similar data and other property delivered to or
      compiled by Executive by or on behalf of the Company or its representatives,
      vendors or customers which pertain to the business of the Company or future
      plans of the Company.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    11.           No
      Prior Agreements.  Executive hereby represents and warrants that
      the execution of this Agreement by Executive and the performance of his duties
      hereunder will not violate or be a breach of any agreement with the Company,
      a
      former employer, client, or any other person or entity.

     

    12.           Assignment;
      Binding Effect.  No assignment or transfer by any party of such
      party's rights and obligations under this Agreement will be made except with
      the
      prior written consent of the other parties to this Agreement; provided that
      the
      Company may assign this Agreement only to the Successor (as hereinafter
      defined), provided that any such assignee shall assume this Agreement in a
      writing delivered to Executive.  Further, upon Executive’s written
      request, the Company will seek to have any Successor (as hereinafter defined),
      by agreement in form and substance satisfactory to Executive, assent to the
      fulfillment by the Company of its obligations under this
      Agreement.  Failure of the Company to obtain such assent prior to or
      at the time a Person becomes a Successor shall constitute a material breach
      of
      this Agreement if a Change in Control of the Company has
      occurred.  For purposes of this Agreement,
“Successor” shall mean any Person that succeeds to, or
      has the practical ability to control (either immediately or with the passage
      of
      time), the Company’s business directly, by merger, consolidation or purchase of
      assets, or indirectly, by purchase of the Company’s Voting Securities or
      otherwise.  Subject to the preceding sentences, this Agreement shall
      be binding upon, inure to the benefit of, and be enforceable by the parties
      and
      their respective heirs, legal representatives, successors, and permitted
      assigns.

     

    13.           Complete
      Agreement; Waiver; Amendment.  Executive has no oral
      representations, understandings, or agreements with the Company or any of their
      respective officers, directors, or representatives covering the same subject
      matter as this Agreement.  This Agreement is the final, complete, and
      exclusive statement of expression of the agreement between the Company and
      Executive with respect to the subject matter hereof, and cannot be varied,
      contradicted, or supplemented by evidence of any prior or contemporaneous oral
      or written agreements.  This written Agreement may not be later
      modified except by a further writing signed by duly authorized officers of
      the
      Company and by Executive, and no term of this agreement may be waived except
      by
      a writing signed by the party waiving the benefit of such term.

     

    14.           Notice.  Whenever
      any notice is required hereunder, it shall be given in writing addressed as
      follows:

     

    
      	 	
              To
                the Company: 

            	
              Electronic
                Clearing House, Inc. 

            
	 	  	
              730
                Paseo Camarillo 

            
	 	  	
              Camarillo,
                California 93010 

            
	 	  	
              Attn:
                 Board of Directors 

            
	 	  	
              Facsimile
                No.:  (805) 419-8682 

            

    

    

    

    
      	 	
              To
                the Executive:

            	_________________ 
	 	 	_________________ 
	 	 	_________________ 
	 	 	
              Facsimile
                No.:  (___) ________ 

            

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    15.           Severability;
      Headings.  If any provision of the Agreement is rendered or
      declared illegal or unenforceable by reason of any existing or subsequently
      enacted legislation or by the decision of any arbitrator or by decree of a
      court
      of last resort, the parties shall promptly meet and negotiate substitute
      provisions for those rendered or declared illegal or unenforceable to preserve
      the original intent of this Agreement to the extent legally possible, but all
      other provisions of this Agreement shall remain in full force and
      effect.

     

    16.           Equitable
      Remedy.  Because of the difficulty of measuring economic losses to
      the Company as a result of a breach of the covenants set forth in Sections 8
      through 12, and because of the immediate and irreparable damage that would
      be caused to the Company for which monetary damages would not be a sufficient
      remedy, it is hereby agreed that in addition to all other remedies that may
      be
      available to the Company at law or in equity, the Company shall be entitled
      to
      specific performance and any injunctive or other equitable relief as a remedy
      for any breach or threatened breach of Executive's covenants.

     

    17.           Jointly
      Drafted. The parties and their respective counsel have
      participated jointly in the negotiation and drafting of this
      Agreement.  In the event that an ambiguity or question of intent or
      interpretation arises, this Agreement shall be construed as if drafted jointly
      by the parties, and no presumption or burden of proof shall arise favoring
      or
      disfavoring any party by virtue of the authorship of any of the provisions
      of
      this Agreement.

     

    18.           Governing
      Law.   This Agreement shall in all respects be governed by
      and construed in accordance with the laws of the State of California, not
      including the choice-of-law rules thereof.  All disputes arising from
      or relating to this Agreement shall be subject to the exclusive jurisdiction
      of
      and be litigated in the state or federal courts located in the State of
      California.  All parties hereby consent to the exclusive jurisdiction
      and venue of such courts for the litigation of all disputes and waive any claims
      of improper venue, lack of personal jurisdiction, or lack of subject matter
      jurisdiction as to any such disputes.

     

    19.           Attorney's
      Fees.  The losing party shall be liable to the prevailing party
      for its reasonable costs and attorney's fees incurred in any action to enforce
      this Agreement.

     

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          9

          
            

          

        

        
          
          

        

      

    

     

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

    

     

    
      	 	 	Electronic
              Clearing House, Inc.
	 	
              By:
                

            	
               

            
	 	 	
              Name:

            	
               

            
	 	 	
              Title: 
                

            	
               

            

    

    

    

    
      	 	
              EXECUTIVE:

            
	 	 
	 	 
	 	
               

            
	 	
              [______________]

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