Document:

Eighth Amendment dated January 1, 2008 to Employment Agreement

 EXHIBIT 10.1 
 EIGHTH AMENDMENT 
 TO 
 EMPLOYMENT AGREEMENT 
 This Eighth Amendment to Employment Agreement is
made and entered into effective as of January 1, 2008, by and between WATSCO, INC., a Florida corporation (hereinafter called the “Company”), and ALBERT H. NAHMAD (hereinafter called the “Employee”).

 RECITALS 
 WHEREAS, the Company and the Employee entered into an Employment Agreement effective as of January 31, 1996 (the “Employment Agreement”) pursuant to which the Employee renders certain services to the Company; and

 WHEREAS, the Compensation Committee of the Company’s Board of Directors amended the Employment Agreement effective as of
January 1, 2001, January 1, 2002, January 1, 2003, January 1, 2004, January 1, 2005, January 1, 2006 and January 1, 2007; and  
 WHEREAS, the Compensation Committee of the Company’s Board of Directors has determined to increase the Employee’s Base Salary from
$998,000 to $1,100,000, effective as of January 1, 2008, and has set the targets for the performance based compensation payable by the Company to the Employee for the year 2008; and 
 WHEREAS, the Company and the Employee now desire to amend the Employment Agreement and Exhibit A-1 to the Employment Agreement to reflect the
increase in Base Salary and specify the performance based compensation amount payable by the Company to the Employee for the calendar year 2008. 
 NOW, THEREFORE, in consideration of the mutual promises and covenants set forth in this Eighth Amendment, and other good and valuable consideration, the parties to this Eighth Amendment agree as follows: 
 1. All capitalized terms in this Eighth Amendment shall have the same meaning as in the Employment Agreement, unless otherwise specified. 
 2. The first sentence of Section 4 of the Employment Agreement is hereby amended to read as follows: 
 “Effective as of January 1, 2008, the Company agrees to pay to Employee and Employee agrees to accept from the Company a salary
at the annual rate of not less than One Million One Hundred Thousand ($1,100,000) Dollars, payable in bi-weekly or monthly installments.” 

 3. The Employment Agreement is hereby amended by replacing “Exhibit A-1 — 2007 Performance
Goals and Performance Based Compensation” with the attached “Exhibit A-1 — 2008 Performance Goals and Performance Based Compensation” thereto. 
 4. All other terms and conditions of the Employment Agreement shall remain the same. 
 IN WITNESS
WHEREOF, the parties have caused this Eighth Amendment to be duly executed effective as of the day and year first above written. 
  

			
	COMPANY:
	
	 WATSCO, INC.

		
	By:	 	 /s/ Barry S. Logan

		 	Barry S. Logan, Senior Vice President
	
	EMPLOYEE:
	
	 /s/ Albert H. Nahmad

	Albert H. Nahmad

 EXHIBIT A-1 
 2008 Performance Goals and Performance Based Compensation 
  
  

				
	 IV.   Formula
	  		
		
	 A.     Earnings Per Share
	  	 	Performance Based
	 	  	Compensation Formula
	 For each $.01 increase
	  	$	65,250
		
	 B.     Increase in Common Stock Price
	  		
	 (i) If the closing price of a share of Common Stock on 12/31/08 does not exceed $36.76
	  	$	0
		
	 (ii) If the closing price of a share of Common Stock on 12/31/08 exceeds $36.76 but does not equal or exceed $44.00, for each $0.01 increase in per share price of
a share of Common Stock above $36.76
	  	$	1,200
		
	 (iii) If the closing price of a share of Common Stock on 12/31/08 equals or exceeds $44.00, for each $0.01 increase in per share price of a share of Common Stock
above $36.76
	  	$	1,800
		
	V. Method of Payment	  		
	
	 A.     Cash. The Performance Based Compensation determined for 2008 under the formula set forth in
Section I above shall be paid in cash if and to the extent such Compensation does not exceed $5,000,000.

	
	 B.     Restricted Stock. If the Performance Based Compensation determined for 2008 under the
formula set forth in Section I above exceeds $5,000,000 (such excess amount being referred to as the “Additional Amount”), the Executive shall be granted a number of shares of restricted Class B Common Stock of the Company (the
“Shares”) equal to the amount determined by dividing (i) two times the Additional Amount, by (ii) the closing price for the Class B Common Stock of the Company on the American Stock Exchange as of the close of trading on
December 31, 2008. The value of any fractional shares shall be paid in cash. The restrictions on the Shares shall lapse on the first to occur of (i) October 15, 2018 (ii) termination of the Executive’s employment with the
Company by reason of Executive’s disability or death, (iii) the Executive’s termination of employment with the Company for Good Reason; (iv) the Company’s termination of Executive’s employment without Cause, or
(v) the occurrence of a Change in Control of the Company (“Good Reason”, “Cause”, and “Change in Control” to be defined in a manner consistent with the most recent grant of Restricted Stock by the Company to the
Executive).

		
	 VI.   2001 Incentive Compensation Plan
	  		
	
	 The performance based award and method of payment specified above (the “Award”) were made by the Compensation Committee in accordance with
Section 8 of the Company’s 2001 Incentive Compensation Plan (the “Incentive Plan”) and are subject to the limitations contained in Section 5 of the Incentive Plan. The Award is intended to qualify as “performance based
compensation” under Section 162(m) of the Internal Revenue Code.

  

			
	Dated: Effective as of January 1, 2008	 	 /s/ Paul Manley

		 	Paul Manley, Chairman
		 	Compensation Committee
		
		 	Acknowledged and Accepted:
		
		 	 /s/ Albert H. Nahmad

		 	Albert H. NahmadDescription of Material Terms of Non-Equity Incentive Compensation Plan

 Exhibit 10.1 
 Description of the Material Terms of PECO II, Inc.’s 
 Non-Equity Incentive
Compensation Plan for Fiscal 2008 
 Messrs. Heindel and Borders and Ms. Boyer (the “Named Executive Officers”) are
eligible to receive cash bonuses under the Company’s Non-Equity Incentive Compensation Plan for the fiscal year ending December 31, 2008 (the “2008 IC Plan”). Fifty percent of the potential cash bonus for each Named Executive
Officer is based upon the achievement of certain EBITDA (earnings before interest, taxes, depreciation and amortization) targets and 50% is based on the achievement of certain customer service goals. If the EBITDA targets are not met, no cash
bonuses will be awarded under the 2008 IC Plan. 
 If the threshold EBITDA target is met but no customer service goals are achieved, the
Named Executive Officers will receive the threshold incentive compensation in the form of cash bonuses in accordance with the table below. If the threshold EBITDA targets are met and exceeded and the customer service goals are achieved, the Named
Executive Officers will receive incentive compensation in the form of cash bonuses in accordance with the table below (with bonus amounts to be interpolated between the performance levels): 
 Incentive Compensation Payout Opportunities for Fiscal 2008 
  

										
	 	  	Threshold	  	Target	  	Maximum
	 John G. Heindel
Chairman of the Board, President, Chief Executive Officer, Chief Financial Officer and Treasurer
	  	$	75,000	  	$	150,000	  	$	300,000
				
	 Guy Kevin Borders
Vice President of Marketing & Product Development and Secretary
	  	$	25,000	  	$	50,000	  	$	100,000
				
	 Jacquie Boyer
Vice President of Sales
	  	$	42,500	  	$	85,000	  	$	170,000Secondment agreement

 Exhibit 10.2 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 SECONDMENT AGREEMENT 
 BY AND BETWEEN 
 LOYALTY MANAGEMENT GROUP CANADA, INC. 
 AND 
 ADS ALLIANCE DATA SYSTEMS,
INC. 
 DATED EFFECTIVE 
 OCTOBER 1, 2006 

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 SECONDMENT AGREEMENT 
 This Secondment Agreement (this “Agreement”) is made and entered effective as of the 1st day of October, 2006 (the “Effective Date”) by and between ADS Alliance Data Systems, Inc. a
corporation organized and existing under the laws of the State of Delaware, USA with its primary headquarter offices in Dallas, Texas (hereinafter referred to as the “Company”), and Loyalty Management Group Canada, Inc. a Canadian
corporation incorporated under the laws of Ontario, Canada (hereinafter referred to as the “Employer”). 
 WITNESSETH 

 WHEREAS, the Employer and the Company deem it necessary and beneficial that certain personnel currently employed by the Employer be seconded to the
Company in order for the Company to benefit from the experience and expertise provided by those personnel; and 
 WHEREAS, Employer is ready, willing and
able to assign and to second to the Company certain of its employees pursuant to the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, IT IS
HEREBY AGREED AS FOLLOWS: 
 ARTICLE 1 - DEFINITIONS 
 Unless the context otherwise requires, the following terms shall, in this Agreement, in the recitals hereto, and in the Annexes attached to this Agreement, have the following meanings: 
 “Affiliate” shall mean a company or other juridical entity, excluding a governmental agency or body, that directly or indirectly
controls, is controlled by, or is under common control with a party hereto. “Control” for this purpose shall, in the case of a company with outstanding voting stock, require the direct or indirect ownership of, or power to vote, the
outstanding shares of such company’s stock constituting fifty (50%) percent or more of the votes of any class of such company’s outstanding voting stock. NOTWITHSTANDING ANY OTHER PROVISION HEREOF TO THE CONTRARY, NEITHER PARTY
HERETO SHALL, FOR PURPOSES OF THIS AGREEMENT, BE CONSIDERED THE AFFILIATE OF THE OTHER PARTY HERETO. 
 “Agreement”
shall mean this Agreement entitled “Secondment Agreement”, together with the Annexes attached hereto, as the same may be amended in writing from time to time by the parties hereto. 
 “Annex” shall mean an annex to this Agreement, attached hereto and made a part hereof for all purposes. 
 “Secondee(s)” shall mean any employee of Employer seconded to the Company pursuant to the provisions of this Agreement. 
 “United States Dollars” shall mean dollars of the United States of America. 

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 “Canadian Dollars” shall mean dollars of Canada. 
 ARTICLE 2 - SCOPE OF AGREEMENT 
 (a)     Subject to the terms and upon the conditions of this Agreement, the Employer hereby undertakes to assign to the Company, certain of its employees for secondment to the Company from time to time during the term
hereof, to assist the Company in the conduct of its business operations. 
 (b)     The Employer shall be an independent
contractor engaged by the Company to make the Secondees available for the purposes of this Agreement, and neither the Employer nor any Secondee shall be a servant or employee of the Company. 
 (c)     Notwithstanding that for the duration of the secondment period the Company shall have the right to exercise supervision,
control and direction over each Secondee, each such Secondee shall remain an employee of the Employer for all purposes (other than for U.S. tax purposes), including promotion and career planning. 
 (d)     The Company shall have no authority to terminate employment or to administer disciplinary action with respect to any
Secondee, except to terminate the secondment pursuant to Article 3.01(b) hereof. Only the Employer shall have authority to discipline or terminate the employment of Secondees. The Company shall have the right to operationally manage the work of the
Secondee as needed in order to ensure Secondee achieves the purposes intended by this Agreement. 
 (e)     The Company
and Employer agree that no Secondee provided hereunder shall retain the authority to negotiate or enter into contracts on behalf of Employer during the course of the Secondment, nor are Secondees working on behalf of or for the benefit of Employer
during the course of their assignment to Company. Any Secondee who prior to their assignment hereunder held positions of corporate authority, including but not limited to, corporate officer positions, shall have those responsibilities suspended
during the course of their assignment pursuant to this Agreement and shall retain no requirements to provide services to Employer except if specifically agreed to in writing between the parties. At Annex 3, incorporated herein by reference is a list
of each Secondee, and any officer or director position held that will be suspended during the course of the Secondment of Secondee. 
 ARTICLE 3 - PROVISION OF SECONDEES 
  

	3.01	Provision of Secondees 

  

	 	(a)	 Attached hereto as Annex 1 is a list of the initial Secondees and the position to which each is assigned. Company and Employer may agree from time to time to
add positions and assign personnel as the needs of the Company dictate, and any additions or changes will be made to Annex 1 and agreed by both parties in 

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writing. The Employer shall give notice to the Company from time to time of any changes in the status of each respective Secondee on account of assignment,
reassignment, termination, retirement or other employment changes affecting said Secondee, and the attached listing shall be modified from time to time to reflect such changes. 

  

	 	(b)	The Secondees shall be approved by the Company, and such approval shall not be unreasonably withheld or unduly delayed. Upon notice by the Company that it does not approve of the
secondment or continued secondment of a Secondee, the Employer shall remove that person from the secondment no later than thirty (30) days after notice is delivered (as provided in Article 16.01 below). The Employer shall have the right to
nominate other persons to fill such positions identified on Annex 1 or, at its option, may notify the Company that it will decline to fill such position(s). 

  

	 	(c)	The Secondees shall perform duties for the benefit of the Company consistent with reasonable standards of performance established by the Company in a professional, competent and
diligent manner. The Company shall have the right to assign work duties as appropriate to each Secondee and to supervise, control and direct the actions of such Secondee during the period of the Secondee’s secondment except as otherwise limited
by this Agreement. 

  

	3.02	Duration of Secondment 

  

	 	(a)	The normal period of secondment for each Secondee shall be for a period to be negotiated between the parties. Each Secondee’s term shall be reviewed after three (3) years
of service, if the term extends to that length of time, to determine if a longer period is needed. 

 ARTICLE 4 –
REASSIGNMENT, REDEPLOYMENT, RESTRICTIONS 
 AND REVISIONS 
  

	4.01	Reassignment 

 Except in cases of death,
termination of employment, resignation, illness, disability or emergency, the Employer shall endeavor to provide the Company with a minimum of thirty (30) days advance notice before a Secondee is reassigned and/or redeployed. 
  

	4.02	Localized Employment 

 If at the end of the
assignment, Company desires to retain the services of the Secondee, the Company may offer Secondee local employment after first notifying Employer and securing Employer’s written agreement to the offer. If local employment is accepted by the
Secondee, his or her employment relationship will cease with Employer as if Secondee resigned voluntarily upon his or her own initiative. Company agrees to include this requirement in any offer it makes to Secondee. 

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	4.03	Revision of Assignment 

 Any change in the
assigned position to which any Secondee has been assigned within the Company, and any material change in duties and responsibilities shall require the prior written approval of the Employer. 
 ARTICLE 5 - DUTIES OF SECONDEES 
 During the period of each respective secondment, each
Secondee shall be integrated into the organization of the Company only to the extent necessary to carry out his or her assigned functions, and will be subject to the administrative regulations of, and to the direction and management of the Company,
except that any disciplinary action shall only be taken by Employer. Each Secondee shall perform the particular duties and assume the responsibilities attendant upon his or her assigned position as may be properly required by the management of the
Company, and in such performance the Secondee shall be acting as the representative of the Company; provided, however, that no Secondee shall have the authority to negotiate or conclude contracts on behalf of the Employer while on assignment to the
Company. If the position of the Secondee warrants authority to negotiate or conclude contracts on behalf of Company, Company shall provide specific authority to Secondee for handling such matters. 
 ARTICLE 6 - TRAINING 
 Attendance of a Secondee
at courses shall be arranged by the Company at the Company’s cost, if the Company deems that such attendance is beneficial to its business. In addition, Company may provide, at its discretion and expense, at reasonable intervals and for agreed
periods, continuing training to the Secondees in functions relevant to their duties for the Employer and/or the Company, and the Company shall use reasonable endeavors to cooperate with Employer in respect of such training by permitting the Secondee
time to attend such training. 
 ARTICLE 7 - RESPONSIBILITIES OF THE COMPANY 
  

	7.01    (a)	The Company shall provide or procure on behalf of the Secondees, at the Company’s cost, the following support and services in accordance with the Company’s practices and
policies and as set forth in any specific enumeration of benefits attached hereto at Annex 2 for each Secondee: 

  

	 	(i)	suitable accommodation and equipment, and other facilities for Secondees that may be required to enable them to carry out their duties in a proper and safe manner;

  

	 	(ii)	administrative assistance in connection with all travel to, within and from the United States including, but not limited to, obtaining required visas and/or work permits, transport,
import and export of personal effects, as well as immigration, customs and registration; 

  

	 	(iii)	local transport for business purposes; and 

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	 	(iv)	withholding of taxes to the appropriate taxing authority required by the applicable laws of the United States, if any. 

  

	 	(b)	All support and services referred to in Article 7.01(a) (ii) hereof shall also apply to immediate families of expatriate Secondees who accompany Secondees on assignment, if
any. 

  

	7.02	The Company shall provide the Employer with supplemental input concerning the performance of each Secondee in the seconded position. 

  

	7.03	The Company shall provide or procure on behalf of each Secondee, at the Company’s cost, any other accommodations or benefits necessary in order for Secondee to reasonably carry
out his or her responsibilities hereunder in the location of the Company. 

 ARTICLE 8 - CHARGES AND FEES FOR PROVISION OF
SECONDEES 
 8.01    Establishment and Elements of Fees: 
  

	 	(a)	During the period of each secondment, the Employer shall maintain payroll responsibility for payment of all salary and benefits that relate to the compensation package applicable to
the Secondee during the course of the assignment, in accordance with the applicable payroll laws of the United States and Canada and with policies of the Employer as the same may exist, from time to time. During the period of each secondment,
Company shall make payments to or on behalf of Secondee as they relate to host country expenses as required. 

  

	 	(b)	Subject to applicable laws regarding transfer pricing in effect in Canada and the United States, the Company shall owe Employer a fee as payment for services rendered by Secondee
that is equal to the costs incurred by Employer associated with this assignment in accordance with Employer’s personnel policies and practices, and any applicable laws and regulations, plus 10%. The cost basis for each Secondee shall be set
forth on Annex 2 and amended from time to time as necessary. 

  

	 	(c)    (i)	In addition, the Company shall be responsible for and shall pay the cost of Secondees’ relocation to and from the location where the Secondees will reside or work in the United
States in connection with the assigned duties and responsibilities of Secondee as enumerated in the documents provided at Annex 2. 

  

	 	(ii)	Such relocation and repatriation costs shall include transportation of Secondees and their families, personal and household effects of the Secondees and their families, transit
expenses, and all other related costs in accordance with Employer’s policies and procedures if applicable to Secondee. 

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	 	(d)	The cost basis for the fee owed by the Company to the Employer shall, in accordance with this Agreement, consist of all of the costs referred to in Article 6, Article 7
and in this Article 8.01 for which the Employer has made payment for each Secondee. 

  

	8.02	Payment of Fees 

  

	 	(a)	On a regular basis according to the accounting functions established by the Employer and communicated to the Company, the Company will pay Employer its fees for each Secondee, which
fees are calculated based on the formula set forth in Article 8.01(b), subject to applicable laws. Division of financial responsibility and specific benefits owed to each Secondee are attached hereto at Annex 2. 

 ARTICLE 9 - LIABILITY AND INDEMNITY 
  

	9.01	General Liability and Indemnity 

 Subject
to the indemnification and hold harmless provisions of Article 9.02 and Article 9.03 hereof, the Company shall be responsible for, and shall defend, protect, release, hold harmless, indemnify and keep indemnified Employer and the Affiliates of
Employer (other than the Company), and the officers, directors, managers, employees, insurers and agents of both (collectively, the “Employer Group”), from and against all costs, claims, liabilities, damages, suits, causes of action and
expenses (including, without limitation, attorneys’ fees and other legal costs and expenses), of whatsoever nature and howsoever caused, which in any way arises out of or in connection with the performance or non-performance of the
Company’s obligations under this Agreement including Company’s obligation to administer and make payments of the costs associated with the Secondees. 
 9.02 Employer Indemnity 
 Employer shall be responsible for, and shall defend, protect, release, hold harmless,
indemnify and keep indemnified the Company from and against all costs, claims, liabilities, damages, suits, causes of action, and expenses (including, without limitation, attorneys’ fees and other legal costs and expenses), for the following,
when arising out of, associated with or incident to the provision of services by the Secondees (or any of them) under this Agreement: 
  

	 	(a)	all injuries to, deaths, or illnesses of employees of Employer (including, but not limited to, the Secondees), 

  

	 	(b)	all damages to or losses of the property of the employees of Employer (including, but not limited to, the Secondees), and 

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	 	(c)	all claims for salaries, wages, taxes, benefit plans and programs, by and on behalf of Employer employees (other than the Secondees), 

 whether or not attributable to any act, omission, negligence (active, passive, sole, joint, or concurrent with that of any other person, party or
entity), strict liability, products liability, any condition or defect in any property, or other fault or responsibility of the Company. 
  

	9.03	Company Indemnity 

 Without prejudice to
the provisions of Article 9.01 hereof, but subject to Employer’s obligations as set forth in Article 9.02 hereof, the Company shall be responsible for, and shall defend, protect, release, hold harmless, indemnify, and keep indemnified the
Employer from and against all costs, claims, liabilities, damages, suits, causes of action, and expenses (including, without limitation, attorneys’ fees and other legal costs and expenses), for the following, when arising out of, associated
with or incident to the provision of services by the Secondees (or any of them) under this Agreement: 
  

	 	(a)	all injuries to, deaths, or illnesses of the Company employees and personnel (other than the Secondees) or those of third parties; 

  

	 	(b)	all damages to or losses of the Company’s or third parties’ property (other than property of the Secondees), and 

  

	 	(c)	all claims for salaries, wages, taxes, benefit plans and programs, by and on behalf of the Company employees and personnel (including the Secondees) or third parties,

 whether or not attributable to any act, omission, negligence (active, passive, sole, joint or concurrent with that of any
other person, partly or entity), strict liability, products liability, any condition or defect in any property, or other fault or responsibility of the Employer. 
 ARTICLE 10 - ASSIGNMENT AND DURATION 
  

	10.01	Assignment by the Company 

 The Company
shall not assign or transfer the whole or any part of this Agreement without the prior written approval of Employer. 
  

	10.02	Assignment by Employer 

 Employer shall, in
addition to its other rights set forth in this Agreement, have the right to assign or transfer its rights and obligations under this Agreement in whole or in part to an Affiliate (other than Company); provided that notice of such assignment or
transfer shall be promptly given to the Company, and that Employer shall remain responsible for the 

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due performance of this Agreement by its assignee or transferee and shall be relieved from its obligations hereunder only to the extent that such obligations
are performed by its assignee or transferee in accordance with this Agreement. 
 ARTICLE 11 - EFFECTIVE DATE AND DURATION

 This Agreement shall come into full force and effect as of the Effective Date, and shall remain in effect until this Agreement is
terminated upon the written agreement of the parties hereto. 
 ARTICLE 12 - FORCE MAJEURE 
  

	12.01	No failure or omission by either party hereto to carry out or observe any of the terms or conditions of this Agreement (other than the failure to pay money, when, as and if due
hereunder), shall give rise to any claim against the party failing or omitting to carry out or observe any of the terms or conditions hereof, or be deemed a breach of this Agreement by such party, if such failure or omission arises from force
majeure. As used herein, “force majeure” means an occurrence resulting from circumstances (other than strikes, industrial disputes or lockouts caused by or involving a party’s own workforce, except if part of a nation wide
general strike and other than mere shortage of labor, material, equipment or supplies) that are beyond the control of the party affected that delays or prevents the due performance of the provisions of this Agreement and which, by exercise of due
diligence, such party is unable to prevent or overcome, provided that the affected party shall give written notice to the other party no later than five (5) days after the party giving notice is first made aware of (a) the force majeure
occurrence, (b) the facts and circumstances giving rise to it, and (c) the obligation or performance which is delayed or is prevented by such force majeure. 

  

	12.02	A party invoking the provisions of Article 12.01 hereof shall take all actions that are reasonable under the circumstances to overcome the force majeure situation, and to proceed
with the performance of its obligations hereunder. 

 ARTICLE 13 - APPLICABLE LAW AND DISPUTE RESOLUTION

  

	13.01	Applicable Law 

 This Agreement shall be
governed by, construed, interpreted and applied in all respects in accordance with the laws of the State of Texas, United States of America, without reference or regard to conflict of law or choice of law rules or principles. 
  

	13.02	Litigation 

 The parties hereto hereby
accept the appropriate Texas State or Federal Court as the exclusive venue for any dispute between the parties hereto arising under this Agreement. 

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 ARTICLE 14 - NOTICES 
  

	14.01	Manner of Notices 

 Unless otherwise
expressly provided herein, any notice, advisement, statement, request, confirmation, or other communication under this Agreement (herein a “notice”) shall be given in writing and shall be deemed effectively given (a) upon personal
delivery to the party to be notified, (b) on confirmation of receipt by facsimile by the party to be notified; provided such facsimile is received during a business day for such party (otherwise, receipt shall be deemed to occur at the
commencement of the immediately following business day), or (c) three (3) days after deposit with a reputable overnight courier, prepaid for overnight delivery and addressed as set forth below in Article 15.02, or at such other address as
such party may, at any time, or from time to time, during the term hereof, designate by ten (10) days advance written notice to the other party set forth and identified below in Article 15.02 given in the foregoing manner. 
  

	14.02	Addresses 

  

			
	Employer	  	Company
		
	Loyalty Management Group Canada, Inc.	  	        ADS Alliance Data Systems, Inc.
	        438 University Avenue, Suite 600	  	        17655 Waterview Parkway
	        Toronto, ON M5G 2L1	  	        Dallas, TX 75252
		
	        Attention: Bryan Pearson, President	  	        Attention: J. Michael Parks, CEO

 ARTICLE 15 - MISCELLANEOUS 
  

	15.01	This Agreement constitutes the entire agreement of the parties hereto, and no other representations, memoranda, protocols, instruments, documents, contracts, agreements or other
matters, oral or written, prior to the Effective Date shall vary, alter or aid in the interpretation of the terms, conditions or provisions hereof. The headings and captions in this Agreement are for the convenience of the parties hereto in
identification of the provisions hereof and shall not constitute a part of this Agreement nor be considered interpretative thereof. 

  

	15.02	In the consideration and interpretation of this Agreement, the following shall apply: 

  

	 	(a)	This Agreement was prepared jointly by the parties hereto and not by either party to the exclusion of the other; 

  

	 	(b)	Failure to exercise any right hereunder shall not be considered a waiver of such right or rights in the future; 

  

	 	(c)	The Annexes attached hereto are incorporated herein by reference and made a part of this Agreement for all purposes; 

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	 	(d)	In the event of a conflict between the terms, conditions and/or provisions of an Annex and those of this Agreement, the terms, conditions and/or provisions of this Agreement shall
in the event of a conflict, prevail, govern and control; 

  

	 	(e)	The provisions hereof shall inure to the benefit of and be binding upon the parties hereto, their respective successors-in-interest and permitted assigns; 

 

	 	(f)	If any provision of this Agreement is or becomes invalid, such invalidity shall not affect the other provisions hereof. If the invalidity of one or more provisions or any other
circumstance concerning the performance of this Agreement reveals a situation not provided for in this Agreement, the parties shall jointly seek an arrangement having a valid legal and economic effect that will be as similar as possible to the
ineffective provisions and will cover the scope of any missing provisions in a reasonable manner for the purposes of this Agreement. 

  

	 	(g)	Words used herein importing the singular shall, where their context so permits or requires, be deemed to include the plural and vice versa; and 

  

	 	(h)	This Agreement may be amended only by the written agreement of the parties hereto. 

  

	15.03	No person or entity (including but not limited to any Secondee) shall receive, obtain or otherwise benefit from any rights, obligations or provisions of this Agreement (except for,
solely with respect to Article 9 hereof, the indemnified parties thereunder). By way of example and without limiting the application of this provision, no Secondee shall, except as provided above, gain any rights or privileges enforceable by
law or by contract on account of any provision in this Agreement. 

  

	15.04	Solely for the purposes of compliance with the laws of Canada, the Company will make any necessary payments on behalf of Secondees to Canadian taxing authorities as may be required.
By complying with Canadian law in this regard, neither the Company nor Employer shall, except as hereinafter provided, be deemed to have modified the status of the Secondees as employees of Employer. Notwithstanding the foregoing, for Canadian tax
purposes, the parties hereto agree to treat the Company as the employer of the Secondees during the secondment period. 

  

	15.05	If a Secondee is a resident of a country with which Canada or the United States has entered into a Totalization Agreement and the Secondee is eligible for an exemption from U.S. or
Canadian social security taxation pursuant to such agreement, then the Employer shall request and obtain, on behalf of such Secondee, a valid “certificate of coverage” from the appropriate governmental agency of such country in order to
establish the Secondee’s entitlement to such exemption. 

  

	15.06	 In the event of a breach or violation of this Agreement, neither party shall be entitled to recover special or consequential damages from the other party, and each
party hereby waives any claim or right to special, consequential, indirect exemplary or punitive 

 Secondment Agreement 
 Canada to United States 
 October 1, 2006 
  Page
 12
 of 15 
  

	 	 
damages hereunder even if caused by the active, passive, sole, joint, concurrent or comparative negligence, strict liability or other fault of the other
party hereto. 

 In Witness Whereof, and intending to be legally bound, the duly authorized and empowered representatives of the parties
hereto have executed this Agreement effective for all purposes as of the Effective Date. 
  

			
	Employer:
	
	Loyalty Management Group Canada, Inc.
		
	By:	 	/s/Bryan Pearson
	Name:	 	Bryan Pearson
	Title:	 	President
	Date:	 	May 8, 2008

  
  

			
	Company:
	
	ADS Alliance Data Systems, Inc.
		
	By:	 	/s/ J. Michael Parks
	Name:	 	J. Michael Parks
	Title:	 	CEO
	Date:	 	May 8, 2008

 Secondment Agreement 
 Canada to United States 
 October 1, 2006 
  Page
 13
 of 15 
  

 ANNEX 1 
 SECONDEES 
  

							
	 	  	 Individual
	  	 Date Secondment
 Begins
	  	 Positions at Host Location

				
	1.	  	John W. Scullion	  	October 1, 2006	  	President, Chief Operating Officer: ADS Alliance Data Systems, Inc., its parent corporation(s) and subsidiaries
				
	2.	  		  		  	
				
	3.	  		  		  	
				
	4.	  		  		  	
				
	5.	  		  		  	
				
	6.	  		  		  	
				
	7.	  		  		  	
				
	8.	  		  		  	
				
	9.	  		  		  	
				
	10.	  		  		  	
				
	11.	  		  		  	
				
	12.	  		  		  	
				
	13.	  		  		  	

  

 Secondment Agreement 
 Canada to United States 
 October 1, 2006 
  Page
 14
 of 15 
  

 ANNEX 2 
 Individual Assignment Benefits Detail 
  

							
	 NAME
	  	 EMPLOYER COSTS
 (Basis for Fees)
	  	 COMPANY
 ASSIGNMENT
	  	 COMPANY COSTS (Paid directly by the
Company and not subject to the
Fee)

				
	John Scullion	  	100% Salary, bonus, other compensation according to practice and policy;	  	ADS Alliance Data Systems, Inc.	  	Local housing; local transportation; local business expenses; air travel between home and host locations
				
		  		  		  	
				
		  		  		  	
				
		  		  		  	
				
		  		  		  	

 Secondment Agreement 
 Canada to United States 
 October 1, 2006 
  Page
 15
 of 15 
  

 ANNEX 3 
 SECONDEE CORPORATE OFFICER POSITION LIST 
  

					
	 NAME
	 	 POSITION HELD; ENTITY INVOLVED
	 	 SUSPENDED

			
	John Scullion	 	Loyalty Management Group, Inc.: President, CEO	 	Suspended authority
			
	John Scullion	 	LMG Travel Services Ltd.: President, Director	 	Suspended authority
			
	John Scullion	 	Thunderball Acquisition I Inc.: Director, President	 	Suspended authority
			
	John Scullion	 	Thunderball Acquisition II Inc.: Director, President	 	Suspended authority
			
	John Scullion	 	Epsilon Interactive CA Inc.: President	 	Suspended authority
			
	John Scullion	 	ICOM Ltd.: Director	 	Suspended authority

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