Document:

Exhibit 10.50.1

 

 

Employment
Agreement for David R. Carlucci

 

As
Amended and Restated at February 16, 2006

 

 

IMS
HEALTH INCORPORATED

 

Employment
Agreement for David R. Carlucci

 

As
Amended and Restated at February 16, 2006

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Employment

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Term

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Offices and Duties

  	
  2

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Generally

  	
  2

  
	
   

  	
  (b) Place of Employment

  	
  2

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Salary and Annual
  Incentive Compensation

  	
  2

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Base Salary

  	
  3

  
	
   

  	
  (b) Annual Incentive Compensation

  	
  3

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Long-Term Compensation, Including Restricted Stock,
  Stock Options, and Benefits, Deferred Compensation, and Expense Reimbursement

  	
  3

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Executive Compensation Plans

  	
  3

  
	
   

  	
  (b) Employee and Executive Benefit Plans

  	
  4

  
	
   

  	
  (c) Acceleration of Awards Upon a Change in
  Control

  	
  6

  
	
   

  	
  (d) Deferral of Compensation

  	
  6

  
	
   

  	
  (e) Reimbursement of Expenses

  	
  6

  
	
   

  	
  (f) Company Registration Obligations

  	
  6

  
	
   

  	
  (g) Limitations Under Code Section 409A

  	
  6

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Termination Due to
  Retirement, Death, or Disability

  	
  7

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Retirement

  	
  7

  
	
   

  	
  (b) Death

  	
  7

  
	
   

  	
  (c) Disability

  	
  8

  
	
   

  	
  (d) Other Terms of Payment Following
  Retirement, Death, or Disability

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Termination of
  Employment For Reasons Other Than Retirement, Death, or Disability

  	
  10

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Termination by the Company for Cause

  	
  10

  
	
   

  	
  (b) Termination by Executive Other Than For Good
  Reason

  	
  10

  
	
   

  	
  (c) Termination by the Company Without Cause
  Prior to a Change in Control

  	
  11

  
	
   

  	
  (d) Termination by Executive for Good Reason
  Prior to a Change in Control

  	
  13

  

 

i

 

	
   

  	
  (e) Termination by the Company Without Cause
  After a Change in Control

  	
  15

  
	
   

  	
  (f) Termination by Executive for Good Reason
  After a Change in Control

  	
  17

  
	
   

  	
  (g) Other Terms Relating to Certain
  Terminations of Employment

  	
  19

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Definitions Relating to
  Termination Events

  	
  20

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) “Cause”

  	
  20

  
	
   

  	
  (b) “Change in Control”

  	
  20

  
	
   

  	
  (c) “Compensation Accrued at Termination”

  	
  21

  
	
   

  	
  (d) “Disability”

  	
  22

  
	
   

  	
  (e) “Good Reason”

  	
  22

  
	
   

  	
  (f) “Potential Change in Control”

  	
  23

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Rabbi Trust Obligation
  Upon Potential Change in Control; Excise Tax-Related Provisions

  	
  24

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Rabbi Trust Funded Upon Potential Change in
  Control

  	
  24

  
	
   

  	
  (b) Gross-up If Excise Tax Would Apply

  	
  24

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Non-Competition and
  Non-Disclosure; Executive Cooperation; Non-Disparagement

  	
  26

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Non-Competition

  	
  26

  
	
   

  	
  (b) Non-Disclosure; Ownership of Work

  	
  26

  
	
   

  	
  (c) Cooperation With Regard to Litigation

  	
  27

  
	
   

  	
  (d) Non-Disparagement

  	
  27

  
	
   

  	
  (e) Release of Employment Claims

  	
  27

  
	
   

  	
  (f) Forfeiture of Outstanding Options

  	
  27

  
	
   

  	
  (g) Survival

  	
  28

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Governing Law;
  Disputes; Arbitration

  	
  28

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Governing Law

  	
  28

  
	
   

  	
  (b) Reimbursement of Expenses in Enforcing
  Rights

  	
  28

  
	
   

  	
  (c) Arbitration

  	
  28

  
	
   

  	
  (d) Interest on Unpaid Amounts

  	
  29

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Miscellaneous

  	
  29

  
	
   

  	
   

  	
   

  
	
   

  	
  (a) Integration

  	
  29

  
	
   

  	
  (b) Successors; Transferability

  	
  29

  
	
   

  	
  (c) Beneficiaries

  	
  30

  
	
   

  	
  (d) Notices

  	
  30

  
	
   

  	
  (e) Reformation

  	
  30

  
	
   

  	
  (f) Headings

  	
  30

  
	
   

  	
  (g) No General Waivers

  	
  30

  
	
   

  	
  (h) No Obligation To Mitigate

  	
  31

  
	
   

  	
  (i) Offsets; Withholding

  	
  31

  
	
   

  	
  (j) Successors and Assigns

  	
  31

  
	
   

  	
  (k) Counterparts

  	
  31

  

 

ii

 

	
   

  	
  (l) Due Authority and Execution

  	
  31

  
	
   

  	
  (m) Representations of Executive

  	
  31

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Indemnification

  	
  31

  

 

iii

 

IMS
HEALTH INCORPORATED

 

Employment
Agreement for David R. Carlucci

 

As
Amended and Restated at February 16, 2006

 

THIS
EMPLOYMENT AGREEMENT by and between IMS HEALTH INCORPORATED, a Delaware
corporation (the “Company”), and David R. Carlucci (“Executive”) became
effective as of October 7, 2002 (the “Effective Date”). The first
amendment and restatement of this Employment Agreement became effective as of December 3,
2002, the second amendment and restatement of this Employment Agreement became
effective as of January 1, 2005, and the third amendment and restatement
of this Employment Agreement shall become effective as of February 16,
2006.

 

W
I T N E S S E T H

 

WHEREAS,
the Company desires to employ Executive as Chief Executive Officer and
President of the Company and Chairman
of the Board (from April 1,
2006 onward), and Executive desires to accept such employment on the terms and
conditions herein set forth.

 

NOW,
THEREFORE, in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration the receipt and adequacy of
which the Company and Executive each hereby acknowledge, the Company and
Executive hereby agree as follows:

 

1.                                       Employment.

 

The
Company hereby agrees to employ Executive as its Chief Executive Officer and
President, and Executive hereby agrees to accept such employment during the
Term as defined in Section 2 (subject to Section 7(c) and 7(e))
and to serve in such capacities from and after January 1, 2005, upon the
terms and conditions set forth in this Employment Agreement (the “Agreement”). Prior to January 1,
2005, Executive served as Chief Operating Officer of the Company, which office
and title he relinquished with his consent. Commencing April 1, 2006,
Executive shall become Chairman of the Board, Chief Executive Officer and
President.

 

2.                                       Term.

 

The
term of employment of Executive under this Agreement (the “Term”) shall be the
period commencing on January 1, 2005 and ending on December 31, 2007
and any period of extension thereof in accordance with this Section 2,
except that the Term will end at a date, prior to the end of such period or
extension thereof, specified in Section 6 or 7 in the event of termination
of Executive’s employment. The Term, if not previously ended, shall be extended
automatically without further action by either party by one additional year
(added to the end of the Term) first on December 31, 2007 (extending the
Term to December 31, 2008) and on each

 

 

succeeding December 31
thereafter, unless either party shall have served written notice in accordance
with Section 12(d) upon the other party on or within 90 days before
the December 31 extension date electing not to extend the Term further as
of that December 31 extension date, in which case employment shall
terminate on that December 31 and the Term shall end at that date, subject
to earlier termination of employment and earlier termination of the Term in
accordance with Section 6 or 7. The foregoing notwithstanding, in the
event there occurs a Potential Change in Control during the period of 180 days
prior to the December 31 on which the Term will terminate as a result of
notice given by Executive hereunder, the Term shall be extended automatically
at that December 31 by an additional period such that the Term will extend
until the 180th day following such Potential Change in Control.

 

3.                                       Offices and Duties.

 

The
provisions of this Section 3 will apply during the Term, except as
otherwise provided in Section 7(c) and 7(e):

 

(a)  Generally.    Executive
shall serve as the Chief Executive Officer and President of the Company, and
from April 1, 2006 onward also as Chairman of the Board of the Company, and shall be
nominated and, if elected, shall serve as a member of the Board of Directors of
the Company (the “Board”) and, for so long as he is serving on the Board,
Executive agrees to serve as a member of any Board committee if the Board shall
elect Executive to such committee. In any and all
such capacities, Executive shall report only to the Board of Directors and, on
or before March 31, 2006, the Executive Chairman of the Board of the
Company. Executive shall have and perform such duties, responsibilities, and
authorities as are customary for the chief executive officer and president and
chairman of the board (from April 1, 2006 onward) of a publicly held
corporation of the size, type, and nature of the Company as they may exist from
time to time and consistent with such position and status. Executive shall
devote his full business time and attention, and his best efforts, abilities,
experience, and talent, to the positions of Chief Executive Officer, President
and Chairman of the Board (from April 1, 2006 onward) and for the
businesses of the Company without commitment to other business endeavors,
except that Executive (i) may make personal investments which are not in
conflict with his duties to the Company and manage personal and family financial
and legal affairs, (ii) may serve as a member of the board of
directors of such companies as he is serving on as of January 1, 2005, (iii) undertake
public speaking engagements, and (iv) serve as a director of (or similar
position with) any other business or an educational, charitable, community,
civic, religious, or similar type of organization, with the approval of the
Board, so long as such activities (i.e., those listed in clauses (i) through
(iv)) do not preclude or render unlawful Executive’s employment or service to
the Company or otherwise materially inhibit the performance of Executive’s
duties under this Agreement or impair the business of the Company or its
subsidiaries.

 

(b)  Place
of Employment.    Executive’s principal place of
employment shall be at the Company’s principal executive offices in Fairfield,
Connecticut.

 

4.                                       Salary and Annual Incentive Compensation.

 

As
partial compensation for the services to be rendered hereunder by Executive,
the Company agrees to pay to Executive during the Term the compensation set
forth in this Section 4.

 

2

 

(a)  Base
Salary.    The Company will pay to Executive
during the Term a base salary at the annual rate of $825,000, payable
commencing at April 1, 2006 in accordance with the Company’s usual payroll
practices with respect to senior executives (except to the extent deferred
under Section 5(d)). Executive’s annual base salary shall be reviewed by
the Compensation and Benefits Committee of the Board (the “Committee”) as of April 1
of each year of the Term, beginning in 2006, and may be increased above, but
may not be reduced below, the then-current rate of such base salary. For
purposes of this Agreement, “Base Salary” means Executive’s then-current base
salary.

 

(b)  Annual Incentive Compensation.    The
Company will pay to Executive during the Term annual incentive compensation
which shall offer to Executive an opportunity to earn additional compensation
based upon performance in amounts determined by the Committee in accordance
with the applicable plan and consistent with past practices of the Company;
provided, however, that the annual target incentive opportunity shall be not
less than 100% of Base Salary for achievement of target level performance, with
the nature of the performance and the levels of performance triggering payments
of such annual target incentive compensation for each year to be established
after consultation with Executive and communicated to Executive during the
first quarter of such year by the Committee. In addition, the Committee (or the
Board) may determine, in its discretion, to increase Executive’s annual target
incentive opportunity or provide an additional annual incentive opportunity, in
excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual
target incentive amount. Any annual incentive compensation payable to Executive
shall be paid in accordance with the Company’s usual practices with respect to
payment of incentive compensation to senior executives (except to the extent
deferred under Section 5(d)).

 

5.                                       Long-Term Compensation, Including Restricted Stock,
Stock Options, Benefits, Deferred Compensation, and Expense Reimbursement.

 

(a)  Executive Compensation Plans.    Executive
shall be entitled during the Term to participate, without discrimination or
duplication, in all executive compensation plans and programs intended for
general participation by senior executives of the Company, as presently in
effect or as they may be modified or added to by the Company from time to time,
subject to the eligibility and other requirements of such plans and programs
and subject to the limitation specified in Section 5(a)(v) below;
provided that for purposes of eligibility and benefit participation levels
under any such programs hereafter adopted that are not tax-qualified or
otherwise subject to nondiscrimination requirements under the Internal Revenue
Code of 1986, as amended, Executive shall be given full service credit for
service with IBM Corporation (“Past Service Credit”) and, with respect
to existing programs, Executive will be entitled to Past Service Credit as
provided in Section 5(b).

 

In
furtherance of the foregoing:

 

(i)                                     Executive
will continue to be eligible for awards of Restricted Stock Units (“PERS”)
under the Performance-Based Restricted Stock Program (the “PBRSP”) which match
the amount of annual incentive compensation earned under Section 4(b);
provided, however, that the Company may replace the PBRSP with a different
long-term incentive program providing an incentive

 

3

 

opportunity
determined by the Committee to be reasonably comparable to that under the
PBRSP.

 

(ii)                                  The
Company shall grant Executive, as of January 1, 2005, 38,000 Restricted
Stock Units (“RSUs”) pursuant to and subject to the terms of the Company’s
Amended and Restated 1998 Stock Incentive Plan (“1998 Plan”) (the “Promotion
RSU Grant”). The Promotion RSU Grant shall vest as to one-third of the RSUs on
each of the first three anniversaries of the date of grant (subject to
accelerated vesting in accordance with other provisions of this Agreement). Other
terms of the RSUs shall be governed by the 1998 Plan and the agreement under
the 1998 Plan setting forth the terms of the RSUs.

 

(iii)                               The Company shall grant
to Executive as of January 1, 2005 stock options (the “Promotion Options”)
to acquire 115,000 common shares of the Company, par value $.01 per share (the “Company
Common Stock”). The Promotion Options shall be granted under the 1998 Plan,
shall have an exercise price per share equal to the Fair Market Value (as
defined in the 1998 Plan) of the Company Common Stock on the date of grant,
shall vest and become fully exercisable as to one-third of the underlying
shares on each of the first three anniversaries of the date of grant (subject
to accelerated vesting in accordance with other provisions of this Agreement)
and shall provide for an exercise period equal to (x) the remaining option term
of ten years from date of grant for so long as Executive remains employed, (y)
upon Executive’s termination of employment by the Company without Cause or by
Executive for Good Reason, the shorter of the remaining option term or three
years from date of termination, and (z), upon other terminations of Executive’s
employment, in accordance with the terms of this Agreement and otherwise in
accordance with the customary terms of options under the 1998 Plan.

 

(iv)                              All
unvested PERS granted under the PBRSP prior to January 1, 2005 and all
unvested stock options granted by the Company prior to January 1, 2005
will continue to vest during the Term and shall be governed by the terms
applicable to the original award (including terms applicable under Executive’s
employment agreement as in effect prior to January 1, 2005).

 

(v)                                 Other
provisions of this Section 5 notwithstanding, Executive agrees that no
stock options (or any long-term equity award that replaces options) will be
granted to Executive for the 2005 award cycle.

 

(b)  Employee
and Executive Benefit Plans.    Executive shall
be entitled during the Term to participate, without discrimination or
duplication, in all employee and executive benefit plans and programs of the
Company, as presently in effect or as they may be modified or added to by the
Company from time to time, to the extent such plans are available to other
senior executives or employees of the Company, subject to the eligibility and
other requirements of such plans and programs, including without limitation
plans providing pensions, supplemental pensions, supplemental and other
retirement benefits, medical insurance, life insurance, disability insurance,
and accidental death or dismemberment insurance, as well as savings,
profit-sharing, and stock ownership plans, provided that such benefit plans and
programs, in the aggregate, shall provide Executive with benefits and
compensation substantially no less

 

4

 

favorable than those
provided by the Company to Executive under such plans and programs as in effect
on the Effective Date. Additionally, Executive shall be eligible to participate
in and receive benefits under the Company’s Employee Protection Plan, and
Executive shall be eligible to receive or participate in perquisites under
policies implemented by the Board and the Committee.

 

In
furtherance of and not in limitation of the foregoing, during the Term:

 

(i)                                     Executive
will participate as Chief Executive Officer and President and Chairman of the
Board (from April 1, 2006 onward) in all executive and employee vacation
and time-off programs; provided that Executive shall be entitled to a minimum
of 25 vacation days annually; and

 

(ii)                                  Executive
will be entitled to retirement benefits substantially in accordance with the
IMS Health Incorporated Supplemental Executive Retirement Plan (the “SERP”), as
in effect on the Effective Date; provided, however, that, the provisions of the
SERP notwithstanding, (A) for vesting purposes under the SERP, Executive
shall be credited with 26 years of “Service,” based on his prior employment
with IBM Corporation; (B) in place of the annual benefit formula in Section 3.1(b)(i) and
3.2(b)(i) of the SERP, Executive’s Retirement Benefit or Deferred Vested
Benefit shall be calculated as “8% of his Average Final Compensation multiplied
by the number of his years of Service not in excess of five years, plus 1.675%
of such Average Final Compensation multiplied by the number of his years of
Service over five through the month in which
Executive reaches age 65, with an additional benefit accruing in the
month in which Executive reaches age 65 such that the aggregate Retirement
Benefit or Deferred Vested Benefit at that time shall equal 60% (such
additional benefit being approximately 0.3%; 60% represents the maximum
authorized level of this Benefit)”; and (C), in addition to the offsets
specified in subsections (ii), (iii) and (iv) of Section 3.1(b) and
3.2(b) of the SERP, the Retirement Benefit or Deferred Vested Benefit
payable under the SERP shall be reduced by the amount of Executive’s vested
retirement benefits paid or payable to Executive under any qualified or
non-qualified defined benefit pension plan maintained by IBM Corporation as
though such benefits were a “Basic Plan Benefit” for purposes of the SERP (and
calculated in the form of an annual life annuity as provided for in Section (3) of
the SERP).

 

Any provision to the
contrary contained in this Agreement notwithstanding, unless Executive is terminated
by the Company for “Cause” (as defined in Section 8(a)) or Executive
terminates voluntarily and not for “Good Reason” (as defined in Section 8(e)),
Executive may elect continued participation after termination of employment in
the Company’s health and medical coverage for himself and his spouse and
dependent children after such coverage would otherwise end for his lifetime
(under rules in effect at the Effective Date hereof); provided, however,
that in the event of such election, Executive shall pay the Company each year
an amount equal to (i), during the first 18 months after termination (or other
applicable period under COBRA), the then-current annual COBRA premium being
paid (or payable) by any other former employee of the Company, and (ii), thereafter,
the annual amount payable in accordance with standard payment rates applicable
to employees as of the Effective date of this agreement except in each case as
may be otherwise provided under Section 6 or 7. If Executive’s age and

 

5

 

years of service do
not qualify him for full benefits under the Company’s retiree health benefits
plan, Executive and his spouse and qualifying dependents shall be entitled to
the same benefits as would have been provided if Executive’s age and years of
service had qualified for full benefits under such plan.

 

(c)  Acceleration
of Awards Upon a Change in Control.    In the
event of a Change in Control (as defined in Section 8(b)), or as otherwise
provided for hereunder, all outstanding stock options, restricted stock, RSUs
and other equity-based awards granted to and held by Executive shall become
vested and exercisable.

 

(d)  Deferral
of Compensation.    If the Company has in effect
or adopts any deferral program or arrangement permitting executives to elect to
defer any compensation, Executive will be eligible to participate in such
program on terms no less favorable than the terms of participation of any other
senior executive officer of the Company. Any plan or program of the Company
which provides benefits based on the level of salary, annual incentive, or
other compensation of Executive shall, in determining Executive’s benefits,
take into account the amount of salary, annual incentive, or other compensation
prior to any reduction for voluntary contributions made by Executive under any
deferral or similar contributory plan or program of the Company, but shall not
treat any payout or settlement under such a deferral or similar contributory
plan or program to be additional salary, annual incentive, or other
compensation for purposes of determining such benefits, unless otherwise
expressly provided under such plan or program.

 

(e)  Reimbursement
of Expenses.    The Company will promptly
reimburse Executive for all reasonable business expenses and disbursements
incurred by Executive in the performance of Executive’s duties during the Term
in accordance with the Company’s reimbursement policies as in effect from time
to time.

 

(f)  Company Registration Obligations.    The
Company will use its best efforts to file with the Securities and Exchange
Commission and thereafter maintain the effectiveness of one or more
registration statements registering under the Securities Act of 1933, as
amended (the “1933 Act”), the offer and sale of shares by the Company to
Executive pursuant to stock options or other equity-based awards granted to
Executive under Company plans or otherwise or, if shares are acquired by
Executive in a transaction not involving an offer or sale to Executive but
resulting in the acquired shares being “restricted securities” for purposes of
the 1933 Act, registering the reoffer and resale of such shares by Executive.

 

(g)  Limitations Under Code Section 409A. In
the event that, as a result of Section 409A of the Code (and any related
regulations or other pronouncements thereunder), any of the payments or
benefits that Executive is entitled to under the terms of this Agreement, the
SERP, or any other plan involving deferred compensation (as defined under Code Section 409A)
may not be made at the time contemplated by the terms thereof without causing
the Executive to be subject to an income tax penalty and interest and the timing of payment is the
sole cause of such adverse tax consequences, the Company will make
such payment on the first day permissible under Code Section 409A without
the Executive incurring a tax penalty. In particular, with respect to the lump
sum SERP payments and severance payments provided for hereunder, in the event
of any delay in the payment date as a result of Code Section 409A(a)(2)(A)(i) and
(B)(i), the Company will adjust the payments to reflect the deferred payment
date using the interest rate prescribed under the SERP. In addition, other
provisions 

 

6

 

of this Agreement, the
SERP, or any other such plan notwithstanding, the Company shall have no right
to accelerate any such payment or to make any such payment as the result of an
event except to the extent permitted under Section 409A.

 

6.                                       Termination Due to Retirement, Death, or Disability.

 

(a)  Retirement.    Executive
may elect to terminate employment hereunder by retirement at or after age 60 or
at such earlier age as may be approved by the Board (in either case, “Retirement”).
At the time Executive’s employment terminates due to Retirement, the Term will
terminate, all obligations of the Company and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which
expressly continue after termination of employment due to Retirement, and the
Company will pay Executive, and Executive will be entitled to receive, the
following:

 

(i)                                     Executive’s
Compensation Accrued at Termination (as defined in Section 8(c));

 

(ii)                                  In
lieu of any annual incentive compensation under Section 4(b) for the
year in which Executive’s employment terminated, an amount equal to annual
incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in PERS or in other non-cash awards) for that
year if his employment had not terminated, based on performance actually
achieved in that year (determined by the Committee following completion of the
performance year), multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the
denominator of which is the total number of days in the year of termination;

 

(iii)                               The vesting and
exercisability of stock options held by Executive at termination and all other
terms of such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted
(subject to Section 10(f) hereof); and

 

(iv)                              All
restricted stock and deferred stock awards, including outstanding PERS awards,
all other long-term incentive awards, and all deferral arrangements under Section 5(d),
shall be governed by the plans and programs under which the awards were granted
or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plan, as modified by this Agreement.

 

(b)  Death.    In
the event of Executive’s death which results in the termination of Executive’s
employment, the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 5 of this Agreement will immediately cease
except for obligations which expressly continue after death, and the Company
will pay Executive’s beneficiary or estate, and Executive’s beneficiary or
estate will be entitled to receive, the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  In
lieu of any annual incentive compensation under Section 4(b) for the
year in which Executive’s death occurred, an amount equal to the annual
incentive

 

7

 

compensation
that would have become payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for that year if his
employment had not terminated, based on performance actually achieved in that
year (determined by the Committee following completion of the performance
year), multiplied by a fraction the numerator of which is the number of days
Executive was employed in the year of his death and the denominator of which is
the total number of days in the year of death;

 

(iii)                               The vesting and
exercisability of stock options held by Executive at death and all other terms
of such options shall be governed by the plans and programs and the agreements
and other documents pursuant to which such options were granted; and

 

(iv)                              All
restricted stock and deferred stock awards, including outstanding PERS awards,
all other long-term incentive awards, and all deferral arrangements under Section 5(d),
shall be governed by the plans and programs under which the awards were granted
or governing the deferral, and all rights under the SERP and any other benefit
plan shall be governed by such plan, as modified by this Agreement.

 

(c)  Disability.    The
Company may terminate the employment of Executive hereunder due to the
Disability (as defined in Section 8(d)) of Executive. Such employment
shall terminate at the expiration of the 30-day period referred to in the
definition of Disability set forth in Section 8(d), unless Executive has
returned to service and presented to the Company a certificate of good health
prior to such termination as specified in Section 8(d). Upon termination
of employment, the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 5 of this Agreement will immediately cease
except for obligations which expressly continue after termination of employment
due to Disability, and the Company will pay Executive, and Executive will be
entitled to receive, the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  In
lieu of any annual incentive compensation under Section 4(b) for the
year in which Executive’s employment terminated, an amount equal to the annual
incentive compensation that would have become payable in cash to Executive
(i.e., excluding the portion payable in PERS or in other non-cash awards) for
that year if his employment had not terminated, based on performance actually
achieved in that year (determined by the Committee following completion of the
performance year), multiplied by a fraction the numerator of which is the
number of days Executive was employed in the year of termination and the
denominator of which is the total number of days in the year of termination;

 

(iii)                               The vesting and
exercisability of stock options held by Executive at termination and all other
terms of such options shall be governed by the plans and programs and the
agreements and other documents pursuant to which such options were granted, as
modified by this Agreement;

 

(iv)                              Any
performance objectives upon which the earning of performance-based restricted
stock and deferred stock awards and other long-term incentive awards

 

8

 

is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;

 

(v)                                 Disability
benefits shall be payable in accordance with the Company’s plans, programs and
policies (including the SERP) as modified by this Agreement, and all deferral
arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral, provided that, if the Company’s
payment obligation (determined on a monthly basis) pursuant to Section 7(c)(ii) hereof
(the “Section 7(c)(ii) Payments”) would have been greater than the
monthly payments if Executive’s termination of employment had been treated as a
termination by the Company without Cause, Executive shall be entitled to an
additional monthly payment equal to the difference between the Section 7(c)(ii) Payments
and the monthly payments due Executive pursuant to this Section 6(c)(v),
to the extent of such excess; and

 

(vi)                              For
the period extending from the date of termination due to Disability until the
date Executive reaches age 65, Executive shall continue to participate in those
employee and executive benefit plans and programs under Section 5(b) to
the extent such plans and programs provide medical insurance, disability
insurance and life insurance benefits (but not other benefits, such as pension
and retirement benefits, provided under Section 5(b)) in which Executive
was participating immediately prior to termination, the terms of which allow Executive’s
continued participation, as if Executive had continued in employment with the
Company during such period or, if the terms of such plans or programs do not
allow Executive’s continued participation, Executive shall be paid a cash
payment equivalent on an after-tax basis to the value of the additional
benefits (of the type described in this Section 6(c)(vi)) Executive would
have received under such plans or programs had Executive continued to be
employed during such period following Executive’s termination until age 65,
with such benefits provided by the Company at the same times and in the same
manner as such benefits would have been provided to Executive under such plans
and programs (it being understood that the value of any insurance-provided benefits
will be based on the premium cost to Executive, which shall not exceed the
highest risk premium charged by a carrier having an investment grade or better
credit rating); provided, however, that Executive must continue to satisfy the
conditions set forth in Section 10 in order to continue receiving the
benefits provided under this Section 6(c)(vi).

 

(d)  Other
Terms of Payment Following Retirement, Death, or Disability.    Nothing
in this Section 6 shall limit the benefits payable or provided in the event
Executive’s employment terminates due to Retirement, death, or Disability under
the terms of plans or programs of the Company more favorable to Executive (or
his beneficiaries) than the benefits payable or provided under this Section 6
(except in the case of annual incentives in lieu of which amounts

 

9

 

are paid hereunder),
including plans and programs adopted after the date of this Agreement. Amounts
payable under this Section 6 following Executive’s termination of
employment, other than those expressly payable following determination of
performance for the year of termination for purposes of annual incentive
compensation or otherwise expressly payable on a deferred basis, will be paid
as promptly as practicable after such termination of employment.

 

7.                                       Termination of Employment For Reasons Other Than
Retirement, Death, or Disability.

 

(a)  Termination
by the Company for Cause.    The Company may
terminate the employment of Executive hereunder for Cause (as defined in Section 8(a))
at any time. At the time Executive’s employment is terminated for Cause, the
Term will terminate, all obligations of the Company and Executive under
Sections 1 through 5 of this Agreement will immediately cease, and the Company
will pay Executive, and Executive will be entitled to receive, the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination (as defined in Section 8(c));

 

(ii)                                  All
stock options, restricted stock and deferred stock awards, including
outstanding PERS awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were
granted, as modified by this Agreement; and

 

(iii)                               All deferral
arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral, and all rights under the SERP
and any other benefit plan shall be governed by such plan, as modified by this
Agreement.

 

(b)  Termination by Executive Other Than For Good Reason.    Executive
may terminate his employment hereunder voluntarily for reasons other than Good
Reason (as defined in Section 8(e)) at any time. An election by Executive
not to extend the Term pursuant to Section 2 hereof shall be deemed to be
a termination of employment by Executive for reasons other than Good Reason at
the date of expiration of the Term, unless a Change in Control (as defined in Section 8(b))
occurs prior to, and there exists Good Reason at, such date of
expiration. At the time Executive’s employment is terminated by Executive other
than for Good Reason the Term will terminate, all obligations of the Company
and Executive under Sections 1 through 5 of this Agreement will immediately
cease, and the Company will pay Executive, and Executive will be entitled to receive,
the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  All
stock options, restricted stock and deferred stock awards, including
outstanding PERS awards, and all other long-term incentive awards will be
governed by the terms of the plans and programs under which the awards were
granted; and

 

10

 

(iii)                               All deferral
arrangements under Section 5(d) will be settled in accordance with
the plans and programs governing the deferral, and all rights under the SERP
and any other benefit plan shall be governed by such plan, as modified by this
Agreement.

 

(c)  Termination
by the Company Without Cause Prior to a Change in Control.    The
Company may terminate the employment of Executive hereunder without Cause, if
at the date of termination no Change in Control or a Potential Change in
Control has occurred, upon at least 90 days’ written notice to Executive. The
foregoing notwithstanding, the Company may elect, by written notice to
Executive, to terminate Executive’s positions specified in Sections 1 and 3 and
all other obligations of Executive and the Company under Section 3 at a
date earlier than the expiration of such 90-day period, if so specified by the
Company in the written notice, provided that Executive shall be treated as an
employee of the Company (without any assigned duties) for all other purposes of
this Agreement, including for purposes of Sections 4 and 5, from such specified
date until the expiration of such 90-day period. An election by the Company not
to extend the Term pursuant to Section 2 hereof shall be deemed to be a
termination of Executive’s employment by the Company without Cause at the date
of expiration of the Term and shall be subject to this Section 7(c) if
at the date of such termination no Change in Control or a Potential Change in
Control has occurred; provided, however, that, if Executive has attained age 65
at such date of termination, such termination shall be deemed a Retirement of
Executive. At the time Executive’s employment is terminated by the Company
(i.e., at the expiration of such notice period), the Term will terminate, all
remaining obligations of the Company and Executive under Sections 1 through 5
of this Agreement will immediately cease (except as expressly provided below),
and the Company will pay Executive, and Executive will be entitled to receive,
the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  Cash
in an aggregate amount equal to two times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an
amount equal to the greater of (x) the Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year of
termination or (y) the Executive’s annual incentive compensation that became
payable in cash to Executive (i.e., excluding the portion payable in PERS or in
other non-cash awards) for the latest year preceding the year of termination
based on performance actually achieved in that latest year (the sum of (A) and
(B) being herein referred to as the “Cash Compensation”) . The amount
determined to be payable under this Section 7(c)(ii) shall be payable
in monthly installments over the 24 months following termination, without
interest, except that (subject to Section 5(g)) the Company may elect to
accelerate payment of the remaining balance of such amount and to pay it as a
lump sum, without discount;

 

(iii)                               In lieu of any annual
incentive compensation under Section 4(b) for the year in which
Executive’s employment terminated, an amount equal to the annual target
incentive compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the year
of termination, multiplied by a fraction the numerator of which is the number
of days

 

11

 

Executive
was employed in the year of termination and the denominator of which is the total
number of days in the year of termination;

 

(iv)                              Stock
options held by Executive at termination, if not then vested and exercisable,
will become fully vested and exercisable at the date of such termination, and,
in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options
were granted;

 

(v)                                 Any
performance objectives upon which the earning of performance-based restricted
stock and deferred stock awards and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;

 

(vi)                              All
deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral and all rights
under the SERP and any other benefit plan shall be governed by such plan, as
modified by this Agreement; and

 

(vii)                           For a period of two years
after such termination (but not after Executive attains age 65), Executive
shall continue to participate in those employee and executive benefit plans and
programs under Section 5(b) to the extent such plans and programs
provide medical insurance, disability insurance and life insurance benefits
(but not other benefits, such as pension and retirement benefits, provided
under Section 5(b)) in which Executive was participating immediately prior
to termination, the terms of which allow Executive’s continued participation,
as if Executive had continued in employment with the Company during such period;
provided, however, that such participation shall terminate, or the benefits
under such plans and programs shall be reduced, if and to the extent Executive
becomes covered (or is eligible to become covered) by plans of a subsequent
employer or other entity to which Executive provides services during such
period providing comparable benefits. If the terms of the Company plans and
programs referred to in this Section 7(c)(vii) do not allow Executive’s
continued participation, Executive shall be paid a cash payment equivalent on
an after-tax basis to the value of the additional benefits described in this Section 7(c)(vii) Executive
would have received under such plans or programs had Executive continued to be
employed during such period, with such benefits provided by the Company at the
same times and in the same manner as such benefits would have been provided to
Executive under such plans and programs (it being understood that the value of
any insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating); provided,

 

12

 

however,
that Executive must continue to satisfy the conditions set forth in Section 10
in order to continue receiving the benefits provided under this Section 7(c)(vii).
Executive agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the benefits-continuation
period and of the nature and extent of benefits for which Executive becomes
eligible during such period which would reduce or terminate benefits under this
Section 7(c)(vii); and the Company be entitled to recover from Executive
any payments and the fair market value of benefits previously made or provided
to Executive hereunder which would not have been paid under this Section 7(c)(vii) if
the Company had received adequate prior notice as required by this sentence.

 

(d)    Termination by Executive for Good Reason Prior to a
Change in Control.    Executive may terminate
his employment hereunder for Good Reason, prior to a Change in Control, upon 90
days’ written notice to the Company; provided, however, that, if the Company
has corrected the basis for such Good Reason within 30 days after receipt of
such notice, Executive may not terminate his employment for Good Reason with
respect to the matters addressed in the written notice, and therefore Executive’s
notice of termination will automatically become null and void. At the time
Executive’s employment is terminated by Executive for Good Reason (i.e., at the
expiration of such notice period), the Term will terminate, all obligations of
the Company and Executive under Sections 1 through 5 of this Agreement will
immediately cease (except as expressly provided below), and the Company will
pay Executive, and Executive will be entitled to receive, the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  Cash
in an aggregate amount equal to two times the sum of (A) Executive’s Base
Salary under Section 4(a) immediately prior to termination plus (B) an
amount equal to the greater of (x) Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year of
termination or (y) Executive’s annual incentive compensation that became
payable in cash to Executive (i.e., excluding the portion payable in PERS or in
other non-cash awards) for the latest year preceding the year of termination
based on performance actually achieved in that latest year (the sum of (A) and
(B) being herein referred to as the “Cash Compensation”). The amount
determined to be payable under this Section 7(d)(ii) shall be payable
in monthly installments over the 24 months following termination, without
interest, except that (subject to Section 5(g)) the Company may elect to
accelerate payment of the remaining balance of such amount and to pay it as a
lump sum, without discount;

 

(iii)                               In lieu of any annual
incentive compensation under Section 4(b) for the year in which
Executive’s employment terminated, an amount equal to Executive’s annual target
incentive compensation potentially payable in cash to Executive (i.e., excluding
the portion payable in PERS or in other non-cash awards) for the year of
termination, multiplied by a fraction the numerator of which is the number of
days Executive was employed in the year of termination and the denominator of
which is the total number of days in the year of termination;

 

13

 

(iv)                              Stock
options held by Executive at termination, if not then vested and exercisable,
will become fully vested and exercisable at the date of such termination, and,
in other respects (including the period following termination during which such
options may be exercised), such options shall be governed by the plans and
programs and the agreements and other documents pursuant to which such options
were granted;

 

(v)                                 Any
performance objectives upon which the earning of performance-based restricted
stock and deferred stock awards and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;

 

(vi)                              All
deferral arrangements under Section 5(d) will be settled in accordance
with the plans and programs governing the deferral and all rights under the
SERP and any other benefit plan shall be governed by such plan, as modified by
this Agreement; and

 

(vii)                           For a period of two years
after such termination (but not after Executive attains age 65), Executive
shall continue to participate in those employee and executive benefit plans and
programs under Section 5(b) to the extent such plans and programs
provide medical insurance, disability insurance and life insurance benefits (but
not other benefits, such as pension and retirement benefits, provided under Section 5(b))
in which Executive was participating immediately prior to termination, the
terms of which allow Executive’s continued participation, as if Executive had
continued in employment with the Company during such period; provided, however,
that such participation shall terminate, or the benefits under such plans and
programs shall be reduced, if and to the extent Executive becomes covered (or
is eligible to become covered) by plans of a subsequent employer or other
entity to which Executive provides services during such period providing
comparable benefits. If the terms of the Company plans and programs referred to
in this Section 7(d)(vii) do not allow Executive’s continued
participation, Executive shall be paid a cash payment equivalent on an
after-tax basis to the value of the additional benefits described in this Section 7(d)(vii) Executive
would have received under such plans or programs had Executive continued to be
employed during such period, with such benefits provided by the Company at the
same times and in the same manner as such benefits would have been provided to
Executive under such plans and programs (it being understood that the value of
any insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating); provided, however, that Executive
must continue to satisfy the conditions set forth in Section 10 in order
to continue receiving the benefits provided under this Section 7(d)(vii).
Executive agrees to promptly notify the Company of any employment or

 

14

 

other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of benefits for which
Executive becomes eligible during such period which would reduce or terminate
benefits under this Section 7(d)(vii); and the Company shall be entitled
to recover from Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not have been
paid under this Section 7(d)(vii) if the Company had received
adequate prior notice as required by this sentence.

 

If
any payment or benefit under this Section 7(d) is based on Base
Salary or other level of compensation or benefits at the time of Executive’s
termination and if a reduction in such Base Salary or other level of
compensation or benefit was the basis for Executive’s termination for Good
Reason, then the Base Salary or other level of compensation in effect before
such reduction shall be used to calculate payments or benefits under this Section 7(d).

 

(e)    Termination by the Company Without Cause After a
Change in Control.    The Company may terminate
the employment of Executive hereunder without Cause, simultaneously with or
within 24 months following a Change in Control, upon at least 90 days’ written
notice to Executive. The foregoing notwithstanding, the Company may elect, by
written notice to Executive, to terminate Executive’s positions specified in
Sections 1 and 3 and all other obligations of Executive and the Company under Section 3
at a date earlier than the expiration of such 90-day notice period, if so
specified by the Company in the written notice, provided that Executive shall
be treated as an employee of the Company (without any assigned duties) for all
other purposes of this Agreement, including for purposes of Sections 4 and 5,
from such specified date until the expiration of such 90-day period. An
election by the Company not to extend the Term pursuant to Section 2
hereof shall be deemed to be a termination of Executive’s employment by the
Company without Cause at the date of expiration of the Term and shall be
subject to this Section 7(e) if the date of such termination
coincides with or is after a Change in Control or Potential Change in
Control; provided, however, that, if Executive has attained age 65 at such date
of termination, such termination shall be deemed a Retirement of Executive. At
the time Executive’s employment is terminated by the Company (i.e., at the
expiration of such notice period), the Term will terminate, all remaining
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease (except as expressly provided below), and the
Company will pay Executive, and Executive will be entitled to receive, the
following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  Cash
in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an
amount equal to the greater of (x) Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion payable in PERS or in other non-cash awards) for the year of
termination or (y) Executive’s annual incentive compensation that became
payable in cash to Executive (i.e., excluding the portion payable in PERS or in
other non-cash awards) for the latest year preceding the year of termination
based on performance actually achieved in that latest year. The amount
determined to be payable under this Section 7(e)(ii) shall be paid by
the Company not later than 15 days after Executive’s termination;

 

15

 

(iii)                               In lieu of any annual
incentive compensation under Section 4(b) for the year in which
Executive’s employment terminated, an amount equal to Executive’s annual target
incentive compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the year
of termination, multiplied by a fraction the numerator of which is the number
of days Executive was employed in the year of termination and the denominator
of which is the total number of days in the year of termination;

 

(iv)                              Stock
options held by Executive at termination, if not then vested and exercisable,
will become fully vested and exercisable at the date of such termination, and
any such options granted on or after the date hereof shall remain outstanding
and exercisable until the stated expiration date of the Option as though
Executive’s employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted;

 

(v)                                 Any
performance objectives upon which the earning of performance-based restricted
stock and deferred stock awards and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;

 

(vi)                              All
deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;

 

(vii)                           All rights under the SERP and any other benefit
plan shall be governed by such plan, as modified by this Agreement, except
that, the provisions of the SERP
notwithstanding, the term “Average Final Compensation” as used in the SERP
shall mean the greater of (A) Average
Final Compensation as defined in the SERP or (B) $1,650,000; and

 

(viii)                        For a period of three years
after such termination (but not after Executive attains age 65), Executive
shall continue to participate in those employee and executive benefit plans and
programs under Section 5(b) to the extent such plans and programs
provide medical insurance, disability insurance and life insurance benefits
(but not other benefits, such as pension and retirement benefits, provided
under Section 5(b)) in which Executive was participating immediately prior
to termination, the terms of which allow Executive’s continued participation,
as if Executive had continued in employment with the Company during such
period, and on terms no less favorable than the terms applicable to Executive
before the Change in Control; provided, however, that such participation shall
terminate, or the benefits under such plans and programs shall be reduced, if
and to the extent Executive becomes covered (or is eligible to become covered)

 

16

 

by
plans of a subsequent employer or other entity to which Executive provides
services during such period providing comparable benefits. If the terms of the
Company plans and programs referred to in this Section 7(e)(viii) do
not allow Executive’s continued participation, Executive shall be paid a cash
payment equivalent on an after-tax basis to the value of the additional
benefits described in this Section 7(e)(viii) Executive would have
received under such plans or programs had Executive continued to be employed
during such period, with such benefits provided by the Company at the same
times and in the same manner as such benefits would have been provided to
Executive under such plans and programs (it being understood that the value of
any insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating); provided, however, that Executive
must continue to satisfy the conditions set forth in Section 10 in order
to continue receiving the benefits provided under this Section 7(e)(viii).
Executive agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of benefits for which
Executive becomes eligible during such period which would reduce or terminate
benefits under this Section 7(e)(viii); and the Company shall be entitled
to recover from Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not have been
paid under this Section 7(e)(viii) if the Company had received
adequate prior notice as required by this sentence.

 

If
any payment or benefit under this Section 7(e) is based on Base
Salary or other level of compensation or benefits at the time of Executive’s
termination and if the Company has purported to reduce Base Salary or other
level of compensation or benefits prior to such termination in a manner that
would constitute Good Reason, then the Base Salary or other level of
compensation in effect before such reduction shall be used to calculate
payments or benefits under this Section 7(e).

 

(f)    Termination by Executive for Good Reason After a
Change in Control.    Executive may terminate
his employment hereunder for Good Reason, simultaneously with or within 24
months following a Change in Control, upon 90 days’ written notice to the
Company; provided, however, that, if the Company has corrected the basis for
such Good Reason within 30 days after receipt of such notice, Executive may not
terminate his employment for Good Reason, and therefore Executive’s notice of
termination will automatically become null and void. At the time Executive’s
employment is terminated by Executive for Good Reason (i.e., at the expiration
of such notice period), the Term will terminate, all obligations of the Company
and Executive under Sections 1 through 5 of this Agreement will immediately
cease (except as expressly provided below), and the Company will pay Executive,
and Executive will be entitled to receive, the following:

 

(i)                                     Executive’s
Compensation Accrued at Termination;

 

(ii)                                  Cash
in an aggregate amount equal to three times the sum of (A) Executive’s
Base Salary under Section 4(a) immediately prior to termination plus (B) an
amount equal to the greater of (x) Executive’s annual target incentive
compensation potentially payable in cash to Executive (i.e., excluding the
portion

 

17

 

payable
in PERS or in other non-cash awards) for the year of termination or (y)
Executive’s annual incentive compensation that became payable in cash to
Executive (i.e., excluding the portion payable in PERS or in other non-cash
awards) for the latest year preceding the year of termination based on
performance actually achieved in that latest year. The amount determined to be
payable under this Section 7(f)(ii) shall be paid by the Company not
later than 15 days after Executive’s termination;

 

(iii)                               In lieu of any annual
incentive compensation under Section 4(b) for the year in which
Executive’s employment terminated, an amount equal to Executive’s annual target
incentive compensation potentially payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the year
of termination, multiplied by a fraction the numerator of which is the number
of days Executive was employed in the year of termination and the denominator
of which is the total number of days in the year of termination;

 

(iv)                              Stock
options held by Executive at termination, if not then vested and exercisable,
will become fully vested and exercisable at the date of such termination, and
any such options granted on or after the date hereof shall remain outstanding
and exercisable until the stated expiration date of the Option as though
Executive’s employment did not terminate, and, in other respects, such options
shall be governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted;

 

(v)                                 Any
performance objectives upon which the earning of performance-based restricted
stock and deferred stock awards and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;

 

(vi)                              All
deferral arrangements under Section 5(d) will be settled in
accordance with the plans and programs governing the deferral;

 

(vii)                           All rights under the SERP and any other
benefit plan shall be governed by such plan, as modified by this Agreement, except
that, the provisions of the SERP
notwithstanding, the term “Average Final Compensation” as used in the SERP
shall mean the greater of (A) Average
Final Compensation as defined in the SERP or (B) $1,650,000; and

 

(viii)                        For a period of three years
after such termination (but not after Executive attains age 65), Executive
shall continue to participate in those employee and executive benefit plans and
programs under Section 5(b) to the extent such plans and programs
provide medical insurance, disability insurance and life insurance benefits
(but not other benefits, such as pension and retirement benefits,

 

18

 

provided
under Section 5(b)) in which Executive was participating immediately prior
to termination, the terms of which allow Executive’s continued participation,
as if Executive had continued in employment with the Company during such
period, and on terms no less favorable than the terms applicable to Executive
before the Change in Control; provided, however, that such participation shall
terminate, or the benefits under such plans and programs shall be reduced, if
and to the extent Executive becomes covered (or is eligible to become covered)
by plans of a subsequent employer or other entity to which Executive provides
services during such period providing comparable benefits. If the terms of the
Company plans and programs referred to in this Section 7(f)(viii) do
not allow Executive’s continued participation, Executive shall be paid a cash
payment equivalent on an after-tax basis to the value of the additional
benefits described in this Section 7(f)(viii) Executive would have
received under such plans or programs had Executive continued to be employed
during such period, with such benefits provided by the Company at the same
times and in the same manner as such benefits would have been provided to
Executive under such plans and programs (it being understood that the value of
any insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating); provided, however, that Executive
must continue to satisfy the conditions set forth in Section 10 in order
to continue receiving the benefits provided under this Section 7(f)(viii).
Executive agrees to promptly notify the Company of any employment or other
arrangement by which Executive provides services during the
benefits-continuation period and of the nature and extent of benefits for which
Executive becomes eligible during such period which would reduce or terminate
benefits under this Section 7(f)(viii); and the Company shall be entitled
to recover from Executive any payments and the fair market value of benefits
previously made or provided to Executive hereunder which would not have been
paid under this Section 7(f)(viii) if the Company had received
adequate prior notice as required by this sentence.

 

If
any payment or benefit under this Section 7(f) is based on Base
Salary or other level of compensation or benefits at the time of Executive’s
termination and if a reduction in such Base Salary or other level of
compensation or benefits was the basis for Executive’s termination for Good
Reason or would otherwise constitute Good Reason, then the Base Salary or other
level of compensation in effect before such reduction shall be used to
calculate payments or benefits under this Section 7(f).

 

(g)    Other Terms Relating to Certain Terminations of
Employment.    Whether a termination is deemed
to be at or following a Change in Control or Potential Change in Control for
purposes of Sections 7(c), (d), (e), or (f) is determined at the date of
termination, regardless of whether the Change in Control had occurred at the
time a notice of termination was given. In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f),
Executive will be entitled to the benefit of any terms of plans or agreements
applicable to Executive which are more favorable than those specified in this Section 7
(except in the case of annual incentives in lieu of which amounts are paid
hereunder). Amounts payable under this Section 7 following Executive’s
termination of employment, other than those expressly payable on a deferred
basis, will be paid as promptly as practicable after such a termination of
employment, and such amounts payable under Section 7(e) or 7(f) will
be paid in no event later

 

19

 

than 15 days after
Executive’s termination of employment unless not determinable within such
period.

 

8.                                       Definitions Relating to Termination Events.

 

(a)    “Cause”.    For
purposes of this Agreement, “Cause” shall mean Executive’s

 

(i)                                     willful
and continued failure to substantially perform his duties hereunder (other than
any such failure resulting from incapacity due to physical or mental illness or
disability or any failure after the issuance of a notice of termination by
Executive for Good Reason) which failure is demonstrably and materially damaging
to the financial condition or reputation of the Company and/or its
subsidiaries, and which failure continues more than 48 hours after a written
demand for substantial performance is delivered to Executive by the Board,
which demand specifically identifies the manner in which the Board believes
that Executive has not substantially performed his duties hereunder and the
demonstrable and material damage caused thereby; or

 

(ii)                                  the
willful engaging by Executive in misconduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise.

 

No act, or failure to act, on the part of Executive shall be deemed “willful”
unless done, or omitted to be done, by Executive not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Company. Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
Executive a copy of the resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to Executive and an opportunity
for Executive, together with Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, Executive was guilty of
conduct set forth above in this definition and specifying the particulars
thereof in detail.

 

(b)    “Change in Control”.    For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if, during the term of this Agreement:

 

(i)                                     any
“Person,” as such term is used for purposes of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), becomes the “Beneficial
Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company’s then-outstanding securities;

 

(ii)                                  during
any period of twenty-four months (not including any period prior to the
effectiveness of this Agreement), individuals who at the beginning of such
period constitute the Board, and any new director (other than (A) a
director nominated by a Person who has entered into an agreement with the
Company to effect a

 

20

 

transaction
described in Sections (8)(b)(i), (iii) or (iv) hereof, (B) a
director nominated by any Person (including the Company) who publicly announces
an intention to take or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if consummated would
constitute a Change in Control or (C) a director nominated by any Person
who is the Beneficial Owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of the Company’s
securities) whose election by the Board or nomination for election by the
Company’s stockholders was approved in advance by a vote of at least two-thirds
(2/3) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least a majority
thereof;

 

(iii)                               the stockholders of the
Company approve any transaction or series of transactions under which the
Company is merged or consolidated with any other company, other than a merger
or consolidation (A) which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation and (B) after which no Person holds 20%
or more of the combined voting power of the then-outstanding securities of the
Company or such surviving entity;

 

(iv)                              the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets; or

 

(v)                                 the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Change in Control has occurred.

 

(c)    “Compensation Accrued at Termination”.    For
purposes of this Agreement, “Compensation Accrued at Termination” means the
following:

 

(i)                                     The
unpaid portion of annual base salary at the rate payable, in accordance with Section 4(a) hereof,
at the date of Executive’s termination of employment, pro rated through such
date of termination, payable in accordance with the Company’s regular pay
schedule;

 

(ii)                                  All
earned and unpaid and/or vested, nonforfeitable amounts owing or accrued at the
date of Executive’s termination of employment under any compensation and
benefit plans, programs, and arrangements set forth or referred to in Sections
4(b) and 5(a) and 5(b) hereof (including the guaranteed bonus
and any earned and vested annual incentive compensation and long-term incentive
award) in which Executive theretofore participated, payable in accordance with
the terms and conditions of the plans, programs, and arrangements (and
agreements and documents thereunder) pursuant to which such compensation and
benefits were granted or accrued; and

 

21

 

(iii)                               Reasonable business
expenses and disbursements incurred by Executive prior to Executive’s
termination of employment, to be reimbursed to Executive, as authorized under Section 5(e),
in accordance the Company’s reimbursement policies as in effect at the date of
such termination.

 

(d)    “Disability”.    For
purposes of this Agreement, “Disability” means Executive’s absence from the
full-time performance of Executive’s duties hereunder for six consecutive
months as a result of his incapacity due to physical or mental illness or
disability, and, within 30 days after written notice of termination is
thereafter given by the Company, Executive shall have not returned to the
full-time performance of such duties.

 

(e)    “Good Reason”.    For
purposes of this Agreement, “Good Reason” shall mean, without Executive’s
express written consent, the occurrence of any of the following circumstances
unless, in the case of subsections (i), (iv), (vi) or (viii) hereof,
such circumstances are fully corrected prior to the date of termination
specified in the notice of termination given in respect thereof:

 

(i)         the assignment to Executive of duties inconsistent
with Executive's position and status hereunder, or an alteration, adverse to
Executive, in the nature of Executive's duties, responsibilities, and
authorities, Executive's positions or the conditions of Executive's employment
from those specified in Section 3 or otherwise hereunder (other than
inadvertent actions which are promptly remedied); for this purpose, it shall
constitute "Good Reason" under this subsection (e)(i) if (A)
Executive shall be required to report to and take direction from any person or
body other than the Board of Directors and, on or before March 31, 2006, the
Executive Chairman of the Board or (B) Executive shall be removed from
the Board, from the office of Chairman of the Board, or from any Board
committee on which Executive has served during the Term, or there occurs any
failure of Executive to be nominated, elected, reappointed or reelected as a
member of the Board, as Chairman of the Board, or as a member of any Board
committee on which he has served during the Term, including a failure of the
Board or stockholders to take such actions (notwithstanding their legal right
to do so); except the foregoing shall not constitute
Good Reason if occurring in connection with the termination of Executive's
employment for Cause, Disability, Retirement, as a result of Executive's death,
or as a result of action by or with the consent of Executive; for purposes of
this Section 8(e)(i), references to the Company (and the Board and stockholders
of the Company) refer to the ultimate parent company (and its board and
stockholders) succeeding the Company following an acquisition in which the
corporate existence of the Company continues, in accordance with Section 12(b);

 

(ii)                                  (A) a
reduction by the Company in Executive’s Base Salary, (B) the setting of
Executive’s annual target incentive opportunity or payment of earned annual
incentive in amounts less than specified under or otherwise not in conformity
with Section 4 hereof, (C) a change in compensation or benefits not
in conformity with Section 5, or (D) a reduction, after a Change in
Control, in perquisites from the level of such perquisites as in effect
immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control except for
across-the-board perquisite reductions similarly affecting all senior
executives of the Company and all senior executives of any Person in control of
the Company;

 

(iii)                               the relocation of the
principal place of Executive’s employment not in conformity with Section 3(b) hereof;
for this purpose, required travel on the Company’s business will not constitute
a relocation so long as the extent of such travel is

 

22

 

substantially
consistent with Executive’s customary business travel obligations in periods
prior to the Effective Date;

 

(iv)                              the
failure by the Company to pay to Executive any portion of Executive’s
compensation or to pay to Executive any portion of an installment of deferred
compensation under any deferred compensation program of the Company within
seven days of the date such compensation is due;

 

(v)                                 the
failure by the Company to continue in effect any material compensation or
benefit plan in which Executive participated immediately prior to a Change in
Control, unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company to continue Executive’s participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amounts of compensation or benefits provided and the level of
Executive’s participation relative to other participants, as existed at the
time of the Change in Control;

 

(vi)                              the
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to fully assume the Company’s obligations and to perform under this
Agreement, as contemplated in Section 12(b) hereof, in a form
reasonably acceptable to Executive;

 

(vii)                           any election by the Company
not to extend the Term of this Agreement at the next possible extension date
under Section 2 hereof, unless Executive will have attained age 65 at or
before such extension date; or

 

(viii)                        any other failure by the
Company to perform any material obligation under, or breach by the Company of
any material provision of, this Agreement.

 

(f)    “Potential Change in Control”.    For
purposes of this Agreement, a “Potential Change in Control” shall be deemed to
have occurred if, during the term of this Agreement:

 

(i)                                     the
Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;

 

(ii)                                  any
Person (including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in
Control; or

 

(iii)                               the Board adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control has occurred.

 

 

23

 

 

9.                                       Rabbi Trust Obligation Upon Potential Change in
Control; Excise Tax-Related Provisions.

 

                (a)    Rabbi Trust Funded Upon Potential Change in Control.    In
the event of a Potential Change in Control or Change in Control, the Company
shall, not later than 15 days thereafter, have established one or more rabbi
trusts and shall deposit therein cash in an amount sufficient to provide for
full payment of all potential obligations of the Company that would arise
assuming consummation of a Change in Control, or has arisen in the case of an
actual Change in Control, and a subsequent termination of Executive’s
employment under Section 7(e) or 7(f). Such rabbi trust(s) shall be
irrevocable and shall provide that the Company may not, directly or indirectly,
use or recover any assets of the trust(s) until such time as all obligations
which potentially could arise hereunder have been settled and paid in full,
subject only to the claims of creditors of the Company in the event of
insolvency or bankruptcy of the Company; provided, however, that if no Change
in Control has occurred within two years after such Potential Change in
Control, such rabbi trust(s) shall at the end of such two-year period become
revocable and may thereafter be revoked by the Company.

 

(b)    Gross-up If Excise Tax Would Apply.    In
the event Executive becomes entitled to any amounts or benefits payable in
connection with a Change in Control or other change in control (whether or not
such amounts are payable pursuant to this Agreement) (the “Severance Payments”),
if any of such Severance Payments are subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Code (or any similar federal, state or
local tax that may hereafter be imposed), the Company shall pay to Executive at
the time specified in Section 9(b)(iii) hereof an additional amount
(the “Gross-Up Payment”) such that the net amount retained by Executive, after
deduction of any Excise Tax on the Total Payments (as hereinafter
defined) and any federal, state and local income tax and Excise Tax upon the
payment provided for by Section 9(b)(i), shall be equal to the Total
Payments.

 

(i)                                     For purposes
of determining whether any of the Severance Payments will be subject to the
Excise Tax and the amount of such Excise Tax:

 

(A)                              any
other payments or benefits received or to be received by Executive in
connection with a Change in Control or Executive’s termination of employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any Person whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (which,
together with the Severance Payments, constitute the “Total Payments”) shall be
treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless in the opinion
of nationally-recognized tax counsel selected by Executive such other payments
or benefits (in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section 280G(b)(4) of
the Code in excess of the base amount within the meaning of Section 280G(b)(3) of
the Code, or are otherwise not subject to the Excise Tax;

 

24

 

(B)                                the
amount of the Total Payments which shall be treated as subject to the Excise
Tax shall be equal to the lesser of (x) the total amount of the Total Payments
and (y) the amount of excess parachute payments within the meaning of Section 280G(b)(1) of
the Code (after applying Section 9(b)(i)(A) hereof); and

 

(C)                                the
value of any non-cash benefits or any deferred payments or benefit shall be
determined by a nationally-recognized accounting firm selected by Executive in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.

 

(ii)                                  For
purposes of determining the amount of the Gross-Up Payment, Executive shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rate of taxation
in the state and locality of Executive’s residence on the Date of Termination,
net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes. In the event that the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time of termination of Executive’s employment, Executive shall
repay to the Company within ten days after the time that the amount of such
reduction in Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax and federal and state and local income
tax imposed on the Gross-Up Payment being repaid by Executive if such repayment
results in a reduction in Excise Tax and/or federal and state and local income
tax deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder at
the time of the termination of Executive’s employment (including by reason of
any payment the existence or amount of which cannot be determined at the time
of the Gross-Up Payment), the Company shall make an additional gross-up payment
in respect of such excess within ten days after the time that the amount of
such excess is finally determined.

 

(iii)                               The payments provided
for in this Section 9(b) shall be made not later than the fifteenth
day following the date of Executive’s termination of employment; provided,
however, that if the amount of such payments cannot be finally determined on or
before such day, the Company shall pay to Executive on such day an estimate, as
determined in good faith by the Company, of the minimum amount of such payments
and shall pay the remainder of such payments (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the thirtieth day
after the date of Executive’s termination of employment. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to Executive,
payable on the fifteenth day after the demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).

 

(iv)                              All
determinations under this Section 9(b) shall be made at the expense
of the Company by a nationally recognized public accounting firm selected by
Executive, and such determination shall be binding upon Executive and the
Company.

 

25

 

10.                                 Non-Competition and Non-Disclosure; Executive
Cooperation; Non-Disparagement.

 

(a)    Non-Competition.    Without
the consent in writing of the Board, Executive will not, at any time during the
Term and for a period of two years following termination of Executive’s
employment for any reason, acting alone or in conjunction with others, directly
or indirectly (i) engage (either as owner, investor, partner, stockholder,
employer, employee, consultant, advisor, or director) in any business in which
he has been directly engaged on behalf of the Company or any affiliate, or has
supervised as an executive thereof, during the last two years prior to such
termination, or which was engaged in or planned by the Company or an affiliate
at the time of such termination, in any geographic area in which such business
was conducted or planned to be conducted; (ii) induce any customers of the
Company or any of its affiliates with whom Executive has had contacts or
relationships, directly or indirectly, during and within the scope of his
employment with the Company or any of its affiliates, to curtail or cancel
their business with the Company or any such affiliate; (iii) induce, or
attempt to influence, any employee of the Company or any of its affiliates to
terminate employment; or (iv) solicit, hire or retain as an employee or
independent contractor, or assist any third party in the solicitation, hire, or
retention as an employee or independent contractor, any person who during the
previous 12 months was an employee of the Company or any affiliate; provided,
however, that the limitation contained in clause (i) above shall not apply
if Executive’s employment is terminated as a result of a termination by the
Company without Cause following a Change in Control or is terminated by
Executive for Good Reason following a Change in Control; and provided further,
that activities engaged in by or on behalf of the Company are not restricted by
this covenant. The provisions of subparagraphs (i), (ii), (iii), and (iv) above
are separate and distinct commitments independent of each of the other subparagraphs.
It is agreed that the ownership of not more than one percent of the equity
securities of any company having securities listed on an exchange or regularly
traded in the over-the-counter market shall not, of itself, be deemed
inconsistent with clause (i) of this Section 10(a).

 

(b)    Non-Disclosure;
Ownership of Work.    Executive shall not, at
any time during the Term and thereafter (including following Executive’s
termination of employment for any reason), disclose, use, transfer, or sell,
except in the course of employment with or other service to the Company, any
proprietary information, secrets, organizational or employee information, or
other confidential information belonging or relating to the Company and its
affiliates and customers so long as such information has not otherwise been
disclosed or is not otherwise in the public domain, except as required by law
or pursuant to legal process. In addition, upon termination of employment for
any reason, Executive will return to the Company or its affiliates all
documents and other media containing information belonging or relating to the
Company or its affiliates. Executive will promptly disclose in writing to the
Company all inventions, discoveries, developments, improvements and innovations
(collectively referred to as “Inventions”) that Executive has conceived or made
during the Term; provided, however, that in this context “Inventions” are
limited to those which (i) relate in any manner to the existing or
contemplated business or research activities of the Company and its affiliates;
(ii) are suggested by or result from Executive’s work at the Company; or (iii) result
from the use of the time, materials or facilities of the Company and its
affiliates. All Inventions will be the Company’s property rather than Executive’s.
Should the Company request it, Executive agrees to sign any document that the
Company may reasonably require to establish ownership in any Invention.

 

26

 

(c)    Cooperation
With Regard to Litigation.    Executive agrees
to cooperate with the Company, during the Term and thereafter (including
following Executive’s termination of employment for any reason), by making
himself available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to assist the Company, or any
subsidiary or affiliate of the Company, in any such action, suit, or
proceeding, by providing information and meeting and consulting with the Board
or its representatives or counsel, or representatives or counsel to the
Company, or any subsidiary or affiliate of the Company, as may be reasonably
requested and after taking into account Executive’s post-termination
responsibilities and obligations. The Company agrees to reimburse Executive, on
an after-tax basis, for all expenses actually incurred in connection with his
provision of testimony or assistance.

 

(d)    Non-Disparagement.    Executive
shall not, at any time during the Term and thereafter make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the Company, its subsidiaries or affiliates or
their respective officers, directors, employees, advisors, businesses or
reputations, nor shall Executive’s successor in office make any such statements
or representations regarding Executive. Notwithstanding the foregoing, nothing
in this Agreement shall preclude Executive or his successor from making
truthful statements that are required by applicable law, regulation or legal
process.

 

(e)    Release
of Employment Claims.    Executive agrees, as a
condition to receipt of any termination payments and benefits provided for in
Sections 6 and 7 herein (other than Compensation Accrued at Termination) (the “Termination
Benefits”), that he will execute a general release in the standard form
employed by the Company, releasing any and all claims arising out of Executive’s
employment (other than enforcement of this Agreement and other than with
respect to vested rights or rights provided for under any benefit plan or
arrangement of the Company).

 

(f)    Forfeiture
of Outstanding Options.    The provisions of
Sections 6 and 7 notwithstanding, if Executive willfully and materially fails
to substantially comply with any restrictive covenant under this Section 10,
all options to purchase Common Stock granted by the Company and then held by
Executive or a transferee of Executive shall be immediately forfeited and
thereupon such options shall be cancelled. Notwithstanding the foregoing,
Executive shall not forfeit any option unless and until there shall have been
delivered to him, within six months after the Board (i) had knowledge of
conduct or an event allegedly constituting grounds for such forfeiture and (ii) had
reason to believe that such conduct or event could be grounds for such
forfeiture, a copy of a resolution duly adopted by a majority affirmative vote
of the membership of the Board (excluding Executive) at a meeting of the Board
called and held for such purpose (after giving Executive reasonable notice
specifying the nature of the grounds for such forfeiture and not less than 30
days to correct the acts or omissions complained of, if correctable, and
affording Executive the opportunity, together with his counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board,
Executive has engaged and continues to engage in conduct set forth in this Section 10(f) which
constitutes grounds for forfeiture of Executive’s options; provided, however,
that if any option is exercised after delivery of such notice and the Board
subsequently makes the determination described in this sentence, Executive
shall be required to pay to the Company an amount equal to the difference
between the aggregate value of the shares acquired upon such exercise at the
date of the Board determination and the aggregate exercise price paid by
Executive. Any such

 

27

 

forfeiture shall apply
to such options notwithstanding any term or provision of any option agreement.
In addition, options granted to Executive on or after the Effective Date, and
gains resulting from the exercise of such options, shall be subject to
forfeiture in accordance with the Company’s standard policies relating to such
forfeitures and clawbacks, as such policies are in effect at the time of grant
of such options.

 

(g)    Survival.    The
provisions of this Section 10 shall survive the termination of the Term
and any termination or expiration of this Agreement.

 

11.                                 Governing Law; Disputes; Arbitration.

 

(a)    Governing
Law.    This Agreement is governed by and is to
be construed, administered, and enforced in accordance with the laws of the
State of Delaware, without regard to conflicts of law principles. If under the
governing law, any portion of this Agreement is at any time deemed to be in
conflict with any applicable statute, rule, regulation, ordinance, or other
principle of law, such portion shall be deemed to be modified or altered to the
extent necessary to conform thereto or, if that is not possible, to be omitted
from this Agreement. The invalidity of any such portion shall not affect the
force, effect, and validity of the remaining portion hereof. If any court
determines that any provision of Section 10 is unenforceable because of
the duration or geographic scope of such provision, it is the parties’ intent
that such court shall have the power to modify the duration or geographic scope
of such provision, as the case may be, to the extent necessary to render the
provision enforceable and, in its modified form, such provision shall be
enforced.

 

(b)    Reimbursement
of Expenses in Enforcing Rights.    All
reasonable costs and expenses (including fees and disbursements of counsel)
incurred by Executive in negotiating this Agreement (up to a maximum of
$15,000) and thereafter seeking to interpret this Agreement or enforce rights
pursuant to this Agreement shall be paid on behalf of or reimbursed to
Executive promptly by the Company, whether or not Executive is successful in
asserting such rights; provided, however, that no reimbursement shall be made
of such expenses relating to any unsuccessful assertion of rights if and to the
extent that Executive’s assertion of such rights was in bad faith or frivolous,
as determined by arbitrators in accordance with Section 11(c) or a
court having jurisdiction over the matter.

 

(c)    Arbitration.    Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in Fairfield, CT by three arbitrators in
accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association in effect at the time of submission to
arbitration. Judgment may be entered on the arbitrators’ award in any court
having jurisdiction. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company and Executive hereby consent to the
jurisdiction of any or all of the following courts: (i) the United States
District Court for the District of Connecticut, (ii) any of the courts of
the State of Connecticut, or (iii) any other court having jurisdiction.
The Company and Executive further agree that any service of process or notice
requirements in any such proceeding shall be satisfied if the rules of
such court relating thereto have been substantially satisfied. The Company and
Executive hereby waive, to the fullest extent permitted by applicable
law, any objection which it may now or hereafter have to such jurisdiction and
any defense of inconvenient forum. The Company and Executive hereby agree that
a judgment upon an award rendered by the arbitrators may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Subject to Section

 

28

 

11(b), the Company
shall bear all costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 11. Notwithstanding any provision in
this Section 11, Executive shall be paid during the pendency of any
dispute or controversy arising under or in connection with this Agreement.

 

(d)    Interest
on Unpaid Amounts.    Any amount which has
become payable pursuant to the terms of this Agreement or any decision by
arbitrators or judgment by a court of law pursuant to this Section 11 but
which has not been timely paid shall bear interest at the prime rate in effect
at the time such amount first becomes payable, as quoted by the Company’s
principal bank.

 

12.  Miscellaneous.

 

(a)    Integration.    This
Agreement cancels and supersedes any and all prior agreements and
understandings between the parties hereto with respect to the employment of
Executive by the Company, any parent or predecessor company, and the Company’s
subsidiaries during the Term, except for contracts relating to compensation
under executive compensation and employee benefit plans of the Company and its
subsidiaries. The foregoing notwithstanding, Executive shall not participate in
the Company’s Employee Protection Plan unless the aggregate benefits provided
under such plan would exceed the aggregate benefits provided to Executive under
this Agreement upon termination of employment. Executive shall remain entitled
to any right or benefit under a Change-in-Control Agreement executed by the
Company, for so long as such Change-in-Control Agreement remains in effect, if
and to the extent that such right or benefit is more favorable than a
corresponding provision of this Agreement, but no payment or benefit under the
Change-in-Control Agreement shall be made or extended which duplicates any
payment or benefit hereunder. If and to the extent that this Agreement may
provide enhanced benefits to Executive under the SERP which benefits are not
explicitly provided for under the SERP, the SERP shall be deemed amended by
this Agreement (but only insofar as it pertains to Executive). This Agreement
constitutes the entire agreement among the parties with respect to the matters
herein provided, and no modification or waiver of any provision hereof shall be
effective unless in writing and signed by the parties hereto. Executive shall
not be entitled to any payment or benefit under this Agreement which duplicates
a payment or benefit received or receivable by Executive under such prior
agreements and understandings or under any benefit or compensation plan of the
Company.

 

(b)    Successors;
Transferability.    The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise, and whether or not the corporate existence of the Company
continues) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise and, in the case of an acquisition
of the Company in which the corporate existence of the Company continues, the
ultimate parent company following such acquisition. Subject to the foregoing,
the Company may transfer and assign this Agreement and the Company’s rights and
obligations hereunder. Neither this Agreement nor the rights or obligations
hereunder of the parties hereto shall be transferable or assignable by
Executive, except in accordance with the laws of descent and distribution or as
specified in Section 12(c).

 

29

 

(c)    Beneficiaries.    Executive
shall be entitled to designate (and change, to the extent permitted under
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits provided hereunder following Executive’s death.

 

(d)    Notices.    Whenever
under this Agreement it becomes necessary to give notice, such notice shall be
in writing, signed by the party or parties giving or making the same, and shall
be served on the person or persons for whom it is intended or who should be
advised or notified, by Federal Express or other similar overnight service or
by certified or registered mail, return receipt requested, postage prepaid and
addressed to such party at the address set forth below or at such other address
as may be designated by such party by like notice:

 

	
  If
  to the Company:

  
	
   

  	
   

  	 

	
   

  	
  IMS HEALTH
  INCORPORATED

  	 

	
   

  	
  1499 Post Road

  	 

	
   

  	
  Fairfield, CT 06824

  	 

	
   

  	
  Attention: General
  Counsel

  	 

	
   

  	
   

  	
   

  
	
  If to Executive:

  
	
   

  	
   

  	 

	
   

  	
  David R. Carlucci

  	 

	
   

  	
  1499 Post Road

  	 

	
   

  	
  Fairfield, CT 06824

  	 

	
   

  	
   

  	 

	
   

  	
  Arthur Woodard, Esq.

  	 

	
   

  	
  Kaye Scholer LLP

  	 

	
   

  	
  425 Park Avenue

  	 

	
   

  	
  New York, NY
  10022-3598

  	 

	
   

  	
  (212) 836-8005

  	 

				

 

If the parties by
mutual agreement supply each other with telecopier numbers for the purposes of
providing notice by facsimile, such notice shall also be proper notice under
this Agreement. In the case of Federal Express or other similar overnight
service, such notice or advice shall be effective when sent, and, in the cases
of certified or registered mail, shall be effective two days after deposit into
the mails by delivery to the U.S. Post Office.

 

(e)    Reformation.    The
invalidity of any portion of this Agreement shall not deemed to render the
remainder of this Agreement invalid.

 

(f)    Headings.    The
headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.

 

(g)    No
General Waivers.    The failure of any party at
any time to require performance by any other party of any provision hereof or
to resort to any remedy provided herein or at law or in equity shall in no way
affect the right of such party to require such performance or to resort to such
remedy at any time thereafter, nor shall the waiver by any party of a breach of
any of the provisions hereof be deemed to be a waiver of any subsequent breach
of such provisions. No

 

30

 

such waiver shall be
effective unless in writing and signed by the party against whom such waiver is
sought to be enforced.

 

(h)    No
Obligation To Mitigate.    Executive shall not
be required to seek other employment or otherwise to mitigate Executive’s
damages upon any termination of employment; provided, however, that, to the
extent Executive receives from a subsequent employer health or other insurance
benefits that are substantially similar to the benefits referred to in Section 5(b) hereof,
any such benefits to be provided by the Company to Executive following the Term
shall be correspondingly reduced.

 

(i)    Offsets;
Withholding.    The amounts required to be paid
by the Company to Executive pursuant to this Agreement shall not be subject to
offset other than with respect to any amounts that are owed to the Company by
Executive due to his receipt of funds as a result of his fraudulent activity.
The foregoing and other provisions of this Agreement notwithstanding, all
payments to be made to Executive under this Agreement, including under Sections
6 and 7, or otherwise by the Company, will be subject to withholding to satisfy
required withholding taxes and other required deductions.

 

(j)    Successors
and Assigns.    This Agreement shall be binding
upon and shall inure to the benefit of Executive, his heirs, executors,
administrators and beneficiaries, and shall be binding upon and inure to the
benefit of the Company and its successors and assigns.

 

(k)    Counterparts.    This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same
instrument.

 

(l)    Due
Authority and Execution.    The execution,
delivery and performance of this Agreement has been duly authorized by the
Company and this Agreement represents the valid, legal and binding obligation
of the Company, enforceable against the Company according to its terms.

 

(m)    Representations
of Executive.    Executive represents and
warrants to the Company that he has the legal right to enter into this
Agreement and to perform all of the obligations on his part to be performed
hereunder in accordance with its terms and that he is not a party to any
agreement or understanding, written or oral, which prevents him from entering
into this Agreement or performing all of his obligations hereunder. In the
event of a breach of such representation or warranty on Executive’s part or if
there is any other legal impediment which prevents him from entering into this
Agreement or performing all of his obligations hereunder, the Company shall
have the right to terminate this Agreement forthwith in accordance with the
same notice and hearing procedures specified above in respect of a termination
by the Company for Cause pursuant to Section 7(a) and shall have no
further obligations to Executive hereunder. Notwithstanding a termination by
the Company under this Section 12(m), Executive’s obligations under Section 10
of this Agreement shall survive such termination.

 

13.  Indemnification.

 

All
rights to indemnification by the Company now existing in favor of Executive as
provided in the Company’s Certificate of Incorporation or By-laws or pursuant
to other

 

31

 

agreements in effect
on or immediately prior to the Effective Date shall continue in full force and
effect from the Effective Date (including all periods after the expiration of
the Term), and the Company shall also advance expenses for which indemnification
may be ultimately claimed as such expenses are incurred to the fullest extent
permitted under applicable law, subject to any requirement that Executive
provide an undertaking to repay such advances if it is ultimately determined
that Executive is not entitled to indemnification; provided, however, that any
determination required to be made with respect to whether Executive’s conduct
complies with the standards required to be met as a condition of
indemnification or advancement of expenses under applicable law and the Company’s
Certificate of Incorporation, By-laws, or other agreement shall be made by
independent counsel mutually acceptable to Executive and the Company (except to
the extent otherwise required by law). After the date hereof, the Company shall
not amend its Certificate of Incorporation or By-laws or any agreement in any
manner which adversely affects the rights of Executive to indemnification
thereunder. Any provision contained herein notwithstanding, this Agreement
shall not limit or reduce any rights of Executive to indemnification pursuant
to applicable law. In addition, the Company will maintain directors’ and
officers’ liability insurance in effect and covering acts and omissions of
Executive during the Term and for a period of six years thereafter on terms
substantially no less favorable than those in effect on the Effective Date.

 

IN
WITNESS WHEREOF, Executive has hereunto set his hand and the Company has caused
this instrument to be duly executed as of the date first above written.

 

	
   

  	
  IMS HEALTH INCORPORATED 

  
	
   

  	
   

  

 

	
   

  	
  By:

  	
  /s/ David M. Thomas

  	
   

  
	
   

  	
   

  	
  Name:    David
  M. Thomas

  
	
   

  	
   

  	
  Title:      Executive
  Chairman of the Board

  

 

	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David R. Carlucci

  	
   

  
	
   

  	
  David R. Carlucci

  

 

32Exhibit 4.1

 

	
  No. 

  	
  ORACLE
  HEALTHCARE ACQUISITION CORP.

  	
  Unit(s)

  
	
  CUSIP No. 

  	
  Incorporated
  under the Laws of the
 State of Delaware

  	
   

  

 

UNIT(S) CONSISTING
OF ONE SHARE OF COMMON STOCK AND ONE WARRANT TO PURCHASE ONE SHARE OF COMMON
STOCK

 

SEE
REVERSE FOR CERTAIN DEFINITIONS

 

THIS
CERTIFIES THAT                                                                                                                                
IS THE OWNER OF                                                                                             
               
UNIT(S). Each Unit (“Unit”) consists of one (1) share of common
stock, par value $.0001 per share (“Common Stock”), of ORACLE HEALTHCARE
ACQUISITION CORP., a Delaware corporation (the “Corporation”), and one (1)
warrant (“Warrant”). Each Warrant entitles the holder to purchase one (1) share
of Common Stock for $6.00 per share (subject to adjustment). The Common Stock
and Warrants comprising the Units represented by this certificate shall
commence separate trading as promptly as practicable following the consummation
of the Corporation's initial public offering, but in no event later than
65 days following the consummation of the Corporation's initial public
offering. The terms of the Warrants are governed by a Warrant Agreement, dated
as of              ,
2005 (the “Warrant Agreement”), between the Corporation and Continental
Stock Transfer & Trust Company, as Warrant Agent, and are subject to
the terms and provisions contained therein, all of which terms and provisions
the holder of this certificate consents to by acceptance hereof. Copies of the
Warrant Agreement are on file at the office of the Warrant Agent at 17 Battery
Place, New York, NY 10004, and are available to any Warrant holder on written
request and without cost. This certificate is not valid unless countersigned by
the Transfer Agent and registered by the Registrar of the Corporation.

 

WITNESS
the seal of the Corporation and the facsimile signature of its duly authorized
officers.

 

	
  Dated:

  	
   

  	
   ,
  2005

  

 

	
   

  	
   

  	
  ORACLE
  HEALTHCARE ACQUISITION 

  	
   

  	
   

  
	
   

  	
   

  	
  CORP.

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  CORPORATE
  SEAL

  	
   

  	
  President
  

  
	
   

  	
   

  	
  2005

  	
   

  	
   

  
	
   

  	
   

  	
  DELAWARE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Transfer
  Agent

  	
   

  	
   

  	
   

  	
   

  

 

 

The following
abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM

  	
   

  	
  as tenants in common

  	
   

  	
  Unif Gift Min Act —

  	
   

  	
  Custodian

  	
   

  
	
  TEN ENT

  	
   

  	
  tenants by the
  entireties

  	
   

  	
   

  	
   

  	
  (Cust)

  	
   

  	
  (Minor)

  	 

	
  JT TEN

  	
   

  	
  as joint tenants with
  right of survivorship

  	
   

  	
   

  	
   

  	
  Under Uniform Gifts to
  Minors

  	 

	
   

  	
   

  	
  and not as tenants in
  common

  	
   

  	
   

  	
   

  	
  Act:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  (State)

  	 

												

 

Additional
abbreviations may also be used though not in the above list.

 

ORACLE
HEALTHCARE ACQUISITION CORP.

 

The Corporation will
furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, option or other special
rights of each class of stock or series thereof of the Corporation and the
qualifications, limitations, or restrictions of such preferences and/or rights.
This certificate and the Units represented hereby are issued and shall be held
subject to the terms and conditions applicable to the securities underlying and
comprising the Units.

 

For
Value Received,                
hereby sell, assign and transfer unto

 

	
  PLEASE
  INSERT SOCIAL SECURITY OR OTHER

  	
   

  
	
    IDENTIFYING
  NUMBER OF ASSIGNEE

  	
   

  
	
   

  	
   

  
	
   

  	
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
  ASSIGNEE)

  
				

 

Units
represented by the within Certificate, and do hereby irrevocably constitute and
appoint                      
Attorney, to transfer the said Units on the books of the within named
Corporation with full power of substitution in the premises.

 

	
  Dated

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
  WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY
  PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

  
	
  Signature(s)
  Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
  GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
  CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
  PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00097-of-00352.parquet"}]]