Document:

<PAGE>

                                                                     EXHIBIT 4.1

                              CONVERSION AGREEMENT

         This CONVERSION AGREEMENT (this "Agreement") is dated as of June 30,
2003, by and among InKine Pharmaceutical Company, Inc., a corporation organized
under the laws of the State of New York (the "Company"), S.A.C. Capital
Associates, LLC, a limited liability company organized under the laws of Anguila
("SAC"), SDS Merchant Fund, L.P., a limited partnership organized under the laws
of the State of New York ("SDS"), Royal Bank of Canada, a Canadian Chartered
Bank, through RBC Dominion Securities Corporation as its agent ("RBC"), Solomon
Strategic Holdings, Inc., a corporation organized under the laws of the British
Virgin Islands ("SSH") and The Tail Wind Fund Ltd., a corporation organized
under the laws of the British Virgin Islands ("Tail Wind"). SAC, RBC, SSH and
Tail Wind are collectively referred to herein as the "Noteholders," and each of
them may be individually referred to herein as a "Noteholder."

         WHEREAS:

              A. The Company has previously sold and the Noteholders have
previously purchased certain senior secured convertible notes (the "Notes") in
the aggregate principal amount of Thirteen Million Dollars ($13,000,000),
pursuant to a certain Securities Purchase Agreement dated as of December 16,
2002 (the "Securities Purchase Agreement").

              B. The Noteholders desire to convert the Notes into shares of
common stock of the Company pursuant to the terms of the Notes and this
Agreement.

         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:

              1. CONVERSION OF THE NOTES.

              (a) In consideration of the Additional Consideration (as herein
defined), the Noteholders shall convert all of the outstanding principal amount
of the Notes into shares of common stock of the Company at a conversion price of
$1.85 per share and pursuant to the procedures of conversion set forth in
Article III(B) of the Notes; except that SAC and RBC shall convert their
respective Notes in two separate conversions, with the latter conversion to be
completed as soon as is reasonably practicable following the date hereof.

              (b) As consideration for the Noteholders converting all of the
outstanding principal amount of the Notes and for foregoing the remaining term
of the conversion privilege contained in the Notes, the Company shall pay the
Noteholders an aggregate of Seven Hundred Fifty Thousand Dollars ($750,000) as
additional consideration (the "Additional Consideration") in immediately
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available U.S. funds. The Additional Consideration shall be paid to each
Noteholder in the pro rata proportion to the original principal amount of each
of their respective Notes.

              (c) Upon receipt of the Additional Consideration, each Noteholder
shall convert their respective Notes pursuant to this Agreement and Article
III(B) of the Notes by delivering to the Company a Notice of Conversion (as
defined in the Notes) for the entire outstanding principal amount of the Notes
no later than June 30, 2003.

              (d) Notwithstanding any provision contained herein to the
contrary, the limitations set forth in Article III(D) of the Notes shall remain
applicable to the Noteholders' obligations hereunder to convert its Notes. The
Company and the Noteholders acknowledge that no Noteholder shall, as a result of
this Agreement, convert its Notes in violation of the limitations set forth in
Article III(D) of the Notes.

              2. FUTURE FINANCINGS.

              (a) During the eighteen (18) month period immediately following
the date hereof, if the Company at any time or from time to time contemplates
any non-public capital raising transaction involving any offer, sale or issuance
of any of the Company's equity securities or any securities directly or
indirectly convertible into or exchangeable or exercisable for equity securities
of the Company (each a "Qualifying Transaction"), the Company shall first
approach SDS, on each occasion that the Company contemplates such Qualifying
Transaction, and enter into good faith negotiations with SDS to arrange a
Qualifying Transaction with SDS on terms and conditions acceptable to both
parties ("Right of First Offer"), provided that if any such Qualifying
Transaction contemplates gross proceeds to the Company in excess of $15 million
in the aggregate, then such Right of First Offer shall only apply to the first
$15 million of such Qualifying Transaction. The Company shall notify SDS of its
desire to enter a Qualifying Transaction by furnishing SDS with written notice
each and every time it contemplates a Qualifying Transaction ("Notice of First
Offer"). Such Notice of First Offer shall constitute an offer to sell to SDS and
Tail Wind, and SDS shall have the right to purchase up to 77%, and Tail Wind
shall have the right to purchase up to 23%, of the dollar amount of securities
contemplated in such Qualifying Transaction.

              (b) If SDS and the Company are unable to agree on mutually
acceptable terms and conditions for a Qualifying Transaction within five (5)
business days following the Notice of First Offer pursuant to subsection (a)
above, or to the extent that SDS elects not to purchase securities from the
Company in a Qualifying Transaction pursuant to subsection (a) above or fails to
respond to the Company's Notice of First Offer within five (5) business days
following SDS's receipt thereof, the Company may thereafter seek third parties
(each a "Third Party") interested in purchasing securities in a Qualifying
Transaction on substantially similar terms and conditions as are set forth in
the Notice of First Offer. If the Company contemplates entering into a
Qualifying Transaction with a Third Party on terms and conditions which are
materially different from the Notice of First Offer, the Company shall give five
(5) business days advance written notice to SDS and Tail Wind prior to
consummating any such Qualifying Transaction with any Third Party, which notice

                                      -2-
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shall again specify all significant terms and conditions contemplated in such
contemplated Qualifying Transaction with such Third Party ("Notice of First
Refusal"). Such Notice of First Refusal shall constitute an offer to sell to SDS
and Tail Wind, and SDS shall have the right to purchase up to 77%, and Tail Wind
shall have the right to purchase up to 23%, of the dollar amount of securities
contemplated in such Qualifying Transaction for the same consideration and on
the same terms and conditions as set forth in the Notice of First Refusal
("Right of First Refusal") by electing to purchase such securities in a written
notice to the Company to be delivered within five (5) business days following
receipt of the Notice of First Refusal. Thereafter, to the extent SDS and Tail
Wind fail and/or elect not to exercise its Right of First Refusal in accordance
with this paragraph, the Company may consummate a Qualifying Transaction with
such contemplated Third Party on the terms and conditions contained in the
Notice of First Refusal. Notwithstanding anything contained herein, if any
Qualifying Transaction contemplates gross proceeds to the Company of in excess
of $15 million in the aggregate, then each Right of First Refusal contained
herein shall only apply to the first $15 million of such Qualifying Transaction.

              (c) Notwithstanding anything to the contrary contained herein, the
number of shares of Common Stock of the Company that may be acquired by SDS or
Tail Wind pursuant to any Qualifying Transaction shall not exceed a number that,
when added to the total number of shares of Company Common Stock deemed
beneficially owned by such person (other than by virtue of the ownership of
securities or rights to acquire securities that have limitations on the holder's
right to convert, exercise or purchase similar to the limitation set forth
herein), together with all shares of Company Common Stock deemed beneficially
owned by the Purchaser's "affiliates" (as defined in Rule 144 of the 1933 Act)
that would be aggregated for purposes of determining whether a group under
Section 13(d) of the 1934 Act, exists, would exceed 9.9% of the total issued and
outstanding shares of the Common Stock. Notwithstanding the foregoing, the
Company shall have the right to turn to a Third Party to complete the balance of
a Qualifying Transaction in the event that this Section 2(c) is applicable to
the Qualifying Transaction.

              (d) Notwithstanding anything herein to the contrary, the actions
and obligations of the Noteholders hereunder are not, under any circumstances,
agreeing to act jointly, in partnership, in concert or as a "group" (as defined
for purposes of Section 13(d) of the Securities Exchange Act of 1934) with
respect to any securities or any of their actions or obligations under this
Agreement or under any other agreements, and shall not constitute a "group"
under the Securities Exchange Act of 1934, as amended. The rights granted herein
by the Company is made independently to each such party.

              3. NO ADDITIONAL OBLIGATIONS.

              The Noteholders acknowledge and agree that upon receipt of the
Company's interest payment on the Notes due on June 17, 2003 and the Additional
Consideration, the Company shall have no further obligations or payments due
under the Notes to the Noteholders, whether in the form of principal, interest,
fees or otherwise.

                                      -3-
<PAGE>

              4. TERMINATION OF CERTAIN RIGHTS.

              (a) Upon the conversion of the Notes pursuant hereto, all
obligations of the Company under that certain Security Agreement dated as of
December 17, 2002 among the Company and the Noteholders (the "Security
Agreement") shall terminate and the Collateral (as defined in the Security
Agreement) shall be released from all liens created by the Security Agreement
and all rights to the Collateral shall revert to the Company.

              (b) Upon the conversion of the Notes pursuant hereto, all of the
Noteholders' rights pursuant to Section 4(d) to the Securities Purchase
Agreement shall terminate.

              5. RESTRICTIONS ON FUTURE SALES OF STOCK.

              In no event shall any Noteholder have the right to sell an amount
of shares of common stock, issued pursuant to the conversion of the Notes under
this Agreement, if such amount would exceed the product of (i) such Noteholder's
pro rata portion of the Notes (as determined by the original face amount of such
Noteholder's Notes divided by $13,000,000) and (ii) 40% of the Average Daily
Trading Volume (as defined herein) of the Company's common stock on the date of
the proposed sale. Notwithstanding anything herein to the contrary, the
Noteholders may sell shares of common stock in excess of the forgoing limitation
with the prior written consent of the Company. For purposes of this Section 5,
the "Average Daily Trading Volume" shall equal the aggregate number of shares of
the Company's common stock traded per day for the past ten (10) trading days
immediately preceding the date of the proposed sale, divided by that number of
days.

              2. GOVERNING LAW; MISCELLANEOUS.

              (a) Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed in the State of New York. The Company and
the Noteholders irrevocably consent to the jurisdiction of the United States
federal courts and the state courts located in the county of New York, State of
New York in any suit or proceeding based on or arising under this Agreement and
irrevocably agree that all claims in respect of such suit or proceeding may be
determined in such courts. The Company irrevocably waives the defense of an
inconvenient forum to the maintenance of such suit or proceeding. The Company
further agrees that service of process upon the Company mailed by first class
mail shall be deemed in every respect effective service of process upon the
Company in any such suit or proceeding. Nothing herein shall affect the right of
the Noteholders to serve process in any other manner permitted by law. The
Company agrees that a final non-appealable judgement in any such suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on such judgment or in any other lawful manner.

              (b) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and

                                      -4-
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delivered to the other party. This Agreement, once executed by a party, may be
delivered to the other parties hereto by facsimile transmission of a copy of
this Agreement bearing the signature of any party so delivering this Agreement.
In the event any signature is delivered by facsimile transmission, the party
using such means of delivery shall cause the manually executed Execution Page
(s) hereof to be physically delivered to the other party within five (5) days of
the execution hereof, provided that the failure to so deliver any manually
executed Execution Page shall not affect the validity or enforceability of this
Agreement.

              (c) Headings. The headings of this Agreement are for convenience
of reference and shall not form part of, or affect the interpretation of, this
Agreement.

              (d) Severability. If any provision of this Agreement shall be
invalid or enforceable in any jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remainder of this
Agreement or the validity or enforceability of this Agreement in any other
jurisdiction.

              (e) Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the
Noteholders, the Company, their affiliates and persons acting on their behalf
with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the
Noteholders makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived other than
by an instrument in writing signed by the party to be charged with enforcement
and no provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and the Noteholders.

              (f) Notices. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally, by responsible overnight
carrier or by confirmed facsimile, and shall be effective five (5) days after
being placed in the mail, if mailed, or upon receipt or refusal of receipt, if
delivered personally or by responsible overnight carrier or confirmed facsimile,
in each case addressed to a party. The addresses for such communications shall
be:

                                    If to the Company:

                                    InKine Pharmaceutical Company, Inc.
                                    1787 Sentry Parkway West
                                    Building 18, Suite 440
                                    Blue Bell, Pennsylvania 19422
                                    Telephone:  215-283-6850
                                    Facsimile:  215-283-4600
                                    Attn:  Chief Executive Officer and Chief
                                           Operating and Financial Officer

                                      -5-
<PAGE>

                        With a copy simultaneously transmitted by like means to:

                                    Saul Ewing LLP
                                    Centre Square West, 38th Floor
                                    1500 Market Street
                                    Philadelphia, Pennsylvania 19102-2186
                                    Telephone:  215-972-7777
                                    Facsimile:  215-972-1934
                                    Attn:  Charles C. Zall, Esquire

                        If to Noteholders to:

                                    S.A.C. Capital Associates, LLC
                                    c/o S.A.C. Capital Advisors, LLC
                                    777 Long Ridge Road
                                    Stamford, Connecticut 06902
                                    Telephone: 203-614-2000
                                    Facsimile: 203-614-2393
                                    Attn: General Counsel

                        with a copy simultaneously transmitted by like means to:

                                    Drinker Biddle & Reath LLP
                                    One Logan Square
                                    18th and Cherry Streets
                                    Philadelphia, Pennsylvania 19103-6996
                                    Telephone:  215-988-2700
                                    Facsimile:  215-988-2757
                                    Attn:  Stephen T. Burdumy, Esquire

                                    AND

                                    Royal Bank of Canada
                                    RBC Dominion Securities Corporation
                                    One Liberty Plaza 165 Broadway, 2nd Floor
                                    New York, New York 10006-1404
                                    Telephone: 212-858-7200
                                    Facsimile: 212-858-7437
                                    Attn:  LaBrena J. Martin, Managing Director
                                           & General Counsel

                                      -6-
<PAGE>

                        with a copy simultaneously transmitted by like means to:

                                    Drinker Biddle & Reath LLP
                                    One Logan Square
                                    18th and Cherry Streets
                                    Philadelphia, Pennsylvania 19103-6996
                                    Telephone:  215-988-2700
                                    Facsimile:  215-988-2757
                                    Attn:  Stephen T. Burdumy, Esquire

                                    AND

                                    The Tail Wind Fund Ltd.
                                    c/o Tail Wind Advisory and Management Ltd.
                                    1st Floor, No. 1 Regent Street
                                    London, SW1Y 4NS UK
                                    Telephone:  44-207-468-7660
                                    Facsimile:  44-207-468-7657
                                    Attn:  David Crook

                                    AND

                                    Solomon Strategic Holdings, Inc.
                                    Greenlands
                                    The Red Gap
                                    Castletown
                                    1M9 1HB
                                    British Isles
                                    Telephone:  44-1624-824171
                                    Facsimile:  44-1624-824191
                                    Attn:  Andrew MacKellar, Director

                       in either of the foregoing cases, with a copy
                       simultaneously transmitted by like means to:

                                    Peter J. Weisman, P.C.
                                    110 East 59th Street, 18th Floor
                                    New York, New York 10022
                                    Telephone:  212-418-4972
                                    Facsimile:  212-317-8855
                                    Attn:  Peter J. Weisman

                                      -7-
<PAGE>

                       If to SDS:

                                    SDS Merchant Fund, L.P.
                                    c/o SDS Capital Partners, LLC
                                    53 Forest Avenue, 2nd Floor
                                    Old Greenwich, Connecticut 06820
                                    Telephone:  203-967-5875
                                    Facsimile:  203-967-5851
                                    Attn:  Steven Derby

                        with a copy simultaneously transmitted by like means to:

                                    Drinker Biddle & Reath LLP
                                    One Logan Square
                                    18th and Cherry Streets
                                    Philadelphia, Pennsylvania 19103-6996
                                    Telephone:  215-988-2700
                                    Facsimile:  215-988-2757
                                    Attn:  Stephen T. Burdumy, Esquire

              Each party shall provide notice to the other party of any change
in address.

              (g) Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and assigns. None
of the parties hereto may assign this Agreement without the prior written
consent of the other parties hereto.

              (h) Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit or, nor may any provision hereof by enforced
by, any other person.

              (i) Publicity. The Company and the Noteholders shall have the
right to approve before issuance any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of the
Noteholders, to make any press release with respect to such transactions as is
required by applicable law and regulations (although the Noteholders shall be
provided with a copy thereof by the Company in connection with any such press
release prior to its release).

              (j) Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

                                      -8-
<PAGE>

              (k) Joint Participation in Drafting. Each party to this Agreement
has participated in the negotiation and drafting of this Agreement. As such, the
language used herein and therein shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party to this Agreement.

              (l) Additional Acknowledgement. Each Noteholder acknowledges that
it has independently evaluated the merits of the transactions contemplated by
this Agreement, that it has independently determined to enter into the
transactions contemplated hereby, that it is not relying on any advice from or
evaluation by any other Noteholder, and that it is not acting in concert with
any other Noteholder in making its purchase of securities hereunder. The
Noteholders agree that the Noteholders have not taken any actions that would
deem such Noteholders to be members of a "group" for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -9-
<PAGE>

         IN WITNESS WHEREOF, the undersigned Noteholders and the Company have
caused this Agreement to be duly executed as of the date first above written.

           INKINE PHARMACEUTICAL COMPANY, INC.

           By:      /s/ Robert Apple
                    -----------------------------------------------------------
                    Name:  Robert Apple
                    Title:  Chief Operating and Financial Officer

           S.A.C. CAPITAL ASSOCIATES, LLC
           By: S.A.C. Capital Advisors, LLC,
           agent and attorney-in-fact

           By:      /s/ Peter A. Nussbaum
                    -----------------------------------------------------------
                    Name:  Peter A. Nussbaum
                    Title:  General Counsel, S.A.C. Capital Advisors, LLC

           SDS MERCHANT FUND, L.P.
           By:  SDS Capital Partners, L.L.C.,
           its General Partner

           By:      /s/ Steve Derby
                    -----------------------------------------------------------
                    Name:  Steve Derby
                    Title:  Managing Member

           ROYAL BANK OF CANADA
           By its agent, RBC Dominion Securities Corporation

           By:      /s/ Steven C. Milke
                    -----------------------------------------------------------
                    Name: Steven C. Milke
                    Title:  Managing Director

           By:      /s/ Richard J. Tavoso
                    -----------------------------------------------------------
                    Name:  Richard J. Tavoso
                    Title:  Managing Director

           THE TAIL WIND FUND LTD.
           By Tail Wind Advisory and Management Ltd., as investment manager

           By:      /s/ David Crook
                    ----------------------------------------------------------
                    Name:  David Crook
                    Title:

           SOLOMON STRATEGIC HOLDINGS, INC.
           By:      /s/ A.P. MacKellar
                    -----------------------------------------------------------
                    Name:  A.P. MacKellar
                    Title:  Director

                                      -10-EXECUTIVE EMPLOYMENT AGREEMENT

 

Exhibit 4.1

EXECUTIVE EMPLOYMENT AGREEMENT

THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of
August 29, 2002, by and between Gemplus International S.A. (“GISA”), a
Luxembourg société anonyme, Gemplus Corp. (“Gemplus Corp.”), a Delaware
corporation and Gemplus Management & Trading S.A. (“GMT”), a Swiss société
anonyme, on the one hand; and Alex J. Mandl (the “Executive”) and ASM
Investments, LLC, a Delaware limited liability company (“ASM”), on the other
hand (GISA, Gemplus Corp., GMT, the Executive and ASM hereinafter referred to
individually as a “Party” and collectively as the “Parties”). Capitalized
terms used in this Agreement shall have the meanings ascribed to them in
Section 16.14 of this Agreement.

RECITALS

WHEREAS, Gemplus Corp. wishes to employ the Executive and GISA wishes the
Executive to serve as its President and Chief Executive Officer (“CEO”), and
the Executive wishes to accept and assume such positions; and the Parties
desire to enter into this Agreement to set out the terms and conditions of the
Executive’s employment relationship with Gemplus Corp. and his service as
President and CEO of GISA;

WHEREAS, the Parties contemplate the possible assignment of Gemplus Corp.’s
rights and obligations as employer hereunder (in whole or part), as provided
for in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the Parties agree as follows:

	1.	 	Employment Agreement

On and subject to the terms and conditions set forth in this Agreement, Gemplus
Corp. agrees to employ the Executive, and the Executive agrees to be employed
by Gemplus Corp., during the Employment Period.

	2.	 	Term

The term of employment under this Agreement shall be four years commencing on
the Effective Date (the “Employment Period”). In the event of termination of
the Executive’s employment pursuant to Section 7 of this Agreement during the
Employment Period, the compensation provisions of Section 8 of this Agreement
shall govern.

	3.	 	Position and Duties

     (a)     The Executive shall serve as President and CEO (“administrateur
délégué”) of GISA and as an employee of Gemplus Corp. during the Employment
Period. In such capacity, the Executive shall have such duties and
responsibilities as are customarily assigned to individuals serving in such
position and such other duties consistent with the

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Executive’s title and position as the Board of Directors of GISA (the
“Board”) specifies from time to time, all subject to the power of the Board to
reasonably modify such duties and responsibilities from time to time hereunder
provided that the Board shall not make any such modification(s) which would
constitute Good Reason as defined herein.

     (b)     The Executive shall be appointed as a director of GISA within ninety
days of the Effective Date (as defined herein), subject to the approval or
ratification by the shareholders of GISA.

     (c)     The Executive shall accept and assume such other appointments as a
director and as chief executive officer or other senior officer position
(consistent with the Executive’s position as President and CEO of GISA) within
other Group entities as the Board may reasonably request from time to time.

     (d)     The Executive shall devote his best efforts and full business time and
attention to the business and affairs of the Group, provided however that the
Executive may retain during the Employment Period his directorship positions
with Dell Computer Corporation (Austin, Texas) and Pfizer Inc. (New York, New
York). The Executive shall not during the Employment Period hold any other
directorships or other positions outside the Group without the prior written
consent of the Board in its discretion. The Executive shall comply with the
rules, standards and policies of GISA, Gemplus Corp. and their affiliated
entities (the “Group”), including without limitation any code of conduct of the
Group, as amended from time to time by the Board and/or the Compensation
Committee, as well as any and all applicable laws.

     (e)     Gemplus Corp. may, with the approval of the Executive which shall not be
unreasonably withheld or delayed, by written notice to the Executive to such
effect, assign this Agreement including all of its rights and obligations
hereunder as the Executive’s employer and otherwise to any other affiliate of
the Group which is owned as to at least a majority of the equity capital and
voting rights thereof by GISA, whether directly and/or indirectly, and which is
capable of performing all of its obligations as assignee hereunder (“Assignee
Employer”), provided that such Assignee Employer agrees in writing to be bound
by the terms of this Agreement. Upon any such assignment, Gemplus Corp. shall
be released and discharged by the Executive from any liability for payments and
the providing of benefits and any and all other obligations due to the
Executive pursuant to this Agreement; provided, however, that any such
assignment shall not modify or change in any way the Executive’s appointment as
CEO of GISA as provided in Section 3(a) of this Agreement.

     (f)  The Parties hereby agree to assignment pursuant to Section 3(e) of
this Agreement by Gemplus Corp. to GMT, if and when proposed by Gemplus Corp.
by written notice to the Executive, subject only to the receipt by the
Executive and / or GMT of working authorization for GMT to employ the
Executive. In such event, the terms and conditions of Schedule 1 to this
Agreement shall automatically apply in full. Each of the Parties shall exercise
all reasonable efforts to facilitate the receipt of the working and
administrative authorizations necessary to implement the provisions of Sections
3(f) and 4 of this Agreement.

-162-

 

	4.	 	Place of Performance

Subject only to receipt by the Executive and / or the Group of any and all
required administrative authorizations, the Executive shall be based and have
his principal place of work at the principal offices of the Group in Geneva,
Switzerland or in the Geneva area, except as otherwise agreed by the Executive
and the Board and except for reasonable travel on Group business worldwide as
necessary and appropriate to manage the business and affairs of the Group,
including without limitation travel to and presence in GISA’s registered office
and corporate headquarters in Senningerberg, Luxembourg; in France; in the
United States; and in Asia. The Executive shall also have an office at the
offices of GISA’s registered office and corporate headquarters in
Senningerberg, Luxembourg.

	5.	 	Compensation and Benefits
	 
	5.1 	 	Base Salary

During the Employment Period, Gemplus Corp. shall pay to the Executive a base
compensation at an annual gross salary of six hundred thousand euros (€
600,000; the “Base Salary”), less all applicable deductions and withholdings,
which shall be paid in monthly installments. The Compensation Committee of the
Board or the Board may review (but may not diminish) the Base Salary from time
to time and at least annually, and for the first time in December 2003.

	5.2 	 	Incentive Compensation

During the Employment Period, the Executive shall be eligible to be paid, in
addition to the Base Salary, incentive compensation as follows (collectively,
the “Incentive Compensation”):

     (a)  Signing Bonus. The Executive shall be paid a signing bonus in a gross
amount equal to five hundred thousand euros (€ 500,000) within three business
days of the Effective Date. Such Signing Bonus shall be reimbursable in full by
the Executive to Gemplus Corp. within fifteen days if the Executive is
terminated for Good Cause by Gemplus Corp. or gives notice of resignation
without Good Reason within twelve months of the Effective Date.

     (b)  Annual Incentive Bonus. The Executive shall be eligible for an annual
incentive bonus (the “Bonus”) in an amount of up to 120% of the Base Salary.
The amount of the Bonus shall be determined by the Compensation Committee based
upon the extent to which the Executive accomplishes the annual fiscal year
goals and objectives (the “Objectives”) of the Executive. The Executive and the
Board or the Compensation Committee will work together to develop in good faith
mutually acceptable Objectives related to the performance of the Group and the
Executive and connected with the Group’s incentive bonus program in which the
Executive shall participate. The annual amount of Bonus due to the Executive in
any fiscal year (including the guaranteed Bonus payments due pursuant to
Section 5.2 (c) of this Agreement) shall be paid at the same time as other
annual executive incentive bonuses are paid (currently during February of the
following year).

     (c)  Bonus for Calendar Years 2002 and 2003. In respect of the period from
the Effective Date until December 31, 2002, the Executive shall be paid a
guaranteed Bonus of not less than a gross amount of € 240,000. In respect of
the period from January 1, 2003 to the

-163-

 

first anniversary of the Effective Date, the Executive shall be paid a
guaranteed Bonus of not less than a gross amount of € 480,000. Such guaranteed
amount of Bonus of not less than € 480,000 shall be a part of and deducted from
the amount of the Executive’s total Bonus determined pursuant to Section 5.2
(b) of this Agreement for fiscal year 2003. In the event of termination by
Gemplus Corp. for Good Cause or by the Executive without Good Reason prior to
September 9, 2003, the above-mentioned Bonus amounts shall be reduced pro rata
temporis in accordance with the provisions of Section 8.2 of this Agreement.

	5.3 	 	Investment in GISA by ASM; Stock Options

     (a)  At the request of GISA, ASM shall within three months of the Effective Date
purchase shares of GISA’s common stock with an aggregate value of two hundred
thousand US dollars (US$ 200,000) at the then current market price of GISA
shares. Such three-month period shall be extended by the duration of any and
all “black-out” periods during such period, during which ASM may not trade in
shares of GISA.

     (b)  ASM shall be entitled to receive two tranches of options to subscribe to
and purchase a total of twelve million shares of GISA’s common stock at a ratio
of one Option per share (collectively the “Options”) as follows.

          (i) ASM shall be granted 8,000,000 Options at an acquisition price per
share equal to the daily average of GISA’s stock price on the Euronext (Paris)
stock exchange on the date of Board approval of such grant.

          (ii) ASM shall be granted 4,000,000 Options at an acquisition price per
share of two euros and twenty-five euro cents (€ 2.25).

          (iii) Except as otherwise provided elsewhere herein, the Options shall
vest in equal 25% annual installments during the Employment Period beginning on
the first anniversary of the Effective Date and continuing on each such
anniversary thereafter until the fourth anniversary of the Effective Date and
shall expire ten years from the date of grant of the Options. The Options shall
be exercisable for twelve months following the Date of Termination of the
Executive’s employment hereunder. The Options shall in all other respects be
subject to the terms and conditions of GISA’s stock option plan(s) under which
the Options are granted.

          (iv) ASM undertakes and agrees, and the Executive undertakes and agrees to
cause ASM, to comply with all provisions of this Agreement and the terms and
conditions of GISA’s stock option plan(s) applicable to the Options.

     (c)  It shall be submitted and recommended to the Board of Directors of GISA to
approve this Agreement and to the shareholders of GISA to ratify the
substantive terms of this Agreement, including without limitation the entire
compensation and benefits package and including specifically (i) the grant to
ASM of those Options in addition to the 6,000,000 options authorized by the
shareholders meeting of April 17, 2002, (ii) the compensation and benefits in
Sections 5 and 8 of this Agreement and (iii) any and all other matters relating
to the Executive’s compensation or duties and functions (including delegation
of day-to-day management authority of GISA to the executive as “administrateur
délégué”) requiring the ratification of GISA’s shareholders. If for any reason
such approval of the Board of Directors and such ratification by

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the shareholders of GISA are not obtained by November 30, 2002, then the
Executive may within thirty days thereafter terminate this Agreement on ten
days prior written notice. In such event, no Party hereto shall have any
liability to the Executive or to ASM for payments or severance of any kind in
connection therewith, except exclusively as follows: the Executive shall be
entitled to retain or receive from Gemplus Corp., pro rata temporis for the
period from the Effective Date through the Date of Termination, (I) the Base
Salary, (II) the Basic Benefits, (III) the Full Bonus, (IV) reimbursement for
the reasonable costs of interim housing in accordance with Group policy, (V)
travel and business expenses incurred in accordance with Section 6 of this
Agreement and (VI) the Executive’s reasonable legal and accounting fees and
expenses in accordance with Section 5.11 of this Agreement; provided however
that (VII) no other Incentive Compensation and no Signing Bonus and no
Relocation benefits shall be due or payable to the Executive, and any and all
amounts paid or reimbursed to the Executive pursuant to Sections 5.2(a) and 5.4
of this Agreement shall be fully and promptly reimbursed by the Executive to
Gemplus Corp. as it designates, and (VIII) any and all Options granted to ASM
shall automatically lapse and be cancelled.

	5.4 	 	Relocation Benefits

     (a)  Gemplus Corp. or GISA shall pay for or reimburse the Executive for
mutually agreed costs of relocation of the Executive and his spouse from Great
Falls, Virginia, to Geneva, Switzerland, in accordance with the Group’s
policies and subject to providing receipts, excluding however costs for
temporary lodging and subsistence in Geneva for the Executive and his spouse.

     (b)  If, during the Initial Period (as defined below), the Executive sells
his current residence located in Great Falls, Virginia (the “Residence”) for
less than the Target Price, then Gemplus Corp. shall pay Executive for any such
shortfall, up to a maximum of three million US dollars (US$3,000,000; the
“Guarantee”), except as the Guarantee may be increased in the manner described
below.

          (i) The “Target Price” shall be the Executive’s documented investment in
such Residence (including the purchase price of the Residence, plus any
documented improvements thereon, but excluding furnishings). The Executive
shall provide notification to Gemplus Corp. of the amount of the Target Price
within thirty days of the date of signature of this Agreement for Gemplus
Corp.’s approval, which shall not be unreasonably withheld or delayed.

          (ii) Except as otherwise provided in Section 5.4(b)(vi) of this Agreement,
the Guarantee shall lapse if a sale of the Residence is not completed within
two years of the Effective Date (the “Initial Period”). The Executive shall
actively market the Residence through a licensed real estate broker as soon as
reasonably practical, and shall promptly inform Gemplus Corp. of any offers
received on the Residence. Gemplus Corp. shall have the right to require that
the Executive accept an offer on the Residence provided that such offer is made
by a ready, willing, and able buyer, capable of paying cash at closing (i.e.,
Executive shall not be required to extend “seller financing”), and that the
offer be at a price not less than $3,000,000 below the Target Price. Should
the Executive not accept Gemplus Corp.’s decision to require the Executive to
sell the Residence, the Guarantee and the Executive’s right

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to reimbursement of any further Running Costs accruing after such date
pursuant to Section 5.4(b)(iii) of this Agreement shall immediately lapse.

          (iii) Until the Residence is sold, Gemplus Corp. shall pay the Executive
$80,000 per month to cover operating expenses and other associated costs (the
“Running Costs”). In the event of and notwithstanding any one or more
assignments pursuant to Section 3(e) or 3(f) of this Agreement, the obligation
to pay the Running Costs to the Executive shall be retained by Gemplus Corp.
and shall not be assigned (except in the event, after such an assignment, of a
sale of substantially all of the assets or shares of Gemplus Corp.; in such
event, such obligation shall be assigned to an affiliate of GISA financially
capable of performing).

          (iv) The Running Costs shall be paid until the earlier of the sale of the
Residence or the end of the Initial Period, or until such right lapses pursuant
to Section 5.4(b)(ii) of this Agreement. The parties agree that (i) the total
amount of payments made by Gemplus Corp. or GISA under the Guarantee and the
Running Costs shall never exceed four million nine hundred and twenty thousand
US dollars (US$4,920,000) in the aggregate (the “Maximum Amount”), (ii)
Executive may require Gemplus Corp. or GISA to increase the Guarantee beyond
UD$3,000,000 for any Running Costs not required to be paid by Gemplus Corp or
GISA as specified above, and (iii) to the extent that Gemplus Corp. and / or
GISA pays more than US$1,920,000 of Running Costs, the Guarantee shall be
reduced below US$3,000,000 on a dollar-for-dollar basis.

          (v) If the Executive is terminated for Good Cause or gives notice of
resignation without Good Reason during the Initial Period, the Group’s
obligations under the Guarantee and for the Running Costs shall immediately
cease and any and all payments made by the Group under these obligations from
the Commencement Date shall be repayable by the Executive within three months
of the Executive’s termination of employment. The Group shall also have the
right to offset these reimbursable amounts due by the Executive against any
remaining payments due to the Executive by the Group in respect of compensation
or otherwise.

          (vi) If the Residence has not been sold during the Initial Period, the
Executive shall have the option to extend the Guarantee and Running Cost
provisions for a further 12 months subject to the same terms and conditions
(including without limitation the Maximum Amount payment cap of US$4,920,000
and the Executive’s obligation in case of termination for Good Cause or
resignation without Good Reason to reimburse all payments made under these
provisions since the Commencement Date) that applied during the Initial Period.

	5.5 	 	Sale of GISA

Upon a Sale of GISA (as defined below), the following terms and conditions
shall apply:

     (i)  Immediately prior to a Sale of GISA, 50% of the Executive’s then
unvested Options shall immediately vest; and

     (ii)  The remaining Options shall continue to vest as per their original
vesting schedule(s), except as otherwise provided elsewhere herein regarding
accelerated vesting.

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	5.6 	 	Change of Control; “Tag Along” Rights

GISA shall exercise best efforts to procure that upon a Change of Control its
shareholders who are disposing of their shares obtain the consent of the
purchaser to allow the Executive to sell any or all GISA shares which he owns
directly or indirectly or to which he is entitled through the exercise of fully
vested Options on the same or substantially similar terms to those on which the
shareholders are selling their shares. Should GISA fail to secure such consent
of the purchaser as aforesaid, the Executive may within 90 days of the Change
of Control choose to treat such failure as Good Reason and give notice of his
intention to terminate this Agreement accordingly.

	5.7 	 	Directors’ and Officers’ Liability Insurance

Gemplus Corp. or GISA shall provide for coverage of the Executive by an
appropriate amount of directors and officers liability insurance, and on terms
and conditions as determined by the Group in its discretion, subject to the
availability of such insurance on the market at acceptable rates, and in all
events on substantially the same terms as applicable to other directors and
senior executives of GISA. Gemplus Corp. and GISA each undertake to indemnify
the Executive to the extent permitted pursuant to applicable law, and to the
extent any claim is not fully covered by such insurance.

	5.8 	 	Company Car

Gemplus Corp. shall provide the Executive with a company car or company car
allowance in accordance with Group policy for company cars applicable to senior
executives.

	5.9 	 	Cooperation by Gemplus Corp. and the Group

Gemplus Corp. and the Group agree to cooperate with any reasonable requests by
the Executive designed to provide the Executive with greater flexibility for
tax and/or estate planning purposes (including trusts, transfers or assignments
to trusts for the benefit of family members, and the creation of limited
liability companies or similar entities), provided that such request does not
negatively affect Gemplus Corp., any permitted assignee or the Group.

	5.10 	 	Other Benefits

During the Employment Period, the Executive will be entitled to receive such
other benefits made generally available to senior executives of GISA according
to their terms (including without limitation on the basis of contributions
payable by the Executive as an employee), including retirement benefits,
vacation leave, family health and accident insurance, disability insurance and
life insurance (the “Other Benefits”). Subject to the foregoing, nothing
contained in this Agreement shall prevent the Group from changing insurance
carriers or from effecting modifications in insurance coverage available to the
Executive. Except as otherwise provided herein, temporary absence of the
Executive from the performance of his duties hereunder due to sickness or other
medical or health reasons shall be governed by the applicable legal and
administrative rules and the policies of the Group then in effect. The
Executive will be entitled to legal holidays and vacation in accordance with
applicable law. The Executive agrees to fully cooperate with efforts of
Gemplus Corp. and the Group to contract life, disability and other insurances
in respect of benefits due to the Executive and in respect of Gemplus Corp.’s
and the Group’s efforts to obtain such insurance coverages as beneficiary for
its and their own insurable interests.

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	5.11 	 	Miscellaneous Benefits

The Executive shall also be entitled to such other benefits as may be mutually
agreed upon by Gemplus Corp. and Executive in their discretion. Gemplus Corp.
agrees to pay or to reimburse the Executive for the reasonable legal and
accounting fees and expenses incurred in the preparation and negotiation of the
term sheet developed by the Parties and this Agreement, up to a maximum amount
of US$ 50,000.

	5.12 	 	Withholding Taxes and Other Deductions

Gemplus Corp. or GISA (as the case may be) shall withhold from all payments due
the Executive under this Agreement all applicable national, federal, state,
cantonal and local taxes and such other deductions as are prescribed by law or
Group policy (or that are otherwise authorized by the Executive).

	5.13 	 	Due Date of Payments

     Except as otherwise expressly provided elsewhere herein, all payments
provided for in this Agreement shall be made as promptly as possible and in any
event not later than seven business days after the date of the occurrence or
the coming into existence of the circumstances giving rise to the obligation to
pay.

	6.	 	Expenses

The Executive is authorized to incur reasonable expenses in the performance of
his duties hereunder, including the costs of air and other travel, hotels and
similar business expenses incurred in the performance of his duties, subject to
the Group’s then-applicable policies and procedures regarding such expenses.
Gemplus Corp. shall reimburse the Executive for all such expenses subject to
submission by the Executive of a written account of such expenses and
appropriate receipts.

	7.	 	Termination of Employment
	 
	7.1 	 	Termination

The Executive’s employment by Gemplus Corp. and his position as President and
CEO of GISA during the Employment Period shall continue until the earliest to
occur of:

     (a)  Mutual written consent of the Executive and Gemplus Corp. terminating
the Executive’s employment with Gemplus Corp.;

     (b)  The end of the Employment Period, as set forth in Section 2 of this
Agreement;

     (c)  Death of the Executive;

     (d)  At Gemplus Corp.’s option on written notice, Disability of the
Executive;

     (e)  Subject to cure periods applicable pursuant to the terms of this
Agreement, the Executive’s resignation from employment with Gemplus Corp. with
or without Good Reason,

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with the Executive to provide thirty business days written notice to
Gemplus Corp. prior to such resignation; or

     (f)  Subject to cure periods applicable pursuant to the terms of this
Agreement, Gemplus Corp.’s termination of the Executive’s employment with
Gemplus Corp. (with or without Good Cause), with Gemplus Corp. to provide
thirty business days written notice to the Executive prior to such termination.

	7.2 	 	Notice of Termination

Any termination of the Executive’s employment by Gemplus Corp. or the Executive
(other than because of the Executive’s death) shall be communicated by written
Notice of Termination to the other Parties in accordance with Section 16.1 of
this Agreement and shall take effect on the Date of Termination.

	7.3 	 	Effect of Termination

In the event of termination of the Executive’s employment with Gemplus Corp. as
set forth in Section 5.3(c) or 7.1 of this Agreement, this Agreement shall be
terminated and of no further force or effect, except that:

     (a)  Nothing in this Section 7.3 of this Agreement shall be deemed to
relieve GISA, Gemplus Corp., GMT, ASM or the Executive from any liability for
any breach of this Agreement, and all due and accrued obligations and
liabilities pursuant to this Agreement shall remain fully due and shall survive
such termination;

     (b)  Each of the Executive, ASM, Gemplus Corp., GMT and GISA shall be
entitled to any remedies at law or in equity for any such breach; and

     (c)  The provisions of all sections of this Agreement intended by their
terms to survive the termination or expiration of this Agreement, including
without limitation Section 16.4 of this Agreement and all those sections
referred to therein, shall remain in full force and effect and shall survive,
in accordance with their terms and conditions, the termination of this
Agreement.

	8.	 	Compensation Upon Termination
	 
	8.1 	 	Termination by Gemplus Corp. due to Executive’s Death or Disability

     (a)  If the Executive’s employment is terminated during the Employment Period as
a result of the Executive’s Disability or death, Gemplus Corp. shall pay to the
Executive or to the Executive’s estate, or as may be directed by the legal
representatives of such estate, the following sums and take the following
actions:

          (i) All Base Salary due for the remaining portion of the Employment
Period, but in any event not in respect of a period of more than twenty-four
months nor a period of less than twelve months, payable as a lump sum without
any offset for compensation received from subsequent employment but subject to
deduction of the amount of any and all disability benefits payable to the
Executive (or his estate); provided further, however, that, with respect to a
Disability, if Gemplus Corp.-provided disability benefits are higher than the
amount of Base

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Salary due pursuant to this Section 8.1 (a) of this Agreement, the
Executive (or his estate) shall receive such disability benefits in lieu of
such amount of Base Salary);

          (ii) Full Bonus for the fiscal year of termination;

          (iii) Basic Benefits, if applicable, shall be provided by Gemplus Corp.
for the remaining term of the Employment Period, but in any event for a period
of not more than twenty-four months nor less than twelve months, to the extent
permitted by insurers and provided that Gemplus Corp. shall pay to the
Executive of his estate or representative the substantial cash equivalent of
such Basic Benefits if consent to continued coverage is not granted by the
carriers.

          (iv) All non-vested Options which would otherwise vest during the
remaining term of the Employment Period (but in any event not in respect of a
period greater than 24 months nor less than 12 months) shall immediately vest,
and all vested Options shall be exercisable for one year after the Date of
Termination.

     (b)  The Executive agrees to cooperate fully with efforts of Gemplus Corp.
and the Group to contract life and disability insurances in respect of benefits
due to the Executive in respect of such events.

	8.2 	 	Termination by Gemplus Corp. with Good Cause or by the Executive without Good Reason

     (a)  If Gemplus Corp. terminates the Executive’s employment during the
Employment Period for Good Cause, or if the Executive voluntarily terminates
the Executive’s employment during the Employment Period other than for Good
Reason, Gemplus Corp. shall pay the Executive the following sums and take the
following actions:

          (i) All Base Salary, prorated through the Date of
Termination;

          (ii) Full Bonus, prorated through the Date of Termination;

          (iii) The Basic Benefits, prorated through the Date of
Termination;

          (iv) All Options non-vested as of the Date of Termination shall lapse and
expire, and all vested Options as of the Date of Termination shall be
exercisable for one year thereafter.

     (b)  The provisions of this Section 8.2 and of Section 7.1 (e) of this Agreement
are entirely without prejudice to Gemplus Corp.’s, GMT’s and GISA’s rights to
seek full recompense for any and all damages and harm caused to them or to the
Group by the Executive’s breach of the terms of this Agreement, including
without limitation by resignation from employment and / or the Executive’s
position as President and CEO of GISA without Good Reason.

	8.3 	 	Termination by Gemplus Corp. without Good Cause or by the Executive with Good Reason

If Gemplus Corp. terminates the Executive’s employment during the Employment
Period other than for Good Cause, death, or Disability, or the Executive
terminates his employment during the

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Employment Period for Good Reason, the Executive shall be entitled to payment
of the following sums and the taking of the following actions:

     (a)  All Base Salary due for the remaining portion of the Employment
Period, but in any event not in respect of a period of more than twenty-four
months nor of a period of less than twelve months, payable as a lump sum
without any offset for compensation received from subsequent employment;

     (b)  Full Bonus due for the remaining portion of the Employment Period, but
in any event not in respect of a period of more than twenty-four months nor of
a period of less than twelve months, payable as a lump;

     (c)  In addition, the Basic Benefits shall be due, as applicable, for the
same period and on the same terms as provided for in Section 8.3 (a) of this
Agreement, to the extent permitted by insurers and provided that Gemplus Corp.
shall pay to the Executive the substantial cash equivalent of such Basic
Benefits if consent to continued coverage is not granted by the carriers.

     (d)  The remaining non-vested Options which would have vested during the
remaining portion of the Employment Period, but in any event not in respect of
a period of more than twenty-four months nor less than twelve months, shall
vest and be exercisable for one year after the Date of Termination.

	9.	 	Confidential Information
	 
	9.1 	 	Company Information

The Executive agrees at all times during the Employment Period and thereafter
that he will not use, disclose, or transfer to any Person, except as authorized
by Gemplus Corp. or as required by law, and except for any information which
the Executive can demonstrate was known to him prior to disclosure by the Group
without breach by the Executive of any obligation of confidentiality to any
third party, any Confidential Information of the Group. For purposes of this
Agreement, “Confidential Information” means any Group proprietary information,
technical data, trade secrets or know-how, market-related information,
software, developments, processes, formulas, technology, designs, drawings,
engineering, marketing, finances or other business information disclosed to the
Executive by the Group or otherwise learned or known by Executive during his
recruitment and his employment hereunder. The Executive further understands
that Confidential Information does not include any of the foregoing items to
the extent they have become publicly known through no wrongful act of the
Executive or others who were under confidentiality obligations as to the item
or items involved.

	9.2 	 	Third Party Information

The Executive recognizes that Gemplus Corp. and the Group have received and in
the future will receive from third parties their confidential or proprietary
information subject to a duty on Gemplus Corp.’s or the Group’s part to
maintain the confidentiality of such information and to use it only for certain
limited purposes. The Executive agrees at all times during the Employment
Period and thereafter that he will not use, disclose, or transfer to any Person
any such confidential or proprietary third-party information, except as
authorized by Gemplus Corp.

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within the scope of the Executive’s duties and as consistent with Gemplus
Corp.’s or the Group’s agreement with such third party, and except for any
information which the Executive can demonstrate was known to him prior to
disclosure by the third party without any breach by the Executive of any
obligation of confidentiality to any third party.

	10.	 	Intellectual and Industrial Property Rights

     (a)  Ideas and Inventions. The Executive represents and warrants that he
does not own or claim any inventions, patents, original works of authorship,
copyrights, designs, developments, improvements, software, trade secrets or
other intellectual or industrial property rights which were made or acquired
prior to the date of this Agreement and which relate to the Group’s business
(the “IP”), and which are not assigned to GISA hereunder. If in the course of
employment hereunder, the Executive incorporates any IP into any property
(including Confidential Information) of the Group, GISA is hereby granted and
shall have a nonexclusive, royalty-free, assignable, irrevocable, perpetual (or
for the full term of the protectable rights therein if a perpetual license is
not legally feasible under applicable law), worldwide license to make, modify,
use and sell such item as part of or in connection with such product, process
or machine.

     (b)  Disclosure and Assignment to GISA. The Executive agrees to promptly
make full written disclosure to GISA, will hold in trust for the sole right and
benefit of GISA, and hereby assigns to GISA, or its designee, all right, title,
and interest in and to any and all IP which he may solely or jointly conceive
or develop or reduce to practice, or cause to be conceived or developed or
reduced to practice in connection with performing services within the scope of
his employment with Gemplus Corp. or the Group or as CEO of GISA or in
connection with his performance hereunder (either on Group’s premises or
elsewhere) or utilizing Group facilities.

     (c)  Written Materials. The Executive acknowledges and agrees that all
writings and computer materials of every kind and nature produced by him in the
course of work for the Group are works produced for hire and the property of
GISA, including without limitation any copyrights; but to the extent any such
writing or computer material may not, by operation of law or otherwise, be a
work made of hire, the Executive hereby assigns to GISA or its designee the
ownership of copyright in such works. The Executive hereby irrevocably waives
any and all moral rights he may be able to claim in respect of any IP.

     (d)  Patent and Copyright Registrations. The Executive agrees to assist the
Group or its designee, at the Group’s expense, in every proper way to secure
the Group’s rights in any and all IP in any and all countries, both during and
after the Employment Period, including by signing of all documents and hereby
granting power of attorney to the officers of GISA to sign in his place if he
is incapacitated or for any other reason does not sign such documents.

	11.	 	Conflicting Employment

The Executive agrees that, during the Employment Period, he will not engage in
any other employment, occupation, consulting or other business activity, or
other activities that conflict

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with his obligations to Gemplus Corp. and the Group, except as otherwise
permitted by Section 3(d) of this Agreement, without the prior written consent
of the Board.

	12.	 	Returning Company Documents; Notification of New Employer

The Executive agrees that, on or before the Date of Termination, he will
deliver to Gemplus Corp. or its designee (and will not keep in his possession,
recreate or deliver to anyone else) any and all devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings,
blueprints, sketches, materials, equipment, other documents or property, or
reproductions of any aforementioned items, developed by the Executive pursuant
to his employment with Gemplus Corp. or otherwise belonging to Gemplus Corp. or
the Group, including without limitation those records required pursuant to
Section 10(c) of this Agreement.

	13.	 	Non-Competition and Non-Solicitation

The Executive agrees that he will not directly or indirectly:

     (a)  During the Employment Period and for a period of one year following
the Date of Termination for any reason, whether as an individual proprietor,
partner, stockholder, officer, employee, director, consultant, joint venturer,
investor, lender or in any other capacity whatsoever, alone or in association
with others, either own, manage, operate, control or participate in the
ownership, management, operation or control of, or work for any Person or
business entity which competes with the Business of the Group; and

     (b)  During the Employment Period and for a period of two years following
the Date of Termination for any reason, solicit, induce, encourage or recruit
any of the Group’s employees, officers, directors or consultants to leave their
employment or relationship, or take away such employees, officers, directors or
consultants, or attempt to solicit, induce, recruit, encourage or take away
employees, officers, directors or consultants of the Group, either for himself
or for any other Person.

The undertakings set forth in this Section 13 of this Agreement shall be of
worldwide geographic scope and are considered by the Parties to be reasonable
for the purposes of protecting the legitimate business interests of the Group.
If any such undertaking is found by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of time or over too
broad a range of activities or in too large a geographic area, however, such
restriction shall be interpreted to the extent permitted by applicable law to
extend only over the maximum period of time, range of activities or geographic
area as to which it may be enforceable. The Executive acknowledges that it is
difficult to determine the damages that will be incurred by the Group if the
Executive breaches the provisions of this Section 13 of this Agreement and, as
such, the Group shall be entitled to seek injunctive relief to enforce the
provisions of this Section 13 of this Agreement, in addition to any and all
other remedies which may be available to the Group.

	14.	 	Electronic Mail

Electronic mail as well as internal mail and e-mail and the Group’s electronic
networks shall be exclusively used for the Group’s business purposes. The
Executive recognizes and acknowledges that all electronic mail is logged and
retained by the Group for a period determined by it in its

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discretion through a “back-up” procedure. The Executive is informed of the fact
that the Group performs periodic verifications regarding the use of electronic
mail and Group’s electronic networks by employees and that the Group may use
such logged and retained correspondence for purposes of establishing
non-compliance with the Group’s correspondence policy and exercising employee
disciplinary sanctions as a result of such non-compliance.

	15.	 	Guarantee of GISA

GISA hereby undertakes to guarantee the proper performance of the obligations
pursuant to this Agreement of Gemplus Corp., GMT and any assignee in accordance
with Section 3(e) or 3(f) of this Agreement. Such undertaking of GISA
constitutes a guarantee of payment and not of collection only, shall remain in
full force and effect notwithstanding any insolvency of Gemplus Corp. or any
permitted assignee of Gemplus Corp., and shall apply and may be relied upon by
the Executive in the event of non-performance by Gemplus Corp. (or if
applicable, GMT or any permitted assignee) which is not cured within thirty
days of written notice from the Executive to Gemplus Corp. (or if applicable,
GMT or any permitted assignee) and to GISA to such effect.

	16.	 	Miscellaneous
	 
	16.1 	 	Notices

All notices, demands, requests or other communications required or permitted to
be given or made hereunder shall be in writing and shall be personally
delivered, faxed, delivered by nationally recognized courier service or mailed
by first class registered or certified mail, postage prepaid, addressed as
follows:

	 	If to Gemplus Corp.:

	 	The Board of Directors

Gemplus Corp.

3 Lagoon Drive

Redwood City, CA 94065-1566

USA

Fax number: 1 650 654 2920

	 	with a copy to the same address (which shall not be

deemed to constitute notice), attention: General

Counsel

	 	If to GISA:

	 	The Board of Directors

Gemplus International S.A.

Aérogolf Center

1, Hohenhoff

L-2633 Senningerberg

Grand Duchy of Luxembourg

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	 	Fax number: 352 26 34 61 61

	 	with a copy (which shall not be deemed to constitute

notice) to the same address, attention: General Counsel

	 	If to GMT:

	 	General Counsel

Gemplus Management & Trading S.A.

Place des Alpes 2-4

1201 Geneva, Switzerland

Fax number: 41 22 544 50 20

	 	If to the Executive:

	 	10250 Akhtamar Drive

Great Falls, VA 22066

USA

Fax number: 1 703 757 0346

	 	with a copy (which shall not be deemed to constitute

notice) to:

	 	Arthur Cirulnick, Esq.

Venable, Baetjer, Howard & Civiletti

1201 New York Avenue, N.W.

Suite 1000

Washington, D.C. 20005-3917

Fax number: 1 202 962 8300

     or to such other address as may be designated by such Party in a notice to
the others. Each notice, demand, request or other communication that shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes, if sent by first class mail, seven business days
after it is deposited in the U.S. or international mail, postage prepaid, or,
if by nationally-recognized courier service or fax, at such time as it is
delivered to the addressee (with the delivery receipt or fax confirmation sheet
deemed conclusive evidence of such delivery) or, if personally delivered, on
the date of such delivery or at such time as delivery is refused by the
addressee upon presentation.

	16.2 	 	Arbitration

     (a)  In consideration for Executive’s employment with Gemplus Corp. and his
receipt of the compensation provided for herein, except as provided in Section
16.2(c) of this Agreement, the Parties agree that any and all disputes or
controversies arising out of, relating to or in connection with this Agreement,
or the interpretation, validity, construction, performance, breach or
termination thereof, shall be settled by binding arbitration to be held in the
borough of Manhattan, New York in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association (the “Rules”). The neutral arbitrator(s) shall be selected in a
manner consistent with the Rules. The arbitrator(s) may grant injunctions or
other relief in any such dispute or controversy and shall have the power to
decide

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any motions brought by any Party to such arbitration. Judgment may be
entered on the decision of the arbitrator(s) in any court having jurisdiction.
The arbitrator(s) shall require the non-prevailing Party pursuant to any such
arbitration to pay and/or reimburse the prevailing Party for any and all fees
or costs associated with the arbitration.

     (b)  The arbitrator(s) shall apply the law of the State of New York to the
merits of any dispute or claim, without reference to rules of conflicts of law.
The arbitration proceedings shall be governed by U. S. federal arbitration law
and by the Rules, without reference to state arbitration law. The Parties
hereby consent to the exclusive jurisdiction and venue of the state and federal
courts located in the borough of Manhattan, New York for any action or
proceeding arising from or relating to this Agreement or relating to any
arbitration concerning a dispute arising out of this Agreement.

     (c)  Notwithstanding the foregoing, the Parties may apply to any court of
competent jurisdiction located in the borough of Manhattan, New York for a
temporary restraining order, preliminary injunction, or other interim or
conservatory injunctive or equitable relief, as necessary, without breach of
this Section 16.2 of this Agreement and without abridgement of the powers of
the arbitrator(s).

	16.3 	 	Severability

The invalidity or unenforceability of any one or more provisions of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which shall remain in full force and effect.

	16.4 	 	Survival

It is the express intention and agreement of the Parties that the provisions of
Sections 5.7, 5.12, 5.13, 7.3, 8, 9, 10, 12, 13, 15, 16.1, 16.2, 16.3, 16.4,
16.6, 16.9, 16.10 and 16.13 of this Agreement and Schedule 1 to this Agreement
shall survive the Date of Termination.

	16.5 	 	Assignment

The rights and obligations of Gemplus Corp. and the Group hereunder shall inure
to the benefit of Gemplus Corp. and the Group and shall be binding on their
successors and assigns, including without limitation in connection with any
subsequent merger, consolidation, sale of all or substantially all of the
assets of Gemplus Corp. or GISA or similar reorganization of a successor
corporation. The rights and obligations of the Executive hereunder shall not
be assignable or delegable without the prior written consent of Gemplus Corp.,
except that, in the event of the Executive’s death, the personal representative
or legatees or distributees of the Executive’s estate, as the case may be,
shall have the right to receive any amounts due and payable to the Executive
pursuant to the terms of this Agreement, including without limitation any
amounts unpaid and owing pursuant to Section 8.1 of this Agreement.

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	16.6 	 	Binding Effect

Subject to any provisions of this Agreement restricting assignment, this
Agreement shall be binding upon the Parties and shall inure to the benefit of
the Parties and their respective heirs, devisees, executors, administrators,
legal representatives, successors and permitted assigns.

	16.7 	 	Amendment; Waiver

This Agreement shall not be amended, altered or modified except by an
instrument in writing duly executed by each of the Parties. Neither the waiver
by either of the Parties of a breach of or a default under any of the
provisions of this Agreement, nor the failure of either of the Parties, on one
or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall thereafter be construed as a
waiver of any subsequent breach or default of a similar nature, or as a waiver
of any such provisions, rights or privileges hereunder.

	16.8 	 	Headings

Section and subsection headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions of this Agreement.

	16.9 	 	Governing Law

     (a)  This Agreement, the rights and obligations of the Parties, and any
claims or disputes relating thereto, shall be governed by and construed in
accordance with the laws of the State of New York (but not including the choice
of law rules thereof).

     (b)  THE PARTIES HEREBY WAIVE ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING BASED UPON, ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     (c)  Notwithstanding the foregoing provisions of this Section 16.9 of this
Agreement, the relationship between GISA and the Executive with respect to his
appointment as a director by the shareholders of GISA and his appointment as
CEO (“administrateur délégué”) by the Board shall be governed by Luxembourg law
(without reference to rules of conflicts of laws).

	16.10 	 	Entire Agreement

This Agreement, including all exhibits attached hereto, constitutes the entire
agreement between the Parties respecting the employment of Executive by Gemplus
Corp. and the subject matter of this Agreement, and supersedes all prior
writings and discussions between or among the Parties.

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	16.11 	 	Counterparts

This Agreement may be executed in one or more counterparts, each of which shall
be an original and all of which shall be deemed to constitute one and the same
instrument. Signatures may be by facsimile. Notwithstanding two signature lines
for GISA on the signature page of this Agreement, GISA represents and warrants
that its Chairman, Mr. Dominique Vignon, through his signature alone has the
full authority to legally bind GISA to this Agreement.

	16.12 	 	Absence of Restrictions on the Executive

By signing this Agreement, the Executive certifies that he is not prevented
from doing so by any contract or other agreement, that he is not subject to any
legal limitation on doing so, and that he does not violate any contractual
obligation that would diminish or limit his capacity to fulfill his obligations
under this Agreement. In addition, the Executive certifies that he does not own
or retain and that he is not bringing with him any book, document, record or
other document or material containing information, business secrets, know-how
or client lists which belong to any other person or entity. The Executive
confirms that no commission is payable by the Group to an agency or an
intermediary in relation to this Agreement due to any action by the Executive
(other than fees payable to the executive search firm engaged by GISA).

	16.13 	 	Excise Tax Payment

In the event that any payment, benefit, or distribution pursuant to this
Agreement (other than pursuant to this section 16.13) made by Gemplus Corp.,
GISA or by any of its affiliates, by any person who acquires ownership or
effective control or ownership of a substantial portion of Gemplus Corp.’s,
GISA’s or its affiliates’ assets (within the meaning of section 280G of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder (the
“Code”)) or by any affiliate of such person (the “Total Payments”), is subject
to the excise tax imposed by section 4999 of the Code (or any successor
provision of the Code) or any interest or penalties with respect to such excise
tax (such excise tax, together with any such interest or penalties, are
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment in an amount that shall fund the
payment by the Executive of such Excise Tax on the Total Payments. Such
additional payment will not however include any gross-up for any income tax
liability arising from such additional payment in respect of such Excise Tax.

	16.14 	 	Definitions

“Agreement” has the meaning set forth in the preamble of this Agreement.

“ASM” means AMS Investments, LLC, which is and throughout the term of this
Agreement shall be wholly owned by the Executive and members of his immediate
family (his spouse and / or his children).

“Base Salary” has the meaning set forth in Section 5.1 of this Agreement.

“Basic Benefits” means the benefits provided for in Sections 5.8 and 5.10 of
this Agreement.

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“Business” means the business and activities of the Group during the Employment
Period in connection with the design, development, marketing, publicity,
manufacturing, production and sale of smart cards and smart card related
solutions, software and services, in all fields of use, whether directly or
indirectly in any manner.

“Change of Control” means any block sale or coordinated series of sales by
two or more of (i) Texas Pacific Group (Fort Worth, Texas and San Francisco,
California), or entities owned by Texas Pacific Group, (ii) entities owned by
the family of Herman Quandt (Bad Homberg, Federal Republic of Germany) or (iii)
Dr Marc Lassus and / or entities controlled by him (including without
limitation Mlfi Holdings (Luxembourg), which together with any related voting
agreements delivers control of 51% or more of the voting equity of GISA to a
Third Party.

“Compensation Committee” means the Compensation and Search Committee of
the Board of Directors of GISA.

“Confidential Information” has the meaning set forth in Section 9.1 of this
Agreement.

“Date of Termination” means, subject to the application of cure periods
pursuant to the terms of this Agreement, (i) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death; (ii) if
the Executive’s employment is terminated because of the Executive’s Disability,
30 calendar days after Notice of Termination, provided that the Executive shall
not have returned to the performance of the Executive’s duties on a full-time
basis at any time during such 30-day period; or (iii) if the Executive’s
employment is terminated by Gemplus Corp. or by the Executive for any reason,
the date specified in the Notice of Termination.

“Disability” means a physical or mental disability, confirmed by a medical
diagnosis performed by a physician who is reasonably acceptable to the
Executive and the Board, that prevents the Executive’s effective performance of
his full-time duties hereunder for a period of 120 substantially consecutive
days or for 120 days in any twelve-month period of the Employment Period.

“Effective Date” means September 9, 2002.

“Employment Period” has the meaning set forth in Section 2 of this Agreement.

“Executive” has the meaning set forth in the preamble of this Agreement.

“Full Bonus” means the entire amount of the Bonus (120% of Base Salary).

“Good Cause” means (i) fraud; (ii) conviction of a felony (or a plea of
nolo contendere thereto) or the equivalent outside the United States; (iii)
willful and serious misconduct which has or is reasonably expected to cause
direct or indirect material harm to Gemplus Corp., GISA or the Group, not cured
after written notice and reasonable opportunity to cure; or (iv) willful
failure substantially to perform a material provision of this Agreement or a
material breach of this Agreement, not cured after written notice and
reasonable opportunity to cure.

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“Good Reason” means any of the following: (i) a failure by Gemplus Corp. or
GISA to comply with any material obligation imposed by this Agreement and
continuance of such failure for thirty business days subsequent to the
Executive’s having notified the Chairman of the Board in writing that the
Executive considers such failure to have occurred; (ii) the Executive is
demoted from the position of President or CEO of GISA, or is not elected as
director of GISA, or the Executive’s duties and responsibilities are materially
and substantially reduced; (iii) the assignment to the Executive of any duties
that are inconsistent with Executive’s position as President and CEO of GISA
and the failure of GISA to have reversed such assignment within thirty business
days of the Executive’s having notified the Chairman of the Board in writing
that the Executive considers such assignment to have occurred; (iv) Executive
is required by Gemplus Corp. or the Group without his consent to reside
somewhere other than the Great Falls, Virginia, USA or Geneva, Switzerland,
areas; or (v) failure by GISA to secure the consent of the purchaser and
thereby implement the Executive’s rights pursuant to Section 5.6 of this
Agreement, in accordance with and subject to the provisions thereof.

“Incentive Compensation” has the meaning set forth in Section 5.2 of this
Agreement.

“Notice of Termination” has the meaning set forth in Section 7.2 of this
Agreement.

“Person” means an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture,
an unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.

“Sale of GISA” means:

          (i) a sale of all or substantially all of GISA’s assets for cash
consideration;

          (ii) a share tender offer which results in more than 50% of then-current
equity securities of GISA being sold to a third party other than existing
shareholders of GISA (“Third Party”) for cash consideration;

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          (iii) a merger or similar business combination with another entity which
results in more than 50% of then-current equity securities of GISA being sold
to a Third Party for cash consideration.

[Remainder of page intentionally left blank; signature page follows]

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     IN
WITNESS WHEREOF, the undersigned have duly executed and delivered, or have
caused to be duly executed and delivered, this Agreement as of the day and year
first hereinabove written.

	 	 	 	 	 	 	 
	 	 	Gemplus International S.A.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	
By:
	 	Dominique Vignon	 	 
	 	 	
Its:
	 	Director	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	
By:	 	 	 	 
	 	 	
Its:
	 	Director	 	 
	 	 	 	 	 	 	 
	 	 	Gemplus Corp.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	
By:
	 	Jason S. Cohen	 	 
	 	 	
Its:
	 	Vice President & Secretary	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Gemplus Management & Trading S.A.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	
By:
	 	Stephen Juge	 	 
	 	 	
Its:
	 	Authorized representative	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	EXECUTIVE	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	Alex J. Mandl	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	ASM Investments, LLC	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	
	 	 
	 	 	
By:
	 	Alex J. Mandl	 	 
	 	 	
Its:
	 	President	 	 

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SCHEDULE 1

Consequences of Assignment to GMT

In the event of an assignment by Gemplus Corp. of its rights and obligations hereunder to GMT pursuant to Section 3(f) of the Agreement, then automatically by virtue of such assignment and henceforth from the effective date thereof, then notwithstanding any other provisions of this Agreement, the following provisions shall apply:

     1.  The provisions of Section 16.2 of the Agreement shall become void and have no further force or effect (except for the continuation and completion of any arbitration proceedings already commenced pursuant thereto).

     2.  The applicable law in accordance with Section 16.9 (a) of the Agreement shall become void and of no further force or effect and shall be automatically modified and amended to become the applicable law of Switzerland (without reference rules of conflicts of laws).

     3.  The exclusively competent courts for any and all disputes or controversies arising out of, relating to or in connection with this Agreement, or the interpretation, validity, construction, performance, breach or termination thereof, shall automatically be modified and amended to become exclusively the competent courts of Geneva, Switzerland.

     4.  The provisions of Section 10 of the Agreement shall become void and of no further force or effect (without prejudice to all rights acquired pursuant thereto prior to the effective date of assignment, all of which rights shall remain unchanged and in full force and effect), and shall be replaced by the following provision which shall apply in lieu of and in place of Section 10 of the Agreement:

          (i)  Inventions, designs, developments and improvements (“Inventions”) which the Executive makes or to which the Executive contributes while performing his activity and duties hereunder shall be the property of GISA, regardless of their protectability. The Executive is not entitled to any additional compensation in relation thereto.

          (ii)  Inventions which the Executive makes or to which the Executives contributes in connection with his activity in relation to the Group but not within the scope of his duties pursuant to this Agreement or by law or practice are assigned to GISA or otherwise as directed by GISA without further formalities as from the date of their creation. The Executive shall inform GISA in writing of such Inventions. GISA shall inform the Executive in writing within six months thereafter whether it wishes to retain the rights to the Invention or to release such rights to the Executive. GISA and the Executive agree to comply with any and all mandatory related provisions of applicable law, including any and all mandatory requirements for GISA to pay special compensation to the Executive in respect of GISA retaining such rights to such Inventions. Negotiations and any possible dispute with respect to the amount of such compensation shall not have any restriction on the full unlimited rights of GISA to use and exploit such Invention.

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          (iii) Sections 4(i) and 4(ii) of this Schedule 1 to the Agreement shall apply mutatis mutandis to industrial designs, models and similar industrial property rights.

          (iv) All rights to copyrights, authors’ rights and similar intellectual property rights (including without limitation in computer programs, drafts, models, plans, drawings and essays) which the Executive creates or to which he contributes while performing his activity for the Group, whether during the performance of his contractual or statutory duties or not, including the right to uses not yet known at this time, are transferred fully and exclusively to GISA or as GISA may direct as from the date of their creation without any additional compensation being due to the Executive. In particular, GISA or as GISA may direct has the exclusive and unlimited right to use, copy and distribute the works involved also in an altered form without being obliged to name the author of such work. GISA is entitled to determine whether, how and when such works, also for the first time, are published and used, e.g. whether reproductions of the works are made, the works are distributed, leased, performed, or otherwise displayed, sent, transmitted or re-transmitted by means of radio and television networks or by similar means. To the extent permitted by law, the Executive further waives his right to exercise his moral rights, in particular his right to be recognized as author, to determine the first publication and work integrity.

          (v) The Executive shall inform GISA in writing and without delay of any intellectual property rights created pursuant to Sections 4(i) through 4(iv) of this Schedule 1. The Executive shall make all statements and provide all documents which are necessary to enable GISA and the Group to exercise the aforementioned rights.

          (vi) GISA has the right to use the results stemming from the Executive’s activity hereunder without any further compensation. The Executive shall not disclose any manufacturing or business secret that comes to his knowledge while in Gemplus Corp.’s or the Group’s service. He shall continue to be bound to secrecy also after termination of this Agreement. The Executive shall himself not make use of any of the results of any of the rights of GISA pursuant to this Section 4 of this Schedule 1 which are not protected by any intellectual property rights nor transfer such results of any such rights to a third party.

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