Document:

Exhibit 10.103

 

SETTLEMENT AGREEMENT AND RELEASE

 

This SETTLEMENT AGREEMENT AND RELEASE (collectively, with the releases
to be executed pursuant hereto, the “Agreement”) is made the 9th day of March
2006 by and among Paul A. Miller (“Miller”), Robert J. Bossart (“Bossart” and,
collectively with Miller, “Plaintiffs”), CompManagement Inc. (“CMI”), CMI
Management Company (“CMC”), CompManagement Health Systems Inc. (“CHI”),
CompManagement Integrated Disability Services, Inc. (“CDI”), WC Holdings, Inc.
(“WC Holdings” and, collectively with CMI, CMC, CHI and CDI, “Defendants”) and
Security Capital Corporation (“SCC”).

 

WHEREAS, Plaintiffs’ employment with Defendants was terminated
effective January 3, 2005;

 

WHEREAS, on or about November 8, 2005, Plaintiffs commenced a civil
action against Defendants in the Court of Common Pleas, Franklin County, Ohio,
entitled Paul A. Miller and Robert J.
Bossart v. CompManagement Inc., CMI Management Company, CompManagement Health
Systems, Inc., CompManagement Integrated Disability Services, Inc., and WC
Holdings, Inc. (the “Lawsuit”), Case No.: 05-CVH-10-12072;

 

WHEREAS, Defendants have denied all of the material allegations
asserted by Plaintiffs in the Lawsuit and assert that they are not liable to
Plaintiffs in any way;

 

WHEREAS, Plaintiffs, Defendants and SCC desire to resolve all of their
differences, including those in the Lawsuit, without the necessity of further
proceedings;

 

WHEREAS, Plaintiffs, Defendants and SCC entered into an Agreement in
Principle dated February 10, 2006 (“Agreement in Principle”), pursuant to which
Plaintiffs, Defendants and SCC set forth the essential terms and conditions on
which they agreed to resolve all of their differences, including the Lawsuit;
and

 

WHEREAS, Plaintiffs, Defendants and SCC now wish to set forth in more
detail in this Agreement the agreements reached in the Agreement in Principle;

 

NOW, THEREFORE, with the intent to be legally
bound hereby, and in consideration of the foregoing and the mutual promises and
covenants set forth herein, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the undersigned agree
as follows:

 

I.              Dismissal
With Prejudice. Plaintiffs authorize and instruct James S. Mowery Jr.,
Esq., of Mowery & Youell, Ltd., to file a Stipulation of Dismissal With
Prejudice with respect to the Lawsuit in the form of Exhibit A hereto on or
prior to the date that is eight (8) days after the date hereof.

 

 

II.            Effectiveness;
Dismissal. This Agreement shall not become effective until the eighth (8th)
day following the execution and delivery of this Agreement by all parties
hereto and the execution and delivery by the party or parties thereto of the
releases referred to in Sections 7.1 and 7.2 hereof (the “Effective Date”). Each
of Miller and Bossart has the right to revoke this Agreement prior to the
eighth (8th) day after his execution thereof by giving notice in
writing to SCC and Defendants. In the event that Bossart or Miller, or both of
them, revokes this Agreement prior to the eighth (8th) day after
execution thereof, this Agreement, and the promises contained therein
(including the releases), shall automatically be deemed null and void as to all
parties hereto.

 

III.           Settlement
Consideration. Defendants shall pay Plaintiffs the consideration set forth
in this Article as and in the manner set forth herein:

 

3.1           Initial
Payments. WC Holdings shall pay, or shall cause CMI to pay, the sum of
$94,976 plus $261,007.50
($355,983.50) to Bossart and the sum of $94,976 plus $111,280 ($206,256) to Miller within one business day
following the later of (i) the Effective Date of this Agreement and
(ii) Defendants’ and SCC’s receipt of proof of entry of the Stipulation of
Dismissal With Prejudice referred to in Article I (such date, the “Settlement
Effective Date”).

 

3.2           Installment
Payments. On the first anniversary of the Settlement Effective Date, WC
Holdings shall pay, or shall cause CMI to pay, $182,705.25 to Bossart and
$77,896 to Miller. On the second anniversary of the Settlement Effective Date,
WC Holdings shall pay, or shall cause CMI to pay, $78,302.25 to Bossart and
$33,384 to Miller.

 

3.3           Contingent
Payments. WC Holdings shall pay, or shall cause CMI to pay, $563,820 to
Bossart and $281,910 to Miller upon the occurrence of a change of control of
SCC or WC Holdings. For purposes of this Agreement, the term “change of control”
shall be defined, with respect to SCC and WC Holdings, in the same way as it is
defined in the agreement with respect to Tag Along Rights and Drag Along
Rights, as defined in Article VIII below; provided, however, that no payment
obligation shall be triggered prior to the occurrence of a change of control as
defined for purposes of Section 409A of the Internal Revenue Code of 1986, as
amended.

 

3.4           Withholding.
All payments made to Bossart and Miller pursuant to this Agreement shall be
subject to any required withholding taxes.

 

3.5           Allocation.
For all purposes (including, but not limited to, tax purposes), the parties
agree to treat the $261,007 and $111,280 payments made pursuant to Section 3.1
and all of the payments made pursuant to Section 3.2 as payments in
consideration of or in exchange for the covenants contained in Article V, and
the $94,976 payments made pursuant to Section 3.1 and the payments made
pursuant to Section 3.3 as severance payments.

 

3.6           Interest
Bearing Account. On the Settlement Effective Date, WC Holdings or CMI, as
applicable, shall place the amounts of the payments to be made pursuant to
Section 3.2 into an interest-bearing WC Holdings or CMI (as applicable) account.
Interest earned on the account shall be allocated on the basis of the
respective interests of Bossart and Miller in the funds in the account, and
interest earned shall be paid to Bossart and Miller with the payments to be
made to them pursuant to Section 3.2 on the second anniversary of the
Settlement Effective 

 

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Date. Other than as expressly provided
herein, no interest shall accrue between the Effective Date and the date of
payment of any payment contemplated by this Agreement.

 

3.7           Wire
Transfer. WC Holdings or CMI, as applicable, shall wire the payments due to
Bossart and Miller pursuant to this Agreement to such accounts as Bossart and
Miller may direct WC Holdings in writing.

 

IV.           Plaintiffs’
Acknowledgment Regarding Payments. Plaintiffs agree and acknowledge that
the payments provided for in Article III of this Agreement (i) exceed
any payment, benefit or other thing of value to which Plaintiffs might otherwise
be entitled under any policy, plan or procedure of the Company; (ii) are
in full discharge of any and all of the Company’s liabilities and obligations
to Plaintiffs; and (iii) are in full discharge of any and all claims
against the Company for damages of any kind.

 

V.            Non-Compete
and Non-Solicitation Covenants.

 

5.1           For
and in consideration of the payments described in Sections 3.1 and 3.2, and for
other valuable consideration set forth in this Agreement, each of Bossart and
Miller agrees that during the thirty-six (36) month period immediately
following the Effective Date of this Agreement, he will not directly or
indirectly, either on his own behalf or on behalf of any person, partnership,
association, corporation, company or other entity:

 

(i)            Engage
in, become employed by, become affiliated with or become interested in any
business that is in competition with any of the Non-Compete Parties (as defined
below in Article XI). Throughout this Article, “engage in,” “become employed
by,” “become affiliated with” or “become interested in” shall mean either (1)
in a capacity calling for the rendering of any services or participating in
management or operations in any capacity or (2) financially, other than as a
stockholder owning less than two (2%) percent of a corporation whose stock is
listed on a national securities exchange or is traded on the over-the-counter
market. Throughout this Article, a business shall be considered to be “in
competition with the Non-Compete Parties” if the business is engaged in the same
or a competing line of business with any of the Non-Compete Parties.

 

(ii)           Transact,
do or solicit business of the same or similar nature to the business of any of
the Non-Compete Parties or with any of the Non-Compete Parties’ Clients. Throughout
this Article, the term “Non-Compete Parties’ Clients” includes, but is not
limited to:

 

(1)           persons,
entities, corporations, divisions or subsidiary offices of companies or
individuals and their affiliates for which any of the Non-Compete Parties is
providing services at the time of the Effective Date of this Agreement or which
have, at any time within the twelve (12) month period prior to the Effective
Date of this Agreement, purchased or acquired or executed an agreement
providing for the purchase or acquisition of any of the Non-Compete Parties’
services or products;

 

(2)           persons,
entities, corporations, divisions or subsidiary offices of those companies or
individuals and their affiliates which were solicited by any of the Non-Compete
Parties at any time during the twelve (12) months prior to January 3, 2005.

 

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(iii)          Cause,
induce or encourage any of the Non-Compete Parties’ Clients to terminate or
adversely change their relationship with any of the Non-Compete Parties,
including without limitation through any employment, consulting or other
relationship with any of the Non-Compete Parties’ Clients.

 

(iv)          Become
employed by, become a consultant or contractor to, become affiliated with or
become interested in any of the following of the Non-Compete Parties
Clients:  Professional Insurance Agents Association of Ohio and University of California.

 

(v)           Divert
or attempt to divert any of the Non-Compete Parties’ Clients to any competitor,
by direct or indirect inducement or otherwise, or do or perform, directly or
indirectly, any other act injurious or prejudicial to the goodwill in any way
associated with any of the Non-Compete Parties.

 

(vi)          Cause,
induce or encourage any employee, consultant, independent contractor or
otherwise of any of the Non-Compete Parties, who at the time thereof provides,
or at any time during the one (1) year period prior thereto provided, services
to any of the Non-Compete Parties, to leave the employ of or terminate any
relationship with any of the Non-Compete Parties.

 

(vii)         Solicit
for hire or engagement, seek to employ or have any discussions or other
communications regarding hiring, engaging or employing any employee,
consultant, independent contractor or otherwise of any of the Non-Compete
Parties, who at the time thereof provides, or at any time during the one (1)
year period prior thereto provided, services to any of the Non-Compete Parties.

 

5.2           Plaintiffs
acknowledge (i) that the promises and covenants in this Agreement are
essential to protect the business and goodwill of the Non-Compete Parties,
(ii) that the Non-Compete Parties would not have entered into this
Agreement without these promises and covenants; (iii) that they have
consulted with counsel and have been fully advised concerning the
reasonableness and propriety of these promises and covenants; (iv) that
these promises and covenants represent reasonable and necessary protection of
the legitimate interests of the Non-Compete Parties; (v) that any breach
or threatened breach of these promises and covenants will cause irreparable
injury to the Non-Compete Parties and money damages will not provide adequate
remedy; and (vi) that they will have the ability to make a reasonable
living while observing these promises and covenants.

 

5.3           If
any court determines that any of the covenants of this Article is unenforceable
because of the duration, scope or nature of such covenant, such court shall
have the power to reduce the duration, scope or nature of such covenant, as the
case may be, and, in its reduced form, such covenant shall then be enforceable
and shall be enforced.

 

VI.           General
Covenants.

 

6.1           Non-Disparagement.
Each of Bossart and Miller agrees that he shall not, at any time or in any
manner, disparage the Company or any officer or director thereof. Defendants
agree that none of them, at any time or in any manner, shall disparage Bossart
or Miller and shall instruct their officers and directors regarding the same. Each
of Bossart and Miller agrees that he will not engage in any conduct that is
injurious to the Company’s reputation or interest.

 

6.2           Cooperation.
Each of Bossart and Miller agrees to cooperate with the Company regarding the
Company’s business activities, including any potential change of control of the

 

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Company. Provided they are pre-approved by WC
Holdings, WC Holdings shall pay or direct the payment of any reasonable
out-of-pocket expenses incurred by Bossart or Miller in fulfilling this
obligation. The obligation in this Section to cooperate with the Company shall
terminate on July 31, 2006.

 

6.3           Reaffirmation
of Employment Agreement Obligations.

 

(i)            Bossart
hereby reaffirms (1) his obligation in Section 11 of his Employment Agreement
dated June 8, 2000 (as the same may have been amended) with WC Holdings, the
other Defendants and affiliates thereof (the “Bossart Employment Agreement”) to
return all records; and (2) his obligation in Section 10(a)(i) of the Bossart
Employment Agreement not to disclose trade secrets or confidential information.

 

(ii)           Miller
hereby reaffirms (1) his obligation in Section 11 of his Employment Agreement
dated June 8, 2000 (as the same may have been amended) with WC Holdings, the
other Defendants and affiliates thereof (the “Miller Employment Agreement”) to
return all records; and (2) his obligation in Section 10(a)(i) of the Miller
Employment Agreement not to disclose trade secrets or confidential information.

 

6.4           No
Admission. Defendants have entered into this Agreement solely for the
purpose of avoiding the burdens and expense of further litigation, and the
making of this Agreement is not intended, and shall not be construed, as an
admission that any of the Defendants or SCC has violated any federal, state or
local law, breached any contract or committed any wrong whatsoever against
Plaintiffs. Neither the fact of the settlement, nor anything contained in this
Agreement or the Agreement in Principle, shall constitute or be used or treated
as an admission by any party with respect to any allegation or claim made or
that could have been made in the Lawsuit. Plaintiffs, Defendants and SCC agree
that this Agreement and the Agreement in Principle may be used as evidence only
in a subsequent proceeding in which Plaintiffs, Defendants or SCC alleges
breach of, or indemnification under, this Agreement. Otherwise, this Agreement
and the Agreement in Principle shall not be filed with a court or used for any
other purpose.

 

6.5           Tax
Liability/Indemnification. Each of Bossart and Miller shall be liable for
and shall pay his own tax liability arising as a result of the settlement
provided for in this Agreement (including, but not limited to, the payments
made to him hereunder to the extent not satisfied by withholding). Bossart
agrees to hold the Company harmless against, and to indemnify the Company for,
any and all claims by the Internal Revenue Service or any other taxing
authority, which may be made against the Company, arising out of or relating to
the Company’s failure to withhold any portion of any payment to Bossart for
income or employment taxes, or for any other purpose, and agrees to reimburse
the Company for any resulting payments that the Company may be required to make
to such taxing authority. Miller agrees to hold the Company harmless against,
and to indemnify the Company for, any and all claims by the Internal Revenue
Service or any other taxing authority, which may be made against the Company,
arising out of or relating to the Company’s failure to withhold any portion of
any payment to Miller for income or employment taxes, or for any other purpose,
and agrees to reimburse the Company for any resulting payments that the Company
may be required to make to such taxing authority.

 

6.6           Confidentiality.
Each party hereby agrees to maintain the terms and conditions of this Agreement
and the Agreement in Principle as confidential, subject only to exceptions for
disclosures (i) to the Company’s officers, directors, employees,
accountants, attorneys, 

 

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consultants and advisers, on a need to know
basis, (ii) to Bossart and Miller’s respective attorneys and accountants,
on a need to know basis, (iii) required by law, including any subpoena,
(iv) to potential acquirers of the Company; and (v) pursuant to any
Securities and Exchange Commission or stock exchange rules or regulations; provided,  however that (1) in the case of
clauses (i), (ii) and (iv), any person to whom confidential information is
provided shall have an obligation to maintain the confidentiality of such
information in accordance with the terms hereof, and (2) before a party
discloses confidential information pursuant to clause (iii), such party shall
provide written notice and a reasonable opportunity to the other parties to
seek a protective order with respect to the information proposed to be
disclosed. Information that becomes publicly available other than by means of a
breach of this confidentiality obligation shall no longer be confidential
hereunder. Each of Bossart and Miller hereby represents and warrants that he
has not heretofore disclosed the existence, terms or conditions of this
Agreement.

 

VII.          Releases
and Related Covenants.

 

7.1           Plaintiffs’
Releases. Upon execution of this Agreement, Miller and Bossart shall
provide to Defendants and SCC an executed Release in the form annexed hereto as
Exhibits B and C.

 

7.2           Defendants’
Releases. Upon execution of this Agreement, Defendants shall provide to
Miller and Bossart an executed Release in the form annexed hereto as Exhibits D
and E.

 

7.3           No
Additional Claims. Each of Bossart and Miller hereby represents and
warrants that he has no claim against the Company other than those being
released under and pursuant to this Agreement and that, other than the Lawsuit,
he has not commenced, maintained, prosecuted, participated in as a party, or
permitted to be filed by any other person on his behalf, any action or
proceeding of any kind against the Company with respect to any act, omission,
transaction or occurrence up to and including the date of the execution of this
Agreement. Each of the Defendants hereby represents and warrants that it has no
claim against Bossart or Miller other than those being released under and
pursuant to this Agreement and that it has not commenced, maintained, prosecuted,
participated in as a party, or permitted to be filed by any other person on his
behalf, any action or proceeding of any kind against Bossart or Miller with
respect to any act, omission, transaction or occurrence up to and including the
date of the execution of this Agreement.

 

7.4           Covenant
Not To Sue. Each of Bossart and Miller covenant not to commence, maintain,
prosecute or participate in (except as may be required by law, pursuant to a
court order, or in response to a valid subpoena) any action, charge, complaint
or proceeding of any kind (on his own behalf and/or on behalf of any other
person or entity and/or on behalf of or as a member of any alleged class of
persons) in any court, or before any administrative or investigative body or
agency (whether public, quasi-public or private), against the Company with
respect to any act, omission, transaction or occurrence up to and including the
date of the execution of this Agreement.

 

7.5           No
Assignment of Released Claims. Each party hereby represents and warrants
that it has not assigned or otherwise transferred any released claim (in whole
or in part) and shall not assign or otherwise transfer any released claims (in
whole or part).

 

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VIII.        Tag
Along/Drag Along Rights. Each of Bossart and Miller shall have the right to
sell his interest in WC Holdings, for cash, if there occurs a change of control
of SCC or WC Holdings (the “Tag Along Rights”). SCC shall have the right to
require Bossart and Miller to sell their respective interests in WC Holdings,
for cash, if there occurs a change of control of SCC or WC Holdings (the “Drag
Along Rights”). The Tag Along Rights and Drag Along Rights shall be on the same
terms and conditions as will be set forth in a separate agreement to be agreed
upon between SCC and the other minority stockholders and optionholders of WC
Holdings, and Bossart and Miller shall execute that separate agreement when
presented to them by SCC. For the avoidance of doubt, neither Bossart nor Miller
shall be required to engage in a roll-up transaction (i.e., convert their
equity in WC Holdings into equity of or other interests in another entity).

 

IX.           Representations
and Warranties.

 

9.1           Authorization.
Each party represents and warrants that it is duly authorized to execute,
deliver and perform its obligations under this Agreement.

 

9.2           No
Conflict. Each party represents and warrants that neither the execution and
delivery of, nor the performance of its obligations under, this Agreement will
conflict with or violate any law, judgment, order or decree applicable to it.

 

9.3           Enforceable
Agreement. Each party represents and warrants that this Agreement has been
duly executed and delivered by it and, assuming due authorization, execution
and delivery by the other parties hereto, constitutes a valid and binding
obligation of it enforceable against it in accordance with its terms (except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforcement of
the rights of creditors generally and the application of equitable principles
in any proceeding, whether at law or in equity).

 

9.4           Represented
By Counsel. Each of Bossart and Miller represents and warrants that
(i) he has been represented by independent legal counsel, of his own
choice, throughout all of the negotiations preceding this Agreement;
(ii) he executed this Agreement after consultation with the
above-described independent legal counsel; (iii) he carefully read this
Agreement in its entirety; (iv) he had at least twenty-one (21) days
within which to consider this Agreement prior to execution or, if elects to
execute and deliver this Agreement prior to the expiration of such twenty-one
(21)-day period, he hereby knowingly and voluntarily waives his right to
consider this Agreement for the days remaining in that twenty-one (21)-day
period; (v) he has had the provisions of this Agreement explained to him
by his own counsel, who has answered to his satisfaction any questions he has
asked with regard to the meaning of any of the provisions of this Agreement;
(vi) he fully understands the terms and significance of this Agreement;
(vii) he voluntarily assents to all the terms and conditions contained in this
Agreement, and is signing this Agreement voluntarily and of his own force and
will; and (viii) he intends to abide by the provisions of this Agreement
without exception.

 

9.5           No
Violations. Each of Bossart and Miller hereby represents and warrants that,
to the best of his knowledge, except for such acts or omissions as have been
disclosed to SCC in writing prior to the date of this Agreement or referenced
in the Report to the Audit Committee, 

 

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he has complied with his employment agreement
and the SCC Code of Conduct. Nothing contained herein shall constitute or be
construed as an admission by Bossart or Miller that he breached his employment
agreement or violated the SCC Code of Conduct.

 

X.            Dispute
Resolution and Remedies.

 

10.1         Arbitration.
All controversies or claims arising out of or related to this Agreement, or the
breach or asserted breach hereof, whether based on contract, tort, statute or
other theory of liability, and including without limitation any claim by or
against a parent, subsidiary or other affiliate of any party, shall be finally
determined by binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the “AAA Rules”), and judgment
upon the award rendered by the arbitrator may be entered in any court of
competent jurisdiction. The arbitration shall be conducted in Columbus, Ohio,
in accordance with the United States Arbitration Act. There shall be three
arbitrators, one chosen by the Company, one chosen by Bossart and/or Miller (as
applicable) and the third (the chair) to be chosen by the two party-appointed
arbitrators. Any party may, at its option, seek emergency interim or
provisional relief pursuant to the AAA Optional Rules for Emergency Measures of
Protection to the AAA Commercial Arbitration Rules. This Agreement shall be
construed and governed by the law of the State of Ohio, without reference to
conflicts of law rules or principles thereof. In any action commenced to
enforce this Agreement, each party shall pay its own costs and expenses, except
that Plaintiffs, on the one hand, and the Company, on the other hand, shall
each pay one-half of any fees and expenses to be paid to the AAA or any
arbitrator. Once a decision is rendered by the arbitrators, unless the
arbitrators shall otherwise allocate the same among the parties, the prevailing
party (or parties, as the case may be) shall be entitled to recover from the
other party (or parties, as the case may be) its reasonable attorneys’ fees and
expenses, and costs, disbursements and the like incurred in prosecuting the
action (including without limitation expert
witness fees, witness expenses, disbursements, AAA administrative fees and
arbitrator compensation) as the arbitrator shall determine is appropriate.

 

10.2         Remedies.
If Plaintiffs breach, or threaten to commit a breach of, this Agreement (the
party in breach the “Breaching Party”), in addition to any actual damages
suffered as a result, the Defendants and SCC shall be entitled to terminate
their obligations under this Agreement with respect to the Breaching Party. The
termination by the Defendants and/or SCC of its obligations under this
Agreement with respect to a Breaching Party shall, automatically and without
any action on its part, relieve WC Holdings or CMI, as applicable, of any
further obligations to make payments due after the date of the breach to the
Breaching Party.

 

If Plaintiffs breach, or threaten to commit a
breach of, Sections 5.1, 5.2, 6.1, 6.2, 6.3, 6.4, 6.6, 7.1, 7.4, 7.5 and Article
VIII of this Agreement, the Company shall have the right and remedy to have
them specifically enforced by any court having equity jurisdiction over the
parties. Plaintiffs specifically acknowledge and agree (i) that the
promises and covenants in this Agreement are essential to protect the business
and goodwill of the Company, (ii) that the Company would not have entered
into this Agreement without these promises and covenants; (iii) that
Plaintiffs have consulted with counsel and have been fully advised concerning
the reasonableness and propriety of these promises and covenants;
(iv) that these promises and covenants represent reasonable and necessary
protection of the legitimate interests of the Company; (v) that any breach
or threatened breach of these promises and covenants will cause 

 

8

 

irreparable injury to the Company and money
damages will not provide adequate remedy to the Company; and (vi) that the
Company shall be entitled to injunctive relief upon such breach or threatened
breach of these promises and covenants without the necessity of proof of actual
damage. This right to injunctive relief shall be in addition to, and not in
lieu of, any other rights and remedies available to the Company in law or in
equity.

 

10.3         Breach
Notice. In the event of a breach or threatened breach of this Agreement,
the party asserting a breach or threatened breach will give the other party
written notice of the alleged breach or threatened breach and fourteen (14)
days, from receipt thereof, within which to cure that breach or threatened
breach before exercising the right to terminate this Agreement or seek to
recoup monetary remedies. Nothing contained in this Section shall require a
notice or cure period before seeking injunctive or other equitable relief to
prevent or remedy a breach or threatened breach of this Agreement.

 

XI.           Miscellaneous
Provisions.

 

11.1         Definitions.
As used throughout this Agreement, (a) the term “Plaintiffs” means Paul A.
Miller and Robert J. Bossart, (b) the term “Defendants” means CompManagement
Inc., CMI Management Company, CompManagement Health Systems Inc.,
CompManagement Integrated Disability Services, Inc., and WC Holdings, Inc., (c)
the term “Company” means any or all of the following: (i) Defendants,
(ii) SCC, (iii) each of Defendants and SCC’s affiliates, and/or
(iv) each of Defendants, SCC, and their affiliates’ successors or assigns,
and (d) the term “Non-Compete Parties” means any or all of the following:
(i) Defendants, (ii) each of Defendants’ affiliates, and/or
(iii) each of Defendants and their affiliates’ successors or assigns;
provided, however, that SCC shall be a Non-Compete Party only to the extent it
is in the same or a competing line of business with any of the Defendants.

 

11.2         Governing
Law. This Agreement shall be construed and governed by the laws of the
State of Ohio, without reference to conflicts of law rules or principles
thereof.

 

11.3         Notices.
All notices and other communications required or permitted to be given under
this Agreement to any party shall be in writing and delivered by hand, telecopy
(which is confirmed) or Federal Express or any similar nationally recognized
express delivery service (which obtains acknowledgment of receipt (or refusal
to accept)) to that party at the address or telecopy number set forth below (or
to such other address or telecopy number as any party may furnish in writing to
the other party). Delivery of any such written notice shall be deemed effective
upon receipt or refusal to accept:

 

(i)            If
to Paul A. Miller:

 

Paul A. Miller

6597 Masefield Street

Worthington, Ohio 43085

 

(ii)           If
to Robert J. Bossart:

 

Robert J. Bossart

2603 Chartwell Road

Columbus, Ohio 43220

 

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(iii)          If
to Defendants:

 

CompManagement Inc.

Corporate Office

6377 Emerald Parkway

Dublin, Ohio 43017

Attention: 
Stephen Brown, Chief Executive Officer

 

(iv)          If
to SCC:

 

Security Capital Corporation

Eight Greenwich Office Park

Third Floor

Greenwich, CT 06831

Attention: 
Brian Fitzgerald

 

A copy of any written notice under this
Agreement to Miller or Bossart, or both, should be sent in the manner described
above to their attorney, James S. Mowery, Esq. of Mowery & Youell, Ltd.,
425 Metro Place North, Suite 420, Dublin, Ohio 43017, telecopy (614) 760-8654.

 

A copy of any written notice under this
Agreement to Defendants or SCC, or both, should be sent in the manner described
above to their attorneys, Kevin T. Abikoff, Esq. and Kathy Russo, Esq., of
Hughes Hubbard & Reed LLP, 1775 I Street, N.W., Washington, DC 20006,
telecopy (202) 721-4646.

 

11.4         Severability.
If any provision of this Agreement shall be held to be illegal, void or
unenforceable, such provision shall be of no force and effect. The illegality
or unenforceability of such provision, however, shall have no effect upon, and
shall not impair the enforceability of, any other provision of this Agreement
provided that, upon a finding by a court of competent jurisdiction that the
Release executed by Plaintiffs pursuant to Section 7.1 above is illegal and/or
unenforceable in any respect, Plaintiffs shall be required to repay to
Defendants any amount paid to them pursuant to Article III above in excess of
$500.

 

11.5         Counterparts.
This Agreement may be executed in several counterparts, each of which shall be
deemed as an original, but all of which together shall constitute one and the
same instrument.

 

11.6         Integration.
This Agreement constitutes the complete understanding between the parties and
supersedes any and all prior negotiations, agreements, representations or
understandings among the parties hereto with respect to the subject matter
hereof, including without limitation the Agreement in Principle. Plaintiffs
acknowledge that neither Defendants nor SCC, nor any representative of
Defendants or SCC, has made any representation or promise to them other than as
set forth herein. No other promises or agreements among the parties hereto
shall be binding unless in writing and signed by the parties.

 

10

 

11.7         Amendments;
Waivers. This Agreement may not be amended or any provision hereof waived
other than in writing executed, in the case of an amendment, by all parties
and, in the case of a waiver, by the party granting the waiver.

 

11.8         Assignments.
This Agreement shall not be assignable by Bossart or Miller and shall be
binding upon, and shall inure to the benefit of, Bossart, Miller and the
Company and their respective successors and assigns (including without
limitation estates, heirs, executors, administrators, legatees and similar
legal representatives).

 

11

 

IN WITNESS WHEREOF, each of the undersigned
has duly executed and delivered this Agreement as of the date first set forth
above.

 

	
   

  	
  /s/ Robert J. Bossart

  	
   

  
	
   

  	
  Robert J. Bossart

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Paul A. Miller

  	
   

  
	
   

  	
  Paul A. Miller

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CompManagement Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CMI Management Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CompManagement Health Systems, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CompManagement Integrated Disability
  Services, 

  
	
   

  	
  Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WC Holdings, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  

 

12

 

	
   

  	
  Security Capital Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
				

 

13

 

EXHIBIT A

 

FORM OF
STIPULATION OF DISMISSAL WITH PREJUDICE

 

IN THE COURT OF COMMON PLEAS

FRANKLIN COUNTY, OHIO

 

	
   

  	
  :

  	
   

  
	
  Paul A. Miller and Robert J. Bossart,

  	
  :

  	
   

  
	
   

  	
  :

  	
   

  
	
  Plaintiffs,

  	
  :

  	
  Case No.: 05-CVH-10-12072

  
	
   

  	
  :

  	
   

  
	
  vs.

  	
  :

  	
  JUDGE: Daniel T. Hogan

  
	
   

  	
  :

  	
   

  
	
  COMPMANAGEMENT INC.,

  	
  :

  	
   

  
	
  CMI MANAGEMENT COMPANY,

  	
  :

  	
   

  
	
  COMPMANAGEMENT HEALTH

  	
  :

  	
   

  
	
  SYSTEMS INC., COMPMANAGEMENT

  	
  :

  	
   

  
	
  INTEGRATED DISABILITY SERVICES,

  	
  :

  	
   

  
	
  INC., and WC HOLDINGS, INC.,

  	
  :

  	
   

  
	
   

  	
  :

  	
   

  
	
  Defendants.

  	
  :

  	
   

  
	
   

  	
  :

  	
   

  

 

NOTICE OF DISMISSAL WITH PREJUDICE

 

Pursuant to Rule 41(A)(1)(b) of the Ohio Rules of Civil Procedure,
Plaintiffs Paul A. Miller and Robert J. Bossart hereby voluntarily dismiss this
action with prejudice. As indicated by the signatures below, all of the parties
in this action consent to this dismissal. Each party shall bear its own costs.

 

	
   

  	
   

  	
  Respectfully submitted,

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John Stephen (0022947)

  	
  James S. Mowery, Jr. (0040227)

  
	
  Porter, Wright, Morris & Arthur, LLP

  	
  Mowery & Youell, Ltd.

  
	
  41 South High Street, 32d Floor

  	
  425 Metro Place No., Suite 420

  
	
  Columbus, Ohio 43215

  	
  Dublin, Ohio 43017

  
	
  Phone: 614-227-2061

  	
  Phone: (614) 764-1444

  
	
  Fax: 614-227-2100

  	
  (614) 760-8654

  
	
   

  	
   

  
	
  Attorneys for the Defendants.

  	
  Attorneys for the Plaintiffs.

  

 

14

 

EXHIBIT B

 

RELEASE

 

Release, executed this 9th day of March 2006,
by Paul A. Miller (“Miller”):

 

For and in consideration of the payments to
be made and for other valuable consideration to be provided to Miller pursuant
to the Settlement Agreement and Release dated March 9, 2006 by and among
(i) Paul A. Miller and Robert J. Bossart (collectively, the “Plaintiffs”),
(ii) CompManagement Inc., CMI Management Company, CompManagement Health
Systems, Inc., CompManagement Integrated Disability Services, Inc., and WC
Holdings, Inc. (collectively, the “Defendants”), and (iii) Security
Capital Corporation (“SCC”), including the payments set forth in Article III of
the Settlement Agreement and Release, Miller, for himself and for his spouse,
heirs, executors, administrators, trustees, legal representatives and assigns
(hereinafter collectively referred to as “Releasors”), hereby irrevocably and unconditionally
forever releases and discharges Defendants and SCC and any and all of their
past, present or future parent companies, partners, subsidiaries, affiliates,
divisions, employee benefit and/or pension plans or funds (except vested rights
under any 401(k) plan), and their respective successors and assigns, and any
and all of their past, present or future directors, officers, attorneys,
agents, trustees, administrators or employees (whether acting as agents for
Defendants and/or SCC or any of their past, present or future parent companies,
partners, subsidiaries, affiliates, divisions or employee benefit and/or
pension plans or funds, or in their individual capacities) (hereinafter
collectively referred to as “Releasees”) from any and all claims, demands,
causes of action and liabilities of any kind or nature whatsoever (upon any
legal or equitable theory, whether contractual, common-law, statutory, federal,
state, local or otherwise), whether known or unknown, whether accrued or
contingent, by reason of any act, omission, transaction or occurrence up to and
including the date of the execution of this Release which Releasors ever had,
now have or thereafter can, shall or may have against Releasees.

 

Without limiting the generality of the
foregoing, Releasors hereby release and discharge Releasees from:

 

(i)            any
and all claims (including without limitation those based upon statutory,
contract or implied contract, tort, public policy or common law grounds)
relating to Miller’s employment by or with Defendants, the terms and conditions
of such employment, the employee benefits related to such employment and/or his
separation from such employment, including without limitation any and all
claims for shares or options in Defendants;

 

(ii)           any
and all claims (including without limitation those based upon statutory,
contract or implied contract, tort, public policy or common law grounds)
relating to Miller’s entry into the Settlement Agreement and Release and/or the
terms thereof;

 

(iii)          any
and all claims of employment discrimination and/or retaliation under and
federal, state or local statute or ordinance, regulation, public policy or
common law, including without limitation, any and all claims under Title VII of
the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment
Act; the Older Workers Benefit Protection 

 

15

 

Act; the Americans with Disabilities Act; the
Employee Retirement Income Security Act; the Worker Adjustment and Retraining
Notification Act; and Ohio Revised Code Chapter 4112.

 

(iv)          any
and all claims asserted by or which could have been asserted by Miller in the
civil action filed by Miller and Robert J. Bossart in the Court of Common
Pleas, Franklin County, Ohio, entitled Paul A. Miller and Robert J. Bossart v.
CompManagement Inc., CMI Management Company, CompManagement Health Systems,
Inc., CompManagement Integrated Disability Services, Inc., and WC Holdings,
Inc, Case No.: 05-CVH-10-12072;

 

(v)           any
and all claims for damages or injury of any kind whatsoever;

 

(vi)          subject to the last
paragraph of this Release, any and all claims for indemnification, including
without limitation under any statute, articles, bylaws, policy, procedure or
agreement of any Releasor, or insurance coverage under any insurance policy of
or maintained by any Releasor; and

 

(vii)         subject to the last
paragraph of this Release, any and all claims for attorneys’ fees, costs,
disbursements and the like which Releasors ever had, now have or hereafter can,
shall or may have against Releasees for, upon or by reason of any act,
omission, transaction or occurrence up to and including the date of the
execution of this Release.

 

This Release may not be changed orally and it
shall be effective on the eighth (8th) day following its execution.

 

Miller represents and warrants that (i) he
has been represented by independent legal counsel, of his own choice,
throughout all of the negotiations preceding execution of this Release; (ii) he
executed this Release after consultation with the above-described independent
legal counsel; (iii) he carefully read this Release in its entirety; (iv) he
had at least twenty-one (21) days within which to consider this Release prior
to execution or, if elects to execute and deliver this Release prior to the
expiration of such twenty-one (21)-day period, he hereby knowingly and
voluntarily waives his right to consider this Release for the days remaining in
that twenty-one (21)-day period; (v) he has had the provisions of this Release
explained to him by his own counsel, who has answered to his satisfaction any
questions he has asked with regard to the meaning of any of the provisions of
this Release; (vi) he fully understands the terms and significance of this
Release; (vii) he voluntarily assents to all the terms and conditions contained
in this Release, and is signing this Release voluntarily and of his own force
and will; and (viii) he intends to abide by the provisions of this Release
without exception. Miller further represents and warrants that he has read this
Release in its entirety, fully understands all of its terms, and voluntarily
assents to all terms and conditions contained herein.

 

The release of Releasor’s claims for
indemnification and insurance coverage (including, without limitation, claims
for attorneys’ fees, costs, disbursements and the like) shall be limited to
claims that Releasor has, had or may have that arise out of or are as a result
of claims that are asserted only against Releasor and based only upon Releasor’s
own acts or omissions. Should Releasor make a demand for indemnification or
insurance coverage under any policy maintained by any Releasee, nothing
contained in this Release shall preclude the Releasee or any insurer under any
insurance policy maintained by any Releasee, from asserting any claim based
upon the 

 

16

 

acts or omissions of Releasor and that relate
to Releasor’s claim for indemnification or insurance, in response to or in
defense of such demand by Releasor for indemnification or insurance coverage. Any
and all rights to indemnification and insurance preserved to Releasor in this
paragraph shall be subject to such rights of Releasees and any insurer under
any insurance policy maintained by any Releasee to assert such defenses, as
stated above.

 

 

	
  /s/ Paul A. Miller

  	
   

  
	
  Paul A. Miller

  	
   

  
	
   

  	
   

  
	
  STATE OF OHIO

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF FRANKLIN

  	
  )

  
			

 

On this 9th day of March 2006, before me
personally came Paul A. Miller, to be known and known to me to be the person
described and who executed the foregoing Release and he duly acknowledged to me
that he executed the same.

 

	
  /s/ Kevin M. Vore

  	
   

  
	
  Notary

  

 

17

 

EXHIBIT C

 

RELEASE

 

Release, executed this 7th day of March 2006,
by Robert J. Bossart (“Bossart”):

 

For and in consideration of the payments to
be made and for other valuable consideration to be provided to Bossart pursuant
to the Settlement Agreement and Release dated March 9, 2006 by and among
(i) Paul A. Miller and Robert J. Bossart (collectively, the “Plaintiffs”),
(ii) CompManagement Inc., CMI Management Company, CompManagement Health
Systems, Inc., CompManagement Integrated Disability Services, Inc., and WC
Holdings, Inc. (collectively, the “Defendants”), and (iii) Security
Capital Corporation (“SCC”), including the payments set forth in Article III of
the Settlement Agreement and Release, Bossart, for himself and for his spouse,
heirs, executors, administrators, trustees, legal representatives and assigns
(hereinafter collectively referred to as “Releasors”), hereby irrevocably and
unconditionally forever releases and discharges Defendants and SCC and any and
all of their past, present or future parent companies, partners, subsidiaries,
affiliates, divisions, employee benefit and/or pension plans or funds, and
their respective successors and assigns, and any and all of their past, present
or future directors, officers, attorneys, agents, trustees, administrators or
employees (whether acting as agents for Defendants and/or SCC or any of their
past, present or future parent companies, partners, subsidiaries, affiliates,
divisions or employee benefit and/or pension plans or funds, or in their
individual capacities) (hereinafter collectively referred to as “Releasees”)
from any and all claims, demands, causes of action and liabilities of any kind
or nature whatsoever (upon any legal or equitable theory, whether contractual,
common-law, statutory, federal, state, local or otherwise), whether known or
unknown, whether accrued or contingent, by reason of any act, omission,
transaction or occurrence up to and including the date of the execution of this
Release which Releasors ever had, now have or thereafter can, shall or may have
against Releasees.

 

Without limiting the generality of the
foregoing, Releasors hereby release and discharge Releasees from:

 

(i)            any
and all claims (including without limitation those based upon statutory,
contract or implied contract, tort, public policy or common law grounds)
relating to Bossart’s employment by or with Defendants, the terms and
conditions of such employment, the employee benefits related to such employment
and/or his separation from such employment, including without limitation any
and all claims for shares or options in Defendants;

 

(ii)           any
and all claims (including without limitation those based upon statutory,
contract or implied contract, tort, public policy or common law grounds)
relating to Bossart’s entry into the Settlement Agreement and Release and/or
the terms thereof;

 

(iii)          any
and all claims of employment discrimination and/or retaliation under and
federal, state or local statute or ordinance, regulation, public policy or
common law, including without limitation, any and all claims under Title VII of
the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment
Act; the Older Workers Benefit Protection 

 

18

 

Act; the Americans with Disabilities Act; the
Employee Retirement Income Security Act; the Worker Adjustment and Retraining
Notification Act; and Ohio Revised Code Chapter 4112.

 

(iv)          any
and all claims asserted by or which could have been asserted by Bossart in the
civil action filed by Bossart and Paul A. Miller in the Court of Common Pleas,
Franklin County, Ohio, entitled Paul A. Miller and Robert J. Bossart v.
CompManagement Inc., CMI Management Company, CompManagement Health Systems,
Inc., CompManagement Integrated Disability Services, Inc., and WC Holdings,
Inc, Case No.: 05-CVH-10-12072;

 

(v)           any
and all claims for damages or injury of any kind whatsoever;

 

(vi)          subject to the
provisions of the last paragraph of this Release, any and all claims for
indemnification, including without limitation under any statute, articles,
bylaws, policy, procedure or agreement of any Releasor, or insurance coverage
under any insurance policy of or maintained by any Releasor; and

 

(vii)         subject
to the last paragraph of this Release, any and all claims for attorneys’ fees,
costs, disbursements and the like which Releasors ever had, now have or
hereafter can, shall or may have against Releasees for, upon or by reason of
any act, omission, transaction or occurrence up to and including the date of
the execution of this Release.

 

This Release may not be changed orally and it shall be effective on the
eighth (8th) day following its execution.

 

Bossart represents and warrants that (i) he
has been represented by independent legal counsel, of his own choice,
throughout all of the negotiations preceding execution of this Release; (ii) he
executed this Release after consultation with the above-described independent
legal counsel; (iii) he carefully read this Release in its entirety; (iv) he
had at least twenty-one (21) days within which to consider this Release prior
to execution or, if elects to execute and deliver this Release prior to the
expiration of such twenty-one (21)-day period, he hereby knowingly and
voluntarily waives his right to consider this Release for the days remaining in
that twenty-one (21)-day period; (v) he has had the provisions of this Release
explained to him by his own counsel, who has answered to his satisfaction any
questions he has asked with regard to the meaning of any of the provisions of
this Release; (vi) he fully understands the terms and significance of this
Release; (vii) he voluntarily assents to all the terms and conditions contained
in this Release, and is signing this Release voluntarily and of his own force
and will; and (viii) he intends to abide by the provisions of this Release
without exception. Bossart further represents and warrants that he has read
this Release in its entirety, fully understands all of its terms, and
voluntarily assents to all terms and conditions contained herein.

 

The release of Releasor’s claims for
indemnification and insurance coverage (including without limitation claims for
attorneys’ fees, costs, disbursements and the like) shall be limited to claims
that Releasor has, had or may have that arise out of or are as a result of
claims that are asserted only against Releasor and based only upon Releasor’s
own acts or omissions. Should Releasor make a demand for indemnification or
insurance coverage under any policy maintained by any Releasee, nothing
contained in this Release shall preclude the Releasee or any insurer under any
insurance policy maintained by any Releasee, from asserting any claim based
upon the 

 

19

 

acts or omissions of Releasor and that relate
to Releasor’s claim for indemnification or insurance, in response to or in
defense of such demand by Releasor for indemnification or insurance coverage. Any
and all rights to indemnification and insurance preserved to Releasor in this
paragraph shall be subject to such right of Releasees and any insurer under any
insurance policy maintained by any Releasee to assert such defenses, as stated
above.

 

 

	
  /s/ Robert J. Bossart

  	
   

  
	
  Robert J. Bossart

  	
   

  
	
   

  	
   

  
	
  STATE OF SC

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF BEAUFORT

  	
  )

  
			

 

On this 7th day of March 2006, before me
personally came Robert J. Bossart, to be known and known to me to be the person
described and who executed the foregoing Release and he duly acknowledged to me
that he executed the same.

 

	
  /s/ Avis B. Young

  	
   

  
	
  Notary

  

 

20

 

EXHIBIT D

 

RELEASE

 

Release, executed this 8th day of March 2006,
by CompManagement Inc., CMI Management Company, CompManagement Health Systems,
Inc., CompManagement Integrated Disability Services, Inc., and WC Holdings,
Inc. (collectively, the “Defendants”) and Security Capital Corporation (“SCC”):

 

For and in consideration of the payments to
be made and for other valuable consideration to be provided to Defendants and
SCC pursuant to the Settlement Agreement and Release by and among (i) Paul
A. Miller and Robert J. Bossart (collectively, the “Plaintiffs”),
(ii) CompManagement Inc., CMI Management Company, CompManagement Health
Systems, Inc., CompManagement Integrated Disability Services, Inc., and WC
Holdings, Inc. (collectively, the “Defendants”), and (iii) and Security
Capital Corporation (“SCC”), dated March 9, 2006, Defendants and SCC, for
themselves and their successors and assigns (hereinafter collectively referred
to as “Releasors”), hereby forever release and discharge Paul A. Miller and his
spouse, heirs, executors, administrators, trustees, legal representatives and
assigns (hereinafter collectively referred to as “Releasees”) from any and all
claims, demands, causes of action, and liabilities of any kind whatsoever (upon
any legal or equitable theory, whether contractual, common-law, statutory,
federal, state, local or otherwise), whether known or unknown, whether accrued
or contingent, by reason of any act, omission, transaction or occurrence which
Releasors ever had, now have or thereafter can, shall or may have against Releasees
up to and including the date of the execution of this Release.

 

Notwithstanding the foregoing, this Release
shall not be effective to preclude any Releasor or any insurer under any
insurance policy maintained by any Releasor from asserting any claim (including
without limitation any claim otherwise released hereunder) in defense of any
demand by Plaintiffs or either of them for indemnification or insurance
coverage under any insurance policy maintained by any Releaser.

 

 

	
  CompManagement Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CMI Management Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CompManagement Health Systems, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  

 

21

 

	
  CompManagement Integrated Disability
  Services, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WC Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Security Capital Corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  

 

	
  STATE OF CONNECTICUT

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF FAIRFIELD

  	
  )

  

 

On this 8th day of March 2006, before me
personally came William R. Schlueter, to be known and known to me to be the
person described and who executed the foregoing Release and he duly
acknowledged to me that he executed the same.

 

	
  /s/ Wendy E. Bolton

  	
   

  
	
  Notary

  

 

22

 

EXHIBIT E

 

RELEASE

 

Release, executed this 8th day of March 2006,
by CompManagement Inc., CMI Management Company, CompManagement Health Systems,
Inc., CompManagement Integrated Disability Services, Inc., and WC Holdings,
Inc. (collectively, the “Defendants”) and Security Capital Corporation:

 

For and in consideration of the payments to
be made and for other valuable consideration to be provided to Defendants and
SCC pursuant to the Settlement Agreement and Release by and among (i) Paul
A. Miller and Robert J. Bossart (collectively, the “Plaintiffs”),
(ii) CompManagement Inc., CMI Management Company, CompManagement Health
Systems, Inc., CompManagement Integrated Disability Services, Inc., and WC Holdings,
Inc. (collectively, the “Defendants”), and (iii) and Security Capital
Corporation (“SCC”), dated March 9, 2006, Defendants and SCC, for themselves
and their successors and assigns (hereinafter collectively referred to as “Releasors”),
hereby forever release and discharge Robert J. Bossart and his spouse, heirs,
executors, administrators, trustees, legal representatives and assigns
(hereinafter collectively referred to as “Releasees”) from any and all claims,
demands, causes of action, and liabilities of any kind whatsoever (upon any
legal or equitable theory, whether contractual, common-law, statutory, federal,
state, local or otherwise), whether known or unknown, whether accrued or
contingent, by reason of any act, omission, transaction or occurrence which
Releasors ever had, now have or thereafter can, shall or may have against
Releasees up to and including the date of the execution of this Release.

 

Notwithstanding the foregoing, this Release
shall not be effective to preclude any Releasor or any insurer under any
insurance policy maintained by any Releasor from asserting any claim (including
without limitation any claim otherwise released hereunder) in defense of any
demand by Plaintiffs or either of them for indemnification or insurance coverage
under any insurance policy maintained by any Releaser.

 

	
  CompManagement Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CMI Management Company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  CompManagement Health Systems, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  

 

23

 

	
  CompManagement Integrated Disability
  Services, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WC Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ William R. Schlueter

  	
   

  

 

 

	
  STATE OF CONNECTICUT

  	
  )

  
	
   

  	
  ) ss.:

  
	
  COUNTY OF FAIRFIELD

  	
  )

  

 

On this 8th day of
March 2006, before me personally came William R. Schlueter, to be known and
known to me to be the person described and who executed the foregoing Release
and he duly acknowledged to me that he executed the same.

 

	
  /s/ Wendy E. Bolton

  	
   

  
	
  Notary

  

 

24Exhibit 10.1

VERTEX
PHARMACEUTICALS INCORPORATED

2006 STOCK and OPTION PLAN

1.                 DEFINITIONS

Unless otherwise specified or unless the context
otherwise requires, the following terms, as used in this Vertex Pharmaceuticals
Incorporated 2006 Stock and Option Plan, have the following meanings:

Administrator means
the Board of Directors and/or a committee of the Board of Directors to which
the Board of Directors has delegated power to act on its behalf in
administering this Plan in whole or in part.

Affiliate means
a corporation that, for purposes of Section 424 of the Code, is a parent
or subsidiary of the Company, direct or indirect.

Board of Directors means
the Board of Directors of the Company.

Code means
the United States Internal Revenue Code of 1986, as amended.

Common Stock means
shares of the Company’s common stock, $.01 par value.

Company means
Vertex Pharmaceuticals Incorporated, a Massachusetts corporation.

Employee means
an employee of the Company or of an Affiliate (including, without limitation,
an employee who is also serving as an officer or director of the Company or of
an Affiliate), designated by the Administrator to be eligible to be granted one
or more Stock Rights under the Plan.

Exchange Act means
the Securities Exchange Act of 1934, as amended.

Fair Market Value of
a Share of Common Stock on a particular date shall be the mean between the
highest and lowest quoted selling prices on such date (the “valuation date”) on
the securities market where the Common Stock is traded, or if there were no sales
on the valuation date, on the next preceding date within a reasonable period
(as determined in the sole discretion of the Administrator) on which there were
sales. If there were no sales in such a market within a reasonable period, the
fair market value shall be as determined in good faith by the Administrator in
its sole discretion. The Fair Market Value as determined in this paragraph
shall be rounded down to the next lower whole cent if the foregoing calculation
results in fractional cents.

ISO means
an option intended to qualify as an incentive stock option under Code Section 422.

Non-Employee Director means
a member of the Board of Directors who is not an employee of the Company or any
Affiliate.

Non-Qualified Option means
an option that is not intended to qualify as an ISO.

Option means
an ISO or Non-Qualified Option granted under the Plan.

Participant means
an Employee, Non-Employee Director, consultant or advisor of the Company or an
Affiliate to whom one or more Stock Rights are granted under the Plan. As used
herein, “Participant” shall include “Participant’s Survivors” and a Participant’s
permitted transferees where the context requires.

 

 

Participant’s Survivors means
a deceased Participant’s legal representatives and/or any person or persons who
acquires the Participant’s rights to a Stock Right by will or by the laws of
descent and distribution.

Plan means
this Vertex Pharmaceuticals Incorporated 2006 Stock and Option Plan, as amended
from time to time.

Shares means
shares of the Common Stock as to which Stock Rights have been or may be granted
under the Plan or any shares of capital stock into which the Shares are changed
or for which they are exchanged within the provisions of Section 3 of the
Plan. The Shares subject to Stock Rights granted under the Plan may be
authorized and unissued shares or shares held by the Company in its treasury,
or both.

Stock Agreement means
an agreement between the Company and a Participant delivered pursuant to the
Plan with respect to a Stock Right, in such form as the Administrator shall
approve.

Stock-Based Award means
a grant by the Company under the Plan of an equity award or equity-based award
that is not an Option or Stock Grant.

Stock Grant means
a grant by the Company of Shares under the Plan.

Stock Right means
a right to Shares or the value of Shares of the Company granted pursuant to the
Plan as an ISO, a Non-Qualified Option, a Stock Grant or a Stock-Based Award.

2.                 PURPOSES OF THE
PLAN

The Plan is intended to encourage ownership of Shares
by Employees, Non-Employee Directors and certain consultants and advisors to
the Company in order to attract such persons, to induce them to work for the
benefit of the Company or of an Affiliate and to provide additional incentive
for them to promote the success of the Company or of an Affiliate. The Plan
provides for the granting of Stock Rights to Employees, Non-Employee Directors,
consultants and advisors of the Company.

3.                 SHARES SUBJECT TO
THE PLAN

The number of Shares subject to this Plan as to which
Stock Rights may be granted from time to time shall be 7,350,000 or the
equivalent of such number of Shares after the Administrator, in its sole
discretion, has interpreted the effect of any stock split, stock dividend,
combination, recapitalization or similar transaction in accordance with Section 17
of this Plan. No Stock Rights shall be granted under this Plan prior to the
date on which the stockholders of the Company approve this Plan. The number of
Shares subject to this Plan shall be reduced, share for share, by the number of
shares underlying Stock Rights, if any, that are granted under the Company’s
1996 Stock and Option Plan after March 22, 2006.

If an Option granted hereunder ceases to be
outstanding, in whole or in part (other than by exercise), or if the Company
shall reacquire (at no more than its original issuance price) any Shares issued
pursuant to a Stock Grant, or if any Stock Right expires or is forfeited,
cancelled or otherwise terminated or results in any Shares not being issued,
the unissued Shares that were subject to such Stock Right shall again be
available for issuance from time to time pursuant to this Plan.

 2
 

 

 

4.                 ADMINISTRATION OF
THE PLAN

The Administrator
shall administer the Plan. Subject to the provisions of the Plan, the
Administrator is authorized to:

a.                 Interpret
the provisions of the Plan and of any Stock Right or Stock Agreement and to
make all rules and determinations that it deems necessary or advisable for
the administration of the Plan;

b.                Determine
which Employees, Non-Employee Directors, consultants and advisors of the
Company and its Affiliates shall be granted Stock Rights;

c.                 Determine
the number of Shares and exercise price for which a Stock Right shall be
granted;

d.                Specify
the terms and conditions upon which a Stock Right or Stock Rights may be
granted;

e.                 In
its discretion, accelerate:

(i)                the
date of exercise of any installment of any Option; provided that the
Administrator shall not, without the consent of the Option holder accelerate
the exercise date of any installment of any Option granted to any Employee as
an ISO (and not previously converted into a Non-Qualified Option pursuant to Section 20)
if such acceleration would violate the annual vesting limitation contained in Section 422(d) of
the Code, as described in Section 6.2.3; or

(ii)             the
date or dates of vesting of Shares, or lapsing of Company repurchase rights
with respect to any Shares, under any Stock Rights; and

f.                   In
its discretion, extend the exercise date for any Option;

provided, however, that all such interpretations,
rules, determinations, terms and conditions shall be made and prescribed in the
context of preserving the tax status under Code Section 422 of those
Options which are designated as ISOs (unless the holder of any such Option
otherwise agrees). Subject to the foregoing, the interpretation and
construction by the Administrator of any provisions of the Plan or of any Stock
Right granted under it shall be final, unless otherwise determined by the Board
of Directors, if the Administrator is other than the Board of Directors.

The Administrator may employ attorneys, consultants,
accountants or other persons, and the Administrator, the Company and its
officers and directors shall be entitled to rely upon the advice, opinions or
valuations of such persons. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be final and
binding upon the Company, all Participants, and all other interested persons.
No member or agent of the Administrator shall be personally liable for any
action, determination, or interpretation made in good faith with respect to
this Plan or grants hereunder. Each member of the Administrator shall be
indemnified and held harmless by the Company against any cost or expense
(including counsel fees) reasonably incurred by him or her or any liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with this Plan
unless arising out of such member’s own fraud or bad faith. Such
indemnification shall be in addition to any rights of indemnification the
members of the Administrator may have as directors or otherwise under the
by-laws of the Company, or any agreement, vote of stockholders or disinterested
directors, or otherwise.

 3
 

 

 

5.                 ELIGIBILITY FOR
PARTICIPATION

The Administrator shall, in its sole discretion, name
the Participants in the Plan, provided, however, that each Participant must be
a Employee, Non-Employee Director, consultant or advisor of the Company or of
an Affiliate at the time a Stock Right is granted. Notwithstanding the
foregoing, the Administrator may authorize the grant of a Stock Right to a
person not then an Employee, Non-Employee Director, consultant or advisor of
the Company or of an Affiliate; provided,
however, that the actual grant of
such Stock Right shall be conditioned upon such person becoming eligible to
become a Participant at or prior to the time of execution of the Stock
Agreement evidencing such Stock Right. ISOs may be granted only to Employees.
The granting of any Stock Right to any individual shall neither entitle that
individual to, nor disqualify him or her from, participation in other grants of
Stock Rights.

6.                 TERMS AND
CONDITIONS OF OPTIONS

6.1   General.   Each Option shall be set forth in
writing in a Stock Agreement, duly executed by the Company and, to the extent
required by law or requested by the Company, by the Participant. The
Administrator may provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically required
under this Plan, as the Administrator may deem appropriate including, without
limitation, subsequent approval by the stockholders of the Company of this Plan
or any amendments thereto. Each Stock Agreement shall state the option price
(per share) of the Shares covered by each Option, the number of Shares to which
it pertains, the date or dates on which it first is exercisable and the date
after which it may no longer be exercised (subject to Sections 11, 12 and 13 of
this Plan). Option rights may accrue or become exercisable in installments over
a period of time, or upon the achievement of certain conditions or the
attainment of stated goals or events.

6.2   ISOs.   Each Option intended to be an ISO
shall be issued only to Employees. In addition to the minimum standards set
forth in Section 6.1, ISOs shall be subject to the following terms and
conditions, with such additional restrictions or changes as the Administrator
determines are appropriate but not in conflict with Code Section 422 and
relevant regulations and rulings of the Internal Revenue Service:

6.2.1   ISO Option Price.   The Option price per share of the
Shares covered by an ISO shall not be less than one hundred percent (100%) of
the Fair Market Value per share of the Common Stock on the date of grant of the
ISO; provided, however, that the Option price per share of the Shares covered
by each ISO granted to a Participant who owns, directly or by reason of the
applicable attribution rules in Code Section 424(d), more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or an Affiliate shall not be less than one hundred ten percent (110%)
of the Fair Market Value on the date of grant.

6.2.2   Term of ISO.   Each ISO shall expire not more than
ten (10) years from the date of grant; provided, however, that an ISO
granted to a Participant who owns, directly or by reason of the applicable
attribution rules in Code Section 424(d), more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company or an
Affiliate shall expire not more than five (5) years from the date of
grant.

6.2.3   Annual Limit on Incentive Stock
Options.   To the
extent required for “incentive stock option” treatment under Section 422
of the Code, the aggregate Fair Market Value 

 4
 

 

(determined as of the time of grant) of the Shares
with respect to which ISOs granted under this Plan and any other plan of the
Company or its Affiliate become exercisable for the first time by a Participant
during any calendar year shall not exceed the aggregate threshold for ISOs
established by the Code ($100,000 as of March 22, 2006). To the extent
that any Option exceeds this limit, it shall constitute a Non-Qualified Option.

6.3   Non-Employee Directors’ Options.   Each Non-Employee Director, upon
first being elected or appointed to the Board of Directors, shall be granted a
Non-Qualified Option to purchase that number of Shares as shall be established
for such Option grants from time to time by the Board of Directors. Each such
Option shall (i) have an exercise price equal to the Fair Market Value
(per share) on the date of grant of the Option, (ii) have a term of ten (10) years,
and (ii) shall become cumulatively exercisable in sixteen (16) equal
quarterly installments, upon completion of each full quarter of service on the
Board of Directors after the date of grant. In addition, on June 1 of each
year, each Non-Employee Director shall be granted a Non-Qualified Option to
purchase that number of Shares as shall be established for such Option grants
from time to time by the Board of Directors. Each such Option shall (i) have
an exercise price equal to the Fair Market Value (per share) on the date of grant
of such Option, (ii) have a term of ten (10) years, and (iii) be
exercisable in full immediately on the date of grant. Any director entitled to
receive an Option grant under this Section may elect to decline the
Option. If a Non-Employee Director ceases to be any of an Employee,
Non-Employee Director, consultant or advisor of the Company, Options granted
under this Section 6.3 shall remain exercisable to the extent such Options
are exercisable on the date of such termination of service, for their full
term, and the provisions of Sections 11 and 13 below shall not apply to any
such Options.

6.4   Limitation on Number of Options
Granted.   Notwithstanding
anything in this Plan to the contrary, no Participant shall be granted an
aggregate of Options and/or Stock-Based Awards under this Plan in any calendar
year for more than an aggregate of 600,000 Shares (subject to adjustment
pursuant to Section 17 to the extent consistent with Section 162(m) of
the Code).

7.                 TERMS AND
CONDITIONS OF STOCK GRANTS

Each Stock Grant shall be set forth in a Stock
Agreement, duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Stock Agreement shall be in
the form approved by the Administrator, with such changes and modifications to
such form as the Administrator, in its discretion, shall approve with respect to
any particular Participant or Participants. The Stock Agreement shall contain
terms and conditions that the Administrator determines to be appropriate and in
the best interest of the Company; provided, however, that the purchase price
per share of the Shares covered by each Stock Grant shall not be less than the
par value per Share. Each Stock Agreement shall state the number of Shares to
which the Stock Grant pertains and the terms of any right of the Company to
reacquire the Shares subject to the Stock Grant, including the time and events
upon which such rights shall accrue and the purchase price therefor, and any
restrictions on the transferability of such Shares.

8.                 TERMS AND
CONDITIONS OF OTHER STOCK-BASED AWARDS

The Administrator shall have the right to grant other
Stock-Based Awards having such terms and conditions as the Administrator may
determine, including, without limitation, the grant of Shares based upon
certain conditions, the grant of securities convertible into Shares and the
grant 

 5
 

 

of stock appreciation rights, phantom stock awards or
stock units. The principal terms of each Stock-Based Award shall be set forth
in a Stock Agreement, duly executed by the Company and, to the extent required
by law or requested by the Company, by the Participant. The Stock Agreement
shall be in a form approved by the Administrator and shall contain terms and
conditions that the Administrator determines to be appropriate.

9.                 EXERCISE OF
OPTIONS AND ISSUANCE OF SHARES

An Option (or any part or installment thereof) shall
be exercised by giving written notice to the Company or its designee, together
with provision for payment of the full purchase price in accordance with this Section for
the Shares as to which the Option is being exercised, and upon compliance with any
other condition(s) set forth in the Stock Agreement. Such notice shall be
signed by the person exercising the Option, shall state the number of Shares
with respect to which the Option is being exercised and shall contain any
representation required by the Plan or the Stock Agreement.

Payment of the purchase price for the Shares as to
which such Option is being exercised shall be made (a) in United States
dollars in cash or by check acceptable to the Administrator, or (b) at the
discretion of the Administrator, (i) through delivery of shares of Common
Stock not subject to any restriction under any plan and having a Fair Market
Value equal as of the date of exercise to the cash exercise price of the
Option, (ii) in accordance with a cashless exercise program established
with a securities brokerage firm, and approved by the Company, (iii) by
any other means (excluding, however, delivery of a promissory note of the
Participant) that the Administrator determines to be consistent with the
purpose of this Plan and applicable law, or (iv) by any combination of the
foregoing. Notwithstanding the foregoing, the Administrator shall accept only
such payment on exercise of an ISO as is permitted by Section 422 of the
Code.

The Company shall then as soon as is reasonably
practicable deliver the Shares as to which such Option was exercised to the
Participant (or to the Participant’s Survivors, as the case may be). It is
expressly understood that the Company may delay the delivery of the Shares in
order to comply with any law or regulation that requires the Company to take
any action with respect to the Shares prior to their issuance. The Shares
shall, upon delivery, be fully paid, non-assessable Shares.

10.          ASSIGNABILITY AND
TRANSFERABILITY OF STOCK RIGHTS

By its terms, a Stock Right granted to a Participant
shall not be transferable by the Participant other than by will or by the laws
of descent and distribution or pursuant to a qualified domestic relations order
as defined by the Code or Title I of the Employee Retirement Income Security
Act or the rules thereunder or as approved by the Administrator in its
discretion and set forth in the applicable Stock Agreement, provided, however,
that the Administrator shall not approve any transfer of a Stock Right for
consideration. Except as provided in the preceding sentence or as otherwise
permitted under a Stock Agreement, a Stock Right shall be exercisable, during
the Participant’s lifetime only by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon a Stock Right, shall be null and void.

 6
 

 

 

11.          EFFECT ON STOCK RIGHTS
OF TERMINATION OF SERVICE

11.1  Except as
otherwise provided in the applicable Stock Agreement or as otherwise provided
in Sections 12 or 13, if a Participant ceases to be an Employee, Non-Employee
Director, consultant or advisor with the Company and its Affiliates (for any
reason other than termination for “cause,” or death) (a “Termination of Service”)
before the Participant has exercised all Stock Rights, the Participant may
exercise any Stock Right granted to him or her to the extent that the Stock
Right is exercisable on the date of such Termination of Service. Any such Stock
Right must be exercised within three months after the date of the Participant’s
Termination of Service, unless otherwise provided in the applicable Stock
Agreement, but in no event after the expiration of the term of the Stock Right.

11.2  The provisions
of this Section, and not the provisions of Section 14, shall apply to a
Participant who subsequently dies after the Termination of Service; provided,
however, that in the case of a Participant’s death within three (3) months
after the Termination of Service, the Participant’s Survivors may exercise the
Stock Right within one (1) year after the date of the Participant’s death,
but in no event after the date of expiration of the term of the Stock Right.

11.3  Notwithstanding
anything herein to the contrary, if subsequent to a Participant’s Termination
of Service, but prior to the exercise of a Stock Right, the Administrator
determines that, either prior or subsequent to the Participant’s Termination of
Service, the Participant engaged in conduct which would constitute “cause” (as
defined in Section 12), then such Participant shall forthwith cease to
have any right to exercise any Stock Right. Stock Rights that consist of Shares
issued under Stock Grants for which any restrictions on transfer or Company repurchase
right shall have lapsed, shall be deemed for all purposes to have been “exercised.”

11.4  Absence
from work with the Company or an Affiliate because of temporary disability or a
leave of absence for any purpose, shall not, during the period of any such
absence in accordance with Company policies, be deemed, by virtue of such
absence alone, a Termination of Service, except as the Administrator may
otherwise expressly provide.

11.5  Except as
required by law or as set forth in a Participant’s Stock Agreement, Stock
Rights granted under the Plan shall not be affected by any change of a
Participant’s status within or among the Company and any Affiliates, so long as
the Participant continues to be an employee, director, consultant or advisor of
the Company or any Affiliate.

12.          EFFECT ON STOCK RIGHTS
OF TERMINATION OF SERVICE FOR “CAUSE”

Except as otherwise provided in a Participant’s Stock
Agreement or as otherwise agreed in writing by the Administrator, if a
Participant’s service with the Company or an Affiliate is terminated for “cause,”
all outstanding and unexercised (vested or unvested) Stock Rights will
immediately be forfeited as of the time the Participant is notified that his or
her service is terminated for “cause.” Stock Rights that consist of Shares
issued under Stock Grants for which any restrictions on transfer or Company
repurchase right shall have lapsed, shall be deemed for all purposes to have
been “exercised.” For purposes of this Plan, “cause” shall include (and is not
limited to) dishonesty with respect to the Company and its Affiliates,
insubordination, substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, breach by the Participant of any
provision of any employment, consulting, advisory, nondisclosure,
non-competition or similar agreement between the Participant and the Company,
and conduct substantially prejudicial to the business of the Company or any
Affiliate. The determination of 

 7
 

 

the Administrator as to the existence of cause will be
conclusive on the Participant and the Company. “Cause” is not limited to events
that have occurred prior to a Participant’s termination of service, nor is it
necessary that the Administrator’s finding of “cause” occur prior to
termination of service. If the Administrator determines, subsequent to a
Participant’s termination of service but prior to the exercise of a Stock
Right, that either prior or subsequent to the Participant’s termination of
service the Participant engaged in conduct which would constitute “cause,” then
the right to exercise any Stock Right shall be forfeited as set forth in this Section 12.
Any definition in an agreement between a Participant and the Company or an
Affiliate which contains a conflicting definition of “cause” for termination of
service and which is in effect at the time of such termination of service shall
supersede the definition in this Plan with respect to that Participant.

13.          EFFECT ON STOCK RIGHTS
OF DEATH WHILE AN EMPLOYEE, DIRECTOR, CONSULTANT OR ADVISOR

Except as otherwise provided in a Participant’s Stock
Agreement, in the event of death of a Participant while the Participant is an
Employee, Non-Employee Director, consultant or advisor of the Company or of an
Affiliate, any Stock Rights granted to such Participant may be exercised by the
Participant’s Survivors to the extent exercisable but not exercised on the date
of death. Any such Stock Right must be exercised within one (1) year after
the date of death of the Participant but in no event after the date of expiration
of the term of the Stock Right, notwithstanding that the decedent might have
been able to exercise the Stock Right as to some or all of the Shares on a
later date if he or she had not died and had continued to be an Employee,
Non-Employee Director, consultant or advisor.

14.          RIGHTS AS A STOCKHOLDER

No Participant to whom a Stock Right (other than a
Stock Grant) has been granted shall have rights as a stockholder with respect
to any Shares covered by such Stock Right, except after due exercise thereof
and/or tender of the full purchase price for the Shares being purchased
pursuant to such exercise. The provisions of this Section 14 shall not be
applicable to Shares issued pursuant to Stock Grants, provided that the
Participant shall have tendered the purchase price therefore, notwithstanding
the existence of stock transfer restrictions on or a Company repurchase right
with respect to such Shares.

15.          EMPLOYMENT OR OTHER
RELATIONSHIP

Nothing in this Plan or any Stock Agreement shall be
deemed to prevent the Company or an Affiliate from terminating the employment,
consultancy or director status of a Participant, or to prevent a Participant
from terminating his or her own employment, consultancy or director status or
to give any Participant a right to be retained in employment or other service
by the Company or any Affiliate for any period of time.

16.          DISSOLUTION OR
LIQUIDATION OF THE COMPANY

Upon the dissolution or liquidation of the Company
(other than in connection with a transaction subject to the provisions of Section 17.2),
all Stock Rights granted under this Plan which as of such date shall not have
been exercised will terminate and become null and void; provided, however, that
if the rights of a Participant or a Participant’s Survivors have not 

 8
 

 

otherwise terminated and expired, the Participant or
Participant’s Survivors will have the right immediately prior to such
dissolution or liquidation to exercise any Stock Right to the extent that such
Stock Right is exercisable as of the date immediately prior to such dissolution
or liquidation. Upon the dissolution or liquidation of the Company, any
outstanding Stock-Based Awards shall immediately terminate unless otherwise
determined by the Administrator or specifically provided in the applicable
Stock Agreement.

17.          ADJUSTMENTS

Upon the occurrence of any of the following events, a
Participant’s rights with respect to any Stock Right granted to him or her
hereunder that have not previously been exercised in full shall be adjusted as
hereinafter provided, unless otherwise specifically provided in the Stock
Agreement or in any employment agreement between a Participant and the Company
or an Affiliate:

17.1   Stock Dividends and Stock Splits.   If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock subject to or
deliverable upon the exercise of a Stock Right shall be appropriately increased
or decreased, and appropriate adjustments shall be made in the purchase price
per Share to reflect such event. The number of Shares subject to Options to be
granted to Non-Employee Directors pursuant to Section 6.3 and the number
of Shares subject to the limitation in Section 6.4 shall also be
proportionately adjusted upon the occurrence of such events.

17.2   Consolidations or Mergers.   In the event of a consolidation or
merger in which the Company is not the surviving corporation or which results
in the acquisition of substantially all the Company’s outstanding stock by a
single person or entity or by a group of persons and/or entities acting in
concert, or in the event of the sale or transfer of substantially all the
Company’s assets (any of the foregoing, an “Acquisition”), all then outstanding
Stock Rights (excluding any Shares subject to Stock Grants as to which all
Company repurchase rights shall have lapsed) shall terminate unless assumed
pursuant to clause (i) below; provided that either (i) the
Administrator shall provide for the surviving or acquiring entity or an
affiliate thereof to assume the outstanding Stock Rights or grant replacement
stock rights in lieu thereof, any such replacement to be upon an equitable
basis as determined by the Administrator, or (ii) if there is no such
assumption or substitution, all outstanding Stock Rights shall become
immediately and fully exercisable and all Company repurchase rights with
respect to Stock Rights shall lapse, in each case immediately prior to the
Acquisition, notwithstanding any restrictions or vesting conditions set forth
therein.

17.3   Recapitalization or Reorganization.   In the event of a recapitalization
or reorganization of the Company (other than a transaction described in Section 17.2
above) pursuant to which securities of the Company or of another corporation
are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising a Stock Right shall be entitled to receive for the
purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Stock Right prior to such
recapitalization or reorganization.

 9
 

 

 

17.4   Adjustments to Stock Grants and
Stock-Based Awards.   Upon
the happening of any of the events described in Sections 17.1, 17.2 or 17.3,
any outstanding Stock-Based Award and the Shares subject to any Stock Grant,
vested or unvested, shall be appropriately adjusted to reflect the events
described in such Sections. The Administrator shall determine the specific
adjustments to be made under this Section 17.4.

17.5   Modification of ISOs.   Notwithstanding the foregoing, any
adjustments made pursuant to Section 17.1, 17.2 or 17.3 with respect to
ISOs shall be made only after the Administrator determines whether such
adjustments would constitute a “modification” of such ISOs (as that term is
defined in Section 424(h) of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Administrator determines that
such adjustments made with respect to ISOs would constitute a modification of
such ISOs, it may refrain from making such adjustments, unless the holder of an
ISO specifically requests in writing that such adjustment be made and such
writing indicates that the holder has full knowledge of the consequences of
such “modification” on his or her income tax treatment with respect to the ISO.

18.          ISSUANCES OF SECURITIES

Except as expressly provided herein, no issuance
(including for this purpose the delivery of shares held in treasury) by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to Stock Rights.
Except as expressly provided herein, no adjustments shall be made for dividends
paid in cash or in property (including without limitation, securities) of the
Company.

19.          FRACTIONAL SHARES

No fractional share shall be issued under the Plan and
the person exercising any Stock Right shall receive from the Company cash in
lieu of any such fractional share equal to the Fair Market Value thereof.

20.          CONVERSION OF ISOs INTO
NON-QUALIFIED OPTIONS: TERMINATION OF ISOs

Any Options granted under this Plan that do not meet
the requirements of the Code for ISOs shall automatically be deemed to be
Non-Qualified Options without further action on the part of the Administrator.
The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant’s
ISOs (or any portion thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. At the time of such conversion,
the Administrator (with the consent of the Participant) may impose such
conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed
to give any Participant the right to have such Participant’s ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Administrator takes appropriate action. The Administrator, with the consent
of the Participant, 

 10
 

 

may also terminate any portion of any ISO that has not
been exercised at the time of such termination.

21.          WITHHOLDING

If any federal, state, or local income taxes,
employment taxes, Federal Insurance Contributions Act (“FICA”) withholdings or
other amounts are required by applicable law or governmental regulation to be
withheld from the Participant’s salary, wages or other remuneration in
connection with the exercise of a Stock Right, the lapsing of a Company
repurchase right or a Disqualifying Disposition (as defined in Section 22),
the Company may withhold from the Participant’ compensation, if any, or may
require that the Participant advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company’s Common Stock, is authorized by the Administrator
(and permitted by law). For purposes hereof, the Fair Market Value of any
shares withheld for purposes of payroll withholding shall be determined in the
manner provided in Section 1 above, as of the most recent practicable date
prior to the date of exercise. If the Fair Market Value of the shares withheld
is less than the amount of payroll withholdings required, the Participant may
be required to advance the difference in cash to the Company or the Affiliate
employer. The Administrator in its discretion may condition the exercise of an
Option for less than the then Fair Market Value on the Participant’s payment of
such additional withholding. In no event shall shares be withheld from any
award in satisfaction of tax withholding requirements in an amount that exceeds
the statutory minimum amount of tax withholding required.

22.          NOTICE TO COMPANY OF
DISQUALIFYING DISPOSITION

Each Employee who receives an ISO must agree to notify
the Company in writing immediately after the Employee makes a “Disqualifying
Disposition” of any Shares acquired pursuant to the exercise of an ISO. A
Disqualifying Disposition is any disposition (as defined in Section 424(c) of
the Code) of such Shares before the later of (a) two years from the date
the Employee was granted the ISO, or (b) one year after the date the
Employee acquired Shares by exercising the ISO. If the Employee has died before
such Shares are sold, the notice provisions of this Section 22 shall not
apply.

23.          EFFECTIVE DATE;
TERMINATION OF THE PLAN

This Plan shall be effective on March 29, 2006,
the date of its adoption by the Board of Directors, subject to approval by the
shareholders of the Company. The Plan will terminate on March 28, 2016.
The Plan also may be terminated at an earlier date by vote of the Board of
Directors. Termination of this Plan will not affect any Stock Rights granted or
Stock Agreements executed prior to the effective date of such termination.

24.          AMENDMENT OF THE PLAN;
AMENDMENT OF STOCK RIGHTS

The Plan may be amended by the stockholders of the Company
by affirmative vote of a majority of the votes cast at a meeting of the
stockholders at which a quorum is present. The Plan also may be amended by the
Board of Directors or the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Stock Rights granted under
the Plan or Stock Rights to be granted under the Plan for favorable federal
income tax treatment 

 11
 

 

(including deferral of taxation upon exercise) as may
be afforded incentive stock options under Section 422 of the Code, and to
the extent necessary to qualify the shares issuable upon exercise of any
outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan
for listing on any national securities exchange or quotation in any national
automated quotation system of securities dealers. Any amendment approved by the
Administrator that the Administrator determines is of a scope that requires
stockholder approval shall be subject to stockholder approval. No modification
or amendment of the Plan shall adversely affect a Participant’s rights under a
Stock Right previously granted to the Participant, without such Participant’s
consent.

In its discretion, the Administrator may amend any
term or condition of any outstanding Stock Right, provided: (i) such term or condition is not prohibited by
the Plan; (ii) if the amendment is adverse to the Participant, such
amendment shall be made only with the consent of the Participant or the
Participant’s Survivors, as the case may be; and (iii) any such amendment
of any ISO shall be made only after the Administrator determines whether such
amendment would constitute a “modification” of any Stock Right which is an ISO
(as that term is defined in Section 424(h) of the Code) or would
cause any adverse tax consequences for the holder of such ISO (in which case,
the Participant’s or Participant’s Survivors’ consent to such amendment shall
be required). Notwithstanding the foregoing, the Administrator shall not have
the authority to reduce the exercise price of any Option after the date of
grant, except for adjustments permitted under Section 17 of this Plan.

25.          GOVERNING LAW

This Plan shall be construed and enforced in
accordance with the law of The Commonwealth of Massachusetts.

 

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