Document:

EXHIBIT 10.10

 

EMPLOYMENT AND NON-INTERFERENCE AGREEMENT

 

This
Employment and Non-Interference Agreement, dated as of December 17, 2003
(the “Agreement”), is by and between Peter Mainz (the “Executive”)
and Sensus Metering Systems Inc., a Delaware corporation (the “Company”),
which is a wholly-owned subsidiary of Sensus Metering Systems (Bermuda 2)
Ltd., a company organized under the laws of Bermuda (“Bermuda 2”),
which is a wholly-owned subsidiary of Sensus Metering Systems (Bermuda 1)
Ltd., a company organized under the laws of Bermuda (“Holdings”).

 

W  I  T  N  E  S
S  E  T  H:

 

WHEREAS, the
Company wishes to obtain the future services of the Executive for the Company
and its divisions and direct and indirect subsidiaries; and

 

WHEREAS, the
Executive is willing, upon the terms and conditions herein set forth, to
provide services hereunder; and

 

WHEREAS, the
Company wishes to secure the Executive’s non-interference, upon the terms and
conditions herein set forth;

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:

 

1.             Nature of
Employment; Term of Employment.

 

The “Term
of Employment” shall commence as of the date hereof, and extend to
December 31, 2006, unless sooner terminated as hereinafter provided; provided,
that such term shall continue for the twelve month period following
December 31, 2006, and for each twelve month period thereafter, unless at
least 90 days prior to the scheduled expiration date, either the Executive or
the Company notifies the other of its decision not to continue such term.  Should the Executive’s employment be earlier
terminated by the Company pursuant to Section 4(a), by the
Executive pursuant to Section 4(b) or mutually by both parties
pursuant to Section 4(c), the Term of Employment shall end on the
date of such earlier termination. 
Nothing contained herein shall be deemed to be an obligation on the part
of the Company to extend the Term of Employment.  During the Term of Employment, the Company agrees to retain
Executive in its employ, and Executive agrees to remain in the employ of the
Company, as Chief Financial Officer. 
Executive will carry out his duties as Chief Financial Officer with
respect to all the divisions and direct and indirect subsidiaries of Holdings
(which companies, together with the Company, shall be referred to collectively
as the “Company Group”), subject to the direction of the Holdings’ Board
of Directors (the “Board of Directors”).

 

2.             Extent of Employment.

 

(a)           During the Term of
Employment, the Executive shall perform his obligations hereunder faithfully
and to the best of his ability under the direction of the Board of Directors of
Holdings to which the Executive shall directly report, and shall abide by the
rules, customs and usages from time to time established by the Company or
Holdings.

 

 

(b)           During the Term of
Employment, the Executive shall devote all of his business time, energy and
skill to the performance of his duties, responsibilities and obligations
hereunder (except for vacation periods and reasonable periods of illness or
other incapacity), consistent with past practices and norms in similar
positions.  The Executive will have such
authority and power as are inherent to the undertakings applicable to his
position as Chief Financial Officer and which are necessary to carry out his
responsibilities and the duties required of him hereunder.

 

(c)           Nothing contained
herein shall require Executive to follow any directive or to perform any act
which would violate any laws, ordinances, regulations or rules of any
governmental, regulatory or administrative body, agent or authority, any court
or judicial authority, or any public, private or industry regulatory authority
(collectively, “Regulations”). 
Executive will not (i) breach or violate any provision of any
Regulations in any material respect or (ii) otherwise act in any manner which
might reasonably be expected to have a material adverse effect on the ongoing
business, operations, conditions, prospects or other business relationships or
properties of any company in the Company Group or Holdings.

 

3.             Compensation.

 

(a)           Base Salary.  During the Term of Employment, the Company
shall pay compensation to Executive as base compensation for his services
hereunder, in substantially equal bi-weekly installments, an annual base salary
of $275,000 (the “Base Salary”), paid partially in the United States in
U.S. Dollars (USD) and partially in Germany in Euros.  The German portion of the Base Salary will amount to €5,100 paid
monthly.  The USD to Euro currency
conversion rate ratio will be measured on January 1 and July 1 of each year and
the new rate shall be applicable for the next six (6) month period, provided that
in no event shall the German portion of the Base Salary amount to less than the
amount which the Company is advised by its auditors will permit Executive to
maximize his pension under German law. 
The Board of Directors shall annually, and in its sole discretion,
determine whether the Base Salary should be increased and, if so, the amount of
such increase.

 

(b)           Annual Bonus.  During the Term of Employment, in addition
to the Base Salary, commencing the fiscal year beginning on April 1, 2004, the
Company shall pay to the Executive an annual bonus or performance incentive
compensation, up to 35% of Executive’s Base Salary, subject to such performance
and other conditions as the Board of Directors, in its sole discretion, shall
determine on an annual basis (the “Annual Bonus”) pursuant to the Company’s
Bonus Program for its senior executives.

 

4.             Termination.

 

(a)           Company
Termination.  Subject to the
Company’s obligations to make the payments contemplated by Section 4(d),
the Term of Employment may be terminated at any time by the Company:

 

(i)            upon
the death of Executive;

 

(ii)           in
the event that because of physical or mental disability the Executive is unable
to perform, and does not perform, as certified by a mutually agreeable
competent

 

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medical physician, his material duties hereunder for 180 days in any
continuous 210 day period;

 

(iii)          for
Cause or Material Breach; or

 

(iv)          for
any other reason not referred to in clauses (i) through (iii) including
nonrenewal of the Term by the Company under Section 1 or no reason, and
the Company shall not be required to specify a reason for the termination,
provided that termination of the Executive’s employment by the Company shall be
deemed to have occurred under this clause (iv) only if it is not for reasons
described in clauses (i) through (iii) such that this Agreement,
subject to the provisions of Section 4(d), shall be construed as
terminable at will by the Company.

 

Executive
acknowledges that no representations or promises have been made concerning the
grounds for termination or the future operation of the Company’s business, and
that, except as set forth in the following sentence, nothing contained herein
or otherwise stated by or on behalf of the Company modifies or amends the right
of the Company to terminate Executive at any time, with or without Cause or for
Material Breach.  Termination shall
become effective 30 days after written notice, or, if for Cause or
Material Breach, upon the delivery by the Company to the Executive of written
notice specifying the basis of such termination and, if for Cause or Material
Breach, the specific reasons therefor.  

 

(b)           Executive
Termination.  Subject to the
Company’s obligations to make the payments contemplated by Section 4(d),
the Term of Employment may be terminated at any time by the Executive:

 

(i)            upon
the death of Executive;

 

(ii)           in
the event that because of physical or mental disability the Executive is unable
to perform, and does not perform, as certified by a mutually agreeable
competent medical physician, his material duties hereunder for 180 days in any
continuous 210 day period;

 

(iii)          under
circumstances involving a material reduction in Executive’s position,
authority, base compensation or benefits or a hostile or adverse work
environment, taken as a whole; or

 

(iv)          voluntarily
or for any reason or no reason not referred to in clauses (i) through
(iii) or no reason or non renewal of this Agreement by either Executive or the
Company (a “Voluntary Termination”), after 30 days’ prior written
notice to the Company and its Board of Directors, provided, that the expiration
of the Term of Employment pursuant to Section 1, or any renewal
term thereof, will not be considered a Voluntary Termination.

 

(c)           Mutual
Termination.  Subject to the
Company’s obligations to make the payments contemplated by Section 4(d),
the Term of Employment may be terminated at any time by the mutual agreement of
the Company and the Executive.  Any
termination of the Executive’s

 

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employment by
mutual agreement of the parties will be memorialized by an agreement which is
reduced to writing and signed by the Executive and a duly appointed officer of
the Company.

 

(d)           Severance.  If Executive’s employment is terminated for
any reason whatsoever, then Executive shall be entitled to (x) accrued and
unpaid base salary and benefits (including sick pay, vacation pay and benefits
under Section 6) with respect to the period prior to termination,
(y) reimbursement for expenses under Section 5 with respect to
such period, and (z) any other benefits (including COBRA) required by law
to be provided after termination of employment under the circumstances.  Except as may otherwise be expressly
provided to the contrary in this Agreement, nothing in this Agreement shall be
construed as requiring the Executive to be treated as employed by the Company
for purposes of any employee benefit plan following the date of the termination
of the Executive’s Term of Employment. 
In the event Executive’s employment is terminated pursuant to:

 

(i)            Sections
4(a)(i) [Death], or 4(a)(ii) [Disability] by the Company, 4(b)(i)
[Death], 4(b)(ii) [Disability], 4(b)(iii) [Material Reduction] by
the Executive, or 4(c) [Mutual Termination] by the Executive, the
Company will also pay to Executive (or his estate or representative) the
Executive’s Base Salary for a 12 month period following the actual date the
Term of Employment is terminated; provided, however, if the
termination of employment occurs after a Change of Control such payment will be
the Executive’s Base Salary for a 24 month period; and

 

(ii)           Section
4(a)(iii) [Cause or Material Breach] by the Company or 4(b)(iv) [Any
or No Reason] by the Executive, there will be no additional amounts owing by
the Company to Executive under this Agreement from and after such termination;
and

 

(iii)          Section
4(a)(iv) [Any or No Reason] by the Company, the Company will pay to
Executive the Executive’s base salary through December 31, 2006, the balance of
the Term of the original Agreement, or for a 12 month period, whichever is
longer; provided, however, if the termination of employment
occurs after a Change of Control such payment will be through December 31,
2006, the balance of the Term of the original Agreement, or for a 24 month period,
whichever is longer.

 

(e)           Repatriation.

 

(i)            In
the event Executive’s employment is terminated pursuant to Sections 4(a)(ii),
[Disability], Section 4(a)(iv) [Any or No Reason] by the Company, 4(b)(ii)
[Disability], 4(b)(iii) [Material Reduction]  by the Executive,  4(c)
[Mutual Termination] or by the nonrenewal of the Term by the Company pursuant
to Section 1, if Executive chooses to return to Germany, the Company
will repatriate Executive back to Germany and will pay or reimburse all
reasonable and documented costs incurred related to rental housing lease
breakage (including remaining lease payments, penalties, etc.) and return
shipment of Executive’s family’s personal household goods not to exceed
$40,000.00.

 

(ii)           In
the event Executive’s employment is terminated pursuant to Sections  4(a)(iii)
[Cause or Material Breach] by the Company or 4(b)(iv) [Any or No Reason]
by

 

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the Executive, the Company will have no responsibility for any costs
described in Section 4(e)(i).

 

(f)            Continuing
Provisions.  Termination of the Term
of Employment will not terminate Sections 7, 8, 9, 10,
12 through 24, and related definitions, or any other provisions
not associated specifically with the Term of Employment.

 

(g)           Mitigation.  In the event of termination, the Executive
shall not have a duty to mitigate the Company’s payment obligations under Section 4(d)
by seeking alternative employment; provided, however, that if the
Executive does accept alternative employment, payment obligations under Section 4(d)
shall be subject to offset by any amounts of base and bonus compensation earned
by Executive through such alternate employment.

 

(h)           Company Election.  Subject to the terms and conditions of this
Agreement, during the period beginning on the date of delivery of a written
notice by the Company or the Executive, as the case may be, indicating that the
Term of Employment is to be terminated, and ending on the actual date the Term
of Employment is terminated, which, in any event, shall be no later than
180 days following the delivery of such notice, the Executive shall
continue to perform his duties as set forth in this Agreement, and shall also
perform such services for the Company as are necessary and appropriate for a smooth
transition to the Executive’s successor, if any.  Notwithstanding the foregoing provisions of this Section 4(g),
the Company may suspend the Executive from performing his duties under this
Agreement following the delivery of a written notice by the Executive providing
for the Executive’s resignation, or delivery by the Company of a notice
providing for the Executive’s termination of employment for any reason; provided,
however, that during the period of suspension (which shall end upon the
actual date the Term of Employment is terminated, which in any event shall be
no later than 180 days following the delivery of such notice), the Executive
shall continue to be treated as employed by the Company for other purposes, and
his rights to compensation or benefits shall not be reduced by reason of the
suspension.

 

5.             Reimbursement of
Expenses.

 

During the
Term of Employment, subject to the approval of the Board of Directors, the
Company shall reimburse Executive for reasonable and documented travel,
entertainment and other expenses reasonably incurred by Executive in connection
with the performance of his duties hereunder and, in each case, in accordance
with the rules, customs and usages promulgated by Holdings and the Company from
time to time in effect.

 

6.             Benefits.

 

(a)           Vacation.  The Executive shall be entitled to five (5)
weeks paid vacation.

 

(b)           Home Leave.  The Company shall pay for economy class
airfares between the United States and Germany for Executive, his spouse and
child once a year.

 

(c)           Company Car.  The Company will provide Executive with one
(1) leased vehicle for both his business and personal use.  If at any time a Company leased vehicle is
no longer available for Executive’s use, the Company will provide Executive
with an automobile

 

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allowance of
$700 per month, to be paid each month. 
The automobile allowance will commence at the time Executive no longer
has access to a Company-leased car.

 

(d)           Taxation.  The Company’s selected tax advisors will
provide Executive reasonable support and assistance during and at the
termination of the Term of Employment in connection with Executive’s personal
tax requirements in both the United States and Germany.  This assistance includes, but is not limited
to, the required annual filings.

 

(e)           Pension
Scheme/Social Security.  The
Executive shall be allowed to continue to participate in his German retirement
and social security plans and the Company agrees to assist the Executive as
reasonably necessary to effectuate such participation during the Term of
Employment.

 

(f)            Visa.  The Company covenants and agrees to assist
Executive in his efforts to secure and/or retain any Visa or related
immigration and nationalization documentation required by law to work in the United
States during the Term of Employment. 

 

(g)           Insurance and
Other Plans.  The Executive shall be
entitled to participate in and be covered by any insurance plan (including but
not limited to medical, dental, health, life, accident, hospitalization and
disability), profit sharing or other employee benefit plan of the Company, to
the same extent and on the same terms as such benefits are or may be provided
by the Company, at the sole discretion of the Board of Directors, from time to
time to other members of senior management.

 

7.             Non-Competition/Non-Disclosure
Provisions.

 

(a)           Non-Competition.  In consideration of this Agreement, the
Executive covenants and agrees that during the Term of Employment and, for a
period of two (2) years from the date of termination of the Term of Employment
(the “Restricted Period”), the Executive shall not, subject to this Section 7,
without the express written approval of the Board of Directors of the Company,
directly or indirectly, in one or a series of transactions, own, manage,
operate, control, invest or acquire an interest in, whether as a proprietor,
partner, stockholder, member, lender, director, officer, employee, joint
venturer, investor, lessor, supplier, customer, agent, representative or other
participant, or otherwise engage or participate in, whether as a proprietor,
partner, stockholder, member, lender, director, officer, employee, joint
venturer, investor, lessor, supplier, customer, agent, representative or other
participant, any business which competes, directly or indirectly, with the
Business in the Market (“Competitive Business”) without regard to (A)
whether the Competitive Business has its office, manufacturing or other
business facilities within or without the Market, (B) whether any of the
activities of the Executive occur or are performed within or without the Market
or (C) whether the Executive resides, or reports to an office, within or
without the Market; provided, however, that (x) the Executive
may, anywhere in the Market, directly or indirectly, in one or a series of
transactions, own, invest or acquire an interest in up to two percent (2%) of
the capital stock of a corporation whose capital stock is traded publicly, or
that (y) the Executive may accept employment with a successor company to
the Company.

 

6

 

(b)           Non-Solicitation.  If the Executive’s employment is terminated,
then, subject to this Section 7, the Executive shall not during the
Restricted Period, without the Company’s prior written consent, (A) directly or
indirectly, in one or a series of transactions, recruit, solicit or otherwise
induce or influence any proprietor, partner, stockholder, member, lender,
director, officer, employee, sales agent, joint venturer, investor, lessor,
customer, supplier, agent, representative or any other person which has a
business relationship with the Company Group or had a business relationship
with the Company Group within the twenty-four (24) month period preceding the
date of the incident in question, to discontinue, reduce or modify such
employment, agency or business relationship with the Company Group, or
(B) employ or seek to employ or cause any Competitive Business to employ
or seek to employ any person or agent who is then (or was at any time within
twelve (12) months prior to the date the Executive or the Competitive Business
employs or seeks to employ such person) employed or retained by the Company
Group.  Notwithstanding the foregoing,
nothing herein shall prevent the Executive from providing a letter of
recommendation to an employee with respect to a future employment opportunity.

 

(c)           Non-Disclosure.  The Executive further agrees, during and
after the Term of Employment, the Restricted Period and thereafter, that the
Executive will not, directly or indirectly in one or a series of transactions
disclose to any person or use or otherwise exploit for his own benefit or for
the benefit of anyone other than the Company Group any Confidential Information
(as defined below) whether prepared by the Executive or not provided, however,
that any Confidential Information may be disclosed to officers,
representatives, employees and agents of the Company Group who need to know
such Confidential Information in order to perform the services or conduct the
operations required or expected of them in the Business.  The Executive shall use his best efforts to
prevent the removal of any Confidential Information from the premises of the
Company Group, except as required in his normal course of employment by the
Company Group.  During the Term, the
Executive shall use his commercially reasonable efforts to cause all persons or
entities to whom Confidential Information shall be disclosed by the Executive
hereunder to observe the terms and conditions set forth herein as though each
such person or entity was bound hereby. 
After the Term, the Executive shall not disclose Confidential
Information other than to his advisors, representatives and agents who execute
a confidentiality agreement whereby they will agree to observe the
confidentiality terms and conditions set forth herein.  The Executive shall have no obligation
hereunder to keep confidential any Confidential Information if and to the
extent disclosure of any thereof is specifically required by law; provided,
however, that in the event disclosure is required by applicable law, the
Executive shall provide the Company with prompt notice of such requirement to
the extent allowed by law, prior to making any disclosure, so that the Company
may seek an appropriate protective order. 
At the request of the Company, the Executive agrees to deliver to the
Company all Confidential Information which the Executive may possess or
control.  The Executive agrees that all
Confidential Information of the Company Group (whether now or hereafter
existing) conceived, discovered or made by him during his employment with the
Company Group exclusively belongs to the Company Group (and not to the
Executive).  The Executive will promptly
disclose such Confidential Information to the Company Group and perform all
actions reasonably requested by the Company Group to establish and confirm such
exclusive ownership.  As used herein,
the term “Confidential Information” means any confidential information
including, without limitation, any study, data, calculations, software storage
media or other compilation of information, patent, patent application,
copyright, trademark, trade name, service mark, service

 

7

 

name,
“know-how”, trade secrets, customer lists, details of client or consultant
contracts, pricing policies, operational methods, marketing plans or
strategies, product development techniques or plans, business acquisition plans
or any portion or phase of any scientific or technical information, ideas,
discoveries, designs, computer programs (including source of object codes),
processes, procedures, formulas, improvements or other proprietary or
intellectual property of the Company Group, whether or not in written or
tangible form, and whether or not registered, and including all files, records,
manuals, books, catalogues, memoranda, notes, summaries, plans, reports,
records, documents and other evidence thereof. 
The term “Confidential Information” does not include, and there
shall be no obligation hereunder with respect to, information that becomes
generally available to the public other than as a result of a disclosure by
such shareholder not permissible hereunder.

 

(d)           Non-Disparagement.  The Executive agrees, during and after the
Term of Employment, the Restricted Period and thereafter, that he shall not
make any false, defamatory or disparaging statements about Holdings or the
Company Group or the officers or directors of Holdings or the Company
Group.  During and after the Executive’s
employment with the Company Group, the Company agrees on behalf of itself and
its subsidiaries that neither the officers nor the directors of the Company
Group shall make any false, defamatory or disparaging statements about the
Executive.

 

(e)           Specific
Performance.  All the parties hereto
agree that their rights under this Section 7 are special and unique
and that violation thereof would not be adequately compensated by money damages
and each grants the other the right to specifically enforce (including
injunctive relief where appropriate) the terms of this Agreement.

 

8.             Defense of
Claims.

 

The Executive
agrees that, for the period beginning on the date hereof, and continuing for a
reasonable period after termination or expiration of the Term of Employment,
the Executive will cooperate with the Company in defense of any claims that may
be made against the Company Group, and will cooperate with the Company in the
prosecution of any claims that may be made by Company Group, to the extent that
such claims may relate to services performed by the Executive for the Company
Group.  The Executive agrees to promptly
inform the Company if he becomes aware of any lawsuits involving such claims
that may be filed against Holdings or the Company Group.  The Company agrees to reimburse the
Executive for all of the Executive’s reasonable out-of-pocket expenses
associated with such cooperation, including travel expenses.  For periods during and following the
Executive’s employment with the Company, the Company agrees to provide
reasonable compensation to the Executive for such cooperation in addition to
reimbursement of expenses and his reasonable attorneys’ fees, if any.

 

9.             Definitions.

 

“Annual
Bonus” has the meaning set forth in Section 3(b).

 

“Authority”
means any governmental, regulatory or administrative body, agency or authority,
any court or judicial authority, any public, private or industry regulatory
authority, whether national, Federal, state or local or otherwise, or any
Person lawfully empowered by any

 

8

 

of the foregoing to enforce or
seek compliance with any applicable law, statute, regulation, order or decree.

 

“Base
Salary” has the meaning set forth in Section 3(a).

 

“Board of
Directors” has the meaning set forth in Section 1.

 

“Business”
means the business of providing the following products and services for
metering and communication by or for utilities or residential/commercial
submetering entities of water, gas, electricity and heat consumption by their
customers:

 

(A)          Residential
Water Meters (Velocity, Positive Displacement, Piston or otherwise);

(B)           Commercial
/ Industrial Water Meters (Turbine, Combination, Propeller, Irrigation, Fire
Hydrant, Fire Service, or otherwise);

(C)           Sub
Meters - Water, Gas, Electric and Heat;

(D)          Residential
Gas Meters (Diaphragm and Ultrasonic);

(E)           Intermediate
and Large Capacity Gas Meters (Diaphragm and Ultrasonic);

(F)           Turbine
Gas Meters;

(G)           Pressure
Regulation Products;

(H)          Correlative
Natural Gas, Energy and Density Measurement Products;

(I)            Residential
and Polyphase Solid-State Electricity Meters;

(J)            Heat
Meters (Velocity and Ultrasonic);

(K)          Heat
Integrators;

(L)           Bulk
Hot Water Meters;

(M)         Automatic
Meter Reading Devices or Systems for any of the foregoing;

(N)          Meter
Test Equipment for any of the foregoing;

(O)          Instrumentation
for any of the foregoing;

(P)           Meter
accuracy testing and recalibration services;

(Q)          Project
management services related to Metering and AMR activities; and 

the business of providing other products and services as follows:

(R)           Pipe
Repair, Pipe Tapping and Pipe Joining Products;

(S)           High
Pressure, Low Porosity Aluminum Die Castings;

(T)           Services
to utilities related to the procurement, testing, repair and management of
meter populations; and

(U)          Software
applications sold, licensed or offered as a service to utilities and used to
manage billing and meter data management for utilities and submetering
entities.

 

“Cause”
means any of the following:

 

(i)            Executive’s
conviction of, or plea of guilty or nolo contendere to, a felony or a crime
involving embezzlement, conversion of property or moral turpitude;

 

(ii)           Executive’s
fraud, embezzlement or conversion of property;

 

(iii)          Executive’s
conviction of, or plea of guilty or nolo
contendere to, a crime involving the acquisition, use or expenditure
of federal, state or local government funds;

 

9

 

(iv)          an
administrative or judicial determination that Executive committed fraud or any
other violation of law involving federal, state or local government funds; 

 

(v)           Executive’s
material violation, with the actual knowledge of Executive, of any obligations
imposed upon Executive, personally, as opposed to upon the Company Group,
whether as a shareholder or otherwise, under this Agreement, the Memorandum of
Association or Bye-Laws of Holdings, the organizational and formation documents
of any of Holdings’ direct or indirect subsidiaries, the Management
Shareholders Agreement and the Restricted Share Plan and related agreements, if
applicable; or

 

(vi)          Executive’s
material and knowing failure, to observe or comply with Regulations whether as
an officer, shareholder or otherwise, in any material respect or in any manner
which would reasonably be expected to have a material adverse effect in respect
of the Company Group’s ongoing business, operations, condition (financial and
other), prospects and other business relationships;

 

“Change of
Control” shall mean the occurrence of any of the following:  (a) the closing of any merger, amalgamation,
combination, consolidation or similar business transaction involving the
Company in which the majority holders of Common Shares immediately prior to
such closing are not the holders, directly or indirectly, of a majority of the
Voting securities of the surviving or continuing Person in such transaction or
its ultimate controlling Person immediately after such closing; (b) the
closing of any sale or transfer by the Company or its Subsidiaries of all or
substantially all of the Company’s assets to an acquiring Person in which the
majority holders of Common Shares immediately prior to such closing are not the
holders of a majority of the Voting securities of the acquiring Person or its
ultimate controlling Person immediately after such closing; (c) the
closing of any sale by the holders of Common Shares (other than any sale to a
Permitted Transferee as defined in the Management Shareholders Agreement and
the Shareholders Agreement) of an amount of Common Shares that equals or
exceeds a majority of the Common Shares issued and outstanding immediately
prior to such closing to a Person in which the holders of a majority of the
Common Shares immediately prior to such closing are not the holders of a
majority of the Voting securities of such Person or its ultimate controlling
Person immediately after such closing.

 

“Company”
has the meaning set forth in the preamble.

 

“Company
Group” has the meaning set forth in Section 1.

 

“Competitive
Business” has the meaning set forth in Section 7(b).

 

“Confidential
Information” has the meaning set forth in Section 7(d).

 

“Executive”
means Peter Mainz or his estate, if deceased.

 

“knowing”
and “knowledge” shall each refer to actual knowledge without any duty of
investigation.

 

10

 

“Management
Shareholders Agreement” means the Management Subscription and Shareholders
Agreement, dated March 5, 2004, among Holdings and the shareholders party
thereto.

 

“Market”
means any county in the United States of America, or any other country in which
the Business was conducted by or engaged in by the Company Group prior to the
date hereof or is conducted or engaged in by the Company Group at any time
during the Term of Employment.

 

“Material
Breach” means:

 

(i)            Executive’s
breach of any of his fiduciary duties to any company in the Company Group or
the Company’s stockholders or making of a willful misrepresentation or omission
which breach, misrepresentation or omission would reasonably be expected to
materially adversely affect the business, properties, assets, condition
(financial or other) or prospects of any company in the Company Group;

 

(ii)           Executive’s
willful, continual and material neglect or failure to discharge his material
duties, responsibilities or obligations prescribed by this Agreement or any
other agreement between the Executive and any company in the Company Group
(other than arising solely due to physical or mental disability);

 

(iii)          Executive’s
habitual drunkenness or substance abuse, which materially interferes with
Executive’s ability to discharge his duties, responsibilities and obligations
prescribed by this Agreement;

 

(iv)          Executive’s
violation of any non-competition, non-solicitation, non-disparagement or
confidentiality agreement with any company in the Company Group, including
without limitation, those set forth in Section 7 of this Agreement,
or any other agreements with any company in the Company Group; and

 

(v)           Executive’s
gross neglect of such his duties and responsibilities, as determined by
Holdings’ Board of Directors;

 

provided,
for purposes of clauses (i) – (v), to the extent such conduct is able to be
remedied or cured by Executive, and such conduct is not cured or remedied after
the Company or the Board of Directors has provided Executive with 30 days’ written
notice of such circumstances and the possibility of a Material Breach in
reasonable detail, and Executive fails to cure such circumstances and Material
Breach within those 30 days.  No act or
omission shall be deemed gross neglect if done, or omitted to be done, in good
faith by Executive based upon a resolution duly adopted by the Board of
Directors.  Whether a breach can be
cured or remedied shall be determined by the Board of Directors in its sole
discretion.

 

“Regulations”
has the meaning set forth in Section 2(c).

 

“Restricted
Period” has the meaning set forth in Section 7(a).

 

11

 

“Shareholders
Agreement” means Shareholders Agreement, dated as of December 17,
2003, by and among the Company and the Shareholders party thereto.

 

“Term of
Employment” has the meaning set forth in Section 1.

 

“Voluntary
Termination” has the meaning set forth in Section 4(b)(iv).

 

10.           Notice.

 

Any notice,
request, demand or other communication required or permitted to be given under
this Agreement shall be given in writing and if delivered personally, sent by
certified or registered mail, return receipt requested, sent by overnight
courier or sent by facsimile transmission (with confirmation and a copy sent by
mail within one day) as follows (or to such other addressee or address as shall
be set forth in a notice given in the same manner):

 

	
  If to
  Executive:

  	
  Peter Mainz

  Chief Financial Officer

  2312 Avinshire Place

  Wake Forest, NC 27587

  
	
   

  	
   

  
	
  If to the
  Company or the

  Board of Directors:

  	
  
Sensus Metering Systems

  c/o The
  Jordan Company, L.P.

  767 Fifth Avenue, 48th Floor

  New York, NY 10153

  Attention:  Jonathan F. Boucher

  Facsimile No.:  (212) 755-5263

  

 

Any such notices shall be
deemed to be given on the date personally delivered or sent by facsimile
transmission or such return receipt is issued or the day after if sent by
overnight courier.

 

11.           Executive’s
Representations.

 

The Executive
represents, warrants and covenants to Holdings and the Company Group that:

 

(a)           Noncompetes.  Executive is not a party to any written
employment contract or written agreement not to compete with or solicit from
any of his former employers.

 

(b)           Proceedings.  To the best of his knowledge and belief,
during his tenure with his former employers, the Executive did not engage
directly in any activity which would give rise to any disciplinary or other
similar proceeding before any federal or state governmental agency or
self-regulatory organization, and he has not been subject to or involved in any
such proceeding and no such proceeding is threatened.

 

12

 

(c)           Sophistication.  He is knowledgeable and sophisticated as to
business matters, including the subject matter of this Agreement, and that
prior to assenting to the terms of this Agreement, or giving the
representations and warranties herein, he has been given a reasonable time to
review it and has consulted with counsel of his choice.

 

(d)           Regulations.  He will not knowingly breach or violate any
provision of any Regulations in any material respect or in any manner which
might reasonably have a material adverse effect in respect of the ongoing
business, operations, conditions, or other business relationships or properties
of any of the companies in the Company Group.

 

12.           Company’s
Obligation; Taxes.

 

Executive
agrees and acknowledges that the obligations owed to Executive under this
Agreement are solely the obligations of the Company, and that none of the
Company’s, Holdings’ or their direct and indirect subsidiaries nor their
respective stockholders, directors, officers or lenders will have any
obligations or liabilities in respect of this Agreement and the subject matter
hereof.  Any amounts payable to the
Executive pursuant to this Agreement shall be subject to withholding and any
other applicable taxes.

 

13.           Validity.

 

If, for any reason, any
provision hereof shall be determined to be invalid or unenforceable, the
validity and effect of the other provisions hereof shall not be affected
thereby.

 

14.           Severability.

 

If any one or
more of the provisions of this Agreement should be ruled wholly or partially
invalid or unenforceable by a court of competent jurisdiction, then (i) the
validity and enforceability of all provisions of this Agreement not ruled to be
invalid or unenforceable shall be unaffected, and (ii) the provision(s) held
wholly or partially invalid or unenforceable shall be deemed amended, and such
court is authorized to reform the provision(s), to the minimum extent necessary
to render them valid and enforceable in conformity with the parties’ intent as
manifested herein.

 

15.           Right to Withhold
Payments.

 

Upon the
determination of a majority of the Board of Directors that the Executive has
breached his obligations in any material respect under Sections 7
or 8 the Company, in addition to pursuing all available remedies under
this Agreement, at law or otherwise, and without limiting its right to pursue
the same, shall cease all payments to the Executive under this Agreement.

 

16.           Waiver of Breach;
Specific Performance.

 

The waiver by
the Company or Executive of a breach of any provision of this Agreement by the
other party shall not operate or be construed as a waiver of any other breach
of such other party.  Each of the
parties (and third party beneficiaries) to this Agreement will be entitled to
enforce its rights under this breach of any provision of this Agreement and to
exercise all other

 

13

 

rights existing in its
favor.  The parties hereto agree and
acknowledge that the Company would be irreparably injured by a violation of Sections 7
or 8 of this Agreement, that the provisions of such sections are
reasonable and that the Company could not adequately be compensated in monetary
damages, in light of the sensitivity of the non-public information of the
Company to which the Executive will be exposed and that any party (and third
party beneficiaries) may in its sole discretion apply to any court of law or
equity of competent jurisdiction for specific performance and/or injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions in order to enforce or prevent any violations of the
provisions of such sections of this Agreement.

 

17.           Assignment; Third
Parties.

 

Neither the
Executive nor the Company may assign, transfer, pledge, hypothecate, encumber
or otherwise dispose of this Agreement or any of his or its respective rights
or obligations hereunder, without the prior written consent of the other.  The parties agree and acknowledge that each
of Holdings, its direct and indirect subsidiaries and the shareholders of,
lenders to and investors therein are intended to be third party beneficiaries
of, and have rights and interests in respect of, Executive’s agreements set
forth in Sections 7 and 8.

 

18.           Amendment; Entire
Agreement.

 

This Agreement
may not be changed orally but only by an agreement in writing agreed to by the
party against whom enforcement of any waiver, change, modification, extension
or discharge is sought.  This Agreement,
the Shareholders Agreement and the Restricted Stock Agreement constitute the
entire agreement between the parties concerning the subject matter hereof and
supersedes all prior and contemporaneous agreements, if any, between the parties
relating to the subject matter hereof. 
The enforceability of this Agreement shall not cease or otherwise be
adversely affected by the termination of the Executive’s employment with the
Company.  The Executive and the Company
agree that the language used in this Agreement is the language chosen by the
parties to express their mutual intent, and that no rule of strict construction
is to be applied against any party hereto.

 

19.           Arbitration.

 

(a)           Except with respect
to disputes or controversies arising out of Sections 7 or 8
hereto, any dispute between any of the parties hereto or claim by a party
against another party arising out of or in relation to this Agreement or in
relation to any alleged breach thereof shall be finally determined by
arbitration in accordance with the rules then in force by the American
Arbitration Association.  The
arbitration proceedings shall take place in Wilmington, Delaware, or such other
location as the parties in dispute hereafter may agree upon; and such
proceedings shall be governed by the laws of the State of Delaware as such laws
are applied to agreements between residents of such State entered into and to
be performed entirely within that State.

 

(b)           The parties shall
agree upon one arbitrator, who shall be an individual skilled in the legal and
business aspects of the subject matter of this Agreement and of the
dispute.  If the parties cannot agree
upon one arbitrator, each party in dispute shall select one arbitrator and the
arbitrators so selected shall select a third arbitrator.  In the event the arbitrators cannot agree

 

14

 

upon the
selection of the third arbitrator, the third arbitrator shall be appointed by
the American Arbitration Association at the request of any of the parties in
dispute.  The arbitrators shall, if
possible, be individuals skilled in the legal and business aspects of the
subject matter of this Agreement and of the dispute.

 

(c)           The decision
rendered by the arbitrator or arbitrators shall be accompanied by a written
opinion in support thereof.  The
decision shall be final and binding upon the parties in dispute without right
of appeal.  Judgment upon the decision
may be entered into any court having jurisdiction thereof, or application may
be made to that court for a judicial acceptance of the decision and any other
enforcement.

 

(d)           THIS AGREEMENT SHALL
BE GOVERNED BY, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF DELAWARE.  EACH OF
THE PARTIES HERETO ACKNOWLEDGES AND AGREES THAT IN THE EVENT OF ANY BREACH OF
THIS AGREEMENT, THE NON-BREACHING PARTY WOULD BE IRREPARABLY HARMED AND COULD
NOT BE MADE WHOLE BY MONETARY DAMAGES, AND THAT, IN ADDITION TO ANY OTHER
REMEDY TO WHICH THEY MAY BE ENTITLED AT LAW OR IN EQUITY, THE PARTIES SHALL BE
ENTITLED TO SUCH EQUITABLE OR INJUNCTIVE RELIEF AS MAY BE APPROPRIATE.  THE CHOICE OF FORUM SET FORTH IN THIS SECTION 19
SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT OF A DELAWARE
FEDERAL OR STATE COURT OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SUCH A JUDGMENT IN ANY OTHER APPROPRIATE JURISDICTION.

 

20.           IN THE EVENT ANY
PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL
ACTION IN CONNECTION WITH OR RELATING TO THE PROVISIONS OF SECTION 7, THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED
HEREIN OR THEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (1) AGREE UNDER ALL
CIRCUMSTANCES ABSOLUTELY AND IRREVOCABLY TO INSTITUTE ANY LITIGATION,
PROCEEDING OR OTHER LEGAL ACTION IN A COURT OF COMPETENT JURISDICTION LOCATED
WITHIN DELAWARE, WHETHER A STATE OR FEDERAL COURT; (2) AGREE THAT IN THE EVENT
OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND
SUBMIT TO THE PERSONAL JURISDICTION OF ANY SUCH COURT DESCRIBED IN CLAUSE (1)
OF THIS SECTION AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE
RULES AND STATUTES GOVERNING SERVICE OF PROCESS (IT BEING UNDERSTOOD THAT
NOTHING IN THIS SECTION SHALL BE DEEMED TO PREVENT ANY PARTY FROM SEEKING TO
REMOVE ANY ACTION TO A FEDERAL COURT IN DELAWARE; (3) AGREE TO WAIVE TO THE
FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR
THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN ANY INCONVENIENT
FORUM; (4) AGREE, AFTER CONSULTATION WITH COUNSEL, TO WAIVE ANY RIGHTS TO
A JURY TRIAL TO RESOLVE ANY DISPUTES OR CLAIMS RELATING TO THIS AGREEMENT;
(5) AGREE TO DESIGNATE, APPOINT AND

 

15

 

DIRECT AN
AUTHORIZED AGENT TO RECEIVE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS AND
DOCUMENTS IN ANY LEGAL PROCEEDING IN DELAWARE; (6) AGREE TO PROVIDE THE OTHER
PARTIES TO THIS AGREEMENT WITH THE NAME, ADDRESS AND FACSIMILE NUMBER OF SUCH
AGENT; (7) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE OF PROCESS IN
ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS
SET FORTH HEREIN FOR COMMUNICATIONS TO SUCH PARTY; (8) AGREE THAT ANY SERVICE
MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (9) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY
TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  TO THE EXTENT PERMITTED BY LAW IN CONNECTION
WITH OR RELATING TO THIS AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS
DESCRIBED OR CONTEMPLATED HEREIN OR THEREIN, AND AGREE TO TAKE ANY AND ALL
ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

 

21.           Further Action.

 

Executive and the Company agree
to perform any further acts and to execute and deliver any documents which may
be reasonable to carry out the provisions hereof.

 

22.           Headings.

 

The headings contained in this
Agreement are for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.

 

23.           Counterparts.

 

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

 

[End of page]

 

16

 

IN WITNESS
WHEREOF, the parties hereto have set their hands as of the day and year first
written above.

 

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PETER MAINZ

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SENSUS
  METERING SYSTEMS INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:EXHIBIT 10.11

 

 

SENSUS RESTRICTED SHARE PLAN

 

 

Table of Contents

 

	
  SECTION 1

  	
  GENERAL

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Purpose

  	
   

  
	
   

  	
  1.2.

  	
  Participation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2

  	
  RESTRICTED SHARE AWARDS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Restricted Share Unit Awards

  	
   

  
	
   

  	
  2.2.

  	
  Eligibility

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3

  	
  OPERATION AND ADMINISTRATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Effective
  Date

  	
   

  
	
   

  	
  3.2.

  	
  Shares
  Subject to Plan

  	
   

  
	
   

  	
  3.3.

  	
  Adjustments to Shares

  	
   

  
	
   

  	
  3.4.

  	
  Subordination

  	
   

  
	
   

  	
  3.5.

  	
  Limit on Distribution

  	
   

  
	
   

  	
  3.6.

  	
  Withholding

  	
   

  
	
   

  	
  3.7.

  	
  Transferability

  	
   

  
	
   

  	
  3.8.

  	
  Notices

  	
   

  
	
   

  	
  3.9.

  	
  Form and Time of Elections

  	
   

  
	
   

  	
  3.10.

  	
  Agreement With Company

  	
   

  
	
   

  	
  3.11.

  	
  Limitation of Implied
  Rights

  	
   

  
	
   

  	
  3.12.

  	
  Evidence

  	
   

  
	
   

  	
  3.13.

  	
  Action by Company
  or Related Company

  	
   

  
	
   

  	
  3.14.

  	
  Gender
  and Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4

  	
  COMMITTEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Administration

  	
   

  
	
   

  	
  4.2.

  	
  Selection of Committee

  	
   

  
	
   

  	
  4.3.

  	
  Powers of Committee

  	
   

  
	
   

  	
  4.4.

  	
  Delegation by Committee

  	
   

  
	
   

  	
  4.5.

  	
  Information to
  be Furnished to Committee

  	
   

  
	
   

  	
  4.6.

  	
  Liability
  and Indemnification of Committee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5

  	
  AMENDMENT AND TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6

  	
  VOTING RIGHTS; MANAGEMENT
  SHAREHOLDERS AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7

  	
  SHAREHOLDERS
  AGREEMENT

  	
   

  

 

i

 

SENSUS RESTRICTED
SHARE PROGRAM

 

SECTION 1

GENERAL

 

1.1.  Purpose.  The Sensus Restricted Share Plan (the “Plan”)
has been established by Sensus Metering Systems (Bermuda 1), Ltd., a Bermuda
limited company (the “Company”) to:

 

(a)                                  attract
and retain employees, directors and other persons providing services to the
Company and the Related Companies (as defined below);

 

(b)                                 motivate
Participants (as defined in subsection 1.2), by means of appropriate
incentives, to achieve long-range goals;

 

(c)                                  provide
incentive compensation opportunities that are competitive with those of other
corporations; and

 

(d)                                 further
identify Participants’ interests with those of the Company’s other shareholders
through compensation that is based on the value of the Company’s common shares;

 

and thereby promote the long-term financial interest
of the Company and the Related Companies, including the growth in value of the
Company’s equity and enhancement of long-term shareholder return.  The term “Related Company” means any company
during any period in which it is a “subsidiary corporation” (as that term is
defined in section 424(f) of the Internal Revenue Code of 1986, as amended (the
“Code”)), with respect to the Company or any affiliate of the Company
which is designated as a Related Company by the Committee.

 

1.2.  Participation.  Subject to the terms and conditions of the
Plan, the Committee (as described in Section 4) shall determine and
designate, from time to time, from among the Eligible Individuals (as defined
below), those persons who will be granted one or more awards under Section 2
of the Plan (an “Award”), and thereby become “Participants” in the
Plan.  In the discretion of the
Committee, and subject to the terms of the Plan, a Participant may be granted
any Award permitted under the provisions of the Plan, and more than one Award
may be granted to a Participant.  Except
as otherwise agreed by the Company and the Participant, or except as otherwise
provided in the Plan, an Award under the Plan shall not affect any previous
Award under the Plan or an award under any other plan maintained by the Company
or the Related Companies.  For purposes
of the Plan, the term “Eligible Individual” shall mean any employee, consultant
or director of the Company or a Related Company or other person providing
services thereto.

 

 

SECTION 2

RESTRICTED SHARE AWARDS

 

2.1.  Restricted
Share Awards.  Participants in
the Plan shall receive Restricted Share Awards to the extent determined by the
Committee.  A “Restricted Share Award”
is the grant of a right to receive a Class B Common Share of the Company (a “Share”)
in the future, with such Shares or right to future delivery of such Shares
subject to a risk of forfeiture or other restrictions that will lapse upon the
achievement of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as determined
by the Committee.  Each Restricted Share
Award shall be subject to such conditions, restrictions and contingencies as
the Committee shall determine.

 

2.2.  Eligibility.  The Committee shall designate the
Participants to whom Awards are to be granted under this Section and shall
determine the number of Shares subject to each such Award.

 

SECTION 3

OPERATION AND ADMINISTRATION

 

3.1.  Effective Date.  The Plan shall be effective as of the date
it is approved by the Board of Directors of the Company (the “Board”).(1)  The Plan shall be unlimited in duration and,
in the event of Plan termination, shall remain in effect as long as any Awards
awarded under it are outstanding.

 

3.2.  Shares
Subject to Plan.  The
aggregate number of Shares with respect to which Awards may be made under the
Plan shall be 2,000,000 Shares.  To the
extent any Restricted Share covered by an Award are forfeited or canceled, the
shares of Share subject to such Restricted Share  shall not be deemed to have been awarded for purposes of
determining the maximum number of Shares available under the Plan.

 

3.3.  Adjustments
to Shares.

 

(a)                                  If
the Company shall effect any subdivision or consolidation of Shares or other
capital readjustment, payment of share dividend, share split, combination of
Shares or recapitalization or other increase or reduction of the number of
Shares outstanding without receiving compensation therefor in money, services
or property, then the Committee shall equitably adjust (i) the number and or
type of Shares available under the Plan; (ii) the number and or type of Shares
available under any individual or other limits; and (iii) the number and or
type of Shares subject to outstanding Awards.

 

(b)                                 If
the Company is reorganized, merged or consolidated or is party to a plan of
exchange with another corporation, pursuant to which reorganization, merger,
consolidation or plan of exchange, the shareholders of the Company receive any

 

(1)          Restricted
Share Awards will be made to initial participants as of December 17, 2003.

 

2

 

shares of stock or other securities or property, or the Company shall
distribute securities of another corporation to its shareholders, there shall
be substituted for the Shares subject to outstanding Awards an appropriate
number of shares of each class of share or amount of other securities or
property which were distributed to the shareholders of the Company in respect
of such Shares, subject to the following:

 

(i)                                     If
the Committee determines that the substitution described in accordance with the
foregoing provisions of this paragraph would not be fully consistent with the
purposes of the Plan or the purposes of the outstanding Awards under the Plan,
the Committee may make such other equitable adjustments to the Awards to the
extent that the Committee determines in good faith such adjustments are
consistent with the purposes of the Plan and of the affected Awards.

 

(ii)                                  All
or any of the Awards may be cancelled by the Committee on or immediately prior
to the effective date of the applicable transaction, but only if the Committee
gives reasonable advance notice of the cancellation to each affected
Participant and only if the Participant receives payment or other benefits that
the Committee determines to be reasonable compensation for the value of all
cancelled Awards (without regard to whether such Awards would otherwise be
vested).

 

(iii)                               Upon
the occurrence of a reorganization of the Company or any other event described
in this paragraph (b), any successor to the Company shall be substituted for
the Company to the extent that the Company and the successor agree to such substitution.

 

(c)                                  Upon
(or, in the discretion of the Committee, immediately prior to) the sale to (or
exchange with) a third party unrelated to the Company of all or substantially
all of the assets of the Company, all Awards shall be cancelled.  If Awards are cancelled under this
paragraph, then, with respect to any affected Participant, the Participant
shall receive payment or other benefits that the Committee determines to be
reasonable compensation for the value of all cancelled Awards (without regard
to whether such cancelled Awards would otherwise be vested).

 

The foregoing provisions
of this paragraph shall also apply to the sale of all or substantially all of
the assets of the Company to a related party, if the Committee determines such
application is appropriate. 
Notwithstanding the foregoing provisions of this paragraph (c), in lieu
of cancellation of outstanding Awards, the Committee and the purchaser of all
or substantially all of the Company’s assets may provide that an appropriate
number of shares or securities of the purchaser or its affiliates shall be
substituted for Shares with respect to outstanding Awards under the Plan,
provided that such substituted awards shall be comparable in value and contain
terms and conditions similar to the Awards.

 

3

 

(d)                                 In
determining what action, if any, is necessary or appropriate under the
foregoing provisions of this subsection, the Committee shall act in a manner
that it determines to be consistent with the purposes of the Plan and of the
affected Awards and, where applicable or otherwise appropriate, in a manner
that it determines to be necessary to preserve the benefits and potential
benefits of the affected Awards for the Participants and the Company.

 

(e)                                  The
existence of this Plan and the Awards granted hereunder shall not affect in any
way the right or power of the Company or its shareholders to make or authorize
any or all adjustments, recapitalizations, reorganizations or other changes in
the Company’s capital structure or its business, any merger or consolidation of
the Company, any issue of bonds, debentures, preferred or prior preference
shares ahead of or affecting the Company’s Shares or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.

 

(f)                                    Except
as expressly provided by the terms of this Plan, the issue by the Company of
shares of stock of any class, or securities convertible into shares of share of
any class, for cash or property or for labor or services, either upon direct
sale, upon the exercise of rights or warrants to subscribe therefor or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof,
shall be made with respect to Awards then outstanding hereunder.

 

(g)                                 Awards
under the Plan are subject to adjustment under this subsection only during the
period in which they are considered to be outstanding under the Plan.  For purposes of this subsection, an Award is
considered “outstanding” on any date if the Participant’s ability to obtain all
benefits with respect to the Award is subject to limits imposed by the Plan
(including any limits imposed by the Agreement reflecting the Award).  The determination of whether an Award is
outstanding shall be made by the Committee.

 

3.4.  Subordination.  All Class B Common Shares issued pursuant to
the Plan shall be subordinated in right of payment upon any liquidation or
winding up of the Company or other distribution of capital of the Company to
the prior payment in full of the liquidation preferences of the Series A
Preferred Shares of the Company, the Class 
A Common Shares of the Company and any other class or series of shares
of the Company ranking senior to the Class B Common Shares in respect of the
right to receive dividends and/or assets upon a liquidation of the Company in
accordance with the Bye-Laws of the Company as in effect from time to time.

 

3.5.  Limit
on Distribution. 
Notwithstanding any other provision of the Plan, the Company shall have
no obligation to deliver any Shares under the Plan or make any other
distribution of benefits under the Plan unless such delivery or distribution
would comply with all applicable laws.

 

4

 

3.6.  Withholding.  All Awards and other payments under the Plan
are subject to withholding of all applicable taxes, which withholding
obligations may be satisfied, with the consent of the Committee, through the
surrender of Shares which the Participant already owns or to which a
Participant is otherwise entitled under the Plan; provided, however,
except to the extent permitted by the Committee, previously-owned Shares that
have been held by the Participant less than six months or Shares to which the
Participant is entitled under the Plan may only be used to satisfy the minimum
tax withholding required by applicable law.

 

3.7.  Transferability.  Awards under the Plan are not transferable
except as designated by the Participant by will or by the laws of descent and
distribution and in accordance with the Agreement.  Notwithstanding the foregoing provisions of this subsection,
Awards under the Plan may be transferred to or for the benefit of the
Participant’s family, subject to such procedures as the Committee may
establish.

 

3.8.  Notices.  Any notice or document required to be filed
with the Committee under the Plan will be properly filed if delivered or mailed
by registered mail, postage prepaid, to the Committee, in care of the Company,
at its principal executive offices.  The
Committee may, by advance written notice to affected persons, revise such
notice procedure from time to time.  Any
notice required under the Plan (other than a notice of election) may be waived
by the person entitled to notice.

 

3.9.  Form and
Time of Elections.  Unless
otherwise specified herein, each election required or permitted to be made by
any Participant or other person entitled to benefits under the Plan, and any
permitted modification or revocation thereof, shall be in writing filed with
the Committee at such times, in such form, and subject to such restrictions and
limitations, not inconsistent with the terms of the Plan, as the Committee
shall require.

 

3.10.  Agreement
With Company.  At the time of an
Award to a Participant under the Plan, the Committee may require a Participant
to enter into an agreement with the Company (the “Agreement”) in a form
specified by the Committee, agreeing to the terms and conditions of the Plan
and to such additional terms and conditions, not inconsistent with the Plan, as
the Committee may, in its sole discretion, prescribe.

 

3.11.  Limitation
of Implied Rights.

 

(a)                                  Neither
a Participant nor any other person shall, by reason of the Plan, acquire any
right in or title to any assets, funds or property of the Company or any
Related Company whatsoever, including, without limitation, any specific funds,
assets, or other property which the Company or any Related Company, in its sole
discretion, may set aside in anticipation of a liability under the Plan.  A Participant shall have only a contractual
right to the amounts, if any, payable under the Plan, unsecured by any assets
of the Company and any Related Company. 
Nothing contained in the Plan shall constitute a guarantee by the
Company or any Related Company that the assets of such companies shall be
sufficient to pay any benefits to any person.

 

5

 

(b)                                 The
Plan does not constitute a contract of employment, and selection as a
Participant will not give any employee the right to be retained in the employ
of the Company or any Related Company, nor any right or claim to any benefit
under the Plan, unless such right or claim has specifically accrued under the
terms of the Plan.  Except as otherwise
provided in the Plan, no Award under the Plan shall confer upon the holder thereof
any right as a shareholder of the Company prior to the date on which he
fulfills all service requirements and other conditions for receipt of such
rights and Shares are registered in his name.

 

3.12.  Evidence.  Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.

 

3.13.  Action
by Company or Related Company. 
Any action required or permitted to be taken by the Company or any
Related Company shall be by resolution of its board of directors or trustees,
as applicable, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board or (except
to the extent prohibited by applicable law or the rules of any share exchange)
by a duly authorized officer of the Company.

 

3.14.  Gender and Number.  Where the context admits, words in any
gender shall include any other gender, words in the singular shall include the
plural and the plural shall include the singular.

 

SECTION 4

COMMITTEE

 

4.1.  Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in the Compensation
Committee of the Board (the “Committee”) in accordance with this Section 4.

 

4.2.  Selection of
Committee.  The Committee shall
be selected by the Board and shall consist of not fewer than two members of the
Board, none of whom shall be eligible to receive Awards under the Plan.

 

4.3.
 Powers of Committee.  The authority to manage and control the
operation and administration of the Plan shall be vested in the Committee,
subject to the following:

 

(a)                                  Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select individuals to receive Awards, to determine the time or
times of receipt, to determine the types of Awards and the number of shares
covered by the Awards, to establish the terms, conditions, performance
criteria, restrictions, and other provisions of such Awards, and to cancel or
suspend Awards.  In making such Award
determinations, the Committee may take into account the nature of services
rendered by the respective employee, the individual’s present and potential
contribution to the Company’s success and such other factors as the Committee
deems relevant.

 

6

 

(b)                                 The
Committee will have the authority and discretion to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of any agreements made pursuant to the Plan
and to make all other determinations that may be necessary or advisable for the
administration of the Plan.

 

(c)                                  Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding on all persons.

 

(d)                                 Except
as otherwise expressly provided in the Plan, where the Committee is authorized
to make a determination with respect to any Award, such determination shall be
made at the time the Award is made, except that the Committee may reserve the
authority to have such determination made by the Committee in the future (but
only if such reservation is made at the time the Award is granted and is
expressly stated in the Agreement reflecting the Award).

 

4.4.  Delegation
by Committee.  The Committee may
allocate all or any portion of its responsibilities and powers to any one or
more of its members and may delegate all or any part of its responsibilities
and powers to any person or persons selected by it.  Any such allocation or delegation may be revoked by the Committee
at any time.

 

4.5.  Information
to be Furnished to Committee. 
The Company and Related Companies shall furnish the Committee such data
and information as may be required for it to discharge its duties.  The records of the Company and Related
Companies as to an employee’s or Participant’s employment (or other provision
of services), termination of employment (or cessation of the provision of
services), leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect.  Participants and other persons entitled to benefits under the
Plan must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of the Plan.

 

4.6.  Liability and Indemnification of
Committee.  No member or
authorized delegate of the Committee shall be liable to any person for any
action taken or omitted in connection with the administration of the Plan
unless attributable to his own fraud or willful misconduct; nor shall the
Company or any Related Company be liable to any person for any such action
unless attributable to fraud or willful misconduct on the part of a Director or
employee of the Company or Related Company. 
The Committee, the individual members thereof, and persons acting as the
authorized delegates of the Committee under the Plan, shall be indemnified by
the Company against any and all liabilities, losses, costs and expenses (including
legal fees and expenses) of whatsoever kind and nature which may be imposed on,
incurred by or asserted against the Committee or its members or authorized
delegates by reason of the performance of a Committee function if the Committee
or its members or authorized delegates did not act dishonestly or in willful
violation of the law or regulation under which such liability, loss, cost or
expense arises.  This indemnification
shall not duplicate but may supplement any coverage available under any applicable
insurance.

 

7

 

SECTION 5

AMENDMENT AND TERMINATION

 

Subject to
obtaining such approvals as may be required under the Code or Bermuda corporate
law, the Board may, at any time, amend or terminate the Plan; provided,
that subject to subsection 3.3 (relating to certain adjustments to
shares), no amendment or termination may materially adversely affect the rights
of any Participant or beneficiary under any Award made under the Plan prior to
the date such amendment is adopted by the Board.

 

SECTION 6

 

VOTING
RIGHTS; MANAGEMENT SHAREHOLDERS AGREEMENT

 

6.1.  Voting Rights.  Each Participant shall be entitled to vote
vested Shares to the same extent as other Class B Common Shares as provided in
the Company’s Bye-Laws.  Each
Participant shall grant the Committee a proxy to vote all unvested Shares which
proxy shall terminate when such Shares become vested in accordance with this
Plan and such Participant’s Agreement.

 

6.2.  Management Shareholders Agreement.  Upon a Participant’s becoming vested in any
portion of a Restricted Share Award in accordance with the terms of this Plan,
Participant agrees that he will execute and become a party to the Company’s
Management Subscription and Shareholders Agreement, dated March 5, 2004, as
amended, restated, supplemented or modified (the “Management Shareholders
Agreement”).

 

8

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