Common use of Effect of Change of Control Clause in Contracts

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in the event that: (i) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executed.

Effect of Change of Control. Notwithstanding If a Change in Control should occur during the other provisions term of Paragraph 9.3this Agreement, and should Employee’s employment be terminated within two (2) years following the Change in the event that: Control (i) by reason of Employee’s Disability or Death, or (ii) either by Employer or its successor Without Cause, then, in lieu of any other benefits described elsewhere in this Agreement: (i) Employer shall pay Employee in a single severance payment as soon as practicable after the Company terminates Termination Date, but in no event later than thirty (30) days thereafter, an amount in cash equal to two (2) times the Executivesum of (a) Employee’s then-current base salary and (b) the higher of Employee’s target annual cash incentive compensation award as in effect on the Termination Date or Employee’s target annual cash incentive compensation award at the time of the Change in Control, (ii) Employer shall pay Employee an amount equal to Employee’s annual cash incentive compensation award for the period in which such termination occurs, prorated to the Termination Date and payable in a lump sum promptly following such termination. (iii) Any unvested stock options and other equity grants shall become immediately and fully vested, and any vested options (or other incentive awards that may be exercised) shall remain exercisable until (a) the later of the fifteenth (15th) day of the third month following the date the award otherwise would have expired if the exercise period had not been extended pursuant to this provision, or December 31 of the calendar year in which the award otherwise would have expired if the exercise period had not been extended pursuant to this provision, or (b) if earlier, their full-term expiration, (iv) For a period of twelve (12) months following the Termination Date, Employer shall reimburse Employee for (a) the cost of any continued coverage under Employer’s group medical insurance plan for the benefit of Employee, Employee’s spouse and dependents, if any, should they elect continued coverage under COBRA, provided they were covered under the plan immediately prior to Employee’s termination, and (b) the cost of continued coverage under Employer’s life and long-term disability plans for the benefit of Employee, should Employee elect to obtain an individual conversion policy, subject to the terms, conditions, and limitations contained in such policy; provided that, if and to the extent required to prevent a violation of Section 409A of the Code, Employee will pay the entire cost of such coverage for the first six months after the Date of Termination and Employer will reimburse Employee for Employer’s share of such costs on the six-month anniversary of Employee’s “separation from service” as defined in Section 409A of the Code, and (v) Employee shall be entitled to any Accrued Benefits and any Vested Benefits. Notwithstanding anything contained herein, if a Change in Control occurs and Employee’s employment without Cause in anticipation of, or pursuant with Employer is terminated prior to a notice Change in Control other than for Cause or Poor Performance, and if such termination of termination delivered employment or event was at the request, suggestion or initiative of a third party who has taken steps reasonably calculated to the Executive within 24 months after, effect a Change in Control; (ii) , then Employee upon occurrence of the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive Control shall be entitled to receive the Accrued Obligations payments and the following benefits: (a) the Company benefits set forth in this Section 5.2.7, in lieu of payments and benefits described elsewhere in this Agreement. All payments under this Section 5.2.7 shall pay be subject to Section 5.2.8, Section 5.2.10., Section 6, and to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then additional benefit described in effect and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionSection 5.2.9, if any, of the 24-month period (unless otherwise limited allowed by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect law and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of by this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executed.

Effect of Change of Control. Notwithstanding (a) If within two (2) years following a “Change of Control” (as hereinafter defined), the other provisions of Paragraph 9.3, in Executive terminates his employment with the event that: Company for Good Reason (ias hereinafter defined) or the Company terminates the Executive’s employment without for any reason other than Cause in anticipation ofor disability, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following : (i) an amount equal to three (3) times the Executive’s Separation from Service (Base Salary as defined below), a lump-sum cash amount equal to: (i) two times of the sum date of (A) his Salary then in effect and (B) 75% of his then current Salary; plus termination; (ii) a an amount equal to three (3) times the average annual cash bonus paid to the Executive for the then current two (2) fiscal year equal to 75% years immediately preceding the date of his Salary (irrespective of whether performance objectives have been achieved); plus termination; (iii) if such notice is given within all benefits under the first 12 Company’s various benefit plans, including group healthcare, dental, life and the Company’s Executive Car Program for the period equal to thirty-six (36) months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, provided that the end continued participation of the Executive is possible under the general terms and provisions of such 12 month periodplans. If the Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse the Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case the event of Executive shall pay to the Company, or provide a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)credit against the Company’s reimbursement obligation for, the annual salary used for computation under this Paragraph 9.4(a) shall be amount equal to the one in effect premiums, or portion thereof, that the Executive was required to pay to maintain such benefits prior to the reduction referred date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to in Paragraph 15.1(h)(ii)the extent such coverage or benefits are otherwise provided by or available from any other employer of the Executive; and (biv) during a lump sum payment equal to the portion, if anyactuarial equivalent (determined by the Company in good faith with assistance of its accountants or actuaries), of the 24-month benefit which would have accrued under the Z▇▇▇ Delaware, Inc. Supplemental Executive Retirement Plan (“SERP”) if: (1) the Executive remained a participant in the SERP for the three (3) year period commencing on the first day of the SERP’s plan year (unless otherwise limited “Plan Year”) in which the Executive’s employment with the Company terminated (“Measurement Period”); (2) during each Plan Year in the Measurement Period the Executive earned benefit points equal to the highest number of the benefit points earned by COBRA or similar state lawsuch Executive in a Plan Year during the three (3) commencing year period ending on the last day of the Plan Year immediately preceding the Plan Year in which his employment with the Company terminated; and (3) the Executive’s final average pay during the Measurement Period is the greater of his monthly Base Salary on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale a Potential Change of the Company is being actively marketedControl, (b) a letter the Change of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, Control or (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) the date of the Company and/or its assets, and/or (d) a contract for the sale/purchase his termination of the Company and/or its assets is being/has been negotiated or has been executedemployment.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in the event that: (ia) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive If within 24 months after, two (2) years following a Change in Control; of Control (ii) the as hereinafter defined), Executive terminates his employment with the Company for Good Reason pursuant to a notice of termination delivered to (as hereinafter defined) or the Company terminates Executive’s employment for any reason other than for Cause (as defined in anticipation ofSection 4(b)) in a termination that constitutes a “separation from service” for purposes of Section 409A of the Code, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of ControlDisability Event, the Company shall have no further obligation to the pay to, and provide for, Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following payments and benefits: (ai) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash An amount equal to: to three (i3) two times the sum of (A) his the Executive’s annual Base Salary then in effect as of the date of termination and (B) 75% the average annual incentive bonus paid to Executive over the prior three years (or such shorter period as may apply if this Agreement has been in effect for less than three years) as of his then current Salary; plus the date of termination, payable in a single lump sum within fifteen (ii15) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months days after the date first set forth above, then, on which the Salary general release required pursuant to Section 8 is executed and delivered to the Executive should have been paid from the date of termination through the end of such 12 month periodCompany and becomes irrevocable in accordance with its terms, provided, however, that in for purposes of the event calculation of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(iiclause (B), the annual salary used Relocation and Signing Bonus shall not be utilized and the Guaranteed Bonus payable for computation Period 1 and for Period 2 shall be utilized; (ii) All benefits under the Company’s various benefit plans, including group healthcare, dental, and life, for thirty-six (36) months from the date of termination, on the same basis as such benefits were provided during Executive’s employment hereunder, provided that the continued participation of Executive is possible under the general terms and provisions of such plans. If Executive’s participation in any such plan is barred or would result in adverse tax consequences to Executive or the Company, the Company shall arrange to provide Executive with benefits substantially similar to those which Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case Executive shall pay to the Company, or provide a credit against the Company’s reimbursement obligation, for the amount equal to the premiums, or portion thereof, that Executive was required to pay to maintain such benefits prior to the date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to the extent reasonably comparable coverage or benefits are provided by or available from any other employer of Executive, provided further that except as permitted by Section 409A of the Code, the continued benefits provided to Executive pursuant to this Paragraph 9.4(aSection 6(a)(ii) during any calendar year will not affect the continued benefits provided to Executive in any other calendar year, and the amount of any costs of purchasing benefits reimbursed pursuant to this Section 6(a)(ii) shall be paid to Executive no later than the one last day of the calendar year following the calendar year in effect prior to the reduction referred to in Paragraph 15.1(h)(ii)which such costs are incurred by Executive; and (biii) during the portion, if any, All unvested restricted stock or units granted to Executive and all unvested stock options granted to Executive will be immediately vested as of the 24-month period (unless otherwise limited date on which Executive’s employment is terminated. Further, all vested stock options granted to Executive, including those vested by COBRA or similar state law) commencing on the date reason of the preceding sentence, will remain exercisable for ninety (90) days after such termination of Executive’s Separation from Service (as defined below) that employment, subject to the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees earlier expiration of the Company pay for the same or similar coverage. For purposes term of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedsuch stock options.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in the event that: (i) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then current Salary; plus (ii) a bonus Bonus at the target amount established for the then current fiscal that year equal to 75but in no event less than 100% of his the Executive’s annual Salary then in effect (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath health plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executed. 3. All other terms and conditions of the Agreement that are not hereby amended are to remain in full force and effect.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3(a) If at any time prior to January 31, in the event that: (i) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, 2005 the Company shall have no further obligation entered into a definitive agreement in respect of a Change of Control or a Change of Control shall have occurred, then (assuming the Executive has not voluntarily terminated the Agreement for other than Good Reason and the Company has not terminated the Agreement for Cause, in either case prior to the Executive under this Agreement or otherwise, except Change of Control) the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service "Change of Control Payment" (as defined below), a lump-sum cash amount equal to: herein) (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal subject to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first offset as set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event last clause of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(aSection 11(b) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionherein, if any, of the 24-month period (unless otherwise limited by COBRA or similar state lawapplicable) commencing on the date of the occurrence or consummation of a Change of Control irrespective of whether the Term has expired or has terminated by reason of the Company's termination of the Agreement without Cause or the Executive’s Separation from Service 's termination of the Agreement for Good Reason. Upon the Executive's receipt of the Change of Control Payment in full (subject to offset as defined belowset forth in the last clause of Section 11(b) that herein, if applicable), the Agreement shall be terminated automatically and the Executive is eligible shall no longer be entitled to elect any further payments described herein except for payments required to be made pursuant to the SERP and elects reimbursements contemplated by Section 5(e) of the Agreement; the Executive shall continue his participation in the Corporate Plan and the Awards in accordance with the provisions thereof; and the Executive shall be entitled to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant medical and dental plans maintained by the Company on the terms set forth in Section 5(c) hereof. The payment contemplated by this Section 12(a) shall not be duplicative to COBRA or similar state law, the payment contemplated by Section 11(b) herein. (b) If at any time prior to the Carryover Determination Date the Company shall reimburse the Executive on have entered into a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees definitive agreement in respect of the Company pay for the same a Change of Control or similar coverage. For purposes of this Agreement, a Change of Control shall have occurred, then the Executive shall (assuming the Executive has not voluntarily terminated the Agreement for other than Good Reason or the Company has not terminated the Agreement for Cause, in either case prior to the Change of Control) be entitled to elect, at his option, to receive either the Change of Control Payment or the Carryover Change of Control Payment (as defined herein) (subject to offset as set forth in the last clause of Section 11(b) herein, if applicable) on the date of the occurrence or consummation of a Change of Control irrespective of whether the Term has previously expired or terminated by reason of the Company's termination of the Agreement without Cause or the Executive's termination for Good Reason. Upon the Executive's receipt of either the Change of Control Payment or the Carryover Change of Control Payment in full (subject to offset as set forth in the last clause of Section 11(b) herein, if applicable), the Agreement shall be terminated automatically and the Executive shall no longer be entitled to any further payments described herein except for payments as required to be made pursuant to the SERP and reimbursements of expenses contemplated by Section 5(e) of the Agreement; and the Executive shall continue his participation in the Corporate Plan and the Awards in accordance with the provisions thereof; and the Executive shall be entitled to continue coverage under the medical and dental plans maintained by the Company on the terms set forth in Section 5(c) hereof. The payment contemplated by this Section 12(b) shall not be considered duplicative to be anticipated unless (athe payment contemplated by Section 11(b) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, herein. (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(sNotwithstanding any other provision herein, the Executive shall not receive both the Change of Control Payment provided in Section 12(a) and the Carryover Change of the Company and/or its assets, and/or Control Payment provided in Section 12(b). (d) a contract for the sale/purchase For purposes of the Company and/or its assets is being/has been negotiated or has been executed.Agreement, the following terms shall have the following meanings:

Effect of Change of Control. Notwithstanding If a Change in Control should occur during the other provisions term of Paragraph 9.3this Agreement, and should Employee’s employment be terminated within two (2) years following the Change in the event that: Control (i) by reason of Employee’s Disability or Death, or (ii) either by Employer or its successor Without Cause, then, in lieu of any other benefits described elsewhere in this Agreement: (i) Employer shall pay Employee in a single severance payment as soon as practicable after the Company terminates Termination Date, but in no event later than thirty (30) days thereafter, an amount in cash equal to two (2) times the Executivesum of (a) Employee’s then-current base salary and (b) the higher of Employee’s target annual cash incentive compensation award as in effect on the Termination Date or Employee’s target annual cash incentive compensation award at the time of the Change in Control, (ii) Employer shall pay Employee an amount equal to Employee’s annual cash incentive compensation award for the period in which such termination occurs, prorated to the Termination Date and payable in a lump sum promptly following such termination. (iii) Any unvested stock options and other equity grants shall become immediately and fully vested, and any vested options (or other incentive awards that may be exercised) shall remain exercisable until (a) the later of the fifteenth (15th) day of the third month following the date the award otherwise would have expired if the exercise period had not been extended pursuant to this provision, or December 31 of the calendar year in which the award otherwise would have expired if the exercise period had not been extended pursuant to this provision, or (b) if earlier, their full-term expiration, (iv) For a period of twelve (12) months following the Termination Date, Employer shall reimburse Employee for (a) the cost of any continued coverage under Employer’s group medical insurance plan for the benefit of Employee, Employee’s spouse and dependents, if any, should they elect continued coverage under COBRA, provided they were covered under the plan immediately prior to Employee’s termination, and (b) the cost of continued coverage under Employer’s life and long-term disability plans for the benefit of Employee, should Employee elect to obtain an individual conversion policy, subject to the terms, conditions, and limitations contained in such policy; provided that, if and to the extent required to prevent a violation of Section 409A of the Code, Employee will pay the entire cost of such coverage for the first six months after the Date of Termination and Employer will reimburse Employee for Employer’s share of such costs on the six-month anniversary of Employee’s “separation from service” as defined in Section 409A of the Code, and (v) Employee shall be entitled to his any Accrued Benefits and any Vested Benefits. Notwithstanding anything contained herein, if a Change in Control occurs and Employee’s employment without Cause in anticipation of, or pursuant with Employer is terminated prior to a notice Change in Control other than for Cause or Poor Performance, and if such termination of termination delivered employment or event was at the request, suggestion or initiative of a third party who has taken steps reasonably calculated to the Executive within 24 months after, effect a Change in Control; (ii) , then Employee upon occurrence of the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive Control shall be entitled to receive the Accrued Obligations payments and the following benefits: (a) the Company benefits set forth in this Section 5.2.7, in lieu of payments and benefits described elsewhere in this Agreement. All payments under this Section 5.2.7 shall pay be subject to Section 5.2.8, Section 5.2.10., Section 6, and to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then additional benefit described in effect and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionSection 5.2.9, if any, of the 24-month period (unless otherwise limited allowed by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect law and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of by this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executed.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in In the event that, within twelve (12) months following a Change of Control, either: (i) the Company terminates the Executive’s employment is terminated without Cause in anticipation ofCause, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation ofReason, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the then Executive shall be entitled to receive (i) the Accrued Obligations Rights, and (ii) subject to delivering to the Company the Release within 21 days following the date the Executive has been given a copy of the Release, and the expiration of the revocation period for such Release has become irrevocable by its terms within 7 days following benefits: the date the Executive returns the executed Release to the Company and, if he should be a director of the Company, Executive’s resignation from the Board in accordance with Section 5(g) hereof, (aA) the Prorated Bonus Payment; (B) the Prorated Plan Benefit; (C) provided the Executive timely elects to continue health insurance benefits under the federal law known as COBRA, the Company shall pay the cost of family health insurance coverage at the same rate the Company contributed for the Executive’s family health insurance coverage prior to the Executive, within 30 days following ’s termination of employment with the Executive’s Separation from Service Company until the earlier of twelve (as defined below), a lump-sum cash amount equal to: (i12) two times months or the sum loss of (A) his Salary then in effect and (B) 75% of his then current SalaryCOBRA entitlement; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) Executive shall be responsible for the one cost of any continuation coverage under COBRA that extends beyond twelve (12) months; (D) his Base Salary in effect at termination, for eighteen (18) months, payable in a lump sum within thirty (30) days; and (E) the vesting of all stock option grants set forth on Exhibit A, regardless of date or condition of vesting. If, upon the Change of Control, (i) the Company shall cease to be a stand-alone publicly traded entity, or (ii) the acquiring entity is unwilling to assume the equity in an economically equivalent manner, then in either event, all equity shall be deemed to have vested two (2) days prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionChange of Control, but only if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not actually be considered consummated. Following the Executive’s termination of employment as described in this Section 5(f) or otherwise in connection with a Change of Control, except as set forth in this Section 5(f), the Executive shall have no further rights to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated any compensation or has been executedany other benefits under this Agreement.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in the event that: (ia) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive If within 24 months after, two (2) years following a Change in Control; of Control (ii) the as hereinafter defined), Executive terminates his employment with the Company for Good Reason pursuant (as hereinafter defined) or the Company terminates Executive’s employment for any reason other than for Cause (as defined in Section 4(h)) in a termination that constitutes a “separation from service” for purposes of Section 409A of the Code, or due to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of ControlDisability Event, the Company shall have no further obligation to the pay to, and provide for, Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following payments and benefits: (ai) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash An amount equal to: to three (i3) two times the sum of (A) his the Executive’s annual Base Salary then in effect as of the date of termination and (B) 75% the average annual incentive bonus paid to Executive over the prior three years (or such shorter period as may apply if this Agreement has been in effect for less than three years) as of his then current Salarythe date of termination, payable in a single lump sum within sixty (60) days after the date of termination of Executive’s employment; plus provided, however, that for purposes of the calculation of clause (B) of this Section 6(a)(i), the Relocation and Signing Bonus shall not be utilized and the Guaranteed Bonus payable for Period 1 and for Period 2 shall be utilized; (ii) a bonus All benefits under the Company’s various benefit plans, including group healthcare, dental, and life insurance, for the then current fiscal year equal to 75% of his Salary thirty-six (irrespective of whether performance objectives have been achieved); plus (iii36) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, on the end same basis as such benefits were provided during Executive’s employment hereunder, provided that the continued participation of Executive is possible under the general terms and provisions of such 12 month periodplans. If Executive’s participation in any such plan is barred or would result in adverse tax consequences to Executive or the Company, the Company shall arrange to provide Executive with benefits substantially similar to those which Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case Executive shall pay to the event Company, or provide a credit against the Company’s reimbursement obligation, for the amount equal to the premiums, or portion thereof, that Executive was required to pay to maintain such benefits prior to the date of a termination for Good Reason of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to the extent reasonably comparable coverage or benefits are provided by or available from any other employer of Executive, provided further that, except as permitted by Section 409A of the Code, the continued benefits provided to Executive pursuant to Clause Paragraph 15.1(h)(ii)this Section 6(a)(ii) during any calendar year will not affect the continued benefits provided to Executive in any other calendar year, and the annual salary used for computation under amount of any costs of purchasing benefits reimbursed pursuant to this Paragraph 9.4(aSection 6(a)(ii) shall be paid to Executive no later than the one last day of the calendar year following the calendar year in effect prior to the reduction referred to in Paragraph 15.1(h)(ii)which such costs are incurred by Executive; and (biii) during the portion, if any, All unvested restricted stock or units granted to Executive and all unvested stock options granted to Executive will be immediately vested as of the 24-month period (unless otherwise limited date on which Executive’s employment is terminated. Further, all vested stock options granted to Executive, including those vested by COBRA or similar state law) commencing on the date reason of the preceding sentence, will remain exercisable for ninety (90) days after such termination of Executive’s Separation from Service (as defined below) that employment, subject to the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees earlier expiration of the Company pay for the same or similar coverage. For purposes term of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedsuch stock options.

Effect of Change of Control. Notwithstanding anything set forth in Section 2(a) or (b) above, if there occurs a Change of Control prior to the other provisions of Paragraph 9.3, in the event that: Vesting Date and: (i) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to Employee is still employed with the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) its Subsidiaries upon the Company fails to renew this Agreement in anticipation of, or within 24 months after, a occurrence of such Change of Control, the Company Performance Restricted Stock Units shall have no further obligation immediately vest and become converted into the right to receive a cash payment equal to the Executive under this Agreement or otherwiseproduct of (x) the total number of Target RSUs and (y) the price per share paid for one share of Common Stock in the Change of Control transaction (such payment, except the Executive “CIC Cashout Amount”), which amount shall be entitled to receive payable on the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then current SalaryVesting Date; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in if, on or after the event Change of a termination Control but prior to the Vesting Date, (A) the Employee’s employment is terminated by the Company and its Subsidiaries without Cause or by the Employee for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)Reason, the annual salary used for computation timing of the payment of the amount otherwise due and payable under this Paragraph 9.4(aSection 2(c) shall be the one in effect prior accelerated and shall be paid to the reduction referred to in Paragraph 15.1(h)(ii); and Employee within ten (b10) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on business days after the date of such termination of employment; or (B) the ExecutiveEmployee’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, employment with the Company shall reimburse and its Subsidiaries is terminated by the Executive on a monthly basis Company and its Subsidiaries for Cause or by the difference between Employee for any reason (other than due to the amount Employee’s death, Disability, Retirement or by the Executive pays to effect and continue such coverage Employee for Good Reason), then the Performance Restricted Stock Units and the employee contribution amount that active senior executive employees of right to receive any cash as set forth in this Section 2(c) shall be forfeited by the Employee without consideration and this Agreement shall terminate without payment in respect thereof; or (ii) the Employee has ceased to be employed with the Company pay for the same or similar coverage. For purposes of this Agreement, a its Subsidiaries prior to such Change of Control shall not under circumstances set forth in Section 2(a)(iii) above, the Employee shall, in lieu of the shares of Common Stock otherwise distributable pursuant to Section 2(a)(iii) on the Vesting Date, instead be considered entitled to be anticipated unless receive a cash payment, payable on the Vesting Date, equal to the product of (ax) the sale of CIC Cashout Amount and (y) the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedProration Factor.

Effect of Change of Control. Notwithstanding As used herein, a “Change in Control” shall be deemed to have occurred if any person or entity other than IndyMac Bank Corp., Inc. becomes the other provisions beneficial owner, as defined in Rule 13d-3 under the Exchange Act, of Paragraph 9.3more than 50% of the combined voting power of the outstanding stock of Employer, or acquires all or substantially all of the assets of Employer. If a Change in Control should occur during the event that: term of this Agreement, and should Officer’s employment be terminated within one (1) year following the Change in Control (i) the Company terminates the Executiveby reason of Officer’s employment without Cause in anticipation ofDisability or Death, or pursuant to a notice of termination delivered (ii) either for No Cause or because this Agreement expires and is not renewed by Employer or its successor on terms that are substantially comparable to the Executive within 24 months afterterms of this Agreement, then all outstanding stock options or similar awards previously granted to Officer under Section 4.3 that have not already vested shall vest on the Termination Date. If a Change in Control should occur during the term of this Agreement, and should Officer’s employment continue without termination beyond the first anniversary of the Change in Control; , then all outstanding stock options or similar awards previously granted to Officer under Section 4.3 that have not already vested shall vest upon the first anniversary of the Change in Control. If a Change in Control should occur during the term of this Agreement, and should Officer’s employment be terminated within two (2) years following the Change in Control either for No Cause or because this Agreement expires and is not renewed by Employer or its successor on terms that are substantially comparable to the terms of this Agreement, then Officer shall be entitled, in addition to the foregoing and in lieu of any other benefits described elsewhere in this Agreement, to (i) any accrued but unpaid vacation benefits, (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation ofany other Vested Benefits, or within 24 months after, a Change in Control; or (iii) payment of Officer’s base salary through the Company fails to renew this Agreement Termination Date, (iv) continuation of Officer’s base salary, increased by 100%, for a period of twelve (12) months following the Termination Date, (v) payment of Officer’s incentive compensation award, without proration, for the year in anticipation ofwhich Officer was terminated, or also increased by 100%, within 24 fifteen (15) days of Officer’s Termination Date, (vi) the additional benefit described in Section 5.2.9, if allowed by law, and (vii) continuation, for a period of twelve (12) months afterfollowing the Termination Date, a Change of Control, the Company shall have no further obligation benefits substantially equivalent to the Executive under this Agreement or otherwiselife, except the Executive shall be entitled to receive the Accrued Obligations disability and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executivemedical insurance policies maintained by Employer on behalf of Officer and Officer’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect spouse and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portiondependents, if any, immediately prior to the Notice of Termination, but only to the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation extent that Officer is not entitled to comparable benefits from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedother employment.

Effect of Change of Control. Notwithstanding If a Change of Control (as defined below) occurs and at any time during the other provisions 12-month period following any such Change of Paragraph 9.3Control, (A) the Company, or its successor, terminates your employment, whether with or without Cause, or (B) the Company, or its successor, elects not to renew this Agreement in accordance with its notice to you pursuant to Section 2(a) hereof, or (C) you terminate your employment with the event that: Company, or its successor, for Good Reason, then: (i) the Company terminates or its successor shall continue to pay you your Base Salary and provide you with the Executive’s employment without Cause benefits set forth in anticipation ofSection 4 hereof, both as in effect on the date of such termination or pursuant non-renewal, whichever the case may be, for a period equal to a notice twelve (12) months subsequent to such date of termination delivered to the Executive within 24 months after, a Change in Control; termination; (ii) in the Executive terminates his employment for Good Reason pursuant event that the Company or its successor pays cash bonuses to a notice executive officers of termination delivered the Company or such successor with respect to the year in which your employment was so terminated by the Company, then the Company in anticipation ofor its successor shall pay you, or within 24 months afterat the time such other bonuses are generally paid, a Change cash bonus in Controlan amount equal to the amount that the Board or the board of directors (or comparable body) of the successor in its discretion would have awarded you had your employment continued through such twelve (12) months, the payment of such amount to be pro rated based upon the portion of such year that your employment with the Company or such successor was continuing; or and (iii) provided that any stock grants or options to purchase shares of the Company’s Common Stock granted to you shall not otherwise have expired or been terminated pursuant to the terms of the Stock Option Plan (or other Company fails to renew stock incentive plan), this Agreement or the agreement evidencing such stock grants or options, such stock grants or options will become fully vested, and you will have the right to exercise any and all of such options. In addition, notwithstanding anything contained herein to the contrary, such stock grants and options will also become fully vested, and you will have the right to exercise any and all of such options in anticipation of, or within 24 months after, the event that (A) a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect Control occurs and (B) 75% you continue your employment with the Company, or its successor, for a period of his then current Salary; plus not less than twelve (ii12) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from following the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedControl.”

Effect of Change of Control. Notwithstanding As used herein, a “Change in Control” shall be deemed to have occurred if any person or entity other than IndyMac Bank Corp., Inc. becomes the other provisions beneficial owner, as defined in Rule 13d-3 under the Exchange Act, of Paragraph 9.3more than 50% of the combined voting power of the outstanding stock of Employer, or acquires all or substantially all of the assets of Employer. If a Change in Control should occur during the event that: term of this Agreement, and should Officer’s employment be terminated within one (1) year following the Change in Control (i) the Company terminates the Executiveby reason of Officer’s employment without Cause in anticipation ofDisability or Death, or pursuant to a notice of termination delivered (ii) either for No Cause or because this Agreement expires and is not renewed by Employer or its successor on terms that are substantially comparable to the Executive within 24 months afterterms of this Agreement, then all outstanding stock options or similar awards previously granted to Officer under Section 4.3 that have not already vested shall vest on the Termination Date. If a Change in Control should occur during the term of this Agreement, and should Officer’s employment continue without termination beyond the first anniversary of the Change in Control; , then all outstanding stock options or similar awards previously granted to Officer under Section 4.3 that have not already vested shall vest upon the first anniversary of the Change in Control. If a Change in Control should occur during the term of this Agreement, and should Officer’s employment be terminated within two (2) years following the Change in Control either for No Cause or because this Agreement expires and is not renewed by Employer or its successor on terms that are substantially comparable to the terms of this Agreement, then Officer shall be entitled, in addition to the foregoing and in lieu of any other benefits described elsewhere in this Agreement, to (i) any accrued but unpaid vacation benefits, (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation ofany other Vested Benefits, or within 24 months after, a Change in Control; or (iii) payment of Officer’s base salary through the Company fails to renew this Agreement Termination Date, (iv) continuation of Officer’s base salary, increased by 100%, for a period of twelve (12) months following the Termination Date, (v) Officer’s incentive compensation award, without proration, for the year in anticipation ofwhich Officer was terminated, or within 24 also increased by 100%, (vi) the additional benefit described in Section 5.2.9, if allowed by law, and (vii) continuation, for a period of twelve (12) months afterfollowing the Termination Date, a Change of Control, the Company shall have no further obligation benefits substantially equivalent to the Executive under this Agreement or otherwiselife, except the Executive shall be entitled to receive the Accrued Obligations disability and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executivemedical insurance policies maintained by Employer on behalf of Officer and Officer’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect spouse and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portiondependents, if any, immediately prior to the Notice of Termination, but only to the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation extent that Officer is not entitled to comparable benefits from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedother employment.

Effect of Change of Control. Notwithstanding (a) If within two (2) years following a Change of Control (as hereinafter defined), Executive terminates her employment with the other provisions of Paragraph 9.3, in the event that: Company for Good Reason (ias hereinafter defined) or the Company terminates the Executive’s employment without for any reason other than for Cause (as defined in anticipation of, Section 4(b)) or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of ControlDisability Event, the Company shall have no further obligation to the pay to, and provide for, Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following payments and benefits: (ai) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash An amount equal to: to three (i3) two times the sum of (A) his Executive’s Base Salary then in effect and (B) 75% Target Bonus as of his then current Salary; plus the date of termination; (ii) a bonus All benefits under the Company’s various benefit plans, including group healthcare, dental, and life for the then current fiscal year equal to 75% of his Salary thirty-six (irrespective of whether performance objectives have been achieved); plus (iii36) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, provided that the end continued participation of Executive is possible under the general terms and provisions of such 12 month periodplans. If Executive’s participation in any such plan is barred, the Company shall arrange to provide Executive with benefits substantially similar to those which Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case Executive shall pay to the event of Company, or provide a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)credit against the Company’s reimbursement obligation for, the annual salary used for computation under this Paragraph 9.4(a) shall be amount equal to the one in effect premiums, or portion thereof, that Executive was required to pay to maintain such benefits prior to the reduction referred date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to in Paragraph 15.1(h)(ii)the extent reasonably comparable coverage or benefits are provided by or available from any other employer of Executive; and (biii) during the portionAll unvested restricted stock or units granted to Executive and all unvested stock options granted to Executive will be immediately vested. Further, if anyall vested stock options granted to Executive, including those vested by reason of the 24-month period preceding sentence, will remain exercisable for ninety (unless otherwise limited by COBRA or similar state law90) commencing on days after such termination of Executive’s employment, subject to the date earlier expiration of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue term of such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedstock options.

Effect of Change of Control. Notwithstanding (a) If within two (2) years following a “Change of Control” (as hereinafter defined), the other provisions of Paragraph 9.3, in Executive terminates his employment with the event that: Company for Good Reason (ias hereinafter defined) or the Company terminates the Executive’s employment without for any reason other than Cause in anticipation ofor disability, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following : (i) an amount equal to three (3) times the Executive’s Separation from Service (Base Salary as defined below), a lump-sum cash amount equal to: (i) two times of the sum date of (A) his Salary then in effect and (B) 75% of his then current Salary; plus termination; (ii) a an amount equal to three (3) times the average annual cash bonus paid to the Executive for the then current two (2) fiscal year equal to 75% years immediately preceding the date of his Salary (irrespective of whether performance objectives have been achieved); plus termination; (iii) if such notice is given within all benefits under the first 12 Company’s various benefit plans, including group healthcare, dental, life and the Company’s Executive Car Program for the period equal to thirty-six (36) months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, provided that the end continued participation of the Executive is possible under the general terms and provisions of such 12 month periodplans. If the Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse the Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case the event of Executive shall pay to the Company, or provide a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)credit against the Company’s reimbursement obligation for, the annual salary used for computation under this Paragraph 9.4(a) shall be amount equal to the one in effect premiums, or portion thereof, that the Executive was required to pay to maintain such benefits prior to the reduction referred date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to in Paragraph 15.1(h)(ii)the extent such coverage or benefits are otherwise provided by or available from any other employer of the Executive; and (biv) during a lump sum payment equal to the portion, if anyactuarial equivalent (determined by the Company in good faith with assistance of its accountants or actuaries), of the 24-month benefit which would have accrued under the Zale Delaware, Inc. Supplemental Executive Retirement Plan (“SERP”) if: (1) the Executive remained a participant in the SERP for the three (3) year period commencing on the first day of the SERP’s plan year (unless otherwise limited “Plan Year”) in which the Executive’s employment with the Company terminated (“Measurement Period”); (2) during each Plan Year in the Measurement Period the Executive earned benefit points equal to the highest number of the benefit points earned by COBRA or similar state lawsuch Executive in a Plan Year during the three (3) commencing year period ending on the last day of the Plan Year immediately preceding the Plan Year in which his employment with the Company terminated; and (3) the Executive’s final average pay during the Measurement Period is the greater of his monthly Base Salary on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale a Potential Change of the Company is being actively marketedControl, (b) a letter the Change of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, Control or (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) the date of the Company and/or its assets, and/or (d) a contract for the sale/purchase his termination of the Company and/or its assets is being/has been negotiated or has been executedemployment.

Effect of Change of Control. Notwithstanding (a) If within two (2) years following a “Change of Control” (as hereinafter defined), the other provisions of Paragraph 9.3, in Executive terminates his employment with the event that: Company for Good Reason (ias hereinafter defined) or the Company terminates the Executive’s employment without for any reason other than Cause in anticipation ofor a Disability Event, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following in the case of clauses (i), (ii) and (iv), and make available to the Executive, in the case of clause (iii): (i) an amount equal to three (3) times the Executive’s Separation from Service (Base Salary as defined below), a lump-sum cash amount equal to: (i) two times of the sum date of (A) his Salary then in effect and (B) 75% of his then current Salary; plus termination; (ii) a an amount equal to three (3) times the average annual cash bonus paid to the Executive for the then current two (2) fiscal year equal to 75% years immediately preceding the date of his Salary (irrespective of whether performance objectives have been achieved); plus termination; (iii) if such notice is given within all benefits under the first 12 Company’s various benefit plans, including group healthcare, dental, life and the Company’s Executive Car Program for the period equal to thirty-six (36) months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, provided that the end continued participation of the Executive is possible under the general terms and provisions of such 12 month periodplans. If the Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse the Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case the event of Executive shall pay to the Company, or provide a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)credit against the Company’s reimbursement obligation for, the annual salary used for computation under this Paragraph 9.4(a) shall be amount equal to the one in effect premiums, or portion thereof, that the Executive was required to pay to maintain such benefits prior to the reduction referred date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to the extent such coverage or benefits are otherwise provided by or available to the Executive from or in Paragraph 15.1(h)(ii)connection with any Income Source; and (biv) during a lump sum payment equal to the portion, if anyactuarial equivalent (determined by the Company in good faith with assistance of its accountants or actuaries), of the 24-month benefit which would have accrued under the Z▇▇▇ Delaware, Inc. Supplemental Executive Retirement Plan (“SERP”) if: (1) the Executive remained a participant in the SERP for the three (3) year period commencing on the first day of the SERP’s plan year (unless otherwise limited “Plan Year”) in which the Executive’s employment with the Company terminated (“Measurement Period”); (2) during each Plan Year in the Measurement Period the Executive earned benefit points equal to the highest number of the benefit points earned by COBRA or similar state lawsuch Executive in a Plan Year during the three (3) commencing year period ending on the last day of the Plan Year immediately preceding the Plan Year in which his employment with the Company terminated; and (3) the Executive’s final average pay during the Measurement Period is the greater of his monthly Base Salary on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale a Potential Change of the Company is being actively marketedControl, (b) a letter the Change of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, Control or (c) nondisclosure/confidentiality agreements have been proposed the date of his termination of employment; provided, however, that the amount paid to allow further due diligence for Executive pursuant to this clause (iv) shall not exceed his accrued benefit under the SERP as of December 31, 2004, except to the extent that such excess is pursuant to a prospective buyer(s) of new supplemental executive retirement plan adopted by the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedsubsequent to such date.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in In the event that, within twelve (12) months following a Change of Control (as defined below), either: (i) the Company terminates the Executive’s employment is terminated without Cause in anticipation ofCause, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation ofReason, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the then Executive shall be entitled to receive (i) the Accrued Obligations Rights, and (ii) subject to delivering to the Company the Release within 21 days following the date the Executive has been given a copy of the Release, and the expiration of the revocation period for such Release has become irrevocable by its terms within 7 days following benefits: the date the Executive returns the executed Release to the Company and, if he should be a director of the Company, Executive’s resignation from the Board in accordance with Section 5.7 hereof, (aA) the Prorated Bonus Payment; (B) the Prorated Plan Benefit; (C) provided the Executive timely elects to continue health insurance benefits under the federal law known as COBRA, the Company shall pay the cost of family health insurance coverage at the same rate the Company contributed for the Executive’s family health insurance coverage prior to the Executive, within 30 days following ’s termination of employment with the Executive’s Separation from Service Company until the earlier of twelve (as defined below), a lump-sum cash amount equal to: (i12) two times months or the sum loss of (A) his Salary then in effect and (B) 75% of his then current SalaryCOBRA entitlement; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that the Executive shall be responsible for the cost of any continuation coverage under COBRA that extends beyond twelve (12) months; (D) his Base Salary in effect at termination, for eighteen (18) months, payable in a lump sum within thirty (30) days; and (E) the event vesting of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(iiall stock option grants set forth on Exhibit 3.5 (a), regardless of date or condition of vesting. If, upon the annual salary used for computation under this Paragraph 9.4(aChange of Control, (i) the Company shall cease to be a stand-alone publicly traded entity, or (ii) the acquiring entity is unwilling to assume the equity in an economically equivalent manner, then in either event, all equity shall be the one in effect deemed to have vested two (2) days prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionChange of Control, but only if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not actually be considered consummated. Following the Executive’s termination of employment as described in this Section 5.6 or otherwise in connection with a Change of Control, except as set forth in this Section 5.6, the Executive shall have no further rights to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated any compensation or has been executedany other benefits under this Agreement.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in In the event that, within twelve (12) months following a Change of Control, either: (i) the Company terminates the ExecutiveEmployee’s employment is terminated without Cause in anticipation ofCause, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive Employee terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation ofReason, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive then Employee shall be entitled to receive (i) the Accrued Obligations Rights, and (ii) subject to delivering to the Company the Release within 21 days following the date the Employee has been given a copy of the Release, and the expiration of the revocation period for such Release has become irrevocable by its terms within 7 days following benefits: the date the Employee returns the executed Release to the Company, (aA) the Prorated Bonus Payment; (B) the Prorated Plan Benefit; (C) provided the Employee timely elects to continue health insurance benefits under the federal law known as COBRA, the Company shall pay the cost of family health insurance coverage at the same rate the Company contributed for the Employee’s family health insurance coverage prior to the ExecutiveEmployee’s termination of employment with the Company until the earlier of twelve (12) months or the loss of COBRA entitlement; provided, within 30 days following however, that the Executive’s Separation from Service Employee shall be responsible for the cost of any continuation coverage under COBRA that extends beyond twelve (as defined below), a lump-sum cash amount equal to: 12) months; (i) two times the sum of (AD) his Base Salary then in effect and at termination, for six (B6) 75% months, payable in accordance with the normal payroll practices of his then current Salary; plus the Company (ii) a bonus for the then current fiscal year equal to 75% “Change of his Salary (irrespective of whether performance objectives have been achievedControl Severance Benefit”); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in during the event Employee’s first year of a termination employment with the Company (and subject to Employee’s continued employment for Good Reason pursuant to Clause Paragraph 15.1(h)(iione full year), the annual salary used Change of Control Severance Benefit shall increase every two months by an amount equal to the amount of Employee’s Base Salary in effect at termination for computation under this Paragraph 9.4(aone (1) month, such that, following one full year of employment, the Change of Control Severance Benefit shall equal (and be capped at) the Employee’s Base Salary in effect at termination for twelve (12) months; and (E) the vesting of all stock option grants set forth on Exhibit A, regardless of date or condition of vesting. If, upon the Change of Control, (i) the Company shall cease to be a stand-alone publicly traded entity, or (ii) the acquiring entity is unwilling to assume the equity in an economically equivalent manner, then in either event, all equity shall be the one in effect deemed to have vested two (2) days prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portionChange of Control, but only if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not actually be considered consummated. Following the Employee’s termination of employment as described in this Section 5(f) or otherwise in connection with a Change of Control, except as set forth in this Section 5(f), the Employee shall have no further rights to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated any compensation or has been executedany other benefits under this Agreement.

Effect of Change of Control. Notwithstanding (a) Upon the other provisions occurrence of Paragraph 9.3, in the event that: (i) the Company terminates the Executive’s employment without Cause in anticipation of, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company Initial Option Grant shall have no further obligation fully vest and all restrictions relating to the Restricted Stock Award shall lapse; provided, however, that if the Corporation shall, on or before the date of such Change of Control, request that Executive under this Agreement or otherwiseremain in the employ of the Corporation following the Change of Control, then: (i) the Initial Option Grant shall instead vest as to all options except that number equal to 10% of the number of options originally granted, and the remainder shall vest upon the completion by Executive of six months service thereafter or, if earlier, the date on which the Corporation terminates Executive’s employment; and (ii) the restrictions on the shares included in the Restricted Stock Award Option Grant shall instead lapse as to all but 10% of the number of shares originally included in the Restricted Stock Award, and the restrictions on the remainder shall lapse upon the completion by Executive of six months service thereafter or, if earlier, the date on which the Corporation terminates Executive’s employment. (b) Upon the occurrence of a Change Control, Executive shall be entitled to receive a special change of control bonus calculated in accordance with the Accrued Obligations following formula on the basis of the net per share price received by the Corporation’s stockholders in such transaction: Net Per Share Price Bonus Amount $10.00 $ 500,000 $25.00 or more $ 2,000,000 For a net per share price between $10.00 and $25.00, the bonus amount shall be interpolated on a straight line basis. The foregoing amounts shall be appropriately adjusted to reflect any stock dividends, stock splits, recapitalizations and the like. (c) As used herein, the term “Change of Control” shall be defined as a change in ownership or control of the Corporation effected through any of the following benefitstransactions: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times a statutory share exchange, merger, consolidation or reorganization approved by the sum of (A) his Salary then in effect and (B) 75Corporation’s stockholders, unless securities representing more than 50% of his then current Salary; plus the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly, by the persons who beneficially owned the Corporation’s outstanding voting securities immediately prior to such transaction; (ii) any stockholder approved transfer or other disposition of all or substantially all of the Corporation’s assets (whether held directly or indirectly through one or more controlled subsidiaries) except to or with a bonus for wholly-owned subsidiary of the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achievedCorporation); plus or (iii) if such notice is given the acquisition, directly or indirectly by any person or related group of persons of beneficial ownership (within the first 12 months after meaning of Rule 13d-3 of the date first set forth aboveSecurities Exchange Act of 1934, then, as amended (the Salary “Exchange Act”) of securities possessing more than 50% of the Executive should have been paid total combined voting power of the Corporation’s outstanding securities pursuant to transactions with the Corporation’s stockholders and not solely by direct purchase from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedCorporation.

Effect of Change of Control. Notwithstanding the other provisions of Paragraph 9.3, in In the event that, within twelve (12) months following a Change of Control, either: (i) Employee’s employment is terminated without Cause, or (ii) Employee terminates his employment for Good Reason, then Employee shall be entitled to receive (i) the Accrued Rights, and (ii) subject to delivering to the Company the Release within 21 days following the date the Employee has been given a copy of the Release, and the expiration of the revocation period for such Release has become irrevocable by its terms within 7 days following the date the Employee returns the executed Release to the Company, (A) the Prorated Bonus Payment; (B) the Prorated Plan Benefit; (C) provided the Employee timely elects to continue health insurance benefits under the federal law known as COBRA, the Company shall pay the cost of family health insurance coverage at the same rate the Company contributed for the Employee's family health insurance coverage prior to the Employee's termination of employment with the Company until the earlier of twelve (12) months or the loss of COBRA entitlement; provided, however, that the Employee shall be responsible for the cost of any continuation coverage under COBRA that extends beyond twelve (12) months; (D) his Base Salary in effect at termination, for twelve (12) months, payable in accordance with the normal payroll practices of the Company (the “Change of Control Severance Benefit”); and (E) the vesting of all stock option grants set forth on Exhibit A, regardless of date or condition of vesting. If, upon the Change of Control, (i) the Company terminates the Executive’s employment without Cause in anticipation ofshall cease to be a stand- alone publicly traded entity, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant acquiring entity is unwilling to a notice of termination delivered assume the equity in an economically equivalent manner, then in either event, all equity shall be deemed to have vested two (2) days prior to the Company Change of Control, but only if such Change of Control shall actually be consummated. Following the Employee's termination of employment as described in anticipation of, this Section 5(f) or within 24 months after, a Change otherwise in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, connection with a Change of Control, except as set forth in this Section 5(f), the Company Employee shall have no further obligation rights to the Executive any compensation or any other benefits under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following the Executive’s Separation from Service (as defined below), a lump-sum cash amount equal to: (i) two times the sum of (A) his Salary then in effect and (B) 75% of his then current Salary; plus (ii) a bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus (iii) if such notice is given within the first 12 months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through the end of such 12 month period, provided, however, that in the event of a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii), the annual salary used for computation under this Paragraph 9.4(a) shall be the one in effect prior to the reduction referred to in Paragraph 15.1(h)(ii); and (b) during the portion, if any, of the 24-month period (unless otherwise limited by COBRA or similar state law) commencing on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale of the Company is being actively marketed, (b) a letter of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, (c) nondisclosure/confidentiality agreements have been proposed to allow further due diligence for a prospective buyer(s) of the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executed.

Effect of Change of Control. Notwithstanding (a) If within two (2) years following a “Change of Control” (as hereinafter defined), the other provisions of Paragraph 9.3, in Executive terminates his employment with the event that: Company for Good Reason (ias hereinafter defined) or the Company terminates the Executive’s employment without for any reason other than Cause in anticipation ofor a Disability Event, or pursuant to a notice of termination delivered to the Executive within 24 months after, a Change in Control; (ii) the Executive terminates his employment for Good Reason pursuant to a notice of termination delivered to the Company in anticipation of, or within 24 months after, a Change in Control; or (iii) the Company fails to renew this Agreement in anticipation of, or within 24 months after, a Change of Control, the Company shall have no further obligation to the Executive under this Agreement or otherwise, except the Executive shall be entitled to receive the Accrued Obligations and the following benefits: (a) the Company shall pay to the Executive, within 30 days following in the case of clause (i), (ii) and (iv), and make available to the Executive, in the case of clause (iii): (i) an amount equal to three (3) times the Executive’s Separation from Service (Base Salary as defined below), a lump-sum cash amount equal to: (i) two times of the sum date of (A) his Salary then in effect and (B) 75% of his then current Salary; plus termination; (ii) a an amount equal to three (3) times the Executive’s target annual bonus for the then current fiscal year equal to 75% of his Salary (irrespective of whether performance objectives have been achieved); plus during which the termination occurs; (iii) if such notice is given within all benefits under the first 12 Company’s various benefit plans, including group healthcare, dental, life and the Company’s Executive Car Program for the period equal to thirty-six (36) months after the date first set forth above, then, the Salary the Executive should have been paid from the date of termination through termination, provided that the end continued participation of the Executive is possible under the general terms and provisions of such 12 month periodplans. If the Executive’s participation in any such plan is barred, the Company shall arrange to provide the Executive with benefits substantially similar to those which the Executive would otherwise have been entitled to receive under such plan or, alternatively at the option of the Company, reimburse the Executive for the reasonable actual costs of purchasing in the marketplace substantially similar benefits; provided, however, that in either case the event of Executive shall pay to the Company, or provide a termination for Good Reason pursuant to Clause Paragraph 15.1(h)(ii)credit against the Company’s reimbursement obligation for, the annual salary used for computation under this Paragraph 9.4(a) shall be amount equal to the one in effect premiums, or portion thereof, that the Executive was required to pay to maintain such benefits prior to the reduction referred date of termination of employment. Further, any insurance or other benefits and benefits coverage provided pursuant hereto shall be limited and reduced to in Paragraph 15.1(h)(ii)the extent such coverage or benefits are otherwise provided by or available from any other employer of the Executive; and (biv) during a lump sum payment equal to the portion, if anyactuarial equivalent (determined by the Company in good faith with assistance of its accountants or actuaries), of the 24-month benefit which would have accrued under the Zale Delaware, Inc. Supplemental Executive Retirement Plan (“SERP”) if: (1) the Executive remained a participant in the SERP for the three (3) year period commencing on the first day of the SERP’s plan year (unless otherwise limited “Plan Year”) in which the Executive’s employment with the Company terminated (“Measurement Period”); (2) during each Plan Year in the Measurement Period the Executive earned benefit points equal to the highest number of the benefit points earned by COBRA or similar state lawsuch Executive in a Plan Year during the three (3) commencing year period ending on the last day of the Plan Year immediately preceding the Plan Year in which his employment with the Company terminated; and (3) the Executive’s final average pay during the Measurement Period is the greater of his monthly Base Salary on the date of the Executive’s Separation from Service (as defined below) that the Executive is eligible to elect and elects to continue coverage for himself and his eligible dependents under the Company’s or an affiliate’s group heath plan pursuant to COBRA or similar state law, the Company shall reimburse the Executive on a monthly basis for the difference between the amount the Executive pays to effect and continue such coverage and the employee contribution amount that active senior executive employees of the Company pay for the same or similar coverage. For purposes of this Agreement, a Change of Control shall not be considered to be anticipated unless (a) the sale a Potential Change of the Company is being actively marketedControl, (b) a letter the Change of intent outlining provisional sale terms and conditions are being negotiated and/or have been offered and/or exchanged, Control or (c) nondisclosure/confidentiality agreements have been proposed the date of his termination of employment; provided, however, that the amount paid to allow further due diligence for Executive pursuant to this clause (iv) shall not exceed his accrued benefit under the SERP as of December 31, 2004, except to the extent that such excess is pursuant to a prospective buyer(s) of new supplemental executive retirement plan adopted by the Company and/or its assets, and/or (d) a contract for the sale/purchase of the Company and/or its assets is being/has been negotiated or has been executedsubsequent to such date.