Common use of Restrictions on Option Exercise and Stock Sale Clause in Contracts

Restrictions on Option Exercise and Stock Sale. Executive and Company agree that, in the event that the employment of the Executive is terminated (i) by the Executive for Good Cause pursuant to Section 5 or (ii) by the Company without Cause pursuant to Section 6, then the following shall apply: (i) The exercise period of all of Executive’s Stock Options shall be extended to and exercisable until, that date which is the fifth year anniversary of the date of termination of Executive’s employment; and (ii) Executive covenants and agrees that, unless (x) there is a Corporate Transaction, as defined in the Stock Option Agreements by and between Executive and Company, or (y) the Company conducts a secondary stock offering in which the Company sells not less than 50% of its shares of common stock outstanding immediately preceding such offering, then (a) he or she will not sell any shares purchased under Executive’s Stock Options prior to the first six months following the date of termination of Executive’s employment, and (b) he or she will not sell more than 20% of the common stock purchased in exercise of any of Executive’s Stock Options during any three month period thereafter. Executive acknowledges and agrees that the Company can place stop transfer instructions to assist in enforcing these covenants.