Common use of Subsidiary Incentive Clause in Contracts

Subsidiary Incentive. If at any time during the Term the Company is successful in creating and "spinning off" one or more subsidiaries which, during the Term, trade on the NASDAQ Small Cap Market, NASDAQ National Market or the American Stock Exchange ("Qualified Market(s)"), you shall be granted an option to purchase 5% of the outstanding shares of each such subsidiary's common stock at a price equal to 25% of the closing bid price for such subsidiary's stock on the first day of trading on any of the Qualified Markets, which option shall (i) be granted on the date which is the first date the stock of such subsidiary trades on a Qualified Market; (ii) vest with respect to the entire 5% interest on the date of grant of such option; (iii) terminate on the earlier of the 10 year anniversary of the date of grant of such option or the 1,095th day following the effective date of your resignation or the termination of your employment; and (iv) be granted pursuant to such subsidiary's Long-Term Incentive Plan ("Subsidiary Option"). For purposes of this Agreement, "spinning off" a subsidiary shall mean granting as a dividend (or otherwise distributing) to the Company's shareholders all or a portion of the Company's stock ownership in such subsidiary. If the Year 1 Option, Year 2 Option, Year 3 Option and/or the Subsidiary Option are required to be issued pursuant to this agreement, the Company shall, within 14 days after the required grant date of the option, file with the SEC a registration statement on Form SB-2 which will register for sale the entire number of shares under the respective option. The Company shall use its best efforts to cause the SEC to declare such registration statement effective within 30 days after filing.