EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made and entered into this _____ day of
__________, 2008, to be effective as of that date (the "Effective Date"), by and
between SUNGAME CORPORATION, (the "Company") and XXX XXXXXX (the "Executive")
WITNESSETH:
WHEREAS, the Company wishes to secure the services of the
Executive subject to the contractual terms and conditions set forth herein; and
WHEREAS, the Executive is willing to enter into this Agreement
upon the terms and conditions, set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the parties here to agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept such employment with the Company, all upon the
terms and conditions set forth herein.
2. TERM OF EMPLOYMENT. Subject to the terms and conditions of this Agreement,
the Executive shall be employed for a term of three (3) years commencing on the
Effective Date and ending on the third (3rd) anniversary of the Effective date
(the "Term") unless sooner terminated as provided for herein. The Term shall
renew automatically for additional one (1) year terms, unless either party gives
written notice no less than ninety (90) days prior to the expiration of the Term
that it does not intend to extend the Term.
3. DUTIES AND RESPONSIBILITIES.
A. CAPACITY. During the Term, the Executive shall serve in the
capacity of the President and Chief Executive Officer subject to the
supervision of the Board of Directors of the Company (the "Board")
B. FULL-TIME DUTIES. During the Term, and excluding any
periods of disability, vacation or sick leave to which the Executive is
entitled, the Executive shall devote substantially all of his business
time, attention and energies to the business of the Company. During the
Term, it shall not be a violation of this Agreement for the Executive
to (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures or fulfill speaking engagements and (iii) manage
personal investments, so long as such activities do not materially
interfere with the performance of the Executive's responsibilities as
an employee of the Company in accordance with this Agreement, (iv) it
is acknowledged that the Executive owns and serves as CEO/Chairman of a
Adversor Corp and its affiliates. The Executive will not allow said
activities to impact negatively or otherwise interfere with his duties
or performance hereunder.
C. STANDARD OF PERFORMANCE. The Executive will perform his
duties under this Agreement with fidelity and loyalty, to the best of
his ability, experience and talent and in a manner consistent with his
duties and responsibilities.
4. COMPENSATION
A. BASE SALARY. The Company shall pay the Executive a salary
(the "Base Salary") of $2000 per month up until IPO listing and $5000
until positive cash flow and $10000 thereafter, prorated for partial
months of employment. The Base Salary shall be payable in accordance
with the general payroll practices of the Company in effect from time
to time. During the Term of this Agreement, the Base Salary shall be
reviewed at least annually by the Board after consultation with the
Executive and may from time to time be increased (but not decreased) as
solely determined by the Board. Effective as of the date of any such
increase, the Base Salary as so increased shall be considered the new
Base salary for all purposes of the Agreement and may not thereafter be
reduced. Any increase in Base Salary shall not limit or reduce any
other obligation of the Company to the Executive under this Agreement.
B. ANNUAL PERFORMANCE BONUS. Executive shall be eligible for
annual discretionary bonus awards payable in cash and/or common stock
of the Company, as so determined solely by the Board, based on
performance objectives determined annually or at other times by the
Board. Bonus Plan shall be established in 2006.
C. LONG TERM INCENTIVES. Upon the Execution of this Agreement,
the Company agrees to issue the Executive the initial option award set
forth on the term sheet attached hereto as Exhibit A. Following the
initial option award, the Executive shall be eligible for grants of
stock options, restricted stock and/or other long-term incentives in
the discretion of the Board on the same basis as other similarly
situated senior executives of the Company. In addition, in the event
the Company pursues additional rounds of equity financing during the
Term, the Executive shall be offered the option to purchase, at the
price offered in such financing, a sufficient additional equity
interest such that if the Executive exercises this purchase option, the
Executive will maintain his proportionate ownership interest in the
Company.
D. BENEFITS.
(1) If and to the extent that the Company maintains
employee benefit plans (including, but not limited to,
pension, profit-sharing, disability, accident, car allowance
or related expenses, medical, life insurance, and
hospitalization plans) (it being understood that the Company
may but shall not be obligated to do so), the Executive shall
be entitled to participate therein accordance with the
Company's regular practices with respect to similarly situated
senior executives. The Company will have the right to amend or
terminate any such benefit plans it may choose to establish.
(2) The Executive shall be entitled to prompt
reimbursement from the Company for reasonable out-of-pocket
expenses incurred by him in the course of the performance of
his duties hereunder, upon the submission of appropriate
documentation in accordance with the practices, policies and
procedures applicable to the other senior executives of the
Company.
(3) The Executive shall be entitled to such vacation,
holidays and other paid or unpaid leaves of absence as are
consistent with the Company's normal policies available to
other senior executives of the Company or as are otherwise
approved by the Board.
(4) The Executive shall be entitled to have the
company pay an automobile allowance or related automobile
expenses for actual amounts incurred and submitted for
reimbursement but in no event less than $500 per month.
5. TERMINATION OF EMPLOYMENT.
Notwithstanding the provisions of Section 2 hereof, the Executive's
employment hereunder shall terminate under any of the following conditions:
A. DEATH. The Executive's employment under this Agreement
shall terminate automatically upon his death.
B. TOTAL DISABILITY. The Company shall have the right to
terminate this Agreement if the Executive becomes Totally Disabled. For
purposes of this Agreement, "totally Disabled" means that the executive
is not working and is currently unable to perform the substantial and
material duties of his position hereunder as a result of sickness,
accident or bodily injury for a period of three months. Prior to a
determination that Executive is Totally Disabled, but after Executive
has exhausted all sick leave and vacation benefits provided by the
Company, Executive shall continue to receive his Base Salary, offset by
any disability benefits he may be eligible to receive.
C. TERMINATION BY COMPANY FOR CAUSE. The Executive's
employment hereunder may be terminated for Cause upon written notice by
the Company. For purposes of this Agreement, "Cause" shall mean:
(1) conviction of the Executive by a court of
competent jurisdiction of any felony or a crime involving
moral turpitude;
(2) the Executive's willful and intentional failure
or willful and intentional refusal to follow reasonable and
lawful instructions of the Board;
(3) the Executive's material breach or default in the
performance of his obligations under this Agreement; or
(4) the Executive's act of misappropriation ,
embezzlement, intentional fraud or similar conduct involving
the Company.
Executive may not be terminated for Cause pursuant to subsections (2) and (3)
above unless Executive is given written notice of the circumstances constituting
the "Cause" and a reasonable period to cure such circumstances, if curable,
which period shall be no less than thirty (30) days.
D. TERMINATION FOR GOOD REASON. The Executive's employment
hereunder may be terminated by the Executive for Good Reason on written
notice by Executive to the Company. For purposes of this Agreement,
"Good Reason" means the occurrence of any of the following
circumstances without the Executive's consent:
(1) a material reduction in the executive's salary or
benefits excluding the substitution of substantially
equivalent compensation and benefits provided that a reduction
in the level of compensation payable to a substantial portion
of the company's employees or to substantially all the
Company's officers as part of a unilateral cost-cutting
program of the Company will not be taken into account for
acceleration or vesting;
(2) a material diminution of the Executives duties,
authority or responsibilities as in effect immediately prior
to such diminution;
(3) the relocation of the Executive' principal
location to a location more than 50 miles from its current
location; or
(4) the failure of a successor to assume and perform
under this Agreement.
6. PAYMENTS UPON TERMINATION.
A. Upon Termination of Executive's employment hereunder for
any reason as so provided for in Section 5 hereof, the Company shall be
obligated to pay and the Executive shall be entitled to receive, within
ten (10) days of termination, Base Salary which has accrued for
services performed to the date of termination and which has not yet
been paid. In addition, the executive shall be entitled to one year,
(12 months) of severance, payment of a pro rata portion of any LTIP or
annual bonus period partially completed, any vested benefits to which
he is entitled under the terms of any applicable Executive benefit plan
or program, vested restricted stock plan and stock option plan of the
Company, and, to the extent applicable, short-term or long-term
disability plan or program with respect to any disability, or any life
insurance policies and the benefits provided by such plan, program or
policies, or applicable law as duly adopted from time to time by the
Board.
B. Upon termination of Executive's employment by the Company
without Cause or by the Executive for Good Reason, the Company shall be
obligated to pay and the Executive shall be entitled to receive:
(1) all of the amounts and benefits described in
Section 6.A. hereof and
(2) a lump sum payment, within ten (10) days of
termination, equal to twelve (12) months of the Executive's
Base Salary; and
(3) continued participation in all Executive welfare
benefit programs of the Company for the remainder of the Term
or, if longer, until the first anniversary of the Executive's
termination of employment, as if there had been no termination
of employment.
Payments under Section 6.B., with the exception of amounts due pursuant to
Section 6. B(1), are continued on the execution by the Executive of a release of
all employment-related claims; provided, however, that such release shall be
contingent upon the Company's satisfaction of all terms and conditions of this
Section.
C. Upon termination of the Executive's employment upon the
death of Executive pursuant to Section 5.A., the Company shall be
obligated to pay, and the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described
in Section 6.A.;
(2) any death benefit payable under a plan or policy
provided by the company; and
(3) continued participation by the Executive's
dependents in the welfare benefit programs of the Company for
the remainder of the Term, or if longer, until the first
anniversary of the Executive's termination of employment, as
if there had been no termination of employment.
D. Upon termination of the Executive's employment or upon the
Disability of the Executive pursuant to Section 5. B., the Company
shall be obligated to pay, and the Executive shall be entitled to
receive:
(1) all of the amounts and vested benefits described
in Section 6.A.;
(2) the Base Salary, at the rate in effect
immediately prior to the date of his termination of employment
due to Disability, for the remainder of the Term, offset by
any payments the Executive receives under the Company's
long-term disability plan and any supplements thereto, whether
funded or unfunded which is adopted by the Company for the
Executive's benefit and not attributable to the Executive's
own contributions; and
(3) continued participation by the Executive and his
dependents in the welfare benefit programs of the Company for
the remainder of the Term or, if longer, until the first
anniversary of the Executive's termination of employment as if
there had been no termination of the employment.
Payments under Section 6.D., with the exception of amounts due pursuant to
Section 6.D(1), are conditioned on the execution by the Executive or the
Executive's representative of a release of all employment-related claims;
provided, however, that such release shall be contingent upon the Company's
satisfaction of all terms and conditions of this Section.
E. Upon voluntary termination of employment by the Executive
for any reason whatsoever (other than for Good Reason as described in
Section 6.B.) or termination by the Company for Cause the Company shall
have no further liability under or in connection with this Agreement,
except to provide the amounts set forth in Section 6.A.
F. Upon voluntary or involuntary termination of employment of
the Executive for any reason whatsoever or expiration of the Term, the
Executive shall continue to be subject to the provisions of Section 7,
hereof (it being understood and agreed that such provisions shall
survive any termination or expiration of the Executive's employment
hereunder for any reason whatsoever).
7. CONFIDENTIALITY, RETURN OF PROPERTY AND COVENANT NOT TO COMPETE.
A. CONFIDENTIAL INFORMATION.
(1) COMPANY INFORMATION. The Company agrees that it
will provide the Executive with Confidential Information, as
defined below, that will enable the Executive to optimize the
performance of the Executive's duties to the company. In
exchange, the Executive agrees to use such Confidential
Information solely for the Company's benefit. The Company and
the Executive agree and acknowledge that its provision of such
Confidential Information is not contingent on the Executive's
continued employment with the company. Notwithstanding the
preceding sentence, upon the termination of the Executive's
employment for any reason, the Company shall have no
obligation to provide the Executive with its Confidential
Information. "Confidential Information" means any Company
proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, product
plans, products services, customer lists and customers
(including, but not limited to, customers of the Company on
whom the Executive called or with whom the Executive became
acquainted during the term of the Executive's employment),
markets, software, developments, inventions, processes,
formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing finances or other
business information disclosed to the Executive by the Company
either directly or indirectly in writing, orally or by
drawings or observation of parts or equipment. Confidential
Information does not include any of the foregoing items which
has become publicly known and made generally available through
no wrongful act of the Executive or of others who were under
confidentiality obligations as to the item or items involved
or improvements or new versions.
The Executive agrees at all times during the Term and
thereafter, to hold in strictest confidence, and not to use,
except for the exclusive benefit of the Company, or to
disclose to any person or entity without written authorization
of the Board of Directors of the Company, any Confidential
Information of the Company.
(2) FORMER EMPLOYER INFORMATION. The Executive agrees
that he will not, during his employment with the Company,
improperly use or disclose any proprietary information or
trade secrets of any former employer or other person or entity
and that the Executive will not bring onto the premises of the
Company any unpublished document or proprietary information
belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.
(3) THIRD PARTY INFORMATION. The Executive recognizes
that the Company has received and in the future will receive
from third parties their confidential or proprietary
information subject to a duty on the Company's party to
maintain the confidentiality of such information and to use it
only for certain limited purposes. The Executive shall hold
all such confidential or proprietary information in the
strictest confidence and not disclose it to any person or
entity or use it except as necessary in carrying, out the
Executive's work for the Company consistent with the Company's
agreement with such third party.
B. RETURNING COMPANY DOCUMENTS. At the time of leaving the
employ of the Company, the Executive will deliver to the Company (and
will not keep in the Executive's possession) specifications, drawings
blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items developed by the
Executive pursuant to the Executive's employment with the Company or
otherwise belonging to the Company, its successors or assigns.
C. NOTIFICATION OF NEW EMPLOYER. In the event that the
Executive leaves the employ of the Company, the Executive hereby grants
consent to notification by the Company to the Executive's new employer
about the Executive's rights and obligations under this Agreement.
D. SOLICITATION OF EMPLOYEES. The Executive agrees that for a
period of twenty-four (24) months immediately following the termination
of the Executive's relationship with the Company for any reason, the
Executive shall not either directly or indirectly solicit, induce or
recruit any of the Company's employees to leave their employment, or
take away such employees, or attempt to solicit, induce, recruit,
encourage or take away employees of the Company, either for himself or
for any other person or entity.
E. COVENANT NOT TO COMPETE.
(1) The Executive agrees that during the course of
his employment and for twenty-four (24) months following the
termination of the Executive's relationship with the Company
for any reason, the Executive will not compete, without the
prior written consent of the Company, as a principle, partner,
employee, consultant, officer, director, manager, agent,
associate, investor, or otherwise directly or indirectly, to
own, purchase, organize or take preparatory steps for the
organization of, build, design, finance, acquire, lease,
operate, manage, invest in, work or consult for or otherwise
affiliate with any business, in competition with the Company's
bio-diesel business; provided, however, that the beneficial
ownership by Executive of up to 5% of the voting stock of any
corporation subject to the periodic reporting requirements of
the Securities and Securities Exchange Act of 1934 shall not
violate this Section 7. The foregoing covenant shall cover the
Executive's activities in every part of the Territory in which
the Executive may conduct business during the term of such
covenant as set forth above. "Territory" shall mean
California, USA.
(2) The Executive acknowledges that he will derive
significant value from the Company's agreement in Section
7.A(1) to provide the Executive with that Confidential
Information to enable the Executive to optimize the
performance of the Executive's duties to the Company. The
Executive further acknowledges that his fulfillment of the
obligations contained in this Agreement, including, but not
limited to, the Executive's obligation neither to disclose nor
to use the Company's Confidential Information other than for
the Company's exclusive benefit and the Executive's obligation
not to compete contained in subsection (1) above, is necessary
to protect the Company's Confidential Information and,
consequently, to preserve the value and goodwill of the
Company. The Executive further acknowledges the time,
geographic and scope limitations of the Executive's
obligations under subsection (1) above are reasonable,
especially in light of the Company's desire to protect its
Confidential Information, and that Executive will not
precluded from gainful employment if the Executive is
obligated not to compete with the Company during the period
and within the Territory as described above.
(3) The covenants contained in subsection (1) above
shall be construed as a series of separate covenants, one for
each city, county and state of any geographic area in the
Territory. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant
contained in subsection (1) above. If, in any judicial
proceeding, a court refuses to enforce any of such separate
covenants (or any part thereof), then such unenforceable
covenant (or such part) shall be eliminated from this
Agreement to the extent necessary permit the remaining
separate covenants (or proportions thereof) to be enforced. In
the event the provisions of subsection (1) above are deemed to
exceed the time, geographic or scope limitations permitted by
Texas law, then such provisions shall be reformed to the
maximum time, geographic or scope limitations such as the case
may be, then permitted by such law.
F. REPRESENTATIONS. The Executive agrees to execute any proper
oath or verify any proper document required to carry out the terms of
this Agreement. The Executive represents that his performance of all
the terms of this Agreement will not breach any agreement to keep in
confidence proprietary information acquired by the Executive in
confidence or in trust prior to the Executive's employment by the
Company. The Executive has not entered into, and the Executive agrees
that he will not enter into, any oral or written agreement in conflict
herewith.
8. ARBITRATION. Any dispute or controversy arising under or in connection with
this Agreement (other than any dispute or controversy arising from a violation
or alleged violation by the Executive of the provisions of Section 7) shall be
settled exclusively by final and binding arbitration in Houston, Texas, in
accordance with the Employment Arbitration Rules of the American Arbitration
Association ("AAA"). The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon appointment of
an arbitrator within thirty (30) days following receipt by one party of the
other party's notice of desire to arbitrate, the arbitrator shall be selected
from a panel or panels of persons submitted by the AA. The selection process
shall be that which is set forth in the AAA Employment Arbitration Rules then
prevailing, except that, if the parties fail to select an arbitrator from one or
more panels, AAA shall not have the power to make an appointment but shall
continue to submit additional panels until an arbitrator has been selected. This
agreement to arbitrate shall not preclude the parties from engaging in
voluntary, non-binding settlement efforts including mediation.
9. NOTICES. All notices and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have duly given upon receipt) by
delivery in person, by registered or certified mail (return receipt requested
and with postage prepaid thereon) or by facsimile transmission to the respective
parties at the following address (or at such other address as either party shall
have previously furnished to the other in accordance with the terms of this
Section):
If to the Company:
Sungame Corporation
000 X. Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Chairman of the Board
If to the Executive:
Xxx Xxxxxx
000 X. Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
10. AMENDMENT; WAIVER. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits thereof.
No failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege granted hereunder.
11. ENTIRE AGREEMENT. This Agreement and all Exhibits attached hereto constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior written or oral agreements or understandings
between the parties relating thereto.
12. SEVERABILITY. In the event that any term or provision of this Agreement is
found to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining terms and provisions hereof shall not be in any
way affected or impaired thereby, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
therein.
13. BINDING EFFECT: ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns (it
being understood and agreed that, except as expressly provided herein, nothing
contained in this Agreement is intended to confer upon any other person or
entity any rights, benefits or remedies of any kind or character whatsoever).
The Executive may not assign this Agreement without the prior written consent of
the Company. Except as otherwise provided in this Agreement, the Company may
assign this Agreement to any of its affiliates or to any successor (whether by
operation of law or otherwise) to all or substantially all of its business and
assets without the consent of the Executive. For purposes of this Agreement,
"affiliate" means any entity in which the Company owns shares or other measure
of ownership representing at least 40% of the voting power or equivalent measure
of control of such entity.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (except that no effect shall
be given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).
15. HEADINGS. The headings of the sections contained in this Agreement are for
the convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[END OF PAGE]
IN WITNESS THEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has signed this
Agreement as of the Effective Date.
SUNGAME CORPORATION
By: ________________________________
For the Board of Directors
EXECUTIVE
------------------------------------
Xxx Xxxxxx
EXHIBIT A
TERM SHEET - INITIAL OPTION AWARD
I. OPTIONS. Company will grant Executive an option pool to purchase 650,000
shares of Company common stock, which may or may not be distributed to other
Company officers and managers in the sole discretion of Executive, such price
being based on the fair market value as of the grant date, which shall be the
date of execution of this Agreement.
A. Fair market value shall be $1.25 per share, the price set forth in
the private placement.
B. Vested and exercisable with respect to (i)250,000 shares on the
grant date, (ii) an additional 100,000 shares 6 months after the Effective date,
(iii) an additional 100,000 shares on the date 12 months following the Effective
Date, (iv) an additional 100,000 shares on the second anniversary of the
Effective Date and (v) the final 100,000 shares on the third anniversary of the
Effective Date. Vesting and exercisability will be accelerated on a Change in
Control, a termination without Cause or a termination for Good Reason.
C. Options will have a term of three (3) years from the date of
vesting. Following a termination for any reason other than cause as defined
herein, options shall remain exercisable for the remainder of the three (3) year
term.
D. Company will register the shares subject to the option on Form S-8
or such other form as may be available, and shall provide a cashless exercise
procedure.
II. CHANGE IN CONTROL.
A. In the event of a Change in Control, Company will pay Executive a
gross-up payment to cover the excise tax, if any, imposed under Section 4999 of
the Internal Revenue Code in connection with excess parachute payments as
defined in Section 280G of the Internal Revenue Code.
B. For purpose of the options, "Change in Control means: (a) the
consummation of a merger or consolidation of the Company with or into another
entity or any other transaction, the stockholders of the Company immediately
prior to such merger, consolidation or other transaction own or beneficially own
immediately after such merger, consolidation or other transaction 50% or more of
the outstanding securities of each of (i) the continuing or surviving entity and
(ii) any direct or indirect parent entity of such continuing or surviving
entity; (b) the sale, transfer or other disposition of all or substantially all
of the Company's assets to a Person which is not owned or controlled by the
Company or its stockholders immediately prior to such sale, transfer or other
disposition; (c) individuals who, immediately following the effective date of
this Agreement, constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided, however, that
any individual becoming a director thereafter whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board; or
(d) any transaction as a result of which any Person is the "Beneficial Owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing at least 50% of the total voting power
represented by the Company's then outstanding voting securities. For purposes of
this definition of Change in Control, the term "Persons" means, acting
individually or as a group, an individual or a corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
III. LOCK UP AGREEMENT.
A. The Executive agrees not to sell, assign or otherwise dispose of any
of the options or the shares purchased under the options until the second
anniversary of the Effective Date unless a transaction or change of control as
stated herein occurs, in which case executive is free to sell, assign or
otherwise dispose of the options at his discretion as part of said event;
provided, however, that any shares may be transferred by gift prior to such
time, to family members or charities and may be sold at the time of Change of
Control or other material transaction.
B. The Executive agrees to execute an agreement with the Company in
similar form to which all other executives and directors and large shareholders
(in excess of 10%) will execute which provides that the party shall give the
Company written notice of the intent to sell shares or options, which notice
shall contain the number of securities to be sold, proposed price, and terms.
The Company shall not unreasonably withhold consent to sell or transfer, except
that if the sale or transfer would negatively impact a financing or pending
registration statement, the Company may delay permission to sell or transfer by
a period not to exceed 120 days from the date notice of intent to transfer is
given. No sale or transfer may be made without compliance herewith, and
appropriate stop transfer instructions shall be given to transfer agent for
Executive's shares and options.
