EMPLOYMENT AGREEMENT
Exhibit
No. 10.13
THIS
EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of May 1, 2006
by and
between Shearson Financial Network, a Nevada corporation (the "Company")
and
Xxxxxx X. Xxxxx-Xxxxxx ("Executive").
WITNESSETH:
WHEREAS,
the Company and Executive desire to enter into this Agreement to assure the
Company of the continuing and exclusive service of Executive and to set forth
the terms and conditions of Executive's employment with the
Company.
NOW,
THEREFORE, in consideration of the mutual promises and covenants set forth
herein, the parties agree as follows:
1.
Term: The Company agrees to employ
Executive and Executive hereby accepts such employment, in accordance with
the
terms of this Agreement, commencing as of the date hereof and ending on the
third anniversary of the date hereof unless this Agreement is earlier terminated
as provided herein. Notwithstanding any other provision of this Agreement,
the
Company shall have an obligation to make any payments to Executive for Base
Salary and Bonuses, as defined below and as required by this
Agreement.
2.
Services and Exclusivity of Services: So long as this
Agreement shall continue in effect, Executive shall devote Executive's full
business time, energy and ability to the matters related thereto in order
to
perform duties as assigned by the Board of directors of the Company (the
"Board"), Executive shall use Executive's best efforts and abilities to promote
the Company's interests and shall perform the services contemplated by this
Agreement in accordance with policies established by and under the direction
of
the Board. Executive agrees to serve without additional remuneration in such
executive capacities for one or more direct or indirect Affiliates of the
Company as the Board may from time to time request, subject to appropriate
authorization by the Affiliate or Affiliates involved and any limitations
under
applicable law. Executive agrees to faithfully and diligently promote the
business, affairs and interests of the Company and its Affiliates.
Without
the prior express written authorization of the Board, Executive shall not,
directly or indirectly, during the term of this Agreement engage in any activity
competitive with or adverse to the Company's business, whether alone, as
a
partner, officer, director, employee or significant investor of or in any
other
entity. (An investment of greater than 5% of the outstanding capital or equity
securities of an entity shall be deemed significant for these
purposes.)
Executive
represents to the Company that Executive has no other outstanding commitments
inconsistent with any of the terms of this Agreement or the services to be
rendered hereunder.
3.
Duties and Responsibilities: In addition to his duties
as an employee as discussed herein, Executive shall serve as Executive Vice
President of the Company for the duration of this Agreement. Executive's
duties
as an Executive shall be overall responsibility and authority, subject to
authorities and limitations as established by the "Board", to implement and
continue to develop the business strategies of the Company. In the performance
of Executive's duties, Executive shall report directly to and shall be subject
to the direction of the Board of Directors.
Executive
agrees to observe and comply with the rules and regulations of the Company
as
adopted by the Board respecting the performance of Executive's duties and
agrees
to carry out and perform orders, directions and policies of the Company and
its
Board as they may be, from time to time, stated either orally or in writing.
The
Company agrees that the duties which may be assigned to Executive shall be
usual
and customary duties of the position(s) to which Executive may from time
to time
be appointed or elected and shall not be inconsistent with the provisions
of the
charter documents of the Company or applicable law. Executive shall have
such
corporate power and authority as shall reasonably be required to enable
Executive to perform the duties required in any office that may be held,
subject
to the limitations on such powers imposed by the CEO or the Board.
4.
Compensation:
Base
Compensation:
During
the term of this Agreement, the Company agrees to pay Executive a base salary
at
the rate of $300,000.00 per year from the date hereof to May 1, 2009, subject
to
increases at the discretion of the Compensation Committee of the Board, payable
in accordance with the Company practices in effect from time to
time.
Bonuses:
Executive
shall be eligible for General Bonuses (as defined below) and Performance
Bonuses
(as defined below) as follows (collectively, "Bonuses"):
General
Bonuses: Executive shall be eligible for bonuses in accordance with any bonus
or
other incentive compensation plans adopted by the Board ("General
Bonuses").
Performance
Bonuses: With respect to each fiscal year in which the actual
revenues and net income of the Company after taxes (as determined by the
Company's public accountants) equal or exceed the actual projected revenue
and
net income amounts set forth in the budget projections approved by the Board
for
such fiscal year, the Company shall pay the Executive a bonus (the "Performance
Bonus"). The Performance Bonus shall be in an amount equal to (a) 50% of
the
Base Salary on the last day of such fiscal year plus (b) the product of the
Base
Salary on the last day of such fiscal year, multiplied by the percentage
by
which the Company's actual net income for such fiscal year exceeded it projected
net income for such fiscal year, if any.
Deferral
of Performance Bonuses: Notwithstanding anything else contained
herein to the contrary, Executive may elect in writing on forms provided
by the
Company to receive the entire Performance Bonus in the form of restricted
stock
if Executive makes such election prior to December 31 of the fiscal year
to
which the Performance Bonus relates.
Restricted
Stock: All shares of restricted stock awarded pursuant to this
Agreement will be granted subject to the terms and restrictions on the actual
certificate as issued at time of signing this Agreement. Executive shall
be
eligible under the plan as approved by the Board of Directors to receive
one
million (1) shares. Such shares shall vest over a 3-year period and only
upon
satisfaction of Executives performance, the shares shall be exercisable in
part
for each month of employment completed or in whole after 3 years from date
hereof.
Additional
Benefits: The Company agrees to provide the following "Additional
Benefits" to Executive:
Medical
plan coverage for Executive, his spouse and dependents, if any, at the expense
of the Company, with such coverage (or comparable coverage) to continue
following termination of employment (other than for "Cause" or without "Good
Reason" as each term is defined in this Agreement) until Executive and spouse
are eligible for Medicare; and
All
rights and benefits for which Executive is otherwise eligible under any pension
plan, profit-sharing plan, dental, disability, or insurance plan or policy
or
other plan or benefit that the Company or its Affiliates may provide for
Executive or (provided Executive is eligible to participate therein) for
employees of the Company generally, as from time to time in effect, during
the
term of this Agreement.
Stock
Options: Executive shall be eligible for stock option grants under
the Company's stock option plans as administered by the Board or the
Compensation Committee of the Board. Affirmatively, Executive shall have
the
right to purchase one million (1,000,000) shares of the $.001 par value common
stock at a purchase price of Fifty Cents ($.0.50) or the price of the initial
Registration Statement to be file with the Securities and Exchange Commission
Form SB-2 whichever is the lower. The purchase price shall be determined
based
on the lower of the two prices. The Company at its option and sole discretion
shall establish the exercise period in accordance with the Company stock
option
plan.
Perquisites: Executive
shall be entitled to four weeks paid vacation and other perquisites in
accordance with the plans, policies, programs and practices which are at
least
as favorable as those in effect with respect to other peer employees of the
Company.
Auto
Allowance: Executive shall be paid $2,000.00 per month payable on
the 1s` of
every month for the use of their auto for company related
business.
5.
Termination: This Agreement and all obligations hereunder (except the
obligations contained in Sections 4(c), 8, 9, 10 and 11 (Additional Benefits,
Confidential Information, Non-Competition, No Solicitation of Customers and
Noninterference with Executives) which shall survive any termination hereunder)
shall terminate upon the earliest to occur of any of the following:
Expiration
of Term: The expiration of the term provided for in Section 1 or the
voluntary termination by Executive or retirement from the Company in accordance
with the normal retirement policies of the Company.
Death
or
Disability of Executive: The death or disability of Executive. For
the purposes of this Agreement, disability shall mean the absence of Executive
performing Executive's duties with the Company on a full-time basis for a
period
of six months period, as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to Executive or
Executive's legal representative (such agreement as to acceptability not
to be
withheld unreasonably). If Executive shall become disabled, Executive's
employment may be terminated by written notice from the Company to
Executive.
For
Cause
or Without Good Reason: The Company may terminate Executive's
employment and all of Executive's rights to receive Base Salary and Bonuses
hereunder for Cause or upon the resignation of Executive without Good Reason.
For purposes of this Agreement, the term "Cause" shall be limited to the
willful
commission of a felony or other act of moral turpitude which directly and
demonstrably causes material, tangible harm to the Company, and "Good Reason"
shall be defined as (i) demotion of Executive from the position of Chairman
and
President without the consent of Executive; (ii) any attempt to decrease
Executive's Base Salary or Bonuses; (iii) any breach of this Agreement by
the
Company; or (iv) any requirement that Executive relocate to an office more
than
30 miles further from Executive's current home address than the Company's
current office.
Notwithstanding
the foregoing, Executive shall not be terminated for Cause pursuant to this
Section 5(c) unless and until Executive has received notice of a proposed
termination for Cause and Executive has had an opportunity to be heard before
at
least a majority of the members of the Board. Executive shall be deemed to
have
had such an opportunity if given written or telephonic notice at least 72
hours
in advance of a meeting. The initial determination that Cause or Good Reason
exists shall be made by the Board. Any dispute regarding such determination
shall be resolved in accordance with Section 20 of this Agreement.
Without
Cause or With Good Reason: Notwithstanding any other provision of this
Section 5, the Board shall have the right to terminate Executive's employment
with the Company without Cause, and Executive shall have the right to resign
with Good Reason, at any time. If the Company terminates Executive without
Cause
or Executive terminates for Good Reason, then the Company shall, within 10
days
of such termination, make an immediate lump sum payment in the amount of
(i) two
times the applicable Base Salary, net of applicable taxes, plus (ii) the
present
value of the Base Salary and Bonuses (based on the assumption that the Company
would achieve all performance targets for a 100% bonus), and the Company
shall
provide the Additional Benefits provided for under Section 4(c) for the
remainder of the term, including the full vesting of Stock Options and any
gross
up of lump sum distributions due to tax effect. The present value of the
aggregate unpaid Base Salary and Bonuses shall be determined under the then
applicable federal rates under the Internal Revenue Code. Further, if Executive
is terminated without Cause or resigns with Good Reason, all stock options
held
by Executive shall become fully vested.
6.
Business Expenses: During the term of this
Agreement, the Company shall reimburse Executive promptly for business
expenditures made and substantiated in accordance with policies, practices
and
procedures established from time to time by the Company generally with respect
to other employees and incurred in the pursuit and furtherance of the Company's
business and good will.
7.
Parachute Limitations: Notwithstanding any other provision of this
Agreement or of any other agreement, contract or understanding heretofore
or
hereafter entered into by Executive with the Company or any Affiliate, except
an
agreement, contract or understanding hereafter entered into that expressly
modifies or excludes application of this Section 7 (the "Other Agreements"),
and
notwithstanding any formal or informal plan or other arrangement heretofore
or
hereafter adopted by the Company or any Affiliate for the direct or indirect
compensation of Executive, whether or not such compensation is deferred,
is in
cash, or is in the form of an option or other benefit to or for Executive
(a
"Benefit Plan"), Executive shall not have any right to exercise an option
or to
receive any payment or other benefit under this Agreement, any Other Agreement
or any Benefit Plan if such right to exercise, payment or benefit, taking
into
account all other rights, payments, or benefits to or for Executive under
this
Agreement, all Other Agreements and all Benefit Plans, would cause any right,
payment, or benefit to Executive under this Agreement to be considered a
"parachute payment" within the meaning of Section 280G(b)(2) of the Internal
Revenue Code as then in effect (a Parachute Payment"). In the event that
the
receipt of any such right to exercise or any other payment or benefit under
this
Agreement, any Other Agreement or any Benefit Plan would cause Executive
to be
considered to have received a Parachute Payment under this Agreement, then
Executive shall have the right, in Executive's sole discretion, to designate
those rights, payments or benefits under this Agreement, any Other Agreement,
and/or any Benefit Plans, that should be reduced or eliminated so as to avoid
having the right, payment or benefit to Executive under this Agreement be
deemed
to be a Parachute Payment.
8.
Confidential
Information: Executive acknowledges that
the nature of Executive's engagement by the Company is such that Executive
shall
have access to information of a confidential and/or trade secret nature which
has great value to the Company and which constitutes a substantial basis
and
foundation upon which the business of the Company is based. Such information
includes financial, manufacturing and marketing data, techniques, processes,
formulas, developmental or experimental work, work in process, methods, trade
secrets (including, without limitation, customer lists and lists of customer
sources), or any other secret or confidential information relating to the
products, services, customers, sales or business affairs of the Company or
its
Affiliates (the "Confidential Information"). Executive shall keep all such
Confidential Information in confidence during the term of this Agreement
and at
any time thereafter and shall not disclose any of such Confidential Information
to any other person, except to the extend such disclosure is (i) required
by
applicable law, (ii) lawfully obtainable from other sources, or (iii) authorized
in writing by the Company. Upon termination of Executive's employment with
the
Company, Executive shall deliver to the Company all documents, records,
notebooks, work papers, and all similar material containing any of the foregoing
information, whether prepared by Executive, the Company or anyone
else.
9.
Non-Competition: In
order to protect the Confidential Information, Executive agrees that during
the
term of Executive's employment, and for a period of one year thereafter if
Executive employment is terminated by the Company with Cause or by Executive
without Good Reason, Executive shall not, directly or indirectly, whether
as an
owner, partner, shareholder, agent, employee, creditor or otherwise, promote,
participate or engage in any activity or other business competitive with
the
Company's business or the business of any present Affiliate of the Company
in
Orange or Los Angeles Counties if such activity or other business involves
any
use by Executive of any of the Confidential Information. The Company shall
notify Executive of any perceived violation of this Section 9, and Executive
shall have 30 days to cure such violation.
10.
Non-Solicitation of
Customers: Executive agrees that for a
period of one year after the termination of employment with the Company,
Executive will not, on behalf of any other individual, association or entity,
call on any of the customers of the Company or any Affiliate of the Company
fbr
the purpose of soliciting or inducing
any of
such customers to acquire (or providing to any of such customers) any product
or
service provided by the Company or any Affiliate of the Company, nor will
Executive in any way, directly or indirectly, as agent or otherwise, in any
other manner solicit, influence or encourage such customers to take away
or to
divert or direct their business to Executive or any other person or entity
by or
with which Executive is employed, associated, affiliated or otherwise related
if
such business is competitive with the Company.
11.
Noninterference with
Executives: In order to protect the
Confidential Information, Executive agrees that during the term hereof and
for a
period of one year thereafter, Executive will not, directly or indirectly,
induce or entice any employee of the Company or its Affiliates to leave such
employment or cause anyone else to leave such employment.
12.
Indemnity: To the
fullest extend permitted by applicable law and the bylaws of the Company,
as
from time to time in effect, the Company shall indemnify Executive and hold
Executive harmless for any acts or decisions made in good faith while performing
services for the Company, and the Company shall use its best efforts to obtain
coverage for Executive (provided the same may be obtained at reasonable cost)
under any liability insurance policy or policies now in force or hereafter
obtained during the term of this Agreement that cover other officers of the
Company having comparable or lesser status and responsibility. The Company
will
pay and, subject to any legal limitations, advance all expenses, including
reasonable attorneys' fees and costs of court approved settlements, actually
and
necessarily incurred by Executive in connection with the defense of any action,
suit or proceeding and in connection with any appeal thereon, which has been
brought against Executive by reason of Executive's service as an officer
or
agent of the Company or of any Affiliate of the Company.
13.
Severability: If any provision of this
Agreement is held to be unenforceable for any reason, it shall be adjusted
rather than voided, if possible, to achieve the intent of the parties to
the
extent possible. In any event, all other provisions of this Agreement shall
be
deemed valid and enforceable to the extent possible.
14.
Accession: This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns
and any such successor or assignee shall be deemed substituted for the Company
under the terms of this Agreement for all purposes. As used herein, "successor"
and "assignee" shall include any person, firm, corporation or other business
entity which at any time, whether by purchase, merger or otherwise, directly
or
indirectly acquires the stock of the Company or to which the Company assigns
this Agreement by operation of law or otherwise. The obligations and duties
of
Executive hereunder are personal and otherwise not assignable. Executive's
obligations and representations under this Agreement will survive the
termination of Executive's employment, regardless of the manner of such
termination.
15.
Notices: Any notice or other communication provided for in
this Agreement shall be in writing and sent if to the Company to its office
at:
0000
X.
Xxxxxxxx Xxxx, Xxxxx # 0
Xxx
Xxxxx, Xxxxxx 00000
(000)
000-0000
or
at
such other address as the Company may from time to time in writing designate,
and if to Executive at such address as Executive may from time to time in
writing designate. Each such notice or other communication shall be effective
(i) if given by telecommunication, when transmitted to the applicable number
so
specified in (or pursuant to) this Section 16 and a verification of receipt
is
received, (ii) if given by mail, three days after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when actually delivered at such
address.
16. Entire
Agreement:This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and supersedes any prior
agreements with Consumer Direct of America, undertakings, commitments and
practices relating to Executive" employment by the Company.
17.
Amendments: No amendment or modification
of the terms of this Agreement shall be valid unless made in writing and
duly
executed by both parties.
18. Waiver: No
failure on the part of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof or of any other right, nor shall
any
single or partial exercise preclude any further or other exercise of such
right
or any other right.
19. Governing
Law: This Agreement, and the legal
relations between the parties, shall be governed by and construed in accordance
with the laws of the State of Nevada without regard to conflicts of law
doctrines, and any court action arising out of this Agreement shall be brought
in any court of competent jurisdiction within the State of Nevada.
20. Arbitration: Executive
may, if he desires, submit any claim for payment under this Agreement or
any
dispute regarding the interpretation of this Agreement to arbitration. This
right to select arbitration shall be solely that of Executive, and Executive
may
decide whether or not to arbitrate in his discretion. The "right to select
arbitration" does not impose on Executive a requirement to submit a dispute
for
arbitration. Executive may, in lieu of arbitration, bring an action in
appropriate civil court. Executive retains the right to select arbitration,
even
if a civil action (including, without limitation, an action for declamatory
relief) if brought by the Company prior to the commencement of arbitration.
If
arbitration is selected by Executive after a civil action concerning Executive's
dispute has been brought by a person other than Executive, the Company and
Executive shall take such actions as are necessary or appropriate, includirg
dismissal of the civil action, so that the arbitration can be timely heard.
Once
arbitration is commenced, it may not be discontinued without the unanimous
consent of all parties to the arbitration.
Any
Claim
for arbitration may be submitted as follows: If Executive disagrees with
an
interpretation of this Agreement by the Company, or disagrees with the
calculation of his benefits under this Agreement, such claim may be filed
in
writing with an arbitrator of Executive's choice who is selected by the method
described in the next four sentences. The first step of the selection shall
consist of Executive submitting in writing a list of five potential arbitrators
to the Company. Each of the five arbitrators must be either (1) a member
of the
National Academy of Arbitrators located in the state of Executive's principal
residence or (2) a retired California Superior Court or Appellate Court judge.
Within one week after receipt of the list, the Company shall select one of
the
five arbitrators as the arbitrator of the dispute in question. If the Company
fails to select an arbitrator in a timely manner, Executive then shall designate
one of the five arbitrators as the arbitrator of the dispute in
question.
The
arbitration hearing shall be held within seven days (or as soon thereafter
as
possible) after the selection of the arbitrator. No continuance of said hearing
shall be allowed without the mutual consent of Executive and the Company.
Absence from or non-participation at the hearing by any party shall not prevent
the issuance of an award. Hearing procedures that will expedite the hearing
may
be ordered at the arbitrator's discretion, and the arbitrator may close the
hearing in his sole discretion when he decides he has heard sufficient evidence
to justify issuance of an award.
The
arbitrator's award shall be rendered as expeditiously as possible and in
no
event later than one week after the close of the hearing. In the event the
arbitrator finds that Executive is entitled to the benefits he claimed, the
arbitrator shall order the Company to pay such benefits, in the amounts and
at
such time as the arbitrator determines. The award of the arbitrator shall
be
final and binding on the parties. The Company shall thereupon pay Executive
immediately the amount that the arbitrator orders to be paid in the manner
described in the award. The award may be enforced in any appropriate court
as
soon as possible after its rendition. If any action is brought to confirm
the
award, no appeal shall be taken by any party from any decision rendered in
such
action.
If
the
arbitrator determines either that Executive is entitled to the claimed benefits
or that the claim by Executive was made in good faith, the arbitrator shall
direct the Company to pay to Executive, and the Company agrees to pay to
Executive in accordance with such order, an amount equal to Executive's expenses
in pursuing the claim, including attorneys' fees.
21. Withholding:
All compensation payable hereunder, including salary and other benefits,
shall
be subject to applicable taxes, withholding and other required, normal or
elected employee deductions.
22. Counterparts: This
Agreement and any amendment hereto may be executed in one or more counterparts.
All of such counterparts shall constitute one and the same agreement and
shall
become effective when a copy signed by each party has been delivered to the
other party.
23. Headings: Section
and other headings contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or interpretation of this
Agreement.
24. Representation
By Counsel; Interpretation: The Company and Executive each acknowledges
that each party to this Agreement has been represented by counsel in connection
with this Agreement and the matters contemplated by this Agreement. Accordingly,
any rule of law, including but not limited to Section 1654 of the California
civil Code, or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it has
no
application and is expressly waived. The provision of this Agreement shall
be
interpreted in a reasonable manner to effect the intent of the
parties.
25.
Right to Purchase Additional Securities:
First
Refusal Right: If the Company proposes to issue (a "Proposed
Issuance") Additional Securities (as defined below), the Company shall offer
such Additional Securities to Executive, and Executive shall have the right
(a
"First Refusal Right") to purchase all or any portion of his Pro Rata Share
(as
defined below) of such Additional Securities, upon the terms of the Proposed
Issuance. The Company shall give Executive written notice of the Proposed
Issuance stating the material terms thereof, including the type of Additional
Securities involved, the proposed purchase price therefore and the anticipated
closing date of such issuance (the "Company Notice"). If Executive desires
to
exercise his First Refusal Right, Executive shall, within 20 days of receipt
of
the Company Notice, deliver to the Company written notice stating the portion
of
Executive's Pro Rata Share of such Additional Securities that he is will
to
purchase (a "Response Notice"). Executive's Response Notice shall be deemed
to
constitute his irrevocable agreement to purchase the specified portion of
his
Pro Rata Share of the Additional Securities upon the terms of the Proposed
Issuance described in the Company Notice, on the later of the closing date
specified in the Company Notice or the closing date of the Proposed Issuance
if
other persons are purchasing Additional Securities. The Company shall have
90
days from the date of the Company Notice to consummate such Proposed Issuance
with respect to the Additional Securities which are not being purchased by
Executive at a price and upon terms that are not materially less favorable
to
the Company than the price and terms specified in the Company Notice, and
such
price and terms shall be made available to Executive if Executive has elected
to
purchase Additional Securities. If the Company proposes to issue Additional
Securities after such 90-day period, or at a price and upon terms, which
are
materially less favorable to the Company than those specified in the Company
Notice, it must again comply with the procedures set forth in this
section.
Further
Rights. If between the date of the Agreement and the effective time
the outstanding shares of the common stock of Shearson Home Loans have been
changed into a different number of shares or a different class, reason of
any
stock dividend, subdivision, reclassification, re-capital split, conversion,
consolidation, combination or exchange of shares or similar transaction,
appropriate adjustments to reflect any such action shall be made to the subject
agreement and the employee shall be entitled to an adjustment of shares being
held.
Termination:
The rights provided to Executive under this Section 25 shall not be
assignable by Executive and shall terminate upon the earlier of
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(i)
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the
termination of this Agreement or
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(ii)
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the
consummation of the initial public offering of the Company's Common
Stock.
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Definitions:
(i) "Additional Securities" means (x) all securities of the Company which
possess general voting power to elect members of the Board of Directors of
the
Company ("Voting Securities"), (y) all rights, options or warrants to purchase
Voting Securities or securities described in the following clause and (z)
all
other securities of any type whatsoever that are, or may become, convertible
into or exchangeable for, or that entitle the holder to purchase, Voting
Securities (such securities described in clauses (x), (y), and (z) referred
to
collectively as "Securities". "Additional Securities" does not include (A)
all
shares of stock of the Company issued and outstanding on the date hereof
(appropriately adjusted in the future to reflect any subsequent stock dividends,
stock splits, reverse stock splits or similar transactions), (B) any Securities
issued on a proportional basis to all of the holders of the Company's Common
Stock, (C) any Securities issued or issuable or reissued or re-issuable to
any
employee, consultant or independent member of the Board of the Company or
any
subsidiary of the Company pursuant to any employee benefit plan, arrangement
or
agreement approved by the Board, (D) any Securities issued or issuable in
connection with an underwritten public offering of Voting Securities, (E)
any
Securities issued or issuable in connection with the acquisition by the Company
of any business, business assets or Securities from any person, (F) any
Securities issued to any financing source for the Company or any subsidiary
of
the Company in connection with such financing or any Securities that are
issued
or issuable upon the exercise of rights, options or warrants to purchase
Securities or upon the conversion or exchange of Securities convertible into
or
exchangeable for Securities where Executive received (or was not required
to
receive) a Company Notice pursuant to this agreement. Pro Rata Share"
means the fraction (y) the numerator of which is the total number of shares
of
Voting Securities then held by Executive and (z) the denominator of which
is the
total number of shares of Voting Securities then outstanding.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date
first
above written.
Shearson
Financial Network, Inc.
/s/ Xxxxxxx
X. Xxxxxx
Xxxxxxx
X. Xxxxxx
CEO
Executive
/s/ Xxxxxx
X. Xxxxx-Xxxxxx
Xxxxxx
X.
Xxxxx-Xxxxxx
