FORM OF MANAGEMENT AGREEMENT
Exhibit
10.2
FORM
OF MANAGEMENT AGREEMENT
The
following is the form of the Management Agreement with Xxxxx Xxxxxxxx, Chief
Technology Officer, Xxxxxxxxx X. Xxxxxxxx, Chief Administrative Officer &
Senior Vice President and Xxxxxxx X. von Gnechten, Chief Financial
Officer:
AMENDED
AND RESTATED SERVICES AGREEMENT
This
Services Agreement (this “Agreement”) dated as of the 11th
day of
January, 2007 (the “Effective Date”), as amended and restated from an earlier
agreement dated the [ORIGINAL DATE OF AGREEMENT] (the “Original Date”), by and
between HouseRaising, Inc., a North Carolina corporation with offices in
Charlotte, North Carolina (“HRI,” “HouseRaising” or “Company”), and [OFFICER
NAME INSERTED], a resident of North Carolina (the “Executive”), relating to
HouseRaising, Inc.
RECITALS:
WHEREAS,
the parties hereto desire to enter into this Agreement to set forth the basis
on
which Executive will perform management services for the Company, all as set
forth more fully in this Agreement.
WHEREAS,
the Company is engaged in and seeks to expand its business in the house building
and related industry segments, and Executive has substantial experience in
managing and operating businesses as a senior executive that would be very
beneficial to the Company’s operations and future prospects;
WHEREAS,
the Company believes its progress and its prospects for future development
and
growth would be significantly enhanced if Executive was engaged for the services
of Executive to serve as the Company’s [TITLE INSERTED];
WHEREAS,
the Board of Directors of the Company (the “Board”) has authorized this
Agreement with Executive and has approved its terms and conditions, all of
which
the Board has found to be reasonable, proper, and in the best interest of the
Company;
NOW,
THEREFORE, in consideration of the premises and covenants set forth herein
and
intending to be legally bound hereby, the parties to this Agreement hereby
agree
as follows:
ARTICLE
I
MANAGEMENT
DUTIES AND COMPENSATION
1.01
(a)
Initial Terms of Management Duties. The
Company hereby engages Executive and Executive hereby accept such engagement,
on
the terms and conditions set forth in this Agreement. The Company is hereby
obtaining the services of Executive and other assistance as may be necessary.
(b)
Initial Terms of Agreement and Duties. The
Company and Executive hereby agree that for a thirty-six (36) month period
beginning on the Effective Date, the Company shall engage Executive for the
services of Executive as [TITLE INSERTED] and the Executive shall perform
services for the Company at the Company’s headquarters location. The last day of
such thirty-six (36) month period shall be the "Termination Date".
(b)
Renewal
of Term. Unless
the Company shall have given the Executive written notice at least 180 days
prior to the Termination Date, this Agreement shall renew and continue in effect
for additional one-year periods (and all provisions of this Agreement shall
continue in full force and effect), and each successive anniversary from such
original Termination Date shall thereafter be designated as the “Termination
Date” for all purposes under this Agreement, provided, however, that the Company
may, at its election at any time after the expiration of the initial term of
this Agreement, give Executive notice of termination, in which event Executive
shall continue to receive, as severance pay, [HIS/HER] base salary, if any,
and
benefits set forth in Paragraphs (d) and (f) below for 12 full months following
such notice of termination. During such 12-month severance period, the Board
may
modify Executive’s duties as described in Paragraph (c) below without triggering
the provisions of Section 2.03 below. The Company agrees that it will not
unreasonably withhold any annual renewals of this Agreement.
(c)
Duties.
Executive
is engaged for [TITLE INSERTED] services to be performed by Executive and shall
carry out the financial and strategic plans and policies as established by
the
Board of Directors and Chairman/CEO of the Company and shall report to the
Chairman and CEO. Duties and responsibilities under this Agreement shall include
but not be limited to the following: [SPECIFIC DUTIES OF OFFICER LISTED,
ILLUSTRATION PROVIDED FOR CHIEF ADMINISTRATIVE OFFICER]
|
|
(i)
|
Supporting
the operations and administration of the Chairman and CEO by advising
and
informing Chairman/CEO and Board of Directors with regard to the
administrative (including Human Resources and Accounting, as necessary)
operations of the Company and interfacing between the Chairman/CEO,
Board
and the staff of the Company;
|
|
|
(ii)
|
Supporting
the design, marketing, promotion, delivery, and quality of company
programs, products and services;
|
|
|
(iii)
|
Recommending
a yearly budget for areas of responsibility for CFO, Chairman/CEO
and
Board approval and prudently managing the Company’s resources within those
budgetary guidelines according to current laws and regulations;
|
|
|
(iv)
|
Effectively
managing the human resources of the organization according to authorized
personnel policies and procedures that fully conform to current laws
and
regulations; and
|
|
|
(v)
|
Assuring
that the Company and its mission programs, products, and services
are
consistently presented in strong, positive image to relevant stakeholders.
|
As
[TITLE
INSERTED] of the Company, Executive shall be entitled to exercise all rights
and
power and shall have all the privileges and authorities commensurate with
[HIS/HER] offices, including without limitation:
|
|
(i)
|
The
full authority for the administrative and accounting operations,
including
proper reporting to the Board of Directors and appropriate state
and
federal agencies;
|
|
|
(ii)
|
General
decision-making authority with respect to the day-to-day administrative
and human resource operations of the business of the Company;
|
|
|
(iii)
|
The
engagement, retention, and termination of employees and independent
contractors of the Company subject only to the supervision of the
Chairman
and Chief Executive Officer, the setting/guidance of the compensation
and
other material terms of engagement of employees and independent
contractors consistent with company and Board policies and the
establishment of company work rules; and
|
|
|
(iv)
|
The
initiation, development, and implementation of new business activities,
subject to the supervision of the Chairman/CEO. Executive shall render
her
services thereunder in the headquarters city subject to such reasonable
travel as may be required to perform her duties hereunder.
|
(d)
Compensation
and Expenses. The
Company will compensate Executive at an annual compensation of [ANNUAL
COMPENSATION INSERTED], to be paid [CASH PORTION INSERTED] in cash compensation
and [STOCK PORTION INSERTED IF APPLICABLE] in S-8 Stock of the Company for
the
initial 12 month period of this agreement beginning February 1, 2007. Conversion
to all cash payments will take place at the same time as other conversions
for
Officers of the Company.
Commencing
on the first anniversary of this Amended and Restated Services Agreement with
Executive (February 1, 2008), and for each renewal term thereafter, Executive
shall (based on adequate performance) receive annual increases as set forth
by
the Chairman and Chief Executive Officer and approved by the Compensation
Committee of the Board of Directors.
Nothing
herein shall be deemed to restrict the right of the Board to increase
Executive’s annual or monthly compensation, bonuses, and other compensation or
grant stock options at any time in its discretion.
(e)
Bonuses.
Executive
shall be entitled to such bonuses for performance as are described in Exhibit
A
attached hereto.
2
(f)
Other
Compensation. The
Company shall also provide to Executive during the term of [HIS/HER] Agreement
hereunder:
|
|
(i)
|
All
so-called “fringe benefits” including, but not limited to, participation
in pension plans, profit-sharing plans, hospitalization insurance,
medical
insurance, dental insurance, disability insurance, life insurance,
and the
like that are granted to or provided for eligible employees or contractors
of the Company, or that may be granted to or provided for during
the term
of the Executive’s engagement under this Agreement; and upon termination
of Executive’s services with the Company, the Executive may, at [HIS/HER]
option and at [HIS/HER] expense, continue the Executive’s
hospitalization/medical/dental/disability and life insurance policy
without interruption until [HIS/HER] death, if permitted by the terms
of
such group policies.
|
|
|
(ii)
|
Executive
will be compensated for the equivalent of four weeks’ paid time off per
year.
|
(g)
Initial
Employee Stock Options. In
consideration for [HIS/HER] services hereunder, the Company hereby grants to
Executive an option to acquire shares of the Company’s Common Stock as described
in Exhibit B. In addition to the stock options described in Exhibit B, Executive
will be granted an option for [ONE-TIME GRANT AMOUNT INSERTED] shares at a
price
of fifty-cents ($0.50) per share, exercisable at any time during the ensuing
ten
years from that date, which will replace the same number of options that had
previously been earned under the original agreement. These options are in
addition to all other options granted and mentioned in Exhibit B.
(h)
Expense
Reimbursement. Executive
shall be paid [QUARTERLY ALLOWANCE AS APPLICABLE] each quarter for all other
expenses incurred by Executive on the Company’s behalf. This amount will be
subject to increase upon each anniversary date. Such reimbursement will be
in
the form of S-8 shares until such time as the company pays reimbursements for
the Chairman/CEO in cash. It is understood that the Company will pay directly
reasonable travel (air-fare only) expenses between the Company headquarters
and
other out-of-state office locations provided that reasonable efforts are made
to
manage the costs associated with such travel.
ARTICLE
II
RIGHTS
ON TERMINATION OF AGREEMENT
2.01
Right
to Terminate Agreement. At
any
time Executive may, at their option, terminate [HIS/HER] Agreement upon not
less
than 30 days’ written notice to the Chairman and CEO or Board of Directors of
the Company. In the event of the termination of this Agreement by Executive,
Executive shall be entitled to:
|
(i)
|
The
portion of monthly compensation, accrued bonus and expenses earned
by
Executive prior to the date of termination, computed pro rata up
to and
including the date of termination and
|
|
(ii)
|
Maintain
ownership of any unexercised stock options that are vested as of
the date
of termination until such date that they would otherwise expire.
Other
than the foregoing, Executive shall be entitled to no further compensation
of any kind after the date of termination.
|
2.02
Disability.
If,
because of mental or physical disability, Executive shall be incapable for
a
period of six consecutive months (the “Disability Period”) of performing
[HIS/HER] obligations and agreements hereunder (hereinafter referred to as
a
“Disability”) during which period the provision of this Agreement will continue
to apply in full force and effect, then, at the election of the Company
expressed to Executive in writing, this Agreement shall terminate at the end
of
such Disability Period, except that Executive shall receive 75% of monthly
compensation then in effect for one year from the date of termination, together
with the bonuses described on Exhibit A hereto. The Company may at its option
alternatively purchase an insurance policy that will provide the same disability
benefit to Executive. Additionally, any stock options previously granted but
not
vested shall become vested upon termination for Disability by the Company.
The
determination of whether Executive has suffered a Disability shall be made
by
three licensed medical doctors: one chosen by the Company, one chosen by
Executive, and one chosen by the two doctors so chosen.
2.03
Rights
Upon Termination of Agreement Without Cause Prior to the Termination:
The
Company may terminate Executive’s services without Cause (as defined below) by
delivering written notice of such termination to Executive. In addition, any:
|
(i)
|
Material
change of Executive’s responsibilities or authority by the Chairman/CEO or
Board without Executive’s concurrence which is not cured within 30 days
after notice by Executive,
|
3
|
(ii)
|
Material
breach by the Company of this Agreement which continues for 30 days
after
notice by Executive, or
|
|
|
(iii)
|
A
change in control of the Company that is required to be reported
by the
Company on Form 8-K,
|
shall
be
deemed termination by the Company without Cause. In the event of termination
pursuant to clauses (i), (ii), or (iii) of the preceding sentence, Executive
shall be entitled to give notice of termination, which notice shall have the
same effect as a notice delivered by the Company, or
If,
prior
to the Termination Date, the Company terminates Executive’s Agreement for any
reason other than Cause or Disability, then the Company shall:
|
|
(i)
|
Continue
to pay Executive (in the same manner as prior to such termination)
after
the date of such termination the compensation provided under Section
1.01
above for a period of twelve (12) months as if Executive had been
engaged
hereunder during such period;
|
|
|
(ii)
|
Continue
to pay all bonuses earned for twelve (12) month period as if Executive
had
been engaged hereunder during such period, provided the mutually
agreed
upon targets are met in such period;
|
|
|
(iii)
|
Provide
Executive reimbursement for continued coverage for a twelve (12)
month
period under any employee benefit plan (as such term is defined in
Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended)
then maintained by Executive or any successor plan thereof.
Notwithstanding 2.03(iii) above, the Company hereby agrees to continue
to
reimburse Executive for hospitalization/medical/dental/disability
and life
insurance policy in effect at the time of termination through the
full
period of this Agreement, to continue to reimburse Executive for
any
premium to maintain the policy for Executive through the full period
of
this Agreement; and
|
|
|
(iv)
|
All
stock options will immediately vest, and the stock granted to Executive
upon [HIS/HER] exercise of such options shall be unrestricted except
for
any governmental restrictions and registered if the Company is a
public
company at the time of termination or subsequently becomes public.
|
2.04
Right
Upon Termination of Agreement for Cause
The
Company shall have the right at any time, by giving written notice to Executive
to terminate Executive’s Agreement for Cause. Cause shall be deemed to have
occurred if Executive is convicted of a felony or a crime involving fraud,
gross
negligence, or significant mismanagement of the business. Upon such termination
for Cause, Executive shall be paid [HIS/HER] current monthly compensation and
any bonuses earned up to that point, and Executive may exercise any unexercised
options or warrants that are vested up to their normal termination date.
Executive shall forfeit all unexercised options not then vested.
2.05
Beneficiaries
of Payments
If
Executive shall die before any event of termination, the Company will continue
to make payments for a 12-month period (as stated in section 2.03) to such
beneficiary or beneficiaries as Executive may designate from time to time by
notice in writing filed with the Company, or if Executive shall fail or fail
effectively to designate a beneficiary, or if no beneficiary shall survive
the
date when the last payment is to be made, any remaining payments shall be made
to the Executive’s estate as agreed upon by the trustee of Executive’s
estate.
ARTICLE
III
PROTECTIONS/CONFIDENTIALITY
3.01
Covenants
Regarding Protections:
Executive
hereby agrees and covenants to the following:
(a)
Solicitation
of Customers and Registered Primary Vendors:
During
the term of this Agreement and for a period of one (1) year following the
termination of this Agreement by either party (other than a termination of
this
Agreement by the Company’s failure to renew it pursuant to Section 1.01(b)
above), Executive hereby agrees not to solicit or contact in any manner that
could be reasonably construed as a solicitation, any past or current customer
or
registered primary vendor of the Company for purposes of encouraging such
customer to refrain from purchasing products or services from the Company or
for
purposes of encouraging such vendor to refrain from providing services or
selling products to the Company. Notwithstanding the above, if Executive should
leave the Company and join a competitive company, it is recognized by the
parties that the industry utilizes a variety of marketing and sales techniques
such as direct mail, telemarketing, advertising, etc., and the customer might
be
contacted by the Company that Executive joins as a matter of course, and in
this
event this practice would not be considered a violation of this Agreement.
4
(b)
Solicitation
of Executives:
During
the term of this Agreement and for a period of one (1) year following the
termination of this Agreement by either party (other than a termination of
this
Agreement by the Company’s failure to renew it pursuant to Section 1.01(b)
above), Executive hereby agrees not to employ, either directly or indirectly
through any entity in which Executive are engaged, and agrees not to solicit,
or
contact in any manner that could reasonably be construed as a solicitation,
any
officer or director of the Company for purposes of encouraging such person
to
leave or terminate [HIS/HER] Agreement with the Company.
3.02
Confidentiality;
Competitive or Personal Disparagement:
Executive
and the Company hereby agree that neither will, during the term of Executive’s
Agreement or at any time following the termination hereof for any reason, do
or
cause to have done any of the following:
|
|
(i)
|
Without
the prior written consent of the other party, use for its own purposes
or
disclosure to any person or other entity any confidential and/or
proprietary information of the Company or Executive; and
|
|
|
(ii)
|
Each
party agrees that it will not disparage the other party.
|
3.03
Enforcement:
Executive
and the Company recognize that the provisions of this Agreement are vitally
important to the continuing welfare of the Company and Executive and that money
damages constitute an inadequate remedy for any violation thereof. Accordingly,
in the event of any such violation by Executive or the Company, the Company
or
Executive, in addition to any other remedies it may have, shall have the right
to institute and maintain a proceeding to compel specific performance thereof
or
to issue an injunction restraining any action by Executive or the Company in
violation of the Agreement.
ARTICLE
IV
4.01
Indemnifications:
The
parties agree that Executive shall be indemnified by the Company against any
liability asserted against Executive (and expenses, including without
limitation, reasonable attorney’s fees, court costs, and other legal expenses
incurred in connection therewith) by reason of [HIS/HER] position with the
Company or any subsidiary to the full extent a North Carolina corporation may
indemnify an officer or director and company under the North Carolina General
Corporate Law.
4.02
No
Obligation to Mitigate Damages:
In
the
event of a termination of Agreement upon a change in control, Executive shall
not be required to mitigate damages by seeking another Agreement.
4.03
Arbitration
and Remedies:
(a)
All
disputes, differences, or questions between the parties concerning the
construction, interpretation, and effect of the Agreement, or the rights,
obligations, and liabilities of the parties, and which have as their sole remedy
monetary damages, will be settled by arbitration in the City of Charlotte,
North
Carolina, or such other place as the parties may mutually agree. In the case
of
a dispute, difference, or question, one party shall appoint its arbitrator
and
shall notify the other party in writing (the “Arbitration Notice”) of the
appointment and the matter to be determined. If the party receiving the
arbitration notice fails to appoint an arbitrator and notify the first party
of
such appointment for 15 days after receipt of such notice, the decision of
the
arbitrator appointed by the first of the parties shall be final and binding
on
both of the parties hereto. If two arbitrators are appointed, they shall meet
within 30 days after appointment of the second arbitrator. If they do not agree
as to their decision, they shall choose a third arbitrator, failing which,
third
arbitrator shall be selected in accordance with the rules of the American
Arbitration Association. The arbitration shall be held as promptly as possible
at such time and place in the designated city as the arbitrators may determine.
The decision of the arbitrators so appointed, or a majority of them, will be
final and binding upon the parties hereto. Judgment upon the award may be
entered in any court having jurisdiction, or application may be made to such
court for judicial acceptance of the award and an order to enforce, as the
case
may be. If the arbitrator appointed refuses to act, is incapable of acting,
or
dies, a substitute for him shall be appointed in the manner provided above.
5
(b)
Each
of
the parties to the Agreement will be entitled to enforce its rights under the
Agreement specifically, to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not
be an
adequate remedy for any breach of the provisions of the Agreement and that
any
party may, in its sole discretion, apply for specific performance and/or
injunctive relief in either a federal or state court to enforce or prevent
any
violations of the provisions of this Agreement.
4.04
Legal
Cost and Indemnification:
The
Company shall pay Executive all legal fees and expenses incurred by [HIS/HER]
as
a result of [HIS/HER] termination without Cause or Disability, including but
not
limited to, all such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce any right
or
benefit provided in this Agreement through legal process or arbitration, if
Executive shall be wholly successful on the merits, such amounts not to exceed
any court-directed maximum.
4.05
Notices:
(a)
Any
notice to be given concerning this Agreement shall be given in writing and
either (i) sent by certified or registered mail, return receipt requested,
postage prepaid; or (ii) hand-delivered to the recipient personally. In the
case
of notice sent by mail, the date of the giving of the notice shall be deemed
to
be (i) the date of the postmark of the executed return receipt or (ii) the
date
of actual receipt if not postmarked by the United States Postal Service. In
the
case of notice being hand-delivered, a written dated receipt shall be given
therefore. Hand-delivery of any notice to the Company shall be delivered to
the
Company’s chief financial officer personally.
(b)
Notice
shall be sent as follows:
|
If
to Executive:
|
[NAME
OF EXECUTIVE INSERTED]
|
|
[ADDRESS
OF EXECUTIVE INSERTED]
|
|
|
If
to the Company:
|
|
|
0000
X. Xxxxxxxxxxxx Xxxx.
|
|
|
|
Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000
|
(c)
By
giving
notice to all other parties, any party may, from time to time, designate a
different address to which notice by mail to such party shall be sent.
4.06
Successors
and Assigns; Survival in Case of Merger:
(a)
This
Agreement is intended to bind and inure to the benefit of, and be enforceable
by, Executive and the Company and their respective successors and assigns.
(b)
Without
limiting the effect of the foregoing, this Agreement and all of its terms shall
survive, and be enforceable by Executive, notwithstanding any merger,
consolidation, combination, or reorganization of the Company with or into any
other entity or person (“Surviving Entity”), including but not limited to any
other corporation, partnership, or other similar organization, whether or not
the Company is the Surviving Entity of such merger, consolidation, combination,
or reorganization. The Surviving Entity shall be bound by this Agreement to
the
same extent as if such Surviving Entity had entered into the Agreement with
Executive on the Effective Date.
(c)
As
a
condition of any merger, consolidation, combination, or reorganization of the
Company as discussed in Section 4.06(b) above, the Company agrees to include,
as
a condition of consummation of such merger, consolidation, combination, or
reorganization, an undertaking by the Surviving Entity, pursuant to which the
Surviving Entity shall agree in writing to be bound by this Agreement.
4.07
Amendment;
Waiver:
No
amendment or other modification of this Agreement nor any waiver of any term
of
this Agreement shall be valid unless it is in writing and signed by the party
against whom enforcement of the amendment, modification, or waiver is sought.
No
waiver by any party of the breach of any term contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be or construed as a further or continuing waiver of any such breach of
any
other term of this Agreement.
4.08
Further
Assurances:
Each
party hereto agrees to perform any further acts and to execute and deliver
any
further documents mutually agreed to in writing that may be reasonably necessary
to carry out the provisions of this Agreement.
6
4.09
Severability:
In
the
event that any of the provisions, or portions thereof, of this Agreement are
held to be unenforceable or invalid by any court of competent jurisdiction,
the
validity and enforceability of the remaining provisions, or portions thereof,
shall not be affected thereby.
4.10
Construction:
Whenever
used herein, the singular number shall include the plural, and the plural number
shall include the singular.
4.11
Gender:
Any
references hereto to the masculine gender, or to the masculine form of any
noun,
adjective, or possessive, shall be construed to include the feminine or neuter
gender and form, and vice versa.
4.12
Headings
The
headings contained in this Agreement are for purposes of reference only and
shall not limit or otherwise affect the meaning of any of the provisions
contained hereof.
4.13
Multiple
Counterparts:
This
agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and
the
same instrument.
4.14
Governing
Law:
THIS
AGREEMENT HAS BEEN EXECUTED IN AND SHALL BE COVERED BY THE LAWS OF THE STATE
OF
NORTH CAROLINA AND THE OBLIGATIONS OF THE PARTIES HERETO SHALL BE PERFORMABLE
IN
CHARLOTTE, NORTH CAROLINA.
4.15
Inurement:
Subject
to the restrictions against transfer or assignment as herein contained, the
provisions of the Agreement shall inure to the benefit of, and shall be binding
on, the assigns, successors in interest, personal representatives, estates,
heirs, and legatees of each of the parties thereto.
4.16
Waiver:
No
waiver
of any provision or condition of this Agreement shall be valid unless executed
in writing and signed by the party to be bound thereby and then only to the
extent specified in such waiver. No waiver of any provision or condition of
this
Agreement shall be construed as a waiver of any other provision or condition
of
this Agreement and no present waivers of any provision or condition of this
Agreement shall be construed as a future waiver of such provision or condition.
4.17
Entire
Agreement:
This
Agreement contains the entire understanding between the parties hereto
concerning the subject matter contained herein.
IN
WITNESS WHEREOF, the parties to the Agreement have set their respective hands
hereto as of the date first written above.
|
|
|
|
|
|
EXECUTIVE
|
|
|
|
|
|
|
By:
|
||
|
|
Name:
[NAME OF EXECUTIVE & SIGNATURE]
|
|
|
|
|
|
|
|
|
|
|
|
COMPANY
|
|
|
|
|
|
|
By:
|
||
|
|
Name:
Xxxxxxx X. Xxxxxxxx
|
|
|
|
Title :
Chairman and CEO
|
|
7
EXHIBIT
A
BONUSES
|
·
|
Period
of Contract and Renewals:
|
Executive
will be eligible for a bonus of up to 75% of the annual compensation under
this
services agreement; payable quarterly based upon the completion of Company
objectives and performance criteria to be mutually agreed upon by Executive
and
the Chairman/CEO and Board of Directors at the beginning of each year.
|
·
|
Note:
|
Regardless
of any other objectives established, if during the first year of this Amended
and Restated Services Agreement the Company reaches a market capitalization
of
$50 Million or more, then the first year’s objectives shall be deemed to have
been met. If in the second year of operation a market capitalization of $75
Million or more is achieved, then the second year’s objectives shall be deemed
to have been met, and if, in the third year of operation, a market
capitalization of $110 Million or more is achieved, then the third year’s
objectives shall be deemed to have been met.
8
EXHIBIT
B
STOCK
OPTIONS
Executive
are granted, upon execution of this Agreement, an option for [NUMBER OF SHARES
INSERTED] shares at a price of fifty cents ($0.50) per share exercisable at
any
time during the ensuing ten years. The stock option shall vest over a three-year
period, 33.4% of the balance vesting upon the first anniversary date of this
agreement, 33.3% of the balance vesting at the end of the second anniversary
date of this agreement, and the remainder vesting at the end of the third
anniversary date of this agreement. Notwithstanding the above, all of the
remaining option will vest upon the Company reaching a market capitalization
of
$75 Million or more.
Additionally,
Executive has the right at any time to exercise all of the option or any portion
of the total option, in which event Executive will take ownership of such stock
but the Company will issue stock certificates to Executive according to the
vesting schedule above and affix an appropriate restrictive legend referencing
this Agreement.
In
the
event Executive elects to exercise [HIS/HER] rights in the preceding paragraph
and if Executive requests ratable issuance, Company agrees to issue shares
ratably at 1/36 th
per
month
starting at the beginning of the first year. At any time the Company reaches
a
valuation of $75 Million or more or there is a change in control requiring
the
filing of a Current Report on Form 8-K, or the sale of the Company is
consummated, then the Company will issue all shares upon such events.
There
will be no buy-back rights in such shares and the grant of any option does
not
imply any right to continued Agreement except what is provided herein.
The
parties agree that the said option will be issued in the name of [EXECUTIVE
NAME
INSERTED], or, as desired by Executive or their successors, the [EXECUTIVE
NAME]
Family Limited Partnership as an immediate pass-through from [EXECUTIVE NAME],
the Executive, to the [EXECUTIVE NAME] Family Limited Partnership.
9
