EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (THIS "AGREEMENT") IS MADE THIS DAY OF NOVEMBER,
17 day 1999 by and among Classics International Entertainment, Inc., a
Delaware corporation ("Classics"), IBP, Inc., a Nevada corporation (the
"Company"), and Xxxxxxx Xxxxxx ("Executive").
WHEREAS, Classics, the Company, Executive and other parties named
therein have entered into a Side Agreement (the "Side Agreement") dated as of
the date hereof, pursuant to which, in pertinent part, Classics will acquire all
of the issued and outstanding capital stock of the Company through a reverse
subsidiary merger of Classics Acquisition Subsidiary, Inc., a Delaware
corporation ("CAS"), with and into the Company;
WHEREAS, as a condition to closing the transactions contemplated by the
Side Agreement. Classics wishes to employ Executive and Executive desires to be
employed by Classics, as Chief Information Officer of Classics, upon the terms
and conditions set forth herein;
WHEREAS, Classics is engaged in the business of developing, marketing
and selling software, firmware and hardware products and other information
technology products and services (the "Business").
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and promises in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Classics and Executive agree as follows:
1. EMPLOYMENT. Classics agrees to employ Executive and Executive agrees to
be employed by Classics upon the terms and conditions of this Agreement.
2. TERM OF EMPLOYMENT. The term of Executive's employment under this
Agreement (the "Employment Term") will commence on the date of this Agreement
and, unless earlier terminated in accordance with Section 12 below, will
continue for two years, ending on the second anniversary of the date of this
Agreement (the "Initial Term"). At the end of the Initial Term, the Employment
Term will automatically be extended for successive one year periods (each an
"Extended Term") unless either party elects not to renew this Agreement by
giving written notice of such election at least sixty (60) days prior to the
scheduled expiration of the Initial Term or then-current Extended Term, as
applicable.
3. POSITION AND RESPONSIBILITIES. Executive will be employed as "Chief
Information Officer" of Classics and will perform the duties of Chief
Information Officer as described in Classics' Bylaws and such other executive
duties for Classics and/or its subsidiaries as Classics' Board of Directors may
reasonably prescribe from time to time.
4. COMMITMENT. During the Employment Term, Executive shall devote
substantially all of his business time, attention, skill, and efforts to
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the faithful performance of his duties herein. Nothing herein shall preclude
Executive from making passive investments which do not interfere with
Executive's responsibilities to Classics and its subsidiaries. In addition, with
the prior written approval of Classics' Board of Directors, Executive may engage
in more active investments or business ventures so long as such investments and
ventures do not conflict or interfere with Executive's obligations to Classics
and its subsidiaries as provided in this Agreement.
5. COMPENSATION. The following shall constitute Executive's "Compensation"
hereunder:
(A) SIGN-ON BONUS. Classics will pay Executive a one-time cash
payment of $20,000 AS A SIGN-ON BONUS (THE "SIGN-ON BONUS") upon
commencement of the Initial Term.
(B) BASE SALARY. During the Employment Term, Classics will pay
Executive an INITIAL BASE SALARY (THE "BASE SALARY") of $150,000 per
year payable on a bi-monthly basis and otherwise in accordance with
Classics then-current executive salary payment practice. Such Base
Salary may be reviewed during the Employment Period at the sole
discretion of Classics' Board of Directors, and shall not be decreased
without the prior written consent of Executive.
(C) INCENTIVE COMPENSATION. Executive will be eligible for,
but is not guaranteed TO RECEIVE, ADDITIONAL COMPENSATION ("INCENTIVE
COMPENSATION") based on performance milestones in accordance with
mutually agreeable guidelines detailed in Schedule I attached hereto.
(D) FRINGE BENEFITS. Executive will be entitled to participate
in Classics' group life and medical insurance plans, accidental/death
and dismemberment, dental, profit-sharing, short-term and long-term
disability and similar plans, and other "fringe benefits"
(COLLECTIVELY, "FRINGE BENEFITS"), comparable to those made available
by Classics to its other senior executive employees, in accordance with
the terms of such plans. Classics will pay for the cost of Executive's
COBRA package, or comparable package, for health care benefits for
Executive and Executive's spouse and dependents until such time as
Executive elects to participate in Classics corresponding benefit
plans, but in no event later than the first anniversary date of this
Agreement Additionally, key man life insurance shall be provided by
Classics, at its sole cost and expense, in the amount of $2,500,000
with the beneficiary of surviving family members in the amount of
$700,000.
(E) WITHHOLDING. All compensation payable to Executive under
this Agreement is stated in gross amount and to the extent required by
law will be subject to all applicable withholding taxes, other normal
payroll deductions, and any other amounts required by law to be
withheld.
(F) EXPENSES. Classics, in accordance with its then-current
policies and past practices, will promptly pay or reimburse Executive
for all expenses (including travel and entertainment expenses)
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reasonably incurred by Executive during the Employment Term in
connection with the performance of Executive's duties under this
Agreement, provided that Executive must provide to Classics
documentation or evidence of expenses for which Executive seeks
reimbursement, in accordance with Classics then-current reimbursement
policy as determined by Classics' Board of Directors.
(G) STOCK OPTIONS. Executive shall be awarded Stock Options (the
"Options") with values, performance criteria and vesting periods set
forth in Schedule II attached hereto.
6. VACATION AND HOLIDAYS. During the Employment Term, Executive will be
entitled to receive paid vacation and paid holidays in accordance with
then-current Classics policy, but in no event less than three (3) weeks per
contract year.
7. INTELLECTUAL PROPERTY RIGHTS.
(a) Executive agrees that Classics will be the sole owner of
any and all of Executive's "Discoveries" and "Work Product" made during
the Employment Term, whether pursuant to this Agreement or otherwise.
For purposes of this Section 7, "Discoveries" means all inventions,
discoveries, improvements, and copyrightable works (including, without
limitation, any information relating to the software products, source
code, know-how, processes, designs, algorithms, computer programs and
routines, formulae, techniques, developments or experimental work,
work-in-progress, or business trade secrets of Classics or its
subsidiaries) made or conceived or reduced to practice by Executive,
whether or not potentially patentable or copyrightable in the United
States or elsewhere. For purposes of this Agreement, "Work Product"
means any and all work product relating to Discoveries.
(b) Executive shall promptly disclose to Classics all
Discoveries and Work Product. All such disclosures must include
complete and accurate copies of all source code, object code or
machine-readable copies, documentation, work notes, flow-charts,
diagrams, test data, reports, samples, and other tangible evidence or
results (collectively, "Tangible Embodiments") and of such Discoveries
or World Product. All Tangible Embodiments of any Discoveries or Work
Product will be deemed to have been assigned to Classics.
(c) Executive hereby assigns and agrees to assign to Classics
all of his interest in any country in any and all Discoveries and Work
Product, whether such interest arises under patent law, copyright law,
trade-secret law, semiconductor chip protection law, or otherwise.
Without limiting the generality of the preceding sentence, Executive
hereby authorizes Classics to make any desired changes to any part of
any such Discovery or Work Product, to combine it with other materials
in any manner desired, and to withhold Executive's identity in
connection with any distribution or use thereof alone or in combination
with other materials. This assignment and assignment obligation applies
to all Discoveries and Work Product arising during Executive's
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employment with Classics (or its predecessors), whether pursuant to
this Agreement or otherwise.
(d) At the, request of Classics, Executive shall promptly and
without additional compensation execute any and all patent
applications, copyright registration applications, waivers of moral
rights, assignments, or other instruments that Classics deems necessary
or appropriate to apply for or obtain Letters Patent of the United
States or any foreign country, copyright registrations or otherwise to
protect Classics' interest in such Discovery and Work Product, the
expenses for which will be borne by Classics. Executive hereby
irrevocably designates and appoints Classics and its duly authorized
officers and agents as his agents and attorneys-in-fact to, if Classics
is unable for any reason to secure Executive's signature to any lawful
and necessary document required or appropriate to apply for or execute
any patent application, copyright registration application, waiver of
moral rights, or other similar document with respect to any Discovery
and Work Product (including, without limitation, renewals, extensions,
continuations, divisions, or continuations in part), (i) act for and in
his behalf, (ii) execute and file any such document and (iii) do all
other lawfully permitted acts to further the prosecution of the same
legal force and effect as if executed, by him; this designation and
appointment constitutes an irrevocable power of attorney coupled with
an interest:
(e) To the extent that any Discovery or Work Product
constitutes copyrightable or similar subject matter that is eligible to
be treated as a "work made for hire" or as having similar status in the
United States or elsewhere, it will be so deemed. This provision does
not alter or limit Executives other obligations to assign intellectual
property rights under this Agreement.
(f) The obligations of Executive set forth in this Section 7
(including, without limitation, the assignment obligations) will
continue beyond the termination of Executive's employment with respect
to Discoveries and Work Product conceived or made by Executive alone or
in concert with others during Executive's employment with Classics,
whether pursuant to this Agreement or otherwise. Those obligations will
be binding upon Executive, his assignees permitted under this
Agreement, executors, administrators, and other representatives.
(g) Notwithstanding anything in this Agreement to the
contrary, this Section 7 DOES NOT APPLY to any invention of Executive
for which no equipment, supplies, facility, or Proprietary Information
(as defined below) of Classics was used and that was developed entirely
on Executive's own time, unless (i) the invention relates to (A) the
Business or (B) Classics' actual or demonstrably anticipated research
or development, or (ii) the invention results from any work performed
by Executive for or on behalf of Classics or its subsidiaries.
8. EXPOSURE TO PROPRIETARY INFORMATION.
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(a) As used in this Agreement, "Proprietary Information" means
all information of a business or technical nature that relates to the
Business, including, without limitation all information about Classics'
and its subsidiaries' software products whether currently released or
in development, all inventions, discoveries, improvements,
copyrightable work, source code, know-how, processes, designs,
algorithms, computer programs and routines, formulae and techniques,
and any information regarding the business of any customer or supplier
of Classics or its subsidiaries or any other information that Classics
or any subsidiary of Classics is required to keep confidential.
Notwithstanding the preceding sentence, the term "Proprietary
Information" does not include information that is or becomes publicly
available through no fault of Executive.
(b) In recognition of the special nature of his employment
under this Agreement, including his special access to the Proprietary
Information, and in consideration of his employment pursuant to this
Agreement, Executive agrees to the covenants and restrictions set forth
in Section 10.
9. USE OF PROPRIETARY INFORMATION. Executive acknowledges that the
Proprietary Information constitutes a protectible business interest of Classics
and its subsidiaries, and covenants and agrees that during the term of his
employment, whether under this Agreement, or otherwise, and alter the
termination of such employment, he will not, directly or indirectly, disclose,
furnish, make available or utilize any of the Proprietary Information, other
than in the proper performance of his duties for Classics. Executive's
obligations under this Section 9 with respect to particular Proprietary
information will survive expiration or termination of this Agreement and
Executive's employment with Classics, and will terminate only at such time (if
any) as the Proprietary Information in question becomes generally known to the
public other than through a breach of Executive's obligations under this
Agreement.
10. RETURN OF COMPANY MATERIALS UPON TERMINATION. Executive
acknowledges that all records, documents, and Tangible Embodiments containing or
of Proprietary Information prepared by Executive or coming into his possession
by virtue of his employment by Classics are and will remain the property of
Classics; upon termination of his employment with Classics, Executive shall, as
soon as reasonably practicable, return to Classics all such items in his
possession and all copies of such items.
11. EQUITABLE REMEDIES.
(a) Executive acknowledges and agrees that the agreements and
covenants set forth in Sections 7, 8, 9, and 10 are reasonable and
necessary for the protection of Classics' business interests, that
irreparable injury will result to Classics if Executive breaches any of
the terms of said covenants, and that in the event of Executive's
actual or threatened breach of any such covenants, Classics will have
no adequate remedy at law. Executive accordingly agrees that, in the
event of any actual or threatened breach by him of any of said
covenants, Classics will be entitled to immediate injunctive and other
equitable relief, without bond, and without the necessity of showing
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actual monetary damages. Nothing in this Section 11 will be construed
a prohibiting Classics from pursuing any other remedies available to
it for such breach or threatened breach, including the recovery of any
damages that it is able to prove.
(b) Each of the covenants in Sections 7, 8, 9, and 10 will be
construed as independent of any other covenants or other provisions of
his Agreement.
(c) In the event of any judicial determination that any of the
covenants in Sections 7, 8, 9, and 10 are not fully enforceable, it is
the intention and desire of the parties that the court treat said
covenants as having been modified to the extent deemed necessary by the
court to render them reasonable and enforceable, and that the court
enforce them to such extent.
12. TERMINATION.
(a) If there has been a material breach of this Agreement by
Executive, Classics may terminate the Employment Term upon thirty days'
prior written notice to Executive issued upon approval of Classics'
Board of Directors which approval was obtained prior to issuance of
such notice. Executive shall have if the right to cure any such breach
within such thirty-day period. Any uncured material breach shall be
considered "cause" hereunder. Upon expiration of such no notice period,
the Employment Term will immediately end and Executive will not be
entitled to receive any further compensation (whether in the form of
Base Salary, Incentive Compensation, Fringe Benefits or otherwise)
other than accrued but unpaid Base Salary and any vested Options.
Without limiting the generality of the preceding sentence, any breach
by Executive of any of his obligations under Sections 7, 8, 9, and 10
will be deemed a material breach of this Agreement that is incapable of
being cured. Notwithstanding the foregoing, any of the following events
will also be deemed a material breach of this Agreement that, except in
the case of 12(a)(i) and 12(a(ii), is incapable of being cured:
(i) Executive's continued and deliberate neglect of,
willful misconduct in connection with the performance
of or refusal to perform his duties in accordance
with, Section 3 of his Agreement;
(ii) Executive's failure to devote his full business
time to Classics' business in accordance with Section
4 of this Agreement;
(iii) willful misconduct on the part of Executive
that causes or is likely to cause a material
financial injury to Classics, including, without
limitation, Executive's embezzlement of Classics'
funds or theft or misappropriation of Classics' or
any other party's property; or
(iv) Executive's conviction of a felony class crime.
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The thirty day notice requirement of this Section 12(a) applies to both
curable and incurable breaches.
(b) The Employment Term will terminate upon the death or
disability of Executive. Disability of Executive will be deemed to have
occurred whenever Executive has suffered physical or mental illness,
injury, or infirmity that prevents Executive from fulfilling his duties
under this Agreement for 120 consecutive days and Classics determines
in good faith that such illness or other disability is likely to
continue for at least the next following 30 days. In the case of death
or disability, Executive will be entitled to receive accrued but unpaid
Base Salary as of the date of such termination, and a pro rata portion
of Incentive Compensation (if any) or the year in which such
termination occurs (payable within a reasonable time after the year in
question), but all other obligations of Classics to pay Executive any
further compensation, whether in the form of Base Salary, Incentive
Compensation, or Fringe Benefits other than death and disability
benefits, if any) or otherwise, will terminate. Executive's Base Salary
during any period of disability will be reduced by any benefits
Executive receives from Classics-provided disability insurance.
(c) Classics may elect to terminate Executive's employment
hereunder without cause upon 60 days prior written notice; provided,
that Classics shall continue to pay Executive all Compensation in
accordance with Section 5 hereof for the remainder of the Initial Term
or then-current Extended Term as applicable.
(d) Executive may elect to terminate the Employment Term upon
30 days prior written notice to Classics if there has been a material
breach of this Agreement by Classics, unless such breach has been cured
within such 30 day period. Upon such elective termination of
employment, Classics shall continue to pay Executive all Compensation
in accordance with Section 5 hereof for the remainder of the Initial
Term or then-current Extended Term as applicable.
(e) Termination of the Employment Term in accordance with this
Section 12, or expiration of the Employment Term, will not affect the
provisions of this Agreement that survive such termination, including,
without limitation, the provisions in Sections 7,8, 9 and 10 and will
not limit either party's ability to pursue remedies at law or equity.
13. COVENANT NOT TO COMPETE.
13.1 EXECUTIVE ACKNOWLEDGMENT. Executive acknowledges that, as
a result of his position with Classics he has and will further develop
knowledge about the Classics and its subsidiaries, and knowledge and a
working relationship with customers with whom they do business, which
knowledge and relationship is special, unique and of an intellectual
character. Such business information is considered confidential by
Classics, the value of which would be destroyed by disclosure of such
information or by its use in competition with
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Classics. In addition, Executive will be performing services to
Classics pursuant to this Agreement and thereby will occupy a position
of trust and confidence with respect to the Proprietary Information. In
light o the foregoing, Executive is agreeing to the covenants set forth
below.
13.2 NON-COMPETITION.
(a) During Executive's employment with Classics or any subsidiary of
Classics (whether pursuant to this Agreement or otherwise) and for a
period two years thereafter, Executive will not, directly or indirectly
through any person, entity or affiliate, whether as an Executive,
consultant, independent contractor, owner, shareholder, limited or
general partner, officer, director, advisor or otherwise, (i) Provide
software development, sales, marketing, management or other related
services to an entity that competes with Classics or any subsidiary of
Classics in the Business or (ii) solicit or contact any customer,
client, vendor or similar party, which Executive solicited or contacted
at any time during the then two previous years of employment with
Classics or any subsidiary of Classics for the purposes of representing
any business which competes such party in the Business.
(b) Executive acknowledges that the Business is conducted throughout
the world and that Classics and its subsidiaries will be competing as
such and that the foregoing restriction would be ineffective if limited
to a more specific geographic area. The Executive further acknowledges
that this Section 13.2, including the nature of the activities
restrained hereby, has been as narrowly drawn as possible to protect
the 'legitimate interests of Classics, and that he will be able to
support his family notwithstanding these restrictions.
(c) If any court of competent jurisdiction shall at any time determine
that a covenant contained in this Section 13. 2, or any part hereof, is
unenforceable due to the duration of its term or geographical scope, or
scope of activities precluded, such court shall reduce the duration or
scope of such provision as the case may be to the extent necessary to
render it enforceable and in its reduced form such provisions shall
then be enforced.
14. EFFECT OF PRIOR AGREEMENTS. This Agreement and the Side Agreement
is the entire understanding between Classics and Executive relating to the
subject matter hereof and supersede any prior employment agreement between
Executive and Classics or other agreement relating to the subject matter hereof
between Classics and Executive. Executive acknowledges that he is not bound by
any other agreements, including employment agreements, confidentiality
agreements and restrictive covenants, that would prohibit or restrict Executive
from entering into this Agreement
15. MODIFICATION AND WAIVER. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties. No term or
condition of this Agreement will be deemed to have been waived, except by
written instrument of the party charged with such waiver. No such written waiver
will be deemed to be a continuing waiver unless specifically stated therein, and
each such waiver will operate only as to the specific term or condition waived
and shall not
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constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
16. SEVERABILITY. If, for any reason, any provision of this Agreement
is held invalid, such invalidity will not affect any other provision of this
Agreement aid each provision will to the full extent consistent with law
continue in full force and effect. If any provision of this Agreement is held
invalid in part, such invalidity will in no way affect the rest of such
provision, and the rest of such provision, together with all other provisions of
this Agreement, will, to the full extent consistent with law, continue in full
force and effect.
17. NOTICES. Any notice or consent required or permitted pursuant to
the provisions of this Agreement must be in writing and will be deemed to have
been properly given if sent by certified or registered United States mail;
prepaid, by overnight courier; or when personally delivered, addressed as
follows:
If to Classics-:
Classics International Entertainment, Inc.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx
00000
If to Executive:
Xxxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX
00000
Each party will be entitled to specify a different address for the receipt of
subsequent notices by giving written notice thereof to the other party in
accordance with this Section 17.
18. HEADINGS. The headings and other captions in this Agreement are
included solely for convenience of reference and will not control the meaning
and interpretation of any provision of this Agreement.
19. GOVERNING LAW. This Agreement has been executed in the State of
Texas, and its validity, interpretation, performance, and enforcement will be
governed by the laws of such state, except with respect to conflicts of laws
principles.
20. JURISDICTION AND VENUE. Any judicial proceeding brought by or
against any party on any dispute arising out of this Agreement or any matter
related thereto shall be brought in the state or federal courts of Dallas
County, Texas and by execution and delivery of this Agreement, each of the
parties accepts for itself the exclusive jurisdiction and venue of the aforesaid
courts as trial courts, and irrevocably agrees to be bound by any judgement
rendered thereby in connection
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with this Agreement after exhaustion of all appeals taken (or by the appropriate
appellate court if such appellate court renders judgement).
21. BINDING EFFECT. This Agreement will be binding upon and inure to
the benefit of Executive, Classics, and their respective successors and
permitted assigns. Classics will be entitled to assign its rights and duties
under this Agreement provided that Classics will remain liable to Executive
should such assignee fail to perform its obligations under this Agreement
22. NO STRICT CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any person.
23. ARBITRATION. Subject to Classics' right to seek equitable relief as
provided for in Section 12, if any controversy or claim between the parties here
to arises out of this Agreement, such disagreement or dispute shall be submitted
to binding arbitration in Dallas, Texas, under the Commercial Arbitration Rules
of the American Arbitration Association (the "AAA"). There shall be one
arbitrator, as shall be agreed upon by the parties. In the absence of such
agreement, each party shall select one arbitrator and the arbitrators so
selected shall select a third arbitrator. In the event the arbitrators cannot
agree upon the selection or third arbitrator, such third arbitrator shall be
appointed by the AAA at the request of either party. The arbitrator or
arbitrators (as the case may be) shall be an individual or individuals (as the
case may be) skilled in employment matters. The decision rendered by the
arbitrator or arbitrators shall be accompanied by a written opinion in support
thereof Such decisions shall be final and binding upon the parties without right
of appeal. Judgment upon any such decision may be entered into any court having
jurisdiction thereof, or application may be made to such court for a judicial
acceptance of the decision and order of enforcement. Costs of the arbitration
shall be assessed by the
SCHEDULE I
INCENTIVE COMPENSATION
ANNUAL AWARDS
ANNUAL MILESTONES CASH STOCK OPTIONS EVALUATION
(initial at $5M) (initial at $5M)
Gross Sales Revenue $ 5M $ 15,000 33,000 shares Audited Sales
(additional award)(additional award)
Gross Sales Revenue $ 50M $ 15,000 33,000 shares Audited Sales
(additional award)(additional award)
Gross Sales Revenue $ 100M + $ 15,000 34,000 shares Audited Sales
Maximum Awards (Grand Totals) $45,000 100,000 shares Audited Sales
SCHEDULE II
PERFORMANCE STOCK OPTIONS
1. GRANT OF OPTION, OPTION PRICE AND TERM.
(a) Classics hereby agrees to grant you, in accordance with the
achievement of performance milestones noted on page 2 of Schedule II, not in
lieu of salary or any other compensation for services, the right and option (the
"Option") to purchase 200,000 shares of the issued and outstanding shares of
Classics International Entertainment, Inc. (CIE), (the "Option Shares") after
the Merger on the terms and conditions set forth herein.
(b) For each of the Option Shares purchased, you shall pay Classics an
option price of $1.35 (the "Option Price").
(c) The term of the Option shall be a period of five (5) years from the
Grant Date (the "Option Period"). The termination of the Option Period shall
result in the termination and cancellation of the Option. In no event shall the
Option be exercisable after the end of the Option Period.
(d) The Option shall be granted pursuant to an incentive stock opinion,
non-qualified stock option agreement or other comparable agreement by and
between you and Classics the "Stock Option Agreement"). Such performance options
shall be reviewed for award on a quarterly basis by the Board of Directors and
shall not be unreasonably withheld.
2. VESTING AND EXERCISABILITY.
(a)The Option Shares shall vest in accordance with the following schedule.
ANNIVERSARY OF THE DATE OF THIS AGREEMENT AGGREGATE PERCENTAGE OF
------------------------------------------ -----------------------
(THE "ANNIVERSARY DATE") OPTION SHARES VEST
------------------------ ------------------
First Anniversary 50%
Second Anniversary 100%
No portion of the Option shall be exercisable unless it is vested.
(b) Notwithstanding Section 2(a) above and subject to Section 3, the
Option granted hereunder shall vest and become fully exercisable immediately
upon consummation of a "Change of Control" (as such term will be defined in the
Stock Option Plan, which definition will be consistent with customary
practices).
3. TERMINATION OF EMPLOYMENT.
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(a) Notwithstanding the provisions of Section 2 above, in the event
that during the Option Period the Company terminates the Employment Term in
accordance with Section 12(a of the Employment Agreement, the unvested portion
of the Option as of the date of such termination shall be forfeited by you and
you shall have no interest in such unvested portion of the Option.
(b) Notwithstanding the provisions of Section 2 above, in the event the
Employment Term is terminated in accordance with Section 12(b), 12(c), 12(d) or
12(e) of the Employment Agreement, the unvested portion of the Option as of the
date of such termination shall become fully vested and exercisable to the extent
specified below:
(i) The percentage of Option Shares scheduled to vest on the
Anniversary Date immediately following the date that the Employment Term is
terminated shall be multiplied by a fraction, the numerator of which is the
number of full calendar months in the twelve-month period immediately proceeding
such Anniversary Date during which you were an employee of the Company, and the
denominator of which is 12; and
(ii) the percentage of Option shares scheduled to vest or the
second Anniversary Date, if any, following the date that the Employment Term is
terminated shall be multiplied by one-half (_).
(c) Regardless of whether the Employment Term is terminated with or
without cause or any other contingency, those Option Shares vested shall remain
vested. Further, during the Option Period you are entitled to exercise vested
Option Shares regardless of your employment status and/or any other contingency.
4. TERMS, CONDITIONS AND PROVISIONS.
The Stock Option Agreement shall contain such other terms, conditions and
provisions as are customary and are in accordance with the Stock Option Plan and
applicable law.
