EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective
as of the 30th day of March, 2012 (the “Effective Date”), by and between Sand
Hills, Inc., a Nevada corporation (the “Company”), and Dale R. Foster, an
individual (the “Executive”).

 

WITNESSETH

 

WHEREAS, the Company desires to retain the Executive to serve in the capacity of
President and Chief Executive Officer of the Company on the terms and conditions
set forth in this Agreement; and

 

WHEREAS, the Executive desires to accept employment in such capacity on such
terms and conditions.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties hereto,
such parties, intending to be legally bound, agree as follows:

 

1. Employment Duties and Acceptance

 

(a) In accordance with the terms of this Agreement, the Company hereby employs
the Executive, for the Term (as hereinafter defined), to render full-time
services to the Company as President and Chief Executive Officer and to perform
the customary duties and bear the customary responsibilities of such positions
and such other duties and responsibilities, commensurate with such positions, as
the Executive shall be directed from time to time by the Board of Directors of
the Company (the “Board”) to perform or bear, which duties and responsibilities
shall be consistent with the provisions of the Bylaws of the Company in effect
on the date hereof that relate to or bear upon the duties of President and Chief
executive Officer all in accordance with the terms of this Agreement.

 

(b) The Executive hereby accepts such employment and agrees to render the
services described above, in accordance with the terms of this Agreement.

 

(c) The Executive further agrees to accept election and to serve during all or
any part of the Term as a director of the Company without any compensation
therefor other than that specified in this Agreement, if elected to such
position by the Board or the stockholders of the Company. At all times during
the Term, the Company shall include the Executive in the management slate for
election as a director at every stockholders’ meeting at which his term as a
director would otherwise expire. At the request of the Board, following
termination or expiration of this Agreement, the Executive promptly shall tender
his resignation as a director of the Company.

 

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(d) The principal place of employment of the Executive hereunder shall at all
times during the Term be in the Columbia, Maryland area or such other
location(s) as may be mutually acceptable to the Executive and the Board.

 

2. Term of Employment

 

The initial term of the Executive’s employment under this Agreement (the “Term”)
shall commence on the Effective Date and shall end on the third anniversary of
the Effective Date (the “Initial Term”), unless sooner terminated by the Company
or the Executive pursuant to Section 6, 7 or 8 of this Agreement, as the case
may be, or voluntarily by the Executive. Notwithstanding the foregoing, unless
notice is given by the Executive or the Company to the other at least three (3)
months prior to the expiration of the Term of this Agreement (including at least
three (3) months prior to the expiration of any extension hereof, as provided
below), the Term automatically shall be extended by one (1) year from the date
it would otherwise end (whether upon expiration of the initial Term or any
extension(s) thereof), unless sooner terminated pursuant to Section 6, 7 or 8
hereof or voluntarily by the Executive. In the event of such an automatic
extension, the term “Term,” as used herein, shall include each and any such
extension.

 

3. Compensation and Benefits

 

(a) As compensation for the services to be rendered pursuant to this Agreement,
the Company agrees to pay the Executive, during the period from the Effective
Date through and including March 29, 2015, an annual base salary in the amount
of two hundred fifty thousand dollars ($250,000.00) (the “Base Salary”). The
Executive’s Base Salary hereunder shall be reviewed as of June 15th 2013 and at
least annually thereafter during the Term of the Agreement for adjustment upward
(but not downward) in the discretion of the Board or the Compensation Committee
of the Board (the “Compensation Committee”). The Executive’s Base Salary, as so
adjusted, shall be considered the new Base Salary for all purposes of this
Agreement. The Base Salary shall be paid in accordance with the Company’s
standard payroll practices applicable to its senior executives.

 

(b) The Company agrees that the Executive shall be eligible for a quarterly
performance bonus of up to ten thousand dollars ($10,000.00) from the Company
with respect to each calendar year quarter of the Company that ends during the
Term. The amount of any such performance bonus shall be determined by the Board
or the Compensation Committee of the Board in its sole and absolute discretion,
consistent with the Company’s performance, the Executive’s contribution to the
Company’s performance and the provisions of any such applicable incentive bonus
program, policy or practice; provided, however, that on an annual basis the
aggregate amount of such quarterly performance bonuses shall not exceed
twenty-five percent (25%) of the Base Salary for the fiscal year to which the
bonus applies except pursuant to a specific finding by the Board or the
Compensation Committee of the Board that a higher percentage is appropriate.

 

(c) The Company shall grant the Executive incentive stock options (the
“Inducement Options”) issued under section 422 of the Internal Revenue Code of
1986 (the “Code”) to purchase four hundred fifty thousand (450,000) shares of
the Company’s common stock, par value $0.0001 per share (“Common Stock”) at one
hundred ten percent (110%) of the fair market value per share of common stock,
as determined by the Board (the “Exercise Price”) on the date on which the
Inducement Options are granted (the “Grant Date”). The Inducement Options shall
vest in three (3) equal installments of Inducement Options to purchase 150,000
shares on the first, second and third anniversaries of the Grant Date (each, an
“Installment”); provided that, if the Executive’s employment is terminated by
the Company prior to the first anniversary of the Grant Date other than pursuant
to Section 6 of this Agreement, the first Installment of Inducement Options
shall vest on the date of such termination and the remainder of the Inducement
Options shall not vest and shall be forfeited; further provided that, if the
Executive is not employed by the Company on the second, third or fourth
anniversary of the Grant Date, the Installments vesting on and after any such
anniversary shall not vest and the Inducement Options included therein shall be
forfeited. The Inducement Options shall be exercisable, once vested, for a
period ending on the fifth anniversary of the Grant Date at the Exercise Price.
As soon as practicable after the Grant Date, the Company shall prepare and file
with the Securities and Exchange Commission a Registration Statement on Form S-8
covering issuance of the shares underlying the Inducement Options. Such
Inducement Options shall be issued under Parent’s 2012 Omnibus Stock Option Plan
(the “Plan”) and shall be evidenced by a separate option agreement which shall
be in the standard form issued under the Plan, except as provided above.

 

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(d) The Company agrees to grant to the Executive, during the Term, at the time
of its usual annual grant to employees for the applicable year, such options to
purchase shares of Common Stock as the Board or the Compensation Committee shall
determine. In the event of a Change in Control (as defined in Section 12), all
stock options and stock awards (and similar equity rights) granted to the
Executive prior to such event, including, without limitation, the Inducement
Options to be granted hereunder, shall immediately vest and become and remain
fully exercisable through their respective original terms and otherwise in
accordance with their respective original terms.

 

(e) The Company shall pay or reimburse the Executive for all reasonable expenses
actually incurred or paid by the Executive during the Term in the performance of
services under this Agreement, upon presentation of expense statements or
vouchers or such other supporting information as may reasonably be required
pursuant to the standard policies of the Company in effect from time to time.

 

(f) During the Term, the Company shall, at its election, reimburse the Executive
for term life insurance up to a maximum of one hundred fifty thousand dollars
($150,000), or provide coverage for the Executive at such level.

 

(g) During the Term, the Executive shall be eligible for paid vacation of 4
weeks per year after 10years of employment in accordance with the vacation
policy of the Company. In the event that Executive does not utilize all of his
vacation in any calendar year, he may carry forward up to two (2) weeks (10
days) for up to one (1) calendar year. Unused vacation days shall not otherwise
accumulate.

 

4. Confidentiality

 

The Executive acknowledges and agrees that the “Employee Proprietary Information
and Ownership of Inventions Agreement” shall be deemed incorporated in and made
a part of this Employment Agreement. Notwithstanding any other provision of this
Agreement, the Executive shall continue to be bound by the terms of such
Proprietary Information and Inventions Agreement for a period of five (5) years
after the expiration or termination of this Agreement for any reason. The
Executive and the Company agree that following expiration or termination of this
Agreement for any reason the Proprietary Information and Inventions Agreement
shall be applicable only to material, non-public, proprietary information of the
Company.

 

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5. Non-Competition, Non-Solicitation and Non-Disparagement

 

(a) During the Term, the Executive shall not (1) provide any services, directly
or indirectly, to any other business or commercial entity without the consent of
the Board or (2) participate in the formation of any business or commercial
entity without the consent of the Board; provided, however, that nothing
contained in this Section 5(a) shall be deemed to prohibit the Executive from
acquiring, solely as an investment, shares of capital stock (or other interests)
of any corporation (or other entity) not exceeding two percent (2%) of such
corporation’s (or other entity’s) then-outstanding shares of capital stock (or
other interests).

 

(b) If this Agreement is terminated by the Company for Cause (as defined in
Section 6(c)) or if the Executive terminates this Agreement other than in
accordance with Section 7 or 8 hereof, or if the Executive is receiving
Severance Payments in accordance with Section 9(c) or payments under Section
9(d), then for a period of one (1) year following the date of termination the
Executive shall not (1) provide any services, directly or indirectly, to any
other business or commercial entity in the Company’s Field of Interest (as
defined in Section 12), (2) solicit any customers or suppliers of the Company,
(3) attempt to persuade or encourage customers or suppliers of the Company not
to do business with the Company and/or to do business with a competitor of the
Company, (4) participate in the formation of any business or commercial entity
engaged primarily in the Company’s Field of Interest, or (5) directly or
indirectly employ, or seek to employ or secure the services in any capacity of,
any person employed at that time by the Company or any of its Affiliates, or
otherwise encourage or entice any such person to leave such employment;
provided, however, that nothing contained in this Section 5(b) shall be deemed
to prohibit the Executive from acquiring, solely as an investment, shares of
capital stock (or other interests) of any corporation (or other entity) in the
Company’s Field of Interest not exceeding two percent (2%) of such corporation’s
(or other entity’s) then outstanding shares of capital stock (or other
interests). This Section 5(b) shall be subject to written waivers, which may be
obtained by the Executive from the Company.

 

(c) At no time during the Term of this Agreement or thereafter will the
Executive knowingly make any written or oral untrue statement or any statement
that disparages the Company or its Affiliates or will the Company knowingly make
any written or oral untrue statement or any statement that disparages the
Executive.

 

(d) If the Executive commits a breach, or threatens to commit a breach, of any
of the provisions of this Section 5, the Company shall have the right and remedy
to have the provisions of this Agreement, as the case may be, specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide an adequate remedy to the
Company.

 

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(e) If any of the covenants contained in this Section 5 or any part hereof or
thereof, is hereafter construed to be invalid, illegal or unenforceable by a
court or regulatory agency or tribunal of competent jurisdiction, such court,
agency or tribunal shall have the power, and hereby is directed, to substitute
for or limit such provision(s) in order as closely as possible to effectuate the
original intent of the parties with respect to such invalid, illegal or
unenforceable covenant(s) generally and so to enforce such substituted
covenant(s). Subject to the foregoing, the invalidity, illegality or
unenforceability of any one or more of the covenants contained in this Section 5
shall not affect the validity of any other provision hereof, which shall be
given full effect without regard to the invalid portions.

 

(f) If any of the covenants contained in this Section 5, or any part hereof or
thereof, is held to be unenforceable because of the duration of such provision,
the area covered thereby or the extent thereof, the parties agree that the
tribunal making such determination shall have the power, and hereby is directed,
to reduce the duration, area and/or extent of such provision and, in its reduced
form, such provision shall then be enforceable.

 

(g) Anything else contained in this Agreement to the contrary notwithstanding,
the parties hereto intend to and hereby do confer jurisdiction to enforce the
covenants contained in this Section 5 A upon the courts of any state within the
geographical scope of such covenants. In the event that the courts of any one or
more of such states shall hold any such covenant wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Company’s right
to the relief provided above in the courts of any other state within the
geographical scope of such other covenants, as to breaches of such covenants in
such other jurisdictions, the above covenants as they relate to each state
being, for this purpose, severable into diverse and independent covenants.

 

6. Termination by the Company

 

During the Term of this Agreement, the Company may terminate this Agreement,
upon expiration of thirty (30) days’ prior written notice given by the Company
to the Executive (except in the case of the Executive’s death), if any one or
more of the following shall occur:

 

(a) The Executive shall die during the Term; provided, however, that the
Executive’s legal representatives shall be entitled to receive (1) the
Executive’s Base Salary through the date which is ninety (90) days after the
Executive’s date of death and (2) a pro rata annual performance bonus (prorated
by multiplying the full year bonus that otherwise would be due by the percentage
derived from dividing the number of days in the then-current year prior to the
death of the Executive by three hundred sixty-five (365)) with respect to the
fiscal year of the Company during which death occurs. Upon the Executive’s
death, stock options previously granted to the Executive that are vested and
fully exercisable at the time of death shall remain fully exercisable, by the
Executive’s legal representatives, for a period of one hundred eighty (180) days
from the date of death, at which time they shall automatically be forfeited if
not exercised. All stock options and stock awards (and similar equity rights)
that have not vested prior the date of death shall be forfeited.

 

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(b) The Executive shall become physically or mentally disabled so that the
Executive is unable substantially to perform his services for (1) a period of
one hundred twenty (120) consecutive days or (2) shorter periods aggregating one
hundred eighty (180) days during any twelve (12) month period. Notwithstanding
such disability the Company shall continue to pay the Executive his Base Salary
through the date of such termination. In addition, the Executive shall be
entitled to a pro rata annual performance bonus (prorated by multiplying the
full year bonus that otherwise would be due by the percentage derived from
dividing the number of days in the then-current year prior to the termination on
account of disability of the Executive by three hundred sixty-five (365)) with
respect to the fiscal year of the Company during which such termination occurs.
Upon such a disability, stock options previously granted to the Executive that
are vested and fully exercisable at the time of disability shall remain fully
exercisable, by the Executive or his legal representatives, should he have such,
for a period of one hundred eight (180) days from the date of disability, at
which time they shall automatically be forfeited if not exercised. All stock
options and stock awards (and similar equity rights) that have not vested prior
to the date of disability shall be forfeited by the Executive.

 

(c) The Executive acts, or fails to act, in a manner that provides Cause for
termination. For purposes of this Agreement, the term “Cause” means: (1) the
Executive’s indictment for, or conviction of, any crime or serious offense
involving money or other property that constitutes a felony in the jurisdiction
involved; (2) the Executive’s willful and ongoing neglect of, or failure to
discharge, duties (including fiduciary duties), responsibilities and obligations
with respect to the Company hereunder; provided such neglect or failure remains
uncured for a period of thirty (30) days after written notice describing the
same is given to the Executive by the Company; (3) the Executive’s violation of
any of the non-competition provisions of Section 5 hereof or the Executive’s
material breach of any provisions of Section 13 hereof hereto; or (4) any act of
fraud or embezzlement by the Executive involving the Company or any of its
Affiliates.

 

7. Termination by the Executive

 

The Executive may terminate this Agreement on written notice to the Company in
the event of a material breach of the terms of this Agreement by the Company if
such breach continues uncured for thirty (30) days after written notice
describing the breach is first given to the Company; provided, however, that the
Executive may terminate this Agreement if such breach is for the payment of
money and continues uncured for ten (10) days after written notice describing
such breach is first given. The Executive may also terminate this Agreement upon
written notice to the Company if any one or more of the following shall occur:

 

(a) loss of material duties or authority of the Executive as President and/or
Chief Executive Officer, and such loss continues for thirty (30) days after
written notice of such loss is given to the Company;

 

(b) a Prohibited Event occurs; provided that the Executive gives written notice
of termination within ninety (90) days after such occurrence and such Prohibited
Event is not remedied within thirty (30) days after such notice. For this
purpose a “Prohibited Event” exists if the Executive is not continuously at
least one (1) of President or Chief Executive Officer of the Company during the
Term;

 

(c) the Company shall make a general assignment for benefit of creditors, or any
proceeding shall be instituted by the Company seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property, or the Company shall take any corporate action to authorize any
of the actions set forth above in this Section 7(c);

 

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(d) an involuntary petition shall be filed or an action or proceeding otherwise
commenced against the Company seeking reorganization, arrangement or
readjustment of the Company’s debts or for any other relief under the Federal
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act or
law, state or federal, now or hereafter existing and shall remain undismissed or
unstayed for a period of thirty (30) days;

 

(e) a receiver, assignee, liquidator, trustee or similar officer for the Company
or for all or any part of its property shall be appointed involuntarily; or

 

(f) a material breach by the Company of any other material agreement with the
Executive shall occur, if such breach continues uncured for thirty (30) days
after written notice describing such breach is first given to the Company;
provided, however, that the Executive shall be permitted to terminate this
Agreement if such breach is for the payment of money and continues uncured for
ten (10) days after written notice describing such breach is first given.

 

8. Termination Following a Change in Control

 

(a) In addition to the above, during the period commencing on the six (6) month
anniversary of a Change in Control (as defined in Section 12) and ending on the
two (2) year anniversary of such Change in Control, the Executive may terminate
this Agreement upon expiration of ninety (90) days’ prior written notice if
“Good Reason” exists for the Executive’s termination. For this purpose,
termination for “Good Reason” shall mean a termination by the Executive of his
employment hereunder following the occurrence, without his prior written
consent, of any of the following events, unless the Company fully cures all
grounds for such termination within thirty (30) days after the Executive’s
notice:

 

(i) any material adverse change in the Executive’s authority, duties, titles or
offices (including reporting responsibility), or any significant increase in the
Executive’s business travel obligations, from those existing immediately prior
to the Change in Control;

 

(ii) any failure by the Company to continue in effect any compensation plan in
which the Executive participated immediately prior to such Change in Control and
which is material to the Executive’s total compensation, including, without
limitation, to the Company’s stock option, bonus and other plans or any
substitute plans adopted prior to the Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or any failure by the Company to continue the
Executive’s participation therein (or in such substitute or alternative plan) on
a basis no less favorable to the Executive, both in terms of the amount of
benefits provided and the level of the Executive’s participation relative to
other participants, as existed immediately prior to such Change in Control;

 

(iii) any failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive under any of
the Company’s retirement, life insurance, medical, health and accident, or
disability plans, programs or arrangements in which the Executive was
participating immediately prior to such Change in Control, the taking of any
action by the Company that would directly or indirectly materially reduce any of
such benefits or deprive the Executive of any perquisite enjoyed by the
Executive at the time of such Change in Control, or the failure by the Company
to maintain a vacation policy with respect to the Executive that is at least as
favorable as the vacation policy (whether formal or informal) in place with
respect to the Executive immediately prior to such Change in Control; or

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(iv) the failure of the Company to obtain the assumption in writing of its
obligation to perform this Agreement by any successor to all or substantially
all of the assets of the Company upon a merger, consolidation, sale or similar
transaction.

 

(b) In addition, the Executive may elect to terminate his employment, at his own
initiative, for any reason or for no reason, during the six (6) month period
commencing on the six (6) month anniversary of a Change in Control of the
Company and ending on the one (1) year anniversary of such Change in Control, in
which case such termination of employment shall also be deemed to be for “Good
Reason”.

 

9. Severance and Benefit Continuation

 

(a) Termination for Cause or Voluntary Termination by the Executive. If the
Company terminates this Agreement for Cause pursuant to Section 6(c) hereof, or
if the Executive voluntarily terminates this Agreement other than pursuant to
Section 7 or 8 hereof (which termination alone shall not constitute a breach of
this Agreement), no severance or benefit continuation provisions shall apply;
provided, however, that the Executive shall have the same opportunity to
continue group health benefits at the Executive’s expense in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) as is available
generally to other employees terminating employment with the Company. All stock
options and stock awards (and similar equity rights) held by the Executive that
have vested prior to such termination of this Agreement may be exercised by the
Executive for a period of ninety (90) days after the date of termination, at
which time they shall automatically be forfeited if not exercised. All stock
options and stock awards (and similar equity rights) that have not vested prior
to such termination shall be forfeited by the Executive. For purposes of this
Agreement, an election by the Company not to renew this Agreement beyond the end
of the then-current Term shall be considered a termination of this Agreement.

 

(b) Termination for Death or Disability. In the event of termination of this
Agreement pursuant to Section 6(a) or 6(b) by reason of the death or disability
of the Executive, in addition to the Base Salary payments and pro rata annual
performance bonus provided for in paragraph (a) or (b) of Section 6, as
applicable, the Company shall continue to provide all benefits subject to COBRA,
at its sole cost and expense, with respect to the Executive and his dependents
for the maximum period provided by COBRA.

 

(c) Termination by the Company Without Cause or Termination by the Executive
Based on a Material Breach by the Company. If (1) the Company terminates this
Agreement other than pursuant to Section 6 hereof or (2) the Executive
terminates this Agreement pursuant to Section 7, and in each case the
termination of employment does not occur within two (2) years following the
consummation of a Change in Control of the Company, then:

 

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(i) the Company shall pay the Executive (x) in accordance with its normal
payroll practice an amount equal to two (2) times the Executive’s Base Salary at
the time of his termination of employment for one (1) year from the date of
termination (the “Severance Period”); and (y) a pro rata annual performance
bonus (prorated by multiplying the full year bonus that otherwise would be due
by the percentage derived from dividing the number of days in the then-current
year prior to the termination of the Executive by three hundred sixty-five
(365)) with respect to the fiscal year of the Company during which such
termination occurs;

 

(ii) all Company employee benefit plans and programs, other than participation
in any Company tax-qualified retirement plan, applicable to the Executive shall
be continued for the Severance Period (or, if such benefits are not available,
or cannot be provided due to applicable law, the Company shall pay the Executive
a lump sum cash amount equal to the after-tax economic equivalent thereof;
provided that, with respect to any benefit to be provided on an insured basis,
such lump sum cash value shall be the present value of the premiums expected to
be paid for such coverage, and with respect to other benefits, such value shall
be the present value of the expected cost to the Company of providing such
benefits). In the case of all benefits subject to COBRA, the Company shall
continue to provide such benefits at its expense with respect to the Executive
and his dependents for the maximum period provided by COBRA; and

 

(iii) all stock options and stock awards (and similar equity rights) that are
vested at the time of termination shall remain fully exercisable for a period of
one hundred eight (180) days after the date of termination, at which time they
shall automatically be forfeited if not exercised. All stock options and stock
awards (and similar equity rights) that have not vested prior to such
termination shall be forfeited by the Executive.

 

(d) Termination by the Company Without Cause, Termination by the Executive for
Good Reason, or Nonrenewal by the Company Upon a Change in Control. If (1) the
Company terminates this Agreement other than pursuant to Section 6 hereof or (2)
the Executive terminates this Agreement pursuant to Section 7 or 8, and in each
case the termination of employment occurs within two (2) years of the
consummation of a Change in Control of the Company, then:

 

(i) the Company shall pay the Executive (x) a cash lump immediately upon such
termination of employment equal to two (2) times the Executive’s Base Salary at
the time of his termination of employment and (y) a pro rata annual performance
bonus (prorated by multiplying the full year bonus that otherwise would be due
by the percentage derived from dividing the number of days in the then-current
year prior to the termination of the Executive by three hundred sixty-five
(365)) with respect to the fiscal year of the Company during which such
termination occurs;

 

(ii) all Company employee benefit plans and programs, other than participation
in any Company tax-qualified retirement plan, applicable to the Executive shall
be continued for one (1) year from the date of such termination of employment
(or, if such benefits are not available, or cannot be provided due to applicable
law, the Company shall pay the Executive a lump sum cash amount equal to the
after-tax economic equivalent thereof; provided that, with respect to any
benefit to be provided on an insured basis, such lump sum cash value shall be
the present value of the premiums expected to be paid for such coverage, and
with respect to other benefits, such value shall be the present value of the
expected cost to the Company of providing such benefits). In the case of all
benefits subject to COBRA, the Company shall continue to provide such benefits
at its sole cost and expense with respect to the Executive and his dependents
for the maximum period provided by COBRA; and

 

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(iii) all stock options and awards of restricted stock (and similar equity
rights), all of which shall have become fully vested pursuant to Section 3(d)
hereof, shall remain fully exercisable through their respective original terms
and otherwise in accordance with their respective original terms as if no Change
in Control had occurred.

 

(e) The payments provided in Section 9(c) and 9(d) are intended as enhanced
severance for a termination by the Company without Cause, or a termination by
the Executive in the circumstances provided. As a condition of receiving such
payments, the Executive or his legal representatives, should he have such, shall
first execute and deliver a general release of all claims against the Company,
its Affiliates, agents and employees (other than any claims or rights pursuant
to the Agreement or pursuant to equity or employee benefit plans), in a form and
substance satisfactory to the Company. In connection with such release by the
Executive, the Company shall execute and deliver a comparable release of claims
against the Executive. Notwithstanding the foregoing, the Executive may elect to
forego the severance payments provided herein, in which event neither party
shall be required to execute a release of the other. Notwithstanding the
foregoing provisions of this section 9(e), no release to be granted by the
Executive shall be required to cause the Executive to release the Company from,
waive, or forego in any way any of the Executive’s rights to indemnification
under the applicable provisions of the Certificate of Incorporation or By-laws
of the Company or any then-existing agreement between the Company and the
Executive with respect thereto.

 

10. Cooperation

 

Following the termination of his employment, the Executive agrees to cooperate
with, and assist, the Company to ensure a smooth transition in management and,
if requested by the Company, to make himself available to consult during regular
business hours at mutually agreed upon times for up to a three (3) month period
thereafter. At any time following the termination of his employment, the
Executive will provide such information as the Company may request with respect
to any Company- related transaction or other matter in which the Executive was
involved in any way while employed by the Company. The Executive further agrees,
during the Term of this Agreement and thereafter, to assist and cooperate with
the Company in connection with the defense or prosecution of any claim that may
be made against, or by, the Company or its Affiliates, in connection with any
dispute or claim of any kind involving the Company or its Affiliates, including
providing testimony in any proceeding before any arbitral, administrative,
judicial, legislative or other body or agency. The Executive shall be entitled
to reimbursement for all properly documented expenses reasonably incurred in
connection with rendering transition services under this Section, including,
without limitation, reimbursement for all reasonable travel, lodging, meal
expenses and legal fees.

 

11. No Mitigation

 

The Executive shall not be required to mitigate the amount of any payment
provided for hereunder by seeking other employment or otherwise, nor shall the
amount of any payment provided for hereunder be reduced by any compensation
earned by the Executive as the result of employment by another employer after
the date of termination of employment by the Company.

 

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12. Definitions

 

As used herein, the following terms have the following meaning:

 

(a) “Affiliate” means and includes any person, corporation or other entity
controlling, controlled by or under common control with the person, corporation
or other entity in question, determined in accordance with Rule 12b-2 under the
Securities Exchange Act of 1934, as amended).

 

(b) “Change in Control” means the occurrence of any of the following events:

 

(i) Any Person, other than the Company, its Affiliates or any Company employee
benefit plan (including any trustee of such plan acting as trustee), is or
becomes the Beneficial Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power
of the then outstanding securities entitled to vote generally in the election of
directors (“Voting Securities”) of the Company; or

 

(ii) Individuals who constitute the Board (the “Incumbent Directors”), as of the
beginning of any twenty-four (24) month period commencing with the Effective
Date of this Agreement, cease for any reason to constitute at least a majority
of the directors. Notwithstanding the foregoing, any individual becoming a
director subsequent to the beginning of such period, whose election or
nomination for election by the Company’s stockholders, was approved by a vote of
at least two-thirds (2/3) of the directors then comprising the Incumbent
Directors, shall be, considered an Incumbent Director; or

 

(iii) Consummation by the Company of a recapitalization, reorganization, merger,
consolidation or other similar transaction (a “Business Combination”), with
respect to which all or substantially all of the individuals and entities who
were the beneficial owners of the Voting Securities immediately prior such
Business Combination (the “Incumbent Shareholders”) do not, following
consummation of all transactions intended to constitute part of such Business
Combination, beneficially own, directly or indirectly, fifty percent (50%) or
more of the Voting Securities of the corporation, business trust or other entity
resulting from or being the surviving entity in such Business Combination, in
substantially the same proportion as their ownership of such Voting Securities
immediately prior to such Business Combination; or

 

(iv) Consummation of a complete liquidation or dissolution of the Company, or
the sale or other disposition of all or substantially all of the assets of the
Company, other than to a corporation, business trust or other entity with
respect to which, following consummation of all transactions intended to
constitute part of such sale or disposition, more than fifty percent (50%) of
the combined Voting Securities is then owned beneficially, directly or
indirectly, by the Incumbent Shareholders in substantially the same proportion
as their ownership of the Voting Securities immediately prior to such sale or
disposition.

 

For purposes of this definition, the following terms shall have the meanings set
forth below:

 

(A) “Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the
Exchange Act;

 

(B) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended;
and

 

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(C) “Person” shall have the meaning as used in Sections 13(d) and 14(d) of the
Exchange Act.

 

Notwithstanding the foregoing, the term “Change in Control” shall also have such
additional meanings as are permitted or required in guidance issued by the
Internal Revenue Service under section 409A of the Code.

 

(c) “Company’s Field of Interest” means the primary businesses of the Company as
described in the Company’s then two most recent Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q or Current Reports on Form 8-K filed with the
Securities and Exchange Commission or as determined from time to time by the
Board during the Term hereof.

 

13. Representations by Executive.

 

The Executive represents and warrants that he has full right, power and
authority to execute this Agreement and perform his obligations hereunder and
that this Agreement has been duly executed by the Executive and such execution
and the performance of this Agreement by the Executive do not and will not
result in any conflict, breach or violation of or default under any other
agreement or any judgment, order or decree to which the Executive is a party or
by which he is bound. The Executive acknowledges and agrees that any material
breach of the representations set forth in this Section 13 will constitute Cause
under Section 6.

 

14. Section 409A Compliance.

 

Certain provisions of this employment agreement may be required to comply with
Code section 409A. Notwithstanding anything in the Employment Agreement to the
contrary, if this Employment Agreement is deemed to be subject to Code section
409A, the parties agree to make any changes necessary to ensure that the
Employment Agreement complies with Code section 409A.

 

15. Arbitration.

 

The parties shall attempt in good faith to resolve all claims, disputes and
other disagreements arising hereunder by negotiation. In the event that a
dispute between the parties cannot be resolved within thirty (30) days of
written notice from one party to the other party, such dispute shall, at the
request of either party, after providing written notice to the other party, be
submitted to arbitration in Baltimore, Maryland in accordance with the
arbitration rules of the American Arbitration Association then in effect. The
notice of arbitration shall specifically describe the claims, disputes or other
matters in issue to be submitted to arbitration. The parties shall jointly
select a single arbitrator who shall have the authority to hold hearings and to
render a decision in accordance with the arbitration rules of the American
Arbitration Association. If the parties are unable to agree within ten (10)
days, the arbitrator shall be selected by the Chief Judge of the Circuit Court
for Baltimore City. The discovery rights and procedures provided by the Federal
Rules of Civil Procedure shall be available and enforceable in the arbitration
proceeding. The written decision of the arbitrator so appointed shall be
conclusive and binding on the parties and enforceable by a court of competent
jurisdiction. The expenses of the arbitration shall be borne equally by the
parties to the arbitration, and each party shall pay for and bear the cost of
its or his own experts, evidence and legal counsel, unless the arbitrator rules
otherwise in the arbitration. Each party agrees to use its or his best efforts
to cause a final decision to be rendered with respect to the matter submitted to
arbitration within sixty (60) days after its submission. Notwithstanding the
foregoing, the Company shall be free to pursue its rights and remedies under
Section 5 hereto in any court of competent jurisdiction, without regard to the
arbitral proceedings contemplated by this Section 14.

 

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16. Notices.

 

All notices, requests, consents and other communications required or permitted
to be given hereunder or contemplated or in connection herewith shall be in
writing and shall be deemed to have been duly given if sent by private overnight
mail service (delivery confirmed by such service), registered or certified mail
(return receipt requested and received), telecopy (confirmed receipt by return
fax from the receiving party) or if delivered personally, as follows (or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith):

 

If to the Company:

 

Sand Hills, Inc.  

10900 Pump House Rd.

Annapolis Junction, MD 20701

 

If to the Executive:

  

Dale R. Foster

10414 Churchill Way 

Laurel, MD 20723

   

17. Indemnification and Limitation of Liability.

 

The Corporation acknowledges and agrees that, to the extent permitted by law,
the protections afforded by its Articles of Incorporation, as amended, and its
Bylaws, as amended, are available to the Executive throughout the Term and
thereafter, in accordance with their respective terms.

 

18. General.

 

(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Maryland.

 

(b) This Agreement, together with the Employee Proprietary Information and
Ownership of Inventions Agreement, sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth. Notwithstanding the foregoing, in the
event that the provisions hereof shall conflict with the terms of any stock
option grant agreement, stock award agreement or similar document granting stock
options, warrants or similar rights, then the terms hereof shall control.

 

(c) This Agreement may be amended, modified, superseded, canceled, renewed or
extended, and the terms or covenants hereof may be waived, only by a written
instrument executed by the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by a party of the breach of any term
or covenant contained in this Agreement, whether by conduct or otherwise, or any
one or more or continuing waivers of any such breach, shall constitute a waiver
of the breach of any other term or covenant contained in this Agreement.

 

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(d) This Agreement shall be binding upon and inure to the benefit of the legal
representatives, heirs, distributees, successors and permitted assigns of the
parties hereto. The Company may not assign its rights and obligation under this
Agreement without the prior written consent of the Executive, except to a
successor to substantially all the Company’s business that expressly assumes the
Company’s obligations hereunder in writing. For purposes of this Agreement,
“successors” shall mean any successor by way of share exchange, merger,
consolidation, reorganization or similar transaction, or the sale of all or
substantially all of the assets of the Company. The Executive may not assign,
transfer, alienate or encumber any rights or obligations under this Agreement,
except by will or operation of law, provided that the Executive may designate
beneficiaries to receive any payments permitted under the terms of the Company’s
benefit plans.

 

[Signature Page follows]

 

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The Company and the Executive acknowledge and agree that this Agreement may be
executed in one or more counterparts, each of which will be deemed an original,
but together they will constitute one and the same instrument.

 

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement under its or
his seal effective as of the date first above written.

 

 

 

DALE R. FOSTER:

  

 

By: /s/ Dale R. Foster                         

Name: Dale R. Foster

 

 

 

SAND HILLS, INC.:

  

 

By: /s/ William J. Ochall                       

Name: William J. Ochall 

Title: Chief Financial Officer

 

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