Exhibit 10.1

 

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PERFORMANCE AND RETENTION AGREEMENT

This Performance and Retention Agreement (the “Agreement”) is entered into by
KiOR, Inc., a Delaware corporation (the “Company”) and            (the
“Executive”).

1. Purpose. The purpose of this Agreement is to provide reasonable protections
to the Executive, who is expected to make substantial contributions to the
success of the Company and for whom the Company desires to provide for stability
and continuity of management, including the Executive.

2. Definitions. For purposes of this Agreement, the following terms have the
meanings set forth below:

“Affiliate” means any company or other entity controlled by, controlling or
under common control with the Company.

“Board” means the Board of Directors of the Company

“Cause” means the Executive’s:

(a) conviction of, or guilty or nolo contendere plea by the Executive to a
felony or to a misdemeanor involving moral turpitude;

(b) willful misconduct in the performance of duties;

(c) failure to observe written Company policies that is dishonest or
demonstrably injurious to the Company (monetarily or otherwise);

(d) willful failure to comply with lawful and ethical directions and
instructions of the Board, which, if curable, has not been cured within five
(5) business days after written notice from the Board; or

(e) willful failure to perform duties with the Company which results in a
material adverse financial effect on the Company, unless such failure is a
result of the Executive’s mental or physical incapacity, provided that such
failure, if curable, has not been cured within five (5) business days after
written notice from the Board.

For purposes of this definition, no act or failure to act on the part of the
Executive shall be considered “willful” unless it is done, or omitted to be
done, by the Executive without the reasonable, good faith belief that the
Executive’s act or omission was in accordance with, or not contrary to, the
duties and responsibilities of the Executive’s position. Any act, or failure to
act, based upon express authority given by the Company with respect to such act
or omission or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Executive in the
best interests of the Company. The termination of the Executive’s employment
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board (not including the Executive) at a meeting of the Board called and held
for such purpose (after reasonable

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notice is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that, in the good
faith opinion of the Board, the Executive is guilty of the conduct described in
this definition, and specifying the particulars thereof in detail.

“Change of Control” means:

(a) Any “person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and is used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) or group of persons acting together
(within the meaning of Section 13(d)(3) of the Exchange Act) becomes the direct
or indirect beneficial owner of 50% or more of the Company’s voting stock;

(b) During any twenty-four (24) month period, individuals who, as of the
beginning of such period, constitute the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to the beginning of such period whose
election or nomination for election was approved by a vote of at least a
majority of the Incumbent Directors then on the Board (either by a specific vote
or by approval of the proxy statement of the Company in which such person is
named as a nominee for director, without written objection to such nomination)
shall be an Incumbent Director (provided, however, that no individual initially
elected or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies by or on behalf of any person
other than the Board shall be deemed to be an Incumbent Director);

(c) The consummation of the merger, consolidation, or other reorganization of
the Company with or into one or more entities, as a result of which outstanding
securities with less than 50% of the voting power of the surviving or resulting
entity (or, if applicable, the ultimate parent company that owns directly or
indirectly all of the voting securities of the surviving or resulting entity)
are owned by stockholders of the Company immediately prior to such merger,
consolidation or reorganization in substantially the same proportion as their
ownership of the voting power of the Company’s outstanding securities
immediately prior to such transaction; or

(d) The sale of the Company’s assets having a total gross fair market value of
at least 50% of all of the Company’s assets immediately before such sale.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board.

“Company” means KiOR, Inc., a Delaware corporation.

“Disability” means the absence of the Executive from the Executive’s duties with
the Company on a full-time basis for a period of time which would entitle the
Executive to receive benefits under the long-term disability policy of the
Company in effect at the time of such illness or other physical or mental
incapacity.

“Effective Date” means the date upon which this Agreement has been executed by
both the Executive and the Company.

“Employee” means an employee of the Company or an Affiliate.

“Equity Awards” shall mean any and all outstanding equity awards (in whatever
form) provided to the Executive pursuant to the terms of any Company equity or
equity-based incentive plan prior to December 31, 2012, whether granted before
or after the Effective Date.

 

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“Good Reason” means

(a) A material adverse change in the scope of the Executive’s responsibilities
or authority;

(b) The material reduction in the Executive’s annual base salary or total direct
compensation, other than an across-the-board reduction generally applicable to
the executive officers of the Company and its Affiliates, and if applicable, the
Company’s successor (including the successor’s ultimate parent company);

(c) The relocation of the Company’s executive offices by more than 50 miles from
its then current location; or

(d) The failure of any successor to the Company in a Change of Control to
expressly assume this Agreement in writing within ten (10) days after the
occurrence of a Change of Control.

In order to terminate employment for Good Reason, the Executive must, within 90
days of learning of circumstances constituting Good Reason, notify the Company
in writing of the existence of such circumstances, and the Company shall then
have 30 days to remedy the circumstances. If the circumstances have not been
fully remedied by the Company, the Executive shall have 60 days following the
end of such 30-day period to exercise the right to terminate for Good Reason.
The Executive shall be conclusively deemed to have learned of such circumstances
on the date of any written notice to the Executive concerning such
circumstances. If the Executive does not timely do so, the right to terminate
for Good Reason shall lapse and be deemed waived, and the Executive shall not
thereafter have the right to terminate for Good Reason unless further
circumstances occur which themselves give rise to a right to terminate for Good
Reason.

“Protection Period” means the 12-month period beginning on the date of the
Change of Control. Notwithstanding anything in the Agreement to the contrary, if
(i) the Executive’s employment is terminated within the 12-month period prior to
a Change of Control for reasons that would have constituted a Qualifying
Termination if they had occurred following a Change of Control, (ii) the
Executive reasonably demonstrates that such termination (or Good Reason event)
was at the request of a third party who had indicated an intention or taken
steps reasonably calculated to effect a Change of Control and (iii) a Change of
Control involving such third party (or a party competing with such third party
to effectuate a Change of Control) does occur, then for purposes of the
Agreement the date immediately prior to the date of such termination of
employment or event constituting Good Reason shall be treated as a Change of
Control. For purposes of determining the timing and amount of payments and
benefits to Executive under Section 3(c), the date of the actual Change of
Control shall be treated as the Executive’s Termination Date and the
requirements of Section 4 and 5, to the extent not satisfied as of such date,
shall no longer be of force or effect.

“Qualifying Termination” means a termination of the Executive’s employment by
the Company without Cause or by the Executive for Good Reason.

“Release” means the waiver and release of claims required of the Executive as
described in Section 4 hereof.

“Separation from Service” means the Executive’s separation from service from the
Company and its Affiliates within the meaning of Section 409A of the Code.

“Termination Date” means the date on which the Executive has a Separation from
Service.

 

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3. Treatment of Equity Awards on Termination Date.

(a) For Cause or Termination without Good Reason. If (x) the Executive
terminates employment with the Company and its Affiliates without Good Reason or
(y) the Company and its Affiliates terminates the Executive’s employment for
Cause, then the Executive will not be entitled to any accelerated vesting or
payment of any Equity Awards pursuant to the terms of this Agreement.

(b) For Death, Disability or Qualifying Termination Other Than During Protection
Period. In the event of (x) the Executive’s Qualifying Termination other than
during the Protection Period, (y) the Company and its Affiliates terminates the
Executive’s employment by reason of the Executive’s Disability, or (z) the
Executive’s employment is terminated by reason of the Executive’s death, subject
to Sections 4 and 5, upon the date that the Release described in Section 4
becomes effective and irrevocable in accordance with its terms, all Equity
Awards shall be vested and exercisable in full, and where applicable, payable.

(c) Qualifying Termination During Protection Period. In the event of the
Executive’s Qualifying Termination during the Protection Period, all Equity
Awards shall be vested and exercisable in full, and where applicable, payable.

(d) Special Rule for Certain Performance-Based and Deferred Compensation Equity
Awards. Notwithstanding the foregoing (and subject to Sections 4 and 5 in the
case of death, Disability or Qualifying Termination other than during the
Protection Period), (i) with respect to any Equity Awards that are granted in
accordance with Section 162(m) of the Code and intended to be qualified
performance-based compensation thereunder, payments under such Equity Awards
shall be made at the time as provided in the establishing documentation and
subject solely to the satisfaction of the performance goals applicable for
purposes of Section 162(m), without requirement of any future service by the
Executive and without the exercise of any negative discretion that may be
allowed for under the establishing documentation, and (ii) (A) for any Equity
Award granted on or prior to the Effective Date that was designed to be
compliant with Section 409A of the Code, the accelerated payment provision
described above shall not apply and only the full vesting provision shall apply
(and for purposes of clarity with respect to such options granted on March 18,
2011, the time of exercise shall continue to be the “Required Exercise Date” as
provided in the agreement evidencing such option, as required under Section 409A
of the Code), and (B) for any Equity Award granted after the Effective Date that
was designed to be compliant with Section 409A of the Code which does not
provide for payment upon the Executive’s Separation from Service, payment of
such Equity Award shall be made on the 65th day after the Executive’s Qualifying
Termination or termination due to death or Disability (and if such Equity Award
does provide for payment upon the Executive’s Separation from Service, payment
shall be made as provided in the establishing documentation for such Equity
Award).

4. Release. The accelerated vesting and payment to be provided under
Section 3(b) and 3(d) (solely in the event of termination for death, Disability
or Qualifying Termination other than during the Protection Period) shall be
provided only if the Executive timely executes and does not timely revoke a
Release; provided that the Company has delivered, or has made a good faith
effort to deliver, a form of the Release to the Executive no later than the
fifth business day after the Executive’s Termination Date. The Release must be
signed by the Executive (or his legal representative, if applicable) and become
effective and irrevocable in accordance with its terms (taking into account any
applicable revocation period set forth therein) by the date specified by the
Company, which shall be no later than 60 days after the Executive’s Termination
Date. If the Executive fails to timely execute and return the Release, or if the
Release returned by the Executive has not become effective and irrevocable in
accordance with its terms (taking into account any applicable revocation period
set forth therein) by the 60th day after the Executive’s Termination Date, the
Executive will not be entitled to any accelerated vesting or payment under this
Agreement.

5. Covenants. The accelerated vesting and payment to be provided under
Section 3(b) and 3(d) (solely in the event of termination for death, Disability
or Qualifying Termination other than during the Protection Period) are subject
to the Executive’s continued compliance with the covenants set forth on Exhibit
A.

 

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6. Effect on Other Plans, Agreements and Benefits. The provisions of this
Agreement shall supersede any contrary provision contained in any Equity Award
to the extent the provisions of this Agreement are more favorable to the
Executive.

7. Administration. Except as otherwise specifically provided herein, the
Committee shall administer this Agreement and shall have full and final
authority in its discretion to take all actions determined by the Committee to
be necessary in the administration of this Agreement. The Committee may
delegate, subject to such terms as the Committee shall determine, any of its
authority hereunder to such person or persons from time to time as it may
designate. In the event of such delegation, all references to the Committee in
this Agreement shall be deemed references to such delegates as it relates to
those aspects of this Agreement that have been delegated.

8. Successors.

(a) Company Successors. This Agreement shall bind any successor of the Company
(whether direct or indirect, by purchase, merger, consolidation or otherwise) of
all or substantially all of the business and/or assets of the Company, in the
same manner and to the same extent that the Company would be obligated under
this Agreement if no succession had taken place. The Company shall require such
successor expressly and unconditionally to assume and agree to perform the
Company’s obligations under this Agreement, in the same manner and to the same
extent that the Company would be required to perform if no such succession had
taken place. The term “Company,” as used in this Agreement, shall mean the
Company as heretofore defined and any successor or assignee to all or
substantially all of the business and/or assets of the Company which by reason
hereof becomes bound by this Agreement.

(b) Executive Successors. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s personal or legal representatives, executors,
administrators, heirs, distributees and/or legatees. The rights under this
Agreement are personal in nature and neither the Company nor the Executive
shall, without the consent of the other, assign, transfer or delegate any rights
or obligations hereunder except as expressly provided in this Section. Without
limiting the generality of the foregoing, the Executive’s right to receive any
benefits hereunder shall not be assignable, transferable or delegable, whether
by pledge, creation of a security interest or otherwise, other than by a
transfer by his or her will or by the laws of descent and distribution and, in
the event of any attempted assignment or transfer contrary to this Section, the
Company shall not be required to accelerate the vesting or payment of any Equity
Award so attempted to be assigned, transferred or delegated.

9. Resolutions of Disputes.

(a) Arbitration. Any and all controversies arising out of or relating to the
validity, interpretation, enforceability, or performance of this Agreement will
be solely and finally settled by means of binding arbitration in Houston, Texas.
The arbitration shall be conducted in accordance with the applicable employment
dispute resolution rules of the American Arbitration Association. The
arbitration will be final, conclusive and binding upon the parties. All
arbitrator’s fees and related expenses shall be divided equally between the
parties.

(b) Legal Fees. The arbitrator shall award the Executive attorneys’ fees and
expenses if the Executive prevails on at least one material issue in dispute,
including the attorneys’ fees and expenses the Executive incurs in connection
with any appeal or the enforcement of any award. Any award of attorneys’ fees
and expenses to the Executive shall be paid by the Company within 60 days
following the award of such fees and expenses by the arbitrator (or, if later,
when such fees and expenses are incurred), but in no event later than
December 31 of the calendar year following the year of the conclusion of the
arbitration (or, if later, December 31 of the calendar year following the year
in which such fees and expenses are incurred).

 

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10. Withholding. The Company shall have the right to deduct and withhold from
any amounts payable under this Agreement such federal, state, local or other
taxes as are required to be withheld pursuant to any applicable law or
regulation.

11. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when actually delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the Secretary at the Company’s corporate headquarters address, and to the
Executive at the last address of the Executive on the Company’s books and
records.

12. Amendment. This Agreement may not be modified except as provided in a
written document executed by both parties.

13. Governing Law. Except to the extent preempted by federal law, the provisions
of this Agreement shall be governed and construed in accordance with the laws of
the State of Texas without regard to the conflict of law provisions thereof.

14. Validity and Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.

15. Headings; Interpretation. Headings in this Agreement are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof. Unless the context clearly requires otherwise, the
masculine pronoun wherever used herein shall be construed to include the
feminine pronoun.

16. No Employment Rights. Nothing in this Agreement will reduce or eliminate the
right of the Company and its Affiliates to terminate the Executive’s employment
at any time for any reason.

17. Section 409A.

(a) It is intended that the payments and benefits provided under this Agreement
shall be exempt from the application of the requirements of Section 409A of the
Code. This Agreement shall be construed, administered and governed in a manner
that effects such intent, and the Committee shall not take any action that would
be inconsistent with such intent. Specifically, any taxable benefits or payments
provided under this Agreement are intended to be separate payments that qualify
for the “short-term deferral” exception to Section 409A of the Code to the
maximum extent possible, and to the extent they do not so qualify, are intended
to qualify for the separation pay exceptions to Section 409A of the Code, to the
maximum extent possible. To the extent that none of these exceptions (or any
other available exception) applies, then notwithstanding anything contained
herein to the contrary, and to the extent required to comply with Section 409A
of the Code, if the Executive is a “specified employee,” as determined under the
Company’s policy for identifying specified employees on his or her Termination
Date, then all amounts due under this Agreement that constitute a “deferral of
compensation” within the meaning of Section 409A of the Code, that are provided
as a result of a Separation from Service within the meaning of Section 409A of
the Code, and that would otherwise be paid or provided during the first six
months following the Termination Date, shall be accumulated through and paid or
provided on the first business day that is more than six months after the date
of the Termination Date (or, if the Executive dies during such six-month period,
within 90 days after the Executive’s death).

(b) With regard to any provision herein that provides for reimbursement of costs
and expenses or in-kind benefits, except as permitted by Section 409A of the
Code: (i) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit; (ii) the amount of expenses
eligible for reimbursement, or in-kind benefits, provided during any calendar
year shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other calendar year; and (iii) such payments
shall be made on or before the last day of the Executive’s calendar year
following the calendar year in which the expense occurred, or such earlier date
as required hereunder.

 

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(c) The payments and benefits provided under this Agreement may not be deferred,
accelerated, extended, paid out or modified in a manner that would result in the
imposition of an additional tax under Section 409A of the Code upon the
Executive. The tax treatment of the benefits provided under this Agreement is
not warranted or guaranteed. Neither the Company, its Affiliates nor their
respective directors, officers, employees or advisers shall be held liable for
any taxes, interest, penalties or other monetary amounts owed by the Executive
(or any other individual claiming a benefit through the Executive) as a result
of this Agreement.

IN WITNESS WHEREOF, this Agreement has been executed by the Company and the
Executive, effective as provided herein.

 

KiOR, INC. By:      Title:      Date:     

 

EXECUTIVE   Date:     

 

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EXHIBIT A

COVENANTS

1. Confidential Information.

(a) For purposes of this Exhibit A, “Confidential Information” means ideas,
concepts, information and material that constitute trade secrets and/or
proprietary and confidential information of the Company and its Affiliates.
Confidential Information includes, but is not limited to, information and
knowledge pertaining to products and services offered, ideas, plans,
manufacturing, marketing, pricing, distribution and sales methods and systems,
sales and profit figures, customer and client lists, and relationships between
the Company or its subsidiaries and their respective affiliates, dealers,
distributors, wholesalers, customers, clients, suppliers and others who have
business dealings with the Company or any of its subsidiaries.

(b) Confidential Information is the sole and exclusive property of the Company.
The Executive must not, either during or after the term of this Agreement,
directly or indirectly disclose any Confidential Information to any third party
without the written permission of the Board, except as required by his
employment with the Company, unless such information is in the public domain for
reasons other than the Executive’s conduct, or except as may be required by law
(provided that the Executive shall give the Company notice of any disclosure
required by law so that the Company shall have a reasonable opportunity to
attempt to preclude such disclosure). The Executive shall not use Confidential
Information to his own advantage or the advantage of parties other than the
Company. The Executive shall take all steps necessary to protect the
confidentiality of all Confidential Information and to inform the Company
immediately of any attempted or actual disclosure of Confidential Information to
any third party. The Executive agrees that, upon request of the Company or
termination of employment, whichever is first, he shall turn over to the Company
all documents, memoranda, notes, plans, records or material in his possession or
control that contain or are derived from Confidential Information.

(c) If at any time the Executive has any material information which belongs to
any former employer that the Executive is not entitled to have or use for the
benefit of the Company and its Affiliates, the Executive shall promptly return
any such materials to the Executive’s former employer or obtain any necessary
consents. The Executive is not permitted to use or refer to any such materials
in the performance of the Executive’s duties.

2. Non-Competition. During the period of the Executive’s employment with the
Company and its Affiliates and continuing for the twelve months after the
Termination Date (the “Restricted Period”), the Executive shall not directly or
indirectly own any interest in, manage, control, participate in, be employed by,
consult with, render services for, or in any manner engage in any Competing
Business within any geographical area in which the Company or any of its
controlled affiliates engage or have active plans at the Termination Date to
engage in such businesses. The restriction is without specific geographic
limitation inasmuch as the Company and its Affiliates conduct business on a
nationwide and international basis, that its sales and marketing prospects are
for continued expansion both nationally and internationally, that access to the
Company’s Confidential Information would provide any national or international
competitor with an unfair competitive advantage, and that, therefore, the
restrictions set forth in this Section are reasonable and properly required for
the adequate protection of the legitimate interests of the Company. Nothing
herein shall prohibit the Executive from owning beneficially not more than 2% of
any class of outstanding equity securities or other comparable interests of any
issuer that is publicly traded, so long as the Executive has no active
participation in the business of such issuer. For purposes hereof, the term
“Competing Business” means any business that is engaged in the production or
sale of products that compete with the products produced, distributed or sold by
the Company or its Affiliates (or are in the process of being actively developed
by such entities) as of the Date of Termination. This restriction shall not
prevent the Executive from working for a subsidiary, division, venture or other
business or functional service unit (collectively a “Unit”) of a Competing
Business so long as (i) such Unit is not itself a Competing Business, (ii) the
Executive does not manage or participate in business activities or projects of
any Unit that is a Competing Business, and (iii) the Executive otherwise
strictly complies with the restrictive covenants contained in this Exhibit A.

 

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3. Nonsolicitation.

(a) During the Restricted Period, the Executive must not, as an individual,
employee, consultant, agent, owner, partner, director or stockholder, directly
or indirectly solicit, call on or accept any business from any Customer of the
Company or its Affiliates. The term “Customer” means all persons, firms or
corporations to whom the Company or its Affiliates sold products at any time
during the one year period immediately preceding when the Executive’s employment
with the Company ceased, notwithstanding that some or all of such persons, firms
or corporations may have been induced to give business to the Company or its
Affiliates by the Executive.

(b) During the Restricted Period, the Executive must not take any action to
divert from the Company or its Affiliates any opportunity in the scope of any
present or contemplated future business of the Company or its Affiliates that
arose while he was employed by the Company.

(c) During the Restricted Period, the Executive must not directly or indirectly
solicit, hire, employ or engage any employee or any former employee of the
Company or its Affiliates whose employment with the Company or its Affiliates
ceased less than one year before the date of such solicitation, enticement,
hiring or engagement.

4. Non-Disparagement. The Executive at all times, both during and after the
Executive’s employment with the Company, shall not make any statement
disparaging the Company, any officer, director, employee or other service
provider for the Company, or any product or service offered by the Company.

5. Stop-Transfer. The Executive agrees (i) not to (a) offer, pledge, announce
the intention to sell, sell, contract to sell, or sell any shares of common
stock of the Company (or any securities substituted therefore) that he or she
has acquired solely pursuant to the terms of this Agreement, less any such
shares used for the exercise of an Equity Award or for the maximum amount of
federal income tax or employment tax withholding (such shares, the “Net
Shares”), or option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any of the Net Shares or (b) enter into any
swap or other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Net Shares, whether any transaction described
in clause (a) or (b) is to be settled by delivery of securities, in cash or
otherwise, during the period beginning on the date of the applicable of the
Executive’s Qualifying Termination other than during the Protected Period, death
or Disability, and lapsing with respect to 25% of the Net Shares on each
three-month anniversary of such date, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company. The Company may
impose legends or restrictions on the Net Shares, or impose stop-transfer
instructions with respect to the Net Shares, during such period as the foregoing
restrictions are in effect.

6. Scope of Restrictions. In the event any provision relating to the time period
or scope of the restrictions in this Exhibit A shall be declared by a court of
competent jurisdiction to exceed the maximum time period or scope such court
deems reasonable and enforceable, such time period or scope shall be deemed
amended and reformed to the minimum degree necessary to be enforceable.

 

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