Exhibit
10.22

MANAGEMENT
AGREEMENT

This
Management Agreement (this Agreement) is effective April 8, 2009 (the Effective
Date) by and between Vaughan Foods, Inc. (the Company) and Mark E. Vaughan (the
Executive) with respect to the
following:.

WHEREAS,
the Executive currently serves as a senior executive officer of the Company;
and

WHEREAS,
the Company desires to provide stability to the Employer/Employee relationship
of the Executive by entering into this Agreement with the Executive; and

WHEREAS,
the Board of Directors of the Company believes it in the best interest of the
Company to provide continuity of its senior management by entering into employment
agreements with certain members of its senior management team.

NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

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|16. | Term of Agreement; Defined Terms.

(a)
Term of Agreement. This Agreement shall not have any specific duration
and shall continue in full force and effect unless and until (i) the Executives
employment is terminated by either party in accordance with Section 3, and (ii)
all obligations and liabilities of the parties arising in connection with such
termination or otherwise accruing under this Agreement have been fully
satisfied. Notwithstanding any contrary
provision in this Agreement, nothing in this Agreement constitutes a guarantee
of continued employment but instead provides for certain rights and benefits
during the Executives employment with the Company and if such employment
terminates.

(b)
Defined Terms. Capitalized terms used throughout this Agreement have the
meaning ascribed to such terms in Exhibit A attached hereto.

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|17. | Terms, Conditions, and Benefits of
 Employment.

(a)
Position and Duties. The Executive shall serve as President and
Chief Operating Officer of the Company or in such other substantially
equivalent position(s) requested by the Board with the appropriate authority,
duties, and responsibilities attendant to such position(s). The Executive shall
devote his full working time, best efforts, abilities, knowledge, and
experience to the Companys business and affairs as necessary to faithfully
perform his duties, responsibilities, and authorities under this
Agreement. The Executive may, without
violating this Agreement, (i) serve on corporate, civic, charitable, or
industry boards or committees, (ii) deliver lectures, fulfill speaking
engagements, or teach at educational institutions, or (iii) manage
personal investments, so long as such activities do not significantly interfere
with the Executives obligations under this Agreement; provided, however,
that the Executive shall not serve on the board of any business, hold any other
position with any business, or otherwise engage in any

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business activity, without the prior written consent
of his Supervisor. If the Executive conducted any such activities as of the
Effective Date, then the continuation of such activities (or similar activities
for the same organization) after the Effective Date shall be permitted.

(b)
Annual Base Salary. The
Executive shall receive an Annual Base Salary, which may be increased from time
to time in the Companys discretion but shall not be reduced unless the Company
reduces the salaries of similarly situated executives, in which case the Annual
Base Salary may be reduced by the same percentage and shall be restored to its
prior level when, and to the same extent as, the Company restores the salaries
of such similarly situated executives.
Any increase in Annual Base Salary shall not limit or reduce any other
obligation owed to the Executive under this Agreement.

(c)
Annual Bonus. The Executive
shall be eligible to participate in a program in which he may receive an Annual
Bonus. If the Compensation Committee establishes
a target for the Annual Bonus as a percentage of the Annual Base Salary, then
such target shall not be less than the targets for similarly situated
executives of the Company. Unless
otherwise payable under Sections 4(b)(i)(B) or 4(c), the Executive must be
actively employed for the entire year upon which the Annual Bonus is based to
be eligible to receive such Annual Bonus.

(d)
Incentive Awards. In the
Compensation Committees discretion, the Company may provide the Executive with
annual equity grants, or cash awards in lieu of such grants, which shall be
comparable to the grants or awards made to similarly situated executives of the
Company.

(e)
Disability. The Company shall
provide the same disability insurance coverage benefits to the Executive as provided
to similarly situated executives of the Company. If, during his employment with
the Company, the Executive receives Short-Term Disability Payments, then the
Company shall pay the Executive the difference between the Short-Term
Disability Payments and the portion of his then-current Annual Base Salary the
Company would have paid him while receiving Short-Term Disability
Payments. If the Executive is Disabled
during his employment with the Company and otherwise entitled to receive salary
and bonus payments under this Agreement, then any such salary and bonus
payments (or such payments in lieu of salary and bonus payments) shall be
reduced by the amount of any Short-Term Disability Payments received by the
Executive for the period of short-term disability and any benefits paid for the
same period under the Company-provided disability insurance coverage.

(f)
Expenses. The Company shall
reimburse the Executive for all reasonable business-related expenses incurred
and accounted for in accordance with its standard policies and procedures for
expense reimbursements and deductibles under Section 162 of the Code.

(g)
Other Employee Benefits. During
the term of this Agreement, the Executive shall be entitled to participate in
all employee benefit, welfare, and other plans, practices, policies, and
programs applicable to similarly situated executives of the Company, subject to
the terms of such plans, practices, policies, and programs as they may be
amended from time to time. Specifically,
the Executive shall be entitled to four (4) weeks of paid vacation a year,
which if not taken may not be carried over to another year. During any CIC Period, the Company shall
continue to provide the Executive (and the Executives dependents, if
applicable) with the same level of

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health (including dental), disability, and life
(including accidental death/dismemberment) insurance benefits as were provided
to the Executive (and the Executives dependents, if applicable) immediately
before the Change in Control upon terms and conditions that are not materially
less favorable to the Executive than as in effect immediately before the Change
in Control with respect to each of such health, disability, and life insurance
coverages.

(h)
Fringe Benefits. To the extent
not otherwise covered under this Agreement, the Company shall provide the
Executive with fringe benefits and perquisites to the same extent and on the
same terms as those benefits are provided by the Company from time to time to
similarly situated executives of the Company.

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|18. | Termination of Employment;
 Suspensions; Change in Control.

(a)
Termination Upon Death. The Executives employment with the Company
shall terminate immediately upon the Executives death.

(b)
Reassignment of Duties and
Termination Due to the Executive Becoming Disabled.

(i)
Reassignment. Whether or not the
Executive is Disabled, the Company may reassign his duties during any time he
has become physically or mentally incapable of performing his essential job
functions with or without reasonable accommodation or job protection as
required by law and no such reassignment shall be deemed Good Reason for the
Executive to terminate his employment under Section 3(d).

(ii)
Termination. If the Executive
becomes Disabled, then the Company may give the Executive written notice of its
intent to terminate his employment, in which case such employment shall
terminate effective on the thirtieth (30th) day after receipt of such notice as
long as the Executive has not been medically released and returned to full-time
duty before such thirtieth (30th) day.

(c)
Termination by the Company; Cause. The Company may terminate the Executives
employment with the Company at any time whether with or without Cause. If the
Company terminates the Executives employment for Cause, then such termination
shall not be effective unless and until the Board (i) provides reasonable
notice and an opportunity to the Executive and his counsel (if applicable) to
be heard at a meeting called to discuss the Executives employment and (ii)
subsequently provides the Executive with a copy of a resolution duly adopted by
at least a three-fifths (3/5) majority of the Board specifying that the Board
has determined in good faith that Cause exists for terminating the Executives
employment.

(d)
Termination by the Executive; Good
Reason. The Executive may
terminate his employment with the Company at any time whether with or without Good Reason. If the Executive
believes Good Reason exists for terminating his employment, then he shall give
the Company written notice of the acts or omissions constituting Good Reason
within thirty (30) days after learning of such acts or omissions constituting
Good Reason (the Good Reason Notice).
No termination of employment for Good Reason shall be effective unless
(i) within thirty (30) days after receiving the Good Reason Notice, the Company
fails to either cure such acts or omissions or notify the Executive of the
intended method of cure, and (ii) the Executive delivers a Notice of
Termination to the Company and subsequently resigns within thirty (30)

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days after the Companys deadline in Section 3(d)(i)
expires. Notwithstanding the previous
sentence and at the Companys request, the Executive shall provide services
consistent with his then-current authority, duties, and responsibilities for up
to ninety (90) days after having provided the Good Reason Notice to the
Company.

(e)
Paid Suspensions.
Notwithstanding any contrary provision in this Agreement, the Company
may suspend the Executive with pay for up to thirty (30) days pending an
investigation authorized by the Company or the Board, or pursued by, or at the
request of, a governmental authority, to determine whether the Executive has
engaged in acts or omissions constituting Cause. Any such paid suspension shall
not constitute Good Reason for the Executive to terminate his employment under
Section 3(d). The Executive shall
cooperate with the Company in connection with any such investigation. If the Executives employment is
subsequently terminated for Cause in connection with such investigation, then the
Executive shall repay any amounts paid by the Company to the Executive during
such paid suspension.

(f)
Effect of a Change in Control on
Timing of Termination Date.
If the Company terminates the Executives employment other than for
Cause or the Executive becoming Disabled and a Change in Control occurs
following the Termination Date, then such Change in Control shall be deemed to
have occurred immediately prior to the Termination Date if either (i) the
Termination Date occurs following the execution of an agreement that provides
for a transaction or transactions that, if consummated, constitutes such Change
in Control, or (ii) the Executive reasonably demonstrates that such termination
was either (A) requested by a third party who had indicated an intention or
taken steps reasonably calculated to effect the Change in Control or who
effectuates such Change in Control, or (B) was otherwise in connection with, or
in anticipation of, such Change in Control.

(g)
Notice of Termination.
Any termination of the Executives employment by the Company or by the
Executive shall be effective only when communicated by a Notice of Termination
given to the other party in accordance with Section 15(d). In the event of a termination by the
Executive for Good Reason, a Notice of Termination shall be effective only if
given within the time limit established by Section 3(d).

(h)
Effect of Termination and Duties
Upon Termination. If, on the Termination Date, the Executive
is a member of the board of directors (or any similar governing body) or an
officer of the Company or any Affiliate, or holds any other position with the
Company or an Affiliate, then the Executive shall resign and be deemed to have
resigned from all such positions as of the Termination Date. Between the date a Notice of Termination is
delivered and the Termination Date, the Executive shall continue to perform his
duties under this Agreement and such services for the Company as are necessary
and appropriate for a smooth transition to the Executives replacement, if any. Notwithstanding the foregoing sentence, the
Company may relieve the Executive from further duties under this Agreement
after receiving a Notice of Termination; provided, however, that prior
to the Termination Date, the Executive shall continue to be treated as a
Company employee for other purposes and the Executives rights to compensation
or benefits shall not be reduced by reason of the relief. Upon the Termination Date, the Executive
shall return to the Company any keys, credit cards, passes, confidential
documents or material, or other property belonging to the Company, and all
writings, files, records, correspondence,

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notebooks,
notes, and other documents and things (including any copies thereof) containing
any Confidential Information.

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|19. | Obligations of the
 Company Upon Termination.

(a)
Accrued Obligations. Upon any
termination of the Executives employment for any reason, the Company shall pay
the Executive (i) his accrued Annual Base Salary and accrued, unused vacation
through the Termination Date in a lump sum in cash within thirty (30) days
after the Termination Date, and (ii) if the Executive is actively employed
during the entire year upon which such Annual Bonus is based under Section 2(c)
before the Termination Date, the Annual Bonus at the same time as such bonuses
are paid to similarly situated executives of the Company but in no event later
than two and one-half (21⁄2) months after the end of the taxable year in which
any substantial risk of forfeiture with respect to such bonus lapses (the payments
in (i) and (ii) shall be referred to as the Accrued Obligations).

(b)
Good Reason; Other Than for Cause,
Death, or Becoming Disabled. If (x) the Company terminates the
Executives employment other than for Cause, the Executives death, or the
Executive becoming Disabled, or (y) the Executive terminates his employment for
Good Reason, then the Company shall, in addition to the payment of the Accrued
Obligations, have the following obligations to the Executive:

(i)
the Company shall pay the Executive within thirty (30) days after the
Termination Date

(A)
a lump sum in cash equal to 1 times the sum of:

(1)
the greater of (x) the Executives then-current Annual Base Salary, and (y) the
Executives Annual Base Salary at any time during the two (2) years before the
Termination Date; and

(2)
the average of the Annual Bonuses received by the Executive within three (3)
years before the Termination Date (or, if termination occurs during the CIC
Period, the greater of (x) the average Annual Bonus received by the Executive
within three (3) years before the Termination Date, and (y) the average Annual
Bonus received by the Executive within three (3) years before the Change in
Control); provided, however, if the Executives employment began in the
same calendar year as the termination of such employment, then the Annual Bonus
amount used for calculating the lump sum payment due shall be determined by the
Compensation Committee in its discretion; and

(B)
any applicable Prorated Annual Bonus;
and

(ii)
the Company shall provide the Executive

(A)
for the period allowed under Section 4980B of the Code, with the same level of
health and dental insurance benefits for the Executive (and his dependents, if
applicable) upon substantially similar terms and conditions (including
contributions required by the Executive for such benefits) as existed
immediately before the Termination Date (or, if more favorable to the
Executive, as such benefits and terms and conditions existed immediately before

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the Change in Control, if applicable); provided,
however, if the Executive is not eligible to continue participating in the
Company plans providing such benefits, then the Company shall otherwise provide
such benefits on the same after-tax basis as if continued participation had
been permitted. The Companys obligations
under this subparagraph (A) shall apply against its coverage obligations under COBRA. Notwithstanding the foregoing, if the
Executive becomes eligible to receive health and dental insurance benefits
through subsequent employment, then the Executive shall ensure that a
coordination of benefits occurs so that the medical and dental plan of the
Executives new employer shall be responsible for such medical and dental
benefits that are available under the new employers plans before any medical
and dental benefits are provided pursuant to this subparagraph (A);

(B)
for three (3) years following the Termination Date, with the same level of life
insurance benefits upon substantially similar terms and conditions (including
contributions required by the Executive for such benefits) as existed
immediately before the Termination Date (or, if more favorable to the
Executive, as such benefits and terms and conditions existed immediately before
the Change in Control); provided, however, if the Executive is not
eligible to continue participating in the Company plans providing such life
insurance benefits, then the Company shall otherwise provide such benefits on
the same after-tax death benefit basis as if continued participation had been
permitted.

(iii)
if the value of any benefits or payment provided under subparagraphs (A) and (B)
above is subject to income taxes, and would not have been subject to income
taxes if the Executive had continued employment with the Company, then the
Company shall pay the Executive a Gross-Up Payment (as described in Section
7(a)) in an amount equal to the aggregate amount of the additional federal,
state, and local income taxes payable by the Executive as a result of the
receipt of such benefit or payment by December 31 of the year next following
the Executives taxable year in which the income taxes were incurred; and

(iv)
the Company shall pay, or reimburse the Executive, for a reasonable amount of
outplacement services from a mutually agreeable service provider for twelve (12)
months following the Termination Date.
The amount of such outplacement services shall be commensurate with the
Executives title and position with the Company and other executives similarly
situated in other companies within the Companys peer industry group. Any reimbursement of such expenses shall be
made by December 31 of the Executives taxable year following the year the
expenses were incurred.

(c)
Death or Disabled. If the Executives employment terminates due
to death or because he is Disabled, then this Agreement shall terminate without
further obligations to the Executive or his legal representatives, as
applicable, under this Agreement, other than the obligation to pay, within
thirty (30) days after the Termination Date, (i) the Accrued Obligations, and
(ii) any applicable Prorated Annual Bonus.

(d)
Cause; Other than for Good Reason. If the Executives employment is terminated
for Cause or the Executive terminates his employment without Good Reason, then
this Agreement shall terminate without further obligations to the Executive
under this Agreement other than for payment of the Accrued Obligations.

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(e)
Application of Section 409A of the
Code. Notwithstanding
the above paragraphs of this Section 4, if the Company determines that (i) the
Executive is a specified employee within the meaning of Section 409A of the
Code (Section 409A) as
of the date of his separation from service as defined by Section 409A (Separation
from Service), and (ii) any amount of any payment to be made under this
Section 4 is subject to Section 409A, then such amount shall not be paid to the
Executive until six (6) months after the date of his Separation from Service
(or, if earlier, the date of his death).
In such case, the portion of the payment so delayed shall be paid in a
single lump sum in cash on the first (1st) day of the seventh (7th) month
following the Executives Separation from Service (or, if earlier, upon his
death).

(f)
General Release. The Companys obligation to make the payments
described under Section 4(b) shall be conditioned on the Executive signing and
not revoking the general form of release attached as Exhibit B or such
other form acceptable to the Company within the time periods provided in such
release. The Company shall not be
required to make any payment under Section 4(b) until the period for the
Executive to revoke the release has expired.

20.      Non-Exclusivity
of Rights. Except
as specifically provided in Sections 4(b)(ii)(A) and 4(b)(v), nothing in this
Agreement shall prevent or limit the Executives right to participate in any
plan, program, policy, or practice provided by the Company or any Affiliate and
for which the Executive may qualify, nor shall anything in this Agreement limit
or otherwise affect such rights as the Executive may have under any other
contract or agreement with the Company or any Affiliate. Amounts that are vested benefits or that the
Executive is otherwise entitled to receive under any plan, policy, practice, or
program of, or any contract or agreement with, the Company or any Affiliate at
or after the Termination Date shall be payable in accordance with such plan,
policy, practice, program, contract, or agreement, except as explicitly
modified by this Agreement; provided, however, that the Executive shall
not be eligible for severance benefits under any other severance program,
policy, practice, or plan of the Company or any Affiliate providing benefits
upon involuntary termination of employment.

21.      Full
Settlement. The
Companys payment and other obligations under this Agreement shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right, or action against the Executive or others. The Executive shall have no obligation to seek employment or
otherwise mitigate his damages under this Agreement and amounts payable to the
Executive under this Agreement shall not be reduced whether or not the
Executive obtains other employment, except as provided in Section 4(b)(ii) of
this Agreement.

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|22. | Certain Additional Payments by the
 Company.

(a)
Gross-Up Payment.
Notwithstanding any contrary provision of this Agreement and except as
provided below, if any payment, benefit, or distribution by the Company, any
Affiliate, or trusts established by the Company or any Affiliate for the
benefit of its employees, to or for the benefit of the Executive (whether
pursuant to this Agreement or otherwise but determined without regard to any
additional payments required under this Section 7) (each, a Payment) is determined to be
subject to excise tax imposed by the Code, including Section 4999 of the
Code, or any interest or penalties are incurred by the Executive with respect
to such an excise tax (such excise tax and any such interest and penalties
shall referred to as the Excise
Tax), then the Executive shall be entitled to receive an additional
payment (a Gross-Up Payment)
in an

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amount such that, after payment by the Executive of
all taxes (including any applicable interest or penalties) and Excise Tax
imposed upon or related to the Gross-Up Payment, the Executive retains a
Gross-Up Payment amount equal to the Excise Tax imposed upon the Payments.

(b)
Determinations and Tax Notice.
Subject to Section 7(c), all determinations required under this Section
7, including whether and when a Gross-Up Payment is required and its amount,
shall be made by a nationally recognized certified public accounting firm
designated and paid by the Company (the Accounting Firm), which shall
provide its analysis and detailed supporting calculations to both the Company
and the Executive within fifteen (15) business days after the Executive
delivers to the Company any written notice of any claim by the Internal Revenue
Service that may require the Companys Gross-Up Payment (the Tax Notice). The Company shall pay any Gross-Up
Payment
due under this Section 7 to the Executive within five (5) days after receiving
the Accounting Firms determination but in no event later than December 31 of
the year next following the taxable year in which the Executive received the
Payment. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, then it shall
furnish the Executive with an opinion supporting the determination not to
report an Excise Tax on the Executives federal income tax return. Any
determination by the Accounting Firm shall be binding upon the parties. Due to
the uncertainty of the application of Section 4999 of the Code when the initial
determination is made by the Accounting Firm, it is possible that Gross-Up
Payments that will not have been made by the Company should have been made (Underpayment),
consistent with the calculations required under this Section 7. If the Company exhausts its remedies
pursuant to Section 7(c) and the Executive thereafter is required to pay any
Excise Tax, then the Accounting Firm shall determine the amount of the
Underpayment that has occurred, and any such Underpayment shall be promptly
paid by the Company to or for the benefit of the Executive but in no event
later than the December 31 of the year next following the taxable year in which
the Executive received the Payment.

(c)
Contests.
The Tax Notice shall be given as soon as practicable but no later than
ten (10) business days after the Executive receives written notice of such
claim describing the nature of such claim and indicating the due date for such
claim. The Executive shall not pay such claim until thirty (30) days after
delivering the Tax Notice to the Company (or such shorter period imposed by the
Internal Revenue Service). If
the Company notifies the Executive in writing before the expiration of such period
that it desires to contest such claim, then the Executive shall:

(i)
provide any information reasonably requested by the Company relating to such
claim;

(ii)
contest such claim as the Company shall reasonably request in writing,
including, without limitation, accepting legal representation reasonably
selected by the Company;

(iii)
cooperate with the Company in good faith to effectively contest such claim; and

(iv)
permit the Company to participate in any proceedings relating to such claim.

The Company (x) shall pay all costs and expenses
(including additional interest and penalties)

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related to such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties) imposed as a result of such representation
and payment of costs and expenses, (y) shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings, and conferences with the
taxing authority in respect of such claim, and (z) may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, in which case, the Executive shall
administratively and judicially prosecute such contest to a determination as
the Company shall determine; provided, however, that the Companys
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable under this Agreement and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority. If the Company
directs the Executive to pay such claim and sue for a refund, then the Company
shall, to the extent permitted by law, advance the amount of such payment to
the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties) imposed with respect to such advance or with
respect to any imputed income with respect to such advance. The Company shall make any payment in
reimbursement of costs and expenses, Excise Tax, income tax, or other amounts
due the Executive under this Section 7(c) no later than December 31 of the year
following the year in which (x) the taxes that are the subject of the audit are
remitted to the taxing authority, or (y) there is a final and non-appealable
settlement or other resolution of the litigation.

(d)
Refunds. If, after receiving an
advance from the Company pursuant to Section 7(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
promptly pay the Company the amount of such refund (together with any interest
paid or credited after applicable taxes). If, after receiving an advance from
the Company pursuant to Section 7(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund before the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset the amount of the
Gross-Up Payment required to be paid.

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|23. | Confidential Information and
 Non-Solicitation.

(a)
Confidential Information. Given
his position and employment with the Company, the Executive acknowledges that
he will be using, acquiring, and adding to Confidential Information of a
special and unique nature and value to the Company and its strategic plan and
financial operations. The Executive further acknowledges that all Confidential
Information belongs exclusively to the Company, is material and proprietary,
and is critical to the Companys success. Accordingly, the Executive shall use
Confidential Information only to the Companys benefit and shall not at any
time during or after his employment with the Company directly or indirectly
disclose any Confidential Information to any person or use any Confidential
Information for the Executives own benefit, for the benefit of others, or to
the Companys detriment.

(b)
Legally Required Disclosure. If
any court or agency requests the Executive to disclose Confidential
Information, then the Executive shall promptly notify the Company and

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take reasonable steps to prevent such disclosure until
the Company receives such notice and has an opportunity to respond to such
court or agency. If the Executive obtains information that may be subject to
the attorney-client privilege of the Company or any Affiliate, then the
Executive shall take reasonable steps to maintain the confidentiality of such
information and to preserve such privilege.

(c)
Exceptions. Confidential
Information shall not include knowledge that was acquired during the course of
the Executives employment under this Agreement that is generally known to
persons of the Executives experience in other companies in the same industry.

(d)
Legal Proceedings. This Section
8 shall not unreasonably restrict the Executives ability to disclose
Confidential Information in any legal proceeding involving any claim for breach
or enforcement of this Agreement. If the parties dispute whether information
may be disclosed in accordance with this Section 8(d), then the matter shall be
considered an Employment Matter and decided in accordance with Section 10.

(e)
Other Obligations. This
Agreement supplements, rather than supplants, the Executives obligations under
any Company policy relating to confidential information and any agreement of
the Executive relating to confidentiality, inventions, copyrightable material,
business and/or technical information, trade secrets, solicitation of
employees, interference with business relationships, competition, and other
similar matters that protect the business and operations of the Company or its
Affiliates.

(f)
Non-Solicitation. During his
employment with the Company and for eighteen (18) months following the date
such employment terminates, regardless of the reason for such termination, the
Executive shall not directly or indirectly hire, employ, solicit for
employment, attempt to solicit for employment, or communicate with about
changing employment, any person who was an employee of the Company or its
Affiliate within six (6) months of such hiring, employing, soliciting, or
communicating.

(g)
Remedies. The Executive
acknowledges and agrees that the Company will have no adequate remedy at law
and could be irreparably harmed if the Executive breaches or threatens to
breach his obligations under this Section 8. The Company shall be entitled
to equitable and/or injunctive relief to prevent any such breach or threatened
breach and to specific performance in addition to any other available legal or
equitable remedies. The Executive shall
not, in any equity proceeding relating to the enforcement of this
Section 8, raise the defense that the Company has an adequate remedy at
law.

(h)
Survival. The Executives
obligations under this Section 8 shall survive any termination of the Executives
employment or of this Agreement.

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|24. | Assignment; Successors.

(a)
Assignment. The Companys rights
and obligations under this Agreement may not be assigned to any entity other
than an Affiliate without the Executives consent. The Executives duties,
responsibilities, authorities, compensation, and benefits are personal to the
Executive and may not be assigned to any person or entity without written
consent from the

10

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Company other than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executives legal representatives.

(b)
Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

(c)
Assumption. The Company shall
require any successor or assignee (whether direct or indirect, by purchase,
merger, consolidation, or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession or assignment had taken place.

|    |                                               
|--- | ----------------------------------------------
|25. | Dispute Resolution and Guarantees
 of Payment.

(a)
Mandatory Arbitration. Subject to Section 10(b), any Employment
Matter shall be finally settled by arbitration in Oklahoma City, Oklahoma
administered by the AAA under its Employment Arbitration Rules then in effect; provided,
however, that the AAAs Employment Arbitration Rules shall be modified as
follows: (i) each arbitrator shall agree to treat as confidential evidence and
other information presented, and (ii) there shall be no authority to award
punitive damages or liquidated or indirect damages unless such damages could be
awarded by a court of competent jurisdiction.
The decision of the arbitrator(s) shall be enforceable in any court of
competent jurisdiction.

(b)
Injunctions and Enforcement of
Arbitration Awards. Either
party may bring an action or special proceeding in a state or federal court of
competent jurisdiction in Oklahoma City, Oklahoma to enforce any arbitration
award under Section 10(a). The Company
also may bring such an action or proceeding, in addition to its rights under
Section 10(a) and whether or not an arbitration proceeding has been or is ever
initiated, to temporarily, preliminarily, or permanently enforce Sections 8 or
11. The Executive agrees that (i) violating Sections 8 or 11 would damage
the Company in ways that cannot be measured or repaired, (ii) the Company
shall be entitled to an injunction, restraining order, or other equitable
relief restraining any actual or threatened violation of Sections 8 or 11,
(iii) the Company shall not be required to post a bond or prove actual damages
when seeking such an injunction, restraining order, or other equitable relief,
and (iv) remedies at law for such violations would be inadequate.

(c)
Waiver of Jury Trial. To the extent permitted by law, the parties
waive any and all rights to a jury trial with respect to any Employment Matter.

(d)
Attorney Fees.

(i)
If (A) a claim for arbitration or a lawsuit in connection with an Employment
Matter (an Employment Matter Claim) is filed by either of the parties,
and (B) the Executive is ultimately successful in respect of one or more
material claims or defenses brought, raised or pursued in connection with such
Employment Matter Claim, then the Company shall reimburse the Executive for all
legal fees and expenses reasonably incurred in connection with such Employment
Matter Claim, provided that such legal fees are reasonable and are calculated
on an hourly rather than a contingency fee basis, as well as all costs and
expenses reasonably incurred in connection with pursuing or defending any such
Employment Matter Claim. Except as

11

---



provided in Section 10(d)(ii) below, the Company shall
make such reimbursement to the Executive as soon as practicable following final
resolution of the Employment Matter Claim, but no later than December 31 of the
year immediately following the year of such resolution, provided that the Company
receives appropriate documentation of such attorneys fees, costs, and expenses,
which shall be provided by the Executive no later than the later of (x)
December 31 of the year in which resolution occurs, or (y) sixty (60) days
following the resolution of the Employment Matter Claim.

(ii)
If an Employment Matter Claim is filed by either of the parties during the CIC
Period, or (B) an Employment Matter Claim has been filed prior to a Change in
Control but has not been resolved as of the effective date of a Change in
Control, then the Executive may submit his request for reimbursement of
attorneys fees, costs and expenses on a monthly basis during the pendency of
such Employment Matter Claim. Within sixty (60) days following the Companys
receipt of each such monthly request and appropriate documentation supporting
such request for reimbursement of attorneys fees, costs and expenses, the
Company shall reimburse the Executive (or pay directly to the Executives
attorney) the Executives attorneys fees, costs and expenses that the Company
is obligated, pursuant to Section 10(d)(i) above, to reimburse with respect to
such Employment Matter Claim. In the event the Executive ultimately fails to be
successful with respect to at least one of the Executives material claims or
defenses brought, raised or pursued in connection with such contest or dispute,
the Executive shall repay the Company the amount of any such reimbursement
received in connection with such dispute in accordance with this Section 10(d)
(without interest) as soon as practicable following the final resolution of
such matter.

(e)
Secondary Liability for Payment.
If any Affiliate is not otherwise obligated to provide benefits to the
Executive by this Agreement, then the Company shall take, and cause each such
Affiliate (the Guarantors) to take, such actions as are necessary to
cause the Guarantors to jointly and severally guarantee the payment of benefits
otherwise due to the Executive under this Agreement if the Company fails to pay
such benefit within thirty (30) days of the due date for such payment; provided,
however, that no entity organized under the laws of any jurisdiction
outside the United States shall have an obligation to enter into such
guarantee. Each of the Guarantors shall be subrogated to the Executives rights
under this Agreement to the extent of any payments by each such Guarantor to or
on account of the Executive under this Section 10(e).

26.      Non-Disparagement. The Executive shall
not make any negative or disparaging comments regarding the Company or its
Representatives or its or their respective performance, operations, or business
practices, or otherwise take any action that could reasonably be expected to
adversely affect the Company or such Representatives or their personal or
professional reputations. The Executive
may truthfully respond to inquiries by government agencies or to inquiries by
any person through a subpoena or other valid judicial process without violating
this Section 11, provided that the Executive delivers written notice of such
required disclosure to the Company promptly before making such disclosure,
unless such notice to the Company is prohibited by applicable law, court order,
subpoena, process, or governmental decree.

12

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|    |                               
|--- | ------------------------------
|27. | Indemnification and Insurance.

(a)
Indemnity. The Company
shall, to the maximum extent permitted by law, defend, indemnify, and hold
harmless the Executive and the Executives heirs, estate, executors, and
administrators against any costs, losses, claims, suits, proceedings, damages,
or liabilities to which they may become subject to arising from, based on, or
relating to the Executives employment by the Company (and any predecessor of
the Company), or the Executives service as an officer or member of the board
of directors (or any similar governing body) of the Company (or any predecessor
of the Company) or any Affiliate, including without limitation reimbursement
for any legal or other expenses reasonably incurred by the Executive in
connection with investigation and defending against any such costs, losses,
claims, suits, proceedings, damages, or liabilities.

(b)
Insurance. The Company
shall maintain directors and officers liability insurance in commercially
reasonable amounts (as reasonably determined by the Board), and the Executive
shall be covered under such insurance to the same extent as other similarly
situated executives of the Company; provided, however, that the Company
shall not be required to maintain such insurance coverage if the Board
determines that it is unavailable at reasonable cost, provided that the
Executive is given written notice of any such determination promptly after it
is made.

(c)
Gross-Up. If the value of
any benefits or payment provided under Section 12(a) is subject to income
taxes, then the Company shall make a Gross-up Payment (as described in Section
7(a)) to the Executive, by December 31 of the year next following the Executives
taxable year in which the income taxes were incurred, such that, after payment
of all taxes imposed on or related to such Gross-up Payment, the Executive
retains an amount equal to 75% of the federal, state, and local income taxes
imposed upon such benefits or payment.

28.      Executive
to Provide Assistance with Claims. During his employment with the Company and
following the termination of such employment, regardless of the reason for such
termination, the Executive shall assist the Company in defending any claims
that may be made against the Company, and shall assist the Company in
prosecuting any claims that may be made by the Company, to the extent that such
claims may relate to the Executives services for the Company. The Executive shall promptly inform the
Company if he learns of any lawsuits involving such claims that may be filed
against the Company. The Company shall reimburse the Executive for all
reasonable out-of-pocket expenses associated with such assistance, including
travel expenses, incurred and accounted for in accordance with its standard
policies and procedures for expense reimbursements and deductibles under
Section 162 of the Code. For periods after the Termination Date, the Company
shall provide reasonable compensation to the Executive for such assistance at a
rate to be determined by the Company in its discretion. The Executive shall
promptly inform the Company if asked to assist in any investigation of the
Company that may relate to the Executives services for the Company, regardless
of whether a lawsuit has then been filed against the Company with respect to
such investigation. For purposes of
this Section 13, the term Company shall include the Company and its
Affiliates.

29.      Entire
Agreement. Except
as provided in Section 8(e), this Agreement constitutes the entire agreement
among the parties with respect to its subject matters and supersedes any and
all prior or contemporaneous oral and written agreements and understandings
with respect to such subject matters, including without limit all prior
agreements relating to employment, severance, or change in control; provided,
however, that this Agreement shall not adversely affect the

13

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Executives rights under the terms of any option on
stock of the Company or any other award based on the stock of the Company.

|    |               
|--- | --------------
|30. | Miscellaneous.

(a)
Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma, without reference to its
conflict-of-laws principles.

(b)
Captions. The captions of this Agreement are not part of this Agreement
and shall have no force or effect.

(c)
Amendment. This Agreement may not be amended or modified except by a written
agreement executed by the parties or their respective successors and legal
representatives.

(d)
Notices. All notices and other communications under this Agreement shall
be in writing and sent to the other party by either hand delivery, pre-paid overnight
carrier, or registered or certified U.S. mail (return receipt requested)
postage prepaid, addressed as follows:

| |                                         
| | ----------------------------------------
| | If to the Executive:                    
| |                                         
| | Mark E. Vaughan                         
| | Vaughan Foods, Inc.                     
| | 216 NE 12th Street                      
| | Moore, Oklahoma 73160                   
| |                                         
| | If to the Company:                      
| |                                         
| | Vaughan Foods, Inc.                     
| | 216 NE 12th Street                      
| | Moore, Oklahoma 73160                   
| |                                         
| | With copies to:                         
| |                                         
| | J. Dudley Hyde, Esq.                    
| | McAfee & Taft A Professional Corporation
| | 10th Floor, Two Leadership Square       
| | 211 N. Robinson                         
| | Oklahoma City, Oklahoma 73102           

or to such other address as either party shall have furnished
to the other in writing. Such notice shall be deemed given (i) in the case of
hand delivery, the day of delivery; (ii) in the case of overnight delivery, the
next business day or the day designated for delivery; and (iii) in the case of
certified or registered U.S. mail, five (5) days after deposit in the U.S.
mail; provided, however, that in no event shall any such notices be
deemed to be given later than the date they are actually received.

(e)
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, and this

14

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Agreement shall be construed as if such invalid or
unenforceable provisions were omitted (but only to the extent such provision
cannot be appropriately reformed or modified). If any such provision may be
made enforceable by limitation, then such provision shall be deemed to be so
limited and shall be enforceable to the maximum extent permitted by applicable
law.

(f)
Withholdings. The Company may withhold from any amounts payable under
this Agreement all amounts authorized by the Executive or required to be
withheld under any applicable federal, state, local, or foreign law or
regulation.

(g)
Waiver. The waiver by either party of a breach of any term or provision
of this Agreement shall not operate or be construed as a waiver of a subsequent
breach of the same term or provision by either party or of the breach of any
other term or provision of this Agreement.

(h)
Representations and Warranties. The Executive represents and warrants
that (i) he is not, and shall not become, a party to any agreement, contract,
arrangement, or understanding, whether of employment or otherwise, that would
in any way restrict or prohibit him from undertaking or performing the duties
required by this Agreement or that would in any way restrict or prohibit his
ability to be employed by the Company in accordance with this Agreement; (ii)
his employment by the Company does not and shall not violate the terms of any
policy of, or any agreement with, any prior employer regarding confidentiality
or competition; and (iii) his position with the Company shall not require him
to improperly use any trade secrets or confidential information of any prior
employer or any other person or entity for whom he has performed services.

[SIGNATURES
APPEAR ON FOLLOWING PAGE]

15

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IN
WITNESS WHEREOF, the Company and the Executive have executed this Amended and
Restated Severance Agreement as of the Effective Date.

| |                                                        
| | -------------------------------------------------------
| | /s/ Mark E. Vaughan                                    
| |                                                        
| | Mark E. Vaughan                                        
| |                                                        
| | Vaughan Foods, Inc.                                    
| |                                                        
| | /s/ Herbert B. Grimes                                  
| |                                                        
| | By: Herbert B. Grimes                                  
| | Its: Chairman of the Board and Chief Executive
 Officer

16

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Exhibit A

Definitions

Definitions. The following terms, when used throughout this Agreement, shall have the
following meanings:

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |  | 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|42. | AAA means the American Arbitration
 Association.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|43. | Accounting
 Firm has the meaning ascribed to such term in Section 7(b).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|44. | Act means the Securities Exchange of Act of
 1934, as amended from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|45. | Accrued Obligations has the meaning
 ascribed to such term in Section 4(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|46. | Affiliate means, with respect to the
 Company, any person that directly, or indirectly through one or more
 intermediaries, controls, is controlled by, or is under common control with,
 the Company; provided, however, that a natural person shall not be
 considered an Affiliate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|47. | Agreement has the meaning set forth in the
 preamble.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|48. | Annual Base Salary means the annual base
 salary of the Executive as in effect from time to time. During the term of
 this Agreement, the Annual Base Salary shall be $260,000 per year, plus the
 use of a company vehicle. The Annual Base Salary is reviewed annually. When
 the Company and its subsidiaries collectively achieve annualized revenue of
 at least $125,000,000 (based on 6-month trailing average), Executives then
 current Annual Base Salary shall be increased by $26,000. Any increase in
 Annual Base Salary shall not service to limit or reduce any obligations of
 Executive in this Agreement. The Annual Base Salary shall not be reduced
 after any increase, and the term Annual Base Salary shall refer to the
 Annual Base Salary as so increased. The Annual Base Salary shall be payable
 in regular installments in accordance with the Companys general payroll
 practices and shall be subject to FICA and income tax withholding.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|49. | Annual Bonus means, with respect to any
 given year, the annual bonus payable to the Executive with respect to that
 year, as determined by the Compensation Committee in its discretion. The
 Annual Bonus target shall be up to 50% of Annual Base Salary in accordance
 with the Companys Bonus Performance Plan proposed by the senior management
 of the Company and approved by the Board. Executive shall only be eligible to
 receive a Annual Bonus at the end of such fiscal year if Executive remains
 employed by the Company or an Affiliate at such, time or under the terms of a
 separate severance arrangement if not then employed by the Company. See
 Section 4(b)(i) if the Executive is terminated for Good Reason.                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|50. | Board means, at any given time, the Companys
 Board of Directors at that time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

- 1 -

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|51. | Cause means any of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the willful failure by the Executive to
 substantially perform the Executives duties for the Company or an Affiliate
 (other than due to physical or mental incapacity) within thirty (30) days
 after receiving a written demand for substantial performance from the
 Supervisor, the CEO, or the Board;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the willful engaging by the Executive in illegal or
 dishonest conduct or gross misconduct that is materially and demonstrably
 injurious to the Company or an Affiliate; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the conviction of the Executive of a felony or any
 crime of moral turpitude, a guilty or nolo contendere plea by the Executive
 with respect to a felony or any crime of moral turpitude, or the deferred
 adjudication or unadjudicated probation of the Executive with respect to a
 felony or any crime of moral turpitude;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | provided, however, that (x) an act
 or omission by the Executive shall be considered willful only if it was not
 in good faith and was without reasonable belief that it was in the Companys
 best interests, and (y) any act or omission by the Executive based upon
 authority granted by resolution duly adopted by the Board, the instructions of
 the Supervisor, or the advice of counsel for the Company shall be
 conclusively presumed to be in good faith and in the Companys best
 interests.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|52. | CEO means, at any given time, the Chief
 Executive Officer of the Company at that time.                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|53. | Change in Control means the occurrence of
 any one of the following events:                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | The Incumbent Directors cease for any reason to
 constitute at least a majority of the Board;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | any person is or becomes a beneficial owner (as defined
 in Rule 13d-3 under the Act), directly or indirectly, of Company
 securities representing 30% or more of either (x) the Companys outstanding
 shares of common stock or (y) the combined voting power of the Companys then
 outstanding securities eligible to vote in the election of directors (each, Company Securities); provided,
 however, that the event described in this paragraph (b) shall not be
 deemed to be a Change in Control by virtue of any of the following
 acquisitions or transactions: (A) by the Company or any subsidiary,
 (B) by any employee benefit plan (or related trust) sponsored or
 maintained by the Company or any subsidiary, (C) by an underwriter
 temporarily holding securities pursuant to an offering of such securities, or
 (D) pursuant to a Non-Qualifying Transaction;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | the consummation of a merger, consolidation,
 statutory share exchange, or similar form of corporate transaction involving
 the Company or any of its subsidiaries that requires the approval of the
 Companys stockholders, whether for such transaction or the issuance of
 securities in the transaction (a Reorganization),
 or the sale or other disposition of all or substantially all of the Companys
 assets to an entity that is not an Affiliate (a Sale), unless:                                                                                                                                                                                                                                                                                                                                                                                                     

- 2 -

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (i)                                                                                                                                                               | the holders of the Companys shares of common stock
 either receive in such Reorganization or Sale, or hold immediately following
 the consummation of the Reorganization or Sale, more than 50% of each of the
 outstanding common stock and the total voting power of securities eligible to
 vote in the election of directors of (x) the corporation resulting from such
 Reorganization or the corporation that has acquired all or substantially all
 of the assets of the Company in connection with a Sale (in either case, the Surviving Corporation), or (y)
 if applicable, the ultimate parent corporation that directly or indirectly
 has beneficial ownership of 100% of the voting securities eligible to elect
 directors of the Surviving Corporation (the Parent Corporation),
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (ii)                                                                                                                                                              | no person (other than any employee benefit plan (or
 related trust) sponsored or maintained by the Surviving Corporation or the
 Parent Corporation) is or becomes, as a result of the Reorganization or Sale,
 the beneficial owner, directly or indirectly, of 30% or more of the
 outstanding shares of common stock or the total voting power of the
 outstanding voting securities eligible to vote in the election of directors
 of the Parent Corporation (or, if there is no Parent Corporation, the
 Surviving Corporation), and                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (iii)                                                                                                                                                             | at least a majority of the members of the board of
 directors of the Parent Corporation (or, if there is no Parent Corporation,
 the Surviving Corporation) following the consummation of the Reorganization
 or Sale were Incumbent Directors at the time of the Boards approval of the
 execution of the initial agreement providing for such Reorganization or Sale;                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (any Reorganization or Sale that satisfies all of
 the criteria specified in (i), (ii) and (iii) above shall be deemed to be a Non-Qualifying Transaction);
 or
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                  
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | the Companys stockholders approve a plan of
 complete liquidation or dissolution of the Company.                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                  
|    | Notwithstanding the foregoing, a Change in Control
 shall not be deemed to occur solely because any person acquires beneficial
 ownership of more than 30% of Company Securities due to the Companys
 acquisition of Company Securities that reduces the number of Company
 Securities outstanding; provided, however, if, following such
 acquisition by the Company, such person becomes the beneficial owner of
 additional Company Securities that increases the percentage of outstanding
 Company Securities beneficially owned by such person, a Change in Control
 shall then occur. In addition, if a Change in Control occurs pursuant to
 paragraph 12(b) above, then no additional Change in Control shall be deemed to
 occur pursuant to paragraph 12(b) by reason of subsequent changes in holdings
 by such person (except if the holdings by such person are reduced below 30%
 and thereafter increase to 30% or above).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|54. | CIC Period means the two-year period
 following a Change in Control.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|55. | COBRA means the Consolidated Omnibus Budget
 Reconciliation Act of 1986, as amended from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                               | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|56. | Code means Internal Revenue Code of 1986,
 as amended from time to time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|57. | Company means Vaughan Foods, Inc., as set
 forth in the preamble to this Agreement, and any successor to or assignee of
 its business and/or assets that assumes and agrees to perform this Agreement
 by operation of law or otherwise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|58. | Compensation Committee means, at any given
 time, the Compensation Committee of the Board at that time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|59. | Confidential
 Information means non-public information (including, without
 limitation, information regarding litigation and pending litigation)
 concerning the Company and its Affiliates that was acquired by or disclosed
 to the Executive during his employment with the Company and following the
 Termination Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|60. | Disabled means, with respect to the
 Executive, that (a) he has received disability payments under the Companys
 long-term disability plan for a period of three (3) months or more, or (b)
 based upon the written report (prepared after a complete physical examination
 of the Executive) of a mutually agreeable qualified physician designated by
 the Company and the Executive or his representative, the Compensation
 Committee determines, in accordance with Section 409A of the Code, that the
 Executive has become physically or mentally incapable of performing his
 essential job functions with or without reasonable accommodation or job
 protection as required by law for a continuous period expected to last for a
 continuous period of not less than twelve (12) months.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|61. | Effective Date has the meaning set forth in
 the preamble to this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|62. | Employment
 Matter means any dispute, controversy, or claim between the
 parties arising out of, relating to, or concerning this Agreement, the
 Executives employment with the Company, or the termination of that
 employment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|63. | Employment Matter Claim has the meaning
 ascribed to such term in Section 10(d)(i).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|64. | Excise Tax has the meaning ascribed to such
 term in Section 7(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|65. | Executive has the meaning set forth in the
 preamble to this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|66. | Good Reason means any of the following
 events, unless the Executive has consented in writing to such events:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | the assignment of any duties materially inconsistent
 with the Executives position (including status, offices, titles, and
 reporting requirements), authority, duties, or responsibilities under this
 Agreement, other than an isolated, insubstantial, or inadvertent action not
 taken in bad faith and which the Company remedies promptly after receipt of
 notice from the Executive;
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                              
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | any material failure by the Company to comply with
 any provision of this Agreement, other than an isolated, insubstantial, or inadvertent
 failure not occurring                                                                                                                                                                                                                            

- 4 -

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                               | 
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | in bad faith and which and which the Company
 remedies promptly after receipt of notice from the Executive;                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                              
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | any failure by the Company to comply with and
 satisfy Section 9(c); or                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                              
|    | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | any relocation of the Executives principal office
 to a location more than fifty (50) miles from the Executives principal
 office prior to such relocation.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                              
|67. | Good Reason Notice has the meaning ascribed
 to such term in Section 3(d).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|68. | Gross-Up
 Payment has the meaning ascribed to such term in Section 7(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|69. | Guarantors has the meaning ascribed to such
 term in Section 10(e).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|70. | Incumbent
 Directors means the members of the Board on the Effective Date; provided,
 however, that (x) any person becoming a director and 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 deemed an Incumbent Director, and (y) no individual initially
 elected or nominated as a director of the Company as a result of an actual or
 threatened election contest (as described in Rule 14a-11 under the Act)
 or other actual or threatened solicitation of proxies or consents by or on
 behalf of any person (as such
 term is used in Sections 13(d)(3) and 14(d)(2) of the Act) other than
 the Board, including by reason of any agreement intended to avoid or settle
 any such election contest or solicitation of proxies or consents, shall be
 deemed an Incumbent Director.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|71. | Notice
 of Termination means a written notice that (i) indicates the
 specific termination provision of Section 3 that is being relied upon, (ii)
 to the extent applicable, reasonably describes the facts and circumstances
 claimed to provide a basis for termination under the provision so indicated,
 and (iii) specifies the Termination Date; provided, however, that the
 failure to describe in the Notice of Termination any fact or circumstance
 constituting Good Reason or Cause shall not waive any right of either party
 under this Agreement or preclude either party from asserting such fact or
 circumstance in enforcing rights under this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|72. | Payment
 has the meaning ascribed to such term in Section 7(a).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|73. | A person shall have the meaning ascribed by
 Section 3(a)(9) of the Act and shall also mean a natural person, company,
 government (and any political subdivision, agency, or instrumentality of a
 government), corporation, partnership, limited liability company, trust,
 unincorporated organization, or other entity. When two or more persons act as
 a partnership, limited partnership, syndicate, or other group for the
 purposes of acquiring, holding, or disposing Company Securities, such
 partnership, limited partnership, syndicate, or other group shall be deemed a
 person for purposes of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|74. | Prorated Annual Bonus means a prorated
 amount of an Annual Bonus payable under Sections 4(b)(i)(B) or 4(c). If the
 Executives employment began in a calendar year before                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

- 5 -

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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | 
|    | the calendar year in which the Termination Date
 occurs, the Prorated Annual Bonus shall be calculated based on the prior years
 Annual Bonus (if any) times the number of days worked in the year in which
 the Termination Date occurs divided by three hundred sixty five (365). If the
 Executives employment began in the calendar year in which the Termination
 Date occurs, then the Prorated Annual Bonus shall be determined by the Compensation
 Committee in its discretion.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|75. | Representatives
 means, with respect to the Company, its Affiliates and any of their
 respective past or present officers, directors, stockholders, partners,
 members, managers, agents, and employees.                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|76. | Section 409A has
 the meaning ascribed to such term in Section 4(e).                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|77. | Separation from Service has the meaning
 ascribed to such term in Section 4(e).                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 
|78. | Short-Term Disability Payments means
 disability payments under the Companys short-term disability policy or plan
 that are less than 100% of the then-current Annual Base Salary.                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|79. | Supervisor means, with respect to the
 Executive, the person to whom the Executive reports, as determined by the CEO
 or the CEOs designee from time to time or the Board with respect to the CEO.                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|80. | Tax Notice has the meaning ascribed to such
 term in Section 7(b).                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|81. | Termination Date means the Executives last
 day of employment by the Company or an Affiliate (including any successor to
 the Company or such Affiliate as determined in accordance with Section 9).                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|82. | Underpayment
 has the meaning ascribed to such term in Section 7(b).                                                                                                                                                                                                                                                                                                                                                                                                                    

- 6 -

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EXHIBIT B

GENERAL
RELEASE

NOTICE

Vaughan Foods, Inc. (the Company)
is an equal opportunity employer. Various laws prohibit employment discrimination
based on sex, race, color, national origin, religion, age, disability,
eligibility for covered employee benefits, veteran status, and other legally
protected characteristics. You may also have rights under other federal, state,
and/or municipal statutes, orders, or regulations pertaining to labor,
employment, and/or employee benefits. These laws are enforced through the
United States Department of Labor (DOL), the Equal Employment Opportunity
Commission (EEOC), and various other federal, state, and municipal labor
departments, fair employment boards, human rights commissions, similar
agencies, and courts.

This General Release is being
provided to you in connection with the Amended and Restated Employment
Agreement previously entered between you and the Company (the Employment
Agreement). You have at least twenty-one (21) days from the date you
receive this General Release, if you want it, to consider whether you wish to
sign this General Release and receive the payments and benefits (the Severance
Benefits) available under the Employment Agreement for doing so. You have
at least until the close of business twenty-one (21) days from the date you
receive this General Release to make your decision. You may not, however, sign
this General Release until, at the earliest, your last effective date of
employment.

BEFORE SIGNING THIS GENERAL RELEASE
YOU SHOULD REVIEW IT CAREFULLY. YOU ALSO HAVE THE RIGHT TO CONSULT WITH AN
ATTORNEY OF YOUR CHOICE.

You may revoke this General Release
within seven (7) days after you sign it and it shall not become effective or
enforceable until that revocation period has expired. If you do not timely sign
and return this General Release, or if you exercise your right to revoke the
General Release after signing it, then you will not be eligible to receive the
Severance Benefits. Any revocation must be in writing and must be received by
the Company within the seven-day period following your execution of this
General Release.

GENERAL
RELEASE

In consideration of the Severance
Benefits offered to me by the Company under the Employment Agreement, I hereby
(i) release and discharge the Company and its predecessors, successors,
affiliates, parent, subsidiaries, and partners and each of those entities
current and former employees, officers, directors, and agents (together, the Released
Parties) from all claims, liabilities, demands, and causes of action,
known or unknown, fixed or contingent, that I may have or claim to have against
them, including without limit any claims that result from or arise out of my
past employment with the Company, the severance of that relationship and/or
otherwise, or any contract or agreement with or relating to the Released
Parties, and (ii) waive

---



any and all rights I may
have with respect to and promise not to file a lawsuit to assert any such
claims.

This General Release
includes, but is not limited to, claims arising under the Age Discrimination in
Employment Act (ADEA) and any other federal, state, and/or municipal
statutes, orders, or regulations pertaining to labor, employment, and/or
employee benefits. This General Release also applies without limitation to any
claims or rights I may have growing out of any legal or equitable restrictions
on the rights of the Released Parties not to continue an employment
relationship with their employees, including any express or implied employment
or other contracts, and to any claims I may have against the Released Parties
for fraudulent inducement or misrepresentation, defamation, wrongful termination,
or other torts or retaliation claims in connection with workers compensation,
any legally protected activity, or alleged whistleblower status, or on any
other basis whatsoever.

It is specifically agreed,
however, that this General Release does not have any effect on any rights or
claims under the ADEA I may have against the Company that arise after the date
I execute this General Release or on any vested rights I may have under any of
the Companys qualified benefit plans or arrangements as of or after my last
day of employment with the Company or on any of the Companys obligations under
the Employment Agreement.

MISCELLANEOUS

By signing this General
Release, I shall, and hereby do, resign from any corporate, board, and other
offices and positions I may hold with the Company and its affiliates as of the
date my employment with the Company terminated.

I agree that (i) none of the
Released Parties shall have any obligation to employ or to hire or rehire me,
to consider me for hire, or to deal with me in any respect with regard to
potential future employment; (ii) I shall not ever apply for or otherwise seek
employment with any of the Released Parties for eighteen (18) months after the
Termination Date; and (iii) my forbearance to seek future employment as just
stated shall be construed as being purely contractual and in no way
involuntary, discriminatory, or retaliatory.

I have carefully reviewed
and fully understand all the provisions of the Employment Agreement and General
Release, including the foregoing Notice. I have not relied on any
representation or statement, oral or written, relating to the Employment
Agreement or this General Release by the Released Parties that are not set
forth in those documents.

The Employment Agreement and
this General Release, including the foregoing Notice, set forth the entire
agreement between me and the Company with respect to payments and benefits
payable to me due to the termination of my employment with the Company, and
supersede all prior agreements and understandings, written and oral, between
the parties with respect to such subject matters. I understand that my receipt
and retention of the Severance Benefits are contingent not only on my execution
and non-revocation of this General Release, but also on my continued compliance
with my other obligations under the Employment Agreement. I acknowledge that
the Company has given me at least twenty-one (21) days to consider whether I
wish to accept or reject the Severance Benefits I am otherwise eligible to
receive under the

2

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Employment Agreement in
exchange for signing and not revoking this General Release. I hereby represent
and state that I fully understand the effects and consequences of the
Employment Agreement and General Release prior to signing those documents.

This General Release and the
Companys obligation to provide the Severance Benefits under the Employment
Agreement shall be interpreted and construed to comply with Section 409A of the
Internal Revenue Code (the Code). The parties agree to cooperate and
work together in good faith to take all actions reasonably necessary to
effectuate the intent of this paragraph. Notwithstanding the preceding
sentence, I understand and acknowledge that I shall be solely responsible for
any risk that the tax treatment of all or part of the Severance Benefits may be
affected by Section 409A of the Code and impose significant adverse tax
consequences on me, including accelerated taxation, a 20% additional tax, and
interest. Because of the potential tax consequences, I understand that I have
the right, and am encouraged by this paragraph, to consult with a tax advisor
of my choice before signing this General Release.

This General Release shall
be governed by the laws of the State of Oklahoma, without regard to any conflict-of-laws
principles, and shall not be modified unless in a writing signed by both of the
parties.

Dated this ___ day of
___________, 20__.

| |                
| | ---------------
| |                
| | Mark E. Vaughan

3

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