(II) EMPLOYEE'S CONVICTION OF A FELONY, (III) ANY ACT BY EMPLOYEE THAT
CONSTITUTES MATERIAL MISCONDUCT AND IS INJURIOUS TO THE COMPANY, OR
(IV) CONTINUED VIOLATIONS BY EMPLOYEE OF HIS OBLIGATIONS TO THE COMPANY;
PROVIDED THAT, IN EACH CASE EXCEPT (II), EMPLOYEE HAS RECEIVED WRITTEN NOTICE OF
THE DESCRIBED ACTIVITY, HAS BEEN AFFORDED A REASONABLE OPPORTUNITY TO CURE OR
CORRECT THE ACTIVITY (NOT TO EXCEED 15 DAYS) AS DESCRIBED IN THE NOTICE, AND HAS
FAILED TO CURE, CORRECT OR CEASE THE ACTIVITY, AS APPROPRIATE.
6
(F)
DISABILITY.
FOR PURPOSES OF THIS
AGREEMENT, "DISABILITY" SHALL MEAN A DISABILITY, DUE TO ILLNESS OR INJURY, WHICH
MATERIALLY LIMITS EMPLOYEE FROM PERFORMING EACH OF HIS MATERIAL AND SUBSTANTIAL
DUTIES, EVEN WITH REASONABLE ACCOMMODATION, FOR A PERIOD OF SIX (6) CONSECUTIVE
MONTHS.
THE COMPANY SHALL PROVIDE EMPLOYEE FOURTEEN (14) DAYS' WRITTEN NOTICE
OF TERMINATION FOR DISABILITY.
10.
STOCK OPTIONS.
(A)
MILESTONE STOCK OPTIONS.
EMPLOYEE HAS
HERETOFORE BEEN GRANTED BY THE COMPANY OPTIONS TO PURCHASE THE COMPANY'S COMMON
STOCK, WHICH VEST UPON THE ATTAINMENT OF CERTAIN MILESTONES AND TRIGGERS (THE
"MILESTONE OPTION").
AS OF THE DATE HEREOF, APPROXIMATELY 300,000 SHARES
SUBJECT TO THE MILESTONE OPTION ARE UNVESTED.
THE COMPANY SHALL ACCELERATE, ON
OR ABOUT THE RELEASE DATE, THE VESTING OF 170,000 SHARES SUBJECT TO THE
MILESTONE OPTION, IN TRANCHES OF 100,000 SHARES AND 70,000 SHARES RESPECTIVELY,
AS IDENTIFIED BY EMPLOYEE.
THE REMAINING 130,000 SHARES SUBJECT TO THE
MILESTONE OPTION SHALL CONTINUE TO VEST IN ACCORDANCE WITH THE TERMS OF THE
STOCK OPTION PLAN UNDER WHICH THEY WERE ISSUED AND THE STOCK OPTION AGREEMENT
BETWEEN THE COMPANY AND EMPLOYEE
(B)
OPTION ACCELERATION IN THE EVENT OF
INVOLUNTARY TERMINATION FOLLOWING A CHANGE OF CONTROL.
IF, DURING THE TERM,
EMPLOYEE'S EMPLOYMENT WITH THE COMPANY OR A SUCCESSOR CORPORATION IS TERMINATED
BY THE COMPANY OR SUCCESSOR CORPORATION AS A RESULT OF AN INVOLUNTARY
TERMINATION (AS DEFINED BELOW) FOLLOWING A CHANGE OF CONTROL (AS DEFINED BELOW),
EMPLOYEE SHALL BE ENTITLED TO FULL ACCELERATION OF THE VESTING OF ANY THEN
UNVESTED STOCK OPTIONS (INCLUDING ALL UNVESTED MILESTONE OPTIONS) THEN HELD BY
EMPLOYEE, AND SUCH ACCELERATED OPTIONS SHALL REMAIN SUBJECT TO AND BE
EXERCISABLE IN ACCORDANCE WITH THE TERMS OF THE STOCK OPTION PLAN UNDER WHICH
THEY WERE ISSUED AND THE STOCK OPTION AGREEMENT BETWEEN THE COMPANY AND
EMPLOYEE.
(C)
CHANGE OF CONTROL.
FOR PURPOSES OF THIS
AGREEMENT, "CHANGE OF CONTROL" MEANS THE OCCURRENCE OF ANY OF THE FOLLOWING
EVENTS:
(I) ANY "PERSON" (AS SUCH TERM IS USED IN SECTIONS 13(D) AND 14(D) OF
THE EXCHANGE ACT) BECOMES THE "BENEFICIAL OWNER" (AS DEFINED IN RULE 13D-3 OF
THE EXCHANGE ACT), DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY
REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTAL VOTING POWER REPRESENTED
BY THE COMPANY'S THEN OUTSTANDING VOTING SECURITIES; (II) THE CONSUMMATION OF
THE SALE OR DISPOSITION BY THE COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE
COMPANY'S ASSETS; OR (III) THE CONSUMMATION OF A MERGER OR CONSOLIDATION OF THE
COMPANY WITH ANY OTHER CORPORATION, OTHER THAN A MERGER OR CONSOLIDATION WHICH
WOULD RESULT IN