FOR TRAVEL, ENTERTAINMENT AND OTHER ORDINARY AND
NECESSARY ACTIVITIES, IN CARRYING OUT HIS DUTIES AND RESPONSIBILITIES UNDER THIS
AGREEMENT, AND THE COMPANY SHALL PROMPTLY REIMBURSE HIM FOR ALL SUCH EXPENSES
SUBJECT TO DOCUMENTATION AND SUBJECT TO THE EXPENSE REIMBURSEMENT POLICIES OF
THE COMPANY RELATING TO EXPENSE REIMBURSEMENT.
5.
EQUITY ARRANGEMENTS.
(A)
EQUITY AWARDS.
ON THE EFFECTIVE DATE, THE COMPANY WILL GRANT THE
FOLLOWING EQUITY AWARDS TO EXECUTIVE:
(I) STOCK OPTIONS TO PURCHASE 51,300
SHARES OF THE COMPANY'S COMMON STOCK (THE "COMMON STOCK") (THE "OPTIONS") AND
(II) 55,576 RESTRICTED SHARES OF COMMON STOCK (THE "RESTRICTED STOCK," AND
TOGETHER WITH THE OPTIONS, THE "EQUITY AWARDS").
THE EQUITY AWARDS SHALL BE
GRANTED PURSUANT TO AN EQUITY INCENTIVE PLAN (THE "INCENTIVE PLAN") THAT THE
COMPANY WILL ESTABLISH AND MAINTAIN DURING THE TERM OF EMPLOYMENT, THE TERMS OF
WHICH (OTHER THAN AS SET FORTH IN THIS AGREEMENT) SHALL BE SUBJECT TO THE
APPROVAL OF THE BOARD OR ITS COMPENSATION COMMITTEE AND WHICH SHALL RESERVE FOR
GRANT TO THE COMPANY'S EMPLOYEES 855,000 SHARES OF COMMON STOCK.
THE COMPANY
WILL TAKE SUCH ACTIONS AS ARE NECESSARY TO PROVIDE THAT (I) AS OF THE EFFECTIVE
DATE THE INCENTIVE PLAN WILL BE EFFECTIVE AND (II) AS SOON AS REASONABLY
PRACTICABLE THAT THE SHARES OF COMMON STOCK AVAILABLE FOR AWARDS UNDER THE
INCENTIVE PLAN ARE FULLY REGISTERED FOR RESALE ON A FORM S-8 OR TO THE EXTENT
OTHERWISE SO REGISTRABLE IN CONNECTION WITH THE GENERAL REGISTRATION OF COMMON
STOCK.
(B)
VESTING.
FIFTY (50%) PERCENT OF THE OPTIONS AND FIFTY (50%)
PERCENT OF THE RESTRICTED STOCK WILL VEST IN THE THREE EQUAL INSTALLMENTS ON
EACH OF THE FIRST TWO ANNIVERSARIES OF THE EFFECTIVE DATE AND DECEMBER 31, 2012,
SUBJECT TO EXECUTIVE'S CONTINUING EMPLOYMENT WITH THE COMPANY.
FIFTY (50%)
PERCENT OF THE OPTIONS AND FIFTY (50%) PERCENT OF THE RESTRICTED STOCK WILL VEST
SUBJECT TO THE ATTAINMENT OF REASONABLE PERFORMANCE CRITERIA TO BE DETERMINED BY
THE BOARD.
NOTWITHSTANDING THE FOREGOING, IN THE EVENT OF (A) A CHANGE OF
CONTROL (AS DEFINED BELOW) OF THE COMPANY, THEN 100% OF THE EQUITY AWARDS SHALL
VEST, AND THE OPTIONS WILL REMAIN EXERCISABLE FOR THE REMAINDER OF THE OPTION
TERM (AS DEFINED BELOW), OR (B) A TERMINATION OF EXECUTIVE'S EMPLOYMENT BY THE
COMPANY WITHOUT CAUSE (AS DEFINED BELOW), OR EXECUTIVE'S RESIGNATION WITH GOOD
REASON (AS DEFINED BELOW), THEN 100% OF THE EQUITY AWARDS SHALL VEST, AND THE
OPTIONS WILL REMAIN EXERCISABLE FOR THE APPLICABLE PERIOD SET FORTH IN
SECTION 9(D)(III).
ANY VESTED OPTIONS HELD BY EXECUTIVE AS OF HIS TERMINATION
SHALL REMAIN EXERCISABLE FOR THE APPLICABLE PERIODS SPECIFIED BELOW UNDER
SECTION 9.
THE OPTIONS SHALL EXPIRE TEN (10) YEARS FOLLOWING THE EFFECTIVE DATE
(THE "OPTION TERM").
(C)
EXERCISE PRICE.
THE EXERCISE PRICE OF EACH SHARE OF COMMON STOCK
UNDERLYING AN OPTION SHALL BE EQUAL TO THE PER SHARE FAIR MARKET VALUE OF THE
COMMON STOCK ON THE EFFECTIVE DATE, AS DETERMINED BY THE BOARD IN ITS SOLE
DISCRETION, IN A MANNER THAT COMPLIES WITH THE REQUIREMENTS OF SECTION 409A OF
INTERNAL REVENUE CODE OF 1986, AS