Document:

Amended and Restated Employment Agreement

 Exhibit 10.1 
  
 AMENDED AND RESTATED EMPLOYMENT AGREEMENT 
  
 THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made as of this 14th day of December, 2005 by and between BUCA, Inc., a
Minnesota corporation (the “Company”) and Steve Hickey (the “Employee”). 
  
 WHEREAS, the Company and the Employee are parties to an Employment Agreement dated as of January 5, 2004, the terms of which expire on December 31, 2005; and 
  
 WHEREAS, the Company desires to continue to employ Employee to devote full
time service to the business of the Company and Employee desires to continue to be so employed. 
  
 NOW THEREFORE, IN CONSIDERATION of the premises and the terms and conditions hereinafter set forth, the parties hereto agree as follows: 
  
 1. Employment. Subject to the terms and conditions hereof, the
Company shall continue to employ Employee and Employee agrees to continue to be so employed in the capacity of Chief Marketing Officer for a term ending on June 30, 2007. 
  
 2. Duties. Employee shall diligently and conscientiously devote his full time and attention to the discharge of his
duties as Chief Marketing Officer and such other positions as assigned by the Board of Directors. In such capacity, Employee shall at all times discharge said duties in consultation with and under the supervision of the CEO or the Board of Directors
of the Company. Employee shall perform such duties as may from time to time be given to him by the Chief Executive Officer or the Board of Directors. 
  
 3. Base Salary. The Company currently pays to Employee an annualized base salary of $225,000. The Board of Directors shall establish
Employee’s base salary for each subsequent calendar year. The base salary is payable in accordance with the Company’s standard payroll practices as in effect from time to time. 
  
 4. Bonuses. Employee shall be entitled to receive annual incentive compensation equal to a percentage of his annual
base salary. For the fiscal year ended December 25, 2005, the maximum percentage of such incentive compensation is 50%. For each subsequent calendar year, the maximum percentage shall be determined by the Board of Directors, but shall not be
less than that established for the prior year. Payment of any incentive compensation shall be based upon the Company attaining certain performance targets selected by the Board of Directors and based upon the budget for the applicable year.

  
 5. Expenses. The Company shall reimburse Employee for
all reasonable and necessary expenses incurred by him in carrying out his duties under this Agreement. Employee shall present to the Company from time to time an itemized statement of account of such expenses in such form as may be required by the
Company. In recognition of Employee’s need for an automobile for business purposes, the Company will provide Employee with a $1,000 per month automobile allowance. 
  
 6. Fringe Benefits. Employee shall be entitled to participate in such fringe benefit programs maintained by the
Company as are available for other employees similarly situated. The Company shall (i) obtain and pay the premium for standard family coverage for Employee and his family in the Company’s group health plan; and (ii) provide Employee
with long-term disability insurance with a benefit equal to 60% of his base salary. 
  
 7. Termination. Employee’s employment hereunder shall be terminated upon the happening of any of the following events; 
  
 (a) Expiration of the term of this Agreement, without renewal; 
  
 (b) Death of Employee; 
  
 (c) Notice to Employee that his employment is terminated due to Employee’s inability to perform his usual and customary duties by reason of Physical
or Mental Disability; 

 (d) Without Cause by the Company at any time upon thirty (30) days prior written notice to Employee;

  
 (e) By Employee upon thirty (30) days prior written
notice to the Company; 
  
 (f) By Employee, if, following a Change
in Control of the Company as defined below, Employee’s duties (as in effect immediately prior to such Change in Control) are Substantially Reduced or Negatively Altered, as defined below, without his prior written consent, upon thirty
(30) days prior written notice to the Company; or 
  
 (g) At
any time without notice by the Company for Cause. 
  
 For purposes
of this Section, “Cause” means (i) Employee’s conviction of a felony which constitutes a crime involving moral turpitude; (ii) Employee’s misappropriation of funds, fraud or embezzlement;
(iii) Employee’s willful or gross and repeated neglect of duties hereunder, or willful or gross repeated misconduct in the performance of such duties, as determined by a majority of the directors of the Company (collectively,
“Misconduct”), and provided that Employee has been given at least fourteen (14) days prior notice of such determination and Employee has failed to cure such Misconduct; or (iv) Misconduct that is deemed by a majority of the
directors to have a material adverse effect on the business, operations, assets, properties, or financial condition of Company, taken as a whole. 
  
 For purposes of this Section, “Physical or Mental Disability” means any ailment or incapacity which prevents Employee from performing the
duties incident to Employee’s employment hereunder which continued for a period of either (i) 90 consecutive days in any twelve-month period or (ii) 180 days in any twelve-month period, and which is expected to be of permanent
duration. 
  
 For purposes of this Section, “Change in
Control” with respect to the Company shall have occurred on the earliest of the following dates: 
  
 (i) the date after the date of this Agreement that any entity or person (including a “group” as defined in Section 13(d)(3)
of the Securities Exchange Act of 1934 (the “Exchange Act”)) shall have become the beneficial owner of, or shall have obtained voting control over, fifty percent (50%) of more of the outstanding common shares of the Company;

  
 (ii) the date the shareholders of the Company
approve a definitive agreement: (A) to merge or consolidate the Company with or into another corporation, or to merge another corporation into the Company, in which the Company is not the continuing or surviving corporation or pursuant to which
any common shares of the Company would be converted into cash, securities of another corporation, or other property (this clause (A) shall not apply to a merger or consolidation of the Company in which, immediately following such merger or
consolidation, more than 70% of both the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors (the “Voting Securities”) and the then outstanding common stock is
then beneficially owned, directly or indirectly, by all or substantially all of the persons who beneficially owned the Voting Securities and the common stock immediately prior to such merger or consolidation in substantially the same proportions as
their ownership of such Voting Securities and common stock, as the case may be, immediately prior to such merger or consolidation); or (B) to sell or otherwise dispose of substantially all of the assets of the Company; or 
  
 (iii) the date there shall have been a change in a majority
of the Board of Directors of the Company within a twelve-month period unless the nomination for election by the Company’s shareholders of each new director was approved by the vote of two-thirds of the directors then still in office who were in
office at the beginning of the twelve-month period. 
  
 “Substantially Reduced or Negatively Altered” means, without Employee’s express written consent: 
  
 (i) the assignment to Employee of any duties inconsistent with Employee’s positions, duties, responsibilities and status with the
Company immediately prior to a Change in Control or a change in Employee’s reporting responsibilities, titles or offices, or any removal of Employee from, or any failure to re-elect Employee to, any of such positions, except in connection with
the termination of Employee’s employment for Cause, upon the Physical or Mental Disability or death of Employee, or upon the voluntary termination by Employee; 

 (ii) a reduction in Employee’s Base Salary below the minimum Base Salary in
Section 3 hereof; 
  
 (iii) requiring
Employee to move his residence more than 100 miles; 
  
 (iv) the failure by Company to continue in effect benefit plans substantially equivalent to the benefit plans in effect at the effective date of this Agreement or established during the term of this Agreement; the taking of any action by
Company not required by law which would adversely affect Employee’s participation in or materially reduce Employee’s benefits under any of such plans or deprive Employee of any material fringe benefit enjoyed by Employee; or the failure by
Company to provide Employee with the number of paid vacation days, holidays and personal days to which Employee was then entitled in accordance with Company’ normal leave policy in effect the effective date of this Agreement; or 
  
 (v) failure of any successor to the Company not otherwise
bound by this Agreement to expressly assume and agree to perform the obligations of the Company under this Agreement. 
  
 8. Effect of Termination. If Employee is terminated by the Company for Cause as defined in Section 7(g) or if Employee terminates employment
under Section 7(e), Employee shall be paid only to the date of actual termination of employment and Employee shall not be entitled to any additional compensation for the year in which termination of employment occurs or any other termination
payment. 
  
 If Employee is terminated by reason of death or
Physical or Mental Disability, Employee or his estate shall be entitled to a termination payment equal to twelve (12) month’s base salary then in effect. The termination payment in the case of termination due to Physical or Mental
Disability shall be made in twelve (12) substantially equal monthly installments, beginning on the first day of the month following termination of employment, and the termination payment shall be reduced by all disability insurance payments
received by Employee during such period under disability insurance policies provided by the Company under Section 6 hereof. 
  
 If Employee terminates employment for the reason specified in Section 7(f) or Employee is terminated by the Company without Cause following a Change
in Control, or within one hundred eighty (180) days prior to a Change in Control and such termination is related to the Change in Control, Employee shall be entitled to a termination payment equal to twelve (12) month’s base salary
then in effect, payable in twelve (12) equal installments, beginning on the first day of the month following termination of employment and the Company shall continue Employee’s health benefits for one (1) year or, at its option, pay
Employee’s COBRA coverage premiums during the COBRA period. If Employee terminates employment as a result of a Change in Control but Employee’s duties have not been Substantially Reduced or Negatively Altered, Employee shall be entitled to
a termination payment equal to twelve (12) month’s base salary then in effect, payable in twelve (12) equal installments beginning the first day of the month following termination of employment. Provided, however, if Employee is a
“specified employee” under Section 409A of the Internal Revenue Code at termination of employment, any cash payments due to Employee under this paragraph that are considered to be deferred compensation under Section 409A of the
Internal Revenue Code shall be delayed to the first day of the seventh month following termination of employment (without interest or earnings adjustment). 
  
 If Employee is terminated by the Company without Cause and other than associated with a Change in Control as outlined above, Employee shall be entitled to
a termination payment equal to six (6) month’s base salary then in effect, payable in six (6) equal installments beginning on the first day of the month following termination of employment. 
  
 9. Excise Tax. Unless otherwise prohibited by applicable law, if an
amount paid to Employee under this Agreement is subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, or any successor provision thereto, the Company shall pay to Employee an additional amount in cash equal to the
amount necessary to cause the aggregate remuneration received by Employee under this Agreement, 

 
including such additional cash payment (net of all federal, state, and local income taxes and all taxes payable as a result of the application of
Section 280G and 4999 of the Internal Revenue Code or any successor provisions thereto) to be equal to the aggregate remuneration executive would have received, excluding such additional payment (net of all federal, state, and local income
taxes), if Section 280G and 4999 (and any successors thereto) have not been enacted into law. The adjustments, if any, required by this Section shall be determined by tax counsel selected by Company’s independent accountants with
Employee’s approval. 
  
 10. Confidentiality.
“Confidential Information” means any information or compilation of information possessed by the Company that derives independent economic value, actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, including by not limited to: (a) any information not generally known in the industry of the Company regarding the Company’s pricing of
services, research, development, marketing, servicing, business systems, and techniques; (b) financial information concerning the Company; and (c) any information that the Company may from time to time designate as
“confidential,” “proprietary,” or “trade secrets” which is not generally known in the industry of the Company. 
  
 Employee may have access to Confidential Information which the Company desires to protect at all times. Employee understands, acknowledges, and agrees
that the Company has expended substantial sums of money, time and effort in developing such Confidential Information and the Company will be substantially harmed in the competitive marketplace if the Confidential Information is used to its detriment
or to the benefit of others. 
  
 In recognition of the foregoing,
Employee agrees that: 
  
 (a) Employee will not,
during or after employment with the Company, directly or indirectly knowingly use or disclose any Confidential Information to any other person, firm or company, or in any way use for his benefit, or to the detriment of the Company, any information
or knowledge obtained during the course of his employment with the Company, except as required in the conduct of the Company’s business or as authorized in writing by the Company; and 
  
 (b) All memoranda, notes, records, papers and other
documents and all copies thereof relating to the Company’s operations and all objects related thereto are and remain the property of the Company; including, but not limited to, those developed, investigated, or considered by the Company.
Employee will not copy or duplicate any of the aforementioned documents or objects nor use any information contained therewith, except for the Company’s benefit, either during or after his employment. 
  
 11. Covenant Not to Compete. The parties agree that the Company would
be substantially harmed if Employee competes with the Company during employment with the Company or after termination of employment with the Company. Therefore, in exchange for the benefits provided to Employee hereunder, Employee agrees that during
his employment with the Company and for a period of six months after termination of such employment for any reason, Employee will not directly or indirectly, without the written consent of the Company; 
  
 (a) Own, operate or render services to any entity engaged,
directly or indirectly, in owning or operating Italian restaurants within fifty (50) miles of any restaurant owned or managed by the Company; or 
  
 (b) Hire, offer to hire, entice away, or in any other way, persuade or attempt to persuade any entity or any employee, officer, agent,
independent contractor, supplier, customer, or subcontractor of the Company to discontinue their relationship with the Company. 
  
 12. Disparagement. The Company and Employee agree that during and after the term of this Agreement, they will not knowingly vilify, disparage,
slander or defame the other party or, in the case of the Company, its officers, directors, employees, business or business practices. 

 13. Remedy. Employee and the Company acknowledge that in the event of a breach of this Agreement
by either party, money damages would be inadequate and the non-breaching party would have no adequate remedy at law. Accordingly, in the event of any controversy concerning the rights or obligations under this Agreement, such rights or obligations
shall be enforceable in a court of equity by a decree of specific performance. Such remedy, however, shall be cumulative and nonexclusive and shall be in addition to any other remedy to which the parties may be entitled to by law. 
  
 14. Notices. All notices required or permitted to be given under this
Agreement shall be given by certified mail, return receipt requested, to the parties at the following addresses or to such other addresses as either may designate in writing to the other party: 
  

			
	If to Company:	  	BUCA, INC.
	 	  	1300 Nicollet Avenue
	 	  	Suite 5003
	 	  	Minneapolis, MN 55403
		
	If to Employee:	  	 Steve Hickey
 110 W. Grant, #31K
 Minneapolis, MN 55403

  
 15. Governing
Law. This Agreement shall be construed and enforced in accordance with the internal laws of the State of Minnesota. 
  
 16. Entire Contract. This Agreement constitutes the entire understanding and agreement between the Company and Employee with regard to the matters
stated herein. There are no other agreements, conditions or representations, oral or written, express or implied, with regard to the employment of Employee by the Company. This Agreement may be amended only in writing, signed by both parties hereto.

  
 17. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns, and shall inure to the benefit of and be binding upon Employee, his heirs, distributees and personal representatives. In the event of Employee’s death, any amounts payable
hereunder shall be paid in accordance with the terms of this Agreement to Employee’s designee, or if there is no such designee, to Employee’s estate. 

 IN WITNESS WHEREOF, the parties have executed this Agreement the date and year first above written.

  

			
	BUCA, INC.
		
	By:	 	 /s/ Wallace B. Doolin

	 	 	Its: Chairman, President and Chief Executive Officer
		
	 	 	 /s/ Steve Hickey

	 	 	Steve HickeyEmployment agreement with Joshua Fraser

 Exhibit 10.1 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and
entered into, effective as of December 13, 2005 (the “Effective Date”), by and between CALLWAVE, INC., a Delaware corporation (the “Company”), and
JOSHUA FRASER (“Employee”), with reference to the following facts: 
  
 RECITALS: 
  
 The parties have agreed to execute this Agreement in order to memorialize the terms and conditions on which the Company shall employ Employee. 

 
 AGREEMENTS: 
  
 NOW, THEREFORE, the parties hereto,
intending to be legally bound, do hereby agree as follows: 
  
 1.
POSITION AND DUTIES 
  
 1.1 POSITION AND TITLE. The Company hereby hires Employee to serve as Vice President of Business Development of the Company. 
  
 (a) LIMITS ON
AUTHORITY. Employee shall perform his duties as Vice President of Business Development of the Company pursuant to this Agreement in compliance with applicable law and consistent with such budgets as the
Company’s Board of Directors adopts and modifies from time to time. In such position, Employee shall (i) supervise the Company’s business development functions, and (ii) be responsible for negotiating the Company’s
distribution contracts with companies providing indirect distribution of the Company’s services. 
  
 (b) ANNUAL REVIEWS. Within thirty (30) days after each annual anniversary of the Effective Date
of this Agreement, the Company shall review Employee’s performance of his duties pursuant to this Agreement and advise Employee of the results of that review. In connection with each such review, the Company shall evaluate whether any increase
in Employee’s compensation under Section 2, below, is appropriate. 
  
 (c) REPORTING AND AUTHORITY. Employee shall report to the Company’s Chief Executive Officer or, to the extent directed by the Chief Executive
Officer, to the Company’s Chief Operating Officer or President. Employee shall render such business and professional services in the performance of his duties hereunder as are consistent with the Employee’s position within the Company and
as shall be reasonably assigned to him from time to time by the Company’s Chief Executive Officer, Chief Operating Officer or President. 
  
 1.2 ACCEPTANCE. Employee hereby accepts employment by the Company in the position set forth in Section 1.1, above, and agrees
to perform the duties of such position from and after the Effective Date of this Agreement in a diligent, efficient, trustworthy, and businesslike manner. Employee agrees that, to the best of the Employee’s ability and experience, Employee at
all times shall loyally and conscientiously discharge all of the duties and responsibilities assigned to Employee pursuant to this Agreement. 
  
 1.3 BUSINESS TIME. Employee shall devote the time necessary to faithfully perform his duties under
this Agreement, but in all events not less than his exclusive business time. 

 1.4 LOCATION. Employee shall perform his duties under this Agreement
from the Company’s principal offices in Santa Barbara, California. Employee acknowledges and agrees that from time to time he shall be required to travel (at the cost and expense of the Company) to other locations outside of Santa Barbara,
California, in order to discharge his duties under this Agreement. 
  
 1.5 TERM. Subject to sooner termination pursuant to Section 3, below, the term of this Agreement (a) shall commence as of the Effective Date and (b) shall expire on December 31, 2008. 
  
 2. COMPENSATION. The Company shall compensate Employee for his services
pursuant to this Agreement as follows: 
  
 2.1
SALARY. Effective November 11, 2005, the Company shall pay to Employee an annual salary in the amount of One Hundred Eighty Thousand Dollars ($180,000) (“Base Compensation”), subject to such periodic
increases, as the Company, in its discretion, shall determine to be appropriate, provided that the minimum annual increase in Employee’s Base Compensation shall be at least equal to ten percent (10%) of the amount of Employee’s
Base Compensation in effect under this Section 2.1 in the immediately preceding year. For purposes of this Section 2.1, the term “year” shall refer to periods of twelve (12) consecutive months commencing on each annual
anniversary of the Effective Date of this Agreement. The Base Compensation shall be paid periodically in accordance with the Company’s normal payroll practices in effect from time to time, and shall be subject to applicable wage tax and income
tax withholding. 
  
 2.2 ANNUAL
PERFORMANCE BONUS. For each calendar year during the term of this Agreement, Employee will be eligible to receive a cash bonus, which shall be based one hundred percent (100%) upon
Employee’s achievement of Employee’s individual and corporate objectives as specified by the Chief Executive Officer after consultation with the Employee (the “Annual Bonus”). 
  
 (a) PAYMENT. Consistent with Company
policy, the payment of the Annual Bonus shall be subject to the final discretion of the Compensation Committee of the Company’s board of directors. Such Annual Bonus shall be payable in increments in accordance with meeting performance criteria
determined under the first sentence of Section 2.2, above. 
  
 (b) TARGET ANNUAL BONUS. Subject to the foregoing, the target (i.e., maximum) Annual Bonus payable for each calendar year shall be two hundred twenty five percent
(225%) of Employee’s Base Compensation. The target Annual Bonus shall be payable in two components as follows: 
  
 (i) 20%: CORPORATE OBJECTIVES. Twenty percent (20%) of such target Annual Bonus compensation
will be payable based upon Employee’s performance against corporate objectives; and 
  
 (ii) 80%: POTENTIAL SUBSCRIBERS FROM INDIRECT CONTRACTS. Eighty percent (80%) of such target Annual Bonus
compensation will be payable in increments from time to time during each year, upon the Company’s execution of new indirect distribution contracts at any time during the year, with such 80% component payable at a rate of Ten Thousand Dollars
($10,000) for each one hundred thousand (100,000) potential subscribers for the Company’s services to whom the Company’s services are made available because of a distribution contract (without regard to how many of those potential
subscribers actually subscribe to the Company’s services). The portion of the bonus payable under this Section 2.2(b)(ii) shall be payable from time to time in periodic increments of $10,000, as the Company achieves access, through such
indirect distribution contracts, to each block of 100,000 

  

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additional potential subscribers. The provisions of this Section 2.2(b)(ii) can be illustrated by the following examples: 
  
 (A) Example 1. Pursuant to Employee’s efforts, the Company
signs an indirect distribution contract with Party X, which has 5,000,000 customers that are potential subscribers to the Company’s services. Under the indirect distribution contract, Party X and the Company agree only to a trial phase in which
Party X allows the Company’s services to be made available to 100,000 of Party X’s customers. Upon execution of that Agreement, Employee is entitled to a bonus of $10,000 because that indirect distribution contract enables the
Company’s services to be made available to only 100,000 of Party X’s customers. Notwithstanding the foregoing, should Party X expand the trial phase to allow the Company’s services to be made available to 4,000,000 of Party X’s
customers, Employee is entitled to a bonus of $400,000. 
  
 (B)
Example 2. Pursuant to Employee’s efforts, the Company on March 1st signs with Party Y an indirect
distribution contract with Party Y, which has 2,000,000 customers to whom the Company’s services are permitted to be marketed pursuant to the indirect distribution contract. The indirect distribution contract requires the parties’
technical teams to work together to implement the distribution of the Company’s services to Party Y’s customers, and the parties contemplate that such distribution will begin within six months of the execution of the contract. There is no
assurance that any of Party Y’s 2,000,000 customers will actually subscribe for the Company’s services. As of the date on which the Company signs the contract on March 1st, Employee has earned a bonus of $200,000 (i.e., $10,000/100,000 potential subscribers x 2,000,000 potential subscribers from Party Y = $200,000).
Neither the delayed distribution of the Company’s services, nor the actual “uptake” rates by Party Y’s customers, affects Employee’s right to receive payment of the bonus that accrues under Section 2.2(b)(ii) upon
execution of the indirect distribution contract with Party Y. 
  
 2.3 EQUITY GRANTS. Employee shall be eligible for the “Initial Option” described in Section 2.3(a), below, and the “Future Options” described in
Section 2.3(b), below (collectively, the “Options”). 
  
 (a) INITIAL GRANT. Promptly following the execution of this Agreement, and subject to approval of the Company’s Board of Directors, the Company shall grant to Employee an
option for the purchase of one hundred thousand (100,000) shares of the Company’s common stock (the “Initial Option”), which Initial Option shall (a) to the extent possible under the applicable rules of the Internal
Revenue Code of 1986, as amended, be an incentive stock option, (b) be issued under and subject to the terms and conditions of the Company’s 2004 Stock Incentive Plan, (c) be exercisable at a price per share equal to the fair market
value of the Company’s common stock on the date on which the Board of Directors approves such Option (such date, the “grant date”), (d) be subject to vesting, subject to Employee’s continuous employment with the
Company, as follows: (x) 25% of the shares subject to the Initial Option shall vest after six (6) months of continuous employment following the grant date, and (y) one-twenty-fourth (1/24th) of the shares subject to the Initial Option shall vest monthly thereafter, so that the Option will be fully vested and exercisable two (2) years
from the date of grant), and (e) be subject to acceleration upon any termination of Employee’s employment by the Company following a Change of Control as set forth in Section 3.3, below. 
  
 (b) FUTURE OPTIONS. On
the date of the first meeting of the Company’s board of directors following the completion of the Employee’s first full year of employment with the Company, and each subsequent year thereafter, the Company will grant to Employee an option
(each, a “Future Option”) to purchase a minimum of twenty-five thousand (25,000) shares of the Company’s common stock, which Future Option shall (a) to the extent possible under the applicable rules of the Internal

  

 3 

 
Revenue Code of 1986, as amended, be an incentive stock option, (b) be issued under and subject to the terms and conditions of the Company’s 2004
Stock Incentive Plan, (c) be exercisable at a price per share equal to the fair market value of the Company’s common stock on the date on which the Board of Directors approves such Option (such date, the “grant date”),
(d) be subject to vesting, subject to Employee’s continuous employment with the Company, as follows: (x) 25% of the shares subject to the Initial Option shall vest after six (6) months of continuous employment following the grant
date, and (y) one-twenty-fourth (1/24th) of the shares subject to the Initial Option shall vest monthly
thereafter, so that the Option will be fully vested and exercisable two (2) years from the date of grant). 
  
 2.4 FRINGE BENEFITS/VACATION. Subject to the Company’s vacation accrual limits and policies,
Employee shall accrue three (3) weeks’ paid vacation in each period of twelve (12) consecutive months of employment during the term of this Agreement. Any unused vacation days from any annual period shall rollover and be available for
use by Employee in subsequent periods of employment. Employee shall be eligible for such other fringe benefits as are provided to the Company’s senior Employee level employees generally from time to time. 
  
 2.5 REIMBURSEMENT OF
EXPENSES. The Company shall reimburse Employee for authorized business expenses incurred by Employee in the performance of his duties in accordance with the Company’s policy for reimbursement of employee business expenses, as
in effect from time to time. 
  
 3. TERMINATION. 

 
 3.1 DEFINITIONS. For purposes of
this Agreement, the term: 
  
 (a) “CHANGE
OF CONTROL” shall mean the occurrence of one of the following events: 
  
 (i) Any transaction or series of related transactions by which any “person” (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), including all affiliates of such person, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities other than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the
Company, (B) any affiliate, or any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, or (C) Peter V. Sperling or any affiliate
thereof. 
  
 (ii) The date of the consummation of a merger
or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company (or such surviving entity) outstanding immediately after such merger or
consolidation; or 
  
 (iii) The date of the consummation
of a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets. For purposes of this clause (iii), the phrase “the sale or disposition by the Company of all
or substantially all of the Company’s assets” shall mean a sale or other disposition transaction or series of related transactions involving assets of the Company or of any direct or indirect subsidiary of the Company (including the
stock of any direct or indirect subsidiary of the Company) in which the value of the assets 

  

 4 

 
or stock being sold or otherwise disposed of (as measured by the purchase price being paid therefor or by such other method as the Board of Directors of the
Company determines is appropriate in a case where there is no readily ascertainable purchase price) constitutes more than two-thirds of the “fair market value of the Company” (as hereinafter defined). For purposes of the preceding
sentence, the “fair market value of the Company” shall be the aggregate market value of the Company’s outstanding common stock (on a fully diluted basis) plus the aggregate market value of the Company’s other outstanding
equity securities. The aggregate market value of the Company’s equity securities shall be determined by multiplying the number of shares of the Company’s common stock (on a fully diluted basis) outstanding on the date of the execution and
delivery of a definitive agreement with respect to the transaction or series of related transactions (the “Transaction Date”) by the average closing price of such security for the ten trading days immediately preceding the
Transaction Date, or if not publicly traded, by such other method as the Board of Directors of the Company shall determine is appropriate. 
  
 (b) “DATE OF TERMINATION” shall mean the date specified in the Notice
of Termination (as defined below).  
  
 (c)
“DISABILITY” shall mean a mental or physical condition, which, in the opinion of a qualified physician approved by the Employer’s Board of Directors, renders Employee incapable for a period of at least six
(6) consecutive months from performing his regular duties under this Agreement. 
  
 (d) “GOOD REASON” shall mean the occurrence of any of the following circumstances without Employee’s consent; provided, however, that such circumstances shall
not constitute Good Reason unless (x) Employee provides the Company with thirty (30) days’ written notice specifying the purported grounds for Good Reason and (y) the purported grounds are not cured within thirty (30) days
after the date upon which such notice is delivered to the Company: 
  
 (i) a material reduction in the duties and authority assigned to Employee or the Employee’s title, immediately prior thereto, from those in effect immediately prior thereto; 
  
 (ii) a 20% or greater reduction by the Company or the Board of his
then current total compensation at plan (other than a reduction generally applicable to other senior Employees of the Company) or, any reduction in Employee’s Base Compensation (other than a reduction generally applicable to other senior
employees of the Company) or any reduction in Employee’s minimum annual option grant (other than a reduction generally applicable to other senior employees of the Company), as specified in Section 2.2; or 
  
 (iii) the relocation of the Company’s principal executive
offices to a location more than twenty-five (25) miles outside the Santa Barbara, California area, or the Company’s requiring Employee to relocate anywhere other than the location of the Company’s principal executive offices, except
for required travel on the Company’s business to an extent substantially consistent with Employee’s business travel obligations contemplated by Section 1.4, above; or 
  
 (iv) a change in reporting structure whereby Employee is no longer the most senior employee whose duties exclusively
(or nearly exclusively) involve being directly responsible for business development and distribution partnerships for the Company (or any division of any successor to the Company following a Change of Control). 
  
 (e) “MISCONDUCT” shall mean (i) the
willful and repeated failure by Employee to substantially perform his duties with the Company (other than any such failure resulting from Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after
the issuance of a 

  

 5 

 
Notice of Termination by Employee for Good Reason), after a written demand for substantial performance is delivered to Employee by the Chief Executive
Officer, which demand specifically identifies the manner in which the Chief Executive Officer believes that Employee has not substantially performed his duties, (ii) the willful engaging by Employee in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise, (iii) Employee’s conviction of, or plea of nolo contendere to, a felony or a crime involving moral turpitude, or (iv) Employee’s gross misconduct. For purposes hereof,
no act, or failure to act, on Employee’s part shall be deemed “willful” unless done, or omitted to be done, by Employee not in good faith and without reasonable belief that Employee’s action or omission was in the best interest
of the Company. 
  
 (f) “NOTICE
OF TERMINATION” shall mean a notice which shall set forth in reasonable detail the reason for termination of Employee’s employment, or in the case of resignation for Good Reason, said notice must specify
in reasonable detail the basis for such resignation. A purported termination which is not effected pursuant to this Section 3.1 shall not be effective. 
  
 3.2 TERMINATION BY COMPANY. The Company may terminate this Agreement: 
  
 (a) FOR MISCONDUCT. At
any time for Misconduct upon delivery of a Notice of Termination. Upon termination for Misconduct, all vesting in all Options shall terminate immediately and the Company (i) shall pay to Employee all accrued and unpaid compensation for the
period ending on the Date of Termination, including any and all pro rated cash bonuses to which Employee would otherwise be entitled, and (ii) shall not be obligated to pay any additional amounts to Employee hereunder. 
  
 (b) OTHER THAN MISCONDUCT
OR DISABILITY. At any time for reasons other than Misconduct upon delivery of a Notice of Termination. Employee’s employment is at will and the Company may terminate this Agreement and
Employee’s employment for any reason deemed sufficient by the Company. However, if Employee’s employment is terminated for any reason other than his Misconduct or Disability, then the Employee shall be entitled to the following benefits:

  
 (i) The Company shall pay to Employee an amount equal
to six (6) months of Employee’s Base Compensation at the rate in effect as of the Date of Termination and any and all pro rated cash bonuses to which Employee would otherwise be entitled, subject to the usual, required withholding (any
such amount to be payable in equal monthly installments at the time and in the amounts due under the Company’s regular payroll practices, as if Employee had remained employed during the period of twelve (12) months following the Date of
Termination, provided, however, that the Company shall have the right, in its sole discretion, to accelerate any payment under this Section 3.2(b)(i). 
  
 (ii) Employee’s vesting in the Initial Option described in Section 2.3(a), above, shall be accelerated to
the same extent as Employee would have become vested therein if Employee had remained employed by the Company for an additional twenty-four (24) months after the Date of Termination. 
  
 (iii) Provided that Employee timely elects to receive continuation of health insurance coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall subsidize the premiums payable by Employee thereunder, so that Employee pays the same monthly premium as an active employee with similar
coverage, for the period ending on the earlier of (A) one (1) year following the Date of Termination, or (B) the first date as of which Employee is covered under the health insurance plan of another employer. 
  

 6 

 (c) DISABILITY. By reason of Employee’s Disability. If the Company elects to
terminate Employee’s employment hereunder by reason of Employee’s Disability, then all vesting of the Option shall terminate immediately and the Company shall pay to Employee all accrued and unpaid compensation for the period ending on the
Date of Termination, and shall not be obligated to pay any additional amounts to Employee hereunder. 
  
 3.3 TERMINATION BY EMPLOYEE. Employee may resign from employment and terminate this Agreement at any
time. If Employee terminates this Agreement and resigns from employment: 
  
 (a) OTHER THAN GOOD REASON. Other than for Good Reason, then all vesting in all Options shall terminate immediately and the Company
(i) shall pay to Employee all accrued and unpaid compensation for the period ending on the Date of Termination, and (ii) shall not be obligated to pay any additional amounts to Employee hereunder. 
  
 (b) FOR GOOD REASON. For
Good Reason, then the Employee shall be entitled to the following benefits: 
  
 (i) The Company shall pay to Employee an amount equal to three (3) months of Employee’s Base Compensation at the rate in effect as of the Date of Termination and any and all pro rated cash bonuses to
which Employee would otherwise be entitled, subject to the usual, required withholding (any such amount to be payable in equal monthly installments at the time and in the amounts due under the Company’s regular payroll practices, as if Employee
had remained employed during the period of twelve (12) months following the Date of Termination, provided, however, that the Company shall have the right, in its sole discretion, to accelerate any payment under this Section 3.3(b)(i).

  
 (ii) Employee’s vesting in the Initial Option
described in Section 2.3(a), above, shall be accelerated to the same extent as Employee would have become vested therein if Employee had remained employed by the Company for an additional twenty-four (24) months after the Date of
Termination. 
  
 (iii) Provided that Employee timely
elects to receive continuation of health insurance coverage pursuant to COBRA, the Company shall subsidize the premiums payable by Employee thereunder, so that Employee pays the same monthly premium as an active employee with similar coverage, for
the period ending on the earlier of (A) one (1) year following the Date of Termination, or (B) the first date as of which Employee is covered under the health insurance plan of another employer. 
  
 (c) CHANGE OF
CONTROL. If within twelve (12) months following the closing of a Change of Control, Employee terminates his employment with Company or successor corporation due to Good Reason, or the Company or the successor
corporation terminates the Employee’s employment with the Company or successor corporation for other than Misconduct or Disability, then the Employee shall be entitled to the following benefits: 
  
 (i) The Company shall pay to Employee an amount equal to twelve
(12) months of Employee’s Base Compensation at the rate in effect as of the Date of Termination and any and all pro rated cash bonuses to which Employee would otherwise be entitled, subject to the usual, required withholding (any such
amount to be payable in equal monthly installments at the time and in the amounts due under the Company’s regular payroll practices, as if Employee had remained employed during the period of twelve (12) months following the Date of
Termination, provided, however, that the Company shall have the right, in its sole discretion, to accelerate any payment under this Section 3.3(b)(i). 
  

 7 

 (ii) Employee shall become one hundred percent (100%) vested in all Options granted to
Employee during the period of his employment with the Company. 
  
 (iii) Provided that Employee timely elects to receive continuation of health insurance coverage pursuant to COBRA, the Company shall subsidize the premiums payable by Employee thereunder, so that Employee pays the same monthly
premium as an active employee with similar coverage, for the period ending on the earlier of (A) one (1) year following the Date of Termination, or (B) the first date as of which Employee is covered under the health insurance plan of
another employer. 
  
 3.4 CONDITIONAL
NATURE OF SEVERANCE PAYMENTS. Notwithstanding any other provision of this Section 3 or any other provision of this Agreement to the contrary: 
  
 (a) NONCOMPETE. Employee acknowledges that the nature
of the Company’s business is such that if Employee were to become employed by, or substantially involved in, the business of a competitor of the Company during the six (6) months following the termination of Employee’s employment with
the Company following a Change of Control, then it would be very difficult for Employee not to rely on or use the Company’s trade secrets and confidential information in connection with that employment. Thus, to avoid the inevitable disclosure
of the Company’s trade secrets and confidential information, Employee acknowledges and agrees that his right to receive the severance consideration described in Sections 3.2 and 3.3, above (to the extent Employee is otherwise entitled to
such payments thereunder) shall be conditioned upon Employee not directly or indirectly engaging in (whether as an employee, consultant, agent, proprietor, principal, partner, stockholder, corporate officer, director or otherwise), or having any
ownership interest in or participating in the financing, operation, management or control of, any person, firm, corporation or business that directly competes with Company or is a customer of the Company. If Employee engages, invests, or otherwise
participates in any competitive activity described in this Section 3.4(a), then all severance payments consideration to which Employee otherwise may be entitled under Section 3.2 and 3.3 above, as applicable, thereupon shall cease.

  
 (b) NON-SOLICITATION.
Until the date one (1) year after the termination of Employee’s employment with the Company for any reason, Employee agrees and acknowledges that Employee’s right to receive the severance consideration described in Section 3.2
and 3.3 (to the extent Employee is otherwise entitled to such payments thereunder) shall be conditioned upon Employee not either directly or indirectly soliciting, attempting to hire, recruiting, encouraging, taking away, hiring any employee of the
Company or inducing or otherwise causing an employee to leave his or her employment with the Company (regardless whether to commence employment with Employee or with any other entity or person). If Employee engages in any such activity, then all
severance consideration to which Employee otherwise would be entitled under Section 3.2 and 3.3, above, as applicable, thereupon shall cease. 
  
 (C) GENERAL RELEASE. Employee shall not be entitled to receive any of the severance
consideration described in Sections 3.2 and 3.3 above, unless prior to receiving the same Employee executes a commercially reasonable general release of claims (including a release of all rights under Section 1542 of the California Civil Code)
against the Company and its directors, officers, employees, stockholders, and other agents and their respective insurers, successors, and assigns, of all claims arising from or in any way relating to Employee’s employment by the Company or the
termination of that employment, provided that such release shall not extend to (i) any claims for benefits under any qualified retirement plan maintained by the Company, (ii) any claims for governmental unemployment benefits, or
(iii) Employee’s right to receive indemnification from the Company under applicable provisions of California law or the certificate of incorporation or bylaws of the Company. 
  

 8 

 3.5 DEATH. This Agreement shall terminate automatically upon the death of Employee.
If Employee’s employment is terminated by reason of Employee’s death, then (i) the Company shall pay to Employee’s beneficiaries or legal representatives within 15 days, all accrued and unpaid Base Compensation, prorated bonus
and vacation pay for all periods ended on or before the date of Employee’s death, and (ii) the Company shall not be obligated to make any further payments hereunder. 
  
 4. MISCELLANEOUS 
  
 4.1 NOTICES. All notices permitted or required by this Agreement shall be in writing,
and shall be deemed to have been delivered and received (i) when personally delivered, or (ii) on the third (3rd) business day after the date on which deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested, or (iii) on the date on which transmitted by facsimile or other electronic
means generating a receipt confirming a successful transmission (provided that on that same date a copy of such notice is deposited in the United States mail, postage prepaid, certified or registered mail, return receipt requested), or
(iv) on the next business day after the date on which deposited with a regulated public carrier (e.g., Federal Express) designating overnight delivery service with a return receipt requested or equivalent thereof administered by
such regulated public carrier, freight prepaid, and addressed in a sealed envelope to the party for whom intended at the address or facsimile number appearing on the signature page of this Agreement, or such other address or facsimile number, notice
of which is given in a manner permitted by this Section 4.1. 
  
 4.2 ARBITRATION. Except for a dispute in which any party is seeking the exercise of the equitable powers of a court, all disputes arising under this Agreement shall be resolved by arbitration in Santa
Barbara, California, before a single arbitrator under the rules then obtaining of the American Arbitration Association. This agreement to arbitrate shall be specifically enforceable. The decision of the arbitrator shall be final and binding, and
judgment thereon may be entered in a court of competent jurisdiction. 
  
 4.3 BINDING ON SUCCESSORS; ASSIGNMENT. This Agreement shall be binding upon, and inure to the benefit of, each of the parties hereto, as well as their
respective heirs, successors, assigns, and personal representatives, provided that Employee may not delegate his duties hereunder. 
  
 4.4 GOVERNING LAW. This Agreement shall be construed in accordance with and shall be governed by the
laws of the State of California, without regard to conflict of law principles. 
  
 4.5 SEVERABILITY. If any of the provisions of this Agreement shall otherwise contravene or be invalid under the laws of any state, country or other jurisdiction where this
Agreement is applicable but for such contravention or invalidity, such contravention or invalidity shall not invalidate all of the provisions of this Agreement but rather it shall be construed, insofar as the laws of that state or other jurisdiction
are concerned, as not containing the provision or provisions contravening or invalid under the laws of that state or jurisdiction, and the rights and obligations created hereby shall be construed and enforced accordingly. 
  
 4.6 COUNTERPARTS. This Agreement may be
executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall be one and the same instrument, binding on all the signatories. 
  

 9 

 4.7 FURTHER ASSURANCES. Each party agrees, upon the
request of another party, to make, execute, and deliver such further certificates, agreements, instruments and other documents, and to take such additional actions, as may be necessary to effectuate the purposes of this Agreement. 
  
 4.8 ENTIRE AGREEMENT;
AMENDMENT. This Agreement, any agreement memorializing the Option, and the Company’s standard Confidential Information Agreement executed by Employee (a) represent the entire understanding of the parties
with respect to the subject matter hereof and thereof, and supersede all prior and contemporaneous understandings, whether written or oral, regarding the subject matter hereof, and (b) may not be modified or amended, except by a written
instrument, executed by the party against whom enforcement of such amendment may be sought. 
  
 4.9 STOCK SPLITS, ETC. All references in this Agreement to specific numbers of shares and prices per share shall be proportionately adjusted for any stock splits,
reverse splits, stock combinations or similar recapitalizations after the date hereof. 
  
 [Signatures appear on the following page] 
  

 10 

 IN WITNESS WHEREOF, the parties hereto have executed
this Agreement, effective as of the date set forth above. 
  

					
	“COMPANY:”	 	“EMPLOYEE:”
		
	CALLWAVE, INC., a Delaware corporation	 	 
			
	By	  	 /s/ David F. Hofstatter

	 	 /s/ Joshua Fraser

	 	  	David F. Hofstatter, President and CEO	 	Joshua Fraser
			
	 	  	 12/14/05

 Date
	 	 12/14/05

 Date

		
	 Address, Facsimile No. and Email for Notices
  
 136 West Canon Perdido Street
 Santa Barbara,
California 93101
  
 Facsimile No.: (805) 690-4211
	 	 Address, Facsimile No. and Email for Notices:
  
 1916  1/2 Castillo St.
 Santa Barbara, CA 93101
  
 Facsimile No.: (775) 371-6657

  

 11

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