Document:

exv10w4

 

Exhibit 10.4

EXECUTIVE EMPLOYMENT AGREEMENT

     THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into as of January
1, 2008 by and between ImaRx Therapeutics, Inc., a Delaware corporation (the “Company”), and Kevin
Ontiveros (“Executive”).

     WITNESSETH:

     WHEREAS, the Company desires to retain the services of Executive, and Executive desires to be
employed by the Company, on the terms and conditions of this Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set
forth herein, the Company and Executive, intending to be legally bound, hereby agree as follows:

     1. Employment. The Company agrees to employ Executive as Vice President, Legal
Affairs and General Counsel and Executive accepts such employment and agrees to perform full-time
employment services for the Company, subject to Section 3.2 of this Agreement and the Certificate
of Incorporation and Bylaws of the Company, as presently in effect and as amended from time to time
(the “Organizational Documents”), and the resolutions of the Board of Directors of the Company (the
“Board”), for the period and upon the other terms and conditions set forth in this Agreement.

     2. Term. The term of Executive’s employment hereunder (the “Term”) commenced on the
date set forth above and shall continue until this Agreement is terminated as set forth in Section
5 below.

     3. Position and Duties.

          3.1 Service with the Company. During the Term of this Agreement, Executive agrees to
perform the duties of Vice President, Legal Affairs and General Counsel and such other duties as
the Board may from time to time prescribe that are consistent with the duties of a Vice President,
Legal Affairs and General Counsel of a company of the size and nature of the Company.

          3.2 No Conflicting Duties. Executive hereby confirms that he is under no contractual
commitments inconsistent with his obligations set forth in this Agreement, and that during the Term
of this Agreement, he will not render or perform services, or enter into any contract to do so, for
any other corporation, firm, entity or person that are inconsistent with the provisions of this
Agreement or Executive’s fiduciary obligations to the Company. Except as otherwise provided
herein, Executive shall not serve as a director of any other corporation (except nonprofit
organizations to the extent such service does not materially affect Executive’s performance of his
duties for the Company) without the prior approval of the Board of Directors.

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     4. Compensation and Benefits.

          4.1 Base Salary. (a) As compensation for all services to be rendered by Executive
under this Agreement, beginning January 1, 2008 the Company shall pay to Executive during the Term
an annual base salary of $206,520 (the “Base Salary”). Subject to Section 4.1(b), the Base Salary
shall be reviewed at least annually and changed at the discretion of the Board (or its Compensation
Committee), provided, however, that the Base Salary may not be decreased without the written
consent of the Executive. The Company shall pay the Base Salary to Executive in accordance with
the Company’s normal payroll procedures and policies.

     (b) If Executive’s Base Salary is increased at any time, it shall not thereafter be decreased
during the Term of this Agreement, unless such decrease is the result of a general reduction (on
the same percentage basis) affecting the base salaries of all other executive officers of the
Company and such decrease does not result in a Base Salary of less than the Base Salary set forth
in Section 4.1 above.

          4.2 Annual Bonus. With respect to each full fiscal year until the Termination Date,
Executive shall be eligible to receive bonus awards aggregating up to 50% of Base Salary annually,
payable periodically based on the achievement of pre-determined milestones established from time to
time by the Board (or its Compensation Committee) pursuant to the Company’s Bonus Plan (as adopted
by the Board on October 18, 2007 and as such plan may be amended from time to time by the Board, in
its sole discretion).

          4.3 Stock Options. (a) The Company has previously granted to Executive various stock
options to purchase shares of the Company’s common stock (the “Shares”), pursuant to the Company’s
2000 Stock Plan and/or the 2007 Performance Incentive Plan (the “Plans”). As a result of the
foregoing grants, the options currently held by Executive are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	% Vested
	 	 	Tax	 	No. of	 	Exercise	 	as of
	Grant Date	 	Character	 	Shares	 	Price	 	12/31/07
	07/31/07
	 	ISO	 	 	30,665	 	 	$	5.00	 	 	 	0	%
	12/18/07
	 	ISO	 	 	87,335	 	 	$	2.10	 	 	 	0	%

          4.4 Participation in Benefit Plans. Executive shall be included to the extent
eligible thereunder in any and all plans of the Company providing general benefits for the
Company’s executive employees, including, without limitation, medical, dental, vision, short and
long term disability insurance, life insurance, 401(k) plan, sick days, vacation, and holidays, to
the extent the Company makes such plans or benefits available to its executive employees generally.
Executive’s participation in any such plan or program shall be subject to the provisions, rules,
and regulations applicable thereto. In addition, during the Term of this Agreement, Executive shall
be eligible to participate in all non-qualified deferred compensation and similar compensation,
incentive, bonus, profit sharing and stock plans offered, sponsored or established by Company on
substantially the same or a more favorable basis as any other employee of Company.

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          4.5 Business Expenses. In accordance with the Company’s policies established from
time to time, the Company will pay or reimburse Executive for all reasonable and necessary
out-of-pocket expenses incurred by him in the performance of his duties under this Agreement,
subject to the presentment of appropriate supporting documentation. During the Term of this
Agreement, the Company shall at its expense provide Executive with reasonable office space and
furnishings (including without limitation desk and lap top computers) at the Company’s principal
executive offices, and a cell telephone.

          4.6 Key Man Life Insurance. During the Term of this Agreement, the Company shall have
the option of purchasing and paying the premiums for a “Key Man” life insurance policy relating to
Executive in a coverage amount determined by the Company, and the Company shall be named as the
beneficiary of such policy.

     5. Termination.

          5.1 Disability. At the Company’s election, Executive’s employment and this Agreement
shall terminate upon Executive’s becoming totally or permanently disabled for a period of ninety
(90) days or more in any twelve (12) month period. For purposes of this Agreement, the term
“totally or permanently disabled” or “total or permanent disability” means Executive’s inability on
account of sickness or accident, whether or not job-related, to engage in regularly or to perform
adequately his assigned duties under this Agreement and Executive is qualified and eligible to
receive disability benefits under the disability policies maintained by the Company for Executive.

          5.2 Death of Executive. Executive’s employment and this Agreement shall terminate
immediately upon the death of Executive.

          5.3 Termination for Cause. The Company may terminate Executive’s employment and this
Agreement at any time for “Cause” (as hereinafter defined) immediately upon written notice to
Executive. As used herein, the term “Cause” shall mean that Executive shall have: (i) been
convicted of a felony; or (ii) committed an act of fraud, embezzlement, or breach of trust; or
(iii) committed an act of willful misconduct or gross negligence resulting in a material loss to
the Company; or (iv) materially violated any material written Company policy or rules of the
Company, unless cured by Executive within 30 days following written notice thereof to Executive; or
(v) refused to follow the reasonable written directions given by the Board or its designee or
materially breached any covenant or obligation under this Agreement or other agreement with the
Company, unless cured by Executive within 30 days following written notice thereof to Executive.

          5.4 Resignation. Executive’s employment and this Agreement shall terminate on the
earlier of the date that is one (1) month following the written submission of Executive’s
resignation to the Company or the date such resignation is accepted by the Company.

          5.5 Termination Without Cause. The Company may terminate Executive’s employment and
this Agreement without cause upon written notice to Executive. Termination “without cause” shall
mean termination of employment on any basis (including no reason or no

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cause) other than termination of Executive’s employment hereunder pursuant to Sections 5.1,
5.2, 5.3, or 5.4.

          5.6 Surrender of Records and Property. Upon termination of his employment with the
Company, Executive shall deliver promptly to the Company all credit cards, computer equipment,
cellular telephone, records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof, that are the property of the
Company and that relate in any way to the business, strategies, products, practices, processes,
policies or techniques of the Company, and all other property, trade secrets and confidential
information of the Company, including, but not limited to, all documents that in whole or in part
contain any trade secrets or confidential information of the Company that in any of these cases are
in his possession or under his control, and Executive shall also remove all such information from
any personal computers that he owns or controls.

     6. Compensation Upon the Termination of Executive’s Employment.

          6.1 In the event that Executive’s employment and this Agreement are terminated pursuant to
Section 5.1 (Disability), 5.3 (Cause), or 5.4 (Resignation), then Executive shall be entitled to
receive Executive’s then current Base Salary through the date his employment is terminated, and
such other amounts that accrued prior to the termination date and are required to be paid to him
pursuant to any employee benefit plan in accordance with such plan and/or by law, but no other
compensation of any kind or amount.

          6.2 In the event Executive’s employment and this Agreement are terminated pursuant to Section
5.2 (Death), Executive’s beneficiary or a beneficiary designated by Executive in writing to the
Company, or in the absence of such beneficiary, Executive’s estate, shall be entitled to receive
Executive’s then current Base Salary through the end of the month in which his death occurs, and
such other amounts that accrued prior to the termination date and are required to be paid to him
pursuant to any employee benefit plan in accordance with such plan and/or by law, but no other
compensation of any kind or amount.

          6.3 Unless Section 7 applies, in the event Executive’s employment and this Agreement are
terminated by the Company pursuant to Section 5.5 (Without Cause) or by Executive for “Good Reason”
(as defined below), (A) the Company shall pay to Executive, as a severance allowance, his then
current monthly Base Salary for the six (6) month period following the date of termination, payable
in the Company’s discretion either on the Company’s regular paydays throughout that 6-month period
or in a one time lump sum amount, and such other salary that accrued prior to the termination date
and amounts required to be paid to him pursuant to any employee benefit plan in accordance with
such plan and/or by law; (B) the Company shall pay on Executive’s behalf for a period of six (6)
months all premiums for medical, dental and vision insurance coverage that were in place at the
time of termination of Executive’s employment; and (C) Executive shall receive accelerated vesting
for twelve (12) months from the date of Executive’s termination for all stock options granted by
the Company to Executive before or after the Commencement Date, and extension of the option
exercise period for an additional twelve (12) months beyond the period set forth in the governing
option documents for such exercise, provided, however, that the period for exercise of such stock
options shall not be extended beyond the date on which they would have terminated had

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Executive continued to be employed by the Company; but no other compensation or benefits of
any kind. Executive shall be entitled to receive these benefits and payments only if he complies
with his continuing obligations to the Company as set forth in this Agreement, provided, however,
that the Company shall not deny any such benefits unless it has provided written notice to
Executive of any claimed breach of such continuing obligations, and Executive has failed to cure
each such breach within fifteen days after receipt of such written notice of breach; and the
exercise period of any such options shall be tolled during such fifteen (15) day period or any
longer period required to resolve any disputed claim of breach of such continuing obligations,
provided, that such stock options shall not be extended beyond the date on which they would have
terminated had Executive continued to be employed by the Company.

          6.4 The provisions of this Section 6 shall not affect Executive’s participation in or
terminating distributions and vested rights under, any pension, profit sharing, insurance or other
employee benefit plan of the Company to which Executive is entitled pursuant to the terms of such
plans.

     7. Change in Control. In the event a Change in Control (as defined below) occurs
and, in the twelve month period preceding or following the Change in Control, Executive’s
employment and this Agreement are terminated by the Company or its successor, assigns or transferee
pursuant to Section 5.5 (Without Cause) or by Executive for “Good Reason” (as defined below), then
the Company shall, within thirty (30) days after occurrence of the last of these conditions (the
“Trigger Date”), pay Executive a lump sum amount equal to fifty percent (50%) of Executive’s then
current annual Base Salary, (less applicable withholdings) and pay on Executive’s behalf for a
period of six months following such termination all premiums for medical, dental and vision
insurance coverage that were in place at the time of termination of Executive’s employment. In
addition, one hundred percent (100%) of Executive’s unvested options (whether granted before or
after the Commencement Date) as of the Trigger Date, shall automatically vest as of the Trigger
Date and the exercise period for all such stock options shall be extended an additional twelve (12)
months (but in any case not beyond the date on which they would have terminated had Executive
continued to be employed by the Company).

          7.1 Definition of Change in Control. For purposes of this Agreement, a “Change in
Control” shall be deemed to have occurred if, at any time during the Term, any of the following
events occurs:

               7.1.1 if the Company does not have a class of securities registered under Section 12 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”):

               7.1.1.1 any person, as that term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act, becomes a beneficial owner (as defined in Rule 13d-3 under the Exchange Act or
any successor rule or regulation), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding
Voting Stock, as defined below, provided, however, that for purposes of this
paragraph, the term “person” shall exclude (A) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its subsidiaries, (B) a
person who beneficially owns 25% or more of the Company’s

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outstanding Voting Stock on the Effective Date, or (C) any person who becomes such a
beneficial owner in connection with a bona fide financing transaction.

               7.1.1.2 the Company is merged, consolidated or reorganized into or with another
corporation or other legal person (an “Acquiring Person”) or securities of the Company are
exchanged for securities of an Acquiring Person, and as a result of such merger,
consolidation, reorganization or exchange less than a majority of the combined voting power
of the then outstanding securities of the Acquiring Person immediately after such
transaction is held, directly or indirectly, in the aggregate by the holders of securities
entitled to vote generally in the election of directors (“Voting Stock”) of the Company
immediately prior to such transaction;

               7.1.1.3 the Company, in any transaction or series of related transactions, sells or
otherwise transfers, directly or indirectly, all or substantially all of its assets, on a
consolidated basis, to an Acquiring Person, and less than a majority of the combined voting
power of the then outstanding securities of the Acquiring Person immediately after such sale
or transfer is held, directly or indirectly, in the aggregate by the holders of Voting Stock
of the Company immediately prior to such sale or transfer; or

               7.1.1.4 during any period of two consecutive years, individuals who at the beginning of
any such period constitute the directors of the Company cease for any reason to constitute
at least a majority thereof, unless the election, or the nomination for election by the
Company’s stockholders, of each director of the Company first elected during such period was
approved by at least a majority vote of the directors of the Company then still in office
who were directors of the Company at the beginning of any such period;

               or

               7.1.2 if the Company has a class of securities registered under Section 12 of the Exchange
Act:

               7.1.2.1 any person, as that term is used in Section 13(d) and Section 14(d)(2) of the
Exchange Act, becomes, is discovered to be, or files a report on Schedule 13D or 14D-1 (or
any successor schedule, form or report) disclosing that such person is, a beneficial owner
(as defined in Rule 13d-3 under the Exchange Act or any successor rule or regulation),
directly or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company’s then outstanding Voting Stock, provided,
however, that for purposes of this paragraph, the term “person” shall exclude (A) a trustee
or other fiduciary holding securities under an employee benefit plan of the Company or any
of its subsidiaries, (B) a person who becomes such a beneficial owner in connection with
the Company’s initial public offering of common stock or (C) any person who was a
shareholder of the Company immediately prior to the Company’s initial public offering of
common stock; or 

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               7.1.2.2 any of the events described in Sections 7.1.1.2, 7.1.1.3 or 7.1.1.4 (the latter
being modified to refer to such a change of a majority of the Board of Directors during any
one year period).

Notwithstanding the foregoing, a transaction shall not constitute a Change in Control if its sole
purpose is to change the state of the Company’s incorporation or to create a holding company that
will be owned in substantially the same proportions by the persons who held the Company’s
securities immediately before such transaction.

          7.2 Definition of Good Reason. As used in this Agreement, “Good Reason” means any of
the following: (i) a material reduction in Executive’s title, status, authority, or responsibility
at the Company, provided, that if Executive is at any time appointed to the office of Secretary of
the Company, the subsequent elimination of such title and related responsibilities and authority
shall not alone constitute Good Reason; or (ii) a material reduction in the salary or other
benefits in effect for the Executive, provided comparable reductions have not been made in the
salary or other benefits of the other members of senior management of the Company; or (iii) except
with Executive’s prior written consent, relocation of Executive’s principal place of employment to
a location more than 25 miles from the Company’s executive offices in Tucson, Arizona; or (iv) )
any breach by the Company of its material obligations under this Agreement unless such breach is
cured within 30 days after written notice of breach from Executive.

     8. Release. As a condition precedent to the Company’s obligation to provide Executive
with the amounts set forth in Section 6.3 or Section 7, Executive must first execute and deliver to
the Company a mutual legal release in the form attached hereto as Exhibit A, with such
changes as the Company deems necessary in order to maintain the breadth of such release in the
event of changes in applicable laws, rules or regulations, it being the intent of the parties that
the release be as broad as possible.

     9. Ventures. If, during the Term of this Agreement, Executive is engaged in or
associated with the planning or implementing of any project, program, or venture involving the
Company and a third party or parties, all rights in the project, program, or venture shall belong
to the Company and shall constitute a corporate opportunity belonging exclusively to the Company.
Except as approved in writing by the Board, Executive shall not be entitled to any interest in such
project, program, or venture or to any commission, finder’s fee, or other compensation in
connection therewith other than the Base Salary to be paid to Executive as provided in this
Agreement.

     10. Restrictions.

          10.1 Definitions. For purposes of this Agreement, the following terms shall have the
following meanings:

               10.1.1 “Trade Secrets” means information that is not generally known about the Company
or its business, including without limitation about its products, recipes, projects, designs,
developmental or experimental work, computer programs, data bases, know-how, processes, business
partners, manufacturers, customers, suppliers, business plans, marketing plans and strategies,
financial or personnel information, and information obtained

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from third parties under confidentiality agreements. “Trade Secrets” also means formulas,
patterns, compilations, programs, devices, methods, techniques, or processes that derive
independent economic value, actual or potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy. In particular, the
parties agree and acknowledge that the following list, which is not exhaustive and is to be broadly
construed, enumerates some of the Company’s Trade Secrets, the disclosure of which would be
wrongful and would cause irreparable injury to the Company: (i) pharmaceutical manufacturing; (ii)
formulation technology; (iii) pricing information; (iv) product development, marketing, sales,
customer, manufacturer and supplier information related to any Company product or service available
commercially or in any stage of development during Executive’s employment with the Company; and (v)
Company marketing and business strategies, ideas, and concepts. Executive acknowledges that the
Company’s Trade Secrets were and are designed and developed by the Company at great expense and
over lengthy periods of time, are secret, confidential, and unique, and constitute the exclusive
property of the Company.

               10.1.2 “Restricted Field” means the business of developing, manufacturing, licensing
and selling (i) treatment of vascular thrombosis comprising thrombolytic drugs with or without
bubbles and ultrasound, and (ii) oxygen delivery with bubbles or fluorocarbon emulsions.

               10.1.3 “Non-Competition Period” means a period of 12 months after the termination of
Executive’s employment with the Company unless a court of competent jurisdiction determines that
that Period is unenforceable under applicable law because it is too long, in which case the
Non-Competition Period shall be for the longest of the following periods that the court determines
is reasonable under the circumstances: 11 months, 10 months, 9 months, 8 months, 7 months, or 6
months after the termination of Executive’s employment with the Company.

               10.1.4 “Business Territory” means the entire United States, unless a court of
competent jurisdiction determines that that geographic scope is unenforceable under applicable law
because it is too broad, in which case the Business Territory shall be amended by eliminating
geographical areas and states from the following list until the Business Territory is determined to
be reasonable: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware,
District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky,
Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota,
Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas,
Utah, Vermont, Virginia, Washington, Washington, District of Columbia, West Virginia, Wisconsin,
Wyoming, Pima County, Arizona, Maricopa County, Arizona, Tucson, Arizona, Phoenix, Arizona. The
parties acknowledge and agree that if any of the geographic areas or States listed above are
required by law to be eliminated, it would be fair and appropriate to do so in the inverse order of
the volume of revenue received or projected to be received by the Company from such area or State
at the time of determination.

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               10.1.5 “Non-Solicitation Period” means a period of 12 months after the termination of
Executive’s employment with the Company.

          10.2 Non-Disclosure Obligations. Executive shall not at any time during the period
specified in Section 4.A. of the Invention and Confidential Information Agreement attached hereto
as Exhibit B, without the express written consent of a superior officer or the Board of the
Company, publish, disclose, or divulge to any person, firm or corporation, or use directly or
indirectly for the Executive’s own benefit or for the benefit of any person, firm, corporation or
entity other than the Company, any Trade Secrets of the Company.

          10.3 Non-Competition Obligations. Executive acknowledges the substantial amount of
time, money, and effort that the Company has spent and will spend in developing its products and
other strategically important information (including Trade Secrets), and agrees that during
Executive’s employment with the Company hereunder and during the Non-Competition Period, Executive
will not, alone or with others, directly or indirectly, as an employee, agent, consultant, advisor,
owner, manager, lender, officer, director, employee, partner, stockholder, or otherwise, engage in
any Restricted Field activities in the Business Territory, nor have any such relationship with any
person or entity that engages in Restricted Field activities in the Business Territory; provided,
however, that nothing in this Agreement will prohibit Executive from owning a passive investment of
less than one percent of the outstanding equity securities of any company listed on any national
securities exchange or traded actively in any national over-the-counter market so long as Executive
has no other relationship with such company in violation of this Agreement. The Non-Competition
Period set forth in this Section 10.3 shall be tolled during any period in which the Executive is
in breach of the restriction set forth in this Section 10.3. 

          10.4 Agreement Not to Solicit Customers. Executive agrees that during Executive’s
employment with the Company hereunder and during the Non-Solicitation Period, Executive will not,
either directly or indirectly, on Executive’s own behalf or in the service or on behalf of others,
solicit, divert, or appropriate, or attempt to solicit, divert, or appropriate, to any business
that engages in Restricted Field activities in the Business Territory (i) any person or entity
whose account with the Company was sold or serviced by or under the supervision of Executive during
the twelve (12) months preceding the termination of such employment, or (ii) any person or entity
whose account with the Company has been directly solicited at least twice by the Company within the
year preceding the termination of Executive’s employment (the “Customers”). The Non-Solicitation
Period set forth in this Section 10.4 shall be tolled during any period in which the Executive is
in breach of the restriction set forth in this Section 10.4.

          10.5 Agreement Not to Solicit Employees. Executive agrees that during Executive’s
employment with the Company hereunder and during the Non-Solicitation Period, Executive will not,
either directly or indirectly, on Executive’s own behalf or in the service or on the behalf of
others solicit, divert, or hire away, or attempt to solicit, divert, or hire away any person then
employed by the Company, nor encourage anyone to leave the Company’s employ. The Non-Solicitation
Period set forth in this Section 10.5 shall be tolled during any period in which the Executive is
in breach of the restriction set forth in this Section 10.5.

          10.6 Defamatory Statements. Executive agrees that during Executive’s employment with
the Company hereunder and thereafter, he will not, either directly or indirectly,

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defame the reputation, character, or image of the Company or its products, services,
employees, directors, or officers.

          10.7 Reasonableness. Executive and the Company agree that the covenants set forth in
this Agreement are appropriate and reasonable when considered in light of the nature and extent of
the Company’s business. Executive further acknowledges and agrees that: (i) the Company has a
legitimate interest in protecting the Company’s business activities and its current, pending, and
potential Trade Secrets; (ii) the covenants set forth herein are not oppressive to Executive and
contain reasonable limitations as to time, scope, geographical area, and activity; (iii) the
covenants do not harm in any manner whatsoever the public interest; (iv) Executive’s chosen
profession, trade, or business is in manufacturing, developing, and marketing pharmaceutical drugs,
products and devices (the “Profession”); (v) the Restricted Field is only a very small or limited
part of the Profession, and Executive can work in many different jobs in Executive’s Profession
besides those in the Restricted Field; (vi) the covenants set forth herein do not completely
restrain Executive from working in Executive’s Profession, and Executive can earn a livelihood in
Executive’s Profession without violating any of the covenants set forth herein; (vii) Executive has
received and will receive substantial consideration for agreeing to such covenants, including
without limitation the consideration to be received by Executive under this Agreement; (viii) if
Executive were to work for a competing company that engages in activities in the Restricted Field,
there would be a substantial risk that Executive would inevitably disclose Trade Secrets to that
company; (ix) the Company competes with other companies that engage in Restricted Field activities
in the Business Territory, and if Executive were to engage in prohibited activities in the
Restricted Field within the Business Territory, it would harm the Company; (x) the Company expends
considerable resources on hiring, training, and retaining its employees and if Executive were to
engage in prohibited activities during the Non-Solicitation Period, it would harm the Company; and
(xi) the Company expends considerable resources acquiring, servicing, and retaining its Customers
and if Executive were to engage in prohibited activities during the Non-Solicitation Period, it
would harm the Company.

     11. Other Agreements. Executive reaffirms Executive’s obligations set forth in the
Employee Agreement Concerning Invention Assignment Non-Disclosure and Non-Competition attached
hereto as Exhibit B, which Executive has previously executed and delivered; provided, that
in the event of any inconsistency between Exhibit B and the terms of Section 10 above, the
terms of Section 10 shall be controlling. Executive further acknowledges and agrees that he will
comply with all other Company policies and procedures. The terms of any Indemnity Agreement
between the Executive and Company will also continue in full force and effect.

     12. Assignment. This Agreement shall not be assignable, in whole or in part, by
either party without the written consent of the other party, except that the Company may, without
the consent of Executive, assign its rights and obligations under this Agreement to any
corporation, firm or other business entity (i) with or into which the Company may merge or
consolidate, (ii) to which the Company may sell or transfer all or substantially all of its assets
or (iii) of which at least a majority of the equity investment and of the voting control is owned,
directly or indirectly, by, or is under common ownership with, the Company. Upon such assignment
by the Company, the Company shall exercise commercially reasonable efforts to obtain the assignees’
written agreement enforceable by Executive to assume and perform, from

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and after the date of such assignment, the terms, conditions, and provisions imposed by this
Agreement upon the Company.

     13. Other Provisions.

          13.1 Governing Law. This Agreement is made under and shall be governed by and
construed in accordance with the laws of the State of Arizona without reference to conflicts of law
provisions thereof.

          13.2 Injunctive Relief. Executive agrees that it would be difficult to compensate the
Company fully for damages for any violation of the provisions of this Agreement. Accordingly,
Executive specifically agrees that the Company shall be entitled to temporary and permanent
injunctive relief to enforce the provisions of this Agreement. This provision with respect to
injunctive relief shall not, however, diminish the right of the Company to claim and recover
damages in addition to injunctive relief.

          13.3 Prior Agreements. This Agreement and its exhibits contain the entire agreement
of the parties relating to the subject matter hereof and supersedes all prior agreements and
understandings with respect to such subject matter, and the parties hereto have made no agreements,
representations, or warranties relating to the subject matter of this Agreement which are not set
forth herein.

          13.4 Withholding Taxes and Right of Offset. The Company may withhold from all
payments and benefits under this Agreement all federal, state, city, or other taxes as shall be
required pursuant to any law or governmental regulation or ruling. Executive agrees that the
Company may offset any payments owed to Executive pursuant to this Agreement by any amounts owed by
Executive to the Company.

          13.5 Amendments. No amendment or modification of this Agreement shall be deemed
effective unless made in writing signed by Executive and the Company.

          13.6 No Waiver. No term or condition of this Agreement shall be deemed to have been
waived nor shall there be any estoppel to enforce any provisions of this Agreement, except by a
statement in writing signed by the party against whom enforcement of the waiver or estoppel is
sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated,
shall operate only as to the specific term or condition waived, and shall not constitute a waiver
of such term or condition for the future or as to any act other than that specifically waived.

          13.7 Severability. To the extent any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted from this Agreement and the remainder of such
provision and of this Agreement shall be unaffected and shall continue in full force and effect.

          13.8 Indemnification. Executive shall be entitled as an officer and director to be
indemnified by the Company under the Organizational Documents, as set forth therein, and to receive
the benefits, if any, of any director and officer liability insurance obtained by the

11

 

Company in its discretion from time to time, subject to the terms, provisions and conditions
of any such insurance.

          13.9 Headings. The headings in this Agreement are included solely for reference
purposes and shall not be considered in the interpretation or construction of this Agreement.

          13.10 Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be delivered personally, by overnight courier or similar
means, by United States certified or registered mail, return receipt requested, postage prepaid, or
sent by facsimile transmission with written confirmation of receipt, at the addresses specified
below or such other addresses as the parties may designate by like notice. Any such notice shall
be effective upon receipt if delivered personally, by overnight courier or by United States
certified or registered mail, or on the next business day following transmittal if sent by
facsimile transmission.

	 	 	 
	If to the Company:

	 	ImaRx Therapeutics, Inc.
	 

	 	1635 East 18th Street
	 

	 	Tucson, AZ 85719
	 

	 	Attn: Chairman of the Board
	 

	 	Telephone: 520-770-1259
	 

	 	Facsimile: 520-791-2437
	 
	 	 
	copy to:

	 	DLA Piper
	 

	 	701 Fifth Ave., Suite 7000
	 

	 	Seattle, Washington 98104
	 

	 	Attn: John M. Steel, Esq.
	 

	 	Telephone: (206) 839-4800
	 

	 	Facsimile: (206) 839-4801
	 
	 	 
	If to Executive:

	 	Kevin Ontiveros
	 

	 	9990 Wild Javelina Place
	 

	 	Tucson, AZ 85749
	 

	 	Telephone: (520) 760-5952

          13.11 No Mitigation Obligation. It will be difficult, and may be impossible, for
Executive to find reasonably comparable employment following the termination of Executive’s
employment with the Company, and the noncompetition covenant contained in Section 10 hereof will
further limit the employment opportunities for Executive. Accordingly, the parties hereto
expressly agree that the payments provided for in Section 6.3 and Section 7 by the Company to
Executive will be liquidated damages, and that Executive shall not be required to seek other
employment, or otherwise, to mitigate any payment provided for hereunder.

12

 

          13.12 Remedies Cumulative. Remedies under this Agreement of either party hereto are
in addition to any remedy or remedies to which such party is entitled or may become entitled at law
or in equity.

          13.13 Attorneys’ Fees. In the event suit is brought to enforce the terms of this
Agreement or to collect any moneys due hereunder, or to collect money damages for breach hereof,
the prevailing party shall be entitled to recover, in addition to any other remedy, reimbursement
for reasonable attorneys’ fees, court costs, costs of investigation and other related expenses
incurred in connection therewith.

          13.14 Counterparts. This Agreement may be executed in any number of counterparts, all
such counterparts shall be deemed to constitute one and the same instrument, and each of said
counterparts shall be deemed an original hereof.

          13.15 Survivability. Sections 4.3, 6, 7, 8, 10 and 13 of this Agreement shall survive
the termination of this Agreement and the termination of Executive’s employment with the Company.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first set
forth above.

	 	 	 	 	 
	 	“Company”: ImaRx Therapeutics, Inc.

 	 
	 	 	 	 
	 	 	By:  	/s/ Richard L. Love 	 
	 	 	Name:  	Richard L. Love 	 
	 	 	Title:  	Chairman of
the Board 	 
	 	 	 
	 	"Executive":	/s/
Kevin Ontiveros 	 
	 	 	Kevin Ontiveros 	 
	 	 	 	 

13

 

	 	 	 	 	 

Exhibit A

Form of Release

[Needs to be attached]

 

 

Exhibit B

Employee Agreement Concerning Invention Assignment

Non-Disclosure and Non-Competition

[Needs to be attached]exv10w4

 

Exhibit 10.4

D.R. HORTON, INC.

AMENDED AND RESTATED

2000 INCENTIVE BONUS PLAN

(as of December 7, 2007)

1. PURPOSE. The purpose of the D.R. Horton, Inc. Amended and Restated 2000 Incentive Bonus Plan
(the “Plan”) is to provide senior management employees of D.R. Horton, Inc., a Delaware
corporation (the “Company”), and its Affiliates with incentive compensation based upon the level
of achievement of financial and other performance criteria. The Plan will enhance the ability of
the Company and its Affiliates to attract and retain individuals of exceptional managerial talent
upon whom, in large measure, the sustained progress, growth and profitability of the Company
depends.

2. DEFINITIONS. As used in the Plan, the following terms shall have the meanings set forth below:

     (a) “Adjusted Pre-Tax Income” shall mean income before income taxes, excluding inventory
impairments and land option cost write-offs and goodwill impairments, as publicly reported by
the Company in its financial statements in accordance with generally accepted accounting
principles.

     (b) “Affiliate” shall mean (i) any Person that directly, or through one or more
intermediaries, controls, is controlled by, or is under common control with, the Company or
(ii) any entity in which the Company has a significant equity interest, as determined by the
Committee.

     (c) “Award” shall mean a right to a payment under the terms of the Plan.

     (d) “Board” shall mean the Board of Directors of the Company.

     (e) “Change in Control” shall mean the occurrence of any of the following events:

     (i) a merger, consolidation or reorganization of the Company into or with another
corporation or other legal person if the stockholders of the Company, immediately before
such merger, consolidation or reorganization, do not, immediately following such merger,
consolidation or reorganization, then own directly or indirectly, more than 50% of the
combined voting power of the then-outstanding voting securities of the corporation or
other legal person resulting from the such merger, consolidation or reorganization in
substantially the same proportion as their ownership of voting securities of the Company
immediately prior to such merger, consolidation or reorganization;

     (ii) the Company sells all or substantially all of its assets to another corporation
or other Person, or there is a complete liquidation or dissolution of the Company;

     (iii) a change in the composition of the Board such that at any time a majority of
the Board shall have been members of the Board for less than twenty-four

 

 

months, unless the election of each new director who was not a director at the
beginning of the period was approved by at least a majority of the directors then still
in office who were directors at the beginning of such period (but in no event by fewer
than three such directors);

     (iv) any Person (other than (x) the Company or (y) Donald R. Horton, Terrill J.
Horton, or their respective wives, children, grandchildren and other descendants, or any
trust or other entity formed or controlled by any of such individuals) acquires
“beneficial ownership” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) of 50% or more of the outstanding voting securities of
the Company; or

     (v) the Company files a report or proxy statement with the Securities and Exchange
Commission pursuant to the Exchange Act disclosing in response to Form 8-K or Schedule
14A (or any successor schedule, form or report or item therein) that a change in control
of the Company has occurred.

     (f) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (g) “Committee” shall mean the Compensation Committee of the Board, which shall consist of two or
more Outside Directors.

     (h) “Covered Employee” shall mean a Participant who is a “covered employee” within the
meaning of Code Section 162(m) and the Treasury regulations promulgated thereunder with respect to
any Performance Period.

     (i) “Outside Directors” shall mean “outside directors” within the meaning of Code Section
162(m) and the Treasury regulations promulgated thereunder.

     (j) “Participant” shall mean any Senior Executive who is selected by the Committee (or in the
case of Senior Executives who are not Covered Employees, any Person or committee empowered by the
Committee to make such selection) to participate in the Plan for a Performance Period.

     (k) “Performance-Based Compensation” shall mean amounts satisfying the applicable
requirements imposed by Code Section 162(m) and the Treasury regulations promulgated thereunder
with respect to that term.

     (l) “Performance Period” shall mean one or more months, quarters or one or more fiscal
years of the Company, including multiple year periods, or any other period selected by the
Committee, as to which an Award may be earned.

     (m) “Person” shall mean any individual, corporation, partnership, limited liability
company, association, joint-stock company, trust, unincorporated organization, or government
or political subdivision thereof.

2

 

     (n) “Senior Executive” shall mean any executive officer of the Company or any other
officer of the Company or any of its Affiliates serving as a region or division president or
manager or in another senior management position.

     (o) “Share” shall mean a share of the Company’s common stock, par value $0.01.

     (p) “Stock Incentive Plan” shall mean the Company’s 2006 Stock Incentive Plan, as amended
from time to time.

     (q) “Target Award” shall mean one or more Award levels for a Performance Period that will be
paid in accordance herewith if certain performance criteria are achieved in such Performance
Period.

3. AWARDS.

     (a) The Committee may determine and designate Senior Executives who shall be Participants
for any Performance Period. With respect to each such designated Participant, if any, the
Committee shall establish: (i) a Target Award for the Performance Period; (ii) the performance
criteria for the Performance Period with respect to the Target Award; and (iii) whether the Award
is intended to satisfy the requirements for Performance-Based Compensation. For any Performance
Period, determinations required for Awards intended to qualify as Performance-Based Compensation
shall be made within the time necessary to comply with such requirements. Designation as a
Participant for any Performance Period shall not entitle any Senior Executive to the right to be
designated as a Participant for any other Performance Period.

     (b) The performance criteria to be established with respect to any Target Awards shall be
based upon any one or more of the following measures, applied to either the Company as a whole or
to any business unit, region, division, or subsidiary, either individually, alternatively, or in
any combination, and measured either monthly, quarterly, annually, or cumulatively over a period
of years, on an absolute basis or relative to (including ranking to) a pre-established target, to
previous years’ results, or to a designated comparison group, in each case as specified by the
Committee: (i) cash flow (before or after dividends), (ii) earnings per share (including,
without limitation, earnings before interest, taxes, depreciation and amortization), (iii) stock
price, (iv) return on equity, (v) equity improvement, (vi) stockholder return or total
stockholder return, (vii) return on capital (including, without limitation, return on total
capital or return on invested capital), (viii) return on investment, (ix) return on assets or net
assets, (x) market capitalization, (xi) economic value added, (xii) debt leverage (debt to
capital) or access to capital, (xiii) gross or net revenue, (xiv) sales, net sales or closings,
(xv) backlog, (xvi) inventory, land or lot improvement or reduction, (xvii) asset turnover,
(xviii) income, pre-tax income or net income, (xix) operating income or pre-tax profit,
(xx) operating profit, operating profit before non-cash charges and asset valuation, net
operating profit or economic profit, (xxi) gross margin, operating margin or profit margin,
(xxii) return on operating revenue or return on operating assets, ( xxiii) cost of sales,
(xxiv) cash from operations, (xxv) operating ratio, (xxvi) operating revenue or return on
revenue, (xxvii) market share improvement, (xxviii) sales cancellations, (xxix) dividend or
dividend yield, (xxx) general, selling and administrative expenses improvement or containment,

3

 

or (xxxi) customer service. Such goals may be particular to a line of business, region,
division, or other unit or may be based on the Company generally or any Affiliate.

     To the extent consistent with Code Section 162(m) (or, alternatively, to the extent that
Code Section 162(m) is not intended to apply to a particular Award), the Committee may
appropriately adjust any evaluation of performance under the above performance criteria to
exclude any of the following events that occur during a Performance Period: (i) litigation,
claims, judgments or settlements; (ii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results; (iii) non-cash charges related to
impairments, write-offs or asset valuation; (iv) corporate overhead charges, (v) accruals for
reorganization and restructuring programs; (vi) adjustments related to deferred tax assets; and
(vii) any extraordinary, unusual, non-recurring or non-comparable items (A) as described in
Accounting Principles Board Opinion No. 30 (or any successor provision), (B) as described in
management’s discussion and analysis of financial condition and results of operations appearing
in the Company’s Annual Report to stockholders for the applicable year or years, or (C) publicly
announced by the Company in a press release or conference call relating to the Company’s results
of operations or financial condition for a completed quarterly, annual, or multi-year fiscal
period. The Committee also may take into account normalization related adjustments to the
performance criteria if necessary to provide a relevant and consistent comparison to the
performance criteria of the Company’s peer group or other comparison group or metric.

     (c) Notwithstanding the establishment of any Target Award and related performance criteria
pursuant to Section 3(a), but subject to Section 6, in the sole discretion of the Committee, the
Award payable to a Participant in respect of such Target Award may be adjusted, at any time prior
to payment of the related Award, either to increase or decrease the value of such Award, as
follows:

     (i) the Committee may adjust an Award for individual performance on the basis of such
quantitative and qualitative performance measures and evaluations as it deems appropriate;

     (ii) the Committee may make such adjustments as it deems appropriate in the case of
any Participant whose position with the Company has changed during the applicable
Performance Period; and

     (iii) the Committee shall have the discretion to adjust performance criteria and
the methodology used to measure the determination of the degree of attainment of such
criteria;

provided, that to the extent required to qualify as Performance-Based Compensation, any Award
designated as Performance-Based Compensation may not be adjusted under this Section 3(c) or
otherwise in a manner that increases the value of such Award. Subject to Section 6, the
Committee shall retain the discretion to adjust such Awards in a manner that does not increase
the value of such Awards, at any time prior to the payment thereof.

4

 

     (d) To the extent that a Target Award is intended to be Performance-Based Compensation, prior
to any payment thereof, the Committee shall certify the extent to which the performance criteria
have been satisfied and the amount payable as a result thereof.

     (e) In general, Awards earned under the Plan shall be payable in cash; provided, however, that
the Committee, in its sole discretion, may elect to satisfy payment of any Award earned under the
Plan in whole or in part by the delivery of a number of Shares or Share Units with a fair market
value equal to the dollar value of the Award so earned. Any Shares or Share Units delivered in
settlement of an Award under the Plan shall be granted as fully vested Restricted Stock or
Restricted Stock Units pursuant to Section 8 of the Stock Incentive Plan, shall not be subject to
the minimum vesting period set forth in Section 8(c) of the Stock Incentive Plan as permitted by
the terms thereof regarding the payment of earned compensation, shall be subject to all other
applicable terms and conditions of the Stock Incentive Plan, and shall reduce the number of Shares
available for issuance under the Stock Incentive Plan in accordance with Section 5 thereof.

     (f) Subject to the above, Awards shall be paid as soon as practicable after the Performance
Period, and if possible by the 15th day of the 3rd month following the end of the year in which the
Participant becomes entitled to such Award payment, but in any event no later than the last day of
the calendar year following the year in which the Target Award is earned, except to the extent that
a Participant has made a timely election to defer the receipt of such Award pursuant to a deferral
arrangement with the Company or any of its Affiliates. Any deferral election shall comply with the
requirements of Code Section 409A so as to avoid the imposition of any taxes or penalties
thereunder. For Awards that do not constitute Performance-Based Compensation, the Compensation
Committee may establish rules and procedures for advance payment of all or a portion of such
Awards, or such other payment arrangements as it deems desirable or appropriate.

4. AWARD LIMITATIONS TO COVERED EMPLOYEES. Notwithstanding any other provision of the Plan to the
contrary, if an award is payable based on one or more monthly or quarterly periods, the maximum
Award payable to any one Covered Employee with respect to any such Performance Period shall not
exceed the sum of (i) 2% of Adjusted Pre-Tax income for such Performance Period (but not below $0)
and (ii) $8 million, provided that no Covered Employee may receive both monthly Target Awards and a
quarterly Target Award with respect to the same quarter under prong (i) and the maximum payout for
all monthly, quarterly, or annual Performance Periods in a fiscal year under prong (ii) shall not
exceed $8 million. Notwithstanding the prior sentence, if the Performance Period is the month of
December, the maximum Award payable to any one Covered Employee shall not exceed the sum of (i) 6%
of Adjusted Pre-Tax Income for such Performance Period (but not below $0) and (ii) $8 million,
provided that no other award under prong (i) of the prior sentence shall be paid for the quarter
(or months therein) that includes December and the maximum payout for all monthly, quarterly, or
annual Performance Periods in a fiscal year under prong (ii) shall not exceed $8 million. If an
Award is payable based on a fiscal year, the maximum Award payable to any one Covered Employee with
respect to the fiscal year Performance Period shall not exceed the sum of (i) 2% of Adjusted
Pre-Tax Income for such fiscal year (but not below $0) and (ii) $8 million, provided that any
amounts paid under prong (i) of the above-referenced monthly or quarterly Performance Period
maximums during the same fiscal year shall reduce, dollar for dollar, the maximum

5

 

amount payable under prong (i) of the maximum annual Performance Period Award, and provided further
that the maximum payout for all monthly, quarterly, and annual Performance Periods in a fiscal year
under prong (ii) of the above formulas shall not exceed $8 million.

     If a Covered Employee is entitled to both a short-term (monthly, quarterly or annual) and a
long-term (covering two or more fiscal years) Target Award covering the same or an overlapping time
period hereunder, then (a) the maximum long-term Award shall not exceed the sum of (i) 2% of
Adjusted Pre-Tax Income for such long-term Performance Period (but not below $0) and (ii) $8
million, and (b) the amount paid under the short-term Award shall reduce, dollar for dollar, the
maximum payable under the long-term Award, such that the total amount that a Covered Employee may
receive for the combined short-term and long-term Awards covering the same or an overlapping time
period shall not exceed the sum of (i) the greater of 2% of Adjusted Pre-Tax Income for such
short-term Performance Period (but not below $0) and 2% of Adjusted Pre-Tax Income for such
long-term Performance Period (but not below $0), and (ii) $8 million.

     Prior to the payment with respect to any Award intended to satisfy the requirements for
Performance-Based Compensation, the Committee shall certify in writing the attainment of the
performance criteria and any other material terms. Unless an Award Agreement expressly provides
otherwise, Awards and payouts hereunder shall not affect any awards or payouts under other
compensation or benefit plans, and participants may receive awards under more than one plan for a
performance period.

5. ELIGIBILITY; PRORATIONS.

     (a) Persons employed by the Company or any of its Affiliates as Senior Executives in a
Performance Period prior to the establishment by the Committee of the Target Award for such
Performance Period are eligible to be Participants under the Plan for such Performance Period
(subject to (b) below, whether or not so employed or living at the date an Award is paid). A
Senior Executive is not rendered ineligible to be a Participant by reason of being a member of the
Board.

     (b) The Award applicable to a Participant under the Plan for a Performance Period shall be
prorated over the Performance Period or the Participant shall be ineligible for an Award, as the
case may be, in the following events:

6

 

	 	 	 	 	 	 	 	 	 
	 

	 	(i)
	 	ceasing to be a Senior Executive,
otherwise than by dismissal, during the
Performance Period, including ceasing to
be such due to death, retirement,
resignation, or leave of absence
	 	—
	 	prorate as of the date of
ceasing to be such, to the
nearest half month
	 
	 	 	 	 	 	 	 	 
	 

	 	(ii)
	 	disability for more than three
months in a Performance Period
	 	—
	 	prorate as of the last day
of the third month of disability
	 
	 	 	 	 	 	 	 	 
	 

	 	(iii)
	 	disability for three months or less in a Performance Period
	 	—
	 	no reduction in applicable Award
	 
	 	 	 	 	 	 	 	 
	 

	 	(iv)
	 	dismissal, with or without cause, during or after a Performance Period by the Company or any Affiliate
	 	—
	 	no Award

If a Change in Control occurs during any Performance Period, the foregoing provisions of this
Section 5(b) shall not apply to any such event occurring on or after the Change in Control.

6. CHANGE IN CONTROL. Within fifteen (15) business days following a Change in Control, each
Participant under the Plan during the Performance Period in which the Change in Control occurs who
is in the employ of the Company at the time of the Change in Control shall be paid an amount equal
to (i) the Award the Participant would have earned for such Performance Period, assuming continued
achievement of the relevant performance goals at the rate achieved as of the end of the calendar
month immediately prior to the calendar month in which the Change in Control occurs, multiplied by
(ii) a fraction, the numerator of which is the number of days in the Performance Period which have
elapsed as of the Change in Control, and the denominator of which is the number of days in the
Performance Period. The Committee, or a successor compensation committee of the surviving
corporation that meets the requirements of Code Section 162(m) and the treasury regulations
promulgated thereunder, shall make the certification described in Section 4 prior to any payment
pursuant to this Section 6. Amounts payable pursuant to this Section 6 shall not be subject to
downward adjustment by the Committee, notwithstanding the provisions of Section 3(c).

7. OTHER CONDITIONS.

     (a) No Person shall have any right to be selected as a Participant for any Performance
Period or, except as provided in Section 10, to receive an Award under the Plan. There is no
obligation for uniformity of treatment of Participants under the Plan. Awards under the Plan
may not be assigned or alienated.

     (b) Neither the Plan nor any action taken hereunder shall be construed as giving to any
Participant the right to be retained in the employ of the Company or any Affiliate.

7

 

     (c) The Company or any Affiliate shall have the right to deduct from any Award to be paid
under the Plan any federal, state or local taxes required by law to be withheld with respect to
such payment.

     (d) No segregation of any moneys or the creation of any trust or the making of any
special deposit shall be required in connection with any Awards made or to be made under the
Plan.

     (e) This Plan is not intended to and shall not preclude the Board from adopting, continuing,
amending or terminating such additional compensation arrangements as it deems desirable for
Participants under this Plan, including any thrift, savings, investments, stock purchase, stock
option, profit-sharing, pension, retirement, insurance, bonus or other incentive plan.

8. DESIGNATION OF BENEFICIARIES. A Participant may designate one or more beneficiaries to receive
all or part of the Award which may be made to the Participant, or may be payable, after such
Participant’s death. A designation of beneficiary may be replaced by a new designation or may be
revoked by the Participant at any time. A designation or revocation shall be on a form to be
provided for this purpose and shall be signed by the Participant and delivered to the Company or
Affiliate employing the Participant prior to the Participant’s death. In case of the Participant’s
death, an Award with respect to which a designation of beneficiary has been made (to the extent it
is valid and enforceable under applicable law) shall be paid to the designated beneficiaries at
the time such Award would have been paid to Participant, if Participant were still alive. Any
Award granted or payable to a Participant who is deceased and not subject to such a designation
shall be distributed to the Participant’s estate at the time such Award would have been paid to
Participant, if Participant were still alive. If there shall be any question as to the legal right
of any beneficiary to receive an Award under the Plan, the amount in question may be paid to the
estate of the Participant, in which event the Company or its employing Affiliate shall have no
further liability to anyone with respect to such amount.

9. PLAN ADMINISTRATION.

     (a) The Committee shall have full power and discretion to administer and interpret the Plan
and to establish rules for its administration. In making any determinations under or referred to
in the Plan, the Committee shall be entitled to rely on opinions, reports or statements of
officers or employees of the Company and its Affiliates, and of counsel, public accountants and
other professional or expert Persons.

     (b) Except to the extent prohibited by applicable law, the Committee may allocate all or any
portion of its responsibilities and powers to any one or more of its members and may delegate all
or any part of its responsibilities and powers to any Person or committee selected by it; provided,
however, that the Committee may not allocate or delegate any portion of its responsibilities in
connection with or relating to Covered Employees or Performance-Based Compensation. Any such
allocation or delegation may be revoked by the Committee at any time.

8

 

     (c) The Plan shall be governed by the laws of the State of Delaware and applicable Federal
law.

10. MODIFICATION OR TERMINATION OF PLAN. The Board may modify or terminate the Plan at any time,
effective at such date as the Board may determine; provided that no modification a `or termination
may, in the absence of written consent to the change by the affected Participant (or, if the
Participant is not then living, the affected beneficiary), adversely affect the rights of any
Participant or beneficiary in respect of any Target Award established prior to the date such
amendment is adopted by the Board.

11. SHAREHOLDER APPROVAL. No Target Award may be paid hereunder to any Covered Employee until the
material terms of the Plan are disclosed to and approved by the shareholders of the Company. Such
approval must be in a separate vote by the holders of a majority of the shares of the Company
present, or represented by proxy, and entitled to vote, at a duly constituted meeting of the
Company’s stockholders in accordance with the laws of the State of Delaware.

9

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