$5 million - $1 million = $4 million (the Excess Revenues)
$4 million X 5% of Excess Revenues = $200,000
$200,000 / $5.00 = 40,000
(d) Notwithstanding the foregoing, Stock Options that do not vest in any given year shall be carried over and added to a subsequent year’s maximum. In the example provided in Section 4.3(c), 10,000 Stock Options will be carried over to the next year, provided that the next year is not the last year in this Agreement. Unless otherwise agreed to between the parties, any unvested Stock Options at the end of the Employment Period shall be canceled and of no force or effect.
(e) Company shall register the shares issuable under the Stock Option on a Form S-8 registration statement prior to the vesting of the first Stock Option and shall keep such registration statement in effect for the entire period the Stock Options remain outstanding. Each shares issued upon exercise of a Stock Option granted pursuant to Sections 4.3(a) and 4.3(b), shall be transferable upon Executive’s election, to the extent consistent with applicable restrictions under the Company’s registration of the underlying shares with the Securities and Exchange Commission.
(f) All of Executive’s Stock Options (including any Stock Options that are outstanding on the Effective Date) shall be subject to, and governed by, the terms and provisions in the applicable Company Stock Option Plan, except to the extent of modifications that are expressly provided for in this Agreement which do not result in any modifications to the Stock Option Plan which would require shareholder approval or which would contravene any law which applies to the Stock Option Plan.
(g) If there is any change in the common stock of Company by reason of any stock dividend, stock split, spin-off, split up, merger, consolidation, recapitalization, reclassification, combination or exchange of shares, or any other similar corporate event or reorganization, however structured, then the number of shares subject to Executive’s Stock Options and the exercise price of Executive’s Stock Options shall be equitably and appropriately adjusted by the applicable Stock Option Plan administrator to effectuate the intent of this Section 4.3. Notice of any adjustment shall be given by Company to Executive and shall be final and binding on Executive.
4.4 Performance Awards. In addition to the foregoing, during the Employment Period, the Executive shall be eligible to earn performance awards from time to time that the Company may, in its discretion, determine to put into effect. The administrator of these plans or arrangements shall determine the performance criteria (which need not be identical) to be utilized to calculate the value of the Performance Awards, the term of such Performance Awards, the Payment Event, and the form and time of payment of Performance Awards. The specific terms and conditions of each Performance Award shall be set forth in a written statement evidencing the grant of such Performance Award. Upon the occurrence of a Payment Event, payment of a Performance Award will be made to the Executive at fair market value on the date of the Payment Event, as the administrator in its discretion may determine. The administrator may impose a limitation on the amount payable upon the occurrence of a Payment Event, which limitation shall be set forth in the written statement evidencing the grant of the Performance Award. If Executive’s employment with the Company is terminated for any reason, including but not limited to, death, or disability prior to the occurrence of the Payment Event, all of the Executive’s rights under the Performance Award shall expire and terminate unless otherwise determined by the administrator. Notwithstanding the foregoing, the Executive shall be afforded the opportunity to earn a minimum aggregate of 300,000 Shares during the Employment Period at a maximum of 75,000 Shares during each calendar year hereof with respect to these plans or arrangements.
4.5 Discretionary Bonus. The Executive may be eligible to receive additional bonus compensation at the sole and unreviewable discretion of the Chief Executive Officer and/or President and the Compensation Committee of the Board of Directors.
4.6 Compensation and Benefit Programs. During the term of Executive’s employment hereunder, Executive shall be entitled to participate in the following plans as they may exist from time to time during the term hereof, to wit, any and all medical, dental, hospitalization, accidental death and dismemberment, disability, travel and life insurance plans, and any and all other plans as offered by the Company from time to time to its Executives, including savings, pension, profit-sharing, stock options, and deferred compensation plans, subject to the general eligibility and participation provisions set forth in such plans.
4.7 Vacation and Other Benefits. During the term of Executive’s employment hereunder, Executive shall be entitled to such paid vacation, fringe benefits and perquisites as are provided from time to time by
3
