During the term of Mr. McGuire’s employment with the Company, upon the sale of all or substantially all the assets not in the ordinary
course of business and/or the licensing of technology in which Mr. McGuire was an inventor, the Company shall pay Mr. McGuire a bonus equal
to 4% of the total compensation received by the Company (which includes wholly-owned subsidiaries) for these transactions. The payment shall
continue as long as the Company receives payments.
In connection with the Proposed EES Licensing Transaction, if it closes Mr. McGuire shall receive a bonus of 4% of the manufacturing
profit of the Company from payments made by EES and 4% of royalties received by the Company. The payment shall continue as long as the
Company receives payments.
The Company granted Mr. McGuire 9,000,000 non-qualified options exercisable at $0.4799 per share over a five-year period. Of the
options, 3,000,000 options will vest at the time of execution of a Definitive Agreement, and the balance will vest in equal increments each June
30 and December 31, over the term of the Definitive Agreement. The vesting will be accelerated if the Proposed Licensee increases its order to
twice the minimum in the Definitive Agreement.
AI
