10. Termination. The Executive's employment terminates before the termination date stated in Article 2 as follows: 10.1 Death or Disability. If the Executive dies or becomes permanently disabled, this Agreement terminates effective at the end of the calendar month during which his death occurs or when his disability becomes permanent. 10.2 Cause. If a majority of the disinterested directors of the Company's board of directors vote to remove the Executive from his duties for Cause, this Agreement terminates and the Executive ceases to be an officer of the Company effective on the date specified by the directors. For purposes of this Agreement, "Cause" means the occurrence of any one or more of the following events: 10.2.1 The Executive has been convicted of or pleaded guilty or no contest to 10.2.1.1 any misdemeanor reflecting unfavorably on the Company; or 10.2.1.2 any felony offense. 10.2.2 The Executive has committed fraud or embezzlement, that determination to be made by a majority of the disinterested directors of the Company's board of directors in their reasonable judgment. 10.2.3 A majority of the disinterested directors of the Company's board of directors has determined in their reasonable judgment that 10.2.3.1 the Executive has breached one or more of his fiduciary duties to the Company or has made an intentional misrepresentation to the Company; and 10.2.3.2 the breach or misrepresentation has had or is likely to have a material adverse effect on the Company's business operations or financial condition. 10.2.4The Executive has failed to obey a specific written direction from the board of directors consistent with this Agreement and the Executive's duties under this Agreement. 10.2.5After written notice and a 30-day cure period, the Executive has materially neglected or failed to satisfactorily discharge any of his duties or responsibilities, that determination to be made by a majority of the disinterested directors of the Company's board of directors in their reasonable judgment.

1. Section 10.1 provides for termination on death or permanent disability. While death is relatively certain, the Company and Executive might dispute whether the Executive's disability has become permanent. If you represented the Executive, what substantive changes could you recommend that would provide greater certainty as to when a disability would become permanent?

2. Why are fraud and embezzlement treated differently from misdemeanors and felonies that require conviction?

3. Does subsection 10.2.3 adequately protect the Company if the Executive makes misrepresentations or breaches his fiduciary duties? What if he lied on his resume? Will this lead to a material adverse effect on the Company's financial condition?

4. If you represented the Executive, what change could you ask for in subsection 10.2.4 that would provide your client with greater protection? Use the other subsections as a guide.

5. Assume that the Company pays the Executive an annual salary and a guaranteed bonus of $10,000, and reimburses his expenses. The guaranteed bonus increases each year by 5 percent on a compounded basis. If you represented the Company, what would you suggest that the Company pay the Executive on termination for each of the scenarios in the excerpt? Not precise dollar amounts, but conceptually. What would you recommend if you represented the Executive?