CNS Response, Inc. – ‘8-K’ for 10/1/07 – EX-10

On:  Friday, 10/5/07, at 12:47pm ET   ·   For:  10/1/07   ·   Accession #:  1170918-7-782   ·   File #:  0-26285

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         5     14K 
 2: EX-10       Material Contract -- ex10-1                            4     19K 

EX-10   —   Material Contract — ex10-1

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                                                                    EXHIBIT 10.1

CNS Response, Inc.
2755 Bristol St, Suite 285
 Costa Mesa, CA 92626-5968
 Phone: (714) 545-3288 Facsimile: (714) 545-2994

September 27, 2007                                                              

George Carpenter                                                                
2 Shelter Cove                                                                  
Laguna Niguel, CA 92677                                                         

Dear George:                                                                    

         On behalf of CNS Response, Inc. (the "Company"),  I am pleased to offer
you a position with the Company based upon the following terms:                 

         1. POSITION.  Upon acceptance of this offer,  you will become President
of the Company,  reporting to the Chief Executive Officer.  You will be expected
to devote at least forty (40) hours per week to the  performance  of your duties
(except  for  vacation  periods as set forth  herein and  reasonable  periods of
illness  or  other  incapacities   permitted  by  Company's  general  employment
policies)  and to give your best  efforts  to such  duties.  Your  position  may
require that you travel from time to time as the Company may reasonably  request
and as shall be appropriate and necessary in the performance of your duties.    

         2. EFFECTIVE  DATE. The effective date of employment  shall be: October
1, 2007.                                                                        

         3. AT-WILL  EMPLOYMENT.  YOU SHOULD BE AWARE THAT YOUR  EMPLOYMENT WITH
THE COMPANY IS FOR NO SPECIFIED PERIOD AND CONSTITUTES "AT-WILL" EMPLOYMENT.  AS
A RESULT,  YOU ARE FREE TO TERMINATE YOUR EMPLOYMENT AT ANY TIME, FOR ANY REASON
OR FOR NO REASON.  SIMILARLY,  THE COMPANY IS FREE TO TERMINATE YOUR EMPLOYMENT,
AT ANY  TIME,  FOR  "CAUSE"  OR FOR NO  CAUSE.  "CAUSE"  SHALL  MEAN  YOUR:  (A)
INDICTMENT OR CONVICTION OF ANY FELONY OR OF ANY CRIME  INVOLVING  DISHONESTY OR
MORAL TURPITUDE;  (B) PARTICIPATION IN ANY FRAUD AGAINST COMPANY; (C) PERSISTENT
FAILURE TO SUBSTANTIALLY  PERFORM YOUR MATERIAL JOB DUTIES;  PROVIDED,  HOWEVER,

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THAT THE CHIEF  EXECUTIVE  OFFICER OR THE BOARD OF DIRECTORS  SHALL  PROVIDE YOU
WRITTEN NOTICE OF SUCH FAILURE AND YOU SHALL HAVE FIFTEEN (15) DAYS TO CURE; AND
(D) INTENTIONAL  DAMAGE TO ANY PROPERTY OF COMPANY.  IN THE EVENT OF TERMINATION
OF YOUR  EMPLOYMENT,  YOU WILL NOT BE ENTITLED  TO ANY  PAYMENTS,  BENEFITS,  OR
EMPLOYMENT  COMPENSATION  OTHER THAN AS SET FORTH HEREIN. IF COMPANY  TERMINATES
YOUR EMPLOYMENT  WITHOUT CAUSE OR YOU  "INVOLUTARILY  TERMINATE" YOUR EMPLOYMENT
WITH THE COMPANY, YOU SHALL RECEIVE, AS SEVERANCE,  YOUR SALARY AND BENEFITS FOR
A PERIOD EQUAL TO SIX (6) MONTHS, PAYABLE IN ONE LUMP SUM UPON TERMINATION.  YOU
SHALL BE CONSIDERED TO  INVOLUTARILY  TERMINATE YOUR EMPLOYMENT WITH THE COMPANY
IF THE COMPANY (A) COMMITS A BREACH OF THIS OFFER LETTER WHICH  REMAINS  UNCURED
FIFTEEN  (15) DAYS  AFTER YOU  PROVIDE  WRITTEN  NOTICE TO THE  COMPANY  OF SUCH
BREACH,  OR (B)  CHANGES,  WITHOUT  YOUR  CONSENT  OR  PURSUANT  TO A  CORPORATE
TRANSACTION (AS DEFINED IN SECTION 6 BELOW),  YOUR TITLE OR  RESPONSIBILITIES SO
THAT YOU ARE NO LONGER THE  PRESIDENT  OF THE  COMPANY.  IF YOUR  EMPLOYMENT  IS
TERMINATED BY COMPANY WITH CAUSE OR YOU VOLUNTARILY  TERMINATE YOUR  EMPLOYMENT,
YOU SHALL NOT BE ENTITLED TO SEVERANCE.                                         

         4.  COMPENSATION.  The Company  will pay you a salary of  $180,000  per
annum, payable in amounts of $7,500 twice-monthly,  less applicable withholdings
.. Your salary will begin as of the effective date of  employment. The first and
last payment by the Company to you will be prorated, if necessary,  to reflect a
commencement  or termination  date other than the first or last working day of a
pay period.  Your salary and performance  shall be reviewed at least annually by
the Chief Executive Officer or the Company's board of directors. You may receive
increases  in  annual  salary  from  time  to time as  determined  by the  Chief
Executive  Officer or the Board,  but in no event  shall your  annual  salary be
decreased below $180,000.                                                       

         5. VACATION AND BENEFITS.  Upon the Effective  Date of your  employment
and then for so long as you are  employed  by the  Company  you will accrue 1.67
days of paid time off  ("PTO")  for each  full  month  you are  employed  by the
Company.  Vacation  days shall be deducted  from your  accrued PTO. You shall be
entitled to health and dental  insurance  coverage for you and your  dependents,
with  premiums  paid  in  full  by  Company,  effective  immediately  upon  your
commencement  of  employment.  You will  also be  entitled  to  standard  fringe
benefits in accordance with the Company's practices covering employees,  as such
benefits may be in effect from time to time.                                    

         6. STOCK OPTION. On the commencement of your employment,  Company shall
grant  to you an  option  (the  "Option")  to  purchase  968,875  shares  of the

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Company's  Common Stock pursuant to the Company's 2006 Incentive Stock Plan (the
"Plan") adopted by the board of directors and  stockholders of the Company.  The
exercise  price of the Option will be $0.89 per share,  the fair market value of
the  Company's  Common Stock on the date of grant as determined by the Company's
board of  directors.  The Option will vest as follows:  121,109  shares  vesting
immediately;  the remaining options to purchase 847,766 shares will vest equally
over 42 months  beginning seven months after the commencement of your employment
until all of the shares are  exercisable,  subject to all provisions of the Plan
and your continued  employment with the Company.  Your vesting  schedule for the
Option  shares  shall   accelerate  if  Company  is  involved  in  a  "Corporate
Transaction"  such that a portion of your  unvested  Option shares will vest. as
follows:  the number of unvested  options at the date of  Corporate  Transaction
times  the ratio of the time  elapsed  between  the  Grant  Date and the date of
Corporate   Transaction   over  the  vesting  period  (48  months).A   Corporate
Transaction  shall  mean (a) a sale of  substantially  all of the  assets of the
Company; (b) a merger or consolidation in which the Company is not the surviving
corporation  (other  than  a  merger  or  consolidation  in  which  shareholders
immediately  before  the merger or  consolidation  have,  immediately  after the
merger or  consolidation,  greater stock voting power);  (c) a reverse merger in
which the company is the surviving  corporation  but the shares of the Company's
common  stock  outstanding  immediately  preceding  the merger are  converted by
virtue of the merger  into other  property,  whether in the form of  securities,
cash or otherwise (other than a reverse merger in which stockholders immediately
before the merger  have,  immediately  after the merger,  greater  stock  voting
power);  or (d) any  transaction or series of related  transactions  in which in
excess of 50% of the Company's voting power is transferred.                     

         7.  EMPLOYMENT,  CONFIDENTIAL  INFORMATION,  INVENTION  ASSIGNMENT  AND
ARBITRATION AGREEMENT. As a condition of accepting this offer of employment, you
will be required to complete,  sign and return the  Company's  standard  form of
Confidential Information, Invention Assignment and Arbitration Agreement.       

         8. IMMIGRATION LAWS. For purposes of federal immigration laws, you will
be required to provide to the Company documentary  evidence of your identity and
eligibility  for employment in the United  States.  Such  documentation  must be
provided  within 3 business days of the effective  date of your  employment,  or
your employment relationship with the Company may be terminated.                

         9. CONFLICTING  EMPLOYMENT.  During the period that you render services
to the Company, you will not engage in any employment, business or activity that
is in any way competitive with the business or proposed business of the Company.
You will  disclose  to the  Company in  writing  any other  gainful  employment,
business or activity that you are currently  associated  with or  participate in
that  competes  with the  Company.  You will not  assist  any  other  person  or
organization  in  competing  with the  Company  or in  preparing  to  engage  in
competition with the business or proposed business of the Company. You represent
that your signing of this offer letter,  agreement(s) representing stock options
granted  to  you,  if  any,  under  the  Plan  and  the  Company's  Confidential

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Information,   Invention   Assignment   and   Arbitration   Agreement  and  your
commencement  of  employment  with the Company  will not  violate any  agreement
currently in place between yourself and current or past employers.              

         10. ENTIRE AGREEMENT.  This offer letter, the Confidential Information,
Invention Assignment and Arbitration Agreement and the agreement(s) representing
stock options  granted to you, if any,  under the Plan,  when signed by you, set
forth the terms of your  employment  with the Company and  supersede any and all
prior representations and agreements, whether written or oral.                  

         11. AMENDMENT.  This offer letter can only be amended in writing signed
by you and an officer  of the  Company.  Any waiver of a right  under this offer
letter must be in writing.                                                      

         12. GOVERNING LAW. This offer letter will be governed under the laws of
the State of California  applicable to such  agreements made and to be performed
entirely within such State.                                                     

         We look forward to you joining the Company.  If the foregoing terms are
agreeable,  please indicate your acceptance by signing the enclosed copy of this
letter in the space provided below and returning it to me within three days.    

        Sincerely,

                CNS RESPONSE, INC.

                     By:  /s/ Leonard Brandt
                                     -----------------------------
                           Leonard Brandt, CEO
AGREED AND ACCEPTED:                                                            

/s/ George Carpenter                                                            
-------------------------                                                       
George Carpenter                                                                

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Filed on:		10/5/07
For Period End:		10/1/07		1					3,  4
		9/27/07		1
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