Exhibit 10.1

 

EVOQUA WATER TECHNOLOGIES CORP.

2017 EQUITY INCENTIVE PLAN

NONSTATUTORY STOCK OPTION - NOTICE OF GRANT

 

Evoqua Water Technologies Corp. (the “Company”), a Delaware corporation, hereby
grants to the Optionee set forth below (the “Optionee”) an option (the “Option”)
to purchase the number of Shares of common stock of the Company (“Shares”) set
forth below at the Option Price set forth below, pursuant to the terms and
conditions of this Notice of Grant (the “Notice”), the Nonstatutory Stock Option
Award Agreement attached hereto as Exhibit A (the “Award Agreement”), and the
Evoqua Water Technologies Corp. 2017 Equity Incentive Plan (the “Plan”).

 

Date of Grant:

 

    

 

 

 

Name of Optionee:

 

    

 

 

 

Number of Shares Subject to Option:

 

     Shares

 

 

 

Option Price
(Price Per Share):

 

$    per Share

 

 

 

Expiration Date:

 

10 year anniversary of the Date of Grant.

 

 

 

Vesting:

 

The Option shall vest pursuant to the terms and conditions set forth in
Section 3 of the Award Agreement.

 

 

 

Vesting Start Date:

 

    

 

The Option shall be subject to the execution and return of this Notice by the
Optionee to the Company within     days of the date hereof (including by
utilizing an electronic signature and/or web-based approval and notice process
or any other process as may be authorized by the Company). This Option is a
non-qualified stock option and is not intended by the parties hereto to be, and
shall not be treated as, an “incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. Capitalized terms
used but not defined herein shall have the meaning attributed to such terms in
the Award Agreement or, if not defined therein, in the Plan, unless the context
requires otherwise. By executing this Notice, the Optionee acknowledges that his
or her agreement to the covenants set forth in Section 7 of the Award Agreement
is a material inducement to the Company in granting this Award to the Optionee.

 

This Notice may be executed by facsimile or electronic means (including, without
limitation, PDF) and in one or more counterparts, each of which shall be
considered an original instrument, but all of which together shall constitute
one and the same agreement, and shall become binding when one or more
counterparts have been signed by each of the parties hereto and delivered to the
other party hereto.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Notice of Grant as of
the Date of Grant set forth above.

 

 

EVOQUA WATER TECHNOLOGIES CORP.

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

OPTIONEE

 

 

 

 

 

 

By:

 

 

Name:

 

 

[SIGNATURE PAGE TO NOTICE OF GRANT FOR THE EVOQUA WATER TECHNOLOGIES CORP. 2017
EQUITY INCENTIVE PLAN NONQUALIFIED STOCK OPTION]

 

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Exhibit A

 

EVOQUA WATER TECHNOLOGIES CORP.

2017 EQUITY INCENTIVE PLAN

NON-STATUTORY STOCK OPTION

AWARD AGREEMENT

 

THIS NONSTATUTORY STOCK OPTION AWARD AGREEMENT (the “Award Agreement”) is
entered into by and among Evoqua Water Technologies Corp. (the “Company”) and
the individual set forth on the signature page to that certain Notice of Grant
(the “Notice”) to which this Award Agreement is attached.  The terms and
conditions of the Option granted hereby, to the extent not controlled by the
terms and conditions contained in the Plan, shall be as set forth in the Notice
and this Award Agreement.  Capitalized terms used but not defined herein shall
have the meaning attributed to such terms in the Notice or, if not defined
therein, in the Plan, unless the context requires otherwise.

 

1.                                      No Right to Continued Employee Status or
Consultant Service

 

Nothing contained in this Award Agreement shall confer upon the Optionee the
right to the continuation of his or her Employee status, or, in the case of a
Consultant or Director, to the continuation of his or her service arrangement,
or in either case to interfere with the right of the Company or any of its
Subsidiaries or other affiliates to Terminate the Optionee.

 

2.                                      Term of Option

 

As a general matter, the Option will expire on the Expiration Date set forth in
the Notice and be deemed to have been forfeited by the Optionee. As provided
below, the Optionee’s right to exercise the Option may expire prior to the
Expiration Date if the Optionee Terminates, including in the event of the
Optionee’s Disability or death. This Award Agreement shall remain in effect
until the Option has fully vested and been exercised or any unexercised portion
thereof has been forfeited by the Optionee as provided in this Award Agreement.
No portion of this Option shall be exercisable after the Expiration Date, or
such earlier date as may be applicable, except as provided herein.

 

3.                                      Vesting of Option

 

[Option 1: Subject to the remainder of this Section 3, the Option will vest as
to twenty-five percent (25%) on each of the first four anniversaries of the
Vesting Start Date, such that the Option shall become fully (100%) vested as of
the fourth anniversary of the Vesting Start Date, subject to the Optionee not
having Terminated as of the applicable vesting date.]

 

[Option 2: Subject to the remainder of this Section 3, the Option will vest as
to thirty-three and one-third percent (33 1/3%) on each of the first three
anniversaries of the Vesting Start Date, such that the Option shall become fully
(100%) vested as of the third anniversary of the Vesting Start Date, subject to
the Optionee not having Terminated as of the applicable vesting date.]

 

[Option 3: Subject to the remainder of this Section 3, the Option shall become
fully (100%) vested upon the first anniversary of the Vesting Start Date,
subject to the Optionee not having Terminated prior to such anniversary.]

 

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[Option 4:  Subject to the remainder of this Section 3, the Option will vest as
to          percent (   %) immediately upon the Vesting Start Date and
thereafter as to                 percent (   %) on each of the first   
anniversaries of the Vesting Start Date, such that the Option shall become fully
(100%) vested as of the        anniversary of the Vesting Start Date, subject to
the Optionee not having Terminated as of the applicable vesting date.]

 

If the Optionee Terminates for any reason, the portion of the Option that has
not vested as of such date shall terminate upon such Termination and be deemed
to have been forfeited by the Optionee without consideration.

 

4.                                      Exercise

 

Prior to the Expiration Date and at any time prior to the Optionee’s
Termination, the Optionee may exercise all or a portion of the Option, to the
extent vested, by giving notice in the form, to the person, and using the
administrative method and the exercise procedures established by the Committee
from time to time (including any procedures utilizing an electronic signature
and/or web-based approval and notice process), specifying the number of Shares
to be acquired. The Optionee’s right to exercise the vested portion of the
Option following the date that of the Optionee’s Termination will depend on the
reason for such Termination, as described in Sections 5 and 6 below.

 

The Optionee must pay to the Company at the time of exercise the amount of the
Option Price for the number of Shares covered by the notice to exercise
(“Aggregate Option Price”). The Aggregate Option Price for any Shares purchased
pursuant to the exercise of an Option shall be paid in any or any combination of
the following forms: (w) cash or its equivalent (e.g., a check);  (x) by making
arrangements through a registered broker-dealer pursuant to cashless exercise
procedures established by the Committee from time to time; (y) if permitted by
the Committee in its sole discretion, the transfer, either actually or by
attestation, to the Company of Shares that have been held by the Optionee for at
least six (6) months (or such lesser period as may be permitted by the
Committee) prior to the exercise of the Option, such transfer to be upon such
terms and conditions as determined by the Committee; or (z) in the form of other
property as determined by the Committee in its sole discretion. Any Shares
transferred to the Company as payment of the Aggregate Option Price shall be
valued at their Fair Market Value on the last business day preceding the date of
exercise of such Option. In addition, at the discretion of the Committee in its
sole discretion at the time of exercise, the Optionee may provide for the
payment of the Aggregate Option Price through Share withholding as a result of
which the number of Shares issued upon exercise of an Option would be reduced by
a number of Shares having a Fair Market Value equal to the Aggregate Option
Price. If requested by the Committee, the Optionee shall deliver this Award
Agreement to the Company, which shall endorse thereon a notation of such
exercise and return such Award Agreement to the Optionee. No fractional Shares
(or cash in lieu thereof) shall be issued upon exercise of an Option and the
number of Shares that may be purchased upon exercise shall be rounded down to
the nearest number of whole Shares.

 

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5.                                      Termination of Service

 

If the Optionee incurs a Termination for any reason, whether voluntarily or
involuntarily, without Cause, other than as a result of the Optionee’s death or
Disability, then the portion of this Option that has previously vested but has
not been exercised shall remain exercisable until, and shall terminate upon, the
first to occur of (a) the end of the day that is forty-five (45) days following
the date of the Optionee’s Termination or (b) the Expiration Date. If the
Optionee incurs a Termination for Cause, then this Option and all rights
attached hereto shall be forfeited and terminate immediately upon the effective
date of such Termination for Cause.

 

6.                                      Death or Disability of the Optionee

 

Upon the Optionee’s Termination by reason of death or Disability, the vested
portion of the Option shall remain exercisable until, and shall terminate upon,
the first to occur of (a) the end of the day that is one hundred and eighty
(180) days after the date of the Optionee’s Termination for death or Disability,
as applicable, or (b) the Expiration Date of the Option.  Until such termination
of the Option, the vested portion of the Option may, to the extent that this
Option has not previously been exercised by the Optionee, be exercised by the
Optionee in the case of his or her Disability, or, in the case of death, by the
Optionee’s personal representative or the person entitled to the Optionee’s
rights under this Award Agreement.

 

7.                                      Prohibited Activities

 

(a)                                 No Sale or Transfer. Unless otherwise
required by law, this Option shall not be (i) sold, transferred or otherwise
disposed of, (ii) pledged or otherwise hypothecated or (iii) subject to
attachment, execution or levy of any kind, other than by will or by the laws of
descent or distribution; provided, however, that any transferred Option will be
subject to all of the same terms and conditions as provided in the Plan and this
Award Agreement and the Optionee’s estate or beneficiary appointed in accordance
with the Plan will remain liable for any withholding tax that may be imposed by
any federal, state or local tax authority.

 

(b)                                 Right to Terminate Option and Recovery. The
Optionee understands and agrees that the Company has granted this Option to the
Optionee to reward the Optionee for the Optionee’s future efforts and loyalty to
the Company and its affiliates by giving the Optionee the opportunity to
participate in the potential future appreciation of the Company.  Accordingly,
if (a) the Optionee materially violates the Optionee’s obligations relating to
the non-disclosure or non-use of confidential or proprietary information under
any Restrictive Agreement to which the Optionee is a party, or (b) the Optionee
materially breaches or violates the Optionee’s obligations relating to
non-disparagement under any Restrictive Agreement to which the Optionee is a
party, or (c) the Optionee engages in any activity prohibited by this Section 7
of this Award Agreement, or (d) the Optionee materially breaches or violates any
non-solicitation obligations under any Restrictive Agreement to which the
Optionee is a party, or (e) the Optionee is convicted of a felony against the
Company or any of its affiliates [or (f) the Optionee breaches or violates any
non-competition obligations under any Restrictive Agreement to which the
Optionee is a party](1), then, in addition to any other rights and remedies
available to the

 

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(1)  Provision to be removed for California residents.

 

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Company, the Company shall be entitled, at its option, exercisable by written
notice, to terminate the Option (including the vested portion of the Option), or
any unexercised portion thereof, which shall be of no further force and effect.
[“Restrictive Agreement” shall mean any agreement between the Company or any
Subsidiary and the Optionee (including any prior option agreement) that contains
non-competition, non-solicitation, non-hire, non-disparagement, or
confidentiality restrictions applicable to the Optionee.](2) [“Restrictive
Agreement” shall mean any agreement between the Company or any Subsidiary and
the Optionee (including any prior option agreement) that contains
non-solicitation, non-hire, non-disparagement, or confidentiality restrictions
applicable to the Optionee.](3)

 

(c)                                  Other Remedies. The Optionee specifically
acknowledges and agrees that its remedies under this Section 7 shall not prevent
the Company or any Subsidiary from seeking injunctive or other equitable relief
in connection with the Optionee’s breach of any Restrictive Agreement.  In the
event that the provisions of this Section 7 should ever be deemed to exceed the
limitation provided by applicable law, then the Optionee and the Company agree
that such provisions shall be reformed to set forth the maximum limitations
permitted.

 

8.                                      No Rights as Stockholder

 

The Optionee shall have no rights as a stockholder with respect to the Shares
covered by any exercise of this Option until the effective date of issuance of
the Shares and the entry of the Optionee’s name as a shareholder of record on
the books of the Company following exercise of this Option. Additionally, as a
condition to the issuance of any Shares covered by any exercise of this Option,
the Company reserves the right to require the Optionee to become party to the
Company’s Second Amended and Restated Stockholders’ Agreement dated as of
December 11, 2014 and the Company’s Second Amended and Restated Registration
Rights Agreement dated as of October 16, 2017, in each case, as may be amended
from time to time.

 

9.                                      Taxation Upon Exercise of Option; Tax
Withholding; Parachute Tax Provisions

 

The Optionee understands that, upon exercise of this Option, the Optionee will
recognize income, for Federal, state and local income tax purposes, as
applicable, in an amount equal to the amount by which the Fair Market Value of
the Shares, determined as of the date of exercise, exceeds the Option Price. The
acceptance of the Shares by the Optionee shall constitute an agreement by the
Optionee to report such income in accordance with then applicable law and to
cooperate with Company and its subsidiaries in establishing the amount of such
income and corresponding deduction to the Company and/or its subsidiaries for
its income tax purposes.

 

The Optionee is responsible for all tax obligations that arise as a result of
the exercise of this Option. The Company may withhold from any amount payable to
the Optionee an amount sufficient to cover any Federal, state or local
withholding taxes which may become required with respect to such exercise or
take any other action it deems necessary to satisfy any income or other tax
withholding requirements as a result of the exercise this Option. The Company
shall have the right to require the payment of any such taxes and require that
the Optionee, or the

 

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(2)  Provision to be removed for California residents.

(3)  Provision to be removed for non-California residents.

 

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Optionee’s beneficiary, to furnish information deemed necessary by the Company
to meet any tax reporting obligation as a condition to exercise or before the
issuance of any Shares pursuant to this Option. The Optionee may pay his or her
withholding tax obligation in connection with the exercise of the Option, by
making (w) a cash payment to the Company, or (x) arrangements through a
registered broker-dealer pursuant to cashless exercise procedures established by
the Committee from time to time.  In addition, the Committee, in its sole
discretion, may allow the Optionee, to pay his or her withholding tax obligation
in connection with the exercise of the Option, by (y) having withheld a portion
of the Shares then issuable to him or her upon exercise of the Option or
(z) surrendering Shares that have been held by the Optionee for at least six
(6) months (or such lesser period as may be permitted by the Committee) prior to
the exercise of the Award, in each case having an aggregate Fair Market Value
equal to the withholding taxes.

 

[In connection with the grant of this Option, the parties wish to memorialize
their agreement regarding the treatment of any potential golden parachute
payments as set forth in Exhibit A attached hereto.]

 

10.                               Securities Laws; Tolling of Exercise Period
Expiration

 

(a)                                 Upon the acquisition of any Shares pursuant
to the exercise of the Option, the Optionee will make such written
representations, warranties, and agreements as the Committee may reasonably
request in order to comply with securities laws or with this Award Agreement.
Optionee hereby agrees not to offer, sell or otherwise attempt to dispose of any
Shares issued to the Optionee upon exercise of the Option in any way which
would: (x) require the Company to file any registration statement with the
Securities and Exchange Commission (or any similar filing under state law or the
laws of any other county) or to amend or supplement any such filing or
(y) violate or cause the Company to violate the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the rules and
regulations promulgated thereunder, or any other Federal, state or local law, or
the laws of any other country. The Company reserves the right to place
restrictions on any Shares the Optionee may receive as a result of the exercise
of the Option.

 

(b)                                 Notwithstanding any provision contained in
this Award Agreement or the Plan to the contrary,

 

(i)                                     if, following the Optionee’s
Termination, all or a portion of the exercise period applicable to the Option
occurs during a time when the Optionee cannot exercise the Option without
violating (w) an applicable Federal, state or local law, (x) the rules related
to a blackout period declared by the Company, (y) any agreed to lock-up
arrangement, or (z) other similar circumstance, in each case, the exercise
period applicable to the Option will be tolled for the number of days that such
prohibitions or restrictions apply, such that the exercise period will be
extended by the same number of days as were subject to the prohibitions or
restrictions; provided, however, that the exercise period may not be extended
due to such tolling past the Expiration Date of the Option as set forth above;
and

 

(ii)                                  if the Expiration Date is set to occur
during a time that the Optionee cannot exercise the Option without violating an
applicable Federal, state or local law

 

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(and the Option has not previously been exercised or otherwise terminated), the
exercise period will be tolled until such time as the violation would no longer
apply; provided, however, that the exercise period applicable to the Option in
this event will be fifteen (15) days from the date such potential violation is
longer applicable.

 

11.                               Modification, Extension and Renewal of Options

 

This Award Agreement may not be modified, amended, terminated and no provision
hereof may be waived in whole or in part except by a written agreement signed by
the Company and the Optionee and no modification shall, without the consent of
the Optionee, alter to the Optionee’s material detriment or materially impair
any rights of the Optionee under this Award Agreement except to the extent
permitted under the Plan.

 

12.                               Notices

 

Unless otherwise provided herein, any notices or other communication given or
made pursuant to the Notice, this Award Agreement or the Plan shall be in
writing and shall be deemed to have been duly given (i) as of the date
delivered, if personally delivered (including receipted courier service) or
overnight delivery service, with confirmation of receipt; (ii) on the date the
delivering party receives confirmation, if delivered by facsimile to the number
indicated or by email to the address indicated or through an electronic
administrative system designated by the Company; (iii) one (1) business day
after being sent by reputable commercial overnight delivery service courier,
with confirmation of receipt; or (iv) three (3) business days after being mailed
by registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below:

 

(a)                                 If to the Company at the address below:

 

Evoqua Water Technologies Corp.

210 Sixth Avenue

Pittsburgh, Pennsylvania

Phone:  (724) 772-0044

Attention:  General Counsel

 

(b)                                 If to the Optionee, at the most recent
address, facsimile number or email contained in the Company’s records.

 

13.                               Award Agreement Subject to Plan and Applicable
Law

 

This Option is made pursuant to the Plan and shall be interpreted to comply
therewith. A copy of the Plan is attached hereto. Any provision of this Option
inconsistent with the Plan shall be considered void and replaced with the
applicable provision of the Plan. The Plan shall control in the event there
shall be any conflict between the Plan, the Notice, and this Award Agreement,
and it shall control as to any matters not contained in this Award Agreement.
The Committee shall have authority to make constructions of this Award
Agreement, and to correct any defect or supply any omission or reconcile any
inconsistency in this Award Agreement, and to prescribe

 

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rules and regulations relating to the administration of this Award and other
Awards granted under the Plan.

 

This Option shall be governed by the laws of the State of Delaware, without
regard to the conflicts of law principles thereof, and subject to the exclusive
jurisdiction of the courts therein. The Optionee hereby consents to personal
jurisdiction in any action brought in any court, federal or state, within the
State of Delaware having subject matter jurisdiction in the matter.

 

14.                               Headings and Capitalized Terms

 

Unless otherwise provided herein, capitalized terms used herein that are defined
in the Plan and not defined herein shall have the meanings set forth in the
Plan. Headings are for convenience only and are not deemed to be part of this
Award Agreement. Unless otherwise indicated, any reference to a Section herein
is a reference to a Section of this Award Agreement.

 

15.                               Severability and Reformation

 

If any provision of this Award Agreement shall be determined by a court of law
of competent jurisdiction to be unenforceable for any reason, such
unenforceability shall not affect the enforceability of any of the remaining
provisions hereof; and this Award Agreement, to the fullest extent lawful, shall
be reformed and construed as if such unenforceable provision, or part thereof,
had never been contained herein, and such provision or part thereof shall be
reformed or construed so that it would be enforceable to the maximum extent
legally possible.

 

16.                               Binding Effect

 

This Award Agreement shall be binding upon the parties hereto, together with
their personal executors, administrator, successors, personal representatives,
heirs and permitted assigns.

 

17.                               Entire Agreement

 

This Award Agreement, together with the Plan, supersedes all prior written and
oral agreements and understandings among the parties as to its subject matter
and constitutes the entire agreement of the parties with respect to the subject
matter hereof.  If there is any conflict between the Notice, this Award
Agreement and the Plan, then the applicable terms of the Plan shall govern.

 

18.                               Waiver

 

Waiver by any party of any breach of this Award Agreement or failure to exercise
any right hereunder shall not be deemed to be a waiver of any other breach or
right whether or not of the same or a similar nature. The failure of any party
to take action by reason of such breach or to exercise any such right shall not
deprive the party of the right to take action at any time while or after such
breach or condition giving rise to such rights continues.

 

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Exhibit A

 

PARACHUTE TAX PROVISIONS

 

This Exhibit A sets forth the terms and provisions applicable to the Optionee
pursuant to the provisions of Section 9 of the Award Agreement.  This Exhibit A
shall be subject in all respects to the terms and conditions of the Award
Agreement.

 

(a)                                 To the extent that the Optionee, would
otherwise be eligible to receive a payment or benefit pursuant to the terms of
this Award Agreement, any employment or other agreement with the Company or any
Subsidiary or otherwise in connection with, or arising out of, the Optionee’s
employment with the Company or a change in ownership or effective control of the
Company or of a substantial portion of its assets (any such payment or benefit,
a “Parachute Payment”), that a nationally recognized United States public
accounting firm selected by the Company (the “Accountants”) determines, but for
this sentence would be subject to excise tax imposed by Section 4999 of the Code
(the “Excise Tax”), subject to clause (c) below, then the Company shall pay to
the Optionee whichever of the following two alternative forms of payment would
result in the Optionee’s receipt, on an after-tax basis, of the greater amount
of the Parachute Payment notwithstanding that all or some portion of the
Parachute Payment may be subject to the Excise Tax: (1) payment in full of the
entire amount of the Parachute Payment (a “Full Payment”), or (2) payment of
only a part of the Parachute Payment so that the Optionee receives the largest
payment possible without the imposition of the Excise Tax (a “Reduced Payment”).

 

(b)                                 If a reduction in the Parachute Payment is
necessary pursuant to clause (a), then the reduction shall occur in the
following order:  (1) cancellation of acceleration of vesting on any equity
awards for which the exercise price exceeds the then fair market value of the
underlying equity; (2) reduction of cash payments (with such reduction being
applied to the payments in the reverse order in which they would otherwise be
made, that is, later payments shall be reduced before earlier payments); and
(3) cancellation of acceleration of vesting of equity awards not covered under
(1) above; provided, however, that in the event that acceleration of vesting of
equity awards is to be cancelled, acceleration of vesting of full value awards
shall be cancelled before acceleration of options and stock appreciation rights
and within each class such acceleration of vesting shall be cancelled in the
reverse order of the date of grant of such equity awards, that is, later equity
awards shall be canceled before earlier equity awards; and provided, further,
that to the extent permitted by Code Section 409A and Sections 280G and 4999 of
the Code, if a different reduction procedure would be permitted without
violating Code Section 409A or losing the benefit of the reduction under
Sections 280G and 4999 of the Code, the Optionee may designate a different order
of reduction.

 

(c)                                  For purposes of determining whether any of
the Parachute Payments (collectively the “Total Payments”) will be subject to
the Excise Tax and the amount of such Excise Tax, (i) the Total Payments shall
be treated as “parachute payments” within the meaning of Section 280G(b)(2) of
the Code, and all “parachute payments” in excess of the “base amount” (as
defined under Section 280G(b)(3) of the Code) shall be treated as subject to the
Excise Tax, unless and except to the extent that, in the opinion of the
Accountants, such Total Payments (in

 

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whole or in part):  (1) do not constitute “parachute payments,” including giving
effect to the recalculation of stock options in accordance with Treasury
Regulation Section 1.280G-1, Q&A 33, (2) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code
in excess of the “base amount” or (3) are otherwise not subject to the Excise
Tax, and (ii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Accountants in accordance with the principles
of Section 280G of the Code.

 

(d)                                 All determinations hereunder shall be made
by the Accountants, which determinations shall be final and binding upon the
Company and the Optionee.

 

(e)                                  The federal tax returns filed by the
Optionee (and any filing made by a consolidated tax group which includes the
Company) shall be prepared and filed on a basis consistent with the
determination of the Accountants with respect to the Excise Tax payable by the
Optionee.  The Optionee shall make proper payment of the amount of any Excise
Tax, and at the request of the Company, provide to the Company true and correct
copies (with any amendments) of his or her federal income tax return as filed
with the Internal Revenue Service, and such other documents reasonably requested
by the Company, evidencing such payment (provided that the Optionee may delete
information unrelated to the Parachute Payment or Excise Tax and provided,
further that the Company at all times shall treat such returns as confidential
and use such return only for purpose contemplated by this paragraph).

 

(f)                                   In the event of any controversy with the
Internal Revenue Service (or other taxing authority) with regard to the Excise
Tax, the Optionee shall permit the Company to control issues related to the
Excise Tax (at its expense), provided that such issues do not potentially
materially adversely affect the Optionee but the Optionee shall control any
other issues.  In the event that the issues are interrelated, the Optionee and
the Company shall in good faith cooperate so as not to jeopardize resolution of
either issue.  In the event of any conference with any taxing authority as to
the Excise Tax or associated income taxes, the Optionee shall permit the
representative of the Company to accompany the Optionee, and the Optionee and
his representative shall cooperate with the Company and its representative.

 

(g)                                  The Company shall be responsible for all
charges of the Accountants.

 

(h)                                 The Company and the Optionee shall promptly
deliver to each other copies of any written communications, and summaries of any
verbal communications, with any taxing authority regarding the Excise Tax
covered by this Exhibit A.

 

(i)                                     Nothing in this Exhibit A is intended to
violate the Sarbanes-Oxley Act of 2002 and to the extent that any advance or
repayment obligation hereunder would do so, such obligation shall be modified so
as to make the advance a nonrefundable payment to the Optionee and the repayment
obligation null and void.

 

(j)                                    Notwithstanding the foregoing, any
payment or reimbursement made pursuant to this Exhibit A shall be paid to the
Optionee promptly and in no event later than the end of the calendar year next
following the calendar year in which the related tax is paid by the Optionee or

 

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where no taxes are required to be remitted, the end of the Optionee’s calendar
year following the Optionee’s calendar year in which the audit is completed or
there is a final and nonappealable settlement or other resolution of the
litigation.

 

(k)                                 The provisions of this Exhibit A shall
survive the termination of the Optionee’s employment with the Company for any
reason and the termination of the Award Agreement.

 

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