EXECUTIVE SERVICE AGREEMENT

Between

INNOSPEC FUEL SPECIALTIES LLC

AND

MR. D E WILLIAMS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE SERVICE AGREEMENT

Dated :

PARTIES

EMPLOYER:

Innospec Fuel Specialties LLC ("the Company").

EMPLOYEE:

Mr. David E Williams of 16309 E Oakwood drive, Centennial, Colorado, 80016
("you")

INTERPRETATION

In this Agreement

"the Board"

means the board of directors of the Parent Company as the case may be and
includes any committee of the Board duly appointed by it;

"Chairman"

means any person or persons jointly holding such office of the Parent Company
from time to time and includes any person(s) exercising substantially the
functions of a Chairman of the Parent Company;

"Confidential Information"

includes but is not limited to any trade secrets, names and contact details of
customers and prospective customers, purchasing and sales agents, suppliers,
prices charged to or charged by the Company and any Group Company, financial and
budget information, and any other information of a confidential nature relating
to the Company or any Group Company or information which has been given to the
Company or any Group Company by a third party under a duty of confidence where
such a duty has been made known to you and which is not in the public domain
otherwise than by breach of your duties of confidentiality to the Company and
any Group Company.

"Group Company"

includes the Parent Company and any holding company from time to time of the
Company or any subsidiary or associated company from time to time of the Company
or of any such holding company (for which purpose "holding company" and
"subsidiary" have the meanings ascribed to them by section 736 of the UK
Companies Act 1985 as amended by the UK Companies Act 1989 and "associated
company" means any company which any such holding company or subsidiary holds or
controls more than 20 per cent. of the equity share capital).

"Marketing Information"

means all and any information (whether or not recorded in documentary form or on
computer disc or tape) relating to the marketing or sales of any product or
service of the Company or any Group Company including without limitation sales
targets and statistics, market share and pricing statistics, marketing surveys
and plans, market research reports, sales techniques, price lists, discount
structures, advertising and promotional material, the names, addresses,
telephone numbers, contact names and identities of customers and potential
customers of and suppliers and potential suppliers to the Company or any Group
Company and the nature of their business operations, their requirements for any
product or service sold to or purchased by the Company or any Group Company and
all confidential aspects of their business relationship with the Company and
Group Company.

"Parent Company"

means Innospec Inc. which is a company listed on the Nasdaq stock exchange.

"Termination Date"

means the date on which your employment under this Agreement terminates.

APPOINTMENT

The Company appoints you to serve the Company and any other Group Company as
Vice President and General Counsel or in such other appointment as may from time
to time be agreed. In addition, the Company appoints you to serve the Company
and any other Group Company as Chief Compliance Officer.

The appointment shall be deemed to have commenced on 17th September 2009 and
shall continue until terminated by the Company or Parent Company under this
Agreement in accordance with clauses 10.1, 11 or 17.1.

With your prior consent, the Company or Parent Company may from time to time
appoint any other person or persons to act jointly with you in your appointment.

You warrant that by virtue of entering into this Agreement you will not be in
breach of any express or implied terms or any contract with or any other
obligation to any third party binding upon you.

DUTIES

You shall at all times during the period of this Agreement;

devote your working time, attention and ability to the duties of your
appointment.

faithfully and diligently perform those duties and exercise such powers
consistent with them which are from time to time assigned to or vested in you;

obey all lawful and reasonable directions of the Board;

use your best endeavours to promote the interests of the Company and Group
Companies;

keep the Board promptly and fully informed on a regular basis or as
circumstances warrant (in writing if so requested) of your conduct of the
business or affairs of the Company and any other Group Company and provide such
explanations in connection therewith as the Board may require;

not at any time knowingly make any untrue or misleading statement relating to
the Company or any Group Company;

inform the Chairman, or President and CEO, promptly if you receive a
solicitation from a competitor or potential competitor either on a personal or
business basis which could be prejudicial to the best interests of the Company
or its Group Companies.

PLACE OF WORK

You will be employed at our Littleton site, but as a term of your employment you
may also be required to work at or from any other of the Group Company's
establishments whether inside or outside of the USA. You may also be transferred
or seconded between establishments when necessary as required by business needs.
Whilst this Agreement provides for such transfer or secondment the Company and
Parent Company will give careful and sympathetic consideration to your personal
circumstances and career interests.

REMUNERATION

Your basic salary will be $205,000 per annum. Your salary will be reviewed on
1st March 2010 and every March thereafter. The fact that your salary may be
increased in any year or years during your employment does not confer any right
on you to receive any increase in any subsequent year.

The salary referred to in this clause will be inclusive of any director's fees
to which you may be entitled.

At the absolute discretion of the Compensation Committee of the Board, you may
participate in the Management Incentive Compensation Plan. Your participation in
the Management Incentive Compensation Plan (MICP) will be subject always to such
terms and targets as the Compensation Committee of the Board may determine from
time to time. Your target bonus in this scheme will be set at 40% of your base
salary and the maximum bonus payable to you under this scheme will be 92% of
your base salary. The Compensation Committee reserve the right to change both
the target and maximum percentages at any time.

You will qualify for a signing on bonus of $15,000, payable once you have joined
the Company. If you leave the organisation voluntarily within two years of your
start date, you will be required to repay any signing on bonus you have
received.

LONG TERM INCENTIVE PLAN

You will be eligible to be considered for grants under the Parent Company's long
term incentive share option plans. Participation in the scheme in any one year
and the number of options awarded is discretionary and is determined by the
Compensation Committee of the Board in line with their stated grant policy. The
Compensation Committee reserves the right to review and modify this grant policy
at any time. You will not be entitled to any compensation in lieu of any options
granted if as a result of such revision, there is a decrease in the value or
number of options granted to you.

You will be required to hold 100% of your annual base salary in Innospec Inc.
stock. You will be expected to achieve this holding within four years of your
appointment. In order to facilitate this, you will be eligible to participate in
the Co Investment Stock Plan, which requires you to use a proportion of your
bonus to purchase shares in Innospec Inc. Under the rules of this Plan, if,
after three years, you are still employed by Innospec in the role of VP and
General Counsel and Chief Compliance Officer and are still holding these shares,
the Company will transfer additional shares to you. The Compensation Committee
reserves the right to review and modify this Plan at any time

In the event of termination of your employment with the Company, any outstanding
options will be treated in line with the Rules of the relevant Share Option
Plan.

HOURS OF WORK

It is recognised that the nature of your role will involve working extended
hours, either during the working week or at weekends. This is accepted as a
normal part of the working life of a global business executive and does not
warrant either extra payment or time off in lieu.

EXPENSES

The Company shall reimburse to you all expenses reasonably incurred by you in
the proper performance of your duties subject to you complying with such
guidelines or regulations issued by the Company and Parent Company from time to
time in this respect and to the production by you to the relevant company of
such receipts or other evidence of actual payment of the expenses as it may
reasonably require.

BENEFITS

You will be eligible to participate in the Company's benefit plans, subject to
all of the terms and conditions of the respective plans as follows:

The Company will provide medical and vision insurance for you and your
spouse/family.

The Company will provide dental insurance for you. You can pay a contribution to
provide cover for your spouse/family.

You will be entitled to participate in the Company long and short term
disability programs and life insurance program which provides cover equal to one
and quarter times base salary (there is an employee contribution).

You will be eligible to participate in the Company 401(k) plan from the
beginning of the month after your hire date. The Company will match your first
6% at 50%. You become 100% vested in the Company's match after 3 years of
service

You are entitled to participate in the 401(k) Pension after completing one year
of service.  The plan is funded at an approximate 8% to 12% of your base salary
on a yearly basis. The funding is totally discretionary by the Company. You
become 100% vested in the plan contributions after 3 years of service

You will be entitled to 15 Paid Time Off (PTO) days each year.   This is an all
purpose time-off policy to use for vacation, illness or injury, and personal
business. You acknowledge that the Company has recognized your prior experience
and has provided you with the two additional service related PTO days which are
normally only provided after three years of service with the Company and you
further acknowledge that you will therefore not be eligible for any additional
service related PTO days after you have completed three years of service

More complete information on policies and benefits will be available in the
Employee Handbook issued to you by the Company when your employment commences.

The Company reserves the right to review and modify any or all of the benefit
programs at any time

EMPLOYMENT BASIS

Your employment with Innospec Fuel Specialties LLC is on an at-will basis and
either party can terminate the employment relationship at any time, with or
without cause and with or without notice.  In line with our normal practice,
your initial three (3) months with Innospec will be on a probationary basis and
continued employment will be contingent upon your ability in the role as well as
performance targets to be mutually agreed.

Your role as Vice President and General Counsel and Chief Compliance Officer is
salaried and exempt from the overtime provisions of the Fair Labor Standards
Act.

On termination of employment pursuant to clause 10.1 you will:

(i) deliver up to the Company in accordance with clause 20 all property
belonging to the Company or any Group Company; and

(ii) resign in accordance with clause 21 from all offices and appointments you
hold in the Company and any Group Company.

Before and after termination of your employment, you will provide the Company
and/or any Group Company with assistance regarding matters of which you have
knowledge and/or experience in any proceedings or possible proceedings in which
the Company and/or Group Company is or may be a party.

You agree to comply with all Company rules and policies as may be amended from
time to time regarding the holding and dealing (whether directly or indirectly)
of shares in the Company, subject to the Board's discretion.

CHANGE OF CONTROL

In the event that there is a Change of Control of the Parent Company, as defined
in Appendix 1, then, for the 12 months following the date of the Change of
Control,

If you terminate for "Good Reason", as defined in Appendix 2, your employment
with the Company, you will be entitled to 24 months' compensation from the date
of the Change of Control defined as base salary, bonus at target and any car
allowance but excluding compensation for pension contributions other benefits
and any other salary supplements.

If the Company terminates your employment under this agreement, other than
pursuant to clause 17 below, you will be entitled to 24 months' compensation, as
defined above in 11.1.1, from the date of such notice.

SICKNESS ABSENCE

If you are absent because of your own physical or mental illness or injury you
shall report this fact forthwith to the Chairman and complete any
self-certification forms or medical practitioner's certificates which are
required by the Company and Parent Company or as may be required by law.

If you are absent because of your own physical or mental illness or injury duly
certified in accordance with the provisions of Clause 12.1 you shall be paid
such remuneration, if any, as the Chairman or President and CEO shall determine
from time to time or as may be required by law. You will in all cases be paid in
compliance with the salary basis requirements of applicable wage and hour laws.

The provisions of this clause will not prejudice or limit in any way the
Company's or Parent Company's right to terminate this Agreement pursuant to its
terms. In particular but without limitation the Company and Parent Company may
terminate your employment pursuant to clause 10.1 for any reason and to clause
17.1 on the grounds set out in that clause. The Company and Parent Company may
terminate this Agreement pursuant to such clauses even if at the time of such
termination, any Company benefits payable pursuant to this clause have not been
exhausted.

MEDICAL EXAMINATIONS

At any time during the period of your appointment you shall at the request and
expense of the Company permit yourself to be examined by a registered medical
practitioner to be selected by the Company or Parent Company and shall authorise
such medical practitioner to disclose and discuss with the Company and Parent
Company the result of such examination and any matters which arise from it,
provided however that the Company or Parent Company may request such examination
only to the extent the request is based on a reasonable concern that a medical
condition may materially affect your ability to perform your duties.

INVENTIONS

You will promptly disclose to the Company and Parent Company and keep
confidential all inventions copyright works, designs or technical know how
conceived or made by you alone or with others in the course of your employment.
You will hold all such intellectual property in trust for the Company and/or
Parent Company and will do everything necessary or desirable at its expense to
vest the intellectual property fully in the Company and/or Parent Company and/or
to secure patent or other appropriate forms of protection for the intellectual
property. Decisions as to the protection or exploitation of any intellectual
property shall be in the absolute discretion of the Company and Parent Company.

You hereby assign to the Company and Parent Company by way of future assignment
all copyright, design rights and other intellectual property rights for the full
terms thereof throughout the world in respect of all copyright works and designs
originated, conceived, written or made by you (except only those works or
designs originated, conceived, written or made by you wholly outside your normal
working hours which are wholly unconnected with your employment or the business
of the Company and Parent Company) during the period of your employment by the
Company.

You hereby irrevocably and unconditionally waive in favour of the Company and
Parent Company any and all moral rights conferred on you for any work in which
copyright or design right is vested in the Company and Parent Company whether by
Clause 14.2 or otherwise.

You shall, at the request and cost of the Company do all things necessary or
desirable to substantiate the rights of the Company or Parent Company under
Clauses 14.2 and/or 14.3.

CONFIDENTIALITY

You acknowledge that the Company and its Group Companies possess or will possess
a valuable body of Confidential Information and Marketing Information and that
you have access to Confidential Information and Marketing Information in order
that you may carry out the duties of your employment.

You acknowledge that you owe a duty of trust and confidence and a duty to act at
all times in the best interests of the Company and any Group Company. You also
acknowledge that the disclosure of any Confidential Information and/or Marketing
Information to any competitor of the Company or any Group Company or to other
third parties would place the Company or any Group Company at a serious
competitive disadvantage and would cause serious financial and other damage to
their businesses.

You agree not to make use of or disclose (either during the period of your
employment by the Company or at any time after the Termination Date) any
Confidential Information or Marketing Information.

You agree not to obtain or seek to obtain any financial advantage from the
disclosure of any Confidential Information or Marketing Information acquired by
you in the course of your employment with the Company.

RESTRICTIVE COVENANTS

Within this Clause 16 the following words shall have the following meanings:

"Relevant Period"

shall mean the twelve month period prior to and ending on the Termination Date.

"Restricted Customer"

shall mean any person, firm, company or other entity who was at any time in the
Relevant Period a customer of any Group Company with which you had dealings,
including without limitation the Company.

"Prospective Customer"

shall mean any person, firm, company or other entity who was at the Termination
Date negotiating with the Company or any Group Company with a view to dealing
with the Company or any Group Company with which you had dealings.

"Prohibited Business"

shall mean any business or activity carried on by the Company or any Group
Company at the Termination Date or at any time in the Relevant Period in which
you shall have been directly concerned in the course of your employment at any
time in the Relevant Period.

"Protected Supplier"

shall mean any supplier or prospective supplier of the Company or any Group
Company with whom you shall have had dealings in the course of your employment
during the Relevant Period.

You shall not in competition with the Company or any Group Company during the
period of twelve months after the Termination Date directly or indirectly on
your own account or on behalf of or in conjunction with any person, firm or
company or other organization canvas or solicit or by any other means seek to
conduct, or conduct Prohibited Business with any Restricted Customer.

You shall not in competition with the Company or any Group Company during the
period of twelve months after the Termination Date directly or indirectly on
your own account or on behalf of or in conjunction with any person, firm or
company or other organization canvas or solicit or by any other means seek to
conduct Prohibited Business with or conduct Prohibited Business with any
Prospective Customer.

You shall not during the period of twelve months after and during any garden
leave period prior to the Termination Date directly or indirectly induce or seek
to induce any employee of the Company or any Group Company to leave the
employment of the Company or any Group Company whether or not this would be a
breach of contract on the part of that employee.

You shall not during the period of twelve months after the Termination Date
directly or indirectly seek to entice away from the Company or any Group Company
or otherwise solicit, interfere with or diminish the relationship between the
Company or any Group Company and any Protected Supplier.

Each of the restrictions contained in this Clause 16 is intended to be separate
and severable. In the event that any of the restrictions shall be held void but
would be valid if part of the wording thereof were deleted, such restriction
shall apply with such deletion as may be necessary to make it valid and
effective.

Each of the restrictions in each of Clauses 16.2 to 16.6 is considered by the
parties to be reasonable in all the circumstances but if any such restriction
shall be held by any Court to be void as going beyond what is reasonable in all
the circumstances for the protection of the interests of the Company and Group
Companies, the said restriction shall apply with such modifications as may be
necessary to render it valid and effective..

TERMINATION

The Company may by notifying you in writing terminate your employment with
immediate effect with Cause without compensation or benefits. For the purposes
of this Agreement, the Company will have "Cause" to terminate your employment:

if you commit any act of gross misconduct or negligence or repeat or continue
any other serious breach of your obligations under this Agreement; or

if you report to work under the influence of alcohol or illegal drugs, or if you
use any illegal drugs (whether or not at the workplace) or if you are guilty of
any conduct which in the reasonable opinion of the Board brings you or the
Company or its Group Companies into disrepute or causes them substantial
economic harm; or

if you breach the provisions of the Company's Code of Ethics; or

if you are convicted of any criminal offence involving moral turpitude or the
commission of any other act or omission involving disloyalty or fraud with
respect to any Group Company or any customer or suppliers of any Group Company,
which in the reasonable opinion of the Board affects your position under this
Agreement; or

if you commit any act of dishonesty or any breach of your fiduciary duty whether
relating to the Company, any Group Company, any of its or their employees or
otherwise; or

if you have in the reasonable opinion of the Board become incompetent to perform
your duties or substantially or repeatedly fail to perform duties consistent
with your position and related to the business of the Company or any Group
Company; or

if you become prohibited by law from being a director of a company or if you
cease to be a director of the Company or any Group Company without the consent
or concurrence of the Board.

PERSONAL DATA

The Company and any Group Company need to keep information about you for
purposes connected with your employment. The sort of information it will hold
includes information for payroll purposes, references, contact names and
addresses and other personal details relating to your employment. Some of this
information may also be processed by other organisations on our behalf.

The information the Company and any Group Company hold will be for its
management and administrative use only but it may, from time to time, need to
disclose some information it holds about you to relevant third parties as
required in the necessary course of the Company or any Group Company's business.
The Company and any Group Company may also transfer information about you to
another Group Company solely for purposes connected with your employment or the
management of the business. You agree to the Company keeping the information for
these purposes throughout your employment and following its termination.

You also agree to the Company and any Group Company keeping information about
your health to the extent relevant to your ability to do your job or, if you are
or become disabled, whether you require any reasonable accommodations to be made
to assist you at work; and to the extent needed in relation to the
administration of any benefit plans in force from time to time.

DEDUCTIONS

You hereby authorize the Company to deduct from your remuneration (which for
this purpose includes salary, bonus, vacation pay and sick pay) all any amount
required by law to be withheld for taxes or for any other purpose, any
contribution required of you under any employee benefit arrangement and all
debts owed by you to the Company or any Group Company, including but without
limitation the balance outstanding of any loans (and interest where appropriate)
advanced by the Company or Group Companies to you.

DELIVERY OF DOCUMENTS AND PROPERTY

On termination of your employment for any reason (or earlier if requested) you
will immediately deliver up to the Company or relevant Group Company all
property (including but not limited to documents and software, credit cards,
mobile telephone, computer equipment, facsimile machine, keys and security
passes) belonging to the Company or any Group Company in your possession or
under your control. Documents and software include (but are not limited to)
correspondence, diaries, address books, databases, files, reports, minutes,
plans, records, documentation or any other medium for storing information. Your
obligations under this clause include the return of all copies, drafts,
reproductions, notes, extracts or summaries (however stored or made and whether
electronic or hard-copy) of all documents and software.

RESIGNATION AS DIRECTOR

On termination of your employment for any reason, you will, at the request of
the Board give notice resigning immediately without claim for compensation (but
without prejudice to any claim you may have for damages for breach of this
Agreement):

as a director of the Company and all such Group Companies of which you are a
director; and

all trusteeships held by you of any employee benefit plan or other trusts
established by the Company or any Group Company or any other company with which
you have had dealings as a consequence of your employment with the Company.

If notice pursuant to clause 21.1 is not received by the relevant company within
seven days of a request by the Company, or Group Company the Company and Group
Company or either of them are irrevocably authorized to appoint a person to
execute any documents and to do everything necessary to effect such resignation
or resignations on your behalf.

Except with the prior written agreement of the Board, you will not during your
employment under this Agreement resign from your office as a director or officer
of the Company or any Group Company.

DISCIPLINARY AND GRIEVANCE PROCEDURES

The Company has a number of policies and procedures including anti harassment
policy and disciplinary and grievance procedures and these are available from
the HR Department. The spirit and principles of these procedures apply to you
suitably adapted to reflect your seniority and status. Except and to the extent
of any procedure implied by statute the Company's disciplinary and grievance
procedures are not incorporated by reference in this Agreement and therefore do
not form any part of your contract of employment.

Disciplinary issues will be handled by the Chief Executive Officer with appeals
to the Chairman or Board Committee appointed by the Chairman to deal with this.

If you have a grievance in relation to your employment or are dissatisfied with
a disciplinary decision against you, you may apply in writing to the Chief
Executive Officer who will decide the matter in question (unless the grievance
or dissatisfaction relates to the Chief Executive Officer or any decision taken
by the Chief Executive Officer, in which case you should apply to the Chairman).
If you are dissatisfied with such decision you may refer the matter to the Chief
Executive Officer or Board Committee appointed by the Chairman to deal with this
whose decision will be final..

THIRD PARTY RIGHTS

The Group Companies shall be third-party beneficiaries of clauses 14, 15, 16 and
20 of this Agreement. Otherwise, apart from any other provisions of this
Agreement which are expressly or impliedly entered into by the Company for
itself and as agent of and trustee for any Group Company the parties do not
intend that this Agreement should confer any right or benefit on any third
party.

NOTICES

Notices under this Agreement by you to the Company or the Parent Company should
be addressed to the Company or Parent Company and left at its registered office
or European Headquarters respectively or sent by post or by facsimile
transmission or other form of electronic delivery to its registered office or
European Headquarters respectively and notices given by the Company or Parent
Company to you should be served personally or sent by post or sent by facsimile
transmission or other form of electronic delivery to your usual or last known
place of residence in the USA. In case of service by post, the day of service
will be 48 hours after posting and in the case of facsimile transmission or
other electronic delivery the day of service will be the day of transmission by
the sender.

MISCELLANEOUS

This Agreement will be governed by and interpreted in accordance with the law of
the State of Delaware.

The parties to this Agreement submit to the exclusive jurisdiction of the state
and federal courts located in the State of Delaware in relation to any claim,
dispute or matter arising out of or relating to this Agreement.

Any delay by the Company in exercising any of its rights under this Agreement
will not constitute a waiver of such rights.

The parties agree that any breach of clause 14, 15, 16 or 20 of this Agreement
is likely to cause the Company serious irreparable harm. In the event of such a
breach, the parties agree that the Company shall have, in addition to its other
remedies, the right to an injunction to prevent the violation of and to enforce
your obligations under this Agreement.

This Agreement, including without limitation clauses 14, 15, 16 and 20 hereof,
shall inure to the benefit of the Company's successors and assigns.

This Agreement contains the entire agreement between the parties with respect to
its subject matter, and supersedes any and all prior communications, agreements
and understandings, written and oral, between the parties with respect to such
subject matter.

This Agreement may not be amended, nor shall any change, waiver, modification,
consent or discharge be effected, except by a written instrument signed by both
you and the Company.

The provisions of clauses 14 through 25 of this Agreement shall survive the
termination of your employment in all events.

THIS AGREEMENT

has been executed on behalf of the Company by a director and executed by you on
the date set out at the beginning.

SIGNED

by PATRICK WILLIAMS,

President and CEO

for and on behalf of THE COMPANY ) .....................................

Director

SIGNED

by YOU in the )

presence of: ) ....................................

Mr. D E Williams

Witness:

Signature: .............................................

Name: .............................................

Address: .............................................

 

 

 

 

 

 

 

 

 

 

 

 

 

 

APPENDIX 1

Change of Control

"Change of Control" means a change in control of a nature that would be required
to be reported in response to item 5 (f) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 of the United States of
America, as amended ("Exchange Act") whether or not the Company or the Parent
Company is then subject to such reporting requirement; provided that, without
limitation, such a change in control shall be deemed to have occurred if

(a) any "person" or "group" (as such terms are used in Section 13 (d) and 14 (d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Parent Company or the Company representing 30% or more of the combined voting
power of the Parent Company or the Company respectively, then outstanding
securities (other than the Parent Company or the Company, any employee benefit
plan of the Company or the Parent Company); and, for purposes of this Agreement,
no change in control shall be deemed to have occurred as a result of the
"beneficial ownership", or changes therein, of the Parent Company or the
Company's securities, respectively, by any of the foregoing,

(b) there shall be consummated (i) any consolidation or merger the Parent
Company or the Company in which the Parent Company or the Company is not the
surviving or continuing corporation or pursuant to which shares of the Parent
Company or the Company's Common Stock, respectively, would be converted into
cash, securities or other property, other than a merger of the Parent Company or
the Company in which the holders of the Parent Company's or the Company's Common
Stock immediately prior to the merger have (directly or indirectly) at least a
70% ownership interest in the outstanding Common Stock of the surviving
corporation immediately after the merger, or (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Parent Company or the Company,

(c) the shareholders of the Parent Company or the Company approve any plan or
proposal for the liquidation or dissolution of the Parent Company or the
Company, or

(d) as the result of, or in connection with, any cash tender offer, exchange
offer, merger or other business combination, sale of assets, proxy or consent
solicitation (other than by the Board), contested election or substantial share
accumulation (a "Control Transaction"), the members of the Board immediately
prior to the first public announcement relating to such Control Transaction
shall thereafter cease to constitute a majority of the Board.

 

APPENDIX 2

"Good Reason" exists if, without your express written consent,

(a) you are assigned duties materially inconsistent from your position, duties,
responsibilities and status with the Company and the Parent Company immediately
prior to the date of the Change of Control,

(b) the Company or Parent Company reduces your base salary as in effect
immediately prior to the date of the Change of Control,

(c) the Company or Parent Company reduces your aggregate compensation and
incentive and benefit package from that provided immediately prior to the date
of the Change of Control,

(d) the Company or Parent Company requires you regularly to perform your duties
of employment beyond a forty miles radius from the location of your place of
employment at the date of the Change of Control,

(e) the Company or Parent Company takes any other action which materially and
adversely changes the conditions of your employment in effect at the time of the
Change of Control,

(f) the Company or Parent Company fails to obtain agreement from any successor
to comply fully with the terms of this Agreement, or

(g) the Company or the Parent Company purports to terminate your employment
other than pursuant to a notice of termination which satisfies the requirements
of this Agreement.