promulgated under the Exchange Act) more than 50% of either (x) the total fair market value of thethen-outstanding shares of the Company’s stock (the “Outstanding Company Stock”) or (y) thecombined voting power of the then-outstanding securities of the Company entitled to vote generallyin the election of directors (the “Outstanding Company Voting Securities”); provided,however, that for purposes of this subsection (a), the following acquisitions shall notconstitute a Change in Control: (i) any acquisition of securities directly from the Company(excluding an acquisition pursuant to the exercise, conversion or exchange of any securityexercisable for, convertible into or exchangeable for common stock or voting securities of theCompany, unless the Person exercising, converting or exchanging such security acquired suchsecurity directly from the Company or an underwriter or agent of the Company), (ii) any acquisitionby the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored ormaintained by the Company or any corporation controlled by the Company, or (iv) any acquisition byany corporation pursuant to a transaction which complies with clauses (i) and (ii) of subsection(c) of this Section 1.1; or               (b) a change in the composition of the Board over a period of twelve (12) months or less suchthat the Continuing Directors (as defined below) fail to constitute a majority of the Board (or, ifapplicable, the Board of Directors of a successor corporation to the Company), where the term“Continuing Director” means at any date a member of the Board (i) who was a member of the Board onthe date of the execution of the Prior Agreement or (ii) who was nominated or elected subsequent tosuch date by at least a majority of the directors who were Continuing Directors at the time of suchnomination or election or whose election to the Board was recommended or endorsed by at least amajority of the directors who were Continuing Directors at the time of such nomination or election;provided, however, that there shall be excluded from this clause (ii) anyindividual whose initial assumption of office occurred as a result of an actual or threatenedelection contest with respect to the election or removal of directors or other actual or threatenedsolicitation of proxies or consents, by or on behalf of a person other than the Board; or               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutoryshare exchange involving the Company or a sale or other disposition of all or substantially all ofthe assets of the Company in one or a series of related transactions over a 12-month period (a“Business Combination”), unless, immediately following such Business Combination, each of thefollowing two conditions is satisfied: (i) all or substantially all of the individuals and entitieswho were the beneficial owners of the Company’s outstanding common stock (the “Company OutstandingCommon Stock”) and Outstanding Company Voting Securities immediately prior to such BusinessCombination beneficially own, directly or indirectly, more than 50% of the then-outstanding sharesof common stock and the combined voting power of the then-outstanding securities entitled to votegenerally in the election of directors, respectively, of the resulting or acquiring corporation insuch Business Combination (which shall include, without limitation, a corporation which as a resultof such transaction owns the Company or substantially all of the Company’s assets either directlyor through one or more subsidiaries) (such resulting or acquiring corporation is referred to hereinas the “Acquiring Corporation”) in substantially the same proportions as their ownership,immediately prior to such Business Combination, of the Outstanding Company Common Stock andOutstanding Company Voting Securities, respectively; and (ii) no Person (excluding any employeebenefit plan (or related trust) maintained or sponsored by the Company or by the AcquiringCorporation)
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beneficially owns, directly or indirectly, 50% or more of the then outstanding shares of commonstock of the Acquiring Corporation, or of the combined voting power of the then-outstandingsecurities of such corporation entitled to vote generally in the election of directors (except tothe extent that such ownership existed prior to the Business Combination); or               (d) a complete liquidation or dissolution of the Company approved by the stockholders of theCompany.          1.2 “Change in Control Date” means the first date during the Term (as defined inSection 2) on which a Change in Control occurs.          1.3 “Cause” means:               (a) the Executive’s willful and continued failure to substantially perform his reasonableassigned duties as an officer of the Company (other than any such failure resulting from incapacitydue to physical or mental illness or any failure after the Executive gives notice of terminationfor Good Reason), which failure is not cured within 30 days after a written demand for substantialperformance is received by the Executive from the Board of Directors of the Company whichspecifically identifies the manner in which the Board of Directors believes the Executive has notsubstantially performed the Executive’s duties; or               (b) the conviction of the Executive of, or the entry of a pleading of guilty or nolocontendere by the Executive to, any crime involving moral turpitude or any felony; or               (c) the Executive’s commission of dishonesty or gross negligence which is materially anddemonstrably injurious to the Company; or               (d) the Executive’s willful engagement in illegal conduct or gross misconduct which ismaterially and demonstrably injurious to the Company; or               (e) any material breach by the Executive of this Restated Agreement or any employmentagreement and related agreements with the Company, including, but not limited to, anynon-competition or non-solicitation provision, which breach is not cured within 30 days after awritten notice of such breach is received by the Executive from the Board of Directors of theCompany, which specifically identifies such breach.     For purposes of this Section 1.3, no act or failure to act by the Executive shall beconsidered “willful” unless it is done, or omitted to be done, in bad faith or without reasonablebelief that the Executive’s action or omission was in the best interests of the Company.     Notwithstanding the foregoing, if the Executive has an effective employment agreement with theCompany that contains a definition of “Cause” for purposes of termination of the Executive’semployment with the Company, the definition of “Cause” contained in such effective employmentagreement shall be used in this Restated Agreement.          1.4 “Good Reason” means the occurrence, without the Executive’s written consent, ofany of the events or circumstances set forth in clauses (a) through (g) below.
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Notwithstanding the occurrence of any such event or circumstance, such occurrence shall not bedeemed to constitute Good Reason if, prior to the Date of Termination specified in the Notice ofTermination (each as defined in Section 3.2(a)) given by the Executive in respect thereof, suchevent or circumstance has been fully corrected and the Executive has been reasonably compensatedfor any losses or damages resulting therefrom (provided that such right of correction by theCompany shall only apply to the first Notice of Termination for Good Reason given by theExecutive):               (a) the assignment to the Executive of duties materially inconsistent with the Executive’sauthority or responsibilities taken as a whole in effect immediately prior to the earliest to occurof (i) the Change in Control Date, (ii) the date of the execution by the Company of the initialwritten agreement or instrument providing for the Change in Control or (iii) the date of theadoption by the Board of Directors of a resolution providing for the Change in Control (with theearliest to occur of such dates referred to herein as the “Measurement Date”), or any other actionor omission by the Company which results in a material diminution in such position, authority orresponsibilities; or               (b) a reduction in the Executive’s annual base salary as in effect on the Measurement Date; or               (c) the failure by the Company to (i) continue in effect any material compensation or benefitplan or program (including without limitation any life insurance, medical, health and accident ordisability plan and any vacation or automobile program or policy) (a “Benefit Plan”) in which theExecutive participates or which is applicable to the Executive immediately prior to the MeasurementDate, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan, alump sum payment or increase in compensation) has been made with respect to such plan or program,(ii) continue the Executive’s participation therein (or in such substitute or alternative plan) ona basis not materially less favorable, both in terms of the amount of benefits provided and thelevel of the Executive’s participation relative to other participants, than the basis existingimmediately prior to the Measurement Date or (iii) award cash bonuses to the Executive in amountsand in a manner substantially consistent with past practice in light of the Company’s financialperformance; or               (d) a change by the Company in the location at which the Executive performs his principalduties for the Company to a new location that is outside a radius of 50 miles from the Executive’sprincipal residence and outside a radius of 25 miles from the location at which theExecutive performed his principal duties for the Company immediately prior to the Measurement Date;or               (e) the failure of the Company to obtain the agreement from any successor to the Company toassume and agree to perform this Restated Agreement, as required by Section 6.1; or               (f) a purported termination of the Executive’s employment which is not effected pursuant to aNotice of Termination satisfying the requirements of Section 3.2(a); or
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               (g) any material breach by the Company of this Restated Agreement or any employment agreementwith the Executive, which breach is not cured within 30 days after a written notice of such breachis received by the Company from the Executive, which specifically identifies such breach.     The Executive’s right to terminate his employment for Good Reason shall not be affected by hisincapacity due to physical or mental illness.               1.5 “Disability” means the Executive’s absence from the full-time performance of theExecutive’s duties with the Company for 180 consecutive calendar days as a result of incapacity dueto mental or physical illness which is determined to be total and permanent by a physician selectedby the Company or its insurers and reasonably acceptable to the Executive or the Executive’s legalrepresentative, which consent shall not be unreasonably withheld.     2. Term of Agreement. This Restated Agreement, and all rights and obligations of theparties hereunder, shall take effect upon the Effective Date and (except to the extent provided inSection 4.2(b)) shall expire upon the first to occur of (a) the termination of the Executive’semployment with the Company more than 60 days prior to the Change in Control Date, (b) the date 24months after the Change in Control Date, if the Executive is still employed by the Company as ofsuch later date, or (c) the fulfillment by the Company of all of its obligations under Sections 4and 5.2 and 5.3 if the Executive’s employment with the Company terminates within the period from 60days prior to the Change in Control Date to 24 months following the Change in Control Date.     3. Employment Status; Termination Following Change in Control.          3.1 Not an Employment Contract. The Executive acknowledges that this RestatedAgreement does not constitute a contract of employment or impose on the Company any obligation toretain the Executive as an employee and that this Restated Agreement does not prevent the Executivefrom terminating employment at any time.          3.2 Termination of Employment.               (a) If the Change in Control Date occurs during the Term, any termination of the Executive’semployment by the Company or by the Executive within 24 months following the Change in Control Date(other than due to the death of the Executive) shall be communicated by a written notice to theother party hereto (the “Notice of Termination”), given in accordance with Section 7. Any Noticeof Termination shall: (i) indicate the specific termination provision (if any) of this RestatedAgreement relied upon by the party giving such notice, (ii) to the extent applicable, set forth inreasonable detail the facts and circumstances claimed to provide a basis for termination of theExecutive’s employment under the provision so indicated and (iii) specify the Date of Termination(as defined below). The effective date of an employment termination shall be (i) the close ofbusiness on the date specified in the Notice of Termination (which date may not be less than 15days or more than 120 days after the date of delivery of such Notice of Termination) in the case ofa termination by the Company or by the Executive within 24 months following the Change in Control,(ii) in the case of termination due
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to the Executive’s death, the date of the Executive’s death, and (iii) in the case of theExecutive’s termination prior to the Change in Control, the date of such termination. In the eventthe Company fails to satisfy the requirements of Section 3.2(a) regarding a Notice of Termination,the purported termination of the Executive’s employment pursuant to such Notice of Terminationshall not be effective for purposes of this Restated Agreement.               (b) If a Change in Control Date occurs during the 60 days after the termination of theExecutive’s employment by the Company, the Company shall give the Executive notice of such Changein Control.               (c) The failure by the Executive or the Company to set forth in the Notice of Termination anyfact or circumstance which contributes to a showing of Good Reason or Cause shall not waive anyright of the Executive or the Company, respectively, hereunder or preclude the Executive or theCompany, respectively, from asserting any such fact or circumstance in enforcing the Executive’s orthe Company’s rights hereunder.               (d) Any Notice of Termination for Cause given by the Company must be given within 90 days ofthe discovery by the Board of the occurrence of the event(s) or circumstance(s) that constitute(s)Cause. Prior to any Notice of Termination for Cause being given (and prior to any termination forCause being effective), the Executive shall be entitled to a hearing before the Board of Directorsof the Company at which he may, at his election, be represented by counsel and at which he shallhave a reasonable opportunity to be heard. Such hearing shall be held on not less than 15 daysprior written notice to the Executive stating the Board of Directors’ intention to terminate theExecutive for Cause and stating in detail the particular event(s) or circumstance(s) which theBoard of Directors believes constitutes Cause for termination.               (e) Any Notice of Termination for Good Reason given by the Executive must be given within 90days of the discovery by the Executive of the occurrence of the event(s) or circumstance(s) thatconstitute(s) Good Reason.     4. Benefits to Executive.          4.1 Stock Acceleration. If the Executive’s employment is terminated by the Companyother than for Cause, or the Executive terminates his employment for Good Reason, during thePre-Closing Period or at any time thereafter during the remainder (if any) of the Term, then,effective upon such termination of employment, (a) each outstanding option to purchase shares ofCommon Stock of the Company held at that time by the Executive shall become immediately exercisablein full and shares of Common Stock of the Company received upon exercise of any options will nolonger be subject to a right of repurchase by the Company, and (b) each outstanding restrictedstock award shall be deemed to be fully vested and will no longer be subject to a right ofrepurchase by the Company. Each option shall remain so exercisable until the expiration date ofthe option term or (if earlier) the termination of that option in accordance with the provisions ofthe applicable stock option agreement. For purposes of this Section 4.1, the Pre-Closing Periodmeans the period commencing with the Company’s execution of the definitive agreement for a Changein Control transaction and ending upon the earlier of (i) the closing of the Change in Controlcontemplated by such definitive agreement or
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(ii) the termination of such definitive agreement without the consummation of the contemplatedChange in Control.          4.2 Compensation. If the Change in Control Date occurs during the Term and theExecutive’s employment with the Company terminates within the period from 60 days prior to theChange in Control Date to 24 months following the Change in Control Date, the Executive shall beentitled to the following benefits:               (a) Termination Without Cause or for Good Reason. If the Executive’s employment withthe Company is terminated by the Company (other than for Cause, Disability or death) or by theExecutive for Good Reason within the period from 60 days prior to the Change in Control Date to 24months following the Change in Control Date, then, subject to Section 4.2(a)(v) below, theExecutive shall be entitled to the following benefits:                    (i) The Company shall pay to the Executive in cash the aggregate of the following amounts:                         (1) The Company shall make a lump sum cash payment to the Executive equal to (A) theExecutive’s base salary through the Date of Termination, (B) the product of (x) the greater of (i)Executive’s largest annual bonus for the most recently completed three (3) fiscal years and (ii)the Executive’s target annual bonus at time of termination and (y) a fraction, the numerator ofwhich is the number of days in the current fiscal year through the Date of Termination, and thedenominator of which is 365 and (C) any accrued vacation pay, in each case to the extent notpreviously paid (the sum of the amounts described in clauses (A) and (C) shall be hereinafterreferred to as the “Accrued Obligations” and the dollar amount described in clause (B) shall behereinafter referred to as the “Pro-Rata Bonus” ). Payment of the Accrued Obligations shall bemade on the Date of Termination, and the payment of the Pro-Rata Bonus shall be made on the 30thday following the later of the Executive’s Separation from Service or the Change in Control Date(the “Applicable Date”) or as soon as administratively practicable following such scheduled paymentdate, but in no event later than the close of the calendar year in which the Applicable Date occursor (if later) the 15th day of the third calendar month following that date.                         (2) Any compensation deferred on behalf of the Executive on the Date of Termination or theChange in Control Date under any deferred compensation plan subject to Section 409A of the InternalRevenue Code, as amended (the “Code”), shall be paid at the time or times specified for paymentpursuant to the provisions of such plan.                         (3) The Company shall, in a series of eighteen (18) successive equal monthly installmentspursuant to the Company’s normal payment practices, pay in cash to the Executive an amount equal to(A) 1.5 multiplied by (B) the sum of (x) the greater of (i) the Executive’s annual base salary forthe most recently completed fiscal year or (ii) the Executive’s current annual base salary at thetime of termination and (y) the greater of (i) Executive’s largest annual bonus for the mostrecently completed three (3) fiscal years and (ii) the Executive’s target annual bonus at time oftermination. The first such installment shall be paid on the 30th day following the ApplicableDate or as soon as administratively practicable
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following such scheduled payment date, but in no event later than the close of the calendaryear in which the Applicable Date occurs or (if later) the 15th day of the third calendar monthfollowing that date.                         (4) The Company shall make a lump sum cash payment, not to exceed $15,000, to cover the costto obtain post-employment continued coverage under life and accidental death or dismembermentinsurance and disability insurance plans for a period of eighteen (18) months following suchtermination date. Such payment shall be made to the Executive on the 30th day followingthe Applicable Date or as soon as administratively practicable following such scheduled paymentdate, but in no event later than the close of the calendar year in which the Applicable Date occursor (if later) the 15th day of the third calendar month following that date.                    (ii) For a period not to exceed eighteen (18) months measured from the Applicable Date, theCompany shall, if the Executive elects under Code Section 4980B to continue health care coverageunder the Company’s group health plan for himself, his spouse and his eligible dependents followingthe Date of Termination, provide such continued health care coverage at the Company’s expense;provided, however***,***that such coverage at the Company’s expense shall immediatelyterminate on the date the Executive is first covered under another employer’s heath benefit programwhich provides substantially the same level of benefits without exclusion for pre-existing medicalconditions (the period of coverage as so terminated shall be referred to as the “Coverage Period”).Such health care coverage shall be at the same level and provide the same type of benefits aswould have been provided to them if the Executive’s employment had not been terminated and they hadcontinued to be covered under the applicable Benefit Plans in effect on the Measurement Date or, ifmore favorable to the Executive and his family, in effect generally at any time thereafter withrespect to other peer executives of the Company and its affiliated companies. Such continuedhealth care coverage shall be provided pursuant to the provisions of this subparagraph (ii) even ifsuch coverage extends beyond the period of statutorily-required coverage under Code Section 4980B,but subject to earlier termination in accordance with the above proviso relating to coverage underanother employer’s plan. In the event the Company’s provision of such continued health carecoverage results in the recognition of taxable income (whether for federal, state or local incometax purposes) by the Executive, then the Company shall report such taxable income as taxable W-2wages and collect the applicable withholding taxes, and the Executive shall be responsible for thepayment of any additional income and employment tax liability resulting from such coverage. To theextent the health coverage under this Section 4.2(a)(ii) is to be provided through a self-fundedprogram maintained by the Company, the Executive shall directly pay for the costs to obtain suchhealth coverage and the Company shall reimburse the Executive for such costs incurred during theCoverage Period. The Executive shall, within 30 days after each periodic payment for areimbursable health or medical care expense under this Section 4.2(a)(ii), submit appropriateevidence of such payment to the Company for reimbursement, and the Company shall pay suchreimbursement on the 30th day following receipt of the submission. In the event such reimbursementof health care coverage during the Coverage Period results in the recognition of taxable income(whether for federal, state, or local income tax purposes) by the Executive, then the Company shallmake an additional payment (the “Health Care Gross-Up Payment”) to the Executive in a dollar amountto fully cover all taxes payable by the Executive on the income recognized with respect to thereimbursed health care coverage, including taxes
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imposed upon the Health Care Gross-Up Payment. The Heath Care Gross-Up Payment shall be paidto the Executive at the time the related taxes are remitted to the tax authorities.     In the event that the Executive’s Date of Termination occurs prior to the Change in ControlDate, then the Coverage Period hereunder shall be reduced by the period from the Executive’s Dateof Termination to the Change in Control Date (the “Interim Period”) and the Company shall reimbursethe Executive for the cost of such coverage paid by the Executive during the Interim Period. TheExecutive shall, within 30 days after the Change in Control Date, submit appropriate evidence ofsuch costs to the Company for reimbursement, and the Company shall pay such reimbursement on the30th day following receipt of submission.     During the period health care coverage remains in effect hereunder, the following provisionsshall govern the arrangement: (i) the amount of the health care costs eligible for reimbursement inany one calendar year of such coverage shall not affect the amount of such costs eligible forreimbursement in any other calendar year for which such reimbursement is to be provided hereunder;(ii) no costs shall be reimbursed after the close of the calendar year following the calendar yearin which those costs were incurred; and (iii) the Executive’s right to the reimbursement of suchcosts cannot be liquidated or exchanged for any other benefit.     For purposes of determining eligibility (but not the time of commencement of benefits) of theExecutive for retiree benefits to which the Executive is entitled, the Executive shall beconsidered to have remained employed by the Company until 18 months after the Date of Termination.                    (iii) Notwithstanding the foregoing, if the Executive breaches any ongoing obligation with theCompany (by way of example and not by way of limitation, any breach of a non-competition ornon-solicitation provision with the Company), and such breach is not cured within 30 days ofwritten notice of such breach received by the Executive from the Company, then the Company shall nolonger be required to provide any of the benefits set forth in this Section 4.2(a).               (b) Termination More Than 60 Days Prior to Change in Control. If (a) a Change inControl occurs, (b) the Executive’s employment with the Company is terminated more than 60 daysprior to the date on which the Change in Control occurs, and (c) it is reasonably demonstrated bythe Executive that such termination of employment (i) was at the request of a third party who hastaken steps reasonably calculated to effect a Change in Control or (ii) otherwise arose inconnection with or in anticipation of a Change in Control, then the Executive shall receive thepayments and benefits set forth in Section 4.2(a), subject to Section 4.2(a)(iv).               (c) Resignation without Good Reason; Termination for Death or Disability. If theExecutive voluntarily terminates his employment with the Company within the period from 60 daysprior to the Change in Control Date to 24 months following the Change in Control Date, excluding atermination for Good Reason, or if the Executive’s employment with the Company is terminated byreason of the Executive’s death or Disability within the period from 60 days prior to the Change inControl Date to 24 months following the Change in Control Date, then the Company shall (i) pay theExecutive (or his estate, if applicable), in a lump sum in
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cash on the Date of Termination, the Accrued Obligations, (ii) pay the Executive (or hisestate, if applicable) the Pro-Rated Bonus in a lump sum in cash on the 30th day following theApplicable Date or as soon as administratively practicable following such scheduled payment date,but in no event later than the close of the calendar year in which the Applicable Date occurs or(if later) the 15th day of the third calendar month following that date, and (iii) pay or provideto the Executive any other amounts or benefits required to be paid or provided or which theExecutive is eligible to receive following the Executive’s termination of employment under anyplan, program, policy, practice, contract or agreement on the Company and its affiliated companies(such other amounts and benefits shall be hereinafter referred to as the “Other Benefits”) as theybecome due and payable in one or more installments under the applicable plan or arrangement subjectto compliance with Code Section 409A. In addition, any vested compensation deferred on behalf ofthe Executive under any deferred compensation plan subject to Code Section 409A shall be paid atthe time or times specified for payment pursuant to the provisions of such plan.               (d) Termination for Cause. If the Company terminates the Executive’s employment withthe Company for Cause within the period from 60 days prior to the Change in Control Date to 24months following the Change in Control Date, then the Company shall (i) pay the Executive, in alump sum in cash on the Date of Termination, the Accrued Obligations and (ii) timely pay or provideto the Executive the Other Benefits as they become due and payable in one or more installmentsunder the applicable plan or arrangement subject to compliance with Code Section 409A. Inaddition, any vested compensation deferred on behalf of the Executive under any deferredcompensation plan subject to Code Section 409A shall be paid at the time or times specified forpayment pursuant to the provisions of such plan.          4.3 Section 409A. Certain payments contemplated by this Restated Agreement may be“deferred compensation” for purposes of Section 409A of the Code. Accordingly, the followingprovisions shall be in effect for purposes of avoiding or mitigating any adverse tax consequencesto the Executive under Code Section 409A.               (a) It is the intent of the parties that the provisions of this Restated Agreement comply withall applicable requirements of Code Section 409A. Accordingly, all provisions of this RestatedAgreement shall be interpreted and applied in a manner that does not result in a violation of theapplicable requirements or limitations of Code Section 409A and the applicable Treasury Regulationsthereunder and such provisions shall be deemed amended to comply with Code Section 409A and theapplicable Treasury Regulations thereunder.               (b) Notwithstanding any provision to the contrary in this Restated Agreement, no payments orbenefits to which the Executive may become entitled under Section 4 or Section 5.3 of this RestatedAgreement shall be made or provided to him prior to the ***earlier***of (i) the expiration of the six(6)-month period measured from the date of the Executive’s Separation from Service or (ii) the dateof his death, if the Executive is deemed, pursuant to the procedures established by theCompensation Committee in accordance with the applicable standards of Code Section 409A and theTreasury Regulations thereunder and applied on a consistent basis for all non-qualified deferredcompensation plans of the Employer Group subject to Code Section 409A, to be a “specified employee”at the time of such Separation from Service and such delayed commencement is otherwise required inorder to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration ofthe applicable Code Section 409A(a)(2)
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deferral period, all payments and benefits deferred pursuant to this Section 4.3 (whether theywould have otherwise been payable in a single sum or in installments in the absence of suchdeferral) shall be paid or reimbursed to the Executive in a lump sum, and any remaining paymentsand benefits due under this Restated Agreement shall be paid or provided in accordance with thenormal payment dates specified for them herein. The specified employees subject to such a delayedcommencement date shall be identified on December 31 of each calendar year. If the Executive is soidentified on any such December 31, he shall have specified employee status for the twelve(12)-month period beginning on April 1 of the following calendar year. For purposes of thisRestated Agreement, including (without limitation) this Section 4.3(b), “**Separation from Service**”shall mean a separation from service as defined under Treasury Regulation Section 1.409A-1(h).          4.4 Excise Tax Gross-Up               (a) In the event that any payments or benefits to which the Executive becomes entitled inaccordance with the provisions of this Restated Agreement or any other agreement with the Companyconstitutes a parachute payment under Section 280G of the Code (collectively, the “ParachutePayment”) subject to the excise tax imposed under Section 4999 of the Code or any interest orpenalties related to such excise tax (with such excise tax and related interest and penalties to becollectively referred to as the “Excise Tax”), then the Executive will be entitled to receive fromthe Company an additional payment (the “Gross-Up Payment”) in a dollar amount such that afterpayment of all taxes (including any interest or penalties imposed with respect to such taxes),including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains a net amountequal to the Excise Tax imposed upon the aggregate Orachute Payment.               (b) All determinations as to whether any of the payments or benefits to which the Executivebecomes entitled in accordance with the provisions of this Restated Agreement or any otheragreement with the Company constitute a Parachute payment, whether a Gross-Up Payment is requiredwith respect to any Parachute Payment, the amount of such Gross-Up Payment, and any other amountsrelevant to the calculation of such Gross-Up Payment, will be made by an independent registeredpublic accounting firm selected by the Company from among the largest four accounting firms in theUnited States (the “Accounting Firm”). Such Accounting Firm will make the applicabledeterminations (the Gross-Up Determination”), together with detailed supporting calculationsregarding the amount of the Excise Tax, any required Gross-Up Payment and any other relevantmatter, within thirty (30) days after the date of the Executive’s Separation from Service. TheGross-Up Determination made by the Accounting Firm will be binding upon both the Executive and theCompany. The Gross-Up Payment (if any) determined on the basis of the Gross-Up Determination shallbe paid to the Executive or on the Executive’s behalf with ten (10) business days after thecompletion of such Determination or (if later) at the time the related Excise Tax is remitted tothe appropriate tax authorities.               (c) In the event that the Executive’s actual Excise Tax liability is determined by a FinalDetermination to be greater than the Excise Tax liability taken into account for purposes of anyGross-Up Payment or Payments initially made to the Executive pursuant to the provisions of Section4.4(a), then within thirty (30) days following that Final
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Determination, the Executive shall notify the Company of such determination, and theAccounting Firm shall, within thirty (30) days thereafter, make a new Excise Tax calculation basedupon that Final Determination and provide both the Executive and the Company with the supportingcalculations for any supplemental Gross-Up Payment attributable to that excess Excise Taxliability. The Company shall make the supplemental Gross-Up payment to the Executive within ten(10) business days following the completion of the applicable calculations pr (if later) at thetime such excess tax liability is remitted to the appropriate tax authorities. In the event thatthe Executive’s actual Excise Tax liability is determined by a Final Determination to be less thanthe Excise Tax liability taken into account for purposes of any Gross-Up Payment initially made tothe Executive pursuant to the provisions of Section 4.4(a), then the Executive shall refund to theCompany, promptly upon receipt (but in no event later than ten (10) business days after suchreceipt), any federal or state tax refund attributable to the Excise Tax overpayment. For purposesof this Section 4.4(c), a “Final Determination” means an audit adjustment by the Internal RevenueService that is either (i) agreed to by both the Executive and the Company or (ii) sustained by acourt of competent jurisdiction in a decision with which both the Executive and the Company concuror with respect to which the period within which an appeal may be filed has lapsed without a noticeof appeal being filed.               (d) Should the Accounting Firm determine that any Gross-Up Payment made to the Executive wasin fact more than the amount actually required to be paid to the Executive in accordance with theprovisions of Section 4.4(a), then the Executive will, at the direction and expense of the Company,take such steps as are reasonably necessary (including the filing of returns and claims forrefund), follow reasonable instructions from, and procedures established by, the Company, andotherwise reasonably cooperate with the Company to correct such overpayment. Furthermore, shouldthe Company decide to contest any assessment by the Internal Revenue Service of an Excise Tax onone or more payments or benefits provided the Executive under this Restated Agreement or otherwise,the Executive will comply with all reasonable actions requested by the Company in connection withsuch proceedings, but shall not be required to incur any out-of-pocket costs in so doing.               (e) Notwithstanding anything to the contrary in the foregoing any Gross-Up Payments due theExecutive under this Section 4.4 shall be subject to the hold-back provisions of Section 4.3(b).In addition, no Gross-Up Payment shall be made later than the end of the calendar year followingthe calendar year in which the related taxes are remitted to the appropriate tax authorities orsuch other specified time or schedule that may be permitted under Section 409A of the Code. To theextent the Executive becomes entitled to any reimbursement of expenses incurred at the direction ofthe Company in connection with any tax audit or litigation addressing the existence or amount ofthe Excise Tax, such reimbursement shall be paid to the Executive no later than the close of thecalendar year following the calendar year in which the Excise Tax that is the subject of such auditor litigation is paid by the Executive. If no Excise Tax liability is found to be due as a resultof such audit or litigation, the reimbursement shall be paid to the Executive no later than theclose of the calendar year following the calendar year in which the audit is completed or there isa final and non-appealable settlement or other resolution of the litigation.
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          4.5 Mitigation. The Executive shall not be required to mitigate the amount of anypayment or benefits provided for in this Section 4 by seeking other employment or otherwise.     5. Disputes.          5.1 Settlement of Disputes; Arbitration. All claims by the Executive for benefitsunder this Restated Agreement shall be directed to and determined by the Board of Directors of theCompany and shall be in writing. Any denial by the Board of Directors of a claim for benefitsunder this Restated Agreement shall be delivered to the Executive in writing and shall set forththe specific reasons for the denial and the specific provisions of this Restated Agreement reliedupon. The Board of Directors shall afford a reasonable opportunity to the Executive for a reviewof the decision denying a claim. Any further dispute or controversy arising under or in connectionwith this Restated Agreement shall be settled exclusively by arbitration in Philadelphia,Pennsylvania, in accordance with the rules of the American Arbitration Association then in effect.Judgment may be entered on the arbitrator’s award in any court having jurisdiction.          5.2 Expenses. The Company agrees to pay as incurred, to the full extent permitted bylaw, all legal, accounting and other fees and expenses which the Executive may reasonably incur asa result of any claim or contest (so long as a court of competent jurisdiction renders a finalorder, decree or judgment in favor of the Executive, and after the time for appeal has expired andno appeal has been perfected for such final order, decree or judgment) by the Company, theExecutive or others regarding the validity or enforceability of, or liability under, any provisionof this Restated Agreement or any guarantee of performance thereof (including as a result of anycontest by the Executive regarding the amount of any payment or benefits pursuant to this RestatedAgreement), plus in each case interest on any delayed payment at the applicable Federal rateprovided for in Section 7872(f)(2)(A) of the Code.          5.3 Compensation During a Dispute. If the Change in Control Date occurs during theTerm and the Executive’s employment with the Company terminates within the period from 60 daysprior to the Change in Control Date to 24 months following the Change in Control Date, and theright of the Executive to receive benefits under Section 4 (or the amount or nature of the benefitsto which he is entitled to receive) are the subject of a dispute between the Company and theExecutive, the Company shall continue (a) to pay to the Executive his base salary in effect as ofthe Measurement Date commencing within 30 days following the Applicable Date and (b) to providebenefits to the Executive and the Executive’s family at least equal to those which would have beenprovided to them, if the Executive’s employment had not been terminated, in accordance with theapplicable Benefit Plans in effect on the Measurement Date, until such dispute is resolved eitherby mutual written agreement of the parties or by an arbitrator’s award pursuant to Section 5.1.Following the resolution of such dispute, the sum of the payments made to the Executive underclause (a) of this Section 5.3 shall be deducted from any cash payment which the Executive isentitled to receive pursuant to Section 4; and if such sum exceeds the amount of the cash paymentwhich the Executive is entitled to receive pursuant to Section 4, the excess of such sum over theamount of such payment shall be repaid (without interest) by the Executive to the Company withinthree (3) business days following the resolution of such dispute.
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     6. Successors.          6.1 Successor to Company. The Company shall require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of thebusiness or assets of the Company expressly to assume and agree to perform this Restated Agreementto the same extent that the Company would be required to perform it if no such succession had takenplace. Failure of the Company to obtain an assumption of this Restated Agreement at or prior tothe effectiveness of any succession shall be a breach of this Restated Agreement and shallconstitute Good Reason if the Executive elects to terminate employment, except that for purposes ofimplementing the foregoing, the date on which any such succession becomes effective shall be deemedthe Date of Termination. As used in this Restated Agreement, “Company” shall mean the Company asdefined above and any successor to its business or assets as aforesaid which assumes and agrees toperform this Agreement, by operation of law or otherwise.          6.2 Successor to Executive. This Restated Agreement shall inure to the benefit of andbe enforceable by the Executive’s personal or legal representatives, executors, administrators,successors, heirs, distributees, devisees and legatees. If the Executive should die while anyamount would still be payable to the Executive or his family hereunder if the Executive hadcontinued to live, all such amounts, unless otherwise provided herein, shall be paid in accordancewith the terms of this Restated Agreement to the executors, personal representatives oradministrators of the Executive’s estate.     7. Notice. All notices, instructions and other communications given hereunder or inconnection herewith shall be in writing. Any such notice, instruction or communication shall besent either (i) by registered or certified mail, return receipt requested, postage prepaid, or (ii)prepaid via a reputable nationwide overnight courier service, in each case addressed to theCompany, at 826 Newtown-Yardley Road, Newtown, Pennsylvania 18940, and to the Executive at theExecutive’s address indicated on the signature page of this Restated Agreement (or to such otheraddress as either the Company or the Executive may have furnished to the other in writing inaccordance herewith). Any such notice, instruction or communication shall be deemed to have beendelivered five business days after it is sent by registered or certified mail, return receiptrequested, postage prepaid, or one business day after it is sent via a reputable nationwideovernight courier service. Either party may give any notice, instruction or other communicationhereunder using any other means, but no such notice, instruction or other communication shall bedeemed to have been duly delivered unless and until it actually is received by the party for whomit is intended.     8. Miscellaneous.          8.1 Employment by Subsidiary. For purposes of this Agreement, the Executive’semployment with the Company shall not be deemed to have terminated solely as a result of theExecutive continuing to be employed by a wholly-owned subsidiary of the Company.
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          8.2 Severability. The invalidity or unenforceability of any provision of thisRestated Agreement shall not affect the validity or enforceability of any other provision of thisRestated Agreement, which shall remain in full force and effect.          8.3 Injunctive Relief. The Company and the Executive agree that any breach of thisRestated Agreement by the Company is likely to cause the Executive substantial and irrevocabledamage and therefore, in the event of any such breach, in addition to such other remedies which maybe available, the Executive shall have the right to specific performance and injunctive relief.          8.4 Governing Law. The validity, interpretation, construction and performance of thisRestated Agreement shall be governed by the internal laws of the Commonwealth of Pennsylvania,without regard to conflicts of law principles.          8.5 Waivers. No waiver by the Executive at any time of any breach of, or compliancewith, any provision of this Restated Agreement to be performed by the Company shall be deemed awaiver of that or any other provision at any subsequent time.          8.6 Counterparts. This Restated Agreement may be executed in counterparts, each ofwhich shall be deemed to be an original but both of which together shall constitute one and thesame instrument.          8.7 Tax Withholding. Any payments provided for hereunder shall be subject to theCompany’s collection of the any applicable tax withholding required under federal, state or locallaw, and the Executive shall only be entitled to the amount of each payment remaining theapplicable withholding taxes have been collected.          8.8 Entire Agreement. This Restated Agreement sets forth the entire agreement of theparties hereto in respect of the subject matter contained herein and supersedes all prioragreements (including, without limitation, the Prior Agreement), promises, covenants, arrangements,communications, representations or warranties, whether oral or written, by any officer, employee orrepresentative of any party hereto in respect of the subject matter contained herein; and any prioragreement of the parties hereto in respect of the subject matter contained herein is herebyterminated and cancelled.          8.9 Amendments. This Restated Agreement may be amended or modified only by a writteninstrument executed by both the Company and the Executive.          8.10 Executive’s Acknowledgements. The Executive acknowledges that he or she: (a) hasread this Restated Agreement; (b) has been represented in the preparation, negotiation, andexecution of this Restated Agreement by legal counsel of the Executive’s own choice or hasvoluntarily declined to seek such counsel; (c) understands the terms and consequences of thisRestated Agreement; and (d) understands that the law firm of Morgan, Lewis & Bockius LLP is actingas counsel to the Company in connection with the transactions contemplated by this RestatedAgreement, and is not acting as counsel for the Executive.     IN WITNESS WHEREOF, the parties hereto have executed this Restated Agreement as of the day andyear first set forth above.
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