THE STOCKHOLDERS OF THE COMPANY
OF A COMPLETE LIQUIDATION OR DISSOLUTION OF THE COMPANY.
2
1.2
"CHANGE IN CONTROL DATE" MEANS THE FIRST
DATE DURING THE TERM (AS DEFINED IN SECTION 2) ON WHICH A CHANGE IN CONTROL
OCCURS.
ANYTHING IN THIS AGREEMENT TO THE CONTRARY NOTWITHSTANDING, IF (A) A
CHANGE IN CONTROL OCCURS, (B)
THE EXECUTIVE'S EMPLOYMENT WITH THE COMPANY IS
TERMINATED PRIOR TO THE DATE ON WHICH THE CHANGE IN CONTROL OCCURS, AND
(C) EITHER (I) SUCH TERMINATION OF EMPLOYMENT (X) WAS AT THE REQUEST OF A THIRD
PARTY WHO HAS TAKEN STEPS REASONABLY CALCULATED TO EFFECT A CHANGE IN CONTROL OR
(Y) OTHERWISE AROSE IN CONNECTION WITH OR IN ANTICIPATION OF A CHANGE IN
CONTROL, OR (II) SUCH TERMINATION OF EMPLOYMENT OCCURS FOLLOWING THE EXECUTION
OF A DEFINITIVE AGREEMENT FOR SUCH CHANGE IN CONTROL, THEN FOR ALL PURPOSES OF
THIS AGREEMENT THE "CHANGE IN CONTROL DATE" SHALL MEAN THE DATE IMMEDIATELY
PRIOR TO THE DATE OF SUCH TERMINATION OF EMPLOYMENT.
1.3
"CAUSE" MEANS:
(A)
THE EXECUTIVE'S WILLFUL AND CONTINUED
FAILURE TO SUBSTANTIALLY PERFORM HIS REASONABLE ASSIGNED DUTIES (OTHER THAN ANY
SUCH FAILURE RESULTING FROM INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS OR ANY
FAILURE AFTER THE EXECUTIVE GIVES NOTICE OF TERMINATION FOR GOOD REASON AND GOOD
REASON EXISTS), WHICH FAILURE IS NOT CURED WITHIN 30 DAYS AFTER A WRITTEN DEMAND
FOR SUBSTANTIAL PERFORMANCE IS RECEIVED BY THE EXECUTIVE FROM THE BOARD OF
DIRECTORS OF THE COMPANY WHICH SPECIFICALLY IDENTIFIES THE MANNER IN WHICH THE
BOARD OF DIRECTORS BELIEVES THE EXECUTIVE HAS NOT SUBSTANTIALLY PERFORMED THE
EXECUTIVE'S DUTIES;
(B)
THE EXECUTIVE'S WILLFUL ENGAGEMENT IN
ILLEGAL CONDUCT OR GROSS MISCONDUCT WHICH IS MATERIALLY AND DEMONSTRABLY
INJURIOUS TO THE COMPANY; OR
(C)
A MATERIAL BREACH BY THE EXECUTIVE OF
SECTION 6 OR 7 OF THE EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND THE EXECUTIVE
OF EVEN DATE HEREWITH (THE "EMPLOYMENT AGREEMENT").
For purposes of this Section 1.3, no act or failure to act by the Executive
shall be considered "willful" unless it is done, or omitted to be done, in bad
faith and without reasonable belief that the Executive's action or omission was
in the best interests of the Company.
1.4
"GOOD REASON" MEANS THE OCCURRENCE, WITHOUT
THE EXECUTIVE'S WRITTEN CONSENT, OF ANY OF THE EVENTS OR CIRCUMSTANCES SET FORTH
IN CLAUSES (A) THROUGH (F) BELOW.
NOTWITHSTANDING THE OCCURRENCE OF ANY SUCH
EVENT OR CIRCUMSTANCE, SUCH OCCURRENCE SHALL NOT BE DEEMED TO CONSTITUTE GOOD
REASON IF, PRIOR TO THE DATE OF TERMINATION SPECIFIED IN THE NOTICE OF
TERMINATION (EACH AS DEFINED IN SECTION 3.2(A)) GIVEN BY THE EXECUTIVE IN
RESPECT THEREOF, SUCH EVENT OR CIRCUMSTANCE HAS BEEN FULLY CORRECTED AND THE
EXECUTIVE HAS BEEN REASONABLY COMPENSATED FOR ANY LOSSES OR DAMAGES RESULTING
THEREFROM (PROVIDED THAT SUCH RIGHT OF CORRECTION BY THE COMPANY SHALL ONLY
APPLY TO THE FIRST NOTICE OF TERMINATION FOR GOOD REASON GIVEN BY THE
EXECUTIVE).
(A)
THE ASSIGNMENT TO THE EXECUTIVE OF DUTIES
INCONSISTENT IN ANY MATERIAL RESPECT WITH THE EXECUTIVE'S POSITION (INCLUDING
STATUS, OFFICES, TITLES OR