WRITING, THE DETERMINATION OF EMPLOYEE'S EXCISE TAX LIABILITY
AND THE AMOUNT REQUIRED TO BE PAID OR REDUCED UNDER THIS SECTION 4 SHALL BE MADE
IN WRITING BY THE COMPANY'S INDEPENDENT AUDITORS WHO ARE PRIMARILY USED BY THE
COMPANY IMMEDIATELY PRIOR TO THE CHANGE OF CONTROL (THE "ACCOUNTANTS").
FOR
PURPOSES OF MAKING THE CALCULATIONS REQUIRED BY THIS SECTION 4, THE ACCOUNTANTS
MAY MAKE REASONABLE ASSUMPTIONS AND APPROXIMATIONS CONCERNING APPLICABLE TAXES
AND MAY RELY ON REASONABLE, GOOD FAITH INTERPRETATIONS CONCERNING THE
APPLICATION OF SECTIONS 280G AND 4999 OF THE CODE.
THE COMPANY AND THE EMPLOYEE
SHALL FURNISH TO THE ACCOUNTANTS SUCH INFORMATION AND DOCUMENTS AS THE
ACCOUNTANTS MAY REASONABLY REQUEST IN ORDER TO MAKE A DETERMINATION UNDER THIS
SECTION.
THE COMPANY SHALL BEAR ALL COSTS THE ACCOUNTANTS MAY REASONABLY INCUR
IN CONNECTION WITH ANY CALCULATIONS CONTEMPLATED BY THIS SECTION 4.
5.
DEFINITION OF TERMS.
THE FOLLOWING TERMS REFERRED TO IN THIS
AGREEMENT SHALL HAVE THE FOLLOWING MEANINGS:
(A)
ANNUAL COMPENSATION.
"ANNUAL COMPENSATION" SHALL MEAN AN AMOUNT
EQUAL TO THE SUM OF (I) THE EMPLOYEE'S COMPANY ANNUAL BASE SALARY AS IN EFFECT
IMMEDIATELY PRECEDING THE CHANGE OF CONTROL, AND (II) 100% OF THE EMPLOYEE'S
TARGET BONUS.
(B)
TARGET BONUS.
"TARGET BONUS" SHALL MEAN EMPLOYEE'S ANNUAL BONUS,
ASSUMING 100% "ON TARGET" SATISFACTION OF ANY OBJECTIVE OR SUBJECTIVE
PERFORMANCE MILESTONES.
(C)
CAUSE.
"CAUSE" SHALL MEAN (I) AN ACT OF PERSONAL DISHONESTY TAKEN
BY THE EMPLOYEE IN CONNECTION WITH HIS RESPONSIBILITIES AS AN EMPLOYEE AND
INTENDED TO RESULT IN SUBSTANTIAL PERSONAL ENRICHMENT OF THE EMPLOYEE,
(II) EMPLOYEE BEING CONVICTED OF A FELONY, (III) A WILLFUL ACT BY THE EMPLOYEE
WHICH CONSTITUTES GROSS MISCONDUCT AND WHICH IS INJURIOUS TO THE COMPANY,
(IV) FOLLOWING DELIVERY TO THE EMPLOYEE OF A WRITTEN DEMAND FOR PERFORMANCE FROM
THE COMPANY WHICH DESCRIBES THE BASIS FOR THE COMPANY'S REASONABLE BELIEF THAT
THE EMPLOYEE HAS NOT SUBSTANTIALLY PERFORMED HIS DUTIES, CONTINUED VIOLATIONS BY
THE EMPLOYEE OF THE EMPLOYEE'S OBLIGATIONS TO THE COMPANY WHICH ARE DEMONSTRABLY
WILLFUL AND DELIBERATE ON THE EMPLOYEE'S PART.
(D)
CHANGE OF CONTROL.
"CHANGE OF CONTROL" MEANS THE OCCURRENCE OF ANY
OF THE FOLLOWING EVENTS:
(I)
ANY PERSON BECOMES THE "BENEFICIAL
OWNER" (AS DEFINED IN RULE 13D-3 UNDER SAID ACT), DIRECTLY OR INDIRECTLY, OF
SECURITIES OF THE COMPANY REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE TOTAL
VOTING POWER REPRESENTED BY THE COMPANY'S THEN OUTSTANDING VOTING SECURITIES; OR
(II)
THE CONSUMMATION OF THE SALE OR
DISPOSITION BY THE COMPANY OF ALL OR SUBSTANTIALLY ALL THE COMPANY'S ASSETS; OR
4
(III)
THE CONSUMMATION OF A MERGER OR
CONSOLIDATION OF THE COMPANY WITH ANY OTHER CORPORATION, OTHER THAN A MERGER OR
CONSOLIDATION WHICH WOULD RESULT IN THE VOTING SECURITIES OF THE COMPANY
OUTSTANDING IMMEDIATELY PRIOR THERETO CONTINUING TO REPRESENT (EITHER BY
REMAINING OUTSTANDING OR BY BEING CONVERTED INTO VOTING SECURITIES OF THE
SURVIVING ENTITY) AT LEAST FIFTY PERCENT (50%) OF THE TOTAL VOTING POWER
REPRESENTED BY THE VOTING SECURITIES OF THE COMPANY OR SUCH SURVIVING ENTITY
OUTSTANDING IMMEDIATELY AFTER SUCH MERGER OR CONSOLIDATION; OR
(IV)
A CHANGE IN THE COMPOSITION OF