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 EMPLOYEE'S EMPLOYMENT WITH THE COMPANY IS TERMINATED PRIOR TO THE DATE
ON WHICH THE CHANGE IN CONTROL OCCURS, AND (C) IT IS REASONABLY DEMONSTRATED BY
THE EMPLOYEE THAT SUCH TERMINATION OF EMPLOYMENT (I) WAS AT THE REQUEST OF A
THIRD PARTY WHO HAS TAKEN STEPS REASONABLY CALCULATED TO EFFECT A CHANGE IN
CONTROL OR (II) OTHERWISE AROSE IN CONNECTION WITH OR IN ANTICIPATION OF A
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 EMPLOYEE'S 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 EMPLOYEE
GIVES WRITTEN NOTICE OF TERMINATION FOR GOOD REASON), WHICH FAILURE IS NOT CURED
WITHIN 30 DAYS AFTER A WRITTEN DEMAND FOR SUBSTANTIAL PERFORMANCE IS RECEIVED BY
THE EMPLOYEE FROM THE BOARD OF DIRECTORS OF THE COMPANY WHICH SPECIFICALLY
IDENTIFIES THE MANNER IN WHICH THE BOARD OF DIRECTORS BELIEVES THE EMPLOYEE HAS
NOT SUBSTANTIALLY PERFORMED THE EMPLOYEE'S DUTIES; OR
(B)
THE EMPLOYEE'S WILLFUL ENGAGEMENT IN ILLEGAL CONDUCT OR GROSS
MISCONDUCT WHICH IS MATERIALLY INJURIOUS TO THE COMPANY.
1.4
"GOOD REASON" MEANS THE OCCURRENCE, WITHOUT THE EMPLOYEE'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 EMPLOYEE IN RESPECT THEREOF, SUCH EVENT OR
CIRCUMSTANCE HAS BEEN FULLY CORRECTED AND THE EMPLOYEE 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 EMPLOYEE).
(A)
THE ASSIGNMENT TO THE EMPLOYEE OF DUTIES WHICH RESULT IN A
MATERIAL DIMINUTION OF THE EMPLOYEE'S POSITION (INCLUDING STATUS, OFFICES,
TITLES AND REPORTING REQUIREMENTS), AUTHORITY OR RESPONSIBILITIES IN EFFECT
IMMEDIATELY PRIOR TO THE EARLIEST TO OCCUR OF (I) THE CHANGE IN CONTROL DATE,
(II) THE DATE OF THE EXECUTION BY THE COMPANY OF THE INITIAL WRITTEN AGREEMENT
OR INSTRUMENT PROVIDING FOR THE CHANGE IN CONTROL OR (III) THE DATE OF THE
ADOPTION BY THE BOARD OF DIRECTORS OF A RESOLUTION PROVIDING FOR THE CHANGE IN
CONTROL (WITH THE EARLIEST TO OCCUR OF SUCH DATES REFERRED TO HEREIN AS THE
"MEASUREMENT DATE");
(B)
A MATERIAL REDUCTION IN THE EMPLOYEE'S ANNUAL BASE SALARY AS IN
EFFECT ON THE MEASUREMENT DATE OR AS THE SAME WAS OR MAY BE INCREASED THEREAFTER
FROM TIME TO TIME;
(C)
THE FAILURE BY THE COMPANY