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