TO TIME APPLICABLE
TO EXECUTIVE) AND THE INCOME TAX COST OF THE GROSS-UP PAYMENT ITSELF.
(C)
"CAUSE" MEANS:
(1)
EXECUTIVE'S WILLFUL VIOLATION OF A COMPANY POLICY (EXCLUDING ANY
ACT OR OMISSION THAT EXECUTIVE REASONABLY BELIEVED IN GOOD FAITH TO HAVE BEEN IN
THE BEST INTEREST OF THE COMPANY), WILLFUL COMMISSION OF AN ACT OF FRAUD OR
DISHONESTY, OR WILLFUL ENGAGEMENT IN ILLEGAL CONDUCT OR GROSS MISCONDUCT, WHICH
IN EACH CASE IS MATERIALLY AND DEMONSTRABLY INJURIOUS TO THE COMPANY;
(2)
EXECUTIVE'S CONTINUED FAILURE TO SUBSTANTIALLY PERFORM HIS DUTIES
WITH THE COMPANY OR TO SUBSTANTIALLY COMPLY WITH A SPECIFIC AND LAWFUL DIRECTIVE
OF THE BOARD (OTHER THAN A CONTINUED FAILURE CAUSED BY OR ATTRIBUTABLE TO
PHYSICAL OR MENTAL ILLNESS OR INFIRMITY), IN EACH CASE AFTER A WRITTEN DEMAND
FOR SUBSTANTIAL PERFORMANCE OR SUBSTANTIAL COMPLIANCE IS DELIVERED TO EXECUTIVE
BY OR ON BEHALF OF THE BOARD, WHICH DEMAND IS BASED ON A GOOD-FAITH
DETERMINATION BY THE BOARD, AFTER REASONABLE INQUIRY, SPECIFICALLY IDENTIFYING
THE MANNER IN WHICH THE BOARD BELIEVES EXECUTIVE HAS NOT SUBSTANTIALLY PERFORMED
HIS DUTIES OR SUBSTANTIALLY COMPLIED WITH A LAWFUL DIRECTIVE;
(3)
EXECUTIVE'S CONVICTION OF (INCLUDING A PLEA OF NOLO CONTENDERE TO)
A CRIME CONSTITUTING A FELONY;
(4)
EXECUTIVE'S EMBEZZLEMENT OR CRIMINAL DIVERSION OF FUNDS;
(5)
EXECUTIVE'S FAILURE (OTHER THAN BY REASON OF PHYSICAL OR MENTAL
ILLNESS OR INFIRMITY) TO PERFORM OR TO COMPLY WITH ANY MATERIAL TERM OR
CONDITION OF THIS AGREEMENT, WHICH FAILURE:
(I)
IS OF SUCH A NATURE THAT IT IS REASONABLY CAPABLE OF BEING CURED,
BUT ONLY IF (X) EXECUTIVE DOES NOT CURE SUCH FAILURE WITHIN THIRTY (30) DAYS
AFTER WRITTEN NOTICE OF SUCH FAILURE OR (Y) IF SUCH FAILURE CANNOT BE CURED IN
SUCH PERIOD AND THE CONTINUATION OF SUCH FAILURE WILL NOT BE MATERIALLY AND
DEMONSTRABLY INJURIOUS TO THE COMPANY, EXECUTIVE DOES NOT COMMENCE AND
DILIGENTLY SEEK TO CURE SUCH FAILURE WITHIN SUCH PERIOD AND THEREAFTER CONTINUE
TO SEEK TO CURE SUCH FAILURE UNTIL CURED; OR
(II)
IS OF SUCH A NATURE THAT IT IS NOT REASONABLY CAPABLE OF BEING
CURED, IN WHICH CASE EXECUTIVE SHALL BE GIVEN WRITTEN NOTICE THEREOF BUT SHALL
NOT BE ENTITLED TO ANY OPPORTUNITY TO CURE SUCH FAILURE.
(D)
"CHANGE IN CONTROL" MEANS:
(1)
ANY "PERSON" (AS SUCH TERM IS USED IN SECTION 13(D) AND 14(D) OF
THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT")) (OTHER THAN, UNTIL
SUCH TIME AS EXECUTIVE FOR THE FIRST TIME HEREAFTER NO LONGER CONTINUES TO OWN
AT LEAST FIFTEEN PERCENT (15%) OF THE COMPANY'S ISSUED AND OUTSTANDING COMMON
STOCK, EXECUTIVE OR ANY AFFILIATE, AFFILIATED PERSON OR ENTITY (INCLUDING ANY
GROUP WITH WHICH EXECUTIVE ACTS IN CONCERT), TRUST, ESTATE, BENEFICIARY, OR
LEGATEE OF EXECUTIVE) BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF
SHARES OF THE COMPANY'S COMMON STOCK OR OTHER INTERESTS IN THE COMPANY
REPRESENTING FIFTY PERCENT (50%) OR MORE OF THE COMBINED VOTING POWER OF THE
THEN-OUTSTANDING COMPANY VOTING SECURITIES; EXCEPT THAT THE FOLLOWING SHALL NOT
CONSTITUTE OR RESULT IN A CHANGE IN CONTROL: (I) ANY ACQUISITION OF
THEN-OUTSTANDING OR NEWLY ISSUED