OPTION
AGREEMENTS, SHALL VEST AND SHALL THEN BE EXERCISABLE IN FULL, AND THE EXECUTIVE
SHALL HAVE 90 DAYS FOLLOWING HIS TERMINATION WITHIN WHICH TO EXERCISE ANY AND
ALL SUCH RIGHTS AND THE RESTRICTIONS ON ANY AND ALL SHARES OF RESTRICTED STOCK
GRANTED TO THE EXECUTIVE THAT ARE OUTSTANDING ON THE DATE OF TERMINATION SHALL
LAPSE AS OF THE DATE OF TERMINATION;
(IV)
THE COMPANY'S GROUP HEALTH PLANS ALLOW FOR
BENEFITS TO EXTEND BEYOND EMPLOYMENT, UNDER CERTAIN CIRCUMSTANCES AND FOR A
SPECIFIED LENGTH OF TIME, AS DEFINED BY THE FEDERAL LAW CALLED THE CONSOLIDATED
OMNIBUS BUDGET RECONCILIATION ACT OF 1985 (COMMONLY KNOWN AS "COBRA").
DURING
THE SEVERANCE PERIOD, IF THE EXECUTIVE AND HIS FAMILY ARE ELIGIBLE FOR COBRA
COVERAGE, THE COMPANY SHALL, AT ITS
11
COST, PAY THE EXECUTIVE'S COBRA PREMIUM FOR HIS AND HIS FAMILY'S COVERAGE, AS
APPLICABLE, UNDER THE MEDICAL, DENTAL, VISION AND THE EMPLOYEE ASSISTANCE PLAN,
UP UNTIL THE EXECUTIVE IS NO LONGER ELIGIBLE FOR COBRA, OR THE END OF THE
SEVERANCE PERIOD, WHICHEVER OCCURS FIRST.
IF UPON COMPLETION OF FEDERAL COBRA,
THE EXECUTIVE AND HIS FAMILY ARE THEN ELIGIBLE FOR THE CORRESPONDING CALIFORNIA
COBRA LAW, AB 1401 ("CAL-COBRA"), WHICH APPLIES TO MEDICAL COVERAGE ONLY, THE
COMPANY SHALL, AT ITS COST, PAY THE EXECUTIVE'S CAL-COBRA PREMIUM FOR HIS AND
HIS FAMILY'S COVERAGE, AS APPLICABLE, UP UNTIL THE EXECUTIVE IS NO LONGER
ELIGIBLE FOR CAL-COBRA, OR THE END OF THE SEVERANCE PERIOD, WHICHEVER OCCURS
FIRST.
DURING THE SEVERANCE PERIOD, THE COMPANY SHALL, AT ITS COST, ARRANGE TO
PROVIDE THE EXECUTIVE WITH LIFE INSURANCE (EXCLUDING ACCIDENTAL DEATH AND
DISMEMBERMENT).
THE AMOUNT OF LIFE INSURANCE COVERAGE WILL BE EQUAL TO THAT IN
EFFECT FOR THE EXECUTIVE ON THE DATE OF TERMINATION UNDER THE COMPANY'S GROUP
LIFE INSURANCE PROGRAM (SUBJECT TO THE AGE REDUCTION SCHEDULE).
THE COMPANY
AGREES TO PAY AN ADDITIONAL AMOUNT NECESSARY TO REIMBURSE THE EXECUTIVE FOR ANY
TAXES IMPOSED SOLELY BY REASON OF HIS RECEIPT OF SUCH BENEFITS FOLLOWING
TERMINATION OF HIS EMPLOYMENT AS STATED HEREIN.
(D)
THE COMPANY SHALL CONTINUE IN EFFECT FOR THE
BENEFIT OF THE EXECUTIVE ALL INSURANCE OR OTHER PROVISIONS FOR INDEMNIFICATION,
DEFENSE OR HOLD-HARMLESS OF OFFICERS OR DIRECTORS OF THE COMPANY THAT ARE IN
EFFECT ON THE DATE THE NOTICE OF TERMINATION IS SENT TO THE EXECUTIVE OR THE
COMPANY WITH RESPECT TO ALL OF HIS ACTS AND OMISSIONS WHILE AN OFFICER OR
DIRECTOR (IF APPLICABLE) AS FULLY AND COMPLETELY AS IF SUCH TERMINATION HAD NOT
OCCURRED, AND UNTIL THE FINAL EXPIRATION OR RUNNING OF ALL PERIODS OF LIMITATION
AGAINST ACTIONS THAT MAY BE APPLICABLE TO SUCH ACTS OR OMISSIONS.
12
(E)
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, IN THE EVENT THAT THE EXECUTIVE BECOMES ENTITLED TO THE
SEVERANCE PAYMENTS, IF ANY OF THE SEVERANCE PAYMENTS WILL BE SUBJECT TO THE TAX
(THE "EXCISE TAX") IMPOSED BY SECTION 4999 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THE COMPANY SHALL PAY TO THE EXECUTIVE AN ADDITIONAL
AMOUNT (THE "GROSS-UP PAYMENT") SUCH THAT THE NET AMOUNT RETAINED BY