IMMEDIATELY PRIOR TO SUCH CHANGE IN CONTROL, AND APPROPRIATE
ADJUSTMENTS SHALL ALSO BE MADE TO THE EXERCISE PRICE, PROVIDED THE AGGREGATE
EXERCISE PRICE SHALL REMAIN THE SAME.
(D)
TERMINATION OF SERVICE NOT FOR CAUSE OR TERMINATION FOR GOOD REASON.
IN
THE EVENT THE OPTIONEE'S SERVICE IS TERMINATED (I) BY THE CORPORATION NOT FOR
CAUSE OR (II) BY THE OPTIONEE FOR GOOD REASON, THIS OPTION AUTOMATICALLY SHALL
BECOME VESTED AND EXERCISABLE IMMEDIATELY PRIOR TO SUCH TERMINATION OF SERVICE
FOR ALL OF THE OPTION SHARES AT THE TIME REPRESENTED BY THIS OPTION.
THE
OPTIONEE'S TERMINATION SHALL BE FOR "GOOD REASON" IF THE OPTIONEE PROVIDES
WRITTEN NOTICE TO THE CHIEF EXECUTIVE OFFICER OF THE CORPORATION AND THE BOARD
OF THE GOOD REASON WITHIN THIRTY (30) DAYS OF THE EVENT CONSTITUTING GOOD REASON
AND PROVIDES THE CORPORATION WITH A PERIOD OF TWENTY (20) DAYS TO CURE THE EVENT
CONSTITUTING GOOD REASON AND THE CORPORATION FAILS TO CURE THE GOOD REASON
WITHIN THAT PERIOD.
FOR PURPOSES OF THIS AGREEMENT, "GOOD REASON" SHALL MEAN
EITHER (X) A MATERIAL REDUCTION IN THE OPTIONEE'S BASE SALARY, OR (Y) A
RELOCATION OF THE OPTIONEE'S PLACE OF EMPLOYMENT BY MORE THAN FIFTY (50) MILES,
PROVIDED AND ONLY IF SUCH CHANGE, REDUCTION OR RELOCATION IS EFFECTED BY THE
CORPORATION WITHOUT THE OPTIONEE'S CONSENT.
NOTWITHSTANDING THE FOREGOING, IN
ORDER TO AVOID THE PAYMENT OF EXCISE TAX IMPOSED BY SECTION 4999 OF THE CODE,
THE CORPORATION MAY, IN ACCORDANCE WITH SECTION 3(B) OF THE EMPLOYMENT AGREEMENT
ENTERED INTO BETWEEN THE OPTIONEE AND CORPORATION, DATED AS OF MAY 24, 2004,
REDUCE THE PAYMENTS OR BENEFITS TO THE OPTIONEE (WITHIN THE MEANING OF
SECTION 280G(B)(2) OF THE CODE).
SUCH REDUCTION MAY APPLY TO CASH PAYMENTS,
VESTING ACCELERATION PURSUANT TO THIS SECTION 6(D) AND OTHER BENEFITS RECEIVED
BY THE OPTIONEE WHICH COULD RESULT IN THE ACCELERATION OF VESTING OF ONLY A
PORTION OR NONE OF THEN UNVESTED OPTION SHARES.
(E)
THIS AGREEMENT SHALL NOT IN ANY WAY AFFECT THE RIGHT OF THE CORPORATION TO
ADJUST, RECLASSIFY, REORGANIZE OR OTHERWISE CHANGE ITS CAPITAL OR BUSINESS
3
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
7.
ADJUSTMENT IN OPTION SHARES.
Should any change be made to Common Stock by reason of any stock split, stock
dividend, recapitalization, combination of shares, exchange of shares or other
change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration, appropriate adjustments shall be made to
(i) the total number and/or class of securities subject to this option and
(ii) the Exercise Price in order to reflect such change and thereby preclude a
dilution or enlargement of benefits hereunder.
8.
STOCKHOLDER RIGHTS.
THE HOLDER OF THIS OPTION SHALL NOT HAVE
ANY STOCKHOLDER RIGHTS WITH RESPECT TO THE OPTION SHARES UNTIL SUCH PERSON SHALL
HAVE EXERCISED THE OPTION, PAID THE EXERCISE PRICE AND BECOME A HOLDER OF RECORD
OF THE PURCHASED SHARES.
9.
MANNER OF EXERCISING OPTION.
(A)
IN ORDER TO EXERCISE THIS OPTION WITH RESPECT