HEREUNDER SHALL BE SUBJECT TO INCOME TAX,
SOCIAL SECURITY AND OTHER APPLICABLE WITHHOLDINGS, AS WELL AS SUCH OTHER
DEDUCTIONS AS MAY BE REQUIRED UNDER APPLICABLE LAWS.
(B)
SECTION 409A.
IT IS INTENDED THAT ALL
PAYMENTS HEREUNDER SHALL COMPLY WITH SECTION 409A OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE") AND THE REGULATIONS AND OTHER GUIDANCE ISSUED
THEREUNDER (IN AGGREGATE, "SECTION 409A") SO AS NOT TO SUBJECT THE EXECUTIVE TO
PAYMENT OF INTEREST OR ANY ADDITIONAL TAX UNDER SECTION 409A.
IN FURTHERANCE
THEREOF, THE PARTIES AGREE TO THE FOLLOWING:
(I)
IF PAYMENT OR PROVISION OF ANY AMOUNT OR
BENEFIT HEREUNDER THAT IS SUBJECT TO SECTION 409A AT THE TIME SPECIFIED HEREIN
WOULD SUBJECT SUCH AMOUNT OR BENEFIT TO ANY ADDITIONAL TAX UNDER SECTION 409A,
THE PAYMENT OR PROVISION OF SUCH AMOUNT OR BENEFIT SHALL BE POSTPONED TO THE
EARLIEST COMMENCEMENT DATE ON WHICH THE PAYMENT OR PROVISION OF SUCH AMOUNT OR
BENEFIT COULD BE MADE WITHOUT INCURRING SUCH ADDITIONAL TAX.
(II)
IN ADDITION, TO THE EXTENT THAT ANY
REGULATIONS OR OTHER GUIDANCE ISSUED UNDER SECTION 409A (AFTER APPLICATION OF
THE PREVIOUS PROVISIONS OF THIS SECTION 3.7(B)) WOULD RESULT IN THE EXECUTIVE'S
BEING SUBJECT TO THE PAYMENT OF INTEREST OR ANY ADDITIONAL TAX UNDER
SECTION 409A, THE PARTIES AGREE, TO THE EXTENT REASONABLY POSSIBLE, TO AMEND
THIS AGREEMENT IN ORDER TO AVOID THE IMPOSITION OF ANY SUCH INTEREST OR
ADDITIONAL TAX UNDER SECTION 409A, WHICH AMENDMENT SHALL HAVE THE MINIMUM
ECONOMIC EFFECT NECESSARY AND BE REASONABLY DETERMINED IN GOOD FAITH BY THE
COMPANY AND THE EXECUTIVE.
(III)
NOTWITHSTANDING ANY PROVISION IN THIS
AGREEMENT TO THE CONTRARY, IF ANY PAYMENT HEREUNDER IS SUBJECT TO SECTION 409A,
AND IF SUCH PAYMENT IS TO BE PAID ON ACCOUNT OF THE EXECUTIVE'S SEPARATION FROM
SERVICE (WITHIN THE MEANING OF SECTION 409A), AND IF THE EXECUTIVE IS A
"SPECIFIED EMPLOYEE" WITHIN THE MEANING OF SECTION 409A(A)(2)(B) OF THE CODE,
THEN SUCH PAYMENT SHALL BE DELAYED UNTIL THE FIRST DAY AFTER THE SIX-MONTH
ANNIVERSARY OF THE EXECUTIVE'S DATE OF TERMINATION.
3
4.
TERMINATION OF EMPLOYMENT.
4.1
THE EXECUTIVE'S EMPLOYMENT HEREUNDER IS
SUBJECT TO TERMINATION EARLIER THAN AS CONTEMPLATED BY SECTION 1, AS FOLLOWS:
(A)
IMMEDIATELY UPON THE DEATH OF THE
EXECUTIVE;
(B)
UPON THE EXECUTIVE'S DISABILITY (AS DEFINED
BELOW);
(C)
BY THE EXECUTIVE AT ANY TIME FOR ANY REASON
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, RESIGNATION, RETIREMENT OR FOR GOOD
REASON (AS DEFINED BELOW); AND
(D)
BY THE COMPANY AT ANY TIME FOR CAUSE (AS
DEFINED BELOW) OR WITHOUT CAUSE.
4.2
THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:
(A)
"CAUSE" SHALL MEAN THE EXECUTIVE'S:
(I) INDICTMENT OR ARREST FOR OR FORMAL CHARGE WITH ANY FELONY, (II) COMMISSION
OF ANY ACT OF DISHONESTY OR MORAL TURPITUDE WHICH IS, OR IS REASONABLY LIKELY TO
BE, MATERIALLY DETRIMENTAL TO THE COMPANY AND/OR ITS AFFILIATES, (III) FAILURE
TO OBEY THE REASONABLE AND LAWFUL ORDERS OF THE BOARD OR (IV) GROSS NEGLIGENCE
IN THE PERFORMANCE OF, OR WILLFUL DISREGARD OF, HIS OBLIGATIONS HEREUNDER;
PROVIDED, HOWEVER, THAT NO TERMINATION PURSUANT TO