HAS
BEEN CONVICTED OF A FELONY INVOLVING FRAUD OR DISHONESTY, (B) THE OPTIONEE DIES
OR SUFFERS FROM A PERMANENT DISABILITY DURING THE OPTIONEE'S SERVICE OR (C) THE
TERMINATION OF SERVICE IS EVIDENCED BY A RESOLUTION ADOPTED IN GOOD FAITH BY A
MAJORITY OF THE MEMBERS OF THE BOARD TO THE EFFECT THAT THE OPTIONEE
(I) INTENTIONALLY AND CONTINUALLY FAILED SUBSTANTIALLY TO PERFORM THE OPTIONEE'S
REASONABLY ASSIGNED DUTIES WITH THE CORPORATION (OTHER THAN A FAILURE RESULTING
FROM THE OPTIONEE'S ASSIGNMENT OF DUTIES THAT WOULD CONSTITUTE AN INVOLUNTARY
TERMINATION FOLLOWING A CHANGE OF CONTROL), WHICH FAILURE CONTINUED FOR A PERIOD
OF AT LEAST THIRTY (30) DAYS AFTER A WRITTEN NOTICE OF DEMAND FOR SUBSTANTIAL
PERFORMANCE HAS BEEN DELIVERED TO THE OPTIONEE SPECIFYING THE MANNER IN WHICH
THE OPTIONEE HAS FAILED SUBSTANTIALLY TO PERFORM, OR (II) INTENTIONALLY ENGAGED
IN CONDUCT WHICH IS DEMONSTRABLY AND MATERIALLY INJURIOUS TO THE CORPORATION;
PROVIDED, THAT NO TERMINATION OF THE OPTIONEE'S SERVICE SHALL BE FOR CAUSE AS
SET FORTH IN CLAUSE (II) ABOVE UNTIL THERE SHALL HAVE BEEN DELIVERED TO THE
OPTIONEE A COPY OF A WRITTEN NOTICE SETTING FORTH THAT THE OPTIONEE WAS GUILTY
OF THE CONDUCT SET FORTH IN CLAUSE (II) AND SPECIFYING THE PARTICULARS THEREOF
IN DETAIL. NO ACT, NOR FAILURE TO ACT, ON THE OPTIONEE'S PART SHALL BE
CONSIDERED "INTENTIONAL" UNLESS THE OPTIONEE HAS ACTED, OR FAILED TO ACT, WITH A
LACK OF GOOD FAITH AND WITH A LACK OF REASONABLE BELIEF THAT THE OPTIONEE'S
ACTION OR FAILURE TO ACT WAS IN THE BEST INTEREST OF THE CORPORATION.
E.
CHANGE IN CONTROL SHALL MEAN ANY OF THE
FOLLOWING:
(A) AN ACQUISITION (OTHER THAN DIRECTLY FROM THE CORPORATION) OF ANY VOTING
SECURITIES OF THE CORPORATION (THE "VOTING SECURITIES") BY ANY PERSON (AS THE
TERM "PERSON" IS USED FOR PURPOSES OF SECTION 13 OR 14 OF 1934 ACT) IMMEDIATELY
AFTER WHICH SUCH PERSON HAS BENEFICIAL OWNERSHIP (AS THE TERM "BENEFICIAL
OWNERSHIP" IS DEFINED UNDER RULE 13D-3 PROMULGATED UNDER THE 1934 ACT) OF FIFTY
PERCENT (50%) OR MORE OF THE COMBINED VOTING POWER OF THE CORPORATION'S THEN
OUTSTANDING VOTING SECURITIES; PROVIDED, THAT IN DETERMINING WHETHER A CHANGE OF
CONTROL HAS OCCURRED, VOTING SECURITIES WHICH ARE ACQUIRED IN A NON-CONTROL
ACQUISITION (AS HEREINAFTER DEFINED) SHALL
A-1
NOT CONSTITUTE AN ACQUISITION WHICH WOULD CAUSE A CHANGE OF CONTROL. A
"NON-CONTROL ACQUISITION" SHALL MEAN AN ACQUISITION BY (I) AN EMPLOYEE BENEFIT
PLAN (OR A TRUST FORMING A PART THEREOF) MAINTAINED BY (1) THE CORPORATION OR
(2) ANY CORPORATION OR OTHER PERSON OF WHICH A MAJORITY OF ITS VOTING POWER OR
ITS EQUITY SECURITIES OR EQUITY INTEREST IS OWNED DIRECTLY OR INDIRECTLY BY THE
CORPORATION (A "NON-CHANGE SUBSIDIARY"), (II) THE CORPORATION OR ANY NON-CHANGE
SUBSIDIARY, OR (III) ANY PERSON IN CONNECTION WITH A NON-CONTROL TRANSACTION (AS
HEREINAFTER DEFINED);
(B) THE INDIVIDUALS WHO, AS OF DATE THE OFFER LETTER, ARE MEMBERS OF THE BOARD
(THE "INCUMBENT BOARD"), CEASE FOR ANY REASON TO CONSTITUTE AT LEAST A MAJORITY
OF THE BOARD; PROVIDED, THAT IF THE APPOINTMENT, ELECTION OR NOMINATION FOR
ELECTION BY