Common use of Determination of Compensation Clause in Contracts

Determination of Compensation. As used in this Agreement, the phrase “current annual rate of total compensation” means the sum of (i) the employee’s rate of annual base salary as in effect immediately prior to the Change of Control or his termination of employment, whichever is greater, (ii) the annual cash bonus last awarded to the employee immediately prior to the Change of Control or the most recent annual cash bonus awarded, whichever is greater, and (iii) the value of the annual Company equity awards received by the employee in the 12-month period preceding the Change of Control or in the 12-month period preceding his termination of employment, whichever period has the greater value of equity awards. In regards to cash bonuses and/or equity awards received pursuant to items (ii) and (iii) above, for purposes of this calculation, any special or one time cash bonuses or equity awards shall be excluded. In determining the value of an equity award for this purpose, the value of a phantom stock or restricted stock grant shall be equal to the number of phantom stock units or shares of stock, as the case may be, multiplied by the reported closing price per share of the stock on the date of grant of the award. The value of a stock option or stock appreciation rights grant shall be the Black-Scholes value of such award on its date of grant, utilizing the same input parameters as utilized by the Company in determining the proper expenses to record for such grant as required by FAS 123R, as verified by the Accounting Firm. No other items of compensation shall be considered for this purpose.