Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made his 23 day of June, 1995, by and between Xxxx X.
Xxxxxx, a resident of Ellicott City, Maryland (the "Executive"), and Precision
Tune, Inc., a Virginia corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Executive desires to provide his services to the Company
and the Company desires to employ the Executive upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
promises, covenants and agreements contained herein, and intending to be legally
bound, the parties hereby agree as follows:
1. Employment and Term.
The Company will employ the Executive, and the Executive hereby accepts
employment with the Company, for an initial term commencing on July 1, 1995, and
continuing for a period of three (3) years until and including June 30, 1998
(the "Initial Term"), unless such employment is earlier terminated as provided
herein. After expiration of the Initial Term, the Executive's employment under
this Agreement shall continue until terminated as provided herein.
2. Duties.
The Executive shall serve in the capacity of President and Chief
Executive Officer. He shall also be elected and serve as a member of the
Company's Board of Directors. During the term of his employment hereunder, the
Executive shall devote his full business time and attention to the performance
of his duties for the Company.
3. Compensation.
(a) Base Salary. The Company shall pay the Executive, and the
Executive shall accept, as full compensation for all services rendered
hereunder, a basic salary (the "Base Salary") and the other compensation and
benefits provided hereunder. The Executive's Base Salary effective July 1, 1995,
shall be at an annual rate of One Hundred Seventy Thousand Dollars ($170,000),
payable in approximately equal installments at such intervals as are consistent
with the Company's pay periods for salaried executive employees. The Executive's
Base Salary shall be reviewed by the Board of Directors no less frequently than
once in any twelve-month period and may be increased, but not decreased
regardless of any change in or diminution of the Executive's duties owed to the
Company.
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(b) Performance Bonus. The Executive is entitled to receive a
Performance Bonus as follows: For each fiscal year in which the Company's
before-tax net profits as determined by generally accepted accounting principles
exceed Two Million Dollars ($2,000,000), the Executive shall be entitled to
receive a bonus of ten percent (10%) of the Base Salary he received during that
fiscal year. For each One Hundred Thousand Dollars ($100,000) of before-tax net
profit over Two Million Dollars ($2,000,000), the Executive shall be entitled to
receive a bonus of an additional Five Percent (5%) of the Base Salary he
received during that fiscal year. Net profits before taxes, and any applicable
bonus, will be determined on a fiscal year basis, with the fiscal year running
from May 1 to April 30; provided that, for the period of July 1, 1995 - April
30, 1996, the Performance Bonus shall be based on before-tax net profits during
said ten (10)-month period, using $1,666,667 instead of $2,000,000 and $83,333
instead of $100,000 to determine the percentage of Base Salary payable.
Notwithstanding any other provision of this Agreement, in no event and under no
circumstances shall the Performance Bonus exceed fifty percent (50%) of the Base
Salary received by the Executive during the relevant fiscal year. For purposes
of computing Performance Bonus, the Company's before-tax net profits shall not
include any charge against profits attributable to any amounts paid or payable
pursuant to this Section 3(b). The percentage amount of bonus payable (except,
as indicated above, for the period of July 1, 1995 - April 30, 1996) shall be:
PRE-TAX BONUS
PROFITS PERCENTAGE
------- ----------
$2.0 MM 10%
2.1 MM 15%
2.2 MM 20%
2.3 MM 25%
2.4 MM 30%
2.5 MM 35%
2.6 MM 40%
2.7 MM 45%
2.8 MM 50%
If the Board of Directors changes the Company's fiscal year, the
$2,000,000/$100,000 figures used to determine Performance Bonus shall be
adjusted pro-rata to reflect any transitional fiscal year containing more or
less than twelve (12) months.
(c) Benefits.
(i) The Executive shall be eligible to
participate in retirement, group insurance, medical, dental, vacation and any
other plans or programs of substantially similar character as are made generally
available to executive employees of the Company which do not duplicate the
benefits otherwise
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specifically provided in this Agreement. All such benefits are to be provided by
the Company, subject to the terms of any welfare or pension plan sponsored by
the Company.
(ii) If the Executive relocates his
residence to the Leesburg, Virginia, area on or before June 30, 1996, the
Company shall pay Executive Fifteen Thousand Dollars ($15,000).
(iii) The Executive shall be eligible to
participate in a Stock Option Plan, as outlined in the document attached hereto
as Appendix A.
(iv) The Company shall reimburse the
Executive for all expenses incurred by him in the performance of his duties
pursuant to this Agreement.
(v) Executive shall receive such other
benefits and/or allowances as are permitted to him from time to time by the
Board of Directors.
(d) Restructuring of Payments. Notwithstanding anything in
this Agreement to the contrary, in the event that, in the opinion of the
Company's auditors, any payments of compensation to be made hereunder would be
treated as "excess parachute payments" within the meaning of section 280G of the
Internal Revenue Code as amended, the Company and the Executive shall use their
best efforts to restructure any of the payments so as to avoid the imposition of
excise tax upon the Executive and the loss of deduction for such payments by the
Company.
4. Confidentiality.
While employed by the Company under this Agreement and at all times
thereafter, the Executive shall not, without the prior written consent of the
Company, divulge to any third party or use for his own benefit or the benefit of
any third party, or for any purpose other than the exclusive benefit of the
Company, any confidential or proprietary business or technical information
revealed, obtained or developed in the course of his employment with the Company
or his duties performed for the Company or which is otherwise the property of
the Company or any of its subsidiaries or affiliated companies; provided that,
nothing contained herein shall restrict the Executive's use or disclosure of
such information (i) in the proper course of conduct of the Company's business,
(ii) known generally to the public (other than that which he may have disclosed
in breach of this Agreement) or (iii) as required by law so long as the
Executive gives the Company prior notice of such required disclosure unless
precluded from doing so by legal authority.
5. Covenant Not to Compete.
(a) The Executive shall not, within any geographical area
while employed by the Company or while performing duties for
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the Company hereunder, and within the United States of America for two (2) years
thereafter, directly or indirectly engage or become interested in (as owner,
stockholder, partner, co-venturer, director, officer, employee, agent,
consultant or otherwise) any business that engages in the auto care industry,
except that the Executive may hold as a passive investment not more than five
percent (5%) of the outstanding securities of any class of any publicly-held
entity that engages in the auto care industry.
(b) It is the desire and the intent of the parties that the
provisions of this Section 6 shall be enforceable to the fullest extent
permissible under applicable law and public policy. Accordingly, if this Section
5 or any portion thereof shall be adjudicated to be invalid or unenforceable,
the length and scope of this Section 5 shall be reduced to the extent necessary
so that this covenant may be enforced to the fullest extent possible under
applicable law.
6. Enforcement.
(a) Injunctive Relief. The parties recognize that, in the
event of any breach by the Executive of any of the provisions of Section 4 or 5
hereof, the Company will suffer continuing and irreparable harm for which the
Company will not have an adequate remedy at law. The Executive hereby waives any
and all right to assert any claim or defense that the Company has an adequate
remedy at law for any such breach. In recognition thereof, the Company and the
Executive hereby agree that, in the event of any such breach, the Company will
be entitled to seek injunctive relief or any other appropriate remedy to enforce
such provisions. The parties further agree that this Section 6 shall not in any
way limit remedies at law or in equity otherwise available to the Company. In
the event the Company seeks injunctive relief and is unsuccessful on the merits,
or terminates such action prior to entry of a judgment or other ruling on the
merits, other than a termination of such action due to a settlement agreement
between the Company and the Executive, the Company shall reimburse the Executive
for his reasonable attorneys' fees.
(b) Arbitration. In the event of any dispute between the
parties under or relating to this Agreement or relating to the Executive's
employment by the Company, such dispute shall be submitted to and settled by
arbitration in the Commonwealth of Virginia in accordance with the Employment
Dispute Resolution Rules of the American Arbitration Association then in effect,
by an arbitrator or arbitrators selected in accordance with said rules. The
arbitrator(s) shall have the right and authority to determine how their award or
decision as to each issue and matter in dispute may be implemented or enforced.
Any decision or award shall be final and conclusive on the parties; there shall
be no appeal therefrom other than for claimed bias, fraud or misconduct by the
arbitrator(s); judgment upon any award or decision may be
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entered in any court of competent jurisdiction in the Commonwealth of Virginia
or elsewhere; and the parties hereto consent to the application by any party in
interest to any court of competent jurisdiction for confirmation or enforcement
of such award. The party against whom a decision or award is made shall pay the
fees of the American Arbitration Association. Notwithstanding the foregoing, the
Company, at its sole option, shall be entitled to enforce its rights, as
contemplated by Section 6(a) hereof, to injunctive and other equitable relief in
the event of breach of Section 4 or 5 hereof by arbitration pursuant to this
Section 6(b) or directly in any court of competent jurisdiction.
7. Termination of Employment.
(a) Death. The Executive's employment hereunder shall
terminate in the event of Executive's death. Except for any salary and benefits
accrued, vested and unpaid as of the date of any such termination and except for
any benefits to which the Executive or his heirs or personal representatives may
be entitled under and in accordance with the terms of any employee benefit plan,
policy or program maintained by the Company, the Company shall be under no
further obligation hereunder to the Executive or his heirs or personal
representatives, and the Executive or his heirs and personal representatives no
longer shall be entitled to receive any payments or any other rights or benefits
under this Agreement.
(b) Disability. The Company may terminate the Executive's
employment hereunder for "Disability," if an independent physician mutually
selected by the Executive or his representative and the Board of Directors or
its designee has determined that the Executive has been substantially unable to
render to the Company services of the character contemplated by Section 2 of
this Agreement, by reason of a physical or mental illness or other condition
continuing for more than one hundred and eight (180) consecutive days or for
shorter periods aggregating more than two hundred and twenty (220) days in any
period of twelve (12) consecutive months (excluding in each case days on which
the Executive was on vacation). In the event of such Disability, the Executive
shall be entitled to receive any salary and benefits accrued, vested and unpaid
as of the date of any such termination and any benefits to which the Executive
may be entitled under and in accordance with the terms of any employee benefit
plan, policy or program maintained by the Company. The Company shall be under no
further obligation hereunder to the Executive, and the Executive no longer shall
be entitled to receive any other payments, rights or benefits under this
Agreement.
(c) Termination by the Company for Cause. The Company may
terminate the Executive's employment hereunder for "Cause." For purposes of this
Agreement, "Cause" shall mean any of the following:
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(i) The Executive's repeated willful
misconduct or gross negligence;
(ii) The Executive's repeated conscious
disregard of his obligations hereunder;
(iii) The Executive's repeated conscious
violation of any provision of the Company's by-laws or of its other stated
policies, standards or regulations;
(iv) A determination that the Executive
has demonstrated a dependence upon any addictive substance, including alcohol,
controlled substances, narcotics or barbiturates; provided, however, that if
the Board of Directors of the Company desires to terminate the Executive for
any of the reasons set forth in clauses (i), (ii) or (iii) of this Section
7(c), the Company within the sixty (60) day period immediately following each
alleged commission of a proscribed act or omission, shall have furnished to the
Executive a written description of the allegedly proscribed act or omission and
a statement advising him that the Company views such conduct as being of the
type that could lead to a termination of the Executive for Cause and, provided
further, that if the Board of Directors of the Company desires to terminate the
Executive on the basis of clause (iii) of this Section 7(c), it must be able to
demonstrate that the Executive has been furnished with a copy of the by-law
provision, policy, standard or regulation, the violation of which the Executive
is being accused, at a time prior to the alleged commission of the violation.
In the event that the Company terminates the Executive's employment for
Cause, the Executive shall be entitled to receive a severance benefit of two (2)
months' Base Salary in effect at the time of termination. The Executive shall
not be entitled to receive any other payments or any other rights or benefits
under this Agreement (except for any salary and benefits accrued, vested and
unpaid as of the date of any such termination); the Company shall be under no
further obligation hereunder to the Executive, and the Company shall have such
rights and remedies as may be available to it for any breach of this Agreement
or otherwise.
(d) Termination by the Company other than for Cause. The
Company may terminate the Executive's employment hereunder at any time for any
other reason, provided that the Company has given the Executive ninety (90)
days' written notice of termination, termination being effective upon expiration
of the notice period. In the event of such termination, the Executive shall be
entitled to receive a severance benefit equal to Base Salary at the rate in
effect at the time of termination for the remainder of the Initial Term or for
eighteen (18) months, whichever is the greater, and shall also be entitled to
receive any salary and benefits accrued, vested and unpaid as of the date
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of any such termination and any benefits to which the Executive may be entitled
under and in accordance with the terms of any employee benefit plan, policy or
program maintained by the Company; and upon the Executive's receipt of such
severance benefit, salary and benefits, the Company shall be under no further
obligation hereunder to the Executive and the Executive no longer shall be
entitled to receive any payments or any other rights or benefits under this
Agreement.
(e) Termination by the Executive for Good Reason.
Notwithstanding anything herein to the contrary, the Executive shall be entitled
to terminate his employment hereunder for "Good Reason" without breach of this
Agreement. For purposes of this Agreement, "Good Reason" shall exist in the
event of any of the following:
(i) A change in the Executive's place of
employment outside of a 100-mile radius of Loudoun County, Virginia;
(ii) A material change in title or a
substantial elimination of the duties and responsibilities of the Executive;
(iii) A failure of the Executive to be
elected to the Company's Board of Directors, or, once elected, his removal
therefrom other than in connection with a termination of his employment
hereunder;
(iv) A material breach by the Company of
its obligations hereunder.
(v) A change in control of the Company;
provided that, for purposes of this Section 7(e)(v), a "change in control of the
Company" shall mean (A) the acquisition, directly or indirectly, by any "person"
(as such term is defined in Section 13(d) and 14(d) of the Securities Exchange
Act of 1934 as in effect on the date hereof), of voting power over voting shares
of the Company that would be entitle holders thereof to cast at least twenty
percent (20%) of the votes that all shareholders would be entitled to cast in
the election of directors of the Company; or (B) during any period of two
consecutive years during the Initial Term of this Agreement, individuals who at
the beginning of such period constitute the Company Board of Directors cease for
any reason to constitute at least a majority thereof, unless the election of
each director who is not a director at the beginning of such period shall have
been approved in advance by directors representing at least three fourths of the
directors then in office who are directors at the beginning of such period.
In the event of such termination by the Executive, the Executive shall
nonetheless be entitled to receive a severance benefit equal to Base Salary at
the rate in effect at the time of
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termination for the remainder of the Initial Term or for eighteen (18) months,
whichever is the greater. Except for such severance benefit and except for any
salary and benefits accrued, vested and unpaid as of the date of such
termination, the Executive no longer shall be entitled to receive any payments
or any other rights or benefits under this Agreement, and the Company shall have
no further obligation hereunder to the Executive following any such termination.
(f) Termination by the Executive for other than Good Reason.
The Executive may terminate his employment hereunder at any time for any other
reason, provided the Executive has given the Company ninety (90) days' written
notice of termination, termination being effective upon expiration of the notice
period. In the event of such termination, the Executive shall be entitled to
receive any salary and benefits accrued, vested and unpaid as of the date of any
such termination and any benefits to which the Executive may be entitled under
and in accordance with the terms of any employee benefit plan, policy or program
maintained by the Company. The Company shall be under no further obligation
hereunder to the Executive and the Executive no longer shall be entitled to
receive any other payments, rights or benefits under this Agreement.
(g) Pro-Rata Bonus. Whenever, pursuant to this Section 7, the
Executive is entitled, upon the termination of his employment, to receive
"salary...accrued, vested and unpaid as of the date of any such termination",
the amount due him shall include a pro-rata Performance Bonus. The pro-rata
Performance Bonus shall be based on the Company's pre-tax net profits from the
start of the fiscal year in which the Executive's termination occurs through the
close of the fiscal quarter during which his termination occurs. The applicable
percentage of Base Salary received by the Executive during that fiscal year,
which is payable as bonus, shall be derived from a pro-rata portion of the
$2,000,000/$100,000 figures used to compute a full year's Performance Bonus,
equivalent to the number of fiscal quarters used in calculating the pre-tax net
profitss, e.g., if one quarter of pre-tax net profits are used, the
determinative figures shall be $500,000/$25,000.
8. Place of Employment. The Company agrees that the principal location
at which the Executive is to render his services hereunder will be within a
100-mile radius of Loudoun County, Virginia.
9. Withholding. Anything to the contrary herein notwithstanding, all
payments required to be made hereunder by the Company to the Executive, or his
estate or beneficiaries, shall be subject to the withholding of such amounts as
the Company may reasonably determine it should withhold pursuant to any
applicable law or regulation.
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10. Survival. The Agreement shall survive any termination of the
Executive's employment hereunder unless otherwise provided herein.
11. Miscellaneous.
(a) Successors and Assigns. The Company may assign this
Agreement to, and only to, an entity which is owned more than fifty percent
(50%), directly or indirectly, by the Company, and any person or entity which
acquires all or substantially all of the Company's business, and, subject to the
foregoing, upon such assignment this Agreement shall inure to the benefit of and
be binding upon such entity. This Agreement shall not be assignable by the
Executive and shall inure to the benefit of and be binding upon him and his
personal representative and other legal representatives. It is understood that
this Section 11(a) shall not affect the right of the Executive to terminate his
employment for "Good Reason" pursuant to Section 7(e) hereof.
(b) Notice. Any notice or communication required or permitted
under this Agreement shall be made in writing or sent by certified or registered
mail, return receipt requested and postage prepaid, addressed as follows:
If to the Executive:
Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
With a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxxxxx, Xxxxxx and Xxxxxxx
0000 Signet Tower
0 Xx. Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
If to the Company:
Precision Tune, Inc.
000 Xxxxxx Xxxxx, X.X.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxx, Esq.
With a copy to:
Xxxxxx Xxxxxxx, Esq.
Popham, Haik, Xxxxxxxxxx & Xxxxxxx
000 00xx Xxxxxx, X.X., 0xx Xxxxx
Xxxxxxxxxx, XX 00000
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or to such other address as either party may from time to time duly specify by
notice given to the other party in the manner specified above. Notice shall be
deemed given when received by the other party, including by his or its agent.
(c) Entire Agreement; Amendments. This Agreement (including
Appendix A hereto) contains the entire agreement and understanding of the
parties relating to the subject matter hereof and supersedes all prior
discussions, agreements and understandings relating thereto between them. This
Agreement may not be changed or modified, except by an agreement in writing
executed by the Company, with the approval of its Board of Directors or its
designee, and by the Executive.
(d) Waiver. The waiver of a breach of any term or provision of
this Agreement shall not operate as or be construed to be a waiver of any other
or subsequent breach of this Agreement.
(e) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement, and the performance
of the obligations imposed by this Agreement, shall be governed by the laws of
the Commonwealth of Virginia applicable to contracts made and wholly to be
performed in such state, without regard to choice of law principles.
(f) Severability. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable, in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of the Agreement. Such
invalid, illegal or unenforceable provision(s) shall be deemed modified to the
extent necessary to make it (them) valid, legal and enforceable.
(g) Indemnification. The Executive shall be entitled to the
benefit of the indemnification provided by Article 7 of the Bylaws of the
Company; provided that the Company shall be permitted to amend such provision
from time to time so long as the Executive, to the extent permitted by
applicable law, is afforded indemnification at least as favorable as that
provided by Such Article 7 as in effect on the date hereof.
(h) Captions. All captions and section headings used herein
are for convenient reference only and do not form a part of this Agreement.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute one and the same Agreement.
(j) Computation of Time. In computing any period of time
pursuant to this Agreement, the day of the act, event or default from which the
designated period of time begins to run
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shall be included, unless it is a Saturday, Sunday, or a legal holiday, in which
event the period shall begin to run on the next day which is not a Saturday,
Sunday, or legal holiday. Likewise, if the period of time concludes on a
Saturday, Sunday or a legal holiday, the period shall run until the end of the
next day thereafter which is not a Saturday, Sunday, or legal holiday.
(k) Pronouns and Plurals. All pronouns and any variations
thereof shall be deemed to refer to the masculine, feminine, neuter, singular,
or plural as the identity of the person or persons may require.
12. Executive's Legal Fees. The Company shall reimburse Executive for
the reasonable legal fees incurred by him in connection with the transaction
which is the subject of this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
PRECISION TUNE, INC.
By:
_____________________________
Name: Xxxx X. Xxxxxxxxx
_________________________
Title: Chairman of the Board
_________________________
_________________________________
Xxxx X. Xxxxxx
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APPENDIX A
STOCK OPTION TERMS
1. ISSUER OF OPTION. WeJac Corporation (the "Corporation").
2. OPTION TYPE. Non-qualified.
3. OPTIONEE. Xxxx X. Xxxxxx (the "Optionee").
4. NUMBER OF SHARES. 80,333 common shares (the "Shares")
(i.e., 5% of the fully diluted issued and outstanding common shares,
and all other common stock equivalents of the Corporation, after giving
effect to the issuance of Shares pursuant to the Option), subject to
anti-dilution adjustments as set forth below.
5. EXERCISE PRICE. _______, based upon the current appraised fair market
value of the Shares.
6. DATE OF GRANT. July 1, 1995.
7. OPTION TERM. Five years from the Date of Grant has been proposed; 10
years from the Date of Grant would be preferred as it is customary.
8. VESTING AND EXERCISABILITY. Option shall vest and become exercisable in
three equal annual installments commencing one year from the Date of
Grant, subject to acceleration upon the occurrence of certain events,
as set forth below.
9. VESTING UPON AN INITIAL PUBLIC OFFERING. The Option shall vest in full
on the effective date (the "Public Offering Date") of the Corporation's
registration statement under the Securities Act of 1933, as amended
(the "Securities Act").
10. VESTING UPON CERTAIN EXTRAORDINARY TRANSACTIONS. The Option shall vest
in full in the event (i) the Corporation consolidates or merges into or
with another corporation (including an affiliated corporation), unless
the Corporation is the survivor and the transaction does not
significantly affect the Corporation's pre-existing capital structure,
including the relative interests of shareholders of the Corporation
immediately prior to the transaction, or (ii) the Corporation sells or
conveys all or substantially all of its property or assets to any other
person.
11. SUCCESSORS TO THE CORPORATION. The Option shall provide that it is
binding on successors to the Corporation by merger, share exchange,
etc.
12. VESTING UPON TERMINATION OF EMPLOYMENT. If the Optionee's employment
is terminated for cause (as defined in the employment agreement), the
Option shall be forfeited to the Corporation to the extent it has not
vested as of the date of termination for cause. If Optionee's
employment with the Corporation or its affiliates terminates for any
other reason, including but not limited death or permanent disability,
then the Option shall be deemed to have vested in full as the date of
termination.
13. VESTING UPON A CHANGE IN CONTROL. The Option shall vest in full in the
event of a Change in Control (as to be defined) of the Corporation.
14. REGISTRATION OF SHARES. The Option shall include "piggyback
registration rights" for the Optionee to have the Shares included in
any registration statement filed by the Corporation under the
Securities Act (with standard exceptions and limitations, including,
but not limited to, underwriter cutbacks and lock-up requirements)
and/or register the Shares on Form S-8 for resale by the Optionee as
soon as practicable after the initial public offering and shall use its
best efforts to qualify the Shares under applicable state "blue sky
laws".
15. ANTI-DILUTION. The Option shall provide that, in the event the
Corporation issues additional common shares prior to an initial public
offering, the number of Shares will be increased proportionally, so
that the number of Shares subject to the Option continues to equal five
percent of the Corporation's fully diluted, issued and outstanding
common shares, and all other common stock equivalents (after giving
effect to the issuance of Shares pursuant to the Option).
16. INVESTMENT INTENT. Any requirement for the Optionee to represent that
the Shares will be held only for investment intent shall only be
applicable for so long as the shares are not publicly traded.
17. CALL RIGHTS. The Corporation shall be entitled to call the Option or
the Shares held by Optionee if the Corporation has not conducted an
initial public offering by July 1, 2000 or in the event neither a
Change in Control nor an extra- ordinary transaction has occurred as of
such date. In connection with an exercise of call rights, the
Corporation shall pay the Optionee (i) in respect of the Option, an
amount equal to the excess, if any, of (A) the aggregate fair value of
the Shares subject to the Option as of the call date, over (B) the
aggregate exercise price of the Option with respect to the Shares, and
(ii) in respect of any outstanding Shares issued in full or partial
exercise of the Option, the aggregate fair value of such Shares.
