COCO » Topics » 4. Early Termination of Option; Change in Control Event .

This excerpt taken from the COCO 10-Q filed Feb 9, 2005.

4. Early Termination of Option; Change in Control Event.


4.1 General. The Option, to the extent not previously exercised, and all other rights hereunder, whether vested and exercisable or not, shall terminate and become null and void prior to the Expiration Date in the event of:


    the termination of the Participant’s employment or services as provided in Section 6.2 of the Plan, or


    the termination of the Option pursuant to Section 6.3 of the Plan.


4.2 Possible Acceleration upon Certain Terminations. Notwithstanding any other provision of this Option Agreement or of the Plan, if a Change in Control Event (as defined in the Plan) occurs and the Option does not accelerate and become fully vested in connection with such event as contemplated by Section 6.3.2 of the Plan, the Option shall automatically accelerate and become fully vested upon a termination of the Participant’s employment or services with the Corporation and its Subsidiaries if such termination of employment or services (a) is by the Corporation or a Subsidiary for any reason other than for Cause (as defined below) or by the Participant for Good Reason (as defined below), and (b) occurs in anticipation of (but in no event more than three months prior to) the date of the Change in Control Event or within two years following the date of the Change in Control Event. (In the event that the Participant’s employment occurs prior to the date of the Change in Control Event and it is subsequently determined that a Change in Control Event requires an acceleration of vesting pursuant to the preceding sentence, the Option shall be deemed to have been fully vested on the date that the Participant’s employment terminated.) The following definitions shall apply solely for purposes of this Section 4.2:


    Cause. “Cause” means that the Participant has been convicted of a felony (other than drunk driving), or has engaged in gross misconduct materially and demonstrably injurious to the Corporation or a Subsidiary. However, no act or failure to act, on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his action or omission was in the best interest of the Corporation and its Subsidiaries.

    Good Reason. “Good Reason” means that, without the Participant’s express written consent, the occurrence of any one or more of the following: (a) the assignment of the Participant to duties materially inconsistent with the Participant’s authorities, duties, responsibilities, and status (including titles and reporting requirements) as an employee of the Corporation or one of its Subsidiaries, or a material reduction or alteration in the nature or status of the Participant’s authorities, duties, or responsibilities, other than an insubstantial and inadvertent act that is remedied by the Company promptly after receipt of notice thereof given by the Participant; (b) a reduction by the Corporation or a Subsidiary in the Participant’s base salary; (c) a material reduction in the Participant’s level of participation in any of the Company’s short and/or long-term incentive compensation plans, employee benefit or retirement plans, or policies, practices, or arrangements in which the Participant participates (provided, however, that reductions in the levels of participation in any such plan, policy, practice or arrangement shall not be deemed to be “Good Reason” if the Participant’s reduced level of participation in each such plan, policy, practice or arrangement remains substantially consistent with the average level of participation of other employees who have positions commensurate with the Participant’s position); or (d) the relocation of the Participant’s offices, as assigned to him by the Company, by more than fifty (50) miles.


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