CHORDIANT SOFTWARE INC
<DOCUMENT>
<TYPE>EX-10.23
<SEQUENCE>4
<FILENAME>ex1023.htm
<TEXT>
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<head>
<title>Change in Control</title>
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<p class="CenteredHeading" style="margin-top:0in;margin-right:0in;margin-bottom:
24.0pt;margin-left:.1in;page-break-after:auto">CHANGE OF CONTROL AGREEMENT</p>
<p class="MsoBodyText" style="text-align:justify;text-indent:.5in"><b>
This Change Of Control Agreement
</b>("Agreement") is made by and between <b>
Chordiant Software, Inc.</b>(the
"Company") and Don Morrison ("Executive").&nbsp; This Agreement will become effective
upon its execution by both parties hereto (the "Effective Date").</p>
<p class="MsoBodyText" align="center" style="text-align:center;text-indent:0in">
<b>RECITALS</b></p>
<p class="MsoBodyText" style="text-align:justify;text-indent:.5in"><b>
Whereas </b>Executive is employed
by the Company pursuant to the terms of Executive's offer letter from the
Company;</p>
<p class="TabbedL1"><b>Whereas</b>
Executive has been granted option(s) to purchase shares of the Company's Common
Stock pursuant to the applicable stock option agreement(s) and stock option
plan(s) ("Prior Grants");</p>
<p class="TabbedL1"><b>Whereas</b>
in the future, Executive may be granted additional options to purchase the
Company's Common Stock, subject to the Board's sole discretion (together with
Prior Grants, "Options"); and</p>
<p class="MsoBodyText" style="text-align:justify;text-indent:.5in"><b>
Whereas</b> the Company believes it
is imperative to provide Executive with accelerated vesting of the Options, as
well as other severance benefits, in the event that Executive is terminated
without Cause (as defined herein) or resigns for Good Reason (as defined herein)
in connection with a Change of Control (as defined herein).</p>
<p class="MsoBodyText" style="text-align:justify;text-indent:.5in"><b>
Now, Therefore</b>, in
consideration of the foregoing, the mutual covenants contained herein, and other
good and valuable consideration, the parties hereto hereby agree as follows:</p>
<p class="TabbedL1" style="margin-left:0in;page-break-after:avoid"><b>1.
Termination of Employment.</b></p>
<p class="TabbedL2" style="margin-left:0in"><b>(a)At-Will Employment.&nbsp; </b>Executive's employment is at-will, which means
that the Company may terminate Executive's employment at any time, with or
without advance notice, and with or without Cause.&nbsp; Similarly, Executive may
resign his/her employment at any time, with or without advance notice or Good
Reason.&nbsp; Executive shall not receive any compensation of any kind, including,
without limitation, severance benefits, following Executive's last day of
employment with the Company (the "Termination Date"), except as expressly
provided herein, as otherwise agreed in writing between Executive and the Chief
Executive Officer of the Company, or as provided in any plan documents governing
the Options.&nbsp; Executive shall devote all reasonable efforts to the performance
of Executive's duties, and shall perform such duties in good faith.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(b)Termination Related to a Change of Control.</b>&nbsp; If Executive's
employment is terminated without Cause or Executive resigns for Good Reason
within ninety (90) days prior to or twelve (12) months after a Change of
Control, and Executive signs a release substantially in the form (whichever is
applicable) attached hereto as <b>Exhibit A </b>(the "Release"), then the
Company shall provide Executive with the following severance benefits: </p>
<p class="TabbedL3" style="margin-left:0in"><b>(i)</b>The Company shall make severance payments to Executive in the form of
continuation of Executive's base salary in effect on the Termination Date for
six (6) months following the Termination Date (the "Severance Period").&nbsp; These
payments will be made on the Company's ordinary payroll dates and will be
subject to standard payroll deductions and withholdings.&nbsp; </p>
<p class="TabbedL3" style="margin-left:0in"><b>(ii)</b>The Company will pay Executive an amount equal to one-half (1/2) of
Executive's annual bonus.&nbsp; The bonus will be calculated at one of the following
rates, whichever is higher: (1) as if both Executive and the Company achieved
one hundred (100) percent of their specified performance objectives; or (2) the
actual performance of the Company and Executive as measured against the
specified performance objectives.&nbsp; This amount will be paid over the entire
Severance Period on the Company's ordinary payroll dates, in equal installments,
and will be subject to standard payroll deductions and withholdings.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(iii)</b>The Company will pay the premiums necessary to continue Executive 's
life and health insurance during the Severance Period.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(iv)</b>The time period in which Executive is required to repay any
promissory note, loan or other indebtedness to the Company shall be extended by
sixty (60) months.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(v)</b>The Company will accelerate the vesting of the Options such that the
greater of the following shall vest within ten (10) days after the date
Executive signs the Release:&nbsp; (a) 50% of the unvested shares as of the
Termination Date subject to the Options (after taking into account any
additional acceleration of vesting Executive may be receiving under any plan
document(s) governing the Options instituted prior to or after this Agreement is
executed); or (b) all such shares that would have vested if Executive had worked
for the Company for twelve (12) additional months beyond the Termination Date.&nbsp;
This acceleration of vesting will be in addition to any acceleration of vesting
that the Executive would otherwise receive under the Company's 2000 Nonstatutory
Equity Incentive Plan, the Company's 1999 Equity Incentive Plan, or any other
plan document(s) governing the Options.&nbsp; Executive shall have sixty (60) months
to exercise any vested Options in addition to any time specified in the plan
document(s) governing the Options.&nbsp; The Options shall continue to be governed by
the terms of the applicable stock option agreements and stock option plan
documents.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(vi)</b>With respect to any Prior Grant intended to be an incentive stock
option, the acceleration of the vesting of the Prior Grant and the extension of
the time that Executive shall have to exercise the Prior Grant as provided in
Paragraph 1(b)(iv) of this Agreement are deemed to be a modification of the
Prior Grant within the meaning of Section 424(h) of the Internal Revenue Code
("Code").&nbsp; Such modification shall result in the granting of a new option as of
the date of execution of this Agreement, including providing a new grant date
for purposes of starting the holding period specified in Section 422(a)(1) of
the Code and for purposes of the provision that the option price be not less
than the fair market value of the stock at the time such option is granted as
specified in Section 422(b)(4) of the Code.&nbsp; If Executive and the Company agree
that the Prior Grant shall remain an incentive stock option and if the new
option meets the requirements for incentive stock options specified in Section
422(b) of the Code, and the $100,000 per year limitation specified in Section
422(d) of the Code as of the date of execution of this Agreement, then the
unexercised portion of the Prior Grant shall be appropriately modified as to the
date of grant and the option price; provided, however, that the option price
shall be the greater of the original option price of the Prior Grant or the fair
market value of the stock on the date of execution of this Agreement.&nbsp; If
Executive and the Company do not agree that such Prior Grant shall remain an
incentive stock option, then the Prior Grant shall be deemed to be a
nonstatutory stock option as of the date of execution of this Agreement, and the
Prior Grant shall be appropriately modified to reflect such changed status.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(c)Termination For Cause Procedure.&nbsp; </b>The Company may not terminate
Executive's employment for Cause unless and until Executive receives a copy of a
resolution duly adopted by the affirmative vote of at least a majority of the
Board of Directors of the Company ("Board") finding that in the good faith
opinion of the Board, Executive was guilty of the conduct constituting "Cause"
and specifying the particulars thereof in detail.&nbsp; The Company shall provide
Executive with reasonable notice of the Board vote and an opportunity for
Executive, together with Executive's counsel, to be heard before the Board.</p>
<p class="TabbedL1" style="margin-left:0in"><b>2.Definitions.</b></p>
<p class="TabbedL2" style="margin-left:0in"><b>(a)Definition of Cause.&nbsp; </b>For purposes of this Agreement, "Cause" shall
mean that Executive has committed, or there has occurred, one or more of the
following events:&nbsp; (1) conviction of any felony or misdemeanor involving moral
turpitude, fraud or act of dishonesty against the Company; (2) a finding by the
Board, after a good faith and reasonable factual investigation, that Executive
has engaged in gross misconduct; or (3) material violation or material breach of
any Company policy or statutory, fiduciary, or contractual duty of Executive to
the Company; <i>provided, however,</i> that in the event that any of the
foregoing events occurs, the Company shall provide notice to Executive
describing the nature of such event and Executive shall thereafter have ten (10)
days to cure such event if such event is capable of being cured.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(b)Definition of Good Reason. </b>For purposes of this Agreement, "Good
Reason" shall mean that any one of the following events occurs during the
Executive's employment with the Company without Executive's consent: (i) any
reduction of Executive's annual base salary (including bonus) as of the time
period immediately preceding the Change of Control, except to the extent that
the annual base salary (including bonus) of all other officers of the Company is
similarly reduced; (ii) any material reduction in the package of benefits and
incentives provided to the Executive, or any action by the Company which would
materially and adversely affect the Executive's participation or reduce the
Executive's benefits under any such plans, except to the extent that such
benefits and incentives of all other officers of the Company are similarly
reduced; (iii) any material change in Executive's position or responsibilities
(including the person or persons to whom Executive has reporting
responsibilities) that represents an adverse change from Executive's position or
responsibilities as in effect at any time within ninety (90) days preceding the
date of the Change of Control or at any time thereafter, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in bad faith
that is remedied by the Company promptly after notice thereof is given by
Executive; (iv) the Company's requiring Executive to relocate to any place
outside of a twenty-five (25) mile driving distance of Executive's current work
site, except for reasonably required travel on the business of the Company or
its affiliates that is not materially greater than such travel requirements
prior to the Change in Control or unless Executive accepts such relocation
opportunity; or (v) any failure to pay Executive any compensation or benefits to
which Executive is entitled within fifteen (15) days of the date due.&nbsp; Executive
may terminate his or her employment for Good Reason so long as Executive tenders
his resignation to the Company within thirty (30) days after the occurrence of
the event which forms the basis for his resignation for Good Reason. Executive
shall provide written notice to the Company describing the nature of the event
which forms the basis for Executive's resignation for Good Reason, and the
Company shall thereafter have ten (10) days to cure such event.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(c)Definition of Change of Control.&nbsp; </b>For purposes of this Agreement, a
"Change of Control" means: (i) a dissolution, liquidation or sale of all or
substantially all of the assets of the Company; (ii) a merger or consolidation
in which the Company is not the surviving corporation; (iii) a reverse merger in
which the Company is the surviving corporation but the shares of the Company's
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; (iv) the acquisition by any person, entity or group within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or any Affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors; or (v) an acquisition by the Company of an unaffiliated company, for
cash or stock of the Company, in which some or all of the members of senior
management of the acquired company are retained by the Company for employment by
the acquired company or the Company.</p>
<p class="TabbedL1" style="margin-left:0in"><b>3.</b>
Gross
Up Provision.&nbsp; </p>
<p class="TabbedL2" style="margin-left:0in"><b>(a)</b>In the event that any payment and the value of any benefit
(collectively, "Payments"), or any portion thereof, received or to be received
by Executive would otherwise be subject to excise tax under Section 4999 of the
Code, then the Company or the acquiring or successor
entity to the Company shall pay to Executive within ninety (90) days of the date
Executive becomes subject to the Excise Tax, an additional amount (the "Excise
Tax Gross-Up Payment") such that the net amount retained by the Executive, after
deduction of (i) any Excise Tax on the Payments and (ii) any federal, state and
local income or employment tax and Excise Tax upon the payment provided for by
this section 3, shall be equal to the Payments, reduced by the amount of any
United States federal, state and local income or employment tax liability of the
Executive if the Payments were not subject to the Excise Tax.</p>
<p class="TabbedL2" style="margin-left: 0in"><b>(b)</b>For purposes of determining whether any of
the Payments will be subject to the Excise Tax and the amount of such Excise
Tax:=</p>
<p class="TabbedL3" style="margin-left:0in"><b>(i)</b>Any other payments or benefits received or to be received by
Executive in connection with transactions contemplated by a Change in Control or
Executive's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company), shall
be treated as "parachute payments" within the meaning of Section&nbsp;280G of the
Code or any similar or successor provision, and all "excess parachute payments"
within the meaning of Section&nbsp;280G or any similar or successor provision shall
be treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company such other payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess parachute payments (in whole
or in part) represent reasonable compensation for services actually rendered
within the meaning of Section&nbsp;280G (or any similar or successor provision of the
Code) in excess of the base amount within the meaning of Section&nbsp;280G (or any
similar or successor provision of the Code), or are otherwise not subject to the
Excise Tax.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(ii)</b>The amount of the Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (i) the total amount of the Payments
or (ii) the amount of the excess parachute payments within the meaning of
Section&nbsp;280G.</p>
<p class="TabbedL3" style="margin-left:0in"><b>(iii)</b>The value of any non-cash benefits or any deferred payment or benefit
shall be determined by the accounting firm that is the Company's outside auditor
at the time of such determination, which firm must be reasonably acceptable to
Executive (the "Accounting Firm") in accordance with the principles of
Section&nbsp;280G of the Code.</p>
<p class="TabbedL2" style="margin-left: 0in"><b>(c)</b>For purposes of determining the amount of
the Excise Tax Gross-Up Payment, Executive shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the calendar
year in which the Excise Tax Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of Executive's residence on the date the Excise Tax Gross-Up Payment is to be
made, net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes.</p>
<p class="TabbedL2" style="margin-left: 0in"><b>(d)</b>In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account under this
section 3, Executive shall repay to the Company at the time that the amount of
such reduction in Excise Tax is finally determined the portion of the Excise Tax
Gross-Up Payment attributable to such reduction (plus the portion of the Excise
Tax Gross-Up Payment attributable to the Excise Tax and federal, state and local
income tax imposed on the Excise Tax Gross-Up Payment being repaid by Executive
if such repayment results in a reduction in Excise Tax and/or a federal, state
or local income tax deduction) plus interest on the amount of such repayment at
the rate provided in Section&nbsp;1274(b)(2)(B) of the Code.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(e)</b>In the event that the Excise Tax is determined to exceed the amount
taken into account under this section 3 (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Excise Tax
Gross-Up Payment), the Company shall make an additional Excise Tax Gross-Up
Payment in respect of such excess (plus any interest payable with respect to
such excess) at the time that the amount of such excess is finally determined in
accordance with the principles set forth in this section 3.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(f)</b>All determinations required to be made under this section 3 shall be
made by the Accounting Firm.&nbsp; The Company shall cause the Accounting Firm to
provide detailed supporting calculations of its determinations to the Company
and Executive.&nbsp; Notice must be given to the Accounting Firm within fifteen (15)
business days after an event entitling Executive to any Payments under this
Agreement.&nbsp; All fees and expenses of the Accounting Firm shall be borne solely
by the Company.&nbsp; The Accounting Firm's determinations must be made with
substantial authority (within the meaning of Section 6662 of the Code).</p>
<p class="TabbedL1" style="margin-left:0in"><b>4.Other Employment Terms and
Conditions.&nbsp; </b>The employment relationship between the parties shall be
governed by the general employment policies and procedures of the Company,
including those relating to the protection of confidential information and
assignment of inventions; provided, however, that when the terms of this
Agreement differ from or are in conflict with the Company's general employment
policies or procedures, this Agreement shall control.&nbsp; </p>
<p class="TabbedL1" style="margin-left:0in;page-break-after:avoid"><b>5.General Provisions.</b></p>
<p class="TabbedL2" style="margin-left:0in"><b>(a)</b>This Agreement, including all exhibits hereto, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
parties with regard to the subject matter hereof.&nbsp; It is entered into without
reliance on any promise or representation, written or oral, other than those
expressly contained herein, and it supersedes any other such promises or
representations.&nbsp; Notwithstanding the foregoing, nothing in this Agreement shall
affect the parties' obligations under the Stock Agreements or the Executive's
Employee Proprietary Information and Inventions Agreement.&nbsp; This Agreement
cannot be modified except in a writing signed by Executive and a duly-authorized
member of the Board.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(b)</b>Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective under applicable law.&nbsp; The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.&nbsp;
Any invalid or unenforceable provision shall be modified so as to be rendered
valid and enforceable in a manner consistent with the intent of the parties
insofar as possible.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(c)</b>The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder shall not be deemed to be
a waiver of such provision or right or any other provision or right of this
Agreement.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(d)</b>This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.&nbsp; Facsimile signatures shall be deemed as effective as
originals.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(e)</b>This Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive, the Company and their respective successors, assigns,
heirs, executives and administrators, except that Executive may not assign any
of his duties hereunder and he may not assign any of his rights hereunder
without the written consent of the Company.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(f)</b>If either party hereto bring any action to enforce such party's
rights hereunder, the prevailing party in any such action shall be entitled to
recover such party's reasonable attorneys' fees and costs incurred in connection
with such action.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(g)</b>For purposes of construction, this Agreement shall be deemed to have
been drafted by the Company, and the rule of construction of contracts that
ambiguities are construed against the drafting party shall be applied against
the Company.</p>
<p class="TabbedL2" style="margin-left:0in"><b>(h)</b>Any notice required to be given or delivered to the Company under the
terms of this Agreement shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices.&nbsp; Any notice
required to be given or delivered to Executive shall be in writing and addressed
to Executive at the address indicated herein or to the last known address
provided by Executive to the Company.&nbsp; All notices shall be deemed to have been
given or delivered upon: personal delivery; three (3) days after deposit in the
United States mail by certified or registered mail (return receipt requested);
one (1) business day after deposit with any return receipt express courier
(prepaid); or one (1) business day after transmission by facsimile.</p>
<p class="TabbedL2" style="text-indent: 0in"><b>
In Witness Whereof</b>, the parties
have executed this Agreement as of the day and year written below.</p>
<p class="MsoSignature" style="margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:3.75in;page-break-after:avoid">__/s/ Donald J.
Morrison_________________________</p>
<p class="MsoSignature" style="margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:3.75in;page-break-after:avoid"><b>
Don Morrison</b></p>
<p class="MsoSignature" style="margin-top:0in;margin-right:0in;margin-bottom:
12.0pt;margin-left:3.75in;page-break-after:avoid">
Address:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; </p>
<p class="MsoSignature" style="margin-top:0in;page-break-after:avoid">
Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
May 6, 2002&nbsp; </p>
<p class="MsoSignature" style="margin-top:.5in;margin-right:0in;margin-bottom:
12.0pt;margin-left:3.75in;page-break-after:avoid"><b>
Chordiant
software, inc.</b></p>
<p class="MsoSignature" style="text-indent: 0in; page-break-after: avoid; margin-left: 3.0in; margin-right: 0in; margin-top: 12.0pt; margin-bottom: .0001pt">
__/s/ Samuel T. Spadafora_____________________________</p>
<p class="MsoSignature" style="text-indent: 0in; page-break-after: avoid; margin-left: 3.0in; margin-right: 0in; margin-top: 0in; margin-bottom: .0001pt">
Name: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sam Spadafora&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
Title:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chairman&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class="MsoSignature" style="margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:3.75in;page-break-after:avoid">
Date:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
May 6, 2002&nbsp; </p>
<p class="MsoSignature" style="margin-top:12.0pt;margin-right:0in;margin-bottom:
12.0pt;margin-left:0in;text-indent:0in;page-break-after:avoid">&nbsp;</p>
<p class="MsoSignature" style="margin:0in;margin-bottom:.0001pt;text-indent:0in">
Exhibit&nbsp;A - Release Agreements</p>
<p>
<br clear="all" style="page-break-before:always">
&nbsp;</p>
<p class="MsoSignature" align="center" style="text-align: center; text-indent: 0in; margin-left: 0in; margin-right: 0in; margin-top: 0in; margin-bottom: 12.0pt">
<b>Exhibit A</b></p>
<p class="MsoNormal" align="center" style="text-align: center"><b>RELEASE
AGREEMENT FOR EMPLOYEES UNDER 40 YEARS OF AGE</b></p>
<p class="MsoBodyTextIndent" style="text-align:justify;text-indent:0in">In
exchange for the severance benefits I am receiving to which I would not
otherwise be entitled, I hereby release, acquit and forever discharge the
Company, and its officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date of this
Release Agreement, including but not limited to:&nbsp; all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the California Fair
Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.</p>
<p class="MsoNormal" style="text-align: justify; margin-bottom: 12.0pt">
I UNDERSTAND THAT THIS RELEASE
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.&nbsp; In giving this release,
which includes claims which may be unknown to me at present, I acknowledge that
I have read and understand Section 1542 of the California Civil Code which reads
as follows:&nbsp; <b>"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with
the debtor."</b> I hereby expressly waive and relinquish all rights and benefits
under that section and any law of any jurisdiction of similar effect with
respect to my release of any unknown or unsuspected claims I may have against
the Company.</p>
<p class="MsoNormal" style="margin-bottom: 12.0pt">
</p>
<p class="MsoNormal"><b>
Dated:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Agreed: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></b></p>
<p class="MsoNormal"><b>&nbsp;&nbsp;
[Employee's Name]</b></p>
<p><b>
<br clear="all" style="page-break-before:always">
&nbsp;</b></p>
<p class="MsoNormal" align="center" style="text-align: center"><b>RELEASE
AGREEMENT FOR EMPLOYEES 40 YEARS OF AGE OR OLDER</b></p>
<p class="MsoBodyTextIndent" style="text-align:justify;text-indent:0in">In
exchange for the severance benefits I am receiving to which I would not
otherwise be entitled, I hereby release, acquit and forever discharge the
Company, and its officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys'
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to and including the execution date of this
Release Agreement, including but not limited to:&nbsp; all such claims and demands
directly or indirectly arising out of or in any way connected with my employment
with the Company or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); the California
Fair Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; harassment; fraud; defamation; emotional distress;
and breach of the implied covenant of good faith and fair dealing.</p>
<p class="MsoBodyTextIndent2" style="text-indent:0in">I acknowledge that I am
knowingly and voluntarily waiving and releasing any rights I may have under the
ADEA, as amended.&nbsp; I also acknowledge that the consideration given for the
waiver and release in the preceding paragraph hereof is in addition to anything
of value to which I was already entitled.&nbsp; I further acknowledge that I have
been advised by this writing, as required by the ADEA, that:&nbsp; (a)&nbsp;my waiver and
release do not apply to any rights or claims that may arise after the execution
date of this Release; (b)&nbsp;I have been advised hereby that I have the right to
consult with an attorney prior to executing this Release; (c)&nbsp;I have twenty-one
(21) days to consider this Release (although I may choose to voluntarily execute
this release earlier); (d)&nbsp;I have seven (7) days following my execution of this
Release to revoke my agreement to it; and (e)&nbsp;this Release will not be effective
until the date upon which the revocation period has expired, which will be the
eighth day after this Release is executed by me.&nbsp; </p>
<p class="MsoNormal" style="text-align: justify; margin-bottom: 12.0pt">
I UNDERSTAND THAT THIS RELEASE
INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.&nbsp; In giving this release,
which includes claims which may be unknown to me at present, I acknowledge that
I have read and understand Section 1542 of the California Civil Code which reads
as follows:&nbsp; <b>"A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with
the debtor."</b> I hereby expressly waive and relinquish all rights and benefits
under that section and any law of any jurisdiction of similar effect with
respect to my release of any unknown or unsuspected claims I may have against
the Company.</p>
<p class="MsoNormal" style="margin-bottom: 12.0pt">
</p>
<p class="MsoNormal"><b>
Dated:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Agreed: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></b></p>
<p class="MsoNormal"><b>&nbsp;&nbsp;
[Employee's Name]</b></p>
<p class="MsoSignature" style="margin:0in;margin-bottom:.0001pt;text-indent:0in">
</p>
<p class="MsoSignature" style="margin:0in;margin-bottom:.0001pt;text-indent:0in">
</p>

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