Common use of Director Designation Rights Clause in Contracts

Director Designation Rights. On or prior to the date hereof, the Board of Directors of Stratus has adopted resolutions that (a) increase the number of individuals that constitute the whole Board by one person, and (b) resolved to fill the newly-created directorship, effective as of the date hereof, with an individual designated by Xxxxxxx (a “Designated Director”) and (c) specify the class to which such Designated Director shall be appointed. For so long as Xxxxxxx and its Affiliates are the Beneficial Owners of at least 5.0% of the issued and outstanding shares of Stratus Common Stock, then Xxxxxxx shall have the right to designate one Designated Director. In the event that Xxxxxxx and its Affiliates are the Beneficial Owners of less than 5.0% of the issued and outstanding shares of Stratus Common Stock, Xxxxxxx shall have no right to designate any directors to the Board. The Designated Director shall, in the reasonable judgment of Stratus, (a) have the requisite skill and experience to serve as a director of a publicly traded company, (b) not be prohibited or disqualified from serving as a director of Stratus pursuant to any rule or regulation of the SEC or NASDAQ or by applicable law, and (c) have not engaged in (i) acts or omissions constituting a breach of such Designated Director's duty of loyalty to any organization, (ii) any transaction from which such Designated Director derived an improper personal benefit, or (iii) acts or omissions that involve intentional misconduct, intentional violation of law or crimes of moral turpitude. Xxxxxxx shall timely provide, and shall use its commercially reasonable efforts to cause the Designated Director to timely provide, Stratus with accurate and complete information relating to Xxxxxxx and the Designated Director that may be required to be disclosed by Stratus under the Securities Act or the Exchange Act. In addition, at Stratus's request, Xxxxxxx shall cause the Designated Director to complete and execute Stratus's standard director and officer questionnaire prior to being admitted to the Board or standing for reelection at an annual meeting of stockholders or at such other time as may be reasonably requested by Stratus. The Parties agree that the initial Designated Director shall be Xxxxxxx Xxxxxx. Not less than one hundred twenty (120) days prior to each annual meeting of stockholders of Stratus (assuming for these purposes that each such annual meeting shall be held on the anniversary of the prior year's annual meeting) at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders, Xxxxxxx shall provide Stratus with written notice of the name of the Designated Director to be nominated for election at such meeting. Within ten (10) days after receipt of such notice, Stratus shall provide Xxxxxxx with written notice as to whether the Designated Director satisfies the requirements of Section 3.1. If it is determined that a Designated Director does not satisfy the requirements of Section 3.1, then Xxxxxxx shall continue to appoint replacement designees in a like manner until the requirements of Section 3.1 has been satisfied. In accordance with the terms herein, Stratus shall nominate the Designated Director for election to the Board at each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders. If elected, the Designated Director will hold office until his or her term expires and such Designated Director's successor has been duly elected and qualified or until such Designated Director's earlier death, resignation or removal. Prior to the termination of rights to designate a director as provided herein: (a) in connection with each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders, and subject to the requirements of this Section 3.1, the Board shall (i) nominate the Designated Director for election at such meeting and (ii) shall not submit to Stratus's stockholders a greater number of Board nominees for election at such meeting than positions to be filled by election at such meeting; (b) in connection with each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders, and subject to the provisions of this Section 3.1, Stratus will take all actions necessary or advisable to cause the Board to recommend that stockholders vote “FOR” the election of the Designated Director and to solicit proxies in favor of the Designated Director at any such meeting; (c) Xxxxxxx shall, and shall cause each Affiliate of Xxxxxxx holding shares of Stratus Common Stock to, at any annual or special meeting of stockholders of Stratus, however called, including any adjournment or postponement thereof, appear at each such meeting or otherwise cause its shares of Stratus Common Stock to be counted as present thereat for purposes of calculating a quorum; (d) if a Designated Director is nominated and not elected at the annual meeting of stockholders, then Xxxxxxx shall provide Stratus the name of a replacement director and, provided that such person satisfies the requirements of this Section 3.1, the Board and Stratus shall take such action as may be necessary to appoint such person to serve as a Designated Director to the Board, whether as a director in such class of directors to which the original Designated Director was appointed or otherwise, including, if applicable, increasing the size of the Board and appointing such Designated Director to fill the newly-created directorship; (e) the Designated Director may be removed for cause pursuant to and in accordance with Section 141 of the Delaware General Corporation Law; (f) upon written notice from Stratus to Xxxxxxx that a Resignation Event has occurred, which notice shall set forth in reasonable detail the facts and circumstances constituting the Resignation Event, Xxxxxxx will cause the applicable Designated Director to resign as a member of the Board within two (2) Business Days of such written notice, and any vacancy created by such resignation shall be filled by the Board with an individual designated by Xxxxxxx who, subject to the requirements of Section 3.1 of this Agreement, shall become a Designated Director; and (g) if a Designated Director ceases to continue in office for any reason, Xxxxxxx shall designate a replacement director and, subject to Section 2(c), the Board shall take such action as is necessary or appropriate to cause such replacement director to be appointed to the vacancy on the Board created by the Designated Director ceasing to serve on the Board. Prior to making a determination that any Resignation Event has occurred, the Board shall provide such Designated Director with proper notice of a meeting of the Board to discuss and, if applicable, to dispute the proposed determination. At such duly called and held Board meeting, the Board shall provide such Designated Director with a reasonable opportunity to be heard and to present information relevant to the Board's proposed determination. The Board may make a determination that a Resignation Event has occurred only following its consideration in good faith of such information presented by such Designated Director. Prior to designating a Designated Director, Xxxxxxx shall enter into a written agreement with such Designated Director whereby such Designated Director agrees to resign as a member of the Board upon a Resignation Event or as otherwise provided therein. Xxxxxxx acknowledges and agrees that such an agreement is in the best interest of Stratus and Xxxxxxx, and that Stratus shall be a third-party beneficiary of the terms and conditions of such an agreement, and Stratus shall have the right to enforce such an agreement to the same extent as the parties thereto. Stratus shall not take any action that would lessen, restrict, prevent or otherwise have an adverse effect upon the foregoing rights of Xxxxxxx to Board representation; provided, however, that Stratus shall not be prohibited from taking such action that the Board determines may be necessary to (i) comply with any rule or regulation of the SEC or NASDAQ or (ii) comply with applicable Law.

Director Designation Rights. (a) On or prior to the date hereof, the Board of Directors of Stratus has adopted shall adopt resolutions that (ai) increase the number of individuals natural persons that constitute the whole Board by one person, (1) person and (bii) resolved to fill the newly-vacancy created directorship, effective as by virtue of such increase in the size of the date hereof, Board with an individual designated by Xxxxxxx the Purchaser (a the “Designated Director”), pursuant to Section 7.1(d) and (c) specify the class to which such Designated Director shall be appointed. For so long as Xxxxxxx and its Affiliates are the Beneficial Owners of at least 5.0% of the issued and outstanding shares of Stratus Common StockCopano LLC Agreement; provided, then Xxxxxxx shall have however, that the right to designate one Designated Director. In the event that Xxxxxxx and its Affiliates are the Beneficial Owners of less than 5.0% of the issued and outstanding shares of Stratus Common Stock, Xxxxxxx shall have no right to designate any directors to the Board. The Designated Director shall, in the reasonable judgment of StratusCopano, (aA) have the requisite skill and experience to serve as a director of a publicly traded company, (bB) not be prohibited or disqualified from serving as a director of Stratus Copano pursuant to any rule or regulation of the SEC or Commission, NASDAQ or by applicable law, Law and (cC) have not engaged in (i) acts or omissions constituting a breach of such Designated Director's duty of loyalty otherwise be reasonably acceptable to any organization, (ii) any transaction from which such Designated Director derived an improper personal benefit, or (iii) acts or omissions that involve intentional misconduct, intentional violation of law or crimes of moral turpitudeCopano. Xxxxxxx shall timely provide, The Purchaser and shall use its commercially reasonable efforts to cause the Designated Director agree to timely provide, Stratus provide Copano with accurate and complete information relating to Xxxxxxx the Purchaser and the Designated Director that may be required to be disclosed by Stratus Copano under the Securities and Exchange Act or of 1934, as amended, and the Exchange Actrules and regulations promulgated thereunder. In addition, at Stratus's Copano’s request, Xxxxxxx the Purchaser shall cause the Designated Director to complete and execute Stratus's standard director Copano’s Standard Director and officer questionnaire Officer Questionnaire prior to being admitted to the Board or standing for reelection at an annual meeting of stockholders Unitholders or at such other time as may be reasonably requested by Stratus. The Parties agree that Copano. (b) Until a Termination Event, and subject to the initial Designated Director shall be Xxxxxxx Xxxxxx. Not less than one hundred twenty (120) days prior to each annual meeting of stockholders of Stratus (assuming for these purposes that each such annual meeting shall be held on the anniversary of the prior year's annual meeting) at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders, Xxxxxxx shall provide Stratus with written notice of the name of the Designated Director to be nominated for election at such meeting. Within ten (10) days after receipt of such notice, Stratus shall provide Xxxxxxx with written notice as to whether the Designated Director satisfies the requirements conditions of Section 3.1. If it is determined that a Designated Director does not satisfy the requirements 2(a) of Section 3.1this Agreement, then Xxxxxxx shall continue to appoint replacement designees in a like manner until the requirements of Section 3.1 has been satisfied. In accordance with the terms herein, Stratus Copano shall nominate the Designated Director for re-election to the Board at each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholdersUnitholders. If elected, the The Designated Director will hold office until his or her term expires and such Designated Director's ’s successor has been duly elected and qualified or until such Designated Director's ’s earlier death, resignation or removal. . (c) Prior to the termination of rights to designate a director as provided hereinTermination Event: (ai) in connection with each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholdersUnitholders, and subject to the requirements conditions of Section 2(a) of this Section 3.1Agreement, the Board shall (i) nominate the Designated Director for election at such meeting and (ii) shall not submit to Stratus's stockholders a greater number of Board nominees for election at such meeting than positions to be filled by election at such meeting; (b) in connection with each annual meeting of stockholders at which directors in such class of directors to which such Designated Director is appointed are to be elected by a vote of Stratus' stockholders, and subject to the provisions of this Section 3.1, Stratus Copano will take all actions necessary or advisable to cause the Board to unanimously recommend that stockholders Unitholders vote “FOR” the election of the Designated Director and to solicit proxies in favor of the Designated Director at any such meetingDirector; (cii) Xxxxxxx shall, and shall cause each Affiliate of Xxxxxxx holding shares of Stratus Common Stock to, at any annual or special meeting of stockholders of Stratus, however called, including any adjournment or postponement thereof, appear at each such meeting or otherwise cause its shares of Stratus Common Stock to be counted as present thereat for purposes of calculating a quorum; (d) if a Designated Director is nominated and not elected at the annual meeting of stockholders, then Xxxxxxx shall provide Stratus the name of a replacement director and, provided that such person satisfies the requirements of this Section 3.1, the Board and Stratus shall take such action as may be necessary to appoint such person to serve as a Designated Director to the Board, whether as a director in such class of directors to which the original Designated Director was appointed or otherwise, including, if applicable, increasing the size of the Board and appointing such Designated Director to fill the newly-created directorship; (e) the Designated Director may be removed for cause pursuant to and in accordance with Section 141 7.1(d) of the Delaware General Corporation Law;Copano LLC Agreement, and any vacancy created by such removal shall be filled by the Board with an individual designated by the Purchaser who, subject to the conditions of Section 2(a) of this Agreement, shall become the Designated Director; and (fiii) upon written notice from Stratus Copano to Xxxxxxx the Purchaser that a Resignation Event has occurred, which notice shall set forth in reasonable detail the facts and circumstances constituting the Resignation Event, Xxxxxxx the Purchaser will cause the applicable Designated Director then serving as a member of the Board to resign as a member of the Board within two (2) Business Days of such written notice, and any vacancy created by such resignation shall be filled by the Board with an individual designated by Xxxxxxx the Purchaser who, subject to the requirements conditions of Section 3.1 2(a) of this Agreement, shall become a the Designated Director; and. (gd) if a Designated Director ceases Any action by the Purchaser to continue in office for any reason, Xxxxxxx shall designate a replacement director and, subject to Section 2(c), the Board shall take such action as is necessary or appropriate to cause such replacement director to be appointed to the vacancy on the Board created by replace the Designated Director ceasing shall be evidenced in writing furnished to serve Copano and shall be signed by or on the Board. Prior to making a determination that any Resignation Event has occurred, the Board shall provide such Designated Director with proper notice of a meeting behalf of the Board to discuss and, if applicable, to dispute the proposed determination. At such duly called and held Board meeting, the Board shall provide such Designated Director with a reasonable opportunity to be heard and to present information relevant to the Board's proposed determination. The Board may make a determination that a Resignation Event has occurred only following its consideration in good faith of such information presented by such Designated Director. Purchaser. (e) Prior to designating a Designated Director, Xxxxxxx the Purchaser shall enter into a written agreement with such the Designated Director whereby such Designated Director agrees to resign as a member of the Board upon a Resignation Event or as otherwise provided thereinEvent. Xxxxxxx The Purchaser acknowledges and agrees that such an agreement is in the best interest of Stratus Copano and Xxxxxxxthe Purchaser, and that Stratus Copano shall be a third-third party beneficiary of the terms and conditions of such an agreement, and Stratus Copano shall have the right to enforce such an agreement to the same extent as the parties thereto. Stratus . (f) Copano shall not take any action that would lessen, restrict, prevent or otherwise have an adverse effect upon the foregoing rights of Xxxxxxx the Purchaser to Board representation; provided, however, that Stratus Copano shall not be prohibited from taking such action that the Board determines (i) may be necessary to (iA) comply with any rule or regulation of the SEC Commission or NASDAQ or (iiB) comply with applicable LawLaw or (ii) is required to achieve compliance with the provisions of the Copano LLC Agreement.