Common use of Members of the Board Clause in Contracts

Members of the Board. (a) From and after the Stockholder Approval Date, if any, and until the Preliminary Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which three members will be designees of Investor (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval of the Company, and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after the Stockholder Approval Date. If necessary to effectuate the placement of the Investor Nominees on the Board, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent of the Company. At any time before the Preliminary Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-third of the members of the Board shall be Investor Nominees. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nominees. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nominees. (d) Investor will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor Nominee. (e) The Company will support the nomination of and the election of each Investor Nominee to the Board, and the Company will exercise all authority under applicable law to cause each Investor Nominee to be elected to the Board. Without limiting the generality of the foregoing, with respect to each meeting of shareholders of the Company at which Directors are to be elected, the Company shall use its reasonable efforts to solicit from the shareholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nominee.

Members of the Board. (a) From Subject to the right of the Nominating Committee to approve nominees for Director as set forth in Section 2.2(a), from and after the Stockholder Approval Date, if any, the Company shall amend its By-laws, and until the Preliminary Threshold Date, the Company and Investor shall will take all actions necessary to cause the Board to be structured to consist of no less than nine eleven members, of which three four members will be designees of Investor (at least one in each class of the Board) (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval of the Company, and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after the Stockholder Approval Date. If necessary to effectuate the placement of the Investor Nominees on the Board, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected Thereafter, at each annual or special meeting of stockholders of the Company at, or the taking of action by written consent of stockholders of the Company with respect to which any class of Directors is to be Art Solomon elected, Investor shall have the right (but not obligation) pursuant to this Agreement and Xxxxx Xxxxx; provided, pursuant to the By-laws of the Company to designate nominees to the Board (subject to right of the Nominating Committee to approve nominees for Director as set forth in Section 2.2(a)) such that Investor may at any time appoint any other person, subject shall have on the Board of Directors a number of representatives equal to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent a percentage of the Company. At any time before the Preliminary Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-third of the members of the Board of Directors that is equal to the percentage of Company Common Stock Beneficially Owned by Investor, on a Fully Diluted Basis; provided, however, that (i) if the Investor would be entitled to a fractional number of representatives, the Investor shall instead be entitled to a number of representatives equal to the next higher number, (ii) in no event shall the Investor Nomineesbe entitled to more than four representatives and (iii) after the occurrence of a Termination Event, if any, Investor shall not be entitled to any representatives on the Board of Directors. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nominees. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nominees. (d) Investor will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, to a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor Nominee. (ec) The Subject to the right of the Nominating Committee to approve nominees for Director as set forth in Section 2.2(a), the Company will support the nomination of and the election of each Investor Nominee to the Board, and the Company will exercise all authority under applicable law to cause each Investor Nominee to be elected to the Board. Without limiting the generality of the foregoing, with respect to each meeting of shareholders stockholders of the Company at which Directors are to be elected, the Company shall use its reasonable efforts to solicit from the shareholders stockholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nominee. (d) During the period that Investor shall have the right to designate nominees to the Board under this Agreement, the number of Directors on the Board shall not exceed eleven members at any time. (e) If Investor's right to nominate directors to the Board is reduced, Investor shall cause the applicable number of its Investor Nominees to immediately resign (regardless of the remaining term, if any) from the Board. (f) It is hereby agreed that any decision to take or omit to take any action on the Company's behalf with respect to any transaction or agreement involving or relating to Investor, including the timing and amounts of Stock Purchases under the Stock Purchase Agreement, shall be subject only to the approval of a majority of non- Investor Nominee Directors, notwithstanding the supermajority provisions of the Company Charter and the By-laws required by the Stock Purchase Agreement but subject to the provisions of Section 5.10 of the Stock Purchase Agreement.

Members of the Board. a. The Board consists of six (a6) From members, three (3) directors to be appointed by the Party A (the “Party A Directors”) and after three (3) directors to be appointed by Party B (the Stockholder Approval Date“Party B Directors”) (all of the directors shall be collectively referred to as the “Directors”). In the event, if anyhowever, that Party A fails to pay a portion of the required Milestone Payment, in the event such Milestone Payment has been triggered, and until the Preliminary Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist its proportion of no less than nine members, of which three members will be designees of Investor (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval equity right ownership of the Company’s Equity rights is reduced accordingly under the JV Agreement, each one-third reduction of such equity right ownership shall cause Party A to forfeit the right to appoint one (1) director, and Party B shall have the right to appoint each such director in its place. b. by notice in writing to the Company and Investor by the Equityholder entitled to appoint such Director, as set forth above. A Director shall only be dismissed and/or replaced by the Equityholder that appointed him/her subject to Article 25a) above. The term of office of the Directors will take all actions necessary to cause such nominees to become members be renewed every three (3) years. c. The Chairperson of the Board as soon as practicable after the Stockholder Approval Date. If necessary to effectuate the placement shall preside at every meeting of the Investor Nominees on the Board, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent of the Company. At any time before the Preliminary Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-third of the members Chairperson of the Board shall be Investor Nominees. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members one of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold DateDirectors appointed by Party B, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members The Vice Chairperson of the Board shall be Investor Nomineesappointed by Party A. If at any meeting the Chairperson is not present within fifteen (15) minutes of the time fixed for the meeting, the Directors present shall choose someone to be the Chairperson of such meeting. Subject to the protective provisions set forth in Article 28, the Chairperson shall be entitled to an additional or casting vote in a Board meeting. The duties and responsibilities of the Chairperson and Vice Chairperson, are as further described in this Articles of Association. (c) From and after the Second Threshold Date and until the Final Threshold Date, d. A Director may appoint an alternate for a specific matter or for a certain meeting by issuance of notice in this regard to the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and two (2) days prior to the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) date of the Board meeting. If a Director serves as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Datean alternate for one or more additional directors, if the total size of the Board is increased, he/she shall have the number of Investor Nominees shall also be increased such that at least one-ninth votes equal to the number of directors he/she represents. e. None of the members of the Board Directors or alternate Directors shall be Investor Nominees. (d) Investor will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, a felony, (iii) the election of such person would violate any law, or (iv) any event required entitled to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of receive from the Company (the "Independent any remuneration for their services as Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor Nominee. (e) The Company will support the nomination of and the election of each Investor Nominee to the Board, and the Company will exercise all authority under applicable law to cause each Investor Nominee to be elected to the Board. Without limiting the generality of the foregoing, with respect to each meeting of shareholders of the Company at which Directors are to be elected, the Company shall use its reasonable efforts to solicit from the shareholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nominee.

Members of the Board. (a) From and after As of the Stockholder Approval Date, if any, and until the Preliminary Threshold Closing Date, the Company and Investor shall will take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which three members will be designees of Investor (at least one in each class of the Board) (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval of the Company, and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after of the Stockholder Approval Closing Date. The initial Investor Nominees shall be Xxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx. If necessary to effectuate the placement of the Investor Nominees on the Board, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected Thereafter until the occurrence of a Termination Event, at each annual or special meeting of stockholders of the Company at, or the taking of action by written consent of stockholders of the Company with respect to which any class of Directors is to be Art Solomon elected, Investor shall have the right (but not obligation) pursuant to this Agreement and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject pursuant to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent By-laws of the Company. At any time before Company to designate three nominees to the Preliminary Threshold Date, Board if the total size of the Board is increaseda single class, the number of Investor Nominees shall also be increased such that at least one-third of the members of and one designee per class if the Board shall be Investor Nomineesis divided into three classes. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nominees. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nominees. (d) Investor will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, to a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor Nominee. (ec) The Company will support the nomination of and the election of each Investor Nominee to the Board, and the Company will exercise all authority under applicable law to cause each Investor Nominee to be elected to the Board. Without limiting the generality of the foregoing, with respect to each meeting of shareholders stockholders of the Company at which Directors are to be elected, the Company shall use its reasonable efforts to solicit from the shareholders stockholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nominee. (d) During the period that Investor shall have the right to designate nominees to the Board under this Agreement, the number of Directors on the Board shall not exceed nine at any time. (e) If Investor's right to nominate directors to the Board is reduced, Investor shall cause the applicable number of its Investor Nominees to immediately resign (regardless of the remaining term, if any) from the Board. (f) It is hereby agreed that any decision to take or omit to take any action on the Company's behalf with respect to any transaction or agreement involving or relating to Investor shall be subject only to the approval of a majority of non-Investor Nominee Directors.

Members of the Board. (a) From and after As of the Stockholder Approval Date, if any, and until the Preliminary Threshold Closing Date, the Company and Investor shall will take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which three members will be designees of Investor (at least one in each class of the Board) (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval of the Company, and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after of the Stockholder Approval Closing Date. If The initial Investor Nominees shall be Robexx X. Xxxxxxx, Xxrrx X. Xxxxx xxx Kennxxx X. Xxxxxx. Xx necessary to effectuate the placement of the Investor Nominees on the Board, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected Thereafter until the occurrence of a Termination Event, at each annual or special meeting of stockholders of the Company at, or the taking of action by written consent of stockholders of the Company with respect to which any class of Directors is to be Art Solomon elected, Investor shall have the right (but not obligation) pursuant to this Agreement and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject pursuant to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent By-laws of the Company. At any time before Company to designate three nominees to the Preliminary Threshold Date, Board if the total size of the Board is increaseda single class, the number of Investor Nominees shall also be increased such that at least one-third of the members of and one designee per class if the Board shall be Investor Nomineesis divided into three classes. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nominees. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nominees. (d) Investor will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, to a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor Nominee. (ec) The Company will support the nomination of and the election of each Investor Nominee to the Board, and the Company will exercise all authority under applicable law to cause each Investor Nominee to be elected to the Board. Without limiting the generality of the foregoing, with respect to each meeting of shareholders stockholders of the Company at which Directors are to be elected, the Company shall use its reasonable efforts to solicit from the shareholders stockholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nominee. (d) During the period that Investor shall have the right to designate nominees to the Board under this Agreement, the number of Directors on the Board shall not exceed nine at any time. (e) If Investor's right to nominate directors to the Board is reduced, Investor shall cause the applicable number of its Investor Nominees to immediately resign (regardless of the remaining term, if any) from the Board. (f) It is hereby agreed that any decision to take or omit to take any action on the Company's behalf with respect to any transaction or agreement involving or relating to Investor shall be subject only to the approval of a majority of non-Investor Nominee Directors.

Members of the Board. (a) From and after Prior to the Stockholder Approval Date, if any, and until the Preliminary Threshold DateClosing, the Company Board is comprised of three members of management of Gottschalks, one person related to certain members of management of Gottschalks and five independent directors. Immediately following the Closing, Gottschalks, Management and ECI will take all action necessary to cause two Investor Nominees (hereinafter defined) to be added to the Board. Thereafter, subject to the terms of this Agreement, at each annual or special meeting of stockholders of Gottschalks at, or the taking of action by written consent of stockholders of Gottschalks with respect to, which any Directors are to be elected, Gottschalks, Management and Investor shall will take all actions necessary action required by this Agreement to cause the Board to be structured to consist of no less than nine eleven (11) members, of which three two (2) members will be designees of Investor ECI (the "Investor Nominees"), two ) and the remaining nine (9) members will consist of which shall be chosen at the sole discretion members of Investor management or persons affiliated with management that are designated by Management (the "Initial Investor Management Nominees") and one of which shall be subject to independent directors (the reasonable approval of the Company"Independent Nominees"), and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after the Stockholder Approval Date. If necessary to effectuate the placement of the Investor Nominees on the Boardcollectively, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx"Designated Board"; provided, however, that the Designated Board shall be increased to twelve (12) members, and Investor may shall be entitled to a total of three (3) representatives on the Designated Board, if and during such time as Investor Beneficially Owns a number of shares of Gottschalks Common Stock equal to at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent least 30% of the Company. At any time before outstanding Gottschalks Common Stock, on a fully diluted basis. (b) Investor's representation on the Preliminary Threshold Date, if Designated Board will be reduced to one representative and the total size of the Designated Board is increased, will be reduced by the number of Investor Nominees shall also be increased such that at least one-third so resigning if either: (i) Investor disposes of more than 700,000 shares of Gottschalks Common Stock; or (ii) Investor and its Affiliates Beneficially Own a number of shares of Gottschalks Common Stock equal to less than 10% of the members of the Board shall be Investor Nominees. (b) From and after the Preliminary Threshold Date and until the Second Threshold Dateoutstanding Gottschalks Common Stock, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nomineeson a fully diluted basis. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause Investor's representation on the Board will be terminated on the earlier of: (i) the date Investor disposes of more than 1,350,000 shares of Gottschalks Common Stock; or (ii) Investor and its Affiliates Beneficially Own a number of shares of Gottschalks Common Stock equal to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) 5% of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Dateoutstanding Gottschalks Common Stock, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nomineeson a fully diluted basis. (d) Subject to the terms of this Agreement: (i) Investor will has the right to designate the Investor Nominees; (ii) Xxxxxx Xxxx (if he is alive and has the capacity) or Xxxx Xxxx (if Xxxxxx Xxxx is not alive or no longer has the capacity) has the right to designate the Management Nominees; and (iii) the Nominating Committee, or the Board if there is no Nominating Committee, has the right to designate the Independent Nominees. In the event both Xxxxxx Xxxx and Xxxx Xxxx are deceased or incapacitated, the Management Nominees shall be chosen by the Chief Executive Officer of Gottschalks. (e) Investor and Management each agrees not to name any person as an Investor Nominee a nominee to the Board if (i) such person is not reasonably experienced in business, business or financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Exchange Act has occurred with respect to such person. Investor and Management, respectively, shall each use its reasonable efforts to afford the independent directors Independent Nominees of the Company (the "Independent Directors") Gottschalks a reasonable opportunity to meet any individual that Investor it is considering naming as an Investor Nomineea nominee to the Board. (ef) The Company Subject to Section 6.1 of this Agreement, Gottschalks will support the nomination of and the election of each Investor Nominee, each Management Nominee and each Independent Nominee to the Board, and the Company Gottschalks will exercise all authority under applicable law to cause each Investor Nominee, each Management Nominee and each Independent Nominee to be elected to the BoardBoard as provided herein. Without limiting the generality of the foregoing, with respect to each meeting of shareholders stockholders of the Company Gottschalks at which Directors are to be elected, the Company Gottschalks shall use its reasonable efforts to solicit from the shareholders stockholders of the Company Gottschalks eligible to vote in the election of Directors proxies in favor of each Investor Nominee, each Management Nominee and each Independent Nominee. (g) Subject to Section 6.1 of this Agreement: (i) During the period under this Agreement, if any, that Investor shall be entitled pursuant to the proviso of Section 2.1(a) to designate three Investor Nominees, if the total size of the Board is later increased (other than as the result of an acquisition transaction approved by the Board) Investor shall be entitled to a proportionate increase in the number of Investor Nominees. The new number of Investor Nominees shall be calculated by multiplying 3/12 by the size of the new Board (excluding any Directors who have been added as a result of any acquisition transaction approved by the Board) and rounding the result up to the next whole number where the resulting fraction is .5 or above. The table below is provided by way of example: (ii) During the period under this Agreement, if any, that Investor shall be entitled to designate two Investor Nominees, if the total size of the Board is increased (other than as the result of an acquisition transaction approved by the Board), Investor shall be entitled to a proportionate increase in the number of Investor Nominees. The new number of Investor Nominees shall be calculated by multiplying 2/11 by the size of the new Board (excluding any Directors who have been added as a result of any acquisition transaction approved by the Board) and rounding the result up to the next whole number where the resulting fraction is .5 or above. The table below is provided by way of example: (iii) During the period under this Agreement, if any, that Investor shall be entitled to designate one Investor Nominee, if the total size of the Board is increased (other than as the result of an acquisition transaction approved by the Board), Investor shall be entitled to a proportionate increase in the number of Investor Nominees. The new number of Investor Nominees shall be calculated by multiplying 1/11 by the size of the new Board (excluding any Directors who have been added as a result of any acquisition transaction approved by the Board) and rounding the result up to the next whole number where the resulting fraction is .5 or above. The table below is provided by way of example: (h) If the Board is increased as provided in paragraph (g) of this Section 2.1, other than those new Directors which must be Investor Nominees pursuant to such paragraph (g), new Directors to be added to the Board shall be either Management Nominees or Independent Nominees. Such Board, as then constituted, will be the "Designated Board" for all purposes hereunder. (i) If Investor's right to nominate directors to the Board is reduced or terminated as set forth in this Agreement, Investor shall cause the applicable number of its Investor Nominees to immediately resign (regardless of the remaining term, if any) and, in the event that the number of Investor Nominees is reduced rather than terminated, the Designated Board shall be reduced in size by the number of Investor Nominees so resigning. (j) Except as otherwise set forth in this Section 2.1, Gottschalks shall not reduce the number of Investor Nominees or Independent Nominees without Investor's consent.

Members of the Board. (a) From and after Prior to the Stockholder Approval Date, if any, and until the Preliminary Threshold DateClosing, the Company Board is comprised of three members of management of Gottschalks, one person related to certain members of management of Gottschalks and five independent directors. Immediately following the Closing, Gottschalks, Management and ECI will take all action necessary to cause two Investor Nominees (hereinafter defined) to be added to the Board. Thereafter, subject to the terms of this Agreement, at each annual or special meeting of stockholders of Gottschalks at, or the taking of action by written consent of stockholders of Gottschalks with respect to, which any Directors are to be elected, Gottschalks, Management and Investor shall will take all actions necessary action required by this Agreement to cause the Board to be structured to consist of no less than nine eleven (11) members, of which three two (2) members will be designees of Investor ECI (the "Investor Nominees"), two ) and the remaining nine (9) members will consist of which shall be chosen at the sole discretion members of Investor management or persons affiliated with management that are designated by Management (the "Initial Investor Management Nominees") and one of which shall be subject to independent directors (the reasonable approval of the Company"Independent Nominees"), and the Company and Investor will take all actions necessary to cause such nominees to become members of the Board as soon as practicable after the Stockholder Approval Date. If necessary to effectuate the placement of the Investor Nominees on the Boardcollectively, the Company shall solicit the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx"Designated Board"; provided, however, that the Designated Board shall be increased to twelve (12) members, and Investor may shall be entitled to a total of three (3) representatives on the Designated Board, if and during such time as Investor Beneficially Owns a number of shares of Gottschalks Common Stock equal to at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent least 30% of the Company. At any time before outstanding Gottschalks Common Stock, on a fully diluted basis. (b) Investor's representation on the Preliminary Threshold Date, if Designated Board will be reduced to one representative and the total size of the Designated Board is increased, will be reduced by the number of Investor Nominees shall also be increased such that at least one-third so resigning if either: (i) Investor disposes of more than 700,000 shares of Gottschalks Common Stock; or (ii) Investor and its Affiliates Beneficially Own a number of shares of Gottschalks Common Stock equal to less than 10% of the members of the Board shall be Investor Nominees. (b) From and after the Preliminary Threshold Date and until the Second Threshold Dateoutstanding Gottschalks Common Stock, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nomineeson a fully diluted basis. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause Investor's representation on the Board will be terminated on the earlier of: (i) the date Investor disposes of more than 1,350,000 shares of Gottschalks Common Stock; or (ii) Investor and its Affiliates Beneficially Own a number of shares of Gottschalks Common Stock equal to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) 5% of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Dateoutstanding Gottschalks Common Stock, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nomineeson a fully diluted basis. (d) Subject to the terms of this Agreement: (i) Investor will has the right to designate the Investor Nominees; (ii) Xxxxxx Xxxx (if he is alive and has the capacity) or Xxxx Xxxx (if Xxxxxx Xxxx is not alive or no longer has the capacity) has the right to designate the Management Nominees; and (iii) the Nominating Committee, or the Board if there is no Nominating Committee, has the right to designate the Independent Nominees. In the event both Xxxxxx Xxxx and Xxxx Xxxx are deceased or incapacitated, the Management Nominees shall be chosen by the Chief Executive Officer of Gottschalks. (e) Investor and Management each agrees not to name any person as an Investor Nominee a nominee to the Board if (i) such person is not reasonably experienced in business, business or financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Exchange Act has occurred with respect to such person. Investor and Management, respectively, shall each use its reasonable efforts to afford the independent directors Independent Nominees of the Company (the "Independent Directors") Gottschalks a reasonable opportunity to meet any individual that Investor it is considering naming as an Investor Nomineea nominee to the Board. (ef) The Company Subject to Section 6.1 of this Agreement, Gottschalks will support the nomination of and the election of each Investor Nominee, each Management Nominee and each Independent Nominee to the Board, and the Company Gottschalks will exercise all authority under applicable law to cause each Investor Nominee, each Management Nominee and each Independent Nominee to be elected to the BoardBoard as provided herein. Without limiting the generality of the foregoing, with respect to each meeting of shareholders stockholders of the Company Gottschalks at which Directors are to be elected, the Company Gottschalks shall use its reasonable efforts to solicit from the shareholders stockholders of the Company Gottschalks eligible to vote in the election of Directors proxies in favor of each Investor Nominee, each Management Nominee and each Independent Nominee. (g) Subject to Section 6.1 of this Agreement: (i) During the period under this Agreement, if any, that Investor shall be entitled pursuant to the proviso of Section 2.1(a) to designate three Investor Nominees, if the total size of the Board is later increased (other than as the result of an acquisition transaction approved by the Board) Investor shall be entitled to a proportionate increase in the number of Investor Nominees. The new number of Investor Nominees shall be calculated by multiplying 3/12 by the size of the new Board (excluding any Directors who have been added as a result of any acquisition transaction approved by the Board) and rounding the result up to the next whole number where the resulting fraction is .5 or above. The table below is provided by way of example: (ii) During the period under this Agreement, if any, that Investor shall be entitled to designate two Investor Nominees, if the total size of the Board is increased (other than as the result of an acquisition transaction approved by the Board), Investor shall be entitled to a proportionate increase in the number of Investor Nominees. The new number of Investor Nominees shall be calculated by multiplying 2/11 by the size of the new Board (excluding any Directors who have been added as a result of any acquisition transaction approved by the Board) and rounding the result up to the next whole number where the resulting fraction is .5 or above. The table below is provided by way of example:

Members of the Board. (a) From and after the Stockholder Approval Date, if any, and until the Preliminary Threshold Date, the Company and Investor shall take all actions necessary to cause the The Board to be structured to will initially consist of no less than nine memberssix (6) individuals (each a “Manager”), three (3) of which three members whom will be designees appointed by ETR, three (3) of Investor (whom will be appointed by Enexus. One or more alternative Managers may be appointed by or on behalf of each Member to act in the "Investor Nominees"), two absence of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and any one of which shall its Managers. If an alternate Manager is appointed, he or she: (i) may, but need not, be subject to the reasonable approval a Manager; (ii) may attend and vote in place of the Company, and relevant Manager at any Board meeting at which the Company and Investor will take all actions necessary relevant Manager is not present; (iii) is entitled to cause such nominees a separate vote for each relevant Manager the alternate Manager represents in addition to become members any vote the alternate Manager may have as a Manager in his or her own right; (iv) is entitled to notice of meetings of the Board in the same way that Managers are entitled to receive notice of such meetings under Section 7.02(i); (v) is to be counted as soon a Manager for each relevant Manager the alternate Manager is attending the meeting on behalf of (in addition to being counted as practicable after a Manager in his or her own right, if applicable) in determining whether a quorum is present; and (vi) shall cease to be an alternate Manager immediately and automatically upon (1) the Stockholder Approval Date. If necessary relevant Manager ceasing to effectuate be a Manager or (2) the placement of the Investor Nominees on the Board, appointor providing notice to the Company shall solicit revoking the resignations of the appropriate number of Directors to the extent necessary to permit the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent of the Company. At any time before the Preliminary Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-third of the members of the Board shall be Investor Nomineesappointment. (b) From In connection with the determination of any and after all matters presented to the Preliminary Threshold Date Board for action, the Members agree and until acknowledge that each Manager will be acting as the Second Threshold Daterepresentative of the Member he or she represents, and each such Manager shall be free to represent the views and positions of such Member and to act in the manner that the Manager believes is in the best interests of the Member that he or she represents, without regard to the interests of any other Member, the Company or any of its Subsidiaries. To the fullest extent permitted by law, including Section 18-1101(c) of the Delaware Act: (i) no Manager will have any fiduciary duty, duty of care or any other duty to any other Manager or to the Company, any of its Subsidiaries or any Member of the Company who did not appoint him or her; and (ii) no Member will have any fiduciary duty, duty of care or any other duty to any other Member or to the Company or any of its Subsidiaries. The Company and Investor shall take all actions necessary each Member therefor waive, to cause the fullest extent permitted by law, any claim against any Member, its Affiliates, or any Nominee Manager appointed by such Member asserting breach of fiduciary duty, duty of care or any other duty in connection with the determination of matters presented to the Board or to be structured to consist of no less than nine members, of which at least two members will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor NomineesMembers for action. (c) From A Member may, by written notice to the other Members, remove any Manager or any alternate Manager such Member appointed and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nomineesappoint a substitute therefor. (d) Investor The Chairman of the Board (the “Chairman”) will be designated alternately by each Member for two (2) year periods, beginning with Enexus on and from the Effective Date. The Chairman will not name any person as an Investor Nominee if (i) such person is not reasonably experienced in business, financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, have a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K deciding vote at meetings of the 1934 Act has occurred with respect to such person. Investor shall use its reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor is considering naming as an Investor NomineeBoard. (e) A Member may, by written notice to the other Members, remove any Chairman such Member appointed and appoint a substitute therefor. (f) The Company will support the nomination initial Managers appointed by each of ETR and Enexus and the election initial Chairman appointed by Enexus will be the individuals specified in Exhibit D to this Agreement. (g) The number of each Investor Nominee Managers may be increased or decreased from time to time by consent of all the Members; provided, however, that at all times, except as provided in the next sentence, ETR and Enexus will have the right to appoint an equal number of Managers. Notwithstanding any other provision of this Agreement to the Boardcontrary, if any Member Transfers a percentage of its Interest such that its Interest (or the aggregate Interests of its Member Group, if applicable) is reduced to less than twenty percent (20%) of the total outstanding Interests (such reduction, a “Reduction Event”), then the number of Managers appointed by the Member (or the Member Group, if applicable) suffering such Reduction Event will be immediately reduced to only one (1) Manager, and the number of Managers appointed by any other Member or Member Group (which has not suffered a Reduction Event) will be immediately increased by one (1), so that such Members (the “Majority Members”) will, together, thereafter be entitled to appoint a majority of the Managers appointed by all the Members. (h) Meetings of the Board will be held at the offices of the Company will exercise all authority under applicable law to cause each Investor Nominee to or at such other places and with such frequency as shall be elected determined by the Board. Meetings of the Board may be called by or at the request of any Manager for any reasonable purpose. The Chairman or the Secretary shall provide written notice to the BoardManagers of all meetings of the Board as directed by the Board or any Manager in accordance with the terms of this Agreement, and shall provide a written agenda for such meetings as well as any related materials deemed necessary or appropriate or as directed by any Manager for review by the Managers in connection with such meetings. Without limiting the generality foregoing, any Manager may also provide notice of a meeting of the foregoingBoard in accordance with the terms of this Agreement. (i) Notice of any special meeting of the Board must be given to each Manager no fewer than two (2) Business Days prior to the date of such special meeting, and notice of any other meeting of the Board must be given to each Manager no fewer than five (5) Business Days prior to the date of such meeting. Notices of meetings shall be delivered in the same manner set forth in Section 12.03 (other than notices of special meetings, which may also be delivered via the internet or other electronic mail). The attendance of a Manager at a meeting of the Board shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not properly called or convened. (j) A majority (in number) of the Managers will constitute a quorum for transaction of business at any meeting of the Board, provided, however, that such majority includes at least one Manager appointed by each Member, unless a Reduction Event shall have occurred, in which case such majority need only include Managers appointed by the Majority Members; and provided further, if less than a quorum of such Managers are present at a meeting, a majority of the Managers present at that meeting may adjourn the meeting to a date not earlier than two (2) days after the first meeting, upon notice being given in accordance with Section 7.02(i). If a quorum is not present at the next meeting (following the meeting that was adjourned), any two (2) Managers will constitute a quorum. (k) Each Manager has one (1) vote, provided that, at any meeting of the Board at which less than all the Managers (or their respective alternate Managers) appointed by a Member (“Nominee Managers”) are present, each Nominee Manager (or his or her alternate Manager) who is present can exercise a number of votes equal to the number of votes that would have been exercisable by all of that Member’s Nominee Managers, if all of them (themselves or through their respective alternate Managers) were present, divided by the number actually present. Fractional votes will be counted. (l) Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting if a consent in writing, setting forth the actions so taken, shall be signed by all of the Managers entitled to vote with respect to the subject matter, unless a Reduction Event shall have occurred, in which case the majority signing such consent must include, with respect to all matters, at least one Nominee Manager of each of the Majority Members. (m) The Managers may participate in and act at all meetings of the Board through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such meetings shall constitute attendance in person at the meeting of shareholders the person or persons so participating. (n) The Board shall establish, from time to time, the amount of any remuneration a Manager shall be entitled to receive from the Company or any Subsidiary of the Company at which Directors are for his or her services as a Manager. Each Manager shall be entitled to be electedreimbursement for reasonable expenses incurred in serving as a Manager, subject to any applicable policies established by the Company shall use its reasonable efforts Board from time to solicit from the shareholders of the Company eligible to vote in the election of Directors proxies in favor of each Investor Nomineetime.

Members of the Board. (a) From The Company, Giannulli and after the Stockholder Approval Date, if any, and until the Preliminary Threshold Date, the Company and Investor shall Xxxxx will take all actions necessary to cause the Board to be structured to consist of no less than nine five members, of which one member will be designated by Giannulli (a "Giannulli Nominee"), one member will be designated by Xxxxx (a "Xxxxx Nominee"), and three members will be designees of Investor (the "Investor Nominees"), two of which shall be chosen at the sole discretion of Investor (the "Initial Investor Nominees") and one of which shall be subject to the reasonable approval of the designated in accordance with Section 2.2. The Company, Giannulli and the Company and Investor Xxxxx will take all actions necessary to cause such the foregoing nominees to become members of the Board as soon as practicable after the Stockholder Approval Datedate hereof. If necessary to effectuate the placement At each annual or special meeting of stockholders of the Investor Nominees on Company at which, or the taking of action by written consent of stockholders of the Company by which, any class of Directors is to be elected (an "Election"), each of Giannulli and Xxxxx shall have the right (but not obligation) pursuant to this Agreement to designate one nominee to the Board; PROVIDED, HOWEVER, that (i) if a Giannulli Nominee is, at the Company shall solicit the resignations time of the appropriate number Election, in a class of Directors which does not stand for reelection until a date following the Election, Giannulli shall not be entitled to nominate a Director in the extent necessary to permit Election, (ii) if a Xxxxx Nominee is, at the Investor Nominees to serve. The Initial Investor Nominees are expected to be Art Solomon and Xxxxx Xxxxx; provided, that Investor may at any time appoint any other person, subject to the provisions of Section 2.1(d) of this Agreement, as an Initial Investor Nominee without the consent of the Company. At any time before Election, in a class of Directors which does not stand for reelection until a date following the Preliminary Threshold DateElection, Xxxxx shall not be entitled to nominate a Director in the Election, (iii) after the occurrence of a Giannulli Termination Event, if any, Giannulli's right to nominate Directors under this Section 2.1 shall terminate and (iv) after the total size occurrence of the Board is increaseda Xxxxx Termination Event, the number of Investor Nominees if any, Xxxxx' right to nominate Directors under this Section 2.1 shall also be increased such that at least one-third of the members of the Board shall be Investor Nomineesterminate. (b) From and after the Preliminary Threshold Date and until the Second Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least two members Neither Giannulli nor Xxxxx will be Investor Nominees, and the Company and Investor will take all actions necessary to cause such nominees to become, designate or continue to be, members of the Board as soon as practicable after the Preliminary Threshold Date. At any time before the Second Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least two-ninths of the members of the Board shall be Investor Nominees. (c) From and after the Second Threshold Date and until the Final Threshold Date, the Company and Investor shall take all actions necessary to cause the Board to be structured to consist of no less than nine members, of which at least one member will be an Investor Nominee, and the Company and Investor will take all actions necessary to cause such nominee(s) to become, or continue to be, member(s) of the Board as soon as practicable after the Second Threshold Date. At any time before the Final Threshold Date, if the total size of the Board is increased, the number of Investor Nominees shall also be increased such that at least one-ninth of the members of the Board shall be Investor Nominees. (d) Investor will not name nominate any person as an Investor Nominee a Director if (i) such person is not reasonably experienced in business, business and financial or real estate matters, (ii) such person has been convicted of, or has pled nolo contendere to, to a felony, (iii) the election of such person would violate any law, or (iv) any event required to be disclosed pursuant to Item 401(f) of Regulation S-K of the 1934 Act has occurred with respect to such person. Investor Each of Giannulli and Xxxxx shall use its his reasonable efforts to afford the independent directors of the Company (the "Independent Directors") a reasonable opportunity to meet any individual that Investor he is considering naming designating or nominating as an Investor Nomineea director. (ec) The Company will support the nomination of and the election of each Investor Giannulli Nominee to the Boardand Xxxxx Nominee, and the Company will exercise all authority under applicable law to cause each Investor Giannulli Nominee and Xxxxx Nominee to be elected to the Board. Without limiting . (d) Until the generality earlier to occur of the foregoing, with respect (i) a Giannulli Termination Event and (ii) a Xxxxx Termination Event (such occurrence shall be referred to each meeting of shareholders of the Company at which Directors are to be electedherein as a "Termination Event"), the Company shall use its reasonable efforts to solicit from the shareholders of the Company eligible to vote in the election number of Directors proxies in favor of each Investor Nomineeon the Board shall not exceed five at any time.