AMNIS SYSTEMS INC.
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EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of April 18, 2001, by and between AMNIS SYSTEMS INC., a Delaware corporation
(the "Company"), and XXXXXXXX X. XXXXXXXX ("Executive").
RECITALS
A. The Company is engaged in the manufacture and distribution of
networked streaming video products for high-quality video, management and
distribution.
B. The Company wishes to employ Executive and to have the benefit of
his skills and services, and Executive wishes to be employed by the Company, as
Vice President, Chief Financial Officer and Secretary of the Company on the
terms and subject to the conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of these premises, the parties hereto
hereby agree as follows:
1. EMPLOYMENT.
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(a) POSITION. The Company hereby employs Executive, and Executive
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hereby accepts employment with the Company, as Vice President, Chief Financial
Officer and Secretary of the Company. Executive shall also serve as Vice
President, Chief Financial Officer and Secretary of Optivision, Inc., a
California corporation and a wholly-owned subsidiary of the Company (the
"Principal Subsidiary").
(b) AUTHORITY. Executive shall have the full power and authority
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customarily associated with his positions.
(c) REPORTING. Executive shall report to the Chief Executive
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Officer of the Company.
(d) PLACE OF EMPLOYMENT. Executive shall perform the services
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required by this Agreement at the Company's principal executive offices in Palo
Alto, California, and shall be provided a suitable office and staff as shall be
necessary for the performance of Executive's duties hereunder.
(e) CHANGE OF DUTIES. The duties of Executive may be modified
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from time to time by the mutual written consent of the Company and Executive.
Notwithstanding any such change, the employment of Executive shall be construed
as continuing under this Agreement as so modified.
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(f) DEVOTION OF TIME TO COMPANY'S BUSINESS. During the Term of
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this Agreement (as such term is defined in Section 1(g) hereof), Executive
agrees to devote substantially all of his productive time, ability and attention
to the business and interests of the Company during normal working hours;
provided, however, that the expenditure of reasonable amounts of time for
charitable, educational or professional activities or personal investments,
shall not be deemed a breach of this Agreement if such activities or investments
do not materially interfere with the performance of Executive's duties under
this Agreement.
(g) TERM. Unless sooner terminated as provided in Section 4
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hereof, the term of this Agreement shall commence as of the date of this
Agreement and shall continue for a term of thirty-six (36) months (the "Initial
Term"), and shall be automatically renewed for successive one (1) year terms
(each, a "Renewal Term") unless a party hereto delivers to the other party
written notice of such party's intention not to renew at least one hundred
twenty (120) days prior to the end of the Initial Term or the applicable Renewal
Term, as the case may be. The Initial Term, together with any Renewal Terms
shall be referred to in this Agreement as the "Term of this Agreement."
2. COMPENSATION.
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(a) BASE SALARY. During the Term of this Agreement, the Company
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shall pay to Executive a base salary of one hundred ninety thousand dollars
($190,000) per year (the "Base Salary"), subject to increase from time to time
as shall be determined in the good faith discretion of the Board of Directors of
the Company (the "Board of Directors"), payable in arrears in equal semi-monthly
installments.
(b) DISCRETIONARY BONUS. In addition to the Base Salary, the
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Company shall pay to Executive such bonuses based on Executive's performance as
the Board of Directors shall determine from time to time in its sole discretion.
(c) INCENTIVE PLANS. In addition to all other benefits and
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compensation provided by this Agreement, Executive shall be eligible to
participate as of the date of this Agreement in all other equity, compensation
and incentive plans as are now or in the future from time to time made available
to senior management executives of the Company.
(d) VACATION. Executive shall be entitled to such annual vacation
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time with full pay as the Company may provide in its standard policies and
practices for senior management executives; provided, however, that in any event
Executive shall be entitled to a minimum of twenty-one (21) days annual paid
vacation time.
(e) DIRECTORS AND OFFICERS LIABILITY INSURANCE. Executive shall
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be entitled to continued participation in, and have the benefit of, directors
and officers liability insurance to the same extent such coverage is provided to
the Company's other senior management executives.
(f) OTHER BENEFITS. Executive shall participate in and have the
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benefits of all present and future vacation, holiday, paid leave, unpaid leave,
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life, accident, disability, dental, vision and health insurance plans, pension,
profit-sharing and savings plans and all other plans and benefits which are now
or in the future from time to time made available to senior management
executives of the Company.
(g) WITHHOLDING. The parties shall comply with all applicable
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withholding requirements in connection with all compensation payable to
Executive.
3. EXPENSE REIMBURSEMENT. The Company shall reimburse Executive for
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all reasonably documented business travel and other out-of-pocket expenses
reasonably incurred by Executive in the course of performing his duties
hereunder this Agreement. In addition, the Company shall reimburse Executive
for (i) all reasonable expenses incurred for continuing education courses
required to maintain Executive's professional status as a certified public
accountant, and (ii) all reasonable professional fees, licenses and dues
associated with Executive's professional status as a certified public
accountant.
4. TERMINATION AND RIGHTS ON TERMINATION. This Agreement shall
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terminate upon the occurrence of any of the following events:
(a) DEATH. Upon the death of Executive, in which event the
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Company shall:
(i) Within ten (10) days of receiving notice of such death,
pay Executive's estate a cash lump sum equal to all accrued Base Salary through
the date of death plus all accrued vacation pay and bonuses, if any;
(ii) Continue to pay Executive's then Base Salary to
Executive's estate for the lesser of (A) the remaining Term of this Agreement,
or (B) twelve (12) months from the date of death; and
(iii) Provide, at the Company's expense, coverage to
Executive's spouse under the health, dental and vision insurance plans available
to the Company's senior management executives and their dependents or, in the
event any of such health, dental or vision insurance is not continued, the
Company shall pay for the premiums for equivalent coverage, in any event, for a
period equal to the longer of (A) the remaining Term of this Agreement, or (B)
six (6) months from the date of death.
(b) DISABILITY. Upon the mental or physical Disability (as such
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term is defined below) of Executive, in which event the Company shall:
(i) Within ten (10) days following the determination of
Disability, pay Executive a cash lump sum equal to all accrued Base Salary
through the date of determination plus all accrued vacation pay and bonuses, if
any;
(ii) Continue to pay Executive's then Base Salary for the
lesser of (A) the remaining Term of this Agreement, or (B) twelve (12) months
from the date of determination; and
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(iii) Provide, at the Company's expense, coverage to
Executive under the life, accident and disability insurance policies available
to the Company's senior management executives, and to Executive and his spouse
under the health, dental and vision insurance plans available to the Company's
management executives and their dependents or, in the event any of such life,
accident, disability, health, dental or vision insurance are not continued or
Executive is not eligible for coverage thereunder due to his termination of
employment, the Company shall pay for the premiums for equivalent coverage, in
any event, for a period equal to the longer of (A) the remaining Term of this
Agreement, or (B) six (6) months from the date of determination of Disability.
For purposes of this Agreement, "Disability" shall mean a physical or
mental condition as determined by Executive's physician which prevents Executive
from carrying out one or more of the material aspects of his assigned duties for
at least ninety (90) consecutive days, or for a total of ninety (90) days in any
six (6) month period.
(c) RETIREMENT. Upon the retirement of Executive at any time, in
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which event the Company shall:
(i) Within ten (10) days following the effective date of
retirement, pay Executive a cash lump sum equal to all accrued Base Salary
through the date of retirement plus all accrued vacation pay and bonuses, if
any; and
(ii) Continue to pay Executive's then Base Salary for the
remaining Term of this Agreement.
(d) TERMINATION BY THE COMPANY FOR CAUSE. Thirty (30) days after
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delivery by the Company to Executive of a written notice terminating this
Agreement for Cause (as such term is defined below), which notice shall be
supported by a reasonably detailed statement of the relevant facts and reasons
for termination, in which event the Company shall, within ten (10) days
following the effective date of termination, pay Executive a cash lump sum equal
to all accrued Base Salary through the date of termination plus all accrued
vacation pay and bonuses, if any. For purposes of this Agreement, "Cause" shall
mean:
(i) Executive shall have committed an act of fraud,
embezzlement or theft; or
(ii) Executive shall have been found guilty of a felony or
other crime involving moral turpitude which would materially injure the Company
or its reputation.
(e) TERMINATION BY THE COMPANY WITHOUT CAUSE. Ninety (90) days
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after delivery by the Company to Executive of a written notice terminating this
Agreement for any reason without cause, in which event the Company shall, within
ten (10) days following the effective date of termination:
(i) Pay Executive a cash lump sum equal to (x) all accrued
Base Salary through the date of termination plus all accrued vacation pay and
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bonuses, if any, plus (y) as severance compensation, an amount equal to the
greater of (A) twelve (12) months of Executive's Base Salary (at the highest
rate in effect during the Term of this Agreement), or (B) Executive's then Base
Salary for the remaining Term of this Agreement;
(ii) Provide, at the Company's expense, coverage to Executive
under the life, accident and disability insurance policies available to the
senior management executives of the Company and to Executive and his dependents
under the health, dental and vision insurance plans available to the Company's
senior management executives and their dependents or, in the event any of such
life, accident, disability, health, dental or vision insurance are not continued
or Executive is not eligible for coverage thereunder due to his termination of
employment, the Company shall pay for the premiums for equivalent coverage, in
any event, for a period of twelve (12) months after the date of termination;
(iii) Provide an office, secretarial support and access to
equipment and supplies for a period of six (6) months after the date of
termination; and
(iv) Provide Executive reasonable outplacement services.
(f) VOLUNTARY TERMINATION BY EXECUTIVE. Thirty (30) days after
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delivery by Executive to the Company of a written notice terminating this
Agreement for any reason without cause, in which event the Company shall, within
ten (10) days following the effective date of termination, pay Executive a cash
lump sum equal to all accrued Base Salary through the date of termination plus
all accrued vacation pay and bonuses, if any.
(g) TERMINATION BY EXECUTIVE FOR GOOD REASON. Ten (10) days after
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delivery by Executive to the Company of a written notice terminating this
Agreement for Good Reason (as such term is defined below), in which event the
Company shall, within ten (10) days following the effective date of termination,
pay Executive such amounts in such manner as provided for in Section 4(e)
hereof. For purposes of this Agreement, "Good Reason" shall mean:
(i) The attempted assignment of Executive to any duties
inconsistent with, or any adverse change in, Executive's positions, duties,
responsibilities, functions or status with the Company, or the removal of
Executive from, or failure to reelect Executive to, any of such positions;
(ii) A reduction by the Company of Executive's Base Salary
without his written consent;
(iii) The Company shall have required Executive to be based
in excess of fifteen (15) miles from the Company's present executive offices
located in Palo Alto, California, except for travel on Company business to an
extent substantially consistent with Executive's present business travel
obligations;
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(iv) Failure of the Company to provide support (or, without
Executive's written consent, a decrease in the level of support), information,
assistance and staffing reasonably appropriate for Executive to carry out
Executive's duties or to achieve the performance goals set by the Company;
(v) The failure by the Company to continue in effect for
Executive any material benefit available to any of the senior management
executives of the Company, including without limitation, any retirement, pension
or incentive plans, life, accident, disability or health insurance plans, equity
or cash bonus plans or savings and profit sharing plans, or any action by the
Company which would adversely affect Executive's participation in or reduce
Executive's benefits under any of such plans or deprive Executive of any fringe
benefit enjoyed by Executive;
(vi) The occurrence of any Change of Control, Corporate
Transaction or Subsidiary Disposition (as each such term is defined in Schedule
A attached hereto and made a part hereof); or
(vii) Any other material breach by the Company of this
Agreement which is not cured within ten (10) days of delivery of written notice
thereof by Executive to the Company, or the material breach by the Company of
this Agreement three (3) or more times (whether or not the breaches are the same
and whether or not the breaches are subsequently cured) in any twelve (12) month
period.
(h) EFFECT OF TERMINATION. All rights and obligations of the
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Company and Executive under this Agreement shall cease as of the effective date
of termination, except that the obligations of the Company under this Section 4
and Executive's obligations under Section 5 hereof shall survive such
termination in accordance with their respective terms. In addition,
notwithstanding anything to the contrary contained herein or in any agreement
with respect thereto, upon termination of Executive's employment pursuant to
this Section 4 (other than Section 4(d) and Section 4(f)), all equity options,
restricted equity grants and similar rights held by Executive with respect to
securities of the Company shall automatically become fully vested and shall
become immediately exercisable for a period of twelve months after the effective
date of termination; provided, however, that in the case of termination pursuant
to Section 4(g)(vi), such equity options, restricted equity grants and similar
rights shall automatically become fully vested sixty (60) days prior to the
effective date of termination and shall be exercisable for the sixty-day period
prior to the effective date of termination and for an additional period of
twelve months after the effective date of termination.
5. CONFIDENTIAL INFORMATION.
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(a) CONFIDENTIAL INFORMATION. Executive hereby agrees to hold in
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strict confidence and not to disclose to any third party any of the confidential
and proprietary business, financial, technical, economic, sales and/or other
types of proprietary business information relating to the Company in whatever
form, whether oral, written, or electronic (collectively, the "Confidential
Information"), to which Executive has, or is given (or has had or been given),
access during the course of his employment with the Company. It is agreed that
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the Confidential Information is confidential and proprietary to the Company
because such Confidential Information encompasses know-how, trade secrets, or
financial, organizational, sales or other valuable aspects of the business and
trade of the Company, including without limitation, technologies, products,
processes, plans, clients, personnel, operations and business activities. This
restriction shall not apply to any Confidential Information that (a) is
generally available in the public domain or becomes known generally to the
public through no fault of the Executive, (b) was independently known by
Executive prior to receipt thereof, (c) is lawfully made available to Executive
by a third party, (d) is subsequently developed by Executive without regard or
access to Confidential Information, (e) is required by applicable law, legal
process, or any order or mandate of a court or other governmental authority to
be disclosed, or (f) is reasonably believed by Executive, based upon the advice
of legal counsel, to be required to be disclosed in defense of a lawsuit or
other legal or administrative action brought against Executive; provided,
however, that in the case of clause (e) or (f), Executive shall give the Company
reasonable advance written notice of the Confidential Information intended to be
disclosed and the reasons and circumstances surrounding such disclosure, in
order to permit the Company to seek a protective order or other appropriate
request for confidential treatment of the applicable Confidential Information.
(b) RETURN OF COMPANY PROPERTY. In the event of termination of
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Executive's employment with the Company for whatever reason or no reason,
Executive or Executive's personal representative shall return to the Company all
Confidential Information.
6. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
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understanding between the parties hereto related to Executive's employment by
the Company and supersedes all prior agreements and understandings, oral or
written. No modification, termination or attempted waiver shall be valid unless
in writing and signed by Executive and the Company.
7. WAIVER. No waiver or any right hereunder shall be effective for any
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purpose unless in writing and signed by the party hereto possessing such right.
No such waiver shall be construed to be a waiver of any subsequent right, term
or provision of this Agreement.
8. ASSIGNMENT; BINDING EFFECT. Executive understands that he has been
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selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Executive agrees, therefore, that he
cannot assign or delegate all or any portion of his performance under this
Agreement. This Agreement may not be assigned or transferred by the Company
without the prior written consent of Executive. Subject to the preceding two
sentences, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors, and assigns. Notwithstanding the foregoing, if
Executive accepts employment with an Affiliate (as such term is defined below),
this Agreement shall automatically be deemed to have been assigned to such new
employer (which shall thereafter be an additional or substitute beneficiary of
the covenants contained herein, as appropriate), with the consent of Executive,
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and references to the "Company" in this Agreement shall be deemed to refer to
such new employer.
9. NOTICE. All notices, requests, demands and other communications
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required or permitted to be given under this Agreement shall be in writing and
shall be given or made by personally delivering the same to or sending the same
by prepaid certified or registered mail, return receipt requested, or by
reputable overnight courier, or by facsimile machine to the party to which it is
directed at the address set out on the signature page to this Agreement or at
such other address as such party shall have specified by written notice to the
other party as provided in this Section, and shall be deemed to be given if
delivered personally at the time of delivery, or if sent by certified or
registered mail as herein provided three (3) days after the same shall have been
posted, or if sent by reputable overnight courier upon receipt, or if sent by
facsimile machine as soon as the sender receives written or telephonic
confirmation that the facsimile was received by the recipient and such facsimile
is followed the same day by mailing by prepaid first class mail.
10. ARBITRATION. Any dispute between the parties arising out of this
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Agreement shall be submitted to final and binding arbitration in the City of
Palo Alto, County of Santa Xxxxx, State of California, under the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association then in effect, upon written notification and demand of either party
therefor. In the event either party demands such arbitration, the American
Arbitration Association shall be requested to submit a list of prospective
arbitrators consisting of persons experienced in matters involving employment
disputes. The provisions of California Code of Civil Procedure Section 1283.05
and the laws of the State of California are incorporated herein and shall be
applicable to the arbitration. In making the award, the arbitrator shall award
recovery of costs and expenses of the arbitration and reasonable attorneys' fees
to the prevailing party. Any award may be entered as a judgment in any court of
competent jurisdiction. Should judicial proceedings be commenced to enforce or
carry out this provision or any arbitration award, the prevailing party in such
proceedings shall be entitled to reasonable attorneys' fees and costs in
addition to other relief. Either party shall have the right, prior to receiving
an arbitration award, to obtain preliminary relief from a court of competent
jurisdiction.
11. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
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invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid and inoperative. The
Sections headings herein are for reference purposes only and are not intended in
any way to describe, interpret, define or limit the extent or intent of this
Agreement or of any part hereof
12. GOVERNING LAW. This Agreement shall in all respects be construed
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according to the laws of the State of California, applicable to agreements to be
made and to be performed entirely within the State of California.
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13. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which may be executed by less than all of the parties to
this Agreement, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
14. SIGNATURES. The parties shall be entitled to rely upon and enforce
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a facsimile of any authorized signatures as if it were the original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
COMPANY: EXECUTIVE:
AMNIS SYSTEMS INC.
By: s/ Xxxxxxx X. Xxxxxxxx s/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx XXXXXXXX X. XXXXXXXX
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Title: President/Chief Executive Officer
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Address: 2740 Xxxxx Xxxxx
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Xxxxxx Xxxxx, XX 00000
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SCHEDULE A
TO
EMPLOYMENT AGREEMENT
DEFINITIONS
DEFINITIONS. For purposes of this Agreement, the following terms shall
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have the following meanings:
1. "AFFILIATE" of, or a person "affiliated" with, a specified person means
a person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
person. For purposes hereof, "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities, by
contract or otherwise.
2. "CHANGE IN CONTROL" means a change in ownership or control of the Company
effected through either of the following transactions:
(A) The direct or indirect acquisition by any person or related group
of persons (other than an acquisition from or by the Company or by a Company
sponsored employee benefit plan or by an entity that directly or indirectly is
controlled by the Company) of beneficial ownership (within the meaning of Rule
13d-3 of the Securities Exchange Act of 1934, as amended) of securities
possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities pursuant to a tender or exchange offer made
directly to the Company's shareholders which a majority of the Continuing
Directors who are not Affiliates or Associates of the offeror do not recommend
such shareholders accept; or
(B) A change in the composition of the Board of Directors over a period
of thirty-six (36) months or less such that a majority of the members of the
Board of Directors (rounded up to the next whole number) ceases, by reason of
one or more contested elections for membership to the Board of Directors, to be
comprised of individuals who are Continuing Directors.
3. "CONTINUING DIRECTORS" means members of the Board of Directors who have
been members either (A) continuously for a period of at least thirty-six (36)
months or (B) for less than thirty-six (36) months and were elected or nominated
for election as members of the Board of Directors by at least a majority of the
members of the Board of Directors described in clause (A) who were still in
office at the time such election or nomination was approved by the Board of
Directors.
4. "CORPORATE TRANSACTION" means any of the following shareholder-approved
transactions to which the Company is a party:
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(A) A merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change the
state in which the Company is incorporated;
(B) The sale, transfer or other disposition of all or substantially all
of the assets of the Company (including the capital stock of the Principal
Subsidiary) in connection with the complete liquidation or dissolution of the
Company; or
(C) Any reverse merger in which the Company is the surviving entity but
in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred to
a person or persons different from those who held such securities immediately
prior to such merger.
5. "PERSON" shall mean any individual, trust, partnership, company,
corporation, business, organization, group or other entity.
6. "SUBSIDIARY DISPOSITION" means the disposition by the Company of its
equity holdings in the Principal Subsidiary effected by a merger involving the
Principal Subsidiary (other than a merger into or with the Company), the sale of
all or substantially all of the assets of the Principal Subsidiary, or the sale
or distribution of substantially all of the outstanding capital stock of the
Principal Subsidiary.
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