EXHIBIT 10.2
CHANGE OF CONTROL AGREEMENT
between
XXXXX X. XXXXXXXXXX
and
PROCYTE CORPORATION
dated as of
APRIL 24, 1998
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CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of April 24,
1998 is between PROCYTE CORPORATION, a Washington corporation (the "Company"),
and XXXXX XXXXXXXXXX (the "Executive").
The Board of Directors of the Company (the "Board") has determined that it
is in the best interests of the Company and its stockholders to ensure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined in Section
1.1 below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive arising from the personal uncertainties
and risks created by a pending or threatened Change of Control, to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with reasonable compensation and benefit arrangements upon a Change of
Control.
In order to accomplish these objectives, the Board has caused the Company
to enter into this Agreement.
1. DEFINITIONS
1.1 CHANGE OF CONTROL
Shall have the definition set forth in Appendix A to this Agreement, which
is hereby incorporated by reference.
1.2 CHANGE OF CONTROL DATE
Shall mean the first date on which a Change of Control occurs.
1.3 EMPLOYMENT PERIOD
Shall mean the two-year period commencing on the Change of Control Date and
ending on the second anniversary of such date.
2. TERM
The term of this Agreement ("Term") shall be for a period of two (2) years
from the date of this Agreement as first entered above, at which time this
Agreement shall terminate without further action by either the Company or the
Executive; provided, however, that if a Change of Control occurs during the
Term, the Term shall automatically extend for the duration of the Employment
Period.
3. EMPLOYMENT
3.1 EMPLOYMENT PERIOD
During the Employment Period, the Company hereby agrees to continue the
Executive in its employ or in the employ of its affiliated companies, and the
Executive hereby agrees to remain in the employ of the Company or its affiliated
companies, in accordance with the terms and provisions of this Agreement;
provided, however, that either the Company or the Executive may terminate the
employment relationship subject to the terms of this Agreement.
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3.2 POSITION AND DUTIES
During the Employment Period, the Executive's position, authority, duties
and responsibilities shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned at any time
during the 90-day period immediately preceding the Change of Control Date.
3.3 LOCATION
During the Employment Period, the Executive's services shall be performed
at the Company's headquarters on the Change of Control Date or any office which
is subsequently designated as the headquarters of the Company and is less than
30 miles from such location.
3.4 EMPLOYMENT AT WILL
The Executive and the Company acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company or its affiliated
companies is "at will" and may be terminated by either the Executive or the
Company or its affiliated companies at any time with or without cause.
Moreover, if prior to the Change of Control Date, the Executive's employment
with the Company or its affiliated companies terminates for any reason, then the
Executive shall have no further rights under this Agreement; provided, however,
that Company may not avoid liability for any termination payments which would
have been required during the Employment Period pursuant to Section 8 below by
terminating the Executive prior to the Employment Period where such termination
is carried out in anticipation of a Change of Control and the principal
motivating purpose is to avoid liability for such termination payments.
4. ATTENTION AND EFFORT
During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive will devote all of
her productive time, ability, attention and effort to the business and affairs
of the Company and the discharge of the responsibilities assigned to her
hereunder, and will use her reasonable best efforts to perform faithfully and
efficiently such responsibilities. It shall not be a violation of this
Agreement for the Executive to (a) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (c) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities in accordance with this Agreement. It is expressly
understood and agreed that to the extent any such activities have been conducted
by the Executive prior to the Employment Period, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
during the Employment Period shall not thereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.
5. COMPENSATION
As long as the Executive remains employed by the Company during the
Employment Period, the Company agrees to pay or cause to be paid to the
Executive, and the Executive agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
5.1 SALARY
The Executive shall receive an annual base salary (the "Annual Base
Salary"), at least equal to the annual salary established by the Board or the
Compensation Committee of the Board (the "Compensation Committee") for the
fiscal year in which the Change of Control Date occurs. The Annual Base Salary
shall be paid in substantially equal installments and at the same intervals as
the salaries of other executives of
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the Company are paid. The Board or the Compensation Committee shall review the
Annual Base Salary at least annually and shall determine in good faith and
consistent with any generally applicable Company policy any increases for future
years.
5.2 BONUS
In addition to Annual Base Salary, the Executive shall be awarded, for each
fiscal year ending during the Employment Period, an annual bonus (the "Annual
Bonus") in cash at least equal to the average annualized (for any fiscal year
consisting of less than 12 full months) bonus paid or payable, including by
reason of any deferral, to the Executive by the Company and its affiliated
companies in respect of the three fiscal years immediately preceding the fiscal
year in which the Change of Control Date occurs. Each such Annual Bonus shall
be paid no later than 90 days after the end of the fiscal year for which the
Annual Bonus is awarded, unless the Executive shall elect to defer the receipt
of such Annual Bonus.
6. BENEFITS
6.1 INCENTIVE, RETIREMENT AND WELFARE BENEFIT PLANS; VACATION
During the Employment Period, the Executive shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be generally made
available to other executives of the Company and its affiliated companies from
time to time during the Employment Period by action of the Board (or any person
or committee appointed by the Board to determine fringe benefit programs and
other emoluments), including, without limitation, paid vacations; any stock
purchase, savings or retirement plan, practice, policy or program; and all
welfare benefit plans, practices, policies or programs (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
or programs).
6.2 EXPENSES
During the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by her in
accordance with the policies, practices and procedures of the Company and its
affiliated companies in effect for the executives of the Company and its
affiliated companies during the Employment Period.
7. TERMINATION
During the Employment Period, employment of the Executive may be terminated
as follows but, in any case, the nondisclosure provisions set forth in Section
10 hereof shall survive the termination of this Agreement and the termination of
the Executive's employment with the Company:
7.1 BY THE COMPANY OR THE EXECUTIVE
At any time during the Employment Period, the Company may terminate the
employment of the Executive with or without Cause (as defined below), and the
Executive may terminate her employment for Good Reason (as defined below) or for
any reason, upon giving Notice of Termination (as defined below).
7.2 AUTOMATIC TERMINATION
This Agreement and the Executive's employment during the Employment Period
shall terminate automatically upon the death or Total Disability of the
Executive. The term "Total Disability" as used herein shall mean the
Executive's inability (with such accommodation as may be required by law and
which places no undue burden on the Company), as determined by a physician
selected by the Company and
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acceptable to the Executive, to perform the duties set forth in Section 3.2
hereof for a period or periods aggregating 120 calendar days in any 12-month
period as a result of physical or mental illness, loss of legal capacity or any
other cause beyond the Executive's control, unless the Executive is granted a
leave of absence by the Board. The Executive and the Company hereby acknowledge
that the duties specified in Section 3.2 hereof are essential to Executive's
position and that Executive's ability to perform those duties is the essence of
this Agreement.
7.3 NOTICE OF TERMINATION
Any termination by the Company or by the Executive during the Employment
Period shall be communicated by Notice of Termination to the other party given
in accordance with Section 12 hereof. The term "Notice of Termination" shall
mean a written notice which (a) indicates the specific termination provision in
this Agreement relied upon and (b) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. The
failure by the Executive or the Company to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Executive or the Company
hereunder or preclude the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
7.4 DATE OF TERMINATION
During the Employment Period, "Date of Termination" means (a) if the
Executive's employment is terminated by reason of death, at the end of the
calendar month in which the Executive's death occurs, (b) if the Executive's
employment is terminated by reason of Total Disability, immediately upon a
determination by the Company of the Executive's Total Disability, and (c) in all
other cases, five days after the date of personal delivery or mailing of the
Notice of Termination. The Executive's employment and performance of services
will continue during such five-day period; provided, however, that the Company
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may, upon notice to the Executive and without reducing the Executive's
compensation during such period, excuse the Executive from any or all of her
duties during such period.
8. TERMINATION PAYMENTS
In the event of termination of the Executive's employment during the
Employment Period, all compensation and benefits shall terminate except as
specifically provided in this Section 8.
8.1 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE OR BY THE EXECUTIVE
FOR GOOD REASON
If during the Employment Period the Company terminates the Executive's
employment other than for Cause or the Executive terminates her employment for
Good Reason, the Executive shall be entitled to:
(a) receive payment of the following accrued obligations (the "Accrued
Obligations"):
(i) the Executive's Annual Base Salary through the Date of Termination to
the extent not theretofore paid;
(ii) the product of (x) the Annual Bonus payable with respect to the
fiscal year in which the Date of Termination occurs and (y) a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of
which is 365; and
(iii) any compensation previously deferred by the Executive (together with
accrued interest or earnings thereon, if any) and any accrued
vacation pay which would be payable under the Company's standard
policy, in each case to the extent not theretofore paid;
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(a) for one year after the Date of Termination, the Company shall pay the
Executive's premiums for health insurance benefit continuation for
Executive and her family members, if applicable, which the Company provides
to the Executive under the provisions of the federal Comprehensive Omnibus
Budget Reconciliation Act of 1986, as amended ("COBRA") to the extent that
the Company would have paid such premiums had the Executive remained
employed by the Company (such continued payment is hereinafter referred to
as "COBRA Continuation"); and
(b) an amount as severance pay equal to one (1) times the Annual Base Salary
for the fiscal year in which the Date of Termination occurs.
8.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
If during the Employment Period the Executive's employment shall be
terminated by the Company for Cause or by the Executive for other than Good
Reason, this Agreement shall terminate without further obligation on the part of
the Company to the Executive, other than the Company's obligation to pay the
Executive (a) her Annual Base Salary through the Date of Termination, (b) the
amount of any compensation previously deferred by the Executive, and (c) any
accrued vacation pay which would be payable under the Company's standard policy,
in each case to the extent theretofore unpaid.
8.3 EXPIRATION OF TERM
In the case of a termination of the Executive's employment as a result of
the expiration of the Term of this Agreement, this Agreement shall terminate
without further obligation on the part of the Company to the Executive, other
than the Company's obligation to pay the Executive the Accrued Obligations.
8.4 TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY
If during the Employment Period the Executive's employment is terminated by
reason of the Executive's death or Total Disability, this Agreement shall
terminate automatically without further obligation on the part of the Company to
the Executive or her legal representatives under this Agreement, other than the
Company's obligation to pay the Executive the Accrued Obligations (which shall
be paid to the Executive's estate or beneficiary, as applicable in the case of
the Executive's death), and to provide COBRA Continuation.
8.5 PAYMENT SCHEDULE
All payments of Accrued Obligations, or any portion thereof payable
pursuant to this Section 8, shall be made to the Executive within ten working
days of the Date of Termination. Any payments payable to the Executive pursuant
to Section 8.1(c) shall be made to the Executive, at the Company's option,
either (a) in a lump sum within ten working days of the Date of Termination; or
(b) in two equal payments, the first of which is made within ten working days of
the Date of Termination and the second of which is made within six months of the
Date of Termination.
8.6 CAUSE
For purposes of this Agreement, "Cause" means cause given by the Executive
to the Company and shall include, without limitation, the occurrence of one or
more of the following events:
(a) A clear refusal to carry out any material lawful duties of the Executive or
any directions of the Board or senior management of the Company, all
reasonably consistent with those duties described in Section 3.2 hereof;
(b) Persistent failure to carry out any lawful duties of the Executive
described in Section 3.2 hereof or any directions of the Board or senior
management reasonably consistent with those duties herein set forth to
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be performed by the Executive, provided Executive has been given reasonable
notice and opportunity to correct any such failure;
(c) Violation by the Executive of a state or federal criminal law involving the
commission of a crime against the Company or any other criminal act
involving moral turpitude;
(d) Current abuse by the Executive of alcohol or controlled substances;
deception, fraud, misrepresentation or dishonesty by the Executive; or any
incident materially compromising the Executive's reputation or ability to
represent the Company with investors, customers or the public; or
(e) Any other material violation of any provision of this Agreement by the
Executive, subject to the notice and opportunity to cure requirements of
Section 11.
8.7 GOOD REASON
For purposes of this Agreement, "Good Reason" means
(a) The assignment to the Executive of any duties materially inconsistent with
the Executive's position, authority, duties or responsibilities as
contemplated by Section 3.2 hereof or any other action by the Company which
results in a material diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated and inadvertent
action not taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive;
(b) Any failure by the Company to comply with any of the provisions of Section
5 or Section 6 hereof, other than an isolated and inadvertent failure not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(c) The Company's requiring the Executive to be based at any office or location
other than that described in Section 3.3 hereof;
(d) Any failure by the Company to comply with and satisfy Section 13 hereof,
provided that the Company's successor has received at least ten days' prior
written notice from the Company or the Executive of the requirements of
Section 13 hereof; or
(e) Any other material violation of any provision of this Agreement by the
Company, subject to the notice and opportunity to cure requirements of
Section 11.
8.8 EXCESS PARACHUTE LIMITATION
If either the Company or the Executive receives confirmation from the
Company's independent tax counsel or its certified public accounting firm, or
such other accounting firm retained as independent certified public accountants
for the Company (the "Tax Advisor"), that any payment by the Company to the
Executive under this Agreement or otherwise would be considered to be an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, or any successor statute then in effect (the "Code"),
then the aggregate payments by the Company pursuant to this Agreement shall be
reduced to the highest amount that may be paid to the Executive by the Company
under this Agreement without having any portion of any amount payable to the
Executive by the Company or a related entity under this Agreement or otherwise
treated as such an "excess parachute payment", and, if permitted by applicable
law and without adverse tax consequence, such reduction shall be made to the
last payment due hereunder. Any payments made by the Company to the Executive
under this Agreement which are later confirmed by the Tax Advisor to be "excess
parachute payments" shall be considered by all parties to have been a loan by
the Company to the Executive, which loan shall be repaid by the Executive
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upon demand together with interest calculated at the lowest interest rate
authorized for such loans under the Code without a requirement that further
interest be imputed.
9. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
In order to induce the Company to enter into this Agreement, the Executive
represents and warrants to the Company as follows:
9.1 HEALTH
The Executive is in good health and knows of no physical or mental
disability which, with any accommodation which may be required by law and which
places no undue burden on the Company, would prevent her from fulfilling her
obligations hereunder. The Executive agrees, if the Company requests, to submit
to reasonable periodic medical examinations by a physician or physicians
designated by, paid for and arranged by the Company. The Executive agrees that
the examination's medical report shall be provided to the Company.
9.2 NO VIOLATION OF OTHER AGREEMENTS
The Executive represents that neither the execution nor the performance of
this Agreement by the Executive will violate or conflict in any way with any
other agreement by which the Executive may be bound.
10. NONDISCLOSURE; RETURN OF MATERIALS
10.1 NONDISCLOSURE
Except as required by her employment with the Company, the Executive will
not, at any time during the term of employment by the Company, or at any time
thereafter, directly, indirectly or otherwise, use, communicate, disclose,
disseminate, lecture upon or publish articles relating to any confidential,
proprietary or trade secret information without the prior written consent of the
Company. The Executive understands that the Company will be relying on this
covenant in continuing the Executive's employment, paying her compensation,
granting her any promotions or raises, or entrusting her with any information
which helps the Company compete with others.
10.2 RETURN OF MATERIALS
All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time while employed by the
Company, or in her possession, including any and all copies thereof, shall be
the property of the Company and shall be held by the Executive in trust and
solely for the benefit of the Company, and shall be delivered to the Company by
the Executive upon termination of employment or at any other time upon request
by the Company.
11. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than clause (a), (b), (c) or (d) of Section 8.6 hereof,
before such action is taken, the party asserting the breach of this Agreement
shall give the other party at least ten days' prior written notice of the
existence and the nature of such breach before taking further action hereunder
and shall give the party purportedly in breach of this Agreement the opportunity
to correct such breach during the ten-day period.
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12. FORM OF NOTICE
Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally
or by registered or certified mail, return receipt requested, at the address set
forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof:
If to the Executive: Xxxxx X. Xxxxxxxxxx
00000 000xx Xxxxxx XX
Xxxxxxx Xx 00000
If to the Company: ProCyte Corporation
0000 000xx Xxxxxx X.X., Xxxx. X
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: President
With a copy to: Xxxxxxx Coie
Attn: Xxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
or such other address as shall be provided in accordance with the terms hereof.
Except as set forth in Section 7.4 hereof, if notice is mailed, such notice
shall be effective upon mailing.
13. ASSIGNMENT
This Agreement is personal to the Executive and shall not be assignable by
the Executive.
The Company shall assign to and require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the business and/or assets of the Company to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean ProCyte Corporation and
any affiliated company or successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by contract, operation of
law, or otherwise; and as long as such affiliated company or successor assumes
and agrees to perform this Agreement, the termination of Executive's employment
by one such entity and the immediate hiring and continuation of the Executive's
employment by the Company or other affiliated company or successor shall not be
deemed to constitute a termination or trigger any obligation under this
Agreement. All the terms and provisions of this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
14. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or
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circumstance. All rights and remedies shall be cumulative and not exclusive of
any other rights or remedies.
15. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by the Company
and the Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by the Company and the Executive.
16. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without regard
to any rules governing conflicts of laws.
17. ARBITRATION; ATTORNEYS' FEES
Except in connection with enforcing Section 10 of this Agreement, for which
legal and equitable remedies may be sought in a court of law, any dispute
arising under this Agreement shall be subject to arbitration. The arbitration
proceeding shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect, conducted by one
arbitrator either mutually agreed upon or selected in accordance with the AAA
Rules. The arbitration shall be conducted in King County, Washington under the
jurisdiction of the Seattle office of the American Arbitration Association. The
arbitrator shall have authority only to interpret and apply the provisions of
this Agreement, and shall have no authority to add to, subtract from, or
otherwise modify the terms of this Agreement. Any demand for arbitration must
be made within sixty (60) days of the event(s) giving rise to the claim that
this Agreement has been breached. The arbitrator's decision shall be final and
binding, and each party agrees to be bound to by arbitrator's award subject only
to an appeal therefrom in accordance with the laws of the State of Washington.
Either party may obtain judgment upon the arbitrator's award in the Superior
Court of King, County, Washington.
If it becomes necessary to pursue or defend any legal proceeding, whether
in arbitration or court, in order to resolve a dispute arising under this
Agreement, the prevailing party in any such proceeding shall be entitled to
recover its reasonable costs and attorneys' fees.
18. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law, (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and
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(c) any court or arbitrator having jurisdiction thereover shall have the power
to reform such provision to the extent necessary for such provision to be
enforceable under applicable law.
19. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Executive with respect
to such subject matter are hereby superseded and nullified in their entireties,
except that the Proprietary Information and Invention Agreement between the
Executive and the Company shall continue in full force and effect to the extent
not superseded by Section 10 hereof.
20. WITHHOLDING
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
21. COUNTERPARTS
This Agreement may be executed in counterparts, each of which counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement effective on the date first set forth above.
PROCYTE CORPORATION EXECUTIVE
By /s/ Xxxx X. Xxxxxxxx By /s/ Xxxxx X. Xxxxxxxxxx
--------------------------- -------------------------------
Name Xxxx X. Xxxxxxxx Name /s/ Xxxxx X. Xxxxxxxxxx
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Title Chief Executive Officer Title V.P. Marketing
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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or
(b) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of (i) 20% or more of either (A) the then outstanding shares of Common Stock of
the Company (the "Outstanding Company Common Stock") or (B) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company Voting
Securities"), in the case of either (A) or (B) of this clause (i), which
acquisition is not approved in advance by a majority of the Incumbent Directors,
or (ii) 33% or more of either (A) the Outstanding Company Common Stock or (B)
the Outstanding Company Voting Securities, in the case of either (A) or (B) of
this clause (ii), which acquisition is approved in advance by a majority of the
Incumbent Directors; provided, however, that the following acquisitions shall
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not constitute a Change of Control: (x) any acquisition by the Company, (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (z)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation, the
conditions described in clauses (i), (ii) and (iii) of subsection (c) of this
Appendix A are satisfied; or
(c) Approval by the stockholders of the Company of a reorganization, merger
or consolidation, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 60% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportion as
their ownership immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Company
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
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reorganization, merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were the Incumbent Directors at the time of the execution of
the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all the assets of the Company, other than to a
corporation with respect to which immediately following such sale or other
disposition, (A) more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 33% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 33%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of directors
of such corporation were approved by a majority of the Incumbent Directors at
the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company.
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