EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into as of the 6th day of February 1999 ("Effective
Date"), by and between Rural Cellular Corporation ("RCC" or "Company") and Xxx
X. Xxxxxxx (the "Employee").
WHEREAS, Employee has demonstrated expertise as an attorney and familiarity
with RCC's legal affairs, and RCC desires to employ Employee as its Senior Vice
President - General Counsel; and
WHEREAS, Employee desires to be employed by RCC; and
WHEREAS, the parties desire by this writing to set forth the employment
relationship of RCC and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. EMPLOYMENT.
(a) TITLE/DUTIES. The Employee is employed in the capacity of Senior
Vice President - General Counsel for RCC, to perform the duties customarily
performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and to the
extent permitted by law, the business of RCC. The Employee's other duties
shall be such as the President/CEO may from time to time reasonably direct;
PROVIDED, that the Employee shall not be required to engage in any activity
that is contrary to the principles of legal ethics. The Employee shall
report to the President/CEO, except in such instances as she determines
that any applicable law, regulation or ethical rule requires her to report
directly to the Board of Directors.
(b) LOCATION. The Employee's principal place of employment shall be
at a location to be selected by mutual agreement of the parties within 50
miles of Minneapolis, Minnesota; PROVIDED, that the Employee may be
required to spend not more than two days per week at RCC's offices in
Alexandria, Minnesota; and, PROVIDED FURTHER, that the Employee may be
required to travel to other locations from time to time to the extent
necessary to perform her duties under this Agreement.
1. BASE COMPENSATION. RCC agrees to pay the Employee during the term
of this Agreement a salary which shall be at the initial rate of Two Hundred
Forty-Nine Thousand Dollars ($249,000.00) per annum beginning on the
Effective Date,
payable not less frequently than every two weeks; PROVIDED, that the rate of
such salary shall be reviewed not less often than annually, and Employee
shall be entitled to receive an increase at such percentage or in such an
amount, if any, as may be determined from time to time. The Employee's
salary may not be decreased below the rate in effect on any date during the
term of this Agreement, except that, in the event that the salaries of other
senior management employees have been generally reduced, Employee's salary
may be reduced in a similar manner, except that any such reduction following
a "Change in Control" (as defined in Appendix A hereto) shall be subject to
the provisions of Section 11(b) hereof.
2. DISCRETIONARY AND INCENTIVE BONUS; STOCK OPTIONS. The Employee shall
be entitled to participate in an equitable manner with all other senior
management employees of RCC in discretionary and incentive bonuses, including,
but not limited to stock option and restricted stock awards and other cash and
non-cash compensation plans that may be authorized and declared by the Board of
Directors to its senior management employees from time to time. Specifically,
but not in limitation of the foregoing, the Employee shall be granted an option
or options to purchase 85,000 shares of RCC's Class A Common Stock pursuant to
the 1995 Stock Compensation Plan. Such option or options shall be granted as of
the Effective Date and shall be upon terms and conditions similar to those of
options granted to other senior management employees.
3. OTHER BENEFITS.
(a) PARTICIPATION IN EMPLOYEE BENEFIT PLANS. The Employee shall be
entitled to participate in any plan of RCC relating to compensation, profit
sharing, retirement, medical coverage or other employee benefits as RCC may
adopt for the benefit of its senior management employees.
(b) FRINGE BENEFITS; EXPENSES. The Employee shall be eligible to
participate in any fringe benefits which may be or may become applicable to
RCC's senior management employees, including by example, participation in
any stock option or incentive plans adopted by the Board of Directors, and
any other benefits adopted by RCC. RCC shall reimburse Employee for all
reasonable out-of-pocket expenses which Employee shall incur in connection
with her service for RCC which are documented in accordance with RCC's
policies as set forth from time to time. Such out-of-pocket expenses shall
include, but shall not be limited to:
(i) the reasonable cost of continued coverage under the
lawyers' professional liability insurance policy maintained by the
Employee's prior law firm;
(ii) the reasonable cost of attending continuing legal education
seminars to the extent required to maintain the Employee's license to
practice law;
(iii) the annual cost of renewing the Employee's license to
practice law; and
(iv) the annual cost of the Employee's membership in national,
state, and/or local bar associations.
(a) CAR ALLOWANCE. The Employee shall be required to have and
maintain a personal automobile for use in the performance of her duties
under this Agreement and a valid drivers license to operate RCC vehicles.
RCC shall pay the Employee an allowance at an initial rate of $6,000 per
year to compensate her for all expenses incurred by her in complying with
these requirements. In addition, RCC shall reimburse the Employee at
current IRS allowable mileage rates for the use of her personal automobile
on RCC business.
1. TERM. The term of employment of Employee under this Agreement shall
be for the period commencing on the Effective Date and ending December 31, 2001;
PROVIDED, that commencing on December 31, 1999, and on each December 31
thereafter, the term of Employee's employment shall automatically be extended
for one additional year, so that the remaining term of her employment shall
never be less than two years, unless either party gives written notice to the
other of its intention not to so extend the term of the Employee's employment.
2. LOYALTY; NONCOMPETITION.
(a) The Employee shall devote her full business time and attention to
the performance of her employment under this Agreement. During the term of
Employee's employment under this Agreement, the Employee shall not engage
in any business or activity contrary to the business affairs or interests
of RCC.
(b) Nothing contained in this Section 6 shall be deemed to prevent or
limit the right of Employee to invest in the capital stock or other
securities of any business dissimilar from that of RCC or, solely as a
passive or minority investor, in any business.
1. STANDARDS. The Employee shall perform her duties under this Agreement
in accordance with the reasonable standards customarily expected of employees
with comparable positions in comparable organizations, or in accordance with
such other standards as may reasonably be established from time to time by the
President/CEO or the Board of Directors.
2. PAID TIME OFF. The Employee shall be entitled, without loss of pay,
to absent herself voluntarily from the performance of the duties of her
employment under this Agreement, with all such voluntary absences to count as
paid time off, in accordance with the following:
(a) The Employee shall be entitled to not less than nineteen (19)
days per calendar year of paid time off for vacation, personal illness,
emergency situations such as family illness, and for any other reason that
time off must be taken during a regular scheduled work day that is not
covered by other Company policies (such as jury duty). Such paid time off
shall be taken in accordance with then current Company policies.
(b) The Employee shall take at least five consecutive business days
of vacation in each calendar year.
(c) The Employee shall not be entitled to receive any additional
compensation from RCC on account of her failure to take paid time off, and
Employee shall be entitled to accumulate unused paid time off in accordance
with then current Company policy (as of the end of 1999 only 120 hours of
paid time off can be carried over into the following year).
(d) In addition to the aforesaid paid time off, the Employee shall be
entitled, without loss of pay, to absent herself voluntarily from the
performance of her employment with RCC for such additional periods of time
as may be necessary for the Employee to attend continuing legal education
seminars that are required to maintain the Employee's license to practice
law, and for such other valid and legitimate reasons as the Board of
Directors in its discretion may determine.
(e) The Employee shall also be entitled to any other paid or unpaid
time off as may be provided by Company policies. Further, the Board of
Directors shall be entitled to grant to the Employee a leave or leaves of
absence with or without pay at such time or times and upon such terms and
conditions as the Board of Directors in is discretion may determine.
(f) The Employee is encouraged to participate in related industry and
professional organizations and activities provided that the assumption of
any significant responsibilities for such outside activities or
organizational participation shall be approved in advance by the
President/CEO.
1. TERMINATION AND TERMINATION PAY. The Employee's employment under this
Agreement may be terminated upon any of the following occurrences:
(a) The death of the Employee during the term of this Agreement, in
which event the Employee's estate shall be entitled to receive the
compensation due the Employee through the last day of the calendar month in
which Employee's death shall have occurred, plus all accrued but unused
paid time off for such calendar year, and PRO RATA payment of all bonuses
or incentive payments earned or to be awarded for such calendar year.
(b) The Board of Directors may terminate the Employee's employment at
any time, but any termination by the Board of Directors other than
termination for Just Cause, as defined below, shall not prejudice the
Employee's right to compensation or other benefits under this Agreement.
The Employee shall have no right to receive compensation or other benefits
for any period after termination for Just Cause, except to the extent
specifically provided under the terms of any benefit plan or program of RCC
or as may otherwise be required by law. Termination shall be for "Just
Cause" if the Employee
(i) has been convicted of a felony or
(ii) has intentionally engaged in conduct that is demonstrably
and materially injurious to the Company, monetarily or otherwise;
PROVIDED, HOWEVER, that no termination of Employee's employment shall
be for Just Cause as set forth in clause (ii) above until
(A) there shall have been delivered to the Employee a copy
of a written notice setting forth that the Employee was
guilty of the conduct set forth in clause (ii) and
specifying the particulars thereof in detail;
(B) the Employee shall have been provided an opportunity to
be heard by the Board of Directors (with the assistance
of the Employee's counsel if the Employee so desires);
and
(C) such conduct is not discontinued within a reasonable
period of time after receipt of the written notice
provided in clause (A).
No act or failure to act on the Employee's part shall be considered
"intentional" unless she has acted or failed to act with an absence of good
faith and without a reasonable belief that her action or failure to act was
in the best interest of the Company. Notwithstanding anything contained in
this Agreement to the contrary, no failure to perform by the Employee after
notice of termination has been given by the Employee will constitute Just
Cause for purposes of this Agreement.
(a) Except as provided pursuant to Section 11 herein, in the event
Employee's employment under this Agreement is terminated by the
Board of Directors without Just Cause, RCC shall be obligated to continue
to pay the Employee the salary provided pursuant to Section 2 herein, up to
the date of termination of the term (including any extension of the term
pursuant to Section 5 above) of this Agreement. Notwithstanding the
foregoing, in no event shall payments to be made in accordance with this
Section 9(c) be for a period of less than 12 months following the date of
termination of employment.
(b) The voluntary termination by the Employee during the term of this
Agreement with the delivery of no less than 60 days written notice to the
Board of Directors (other than pursuant to Section 11(b)), in which case
the Employee shall be entitled to receive compensation, vested rights, and
all employee benefits only up to the date of such termination except as
specifically provided below or as required by law.
1. DISABILITY. If the Employee shall become disabled or incapacitated to
the extent that she is unable to perform her duties hereunder, by reason of
medically determinable physical or mental impairment, as determined by a doctor
mutually acceptable to the Board of Directors and the Employee and retained by
RCC, Employee shall nevertheless continue to receive the compensation and
benefits provided under the terms of this Agreement as follows: 100% of such
compensation and benefits for a period of six months, but not exceeding the
remaining term of the Agreement, and 65% thereafter for the remainder of the
term of the Agreement. Such benefits noted herein shall be reduced by any
benefits otherwise provided to the Employee during such period under the
provisions of disability insurance coverage in effect for RCC employees.
Thereafter, Employee shall be eligible to receive benefits provided by RCC under
the provisions of disability insurance coverage in effect for RCC employees.
Upon returning to active full-time employment, the Employee's full compensation
as set forth in this Agreement shall be reinstated as of the date of
commencement of such activities. In the event that the Employee returns to
active employment on other than a full-time basis, then her compensation (as set
forth in Section 2 of this Agreement) shall be reduced in proportion to the time
spent in said employment, or as shall otherwise be agreed to by the parties.
2. CHANGE IN CONTROL.
(a) TERMINATION BY COMPANY. Notwithstanding any provision herein
to the contrary, in the event the Company terminates Employee's employment
under this Agreement, absent Just Cause, in connection with, or within 24
months after, any Change in Control (as defined in Appendix A hereto) of RCC,
Employee shall be paid an amount equal to the product of 2.99 times the
Employee's "base amount" as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code") and regulations promulgated
thereunder. Said sum shall be paid to the Employee in one lump sum within
five (5) days of such termination. Such payment shall
be in lieu of any other future payments which the Employee would be otherwise
entitled to receive under Section 9 of this Agreement.
(b) TERMINATION FOR "GOOD REASON." Notwithstanding any other
provision of this Agreement to the contrary, if Employee voluntarily
terminates her employment under this Agreement within 24 months following a
Change in Control of RCC for "Good Reason" (as defined herein), Employee
shall be entitled to receive the payment described in Section 11(a) of this
Agreement within five (5) days of such termination. "Good Reason" for
purposes of this Agreement shall be the occurrence of any of the following
events, which have not been consented to in advance by the Employee in
writing: (i) if at the time of a Change in Control of the Company,
Employee's employed at the Company's principal executive offices, a
relocation of such principal executive offices to a location more than fifty
miles from such location or requiring the Employee to be based anywhere other
than the Company's principal executive offices at the time of a Change in
Control, or if Employee is not employed at the Company's principal executive
offices at the time of a Change in Control, Employee's relocation to any
place other than the location at which the Employee principally performed
Employee's duties prior to the Change in Control, or requiring travel by
Employee on the Company's business to an extent substantially greater than
Employee's business travel obligations at the time of the Change in Control;
(ii) if in the organizational structure of RCC Employee would be required to
report to a person or persons other than the President/CEO; (iii) if RCC
should fail to maintain Employee's base compensation in effect as of the date
of the Change in Control and the existing material fringe benefit,
performance incentive and employee benefit plans; (iv) if Employee would be
assigned duties and responsibilities other than those normally associated
with her position as referenced at Section 1 herein; or (v) if Employee's
responsibilities or authority have in any way been materially diminished or
reduced.
(c) EXCISE TAX PAYMENTS.
(i) In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Code), paid or payable to the
Employee or for her benefit or distributed or distributable pursuant
to the terms of this Agreement or otherwise in connection with, or
arising out of, her employment with the Company or a Change in Control
of the Company (a "Payment" or "Payments"), would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Employee with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the
Employee will be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Employee of all taxes (including any interest or penalties, other
than interest and penalties imposed by reason of the Employee's
failure to file timely a tax return or
pay taxes shown as due on her return, imposed with respect to such
taxes and the Excise Tax), including any Excise Tax imposed upon the
Gross-Up Payment, the Employee retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(ii) An initial determination as to whether a Gross-Up Payment
is required pursuant to this Agreement and the amount of such Gross-Up
Payment shall be made at the Company's expense by an accounting firm
selected by the Company and reasonably acceptable to the Employee
which is designated as one of the five largest accounting firms in the
United States (the "Accounting Firm"). The Accounting Firm shall
provide its determination (the "Determination"), together with
detailed supporting calculations and documentation, to the Company and
the Employee within five days of the date of termination of the
Employee's employment, if applicable, or such other time as requested
by the Company or the Employee (provided the Employee reasonably
believes that any of the Payments may be subject to the Excise Tax).
If the Accounting Firm determines that no Excise Tax is payable by the
Employee with respect to a Payment or Payments, it shall furnish the
Employee with an opinion reasonably acceptable to the Employee that no
Excise Tax will be imposed with respect to any such Payment or
Payments. Within ten days of the delivery of the Determination to the
Employee, the Employee shall have the right to dispute the
Determination (the "Dispute"). The Gross-Up Payment, if any, as
determined pursuant to this Section 11(c) shall be paid by the Company
to the Employee within five days of the receipt of the Determination.
The existence of the Dispute shall not in any way affect the
Employee's right to receive the Gross-Up Payment in accordance with
the Determination. Upon the final resolution of a Dispute, the
Company shall promptly pay to the Employee any additional amount
required by such resolution, or, if it is determined that the Excise
Tax is lower than originally determined, the Employee shall repay to
the Company the excess amount of the Gross-Up Payment. If there is no
Dispute, the Determination shall be binding, final and conclusive upon
the Company and the Employee subject to the application of Section 11
(c)(iii) below.
(iii) Notwithstanding anything contained in this Agreement to the
contrary, in the event that, according to the Determination, an Excise
Tax will be imposed on any Payment or Payments, the Company shall pay
to the applicable government taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that the Company has
actually withheld from the Payment or Payments.
1. NON-COMPETITION AGREEMENT.
(a) TERM. During the term of the Employee's employment pursuant to
this Agreement and for the period ending six months after the voluntary or
involuntary termination of such employment, Employee agrees that she will not,
without RCC's prior written consent, directly or indirectly, within the service
areas served by RCC at the time of termination, lend her credit, advice or
assistance, or engage in any activity or act in any manner, including but not
limited to, as an individual, owner, sole proprietor, founder, associate,
promoter, partner, joint venturer, shareholder other than as a less than five
percent shareholder of a publicly traded corporation, officer, director,
trustee, manager, employer, employee, licensor, licensee, principal, agent,
salesman, broker, representative, consultant, adviser, investor or otherwise,
for the purpose of establishing, operating or managing any business or entity
that is engaged in activities competitive with the business of the Company as
carried on as of the date of termination.
(b) NON-SOLICITATION AGREEMENT. As used in this Agreement, the term
"Person" means any individual, corporation, joint venture, general or limited
partnership, association or other entity. During the period of six months from
and after the date of termination of her employment pursuant to this Agreement,
Employee agrees that she will not, whether for her own account or for the
account of any other Person, directly or indirectly interfere with the Company's
relationship with or endeavor to divert or entice away from the Company any
Person who or which at any time during the term of Employee's employment by RCC
is or was an employee or customer of or in the habit of dealing with RCC.
(c) REASONABLENESS OF COVENANTS. Employee acknowledges and agrees
that the geographic scope and period of duration of the restrictive covenants
contained in this Agreement are both fair and reasonable and that the interests
sought to be protected by the Company are legitimate business interests entitled
to be protected. It is the intention of the parties that the provisions of this
Section 12 shall be enforceable to the fullest extent permissible under
applicable law; however, if any restriction contained in this Section is held to
be unenforceable because of the duration of such restriction or the geographical
area covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or geographical area of such
restriction and, in its reduced form, said restriction shall then be
enforceable.
(d) INJUNCTIVE RELIEF; ATTORNEYS' FEES. The parties agree that
the remedy of damages at law for the breach by Employee of any of the
covenants contained in this Section 12 is an inadequate remedy. In
recognition of the irreparable harm that a violation by Employee of any of
the covenants, agreements or obligations arising under this Agreement would
cause RCC, Employee agrees that in addition to any other remedies or relief
afforded by law, an injunction against an actual or threatened
violation or violations may be issued against her and every other Person
concerned thereby, it being the understanding of the parties that both
damages and an injunction shall be proper modes of relief and are not to be
considered alternative remedies. In the event of any such an actual or
threatened violation, Employee agrees to pay the costs, expenses and
reasonable attorneys' fees incurred by the Company in pursuing any of its
rights with respect to such actual or threatened violation, in addition to
the actual damages sustained by the Company as a result thereof. Such costs,
expenses, fees and damages shall not be payable by the Employee until a final
judgment, from which no further appeal may be taken, has been entered in
favor of the Company by a court of competent jurisdiction. If no such
judgment is entered, the Employee shall not be liable for any such costs,
expenses, fees or damages, and the Company shall reimburse the Employee for
any costs, expenses and reasonable attorneys' fees incurred by her in
defending against the Company's allegations.
(e) COMPENSATION. In the event that Employee's employment has
terminated and Employee is not entitled to receive payment under Section 9 or
11 of this Agreement, to compensate Employee for the restrictive covenants
contained in this Agreement, RCC agrees to pay Employee an amount equal to
25% of the Employee's final compensation. One-half of this amount is payable
in equal monthly payments commencing on the last day of the month following
termination and continuing thereafter on the last day of each and every month
until the end of the period stated in Section 12(a) and one-half at the end
of the period stated in Section 12(a). For the purposes of this paragraph,
the Employee's "final compensation" means the Employee's annual rate of
salary in effect on the date her employment terminates, plus her bonus and/or
incentive payment(s) for the year immediately preceding the year in which her
employment terminates.
In the event that Employee shall breach any of her covenants,
agreements or obligations arising under this Agreement, RCC shall have the
right to discontinue making the payments to Employee provided for herein
unless and until Employee has cured any such existing breaches.
(a) WAIVER OF RESTRICTIONS. RCC may waive the restrictions on
Employee imposed in Section 12 at any time. In the event of such waiver: (i)
RCC shall not be obligated to make any further monthly payments pursuant to
Section 12(e); and (ii) any payment due pursuant to Section 12(e) at the
expiration of the period stated in Section 12(a) shall be prorated and paid
at the time of the waiver.
1. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall inure to the benefit of and be binding
upon any corporation or other successor of RCC which shall acquire, directly
or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the business, assets or stock of RCC.
(b) Since RCC is contracting for the unique and personal skills of
the Employee, the Employee shall be precluded from assigning or delegating her
rights or duties hereunder without first obtaining the written consent of RCC.
1. AMENDMENTS. No amendments or additions to this Agreement shall be
binding upon the parties hereto unless made in writing and signed by both
parties, except as herein otherwise specifically provided.
2. APPLICABLE LAW. This Agreement shall be governed in all respects,
whether as to validity, construction, capacity, performance or otherwise, by the
laws of the State of Minnesota, except to the extent that Federal law shall be
deemed to apply.
3. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
4. ARBITRATION. Subject to RCC's right to seek injunctive relief from
a court of competent jurisdiction pursuant to Section 12(e), any controversy
or claim arising out of or relating to this Agreement, or the breach thereof,
shall be settled by arbitration in accordance with the rules then in effect
of the district office of the American Arbitration Association ("AAA")
nearest to the home office of RCC, and judgment upon the award rendered may
be entered in any court having jurisdiction thereof, except to the extent
that the parties may otherwise reach a mutual settlement of such issue. RCC
shall incur the cost of all fees and expenses associated with filing a
request for arbitration with the AAA, whether such filing is made on behalf
of RCC or the Employee, and the costs and administrative fees associated with
employing the arbitrator and related administrative expenses assessed by the
AAA. If the parties cannot mutually agree on an arbitrator, each party shall
select an arbitrator and those two arbitrators shall select a third
arbitrator and the third arbitrator shall conduct the arbitration.
Otherwise, each party shall pay its own costs and expenses, including
reasonable attorneys' fees, arising from such dispute, proceedings or
actions, notwithstanding the ultimate outcome thereof, upon delivery of a
final judgment or settlement of the dispute.
5. REPRESENTATION BY COUNSEL. Employee acknowledges that she has read
this Agreement and that she fully understands her rights, privileges, and
duties hereunder. She further acknowledges that she has had the opportunity
to consult and has consulted with attorneys of her choice to review and
explain the terms of this Agreement and the consequences of signing it.
6. ENTIRE AGREEMENT. This Agreement, together with any understanding
or modifications thereof as agreed to in writing by the parties, shall
constitute the entire agreement between the parties hereto, and shall
supersede all prior understandings in writing or otherwise between the
parties.
* * * * *
RURAL CELLULAR CORPORATION
ATTEST:
------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
--------------------------------
Secretary
WITNESS:
-------------------------------- -------------------------------------------
Xxx X. Xxxxxxx
APPENDIX A
TO EMPLOYMENT AGREEMENT BETWEEN
RURAL CELLULAR CORPORATION AND XXX X. XXXXXXX
For the purposes of the Employment Agreement to which this Appendix is attached,
a "Change in Control" means the happening of any of the following:
(1) A majority of the directors of RCC shall be persons other than
persons:
(a) for whose election proxies shall have been solicited by the
Board, or
(b) who are then serving as directors appointed by the Board to fill
vacancies on the Board caused by death or resignation (but not by
removal) or to fill newly-created directorships,
(2) 30% or more of the outstanding voting stock of RCC is acquired or
beneficially owned (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934, or any successor rule thereto) by any person (other than RCC
or a subsidiary of RCC) or group of persons acting in concert (other than
the acquisition and beneficial ownership by a parent corporation or its
wholly-owned subsidiaries, as long as they remain wholly-owned
subsidiaries, of 100% of the outstanding voting stock of RCC as a result of
a merger which complies with paragraph (3)(a)(ii) hereof in all respects),
or
(3) The shareholders of RCC approve a definitive agreement or plan to:
(a) merge or consolidate RCC with or into another corporation other
than
(i) a merger or consolidation with a subsidiary of RCC, or
(ii) a merger in which:
(A) RCC is the surviving corporation,
(B) no outstanding voting stock of RCC (other than
fractional shares) held by shareholders immediately prior
to the merger is converted into cash, securities, or other
property (except: (1) voting stock of a parent corporation
owning directly, or indirectly through wholly owned
subsidiaries, both beneficially and of record 100% of the
voting stock of RCC immediately after the merger; and (2)
cash upon the exercise by holders of voting stock of RCC of
statutory dissenters' rights),
(C) the persons who were the beneficial owners,
respectively, of the outstanding common stock and
A-1
outstanding voting stock of RCC immediately prior to such
merger beneficially own, directly or indirectly,
immediately after the merger, more than 70% of,
respectively, the then outstanding common stock and the
then outstanding voting stock of the surviving corporation
or its parent corporation, and
(D) if voting stock of the parent corporation is exchanged
for voting stock of RCC in the merger, all holders of any
class or series of voting stock of RCC immediately prior to
the merger have the right to receive substantially the same
per share consideration in exchange for their voting stock
of RCC as all other holders of such class or series,
(b) exchange, pursuant to a statutory exchange of shares of
voting stock of RCC held by shareholders of RCC immediately prior to
the exchange, shares of one or more classes or series of voting stock
of RCC for cash, securities, or other property,
(c) sell or otherwise dispose of all or substantially all of
the assets of the Company (in one transaction or a series of
transactions), or
(d) liquidate or dissolve the Company.
A-2
