EXHIBIT 10.19
CHANGE OF CONTROL SEVERANCE AGREEMENT
-------------------------------------
THIS AGREEMENT between BJ's Wholesale Club, Inc., a Delaware corporation
(the "Company",), and ("Executive"), dated
as of February 4, 1999.
Executive is a key executive of the Company or a Subsidiary and an integral
part of its management.
The Company recognizes that the possibility of a Change of Control or
Potential Change of Control of the Company may result in the departure or
distraction of management to the detriment of the Company and its shareholders
and wishes to modify and restate the agreement previously applicable under such
circumstances.
The Company wishes to assure Executive of fair severance should Executive's
employment terminate in specified circumstances following a Change of Control or
Potential Change of Control of the Company and to assure Executive of certain
other benefits upon such event.
In consideration of Executive's continued employment with the Company or a
Subsidiary and other good and valuable consideration, the parties agree as
follows:
1. Benefits Upon Change of Control.
-------------------------------
1.1 In General. Within 30 days following the earlier of a Change of
----------
Control or Potential Change of Control (such earlier event to be a "Control
Event") as long as this Agreement had not been terminated under Section 8.6 at
the time of the Control Event, then whether or not Executive's employment has
been terminated following the Control Event, the Company shall pay to Executive
the following in a lump sum:
(a) an amount equal to the product of (i) the "Target Bonus" under
the Company's Management Incentive Plan or any other annual incentive plan
which is applicable to Executive for the fiscal year in which the Control
Event occurs (or if the Target Bonus is reduced within 180 days before the
commencement of a Standstill Period, the "Target Bonus" applicable to
Executive for the fiscal year in which such reduction occurred) and (ii) a
fraction, the numerator of which is the number of days in such fiscal year
prior to the Control Event and the denominator of which is 365; and
(b) if Executive is a participant in a performance-based long-range
incentive plan at the time of a Control Event, such amount as is required
to be paid to Executive upon a Control Event pursuant to the provisions of
such plan; provided, that if such incentive plan does not provide for an
automatic payment on the earlier of a Change of Control or a Potential
Change of Control, then any payment under such incentive plan shall be made
only as and when provided for in such incentive plan even though the
benefit under Section 1.1(a) above has been paid previously.
1.2 Benefits Following Qualified Termination of Employment. Executive
------------------------------------------------------
shall be entitled to the following benefits upon a Qualified Termination:
(a) Within 30 days following the Date of Termination, the Company
shall pay to Executive the following in a lump sum:
(i) an amount equal to two times Executive's Base Salary for
one year at the rate in effect immediately prior to the Date of
Termination or, if higher, the Control Event (or if Executive's Base
Salary was reduced within 180 days before the commencement of a
Standstill Period, the rate in effect immediately prior to such
reduction), plus the accrued and unpaid portion of Executive's Base
Salary through the Date of Termination. Any payments made to Executive
under any long term disability plan of the Company with respect to the
two years following termination of employment shall be offset against
such two times Base Salary payment. Executive shall promptly make
reimbursement payments to the Company to the extent any such
disability payments are received by Executive after the Base Salary
payment; and
(ii) an amount equal to two times Executive's automobile
allowance for one year at the rate in effect immediately prior to the
Date of Termination or, if higher, the Control Event (or if such
automobile allowance was reduced within 180 days before the
commencement of a Standstill Period, the rate in effect immediately
prior to such reduction unless such reduction was offset by an
increase in Base Salary during such 180-day period), plus any portion
of Executive's automobile allowance payable but unpaid through the
Date of Termination; and
(iii) an amount equal to two times the Target Bonus amount, as
defined and determined under Section 1.1(a) above without any
fractional adjustment.
(b) Until the second anniversary of the Date of Termination, the
Company shall maintain in full force and effect for the continued benefit
of Executive and Executive's family all life insurance and medical
insurance (other than long-term disability) plans and programs in which
Executive was entitled to participate immediately prior to the Control
Event (or if Executive's title was changed to a level below that of
Executive's Current Title within 180 days before the commencement of a
Standstill Period, all such plans and programs in which Executive was
entitled to participate immediately prior to such change,
-2-
if the benefits thereunder are greater), provided that Executive's
continued participation is possible under the general terms and provisions
of such plans and programs. In the event that participation in such plans
or programs is not available to Executive for any reason, including
termination of the plan, the Company shall arrange upon comparable terms to
provide Executive with benefits substantially similar to those which
Executive is entitled to receive under such plans and programs.
Notwithstanding the foregoing, the Company's obligations hereunder with
respect to life insurance or medical insurance plans and programs shall be
deemed satisfied to the extent (but only to the extent) of any such
insurance coverage or benefits provided by another employer.
(c) If Qualified Termination occurs by reason of Disability, the
Company shall maintain in full force and effect for the continued benefit
of Executive, disability benefits and/or disability insurance at the same
level to which Executive was entitled immediately prior to the Qualified
Termination.
1.3 Coordination With Certain Tax Rules.
-----------------------------------
(a) Notwithstanding any other provision of this Agreement, in the
event that the Company undergoes a Change in Ownership or Control (as
defined below), the Company shall not be obligated to provide to Executive
a portion of any "Contingent Compensation Payments" that Executive would
otherwise be entitled to receive to the extent necessary to eliminate any
"excess parachute payments" (as defined in Section 280G(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code")) for Executive. For
purposes of this Section 1.3, the Contingent Compensation Payments so
eliminated shall be referred to as the "Eliminated Payments" and the
aggregate amount (determined in accordance with Proposed Treasury
Regulation Section 1.280G-1, Q/A-30 or any successor provision) of the
Contingent Compensation Payments so eliminated shall be referred to as the
"Eliminated Amount."
(b) For purposes of this Section 1.3, the following terms shall have
the following respective meanings:
(i) "Change in Ownership or Control" shall mean a change in the
ownership or effective control of the Company or in the ownership of a
substantial portion of the assets of the Company determined in
accordance with Section 280G(b)(2) of the Code.
(ii) "Contingent Compensation Payments" shall mean any payment
(or benefit) in the nature of compensation that is made or made
available (under this Agreement or otherwise) to a "disqualified
individual" (as defined in Section 280G(c) of the Code) and that is
contingent (within the meaning of Section 280G(b)(2)(A)(i) of the
Code) on a Change in Ownership or Control of the Company.
-3-
(c) Any payments or other benefits otherwise due to the Executive
following a Change in Ownership or Control that could be characterized (as
reasonably determined by the Company) as Contingent Compensation Payments
shall not be made until the determination, pursuant to this Section 1.3(c),
of which Contingent Compensation Payments shall be treated as Eliminated
Payments. Within 30 days after each date on which the Executive first
becomes entitled to receive (whether or not then due) a Contingent
Compensation Payment relating to such Change in Ownership or Control, the
Company shall determine and notify Executive (with reasonable detail
regarding the basis for its determinations) (i) which of such payments and
benefits constitute Contingent Compensation Payments and (ii) the
Eliminated Amount. Within 30 days after delivery of such notice to
Executive, Executive shall notify the Company which Contingent Compensation
Payments, or portions thereof (the aggregate amount of which, determined in
accordance with Proposed Treasury Regulation Section 1.280G-1, Q/A-30 or
any successor provision, shall be equal to the Eliminated Amount), shall be
treated as Eliminated Payments. In the event that Executive fails to notify
the Company pursuant to the preceding sentence on or before the required
date, the Contingent Compensation Payments (or portions thereof) that shall
be treated as Eliminated Payments shall be determined by the Company in its
absolute discretion.
(d) The provisions of this Section 1.3 are intended to apply to any
and all payments or benefits available to Executive under this Agreement or
any other agreement or plan of the Company under which Executive receives
Contingent Compensation Payments.
1.4 Definitions. The terms defined in Exhibits A and B hereto are used
-----------
herein as so defined.
2. Noncompetition; No Mitigation of Damages; Other Severance Payments;
-------------------------------------------------------------------
Withholding.
-----------
2.1 Noncompetition. Upon a Qualified Termination, any agreement by
--------------
Executive not to engage in competition with the Company subsequent to the
termination of Executive's employment, whether contained in an employment
contract or other agreement, shall no longer be effective.
2.2 No Duty to Mitigate Damages. Executive's benefits under this
---------------------------
Agreement shall be considered severance pay in consideration of Executive's
past service and Executive's continued service from the date of this Agreement,
and Executive's entitlement thereto shall neither be governed by any duty to
mitigate Executive's damages by seeking further employment nor offset by any
compensation which Executive may receive from future employment.
2.3 Other Severance Payments. In the event that Executive has an
------------------------
employment contract or any other agreement with the Company (or a Subsidiary)
which entitles Executive to severance payments upon the termination of
Executive's employment with the Company, the amount of any such severance
payments shall be deducted from the payments to be made under this Agreement.
-4-
2.4 Withholding. Anything to the contrary notwithstanding, all payments
-----------
required to be made by the Company hereunder to Executive shall be subject to
the withholding of such amounts, if any, relating to tax and other payroll
deductions as the Company may reasonably determine it should withhold pursuant
to any applicable law or regulation.
3. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in Boston, Massachusetts in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof.
4. Legal Fees and Expenses. The Company shall pay all legal fees and
-----------------------
expenses, including, but not limited to, counsel fees, stenographer fees,
printing costs, etc. reasonably incurred by Executive in contesting or disputing
that the termination of Executive's employment during a Standstill Period is for
Cause or other than for good reason (as defined in paragraph (k) of Exhibit A)
or in obtaining any right or benefit to which Executive is entitled under this
Agreement. Any amount payable under this Agreement that is not paid when due
shall accrue interest at the prime rate as from time to time in effect at
BankBoston, N.A., or its successor, until paid in full.
5. Notice of Termination. During a Standstill Period, Executive's
---------------------
employment may be terminated by the Company (or a Subsidiary) only upon 30
days' written notice to Executive.
6. Notices. All notices shall be in writing and shall be deemed given
-------
five days after mailing in the continental United States by registered or
certified mail, or upon personal receipt after delivery, telex, telecopy or
telegram, to the party entitled thereto at the address stated below or to such
changed address as the addressee may have given by a similar notice:
To the Company: BJ's Wholesale Club, Inc.
Xxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attention: President
To Executive: At Executive's home address, as last shown
on the records of the Company.
7. Severability. In the event that any provision of this Agreement shall
------------
be determined to be invalid or unenforceable, such provision shall be
enforceable in any other jurisdiction in which valid and enforceable and in any
event the remaining provisions shall remain in full force and effect to the
fullest extent permitted by law.
8. General Provisions.
------------------
8.1 Binding Agreement. This Agreement shall be binding upon and inure to
-----------------
the benefit of the parties and be enforceable by Executive's personal legal
representatives or
-5-
successors. If Executive dies while any amounts would still be payable to
Executive hereunder, benefits would still be provided to Executive's family
hereunder or rights would still be exercisable by Executive hereunder as if
Executive had continued to live. Such amounts shall be paid to Executive's
estate, such benefits shall be provided to Executive's family and such rights
shall remain exercisable by Executive's estate in accordance with the terms of
this Agreement. This Agreement shall not otherwise be assignable by Executive.
8.2 Successors. This Agreement shall inure to and be binding upon the
----------
Company's successors, including any successor to all or substantially all of the
Company's business and/or assets. The Company will require any successor to all
or substantially all of the business and/or assets of the Company by sale,
merger (where the Company is not the surviving corporation), lease or otherwise,
by agreement in form and substance satisfactory to Executive, to assume
expressly this Agreement. If the Company shall not obtain such agreement prior
to the effective date of any such succession, Executive shall have all rights
resulting from a Qualified Termination by Executive for good reason (as defined
in paragraph (k) of Exhibit A) under this Agreement. This Agreement shall not
otherwise be assignable by the Company.
8.3 Amendment or Modification; Waiver. This Agreement may not be amended
---------------------------------
unless agreed to in writing by Executive and the Company. No waiver by either
party of any breach of this Agreement shall be deemed a waiver of a subsequent
breach.
8.4 Titles. No provision of this Agreement is to be construed by
------
reference to the title of any section.
8.5 Continued Employment. This Agreement shall not give Executive any
--------------------
right of continued employment or any right to compensation or benefits from the
Company or any Subsidiary except the right specifically stated herein to certain
severance and other benefits, and shall not limit the Company's (or a
Subsidiary's) right to change the terms of or to terminate Executive's
employment, with or without Cause, at any time other than during a Standstill
Period, except as may be otherwise provided in a written employment agreement
between the Company (or a Subsidiary) and Executive.
8.6 Termination of Agreement Outside of Standstill Period. This Agreement
-----------------------------------------------------
shall be automatically terminated upon the first to occur of (i) the termination
of Executive's employment for any reason, whether voluntary or involuntary, at
any time other than during a Standstill Period or (ii) the 180/th/ day after a
change in Executive's title to a level below that of Executive's Current Title
unless a Standstill Period was in effect on the date of such change or within
180 days thereafter or (iii) if Executive is employed by a Subsidiary of the
Company, the date on which the Subsidiary either ceases to be a Subsidiary of
the Company or sells or otherwise disposes of all or substantially all of its
assets, unless such event occurs during a Standstill Period and Executive's
employment shall have been terminated in a Qualified Termination within 90 days
of such event, or (iv) March 31, 2002; provided that on March 31, 2000 and each
March 31 thereafter, the termination date provided in this clause (iv) shall be
automatically extended for an additional year (the "Date") (so that on March 31,
2000 the Date shall become
-6-
March 31, 2003, and so on) unless, not later than 90 days prior to any March 31,
the Company shall have given the Executive written notice that the term of this
Agreement will not be further extended.
8.7 Prior Agreement. This Agreement amends and restates and shall
---------------
supersede and replace any prior change of control severance agreement between
the Company or any of its subsidiaries, or any predecessor, and Executive.
8.8 Governing Law. The validity, interpretation, performance and
-------------
enforcement of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
BJ'S WHOLESALE CLUB, INC.
By___________________________________
_____________________________________
Executive:
-7-
EXHIBIT A
---------
Definitions
-----------
The following terms as used in this Agreement shall have the following
meanings:
(a) "Base Salary" shall mean Executive's annual base salary, exclusive of
any bonus or other benefits Executive may receive.
(b) "Cause" shall mean (i) dishonesty, (ii) conviction of a felony, (iii)
gross neglect of duties (other than as a result of Incapacity, Disability or
death), or (iv) conflict of interest; provided that for purposes of clauses
(iii) or (iv) any such gross neglect or conflict shall continue for 30 days
after the Company gives written notice to Executive requesting the cessation of
such gross neglect or conflict, as the case may be.
In respect of any termination during a Standstill Period, Executive shall
not be deemed to have been terminated for Cause until the later to occur of (i)
the 30/th/ day after notice of termination is given and (ii) the delivery to
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a majority of the Company's directors at a meeting called and held for
that purpose (after reasonable notice to Executive), and at which Executive
together with Executive's counsel was given an opportunity to be heard, finding
that Executive was guilty of conduct described in the definition of "Cause"
above, and specifying the particulars thereof in detail; provided, however, that
-------- -------
the Company may suspend Executive and withhold payment of Executive's Base
Salary from the date that notice of termination is given until the earliest to
occur of (a) termination of Executive for Cause effected in accordance with the
foregoing procedures (in which case Executive shall not be entitled to
Executive's Base Salary for such period), (b) a determination by a majority of
the Company's directors that Executive was not guilty of the conduct described
in the definition of "Cause" above (in which case Executive shall be reinstated
and paid any of Executive's previously unpaid Base Salary for such period), or
(c) the 90/th/ day after notice of termination is given (in which case Executive
shall be reinstated and paid any of Executive's previously unpaid Base Salary
for such period).
(c) "Change of Control" shall have the meaning set forth in Exhibit B.
(d) "Company" shall mean BJ's Wholesale Club, Inc. or any successor.
(e) "Current Title" shall mean Executive's title on the date 180 days
prior to the commencement of a Standstill Period.
(f) "Date of Termination" shall mean the date on which Executive's
employment is terminated.
(g) "Disability" shall have the meaning given it in the Company's long-
term disability plan. Executive's employment shall be deemed to be terminated
for Disability on the date on which Executive is entitled to receive long-term
disability compensation pursuant to such long-term disability plan.
-8-
(h) "Executive" shall mean the person named in the first paragraph of this
Agreement.
(i) "Incapacity" shall mean a disability (other than Disability within the
meaning of the definition in (g) above) or other impairment of health that
renders Executive unable to perform Executive's duties to the reasonable
satisfaction of the Board of Directors of the Company. If by reason of
Incapacity Executive is unable to perform Executive's duties for at least six
months in any 12-month period, upon written notice by the Company, the
employment of Executive shall be deemed to have terminated by reason of
Incapacity.
(j) "Potential Change of Control" shall mean:
(i) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change of Control; or
(ii) the Board of Directors of the Company adopts a resolution that,
for purposes of this Agreement, a Potential Change of Control has occurred.
(k) "Qualified Termination" shall mean the termination of Executive's
employment during a Standstill Period (1) by the Company other than for Cause,
or (2) by Executive for good reason, or (3) by reason of death, Incapacity or
Disability.
For purposes of this definition, termination for "good reason" shall mean
the voluntary termination by Executive of Executive's employment (A) within 120
days after the occurrence without Executive's express written consent of any of
the events described in clauses (I), (II), (III), (IV), (V) or (VI) below,
provided that Executive gives notice to the Company at least 30 days in advance
requesting that the situation described in those clauses be remedied, and the
situation remains unremedied upon expiration of such 30-day period; (B) within
120 days after the occurrence without Executive's express written consent (which
must expressly refer to such consent as being given under this Agreement) of the
events described in clauses (VII) or (VIII) below, provided that Executive gives
notice to the Company at least 30 days in advance; or (C) upon occurrence of the
event described in clause (IX) below, provided that Executive gives notice to
the Company at least 30 days in advance:
(I) the assignment to Executive of any duties inconsistent with
Executive's positions, duties, responsibilities, reporting
requirements, and status with the Company (or a Subsidiary)
immediately prior to a Control Event, or a substantive change in
Executive's titles or offices as in effect immediately prior to a
Control Event, or any removal of Executive from or any failure to
reelect Executive to such positions, except in connection with the
termination of Executive's employment by the Company (or a Subsidiary)
for Cause or by Executive other than for good reason; or any other
action by the Company (or a Subsidiary) which results in a
diminishment in such position, authority, duties or responsibilities,
other than an insubstantial and inadvertent action which is remedied
by the Company or the Subsidiary promptly after receipt of notice
thereof given by Executive; or
-9-
(II) Executive's rate of Base Salary for any fiscal year is less than
100 percent of the rate of Base Salary paid to Executive in the
completed fiscal year immediately preceding the Control Event, or
Executive's total cash compensation opportunities, including
salary, auto allowance, and incentives, for any fiscal year are
less than 100 percent of the total cash compensation opportunities
made available to Executive in the completed fiscal year
immediately preceding the Control Event, unless any such reduction
represents an overall reduction of no more than 5 percent of the
rate of Base Salary paid or cash compensation opportunities made
available, as the case may be, and affects all other executives in
the same organizational level (it being the Company's burden to
establish this fact); or
(III) the failure of the Company (or a Subsidiary) to continue in effect
any benefits or perquisites, or any pension, life insurance,
medical insurance or disability plan in which Executive was
participating immediately prior to the Control Event (the
"Benefits," individually, a "Benefit") unless the Company (or a
Subsidiary) provides Executive with substantially similar Benefits,
or the taking of any action by the Company (or a Subsidiary) that
would adversely affect Executive's participation in or materially
reduce any of Executive's Benefits or deprive Executive of any
material Benefit enjoyed by Executive immediately prior to the
Control Event, unless any elimination or reduction of any Benefit,
or any adverse effect on Executive's participation has an aggregate
value equal to no more than 5 percent of the Benefits, and affects
all other executives in the same organizational level (it being the
Company's burden to establish this fact); or
(IV) any purported termination of Executive's employment by the Company
(or a Subsidiary) for Cause during a Standstill Period which is not
effected in compliance with paragraph (b) of this Exhibit; or
(V) any relocation of Executive of more than 40 miles from the place
where Executive was located at the time of the Control Event; or
(VI) any other breach by the Company of any provision of this Agreement;
or
(VII) the Company sells or otherwise disposes of, in one transaction or a
series of related transactions, assets or earning power aggregating
more than 30 percent of the assets (taken at asset value as stated
on the books of the Company determined in accordance with generally
accepted accounting principles consistently applied) or earning
power of the Company (on a non-consolidated basis) or the Company
and its Subsidiaries (on a consolidated basis) to any other Person
or Persons (as defined in Exhibit B); or
(VIII) if Executive is employed by a Subsidiary of the Company, such
Subsidiary either ceases to be a Subsidiary of the Company or sells
or otherwise disposes of, in one transaction or a series of related
transactions, assets or earning power aggregating more than 30
percent of the assets (taken at asset value as stated on the books
of the Subsidiary determined in accordance with generally accepted
accounting
-10-
principles consistently applied) or earning power of such
Subsidiary (on a non-consolidated basis) or such Subsidiary and its
subsidiaries (on a consolidated basis) to any other Person or
Persons (as defined in Exhibit B); or
(IX) the voluntary termination by Executive of Executive's employment at
any time during the period commencing eight months plus one day
after the Change of Control and ending 12 months after the Change
of Control, provided, that in the event of any such voluntary
--------
termination pursuant to this clause (IX), the Executive shall be
entitled to receive only one-half (1/2) of the lump sum amount
provided for in Section 1.2(a) of this Agreement and the benefits
provided for in Section 1.2(b) shall be provided for one year
rather than two years from the Date of Termination.
(l) "Standstill Period" shall be the period commencing on the date of a
Control Event and continuing until the close of business on the last business
day of the 24/th/ calendar month following a Change of Control; provided,
however, if no Change of Control occurs within 12 months of a Potential Change
of Control, then the Standstill Period that began as a result of such Potential
Change of Control shall end on the close of business on the last business day of
the 12/th/ calendar month following such Potential Change of Control.
(m) "Subsidiary" shall mean any corporation in which the Company owns,
directly or indirectly, 50 percent or more of the total combined voting power of
all classes of stock or with respect to determining the subsidiaries of a
Subsidiary in paragraph (k)(VIII), shall mean any corporation in which the
Subsidiary owns, directly or indirectly, 50 percent or more of the total
combined voting power of all classes of stock.
-11-
EXHIBIT B
---------
Definition of Change of Control
-------------------------------
A "Change of Control" shall mean:
(a) The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then-outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) 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");
provided, however, that for purposes of this subsection (a), the following
-------- -------
acquisitions shall not constitute a Change of Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any acquisition by any corporation pursuant to a transaction which satisfies the
criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this
definition; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequently
-------- -------
to the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board (except that this proviso shall
not apply to any individual whose initial assumption of office as a director
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board); or
(c) Consummation of a reorganization, merger or consolidation involving
the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
immediately following such Business Combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of, respectively, the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, of the
corporation resulting from such Business Combination (which as used in Section
(c) of this definition shall include, without limitation, a corporation which as
a result of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination, of the outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially
-12-
owns, directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination, or the combined voting power of the then-outstanding voting
securities of such corporation and (iii) at least half of the members of the
board of directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
-13-
