EMPLOYMENT AGREEMENT
Exhibit 10.7
THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of December 30, 2004 and
amended and restated effective March 20, 2007 by and among Biodel Inc., a Delaware corporation with
an address at 0 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000-0000 (“BIODEL”, “Employer” or the
“Company”), and Roderike Xxxx, an individual residing at 0 Xxxxxx Xxxx Xxxx, Xxxxxxx, XX. 00000
(“Employee”).
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Employee as
Vice President, Research; and
WHEREAS, Employee desires to continue into the employ of Employer in accordance with the terms
and conditions herein set forth;
WHEREAS, the parties entered into an agreement as of December 30, 2004;
WHEREAS, the parties wish to amend such agreement so that such agreement as so amended shall
read in its entirety as follows
NOW, THEREFORE, in consideration of the premises and of the covenants and agreements of the
parties herein set forth, the parties hereto hereby covenant and agree as follows:
1. Position of Employment. Subject to the terms and conditions hereof, Employer
hereby agrees to employ the services of Employee as Vice President, Research and Employee hereby
accepts such employment and agrees to serve the Company in such
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capacity. Employee shall have the duties, authority and responsibilities customarily
associated with the office of Vice President, Research. During the period that Employee is
employed by Employer, Employee shall devote substantially all of her business time and attention to
the performance of the duties described herein. Notwithstanding the foregoing, Employee shall be
entitled to pursue charitable endeavors and to participate in professional organizations, provided
that such activities do not interfere in any material respect with the performance by Employee of
her duties hereunder. Employee shall at all times act in good faith in the performance of her
duties. Employee agrees to abide by the rules, regulations, instructions, personnel practices and
policies of the Company and any changes therein which may be adopted from time to time by the
Company applicable to employees generally, including, but not limited to, those relating to the
protection of the Company’s proprietary trade secrets and confidential information.
2. Contract Term. Unless terminated earlier pursuant to Section 4 below,
the initial term of Employee’s employment under this Agreement shall be for the period from the
date of this Agreement (the “Commencement Date”) to
December 30, 2009 (the “Initial Termination
Date”). Following the Initial Termination Date, this Agreement shall be automatically renewed for
successive one-year terms (each, a “Renewal Term”) unless, at least three months prior to the
Initial Termination Date or the expiration of a Renewal Term, as applicable, Employee or BIODEL in
her or its respective sole discretion notifies the other party in writing of her or its intent to
terminate the Employment Agreement as of the Initial Termination Date or the expiration of a
Renewal Term, as applicable. The term of Employee’s employment hereunder, including any renewal
periods pursuant to the immediately preceding sentence, shall be hereafter referred to as the
“Contract Term.”
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Notwithstanding the foregoing, if a Change of Control occurs during the Contract Term, the Contract
Term shall automatically extend for a period of two (2) years from the effective date of Change of
Control and shall automatically terminate at the end of such period. “Change of Control” shall have
the Definition set forth in Appendix A hereto, which is hereby incorporated by reference.
3. Salary and Additional Benefits.
3.1 Employer shall pay to Employee and Employee agrees to accept as compensation for her
services to be rendered hereunder, an initial base salary of One Hundred Fifty Thousand Dollars
($150,000.00) (“Base Salary”) per year for the period commencing with the Commencement Date and
ending on the completion of the Contract Term, payable in equal installments on the 15th and last
day of each month or, if not a business day, the next preceding day which is a business day.
3.2 During the term of this Agreement, Employee, as Vice President, shall be entitled to
receive an annual year-end bonus in cash in an amount determined by the Board of Directors. At the
time the Board of Directors considers the Employee’s bonus but not less than annually, the Board of
Directors shall also consider an award to the employee of stock or options to acquire stock under
any stock award plan then in effect.
3.3 Employee shall be entitled to vacations, at such times as Employee shall reasonably
determine, of at least four weeks each year of employment hereunder.
3.4 In addition to the foregoing, Employee shall also(i) participate in and be entitled to
receive medical insurance and other benefits substantially equivalent to
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the normal benefits provided by BIODEL to its employees generally and (ii) participate in various
retirement, welfare, fringe benefit and executive perquisite plans, programs and arrangements of
the Company to the extent the senior executives of the Company generally are eligible for
participation under the terms of such plans, programs and arrangements including, without
limitation, plans, programs and arrangements for the granting of options to purchase securities of
the Company or other equity based compensation. Employee acknowledges the right of Employer to
change, amend, or terminate any of the benefits referred to in this paragraph, at any time in a
manner which does not discriminate between Employee and other company employees who are eligible to
participate in such benefits.
3.5 Employer shall reimburse Employee for any ordinary, necessary and reasonable travel,
maintenance and entertainment expenses incurred by the Employee in the course of her duties under
this Agreement, in accordance with the Employer’s customary policies and practices in effect from
time to time, upon submission to the Employer of appropriate vouchers and receipts evidencing the
same.
4. Termination. The employment of the Employee by the Company pursuant to the
Agreement shall terminate upon the occurrence of any of the following:
4.1 Expiration of the Contract Term in accordance with Section 2;
4.2 At the election of the Company, for cause, upon written notice by the Company to the
Employee. For the purposes of this Section 4.2, cause for termination shall be deemed to exist upon
(a) a good faith finding by the Board of Directors of the Company of (i) failure of the Employee to
perform in any material respect her assigned duties for the Company customarily associated with the
Office of Vice President, which
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failure continues for ten (10) days subsequent to written notice from the Company to the Employee
of such failure, or (ii) dishonesty, gross negligence or misconduct not involving any exercise of
business judgment in good faith relating to the performance of her duties for the Company; (b) the
conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the
Employee to, any crime involving moral turpitude or any felony; or (c) the material breach by the
Employee of any terms of the Agreement, which breach continues for ten (10) days subsequent to
written notice from the Company to the Employee of the breach;
4.3 Upon the death or, at the election of the Company, disability of the Employee. As used in
this Agreement, the term “disability” shall mean the inability of the Employee, due to a physical
or mental disability, for a period of 180 days, whether or not consecutive, during any 360-day
period to perform the services contemplated under this Agreement. A determination of disability
shall be made by a physician satisfactory to both the Employee and the Company; provided that if
the Employee and the Company do not agree on a physician, the Employee and the Company shall each
select a physician and these two together shall select a third physician, whose determination as to
disability shall be binding on all parties. Nothing herein shall be construed to violate any
Federal or State law including the Family and Medical Leave Act of 1993, 29 U.S.C.S. §2601 et
seq., and the Americans With Disabilities Act, 42 U.S.C.S. §12101 et seq.
4.4 The Company may terminate the employment of the Employee at any time without cause
immediately upon giving the Employee ninety (90) days’ prior written notice of termination or
payment in lieu of notice. The Employee may terminate her employment at any time for good reason
immediately upon giving the Employer thirty
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(30) days prior written notice of termination. For the purpose of the Section 4.4, good reason for
termination shall exist upon (i) the material breach by the Company of any term of this Agreement
which breach continues for ten (10) days subsequent to written notice from the Employee to the
Company of the breach, (ii) the relocation of the principal office of the Company to a location
which is more than 50 miles away from the present location, or (iii) the assignment of the Employee
of any duties inconsistent in any material respect with the Employee’s positions with the Company
as set forth in this Agreement (including status, offices and titles), authority, duties or
responsibilities as contemplated by this Agreement or any action by the Company which results in a
material diminution in such positions, authority, duties or responsibilities, excluding for this
purpose any isolated, insubstantial and inadvertent action not taken in bad faith and which is
promptly remedied by the Company.
5. Effect of Termination.
5.1 Termination for Cause. In the event the Employee’s employment is
terminated for cause pursuant to Section 4.2, the Company shall pay to the Employee the
compensation and benefits which would otherwise be payable or accrued to her through the last day
of her actual employment by the Company.
5.2 Termination for Death or Disability. If the Employee’s employment is terminated
by death or because of disability pursuant to Section 4.3, the Company shall pay to the estate of
the Employee or to the Employee, as the case may be, the compensation and benefits which would
otherwise be payable or accrued to the Employee through the date of her termination and an
additional six months because of
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death or disability. The Company will continue health benefits for one year after the date of
termination.
5.3 Termination Without Cause or For Good Reason. If the Employee’s employment is
terminated (a) at the election of the Company pursuant to Section 4.4 without cause, or (b) at the
election of the Employee pursuant to Section 4.4 for good reason, and in consideration of the
post-termination non-compete and non-solicitation agreement set forth in Section 6, the Company
shall pay to the Employee the compensation and benefits payable or accrued to her under Section 4
(including the provision of medical insurance, disability and life insurance), at the times
provided in Section 4, through the longer of (x) two (2) years following the termination date or
(y) the balance of the term of this Agreement.
6. Non-Compete and Non-Solicitation.
6.1 The Employee recognizes that her willingness to enter into the restrictive
covenants contained in the Section 6 are a critical condition precedent to the willingness of
BIODEL to enter into and perform under this Agreement. The Employee also acknowledges that the
restrictions contained in this Section 6 will not materially or unreasonably interfere with the
Employee’s ability to earn a living. The Employee acknowledges that the restrictions contained in
this Section 6 are necessary to protect the legitimate interests of BIODEL and to ensure that
Employee will not reveal or use BIODEL’s confidential, proprietary or trade secret information or
unfairly compete with BIODEL after her termination.
6.2 During the Contract Term and, in the event the Employee’s employment is terminated for
cause pursuant to Section 4.2, through the day immediately
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prior to the first anniversary of the termination date, or, if the Employee’s employment is
terminated (a) at the election of the Company pursuant to Section 4.4 without cause, or (b) at the
election of the Employee pursuant to Section 4.4 for good reason, for so long as the Company shall
pay to the Employee the compensation and benefits payable or accrued to her under Section 4
(including the provision of medical insurance, disability and life insurance), at the times
provided in Section 4, the Employee will not directly or indirectly:
(a) as an individual proprietor, partner, stockholder, officer, employee, consultant,
director, joint venturer, investor, agent, distributor, dealer, representative, lender, or in any
other capacity whatsoever (other than as the holder of not more than 5% of the outstanding stock or
equity of another entity), engage in the business of delivering insulin by the oral, sublingual or
injectable route of administration; or
(b) recruit, solicit or induce, or attempt to induce, any employee or employees of the Company
to terminate their employment with, or otherwise cease their relationship with, the Company, or
hire any such employee; or
(c) knowingly solicit, divert, limit or take away, or attempt to divert or to take away, the
business or patronage of any of the clients, customers, dealers, distributors, representatives or
accounts, or prospective clients, customers, dealers, distributors, representatives or accounts, of
the Company which were contacted, solicited or served by employees of the Company while the
Employee was employed by the Company.
6.3. In the event that any court of competent jurisdiction determines that the duration or the
scope, or both, of the non-competition and non-solicitation
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provisions set forth in this Section 6 are unreasonable and that such provisions are to that extent
unenforceable, the parties hereto agree that the provisions shall remain in full force and effect
for the greatest time period, in the greatest area and to the greatest number of persons and
entities that would not render them unenforceable.
6.4 The restrictions contained in this Section 6 and in Section 7 are necessary for the
protection of the Company’s legitimate interests, confidential, proprietary or trade secret
information, or goodwill; to protect the Company from the misuse or disclosure of its confidential,
proprietary or trade secret information; and to protect the Company from unfair competition. The
Employee agrees that any breach of this Section 6 or Section 7 will cause the Company substantial
and irreparable damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek specific performance and
injunctive relief.
6.5 The Employee agrees that the duration and other restrictions imposed in this Agreement are
fair and reasonable and are reasonably required for the protection of the Company. To the extent
any portion of this Agreement, or any portion of any provision of this Agreement, is held to be
invalid or unenforceable, it shall be revised to reflect most nearly the parties’ intent and the
remainder of the provision or provisions of this Agreement shall be unaffected and shall continue
in full force and effect.
6.6 For purposes of this Section 6 and Section 7, the “Company” refers to the Company and any
of its affiliates.
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7. Confidential Information
7.1. By executing this Agreement, the Employee recognizes and agrees that he is
employed in a position with the Company in which he will have access to certain confidential and
proprietary information concerning the business of the Company which is of great value to the
Company and which, if used in competition with the Company, would render great and irreparable harm
to the Company. Such information includes, but is not limited to, information relating to business
operations; services; network; systems; strategic business plans; marketing plans; long-range
goals; assets and liabilities; technical and engineering methods, processes, and/or know-how;
research and development activities; products; computer software and programs; marketing data;
pricing; product designs; discoveries; inventions; budgets; projections; customers and suppliers;
development plans, strategies and forecasts; new products and services; and financial statements.
This information is provided to the Employee solely for use in the course of her employment with,
and for the benefit of, the Company.
7.2. To ensure that such confidential information provided to the Employee is maintained in
confidence by her and not used by her to unfairly compete with the Company, the Employee shall not,
during the course of the Employee’s employment and at any time within two (2) years thereafter
following the termination of her employment (regardless of whether the Employee’s termination is
voluntary or involuntary, or with or without cause), divulge, furnish or make accessible to anyone,
or use in any way other than in furtherance of the interests of the Company: (i) any confidential,
proprietary or secret knowledge or information which the Employee has acquired or become acquainted
with, or will acquire or become acquainted with, during
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the course of the Employee’s employment with the Company; (ii) any confidential or proprietary
information concerning the Company’s customers, including but not limited to, information
concerning a customer’s need, practice or preferences; (iii) any confidential, proprietary or trade
secret research and development activities of the Company; and (iv) any other confidential,
proprietary or trade secret information relating to the business of the Company. The Employee
agrees that this restriction applies to all such information regardless of whether such information
was developed by her. This restriction shall not apply to information (i) which is or becomes
public knowledge through no fault of the Employee, (ii) is known to the Employee at the time of its
disclosure to her as shown by her prior written records, or (iii) is disclosed to the Employee by a
third party who is under no confidential obligation to the Company. The Employee further agrees
that upon request by the Company, or upon the termination of the Employee’s employment, the
Employee will immediately return to the Company any and all such information in the Employee’s
possession or under the Employee’s control.
8. Representations and Warranties of the Employee. The Employee represents and
warrants to the Company as follows:
8.1. All facts concerning the Employee’s background, education, experience and employment
history as described to the Company in writing are true and correct;
8.2 The Employee’s execution of this Agreement and employment with the Company does not and
will not conflict with any obligations that the Employee has to any current or former employer, any
other individual, corporation, partnership,
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association, trust or any other entity or organization, including any instrumentality of
government;
8.3 All files, records, compilations, reports, studies, manuals, memoranda, notebooks,
documents, financial reports and statements, correspondence, and other confidential information
whether prepared by the Employee or otherwise coming into the possession of the Employee, and all
copies thereof, are, and shall remain, the exclusive property of the Company, and shall be
delivered to the Company as soon as reasonably practicable and at the expense of the Company in the
event of the Employee’s termination or at any other time if requested by the Company.
8.4 The Employee acknowledges that the Company may, and contemplates, purchasing “key man life
insurance” on Employee with the Company as sole benificiary.
8.5 The Employee confirms that all IP created or owned by her, since the commencement of her
employment by the Company belongs to the Company.
9. Indemnification. Employer shall indemnify Employee and hold her harmless against
any and all claims and liabilities asserted against Employee which arise in connection with the
performance of Employee’s duties and responsibilities while acting in Employee’s capacity as an
employee of Employer, except Employer shall not be obligated to indemnify or hold Employee harmless
against any claim or liability which arises out of Employee’s bad faith or intentional misconduct
or breach of a representation set forth in Article 8.
10. Property Rights. With respect to information, inventions and discoveries
developed, made or conceived of by Employee, either alone or with others, at any time
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during Employee’s employment by the Company and whether or not within working hours, arising out of
such employment or pertinent to any field of business or research in which, during such employment,
the Company is engaged or (if such is known to or ascertainable by Employee) is considering
engaging, Employee agrees:
10.1 that all such information, inventions and discoveries, whether or not patented or
patentable, shall be and remain the exclusive property of the Company;
10.2 to disclose promptly to an authorized representative of the Company all such information
in Employee’s possession as to possible applications and uses thereof;
10.3 not to file any patent application relating to any such invention or discovery except
with the prior written consent of an authorized officer of the Company;
10.4 that Employee hereby waives and releases any and all rights Employee may have in and to
such information, inventions and discoveries and hereby assigns to the Company and/or its nominees
all of Employee’s right, title and interest in them, and all Employee’s right, title and interest
in any patent, patent application, copyright or other property right based thereon. Employee hereby
irrevocably designates and appoints the Company and each of its duly authorized officers and agents
as Employee’s agent and attorney-in-fact to act for Employee and in Employee’s behalf and stead to
execute and file any document and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of any such patent, patent application, copyright or other
property right with the same force and effect as if executed and delivered by Employee; and
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10.5 at the request of the Company and without expense to Employee, to execute such documents
and perform such other acts as the Company deems necessary or appropriate for the Company to obtain
patents on such inventions in a jurisdiction or jurisdictions designated by the Company, and to
assign to the Company or its designee such inventions and any patent applications and patents
relating thereto.
11. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon personal delivery or upon deposit in the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the other party at the
address shown above, or at such other address or addresses as either party shall designate to the
other in accordance with this Section 10.
12. Governing Law. This Agreement shall be construed, interpreted and enforced in
accordance with the internal laws (and not the law of conflicts) of the State of New York.
13. Jurisdiction. Except as otherwise provided for herein, each of the parties (a)
submits to the exclusive jurisdiction of any state court sitting in New York County, New York or
federal court sitting in the Southern District of New York in any action or proceeding arising out
of or relating to this Agreement, (b) agrees that all claims in respect of the action or proceeding
may be heard and determined in any such court and (c) agrees not to bring any action or proceeding
arising out of or relating to this Agreement in any other court. Each of the parties waives any
defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives
any bond, surety or other security that might be required of any other party with respect thereto.
Any party may make service on another party by sending or delivering a copy of the process to the
party
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to be served at the address and in the manner provided for giving of notices in Section 11. Nothing
in this Section 13, however, shall affect the right of any party to serve legal process in any
other manner permitted by law.
14. Survival. The provisions of Sections 6, 7, 8, 9, 10, 11, 12, 13 and 14
shall survive the termination of this Agreement.
15. Pronouns. Whenever the context may require, any pronouns used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the singular forms of
nouns and pronouns shall include the plural, and vice versa.
16. Entire Agreement. This Agreement constitutes the entire agreement between the
parties and supersedes all prior agreements and understandings, whethe written or oral, relating to
the subject matter of the Agreement.
17. Amendment. This Agreement may be amended or modified only by a written
instrument executed by all of the parties hereto.
18. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of all of the parties hereto and their respective successors and assigns, including
any corporation with which or into which the Company may be merged or which may succeed to its
assets or business; provided, however, that the obligations of the Employee are personal and shall
not be assigned by her.
19. Miscellaneous.
19.1 No delay or omission by either party in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the
Company on any one occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.
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19.2 The captions of the sections of this Agreement are for convenience of reference only and
in no way define, limit or affect the scope or substance of any section of this Agreement.
19.3 In case any provision of this Agreement shall be invalid, illegal or otherwise
unenforceable, the validity, legality and enforceability of the remaining provisions shall in no
way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
written above.
| BIODEL INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Chairman, President and Chief Financial Officer | |||
| /s/ Roderike Xxxx | ||||
| Roderike Xxxx | ||||
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APPENDIX A
For purposes of this Agreement, a “Change of Control” shall be deemed to have occurred, if any one
of the following events occurs:
(a) the acquisition by any person or group of beneficial ownership of more than
50% of the outstanding shares of Common Stock of the Company, or, if there are
then outstanding any other voting securities of the Company, such acquisition
of more than 50% of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors, except for any of the following acquisitions of beneficial ownership
of Common Stock or other voting securities of the Company: (i) by the Company
or any Employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company; (ii) by Xxxxxxx X. Xxxxxxx; or
(iii) by any person or entity during the lifetime Xxxxxxx X. Xxxxxxx if the
shares acquired were beneficially owned by Xxxxxxx X. Xxxxxxx immediately prior
to their acquisition and the acquisition is a transfer to a trust, partnership,
corporation or other entity in which Xxxxxxx X. Xxxxxxx owns a majority of the
beneficial interests;
(b) the Company sells all or substantially all of its assets (or consummates
any transaction having a similar effect) or the Company merges or consolidates
with another entity or completes a reorganization unless the holders of the
voting securities of the Company outstanding immediately prior to the
transaction own immediately after the transaction in approximately the same
proportions 50% or more of the combined voting power of the voting securities
of the entity purchasing the assets or surviving the merger or consolidation or
the voting securities of its parent company, or, in the case of a
reorganization, 50% or more of the combined voting power of the voting
securities of the Company; Notwithstanding the foregoing, any purchase or
redemption of outstanding shares of Common Stock or other voting securities by
the Company resulting in an increase in the percentage of outstanding shares or
other voting securities beneficially owned by any person or group shall be
deemed to constitute a reorganization; however, no increase in the percentage
of outstanding shares or other voting securities beneficially owned by Xxxxxxx
X. Xxxxxxx or any person or entities referred to in (a)(i) or (iii) above
resulting from any redemption of shares or other voting securities by the
Company shall result in a Change of Control;
(c) the Company is liquidated; or
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(d) the Board (if the Company continues to own its business) or the board of
directors or comparable governing body of any successor owner of its business
(as a result of a transaction which is not itself a Change of Control) consists
of a majority of directors or members who are not Incumbent Directors. For
purposes of this Agreement, (A) “voting securities” means securities whose
holders are entitled to vote in the election of all or a majority of the
authorized number of directors at the time the determination of ‘voting
securities” status is being made and (B) 50% or more of the combined voting
power shall refer to the voting power to elect a majority of the authorized
number of directors determined at that time. “Voting securities” shall not
include preferred stock or other securities whose holders are entitled to vote
in the election of all or a majority of the authorized number of directors upon
the occurrence of some event or circumstance which has not occurred and such
rights to vote are not in effect at the time of the determination of “voting
securities” status. Preferred stock and other securities whose holders are then
entitled to vote for less than a majority of the authorized number of
directors, shall not be considered “voting securities.”
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