Exhibit 10.4

 

October 22, 2008

 

Wade Hampton

1501 Caldwells Creek Drive

Colleyville, TX 76034

 

Re:          AMENDED AND RESTATED EMPLOYMENT TERMS

 

Dear Wade:

 

Accuray Incorporated (the “Company”) is pleased to offer to continue your
employment as Senior Vice President, Worldwide Sales of the Company on the terms
and conditions set forth in this letter, effective as of February 2, 2009 (the
“Effective Date”).  This letter amends and restates in its entirety that certain
employment letter, dated as of November 10, 2006, between you and the Company
(the “Employment Letter”). You and the Company mutually agree to amend certain
provisions of the Employment Letter as a result of Section 409A of the Internal
Revenue Code of 1986, as amended.

 

1.   TERM.  The employment relationship between you and the Company will be
at-will.  You and the Company will have the right to terminate the employment
relationship at any time and for any reason whatsoever, with or without cause,
and without any liability or obligation except as may be expressly provided
herein.

 

2.   POSITION, DUTIES AND RESPONSIBILITIES.  During the period of the employment
relationship between you and the Company (the “Term”), the Company will employ
you, and you agree to be employed by the Company, as Senior Vice President,
Worldwide Sales of the Company.  In the capacity of Senior Vice President,
Worldwide Sales, you will have such duties and responsibilities as are normally
associated with such position and will devote your full business time and
attention serving the Company in such position.  Your duties may be changed from
time to time by the Company, consistent with your position.  You will report to
the Chief Executive Officer of the Company (the “CEO”), and will work primarily
from your home in Texas, however will also work as reasonably required from our
principal offices located at 1310 Chesapeake Terrace, Sunnyvale, California
94089 (or such other location in the greater Sunnyvale area as the Company may
utilize as its principal offices), except for travel to other locations as may
be necessary to fulfill your responsibilities.

 

3.   BASE COMPENSATION.  During the Term, the Company will pay you a base salary
of $276,000 per year, less payroll deductions and all required withholdings,
payable in accordance with the Company’s normal payroll practices and prorated
for any partial month of employment.  Your base salary may be subject to
increase pursuant to the Company’s policies as in effect from time to time.

 

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4.   ANNUAL BONUS.  In addition to the base salary set forth above, during the
Term, you will be eligible to participate in the Company’s executive bonus plan
applicable to similarly situated executives of the Company.  The amount of your
annual bonus will be based on the attainment of performance criteria established
and evaluated by the Company in accordance with the terms of such bonus plan as
in effect from time to time, provided that, subject to the terms of such bonus
plan, your target (but not necessarily maximum) annual bonus shall be 83% of
your base salary actually paid for such year.  Exhibit A attached hereto sets
forth the terms of your first annual bonus. In accordance with the terms of such
bonus plan, payment of each bonus shall be made in a single lump-sum cash
payment not later than the last day of the applicable two and one-half (2 ½)
month short-term deferral period with respect to such bonus payment, within the
meaning of Treasury Regulation Section 1.409A-1(b)(4).

 

5.   STOCK OPTION AWARDS.  You and the Company hereby acknowledge that pursuant
to the terms of the Original Employment Letter, as of October 24, 2006, the
Company granted you a stock option to purchase 250,000 shares of the Company’s
common stock (the “Initial Stock Option”) at an exercise price of $10.00 per
share.  The Initial Stock Option was granted to you under the Company’s 1998
Equity Incentive Plan, and, subject to your continued employment with the
Company, the Initial Stock Option shall vest and become exercisable over a four
(4) year period, with twenty-five percent (25%) of the shares subject thereto
vesting on September 5, 2007, and the remaining seventy-five percent (75%)
vesting in equal monthly installments on the fifth day of each month
thereafter.  In addition, the Company will annually recommend to the Board of
Directors of the Company (the “Board”) that the Company grant you a stock option
no later than the September 30 following each of the first three anniversaries
of your commencement of employment with the Company to purchase 100,000 shares
of the Company’s common stock (each, a “Subsequent Stock Option,” and together
with the Initial Stock Option, the “Stock Options”).  The exercise price per
share of each Subsequent Stock Option shall be equal to the fair market value of
a share of the Company’s common stock on the date of grant, as determined in
accordance with the Company’s incentive award plan under which such Subsequent
Stock Option is granted.  Subject to your continued employment with the Company,
each Subsequent Stock Option shall vest and become exercisable over a four
(4) year period, with 1/48th of the shares subject thereto vesting in equal
monthly installments on each monthly anniversary of the date of grant. 
Consistent with the foregoing, the terms and conditions of each Stock Option
shall be set forth in a stock option agreement (each, a “Stock Option
Agreement”) to be entered into by the Company and you which shall evidence the
grant of each such Stock Option.

 

6.   BENEFITS AND VACATION.  During the Term, you will be eligible to
participate in all incentive, savings and retirement plans, practices, policies
and programs maintained or sponsored by the Company from time to time which are
applicable to other similarly situated executives of the Company, subject to the
terms and conditions thereof.  During the Term, you will also be eligible for
standard benefits, such as medical, vision and dental insurance, sick leave,
vacations and holidays to the extent applicable generally to other similarly
situated executives of the Company, subject to the terms and conditions of the
applicable Company plans or policies.  The benefits described in this Section 6
will be subject to change from time to time as deemed appropriate and necessary
by the Company.

 

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7.   TERMINATION OF EMPLOYMENT.

 

(a)           In the event that you incur a “separation from service” (within
the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as
amended (the “Code”), and Treasury Regulation Section 1.409A-1(h)) (“Separation
from Service”) by reason of (i) a termination of your employment by the Company
other than for Cause (as defined below), death or disability, or (ii) a
termination of your employment by you for Good Reason (as defined below), and
provided that you execute a general release of claims in a form prescribed by
the Company (the “Release”) within twenty-one (21) days (or, if required by
applicable law, forty-five (45) days) after the date of such Separation from
Service (the “Separation Date”) and you do not revoke such Release, and further
subject to Section 16(b) below, then, in addition to any other accrued amounts
payable to you through the Separation Date (including any earned but unpaid
bonus), (1) the Company will, no later than thirty (30) days after the
Separation Date, pay you a lump-sum severance payment (the “Severance Payment”)
in an amount equal to the sum of (x) six (6) months of your annual base salary
as in effect immediately prior to the Separation Date plus (y) a pro rata
portion of your target annual bonus for the fiscal year of the Company in which
such Separation from Service occurs, calculated based on the number of days
elapsed in such fiscal year through the Separation Date plus (z) 50% of your
target annual bonus for the fiscal year of the Company in which such Separation
from Service occurs, and (2) provided that you properly elect COBRA continuation
coverage, the Company will pay the COBRA premium for health care coverage for
you and your spouse and children, as applicable and to the extent eligible (the
“Severance Benefits”), for the six (6) month period immediately following the
Separation Date, but in no event longer than the period of time during which you
would be entitled to continuation coverage under Section 4980B of the Code
absent this provision..

 

(b)           If a Change in Control (as defined in Exhibit B hereto) occurs
during the Term and, within the twelve (12) month period immediately following
the effective date of the Change in Control, you incur a Separation from Service
by reason of (i) a termination of your employment by the Company other than for
Cause, death or disability, or (ii) a termination of your employment by you for
Good Reason, then, subject to Section 16(b) below, in addition to the amounts
payable to you pursuant to paragraph (a) of this Section 7, each of your then
outstanding options to purchase shares of the Company’s common stock (including,
without limitation, the Stock Options) shall become fully vested and exercisable
immediately prior to the Separation Date.

 

(c)           Notwithstanding the foregoing, your right to receive the payments
and benefits set forth in this Section 7 is conditioned on and subject to your
execution and non-revocation of the Release.  In no event shall you or your
estate or beneficiaries be entitled to any of the payments or benefits set forth
in this Section 7 upon any termination of your employment by reason of your
total and permanent disability or your death.

 

(d)           For purposes of this letter:

 

(A)  “Cause” shall be deemed to exist upon a good faith finding by the Company
of (i) your material failure to competently perform your assigned duties for the
Company, (ii) your sustained poor performance of any material aspect of your
duties or

 

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obligations hereunder, (iii) your dishonesty, gross negligence or other material
misconduct, or (iv) your conviction of, or the entry of a plea of guilty or nolo
contendere by you to, any crime involving moral turpitude or any felony; and

 

(B)  “Good Reason” shall mean the occurrence of any one or more of the following
events without your prior written consent:  (i) a material diminution by the
Company of your duties and responsibilities hereunder; (ii) a material change in
the geographic location at which you must perform services under this letter,
provided that in no event will a change to a location within a 35 mile radius of
the Company’s Sunnyvale corporate headquarters be deemed material for purposes
of this clause; or (iii) a material diminution by the Company of your annual
base salary as in effect on the date hereof or as the same may be increased from
time to time, provided that in no event will a diminution that is less than 10%
of your annual base salary be deemed material for purposes of this clause;
provided, however, that a termination of your employment by you shall only
constitute a termination for “Good Reason” hereunder if (a) you provide the
Company with written notice setting forth the specific facts or circumstances
constituting Good Reason within thirty (30) days after the initial existence of
such facts or circumstances, (b) the Company has failed to cure such facts or
circumstances within thirty (30) days after receipt of such written notice, and
(c) the Separation Date occurs no later than seventy-five (75) days after the
initial occurrence of the event constituting Good Reason.

 

8.   CODE SECTION 280G.

 

(a)           In the event it shall be determined that any payment or
distribution to you or for your benefit which is in the nature of compensation
and is contingent on a change in the ownership or effective control of the
Company or the ownership of a substantial portion of the assets of the Company
(within the meaning of Section 280G(b)(2) of the Code), whether paid or payable
pursuant to this letter or otherwise (a “Payment”), would constitute a
“parachute payment” under Section 280G(b)(2) of the Code and would be subject to
the excise tax imposed by Section 4999 of the Code (together with any interest
or penalties imposed with respect to such excise tax, the “Excise Tax”), then
the Payments shall be reduced to the extent necessary so that no portion thereof
shall be subject to the excise tax imposed by Section 4999 of the Code but only
if, by reason of such reduction, the net after-tax benefit received by you shall
exceed the net after-tax benefit received by you if no such reduction was made.
The specific Payments that shall be reduced and the order of such reduction
shall be determined so as to achieve the most favorable economic benefit to you,
and to the extent economically equivalent, the Payments shall be reduced pro
rata, all as determined by the Company in its sole discretion. For purposes of
this Section 8(a), “net after-tax benefit” shall mean (i) the Payments which you
receive or are then entitled to receive from the Company that would constitute
“parachute payments” within the meaning of Section 280G of the Code, less
(ii) the amount of all federal, state and local income taxes payable with
respect to the Payments calculated at the maximum marginal income tax rate for
each year in which the Payments shall be paid to you (based on the rate in
effect for such year as set forth in the Code as in effect at the time of the
first payment of the foregoing), less (iii) the amount of Excise Taxes imposed
with respect to the Payments.

 

(b)           All determinations required to be made under this Section 8 shall
be made by such nationally recognized accounting firm as may be selected by the
Audit Committee of the

 

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Board as constituted immediately prior to the change in control transaction (the
“Accounting Firm”), provided, that the Accounting Firm’s determination shall be
made based upon “substantial authority” within the meaning of Section 6662 of
the Code.  The Accounting Firm shall provide its determination, together with
detailed supporting calculations and documentation, to you and the Company
within 15 business days following the date of termination of your employment, if
applicable, or such other time as requested by you (provided that you reasonably
believe that any of the Payments may be subject to the Excise Tax) or the
Company.  All fees and expenses of the Accounting Firm shall be borne solely by
the Company.

 

9.   RESTRICTIVE COVENANTS.

 

(a)           As a condition of your employment with the Company, you agree that
during the Term and thereafter, you will not directly or indirectly disclose or
appropriate to your own use, or the use of any third party, any trade secret or
confidential information concerning the Company or its subsidiaries or
affiliates (collectively, the “Company Group”) or their businesses, whether or
not developed by you, except as it is required in connection with your services
rendered for the Company.  You further agree that, upon termination of your
employment, you will not receive or remove from the files or offices of the
Company Group any originals or copies of documents or other materials maintained
in the ordinary course of business of the Company Group, and that you will
return any such documents or materials otherwise in your possession.  You
further agree that, upon termination of your employment, you will maintain in
strict confidence the projects in which any member of the Company Group is
involved or contemplating.

 

(b)           You further agree that during the Term and continuing through the
first anniversary of the date of termination of your employment, you will not
directly or indirectly solicit, induce, or encourage any employee, consultant,
agent, customer, vendor, or other parties doing business with any member of the
Company Group to terminate their employment, agency, or other relationship with
the Company Group or such member or to render services for or transfer their
business from the Company Group or such member and you will not initiate
discussion with any such person for any such purpose or authorize or knowingly
cooperate with the taking of any such actions by any other individual or entity.

 

(c)           While employed by the Company, you agree that you will not engage
in any business activity in competition with any member of the Company Group nor
make preparations to do so.

 

(d)           Upon the termination of your relationship with the Company, you
agree that you will promptly return to the Company, and will not take with you
or use, all items of any nature that belong to the Company, and all materials
(in any form, format, or medium) containing or relating to the Company’s
business.

 

(e)           In recognition of the facts that irreparable injury will result to
the Company in the event of a breach by you of your obligations under Sections
9(a), (b), (c) or (d) above, that monetary damages for such breach would not be
readily calculable, and that the Company would not have an adequate remedy at
law therefor, you acknowledge, consent and

 

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agree that in the event of such breach, or the threat thereof, the Company shall
be entitled, in addition to any other legal remedies and damages available, to
specific performance thereof and to temporary and permanent injunctive relief
(without the necessity of posting a bond) to restrain the violation or
threatened violation of such obligations by you.

 

10.   COMPANY RULES AND REGULATIONS.  As an employee of the Company, you agree
to abide by Company policies, procedures, rules and regulations as set forth in
the Company’s Employee Handbook or as otherwise promulgated.  In addition, as a
condition of your employment, you acknowledge that you and the Company have
entered into that certain Employee Confidentiality and Inventions Agreement
dated as of September 5, 2006, and you hereby agree to abide by the terms of
that certain Employee Confidentiality and Inventions Agreement dated as of
September 5, 2006, by and between you and the Company.

 

11.   WITHHOLDING.  The Company may withhold from any amounts payable under this
letter such federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

 

12.   ARBITRATION.  Except as set forth in Section 9(e) above, any disagreement,
dispute, controversy or claim arising out of or relating to this letter or the
interpretation of this letter or any arrangements relating to this letter or
contemplated in this letter or the breach, termination or invalidity thereof
shall be settled by final and binding arbitration administered by JAMS/Endispute
in Santa Clara County, California in accordance with the then existing
JAMS/Endispute Arbitration Rules and Procedures for Employment Disputes.  Except
as provided herein, the Federal Arbitration Act shall govern the interpretation,
enforcement and all proceedings.  The arbitrator shall apply the substantive law
(and the law of remedies, if applicable) of the state of California, or federal
law, or both, as applicable, and the arbitrator is without jurisdiction to apply
any different substantive law.  The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by any party
and shall apply the standards governing such motions under the Federal Rules of
Civil Procedure.  Judgment upon the award may be entered in any court having
jurisdiction thereof.  Each party shall pay his or its own attorneys’ fees and
expenses associated with such arbitration to the extent permitted by applicable
law.

 

13.   ENTIRE AGREEMENT.  As of the Effective Date, this letter, together with
any Stock Option Agreement, constitutes the final, complete and exclusive
agreement between you and the Company with respect to the subject matter hereof
and replaces and supersedes any and all other agreements, offers or promises,
whether oral or written, made to you by any member of the Company Group
(including, without limitation, the Original Employment Letter).

 

14.  SEVERABILITY.  Whenever possible, each provision of this letter will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this letter is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision of this letter, but such invalid, illegal or unenforceable
provision will be reformed, construed and enforced so as to render it valid,
legal, and enforceable consistent with the intent of the parties insofar as
possible.

 

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15.  ACKNOWLEDGEMENT.  You hereby acknowledge (a) that you have consulted with
or have had the opportunity to consult with independent counsel of your own
choice concerning this letter, and have been advised to do so by the Company,
and (b) that you have read and understand this letter, are fully aware of its
legal effect, and have entered into it freely based on your own judgment.

 

16.  SECTION 409A OF THE CODE.

 

(a)           The compensation and benefits payable under this letter are not
intended to constitute “nonqualified deferred compensation” within the meaning
of Section 409A of the Code.  Notwithstanding any provision of this letter to
the contrary, in the event that the Company determines that any payments or
benefits payable hereunder may be subject to Section 409A of the Code, the
Company may (without any obligation to do so or to indemnify you for failure to
do so) adopt such amendments to this letter or take any other actions that the
Company determines are necessary or appropriate to (a) exempt such payments and
benefits from Section 409A of the Code in order to preserve the intended tax
treatment of such payments or benefits, or (b) comply with the requirements of
Section 409A of the Code and thereby avoid the application of penalty taxes
thereunder.  To the extent that any payments or benefits under this letter are
deemed to be subject to Section 409A of the Code, this letter will be
interpreted in accordance with Section 409A of the Code and Department of
Treasury Regulations and other interpretive guidance issued thereunder.

 

(b)           Notwithstanding anything to the contrary in this letter, no
compensation or benefits, including without limitation any severance payments or
benefits payable under Section 7 above, shall be paid to you during the six
(6)-month period following your Separation from Service to the extent that
paying such amounts at the time or times indicated in this letter would result
in a prohibited distribution under Section 409A(a)(2)(b)(i) of the Code.  If the
payment of any such amounts is delayed as a result of the previous sentence,
then on the first business day following the end of such six (6)-month period 
(or such earlier date upon which such amount can be paid under Section 409A of
the Code without resulting in a prohibited distribution, including as a result
of your death), the Company shall pay you a lump-sum amount equal to the
cumulative amount that would have otherwise been payable to you during such
six-month period.

 

(c)           To the extent that any reimbursements or corresponding in-kind
benefits provided to you under this letter are deemed to constitute compensation
to you, such amounts will be paid or reimbursed reasonably promptly, but not
later than December 31 of the year following the year in which the expense was
incurred.  The amount of any such payments or expense reimbursements in one year
will not affect the expenses or in-kind benefits eligible for payment or
reimbursement in any other taxable year, and your right to such payments or
reimbursement of any such expenses will not be subject to liquidation or
exchange for any other benefit.

 

[SIGNATURE PAGE FOLLOWS]

 

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Please confirm your agreement to the foregoing by signing and dating the
enclosed duplicate original of this letter in the space provided below for your
signature and returning it to Euan Thomson, Ph.D., Chief Executive Officer of
the Company.  Please retain one fully-executed original for your files.

 

 

 

Sincerely,

 

 

 

 

 

ACCURAY INCORPORATED,

 

a Delaware Corporation

 

 

 

 

 

By:

     /s/ Euan Thomson

 

Name:  Euan Thomson, Ph.D.

 

Title:  President & Chief Executive Officer

 

 

 

 

Accepted and Agreed,

 

October 22, 2008.

 

 

 

 

 

By:

     /s/ Wade Hampton

 

 

 

     Wade Hampton

 

 

 

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EXHIBIT A

 

Table 1:  Sales Commission

 

Contract #s

 

Sales Commission

 

1 – 76

 

$

1,000

 

77 – 91

 

$

1,500

 

92 – Total

 

$

2,500

 

 

Table 2:  Total Bonus

 

Period

 

Contracts
Quota

 

Sales
Commission $

 

Quota
Bonus $

 

Corporate
Bonus $

 

Total
Bonus $

 

Q1 Commission

 

16

 

$

16,000

 

$

5,000

 

N/A

 

$

21,000

 

Q2 Commission

 

26

 

$

26,000

 

$

5,000

 

N/A

 

$

31,000

 

Q3 Commission

 

24

 

$

24,000

 

$

5,000

 

N/A

 

$

29,000

 

Q4 Commission

 

30

 

$

45,000

 

$

5,250

 

N/A

 

$

50,250

 

Corporate/Sales

 

N/A

 

N/A

 

N/A

 

$

18,750

 

$

18,750

 

Corporate/Non-Sales

 

N/A

 

N/A

 

N/A

 

$

37,500

 

$

37,500

 

FY 2007

 

96

 

$

111,000

 

$

20,250

 

$

56,250

 

$

187,500

 

 

Table 1 provides for the sales commissions for each contract that is signed
pursuant to the Company’s standard contract with no contingencies, pursuant to
the Company’s discretion.  For each of the Company’s fiscal quarters in its
fiscal year ending June 30, 2007, if the Executive satisfies the Contracts
Quota, he will receive (A) an aggregate Sales Commission as set forth in Table 2
and as calculated according to Table 1 and (B) a Quota Bonus as set forth in
Table 2.  In addition, at the end of the Company’s fiscal year ending June 30,
2007, (C) if the Company achieves its corporate sales targets as determined by
the Board, the Executive will receive an additional Corporate Bonus in the
amount of $18,750, and (D) if the Company achieves its corporate non-sales
targets as determined by the Board, the Executive will receive an additional
Corporate Bonus in the amount of $37,500.  All such commissions and bonuses are
subject to the Executive’s continued employment with the Company in accordance
with the Company’s executive bonus plan applicable to the Executive.

 

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EXHIBIT B

 

FOR PURPOSES OF THIS LETTER, “CHANGE IN CONTROL” MEANS AND INCLUDES EACH OF THE
FOLLOWING:

 

(A)         A TRANSACTION OR SERIES OF TRANSACTIONS (OTHER THAN AN OFFERING OF
THE COMPANY’S COMMON STOCK TO THE GENERAL PUBLIC THROUGH A REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION) WHEREBY ANY
“PERSON” OR RELATED “GROUP” OF “PERSONS” (AS SUCH TERMS ARE USED IN SECTIONS
13(D) AND 14(D)(2) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE
“EXCHANGE ACT”)) (OTHER THAN THE COMPANY, ANY OF ITS SUBSIDIARIES, AN EMPLOYEE
BENEFIT PLAN MAINTAINED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES OR A “PERSON”
THAT, PRIOR TO SUCH TRANSACTION, DIRECTLY OR INDIRECTLY CONTROLS, IS CONTROLLED
BY, OR IS UNDER COMMON CONTROL WITH, THE COMPANY) DIRECTLY OR INDIRECTLY
ACQUIRES BENEFICIAL OWNERSHIP (WITHIN THE MEANING OF RULE 13D-3 UNDER THE
EXCHANGE ACT) OF SECURITIES OF THE COMPANY POSSESSING MORE THAN 50% OF THE TOTAL
COMBINED VOTING POWER OF THE COMPANY’S SECURITIES OUTSTANDING IMMEDIATELY AFTER
SUCH ACQUISITION; OR

 

(B)         DURING ANY PERIOD OF TWO CONSECUTIVE YEARS, INDIVIDUALS WHO, AT THE
BEGINNING OF SUCH PERIOD, CONSTITUTE THE BOARD TOGETHER WITH ANY NEW
DIRECTOR(S) (OTHER THAN A DIRECTOR DESIGNATED BY A PERSON WHO SHALL HAVE ENTERED
INTO AN AGREEMENT WITH THE COMPANY TO EFFECT A TRANSACTION DESCRIBED IN CLAUSE
(A) OR CLAUSE (C) HEREOF) WHOSE ELECTION BY THE BOARD OR NOMINATION FOR ELECTION
BY THE COMPANY’S STOCKHOLDERS WAS APPROVED BY A VOTE OF AT LEAST TWO-THIRDS OF
THE DIRECTORS THEN STILL IN OFFICE WHO EITHER WERE DIRECTORS AT THE BEGINNING OF
THE TWO-YEAR PERIOD OR WHOSE ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY
SO APPROVED, CEASE FOR ANY REASON TO CONSTITUTE A MAJORITY THEREOF; OR

 

(C)         THE CONSUMMATION BY THE COMPANY (WHETHER DIRECTLY INVOLVING THE
COMPANY OR INDIRECTLY INVOLVING THE COMPANY THROUGH ONE OR MORE INTERMEDIARIES)
OF (X) A MERGER, CONSOLIDATION, REORGANIZATION, OR BUSINESS COMBINATION OR (Y) A
SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS IN
ANY SINGLE TRANSACTION OR SERIES OF RELATED TRANSACTIONS OR (Z) THE ACQUISITION
OF ASSETS OR STOCK OF ANOTHER ENTITY, IN EACH CASE OTHER THAN A TRANSACTION:

 

(I)            WHICH RESULTS IN THE COMPANY’S VOTING SECURITIES OUTSTANDING
IMMEDIATELY BEFORE THE TRANSACTION CONTINUING TO REPRESENT (EITHER BY REMAINING
OUTSTANDING OR BY BEING CONVERTED INTO VOTING SECURITIES OF THE COMPANY OR THE
PERSON THAT, AS A RESULT OF THE TRANSACTION, CONTROLS, DIRECTLY OR INDIRECTLY,
THE COMPANY OR OWNS, DIRECTLY OR INDIRECTLY, ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS OR OTHERWISE SUCCEEDS TO THE BUSINESS OF THE COMPANY (THE
COMPANY OR SUCH PERSON, THE “SUCCESSOR ENTITY”)) DIRECTLY OR INDIRECTLY, AT
LEAST A MAJORITY OF THE COMBINED VOTING POWER OF THE SUCCESSOR ENTITY’S
OUTSTANDING VOTING SECURITIES IMMEDIATELY AFTER THE TRANSACTION, AND

 

(II)           AFTER WHICH NO PERSON OR GROUP BENEFICIALLY OWNS VOTING
SECURITIES REPRESENTING 50% OR MORE OF THE COMBINED VOTING POWER OF THE
SUCCESSOR ENTITY; PROVIDED, HOWEVER, THAT NO PERSON OR GROUP SHALL BE TREATED
FOR PURPOSES OF THIS CLAUSE (C)(II) AS BENEFICIALLY OWNING 50% OR MORE OF
COMBINED VOTING POWER OF THE SUCCESSOR ENTITY SOLELY AS A RESULT OF THE VOTING
POWER HELD IN THE COMPANY PRIOR TO THE CONSUMMATION OF THE TRANSACTION; OR

 

(D)           THE COMPANY’S STOCKHOLDERS APPROVE A LIQUIDATION OR DISSOLUTION OF
THE COMPANY.

 

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