Document:

EXHIBIT 10.2

 

	
  WELLS FARGO

  	
   

  	
  REVOLVING LINE OF CREDIT NOTE

  
	
   

  	
   

  	
   

  
	
  $15,000,000.00

  	
   

  	
  Portland, Oregon

  	
   

  
	
   

  	
   

  	
  December 1, 2007

  	
   

  

 

FOR
VALUE RECEIVED, the undersigned RENTRAK
CORPORATION (“Borrower”) promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Portland RCBO, 1300 SW Fifth Avenue,  Portland, OR 97201, or at such other place
as the holder hereof may designate, in lawful money of the United States
of America and in immediately available funds, the principal sum of $15,000,000.00, or so much thereof as may be
advanced and be outstanding, with interest thereon, to be computed on each
advance from the date of its disbursement as set forth herein:

 

1.
DEFINITIONS:

 

As used herein, the following terms shall have the
meanings set forth after each, and any other term defined in the Note shall
have the meaning set forth at the place defined:

 

1.1                                 “Business Day” means any day except a
Saturday, Sunday or any other day on which commercial banks in Oregon are
authorized or required by law to close.

 

1.2  “Fixed Rate Term” means a period commencing
on a Business Day and continuing for 1, 2 or
3 months, as designated by Borrower, during which all or a portion
of the outstanding principal balance of this Note bears interest determined in
relation to LIBOR; provided, however, that no Fixed Rate Term may be
selected for a principal amount less than $100,000.00;
and provided further, that no Fixed Rate Term shall extend beyond
the scheduled maturity date hereof. If any Fixed Rate Term would end on a day
which is not a Business Day, then such Fixed Rate Term shall be extended to the
next succeeding Business Day.

 

1.3  “LIBOR” means the rate per annum (rounded
upward, if necessary, to the nearest whole 1/8 of 1%) determined by dividing
Base LIBOR by a percentage equal to 100% less any LIBOR Reserve Percentage.

 

(a)            “Base LIBOR” means the rate per annum for
United States dollar deposits quoted by the Bank as the Inter-Bank Market
Offered Rate, with the understanding that such rate is quoted by Bank for the
purpose of calculating effective rates of interest for loans making reference
thereto, on the first day of a Fixed Rate Term for delivery of funds on said
date for a period of time approximately equal to the number of days in such
Fixed Rate Term and in an amount approximately equal to the principal amount to
which such Fixed Rate Term applies. Borrower understands and agrees that Bank may base
its quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as Bank in its discretion deems
appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market

 

(b)           “LIBOR Reserve Package” means the reserve percentage prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for “Eurocurrency
Liabilities” (as defined in Regulation D of the Federal Reserve Board, as
amended), adjusted by Bank for expected changes in such reserve percentage
during the applicable Fixed Rate Term.

 

1.4  “Prime Rate” means at any time the rate of
interest most recently announced within Bank at its principal office as its
Prime Rate, with the understanding that the Prime Rate is one of Bank’s base
rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Bank may designate.

 

2. INTEREST:

 

2.1
Interest. The outstanding principal balance of this Note shall bear
interest (computed on the basis of a 360-day
year, actual days elapsed) either (a) at a fluctuating rate per annum 0.50000% below the Prime Rate in effect
from time to time, or (b) at a fixed rate per annum determined by Bank to
be 1.25000%
above LIBOR in

 

1

 

effect
on the first day of the applicable Fixed Rate Term. When interest is determined
in relation to Prime Rate, each change in the rate of interest hereunder shall
become effective on the date each Prime Rate change is announced within Bank. With
respect to each LIBOR selection option selected hereunder, Bank is hereby
authorized to note the date, principal amount, interest rate and Fixed Rate
Term applicable thereto and any payments made thereon on Bank’s books and
records (either manually or by electronic entry) and/or on any schedule attached
to this Note, which notations shall be prima facie evidence of the accuracy of
the information noted.

 

2.2
Selection of Interest Rate Options. At any time any portion of this Note
bears interest determined in relation to LIBOR, it may be continued by
Borrower at the end of the Fixed Rate Term applicable thereto so that all or a
portion thereof bears interest determined in relation to the Prime Rate or to
LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion
of this Note bears interest determined in relation to the Prime Rate, Borrower may convert
all or a portion thereof so that it bears interest determined in relation to
LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower
requests an advance hereunder or wishes to select a LIBOR option for all or a
portion of the outstanding principal balance hereof, and at the end of each Fixed
Rate Term, Borrower shall give Bank notice specifying:  (a) the interest rate option selected by
Borrower; (b) the principal amount subject thereto; and (c) for each
LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be
given by telephone (or such other electronic method as Bank may permit) so
long as, with respect to each LIBOR selection, (i) if requested by Bank,
Borrower provides to Bank written confirmation thereof not later than 3
Business Days after such notice is given, and (ii) such notice is given to
Bank; prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a
later time during any Business Day if Bank, at it’s sole option but without
obligation to do so, accepts Borrower’s notice and quotes a fixed rate to
Borrower. If Borrower does not immediately accept a fixed rate when quoted by
Bank, the quoted rate shall expire and any subsequent LIBOR request from
Borrower shall be subject to a redetermination by Bank of the applicable fixed
rate. If no specific designation of interest is made at the time any advance is
requested hereunder or at the end of any Fixed Rate Term, Borrower shall be
deemed to have made a Prime Rate interest selection for such advance or the
principal amount to which such Fixed Rate Term applied.

 

2.3
Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon
demand, in addition to any other amounts due or to become due hereunder, any
and all (a) withholdings, interest equalization taxes, stamp taxes or
other taxes (except income and franchise taxes) imposed by any domestic or
foreign governmental authority and related in any manner to LIBOR, and (b) future,
supplemental, emergency or other changes in the LIBOR Reserve Percentage,
assessment rates imposed by the Federal Deposit Insurance Corporation, or
similar requirements or costs imposed by any domestic or foreign governmental
authority or resulting from compliance by Bank with any request or directive
(whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they
are not included in the calculation of LIBOR. In determining which of the
foregoing are attributable to any LIBOR option available to Borrower hereunder,
any reasonable allocation made by Bank among its operations shall be conclusive
and binding upon Borrower.

 

2.4
Payment of Interest. Interest accrued on this Note shall be payable on
the 1st  day of each month commencing January 1, 2008.

 

2.5
Default Interest. From and after the maturity date of the Note, or such
earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on
the basis of a 360-day year,
actual days elapsed) equal to 4% above the rate of interest from time to time
applicable to this Note.

 

3. BORROWING AND REPAYMENT:

 

3.1
Borrowing and Repayment. Borrower may from time to time during the
term of this Note borrow, partially or wholly repay its outstanding borrowings,
and reborrow, subject to all of the limitations, terms and conditions of this
Note and of the Credit Agreement between Borrower and Bank defined below;
provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid balance of
this obligation at any time shall be the total amounts advanced hereunder by
the holder hereof less the amount of principal payments made hereon by or for
any Borrower, which balance may be

 

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endorsed
hereon from time to time by the holder. The outstanding principal balance of
this Note shall be due and payable in full on December 1,
2008.

 

3.2
Advances. Advances hereunder, to the total amount of the principal sum
available hereunder, may be made by the holder at the oral or written
request of (a) Mark  Thoenes or Paul A. Rosenbaum, any one
acting alone, who are authorized to request advances and direct the disposition
of any advances until written notice of the revocation of such authority is
received by the holder at the office designated above, or (b) any person,
with respect to advances deposited to the credit of any deposit account of any
Borrower, which advances, when so deposited, shall be conclusively presumed to
have been made to or for the benefit of each Borrower regardless of the fact
that persons other than those authorized to request advances may have
authority to draw against such account. The holder shall have no obligation to
determine whether any person requesting an advance is or has been authorized by
any Borrower.

 

3.3
Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of the Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding
principal balance of this Note which bears interest determined in relation to
LIBOR, with such payments applied to the oldest Fixed Rate Term first.

 

4. PREPAYMENT:

 

4.1
Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any time,
in any amount and without penalty.

 

4.2
LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to LIBOR at any time and in the
minimum amount of $100,000.00;
provided however, that if the outstanding principal balance of such portion of
this Note is less than said amount, the minimum prepayment amount shall be the
entire outstanding principal balance thereof. In consideration of Bank providing
this prepayment option to Borrower, or if any such portion of this Note shall
become due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank
immediately upon demand a fee which is the sum of the discounted monthly
differences for each month from the month of prepayment through the month in
which such Fixed Rate Term matures, calculated as follows for each such month:

 

(a)          Determine the amount of interest which would have accrued each month on the
amount prepaid at the interest rate applicable to such amount had it remained
outstanding until the last day of the Fixed Rate Term applicable thereto.

 

(b)         Subtract from the amount determined in (a) above the amount of interest
which would have accrued for the same month on the amount prepaid for the
remaining term of such Fixed Rate Term at LIBOR in effect on the date of
prepayment for new loans made for such term and in a principal amount equal to
the amount prepaid.

 

(c)          If the result obtained in (b) for any month is greater than zero,
discount that difference by LIBOR used in (b) above.

 

Each
Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expensed and/or liabilities, and that it is
difficult to ascertain the full extend of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to
pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum 2.000% above the Prime Rate in effect from
time to time (computed on the basis of a 360-day
year, actual days elapsed). Each change in the rate of interest on any such
past due prepayment fee shall become effective on the date each Prime Rate
change is announced within Bank.

 

3

 

5. EVENT OF DEFAULT:

 

This Note is made pursuant to and is subject to the
terms and conditions of that certain Credit Agreement between Borrower and Bank
dated as of July 15, 2002, as
amended from time to time (the “Credit Agreement”). Any default in the payment
or performance of any obligation under this Note, or any defined event of
default under the Credit Agreement, shall constitute an “Event of Default”
under this Note.

 

6. MISCELLANEOUS:

 

6.1
Remedies. Upon the occurrence of any Event of Default, the holder of
this Note, at the holder’s option, may declare all sums of principal and
interest outstanding hereunder to be immediately due and payable without
presentment, demand, notice of nonperformance, notice of protest, protest or
notice of dishonor, all of which are expressly waived by each Borrower, and the
obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys’ fees (to include outside
counsel fees and all allocated costs of the holder’s in-house counsel),
expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or collection of any amounts which become due to the holder
under this Note, and the prosecution or defense of any action in any way
related to this Note, including without limitation, any action for declaratory
relief, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

 

6.2
Obligations Joint and Several. Should more than one person or entity
sign this Note as a Borrower, the obligations of each such Borrower shall be
joint and several.

 

6.3
Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Oregon.

 

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
BANK CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BE THE BORROWER’S RESIDENCE MUST
BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE ENFORCEABLE.

 

IN
WITNESS WHEREOF, the undersigned has executed this Note as of the date first
written above.

 

RENTRAK
CORPORATION

 

 

	
  By:

  	
  /s/Mark Thoenes

  	
   

  
	
       Mark Thoenes, Chief Financial Officer

  

 

4Exhibit 10.1

 

PONIARD PHARMACEUTICALS, INC.

CHANGE OF CONTROL AGREEMENT

 

This Change of
Control Agreement (this “Agreement”),
dated as of February 1, 2008, is entered into by and between PONIARD
PHARMACEUTICALS, INC., a Washington corporation (as supplemented by Section 13,
the “Company”), and Robert L. De Jager
(the “Executive”).

 

The Board of
Directors of the Company (the “Board”) has
determined that it is in the best interests of the Company and its shareholders
to ensure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined in Section 1 hereof) of the Company.  The Board believes it is imperative to
diminish the inevitable distraction of the Executive arising from the personal
uncertainties and risks created by a pending or threatened Change of Control,
to encourage the Executive’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with reasonable compensation and benefit arrangements
upon a Change of Control.

 

In order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.

 

1.                                      Definitions

 

1.1           “Change of Control”
shall have the definition set forth in Appendix A hereto, which is hereby
incorporated by reference.

 

1.2           “Change of Control Date”
shall mean the first date on which a Change of Control occurs.

 

1.3           “Employment Period”
shall mean the two (2) year period commencing on the Change of Control
Date and ending on the second anniversary of such date.

 

1.4           “Severance Agreement”
shall mean the Key Executive Severance Agreement, dated as of the date hereof,
between the parties, as it may be amended from time to time, that provides for
certain benefits related to termination of the Executive’s employment that are
unrelated to a Change of Control.

 

2.                                      Term

 

The initial
term of this Agreement (“Initial Term”)
shall be for a period of one (1) year from the date of this Agreement as
first appearing above; provided, however, that this Agreement shall
automatically renew for successive additional one (1) year periods (“Renewal Terms”) unless notice of
nonrenewal is given by either party to the other at least ninety (90) days prior
to the end of the Initial Term or any Renewal Term, and provided 

 

 

further that if a Change in Control occurs during the Term, the Term
shall automatically extend for the duration of the Employment Period.  The “Term” of
this Agreement shall be the Initial Term plus all Renewal Terms and, if
applicable, the duration of the Employment Period.  At the end of the Term, this Agreement shall
terminate without further action by either the Company or the Executive.

 

3.                                      Employment

 

3.1          Employment Period

 

During the
Employment Period, the Company hereby agrees to continue the Executive in its
employ or in the employ of its affiliated companies, and the Executive hereby
agrees to remain in the employ of the Company or its affiliated companies, in
accordance with the terms and provisions of this Agreement; provided, however,
that either the Company or the Executive may terminate the employment
relationship subject to the terms of this Agreement.

 

3.2                               Position and Duties

 

During the
Employment Period, the Executive’s position, authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the ninety (90) day period immediately preceding the Change of Control Date.

 

3.3                               Location

 

During the
Employment Period, the Executive’s services shall be performed at the Company’s
offices on the Change of Control Date at which the Executive was employed or
any office that is subsequently designated by the Company and is less than
thirty (30) miles from such location.

 

3.4                               Employment at Will

 

The Executive
and the Company acknowledge that, except as may otherwise be provided under any
other written agreement between the Executive and the Company, the employment
of the Executive by the Company or its affiliated companies is “at will” and
may be terminated by either the Executive or the Company or its affiliated
companies at any time with or without cause. 
Moreover, if prior to the Change of Control Date, the Executive’s
employment with the Company or its affiliated companies terminates for any
reason, then the Executive shall have no further rights under this Agreement;
provided, however, that the Company may not avoid liability for any termination
payments that would have been required during the Employment Period pursuant to
Section 8 hereof by terminating the Executive prior to the Employment
Period where such termination is carried out in anticipation of a Change of
Control and the principal motivating purpose is to avoid liability for such
termination payments.

 

2

 

4.                                      Attention and Effort

 

During the
Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive will devote all of the
Executive’s productive time, ability, attention and effort to the business and
affairs of the Company and the discharge of the responsibilities assigned to
the Executive hereunder, and will use the Executive’s reasonable best efforts
to perform faithfully and efficiently such responsibilities.  It shall not be a violation of this Agreement
for the Executive to (a) serve on corporate, civic or charitable boards or
committees, (b) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (c) manage personal investments, or (d) engage
in activities permitted by the policies of the Company or as specifically
permitted by the Company, so long as such activities do not significantly
interfere with the performance of the Executive’s responsibilities in
accordance with this Agreement.  It is
expressly understood and agreed that to the extent any such activities have
been conducted by the Executive prior to the Employment Period, the continued
conduct of such activities (or the conduct of activities similar in nature and
scope thereto) during the Employment Period shall not thereafter be deemed to
interfere with the performance of the Executive’s responsibilities to the
Company.

 

5.                                      Compensation

 

As long as the
Executive remains employed by the Company during the Employment Period, the
Company agrees to pay or cause to be paid to the Executive, and the Executive
agrees to accept in exchange for the services rendered hereunder by the
Executive, the following compensation:

 

5.1                               Salary

 

The Executive
shall receive an annual base salary (the “Annual Base Salary”),
at least equal to the annual salary established by the Board or the
Compensation Committee of the Board (the “Compensation Committee”)
or the Chief Executive Officer for the fiscal year in which the Change of
Control Date occurs.  The Annual Base
Salary shall be paid in substantially equal installments and at the same
intervals as the salaries of other executives of the Company are paid.  The Board or the Compensation Committee or
the Chief Executive Officer shall review the Annual Base Salary at least
annually and shall determine in good faith and consistent with any generally
applicable Company policy any increases for future years.

 

5.2                               Bonus

 

In addition to
the Annual Base Salary, the Executive shall be awarded, for each fiscal year
ending during the Employment Period, an annual bonus (the “Annual
Bonus”) in cash at least equal to the average annualized (for
any fiscal year consisting of less than twelve (12) full months) bonus paid or
payable (including, with respect to any stock or stock options awarded as an
annual bonus in place of cash, the value of the stock awards and the
compensation expense disclosed in the Company’s financial statements for the
grant of the 

 

3

 

stock options) to the Executive by the Company and its affiliated
companies in respect of the three fiscal years (or such shorter period of
employment) immediately preceding the fiscal year in which the Change of
Control Date occurs.  Each Annual Bonus
shall be paid in the fiscal year following the fiscal year for which the Annual
Bonus is awarded, but no later than the fifteenth day of the third month of
such subsequent fiscal year, unless the Executive shall elect to defer the
receipt of the Annual Bonus in accordance with the terms of the Company’s
deferred compensation program.

 

6.                                      Benefits

 

6.1                               Incentive, Retirement and Welfare Benefit
Plans; Vacation

 

As long as the
Executive remains employed by the Company during the Employment Period, the
Executive shall be entitled to participate, subject to and in accordance with
applicable eligibility requirements, in such fringe benefit programs as shall
be generally made available to other executives of the Company and its
affiliated companies from time to time during the Employment Period by action
of the Board (or any person or committee appointed by the Board to determine
fringe benefit programs and other emoluments), including, without limitation,
paid vacations; any stock purchase, savings or retirement plan, practice,
policy or program; and all welfare benefit plans, practices, policies or
programs (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans or programs).

 

6.2                               Expenses

 

As long as the
Executive remains employed by the Company during the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance with the policies,
practices and procedures of the Company and its affiliated companies in effect
for the executives of the Company and its affiliated companies during the
Employment Period.  Without limitation on
the foregoing, reimbursement shall be made no later than the end of the fourth
month of the year following the year in which the expense was incurred.

 

7.                                      Termination

 

During the
Employment Period, employment of the Executive may be terminated as follows,
but, in any case, the nondisclosure provisions set forth in Section 10
hereof shall survive the termination of this Agreement and the termination of
the Executive’s employment with the Company:

 

7.1                               By the Company or the Executive

 

At any time during the Employment Period, the Company may terminate the
employment of the Executive with or without Cause (as defined below), and the
Executive

 

4

 

may terminate the Executive’s employment for Good Reason (as defined
below) or for any reason, upon giving the Notice of Termination (as defined
below).

 

7.2                               Automatic Termination

 

This Agreement
and the Executive’s employment during the Employment Period shall terminate
automatically upon the death or Total Disability of the Executive.  The term “Total Disability”
as used herein shall mean the Executive’s inability (with such accommodation as
may be required by law and which places no undue burden on the Company), as
determined by a physician selected by the Company and acceptable to the
Executive, to perform the duties set forth in Section 3.2 hereof for a
period or periods aggregating twelve (12) weeks in any three hundred sixty-five
(365) day period as a result of physical or mental illness, loss of legal
capacity or any other cause beyond the Executive’s control, unless the
Executive is granted a leave of absence by the Board.  The Executive and the Company hereby
acknowledge that the duties specified in Section 3.2 hereof are essential
to the Executive’s position and that Executive’s ability to perform those
duties is the essence of this Agreement.

 

7.3                               Notice of Termination

 

Any
termination by the Company or by the Executive during the Employment Period
shall be communicated by the Notice of Termination to the other party given in
accordance with Section 12 hereof. 
The term “Notice of Termination” shall
mean a written notice that (a) indicates the specific termination
provision in this Agreement relied upon and (b) to the extent applicable,
sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Executive’s employment under the provision so
indicated.  The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance that contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in enforcing
the Executive’s or the Company’s rights hereunder.

 

7.4                               Date of Termination

 

During the
Employment Period, “Date of Termination” means (a) if
the Executive’s employment is terminated by reason of death, at the end of the
calendar month in which the Executive’s death occurs, (b) if the
Executive’s employment is terminated by reason of Total
Disability, immediately upon a determination by the Company of the
Executive’s Total Disability, and (c) in all other cases, ten (10) days
after the date of personal delivery or mailing of the Notice of
Termination.  The Executive’s employment
and performance of services will continue during such ten (10) day period;
provided, however, that the Company may, upon notice to the Executive and
without reducing the Executive’s compensation during such period, excuse the
Executive from any or all of the Executive’s duties during such period.

 

5

 

8.                                      Termination Payments

 

In the event
of termination of the Executive’s employment during the Employment Period, all
compensation and benefits set forth in this Agreement shall terminate except as
specifically provided in this Section 8.

 

8.1                               Termination by the Company Other Than for
Cause or by the Executive for Good Reason

 

If during the
Employment Period the Company terminates the Executive’s employment other than
for Cause or the Executive terminates the Executive’s employment for Good
Reason, the Executive shall be entitled to:

 

(a)           receive payment of the following
accrued obligations (the “Accrued Obligations”):

 

(i)            the Annual Base Salary through the
Date of Termination to the extent not theretofore paid;

 

(ii)           the product of (x) the Annual
Bonus payable with respect to the fiscal year in which the Date of Termination
occurs and (y) a fraction the numerator of which is the number of days in
the current fiscal year through the Date of Termination, and the denominator of
which is three hundred sixty-five (365);

 

(iii)          any compensation previously deferred
by the Executive (together with accrued interest or earnings thereon, if any);
and

 

(iv)          any accrued vacation pay that would be
payable under the Company’s standard policy, in each case to the extent not
theretofore paid;

 

(b)           for one year after the Date of
Termination or until the Executive qualifies for comparable medical and dental
insurance benefits from another employer, whichever occurs first, the Company
shall pay the Executive’s premiums for health insurance benefit continuation
for the Executive and the Executive’s family members, if applicable, which the
Company provides to the Executive under the provisions of the federal
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), to the extent that the Company would have paid
such premiums had the Executive remained employed by the Company (such
continued payment is hereinafter referred to as “COBRA
Continuation”);

 

(c)           an amount as severance pay equal to
one (1) times the Annual Bonus payable with respect to the fiscal year in
which the Date of Termination occurs;

 

(d)           an amount as severance pay equal to
one (1) times the Annual Base Salary for the fiscal year in which the Date
of Termination occurs; and

 

6

 

(e)           immediate vesting of all outstanding
stock options previously granted to the Executive by the Company.

 

8.2                               Termination for Cause or Other Than for Good
Reason

 

If during the
Employment Period the Executive’s employment shall be terminated by the Company
for Cause or by the Executive for other than Good Reason, this Agreement shall
terminate without further obligation on the part of the Company to the
Executive, other than the Company’s obligation to pay the Executive (a) the
Annual Base Salary through the Date of Termination, (b)  the amount of any
compensation previously deferred by the Executive in accordance with the terms
of the Company’s deferred compensation program, and (c) any accrued
vacation pay that would be payable under the Company’s standard policy, in each
case to the extent theretofore unpaid.

 

8.3                               Expiration of Term

 

In the event
the Executive’s employment is not terminated prior to expiration of the Term,
this Agreement shall terminate without further obligation on the part of the
Company to the Executive, other than the Company’s obligation to pay the Executive
the product of (a) the Annual Bonus payable with respect to the fiscal
year in which the Term expired and (b) a fraction the numerator of which
is the number of days in the current fiscal year through the end of the Term
and the denominator of which is three hundred sixty-five (365).  Such payment will be made in the fiscal year
following the fiscal year in which the Term expired no later than the fifteenth
day of the third month of such subsequent fiscal year.

 

8.4                               Termination Because of Death or Total
Disability

 

If during the
Employment Period the Executive’s employment is terminated by reason of the
Executive’s death or Total Disability, this Agreement shall terminate
automatically without further obligation on the part of the Company to the
Executive or the Executive’s legal representatives under this Agreement, other
than the Company’s obligation to pay the Executive the Accrued Obligations
(which shall be paid to the Executive’s estate or beneficiary, as applicable in
the case of the Executive’s death), and to provide COBRA Continuation.

 

8.5                               Payment Schedule

 

All payments
of Accrued Obligations, or any portion thereof payable pursuant to this Section 8,
other than deferred compensation pursuant to Section 8.1(a)(iii), shall be
made to the Executive within ten (10) working days of the Date of
Termination.  Deferred compensation
pursuant to Section 8.1(a)(iii) shall be payable pursuant to the
terms of the deferred compensation program. 
Any payments payable to the Executive pursuant to Section 8.1(c) and
(d) hereof shall be made to the Executive in a lump sum within ten (10) working
days of the Date of Termination.  For
purposes of determining the payment schedule, other than for deferred
compensation pursuant to Section 8.1(a)(iii), to the extent

 

7

 

that the payment schedule in
this Section 8.5 would subject payments to the distribution requirements
set forth in Section 409A(a)(2) of the Internal Revenue Code of 1986,
as amended (“Code”), because the Date of Termination is different than the date
that a person would be deemed to have had a separation from service within the
meaning of Code Section 409A(a)(2)(i), the Date of Termination shall be
treated as the latest date so as to not subject such payments to the
distribution requirements set forth in Code Section 409A(a)(2).  Notwithstanding the preceding provisions of
this Section 8, if necessary to meet the requirements of subparagraphs (A)(i) and
(B)(i) of Code Section 409A(a)(2), the amounts that would normally be
paid during the first six months after the Executive’s separation from service
within the meaning of Code Section 409A(a)(2) shall not be paid to an
Executive who is a specified employee (as defined in Code Section 409A(a)(2)(B)(i) in
accordance with the procedures established by the Compensation Committee) until
the six-month anniversary of the Executive’s separation from service.

 

8.6                               Cause

 

For purposes
of this Agreement, “Cause” means cause given by
the Executive to the Company and shall include, without limitation, the
occurrence of one (1) or more of the following events:

 

(a)           a clear refusal to carry out any
material lawful duties of the Executive or any directions of the Board or
senior management of the Company, all reasonably consistent with the duties
described in Section 3.2 hereof;

 

(b)           persistent failure to carry out any
lawful duties of the Executive described in Section 3.2 hereof or any
directions of the Board or senior management reasonably consistent with the
duties herein set forth to be performed by the Executive, provided, however,
that the Executive has been given reasonable notice and opportunity to correct
any such failure;

 

(c)           violation by the Executive of a state
or federal criminal law involving the commission of a crime against the Company
or any other criminal act involving moral turpitude;

 

(d)           current abuse by the Executive of
alcohol or controlled substances; deception, fraud, misrepresentation or
dishonesty by the Executive; or any incident materially compromising the
Executive’s reputation or ability to represent the Company with investors,
customers or the public; or

 

(e)           any other material violation of any
provision of this Agreement by the Executive, subject to the notice and
opportunity-to-cure requirements of Section 11 hereof.

 

8.7                               Good Reason

 

For purposes
of this Agreement, “Good Reason” means

 

8

 

 

(a)           the assignment to the Executive of
any duties materially inconsistent with the Executive’s position, authority,
duties or responsibilities as contemplated by Section 3.2 hereof or any
other action by the Company that results in a material diminution in such
position, authority, duties or responsibilities, excluding for this purpose an
isolated and inadvertent action not taken in bad faith and that is remedied by
the Company promptly after receipt of notice thereof given by the Executive;

 

(b)           any failure by the Company to comply
with any of the provisions of Section 5 or Section 6 hereof, other
than an isolated and inadvertent failure not taken in bad faith and that is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

 

(c)           the Company’s requiring the Executive
to be based at any office or location other than that described in Section 3.3
hereof;

 

(d)           any failure by the Company to comply
with and satisfy Section 13 hereof; provided, however, that the Company’s
successor has received at least ten (10) days’ prior written notice from
the Company or the Executive of the requirements of Section 13 hereof; or

 

(e)           any other material violation of any
provision of this Agreement by the Company;

 

provided,
however, that the Executive has notified the Company of such assignment,
failure, situation or violation within ninety (90) days of its occurrence and
there has been compliance with the notice and opportunity-to-cure requirements
of Section 11 hereof.

 

8.8                               Excess
Parachute Limitation

 

If any portion
of the payments or benefits for the Executive under this Agreement, the
Severance Agreement, or any other agreement or benefit plan of the Company
(including stock option plan) would be characterized as an “excess parachute
payment” to the Executive under Section 280G of the Internal Revenue Code
of 1986, as amended (the “Code”), the Executive shall
be paid any excise tax that the Executive owes under Section 4999 of the
Code as a result of such characterization, such excise tax to be paid to the
Executive at least ten (10) days prior to the date that the Executive is
obligated to make the excise tax payment. 
The determination of whether and to what extent any payments or benefits
would be “excess parachute payments” and the date by which any excise tax shall
be due, shall be determined in writing by recognized tax counsel selected by
the Company and reasonably acceptable to the Executive.  Without limitation on the foregoing, the
payments made pursuant to this Section 8.8 shall be made no later than the
end of the year following the year in which the Executive remits such excise
tax to the IRS.

 

9

 

8.9          Release

 

As a condition
to receiving the payments and benefits under this Section 8, the Executive
shall execute a general release and waiver of all claims against the Company,
which release and waiver shall be in a form acceptable to the Company, in its
reasonable discretion, and delivered to the Company no later than the fifteenth
day of the third month of the fiscal year following the year in which the Date
of Termination occurs.

 

9.                                      Representations,
Warranties and Other Conditions

 

In order to
induce the Company to enter into this Agreement, the Executive represents and
warrants to the Company as follows:

 

9.1                               Health

 

The Executive
is in good health and knows of no physical or mental disability that, with any
accommodation that may be required by law and that places no undue burden on
the Company, would prevent the Executive from fulfilling the Executive’s
obligations hereunder.  The Executive
agrees, if the Company requests, to submit to reasonable periodic medical
examinations by a physician or physicians designated by, paid for and arranged
by the Company.  The Executive agrees that
the examination’s medical report shall be provided to the Company.

 

9.2                               No Violation of
Other Agreements

 

The Executive
represents that neither the execution nor the performance of this Agreement by
the Executive will violate or conflict in any way with any other agreement or
obligations by which the Executive may be bound.

 

10.                               Nondisclosure;
Return of Materials

 

10.1                        Nondisclosure

 

Except as
required by the Executive’s employment with the Company, the Executive will
not, at any time during the term of employment by the Company, or at any time
thereafter, directly, indirectly or otherwise, use, communicate, disclose,
disseminate, lecture upon or publish articles relating to any confidential,
proprietary or trade secret information without the prior written consent of
the Company.  The Executive understands
that the Company will be relying on this Agreement in continuing the
Executive’s employment, paying the Executive compensation, granting the
Executive any promotions or raises, or entrusting the Executive with any
information that helps the Company compete with others.

 

10

 

10.2                        Return of
Materials

 

All documents,
records, notebooks, notes, memoranda, drawings or other documents made or
compiled by the Executive at any time, or in the Executive’s possession,
including any and all copies thereof, shall be the property of the Company and
shall be held by the Executive in trust and solely for the benefit of the
Company, and shall be delivered to the Company by the Executive upon
termination of employment or at any other time upon request by the Company.

 

11.                               Notice and Cure
of Breach

 

Whenever a
breach of this Agreement by either party is relied upon as justification for
any action taken by the other party pursuant to any provision of this
Agreement, other than clause (a), (b), (c) or (d) of Section 8.6
hereof, before such action is taken, the party asserting the breach of this
Agreement shall give the other party at least twenty (20) days’ prior written
notice of the existence and the nature of such breach before taking further
action hereunder and shall give the party purportedly in breach of this
Agreement the opportunity to correct such breach during the twenty (20) day
period.

 

12.                               Form of
Notice

 

Every notice
required by the terms of this Agreement shall be given in writing by serving
the same upon the party to whom it was addressed personally or by registered or
certified mail, return receipt requested, at the address set forth below or at
such other address as may hereafter be designated by notice given in compliance
with the terms hereof:

 

	
  If to the Executive:

  	
   

  	
  Robert L. De Jager

  
	
   

  	
   

  	
  3611 Calle Juego

  
	
   

  	
   

  	
  Rancho Santa Fe, CA 92091

  
	
   

  	
   

  	
   

  
	
  If to the Company:

  	
   

  	
  Poniard Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  7000 Shoreline Court, Suite 270

  
	
   

  	
   

  	
  South San Francisco, CA 94080

  
	
   

  	
   

  	
  Attn: Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Perkins Coie LLP

  
	
   

  	
   

  	
  1201 Third Avenue, 48th Floor

  
	
   

  	
   

  	
  Seattle, WA 98101-3099

  
	
   

  	
   

  	
  Attn: James R. Lisbakken

  

 

Except
as set forth in Section 7.4 hereof, if notice is mailed, such notice shall
be effective upon mailing.

 

11

 

13.                               Assignment

 

This Agreement
is personal to the Executive and shall not be assignable by the Executive.

 

The Company
shall assign to and require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Company to assume expressly and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place.  As used in this Agreement, “Company”
shall mean Poniard Pharmaceuticals, Inc. and any successor to its business
and/or assets as aforesaid that assumes and agrees to perform this Agreement by
operation of law, or otherwise.  All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.

 

14.                               Waivers

 

No delay or
failure by any party hereto in exercising, protecting or enforcing any of its
rights, titles, interests or remedies hereunder, and no course of dealing or
performance with respect thereto, shall constitute a waiver thereof.  The express waiver by a party hereto of any
right, title, interest or remedy in a particular instance or circumstance shall
not constitute a waiver thereof in any other instance or circumstance.  All rights and remedies shall be cumulative
and not exclusive of any other rights or remedies.

 

15.                               Amendments in
Writing

 

No amendment,
modification, waiver, termination or discharge of any provision of this
Agreement, or consent to any departure therefrom by either party hereto, shall
in any event be effective unless the same shall be in writing, specifically
identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by the Company and the Executive,
and each such amendment, modification, waiver, termination or discharge shall
be effective only in the specific instance and for the specific purpose for
which given.  No provision of this
Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the Company and the Executive.

 

16.                               Applicable Law

 

This Agreement
shall in all respects, including all matters of construction, validity and
performance, be governed by, and construed and enforced in accordance with, the
laws of the State of Washington, without regard to any rules governing
conflicts of laws.

 

12

 

17.                               Arbitration;
Attorneys’ Fees

 

Except in
connection with enforcing Section 10 hereof, for which legal and equitable
remedies may be sought in a court of law, any dispute arising under this
Agreement shall be subject to arbitration. 
The arbitration proceeding shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (the
“AAA Rules”) then in effect, conducted by one arbitrator
either mutually agreed upon or selected in accordance with the AAA Rules.  The arbitration shall be conducted in King
County, Washington, under the jurisdiction of the Seattle office of the
American Arbitration Association.  The
arbitrator shall have authority only to interpret and apply the provisions of
this Agreement, and shall have no authority to add to, subtract from or otherwise
modify the terms of this Agreement.  Any
demand for arbitration must be made within sixty (60) days of the event(s) giving
rise to the claim that this Agreement has been breached.  The arbitrator’s decision shall be final and
binding, and each party agrees to be bound to by the arbitrator’s award,
subject only to an appeal therefrom in accordance with the laws of the State of
Washington.  Either party may obtain
judgment upon the arbitrator’s award in the Superior Court of King, County,
Washington.

 

If it becomes
necessary to pursue or defend any legal proceeding, whether in arbitration or
court, in order to resolve a dispute arising under this Agreement, the
prevailing party in any such proceeding shall be entitled to recover its
reasonable costs and attorneys’ fees.  To
the extent necessary to prevent Executive from being subject to any additional
tax pursuant to Code Section 409A(a)(1)(B), any amounts payable to the
Executive pursuant to this paragraph shall be paid in no event later than the
year following the year during which such costs and fees were incurred.

 

18.                               Severability

 

If any
provision of this Agreement shall be held invalid, illegal or unenforceable in
any jurisdiction, for any reason, including, without limitation, the duration
of such provision, its geographical scope or the extent of the activities
prohibited or required by it, then, to the full extent permitted by law, (a) all
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the intent
of the parties hereto as nearly as may be possible, (b) such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.

 

19.                               Entire
Agreement

 

Except as
described in Section 23 hereof, this Agreement constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof, and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Executive with respect
to such subject matter, are

 

13

 

hereby superseded and nullified
in their entireties, except that the Proprietary Information and Invention
Agreement between the Company and the Executive shall continue in full force
and effect to the extent not superseded by Section 10 hereof.

 

20.                               Withholding

 

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

 

21.                               409A Interpretation
Provision

 

The Company
intends that this Agreement fully comply with the payout and other limitations
and restrictions imposed under Code Section 409A if and to the extent such
Code Section 409A is otherwise applicable to payments under this Agreement
and such compliance is necessary to avoid the penalties otherwise imposed under
Code Section 409A.  In this
connection, the Company and Executive agree that the payout timing provisions
and any other terms of this Agreement shall be interpreted and deemed modified,
if and to the extent necessary, to comply with the payout and other limitations
and restrictions imposed under Code Section 409A if and to the extent such
Code Section 409A is otherwise applicable to this Agreement and such
compliance is necessary to avoid the penalties otherwise imposed under Code Section 409A.

 

22.                               Counterparts

 

This Agreement
may be executed in counterparts, each of which counterparts shall be deemed an
original, but all of which together shall constitute one and the same instrument.

 

23.                               Coordination
with Severance Agreement

 

The Severance
Agreement that the parties are entering into contemporaneously with this
Agreement provides for certain forms of severance and benefit payments in the
event of termination of the Executive’s employment.  This Agreement is in addition to the
Severance Agreement and in no way supersedes or nullifies the Severance
Agreement.  Nevertheless, it is possible
that termination of employment by the Company or by the Executive may fall
within the scope of both agreements.  In
such event, payments made to the Executive under Section 8.1 hereof shall
be coordinated with payments made to the Executive under Section 5.1 of
the Severance Agreement as follows:

 

(a)           Accrued Obligations under this
Agreement shall be paid first, in which case Accrued Obligations need not be
paid under the Severance Agreement;

 

(b)           COBRA Continuation under this
Agreement shall be provided first, in which case COBRA Continuation need not be
provided under the Severance Agreement; and

 

14

 

(c)           the severance payment required under Section 8.1(d) hereof
shall be paid first, in which case only that portion of any severance payment
required under Section 5.1(c) of the Severance Agreement in excess of
the severance payment required under Section 8.1(d) hereof shall be
paid in accordance with the provisions of the Severance Agreement.

 

IN WITNESS
WHEREOF, the parties have executed and entered into this Agreement effective on
the date first set forth above.

 

	
   

  	
  PONIARD PHARMACEUTICALS,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald McMahon

  	
   

  
	
   

  	
   

  	
  Name:   Gerald McMahon

  
	
   

  	
   

  	
  Its:         Chairman &
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert L. De Jager

  	
   

  
	
   

  	
   

  	
  Name:  Robert L. De Jager

  
					

 

15

 

APPENDIX A

 

For purposes
of this Agreement, a “Change of Control” shall
mean:

 

(a)           A “Board
Change” that, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Board are
occupied by individuals who were neither (i) nominated by a majority of
the Incumbent Directors nor (ii) appointed by directors so nominated.  An “Incumbent Director”
is a member of the Board who has been either (i) nominated by a majority
of the directors of the Company then in office or (ii) appointed by
directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in former Rule 14a-11
of Regulation 14A promulgated under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person (as hereinafter defined) other than the Board; or

 

(b)           The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of (i) twenty percent (20%) or more of either (A) the then
outstanding shares of Common Stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”), in the case of either (A) or (B) of
this clause (i), which acquisition is not approved in advance by a majority of
the Incumbent Directors, or (ii) thirty-three percent (33%) or more of
either (A) the Outstanding Company Common Stock or (B) the
Outstanding Company Voting Securities, in the case of either (A) or (B) of
this clause (ii), which acquisition is approved in advance by a majority of the
Incumbent Directors; provided, however, that the following acquisitions shall
not constitute a Change of Control:  (x) any
acquisition by the Company, (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (z) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions
described in clauses (i), (ii) and (iii) of subsection (c) of
this Appendix A are satisfied; or

 

(c)           Approval by the shareholders of the
Company of a reorganization, merger or consolidation, in each case, unless,
immediately following such reorganization, merger or consolidation, (i) more
than sixty percent (60%) of, respectively, the then outstanding shares of
common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all the individuals and entities who were 

 

 

the beneficial owners, respectively, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same proportion as
their ownership immediately prior to such reorganization, merger or
consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding
the Company, any employee benefit plan (or related trust) of the Company or
such corporation resulting from such reorganization, merger or consolidation
and any Person beneficially owning, immediately prior to such reorganization,
merger or consolidation, directly or indirectly, thirty-three percent (33%) or
more of the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly,
thirty-three percent (33%) or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such reorganization,
merger or consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization,
merger or consolidation were the Incumbent Directors at the time of the
execution of the initial agreement providing for such reorganization, merger or
consolidation; or

 

(d)           Approval by the shareholders of the
Company of (i) a complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all the assets of the
Company, other than to a corporation with respect to which immediately
following such sale or other disposition, (A) more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or substantially
all the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (B) no Person (excluding
the Company, any employee benefit plan (or related trust) of the Company or
such corporation and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or indirectly, thirty-three percent (33%)
or more of the Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, thirty-three percent (33%) or more of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors, and (C) at least a majority
of the members of the board of directors of such corporation were approved by a
majority of the Incumbent Directors at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition
of the Company’s assets.

 

2

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