Document:

exv10w2

 

Exhibit-10.2

July 25, 2006

John Hodgman

	 	 	 
	Re:

	 	Employment with InterMune, Inc.

Dear John:

     On behalf of InterMune, Inc., I am pleased to extend to you this offer of employment with
InterMune as Chief Financial Officer and Senior Vice President, reporting to Dan Welch, President
and Chief Executive Officer, to begin on August 14, 2006. In your role, you will have primary line
responsibility for the Finance, Investor Relations/Public Relations and Information Technology
departments. This position is a full-time, exempt position.

     Your employment is subject to proof of your legal right to work in the United States, and to
your completing the INS Employment Eligibility Verification Form I-9. Your employment also is
subject to the completion of our standard pre-employment process, which includes an employment
application, successful verification of your professional and character references, and a
background check.

Compensation

     If you accept this offer and begin employment, you will receive an initial base salary of
$25,833.33 per month (equivalent to $310,000.00 per year), paid on a semi-monthly basis on our
regular paydays. Deductions required by law or authorized by you will be taken from each paycheck.
Upon your successful completion of four months of employment, you also will receive a one-time
bonus payment of $50,000, less all required deductions.

     In addition to your base salary, you also will be eligible to participate in our discretionary
incentive bonus program designed to provide a financial reward for achieving performance goals. The
incentive plan is based on two criteria: your individual performance against your goals as
determined by your manager and InterMune’s performance as determined by the Company’s senior
management and Board of Directors. For 2006, your bonus target will be 35% of your base salary,
although the Board, in its discretion, may award a bonus of up to 150% of your target (i.e., 52.5%
of your base salary), based on your performance. Your 2006 bonus will be pro-rated to your
employment start date.

     You also will be eligible to participate in the Company’s Amended and Restated 2000
Equity Incentive Plan. Following commencement of employment, the grant of an option to purchase up
to 125,000 shares of Common Stock under InterMune’s Equity Incentive Plan will be recommended to
the Company’s Board of Directors on your behalf. The option exercise price will be the NASDAQ
closing price of InterMune common stock on the last business day before

 

 

John Hodgman

July 25, 2006

Page 2

you begin your InterMune employment. All option grants are governed by the terms of the
Equity Incentive Plan and subject to approval by the Compensation Committee of the InterMune Board
of Directors.

Employee Benefits

     As a full-time employee, you will be eligible for paid time-off benefits, such as sick leave
and holidays, in accordance with our policies for similarly situated employees. You also will be
eligible to participate in InterMune’s employee benefit plans, in accordance with the terms and
eligibility requirements of those plans. Currently, InterMune maintains group health insurance,
vision and dental plans; a long-term disability plan; a Flexible Spending Account plan; a group
Life Insurance and AD&D plan; a 401(k) savings plan, a Long Term Care plan and an Employee Stock
Purchase Plan.

     InterMune reserves the right to modify, amend or discontinue any benefit plan at any time, in
its sole discretion. You may receive such other benefits as we many determine from time to time,
in our sole discretion.

Other Terms and Conditions of Employment

     Employment with InterMune is at will. “Employment at will” means that you are free to resign
from your employment at any time, for any reason or no reason, with or without cause and with or
without notice. Similarly, InterMune may terminate your employment at any time for any legal
reason or for no reason, with or without cause and with or without notice. By accepting this offer
of employment, you agree that your employment is at will, and acknowledge that no one, other than
the Chief Executive Officer of InterMune, has the authority to promise you anything to the
contrary. Any such agreement must be in writing and signed by both you and the Chief Executive
Officer of InterMune to be effective.

     We believe that your employment with InterMune requires a significant commitment. Employment
with any other entity, or for yourself in competition with InterMune, is not permitted, with the
sole and limited exception that you will be permitted to continue as an ongoing member of the Board
of Directors of AVI BioPharma, Inc. and Immersion Corp., and the boards of any not-for-profit
charitable or educational organizations on which you may serve. You agree to resign from all other
Boards on which you serve (other than the Board of Cygnus, Inc.) by no later than December 31,
2006. You agree to resign from the Board of Cygnus, Inc. by no later than December 31, 2008.

     Prior to commencing your employment with InterMune, you agree to provide to InterMune a brief
profile of all entities you currently serve as a board member, including (i) a brief corporate
history and description of principal therapeutic areas, (ii) a list of all current officers,
directors and major (>10%) shareholders, and (iii) the names of the entities’ current auditors,
attorneys and key partners. You also agree to provide to InterMune copies of any and all indemnity
agreements you have with the entities you serve as a director and a summary of each such entity’s
directors and officers liability insurance coverage. You further agree to notify InterMune
immediately of the following as to each entity you serve as a director: (a) any pending or
threatened litigation that might propose a risk to you of exposure to liability as a director, (b)

 

 

John Hodgman

July 25, 2006

Page 3

any material change in D&O coverage, and (c) any change in therapeutic focus that could
constitute, or that could reasonably be perceived to constitute, a conflict of interest with
InterMune.

     During the course of your employment, you may create, develop or have access to confidential
information belonging to InterMune, including trade secrets and proprietary information, such as
clinical and other scientific data, customer information, business plans, marketing plans,
unpublished financial information, software, source codes, and personnel information. You agree
that as a condition of your employment with InterMune, you will sign and comply with the enclosed
InterMune Proprietary Information and Inventions Agreement, which contains certain commitments
regarding confidentiality. By accepting employment with InterMune, you also agree to keep all
InterMune information strictly confidential, and not to use it or disclose it to any person or
entity, except as is necessary in the ordinary course of performing your work. Similarly, you
agree to act in accordance with any valid non-disclosure agreements to which you may be subject.
You further acknowledge that your obligation to protect our confidential information from
disclosure exists both during your employment and after it ends. You also agree that at the
termination of your employment, for any reason, you will return to us all copies (including
electronic copies) of any documents or other materials you have that refer to or contain
InterMune’s confidential information, including notebooks, manuals, letters and customer lists.

     In your work for InterMune, you will be expected not to use or disclose any confidential
information, including trade secrets, of any former employer or other person to whom you have an
obligation of confidentiality. You agree to act in accordance with any valid non-disclosure
agreements to which you may be subject. You will be expected to use only that information which is
generally known and used by persons with training and experience comparable to your own, which is
common knowledge in the industry or otherwise legally in the public domain, or which is otherwise
provided or developed by InterMune. By accepting this offer of employment, you acknowledge that
you will be able to perform your duties within these guidelines. You further agree that you will
not bring onto InterMune’s premises any unpublished documents or property belonging to any former
employer or other person to whom you have an obligation of confidentiality.

     You also agree, if you accept this offer of employment, that for a period of two years after
your employment ends, you will not solicit any InterMune employee to leave his or her employment
with InterMune in order to begin employment or a consulting or independent contractor relationship
with any company or business in actual or potential competition with InterMune.

     Severance Pay in the Event of Termination (Not For Cause). As a member of the
Company’s Executive Committee, you will be entitled to the following benefits in the event your
employment is terminated other than for “Cause” or in the event of a “Change in Control” of
InterMune (as those terms are defined below). Although you at all times will remain an at-will
employee of InterMune, InterMune agrees that in the event you are terminated by the Company other
than for “Cause” in the absence of a “Change in Control” of InterMune, you will receive the
following benefits within fourteen (14) days after receipt by the Company of a general release duly
signed by you that releases the Company from all of your actual or potential claims against the
Company:

 

 

John Hodgman

July 25, 2006

Page 4

	 	•	 	If you have completed less than one (1) full year of service, you will receive six
(6) months’ base salary at your final rate of pay, six (6) months benefits
continuation (i.e., Company-provided COBRA payments), and six (6) months immediate
acceleration of vesting of each of your outstanding equity grants, whether stock
options or restricted shares.
	 
	 	•	 	If you have completed at least one (1) year but less than two (2) years of service,
you will receive nine (9) months’ base salary at your final rate of pay, nine (9)
months benefits continuation (i.e., Company-provided COBRA payments), and nine (9)
months immediate acceleration of vesting of each of your outstanding equity grants,
whether stock options or restricted shares.
	 
	 	•	 	If you have completed two (2) years of service or more, you will receive twelve
(12) months’ base salary at your final rate of pay, twelve (12) months benefits
continuation (i.e., Company-provided COBRA payments), and twelve (12) months immediate
acceleration of vesting of each of your outstanding equity grants, whether stock
options or restricted shares.
	 
	 	•	 	If such termination not for Cause occurs in the second half of the calendar year,
you also will receive a pro rata share of your discretionary target bonus for that
year.

The acceleration of vesting provided for in this section of this agreement is intended to be in
lieu of any acceleration rights provided in any operative stock option agreement you may sign. All
other terms and conditions applicable to your equity grants, e.g., with regard to exercise after
termination, forfeiture, etc., will continue to be governed by the operative stock option agreement
and stock plan document. Cash compensation required to be paid pursuant to this section of this
Agreement will be paid either in a single lump-sum payment or ratably on a monthly basis over the
severance period, in the Company’s sole discretion.

     Compensation upon Change in Control. In the event of a Change in Control of the
Company that results in: (i) your termination without Cause, or (ii) your resignation for “Good
Reason,” which for purposes of this Agreement shall mean either (a) a material diminution in your
duties, title or compensation, or (b) a requirement that you relocate more than fifty (50) miles
from the Company’s home office location, any of which event occurs within one (1) year following
the Change in Control (a “Triggering Event”), you will receive the following benefits within
fourteen (14) days after receipt by the Company of a general release duly signed by you that
releases the Company from all of your actual or potential claims against the Company:

     (a)     Cash Compensation: Two (2) years base salary at your final rate of pay and two
(2) years benefits continuation (i.e., Company-provided COBRA payments). If a Triggering Event
occurs in the second half of the calendar year, you also will receive a pro rata share of your
discretionary target bonus for that year.

     (b)     Options or Restricted Share Grants: Vesting of all outstanding equity grants
(including InterMune stock option grants, InterMune restricted stock grants, and any grants made by
the acquiring entity) will immediately accelerate. The acceleration of vesting provided for in this
section of this Agreement is intended to be in lieu of any acceleration rights provided in the

 

 

John Hodgman

July 25, 2006

Page 5

operative stock option agreement, and in addition to any acceleration rights provided in the
operative stock plan document. All other terms and conditions applicable to your equity grants,
e.g., with regard to exercise after termination, forfeiture, etc., will continue to be governed by
the operative stock option agreement and stock plan documents.

     (c)     Transition Management Services: you will receive executive transition management
services for a one-year period from the Triggering Event with Lee Hecht Harrison, Right Management,
or a similar transition management firm, up to a cap of Forty Thousand Dollars ($40,000).

     Definitions.

     For purposes of this agreement, “Cause” shall mean any of the following:

	 	•	 	Willful refusal to follow lawful and reasonable corporate policy or Chief Executive
Officer directives;
	 
	 	•	 	Willful failure, gross neglect or refusal to perform duties;
	 
	 	•	 	Willful act that intentionally or materially injures the reputation or business of
the Company;
	 
	 	•	 	Willful breach of confidentiality that has a material adverse affect on the
Company;
	 
	 	•	 	Fraud or embezzlement; or
	 
	 	•	 	Indictment for criminal activity.

     For purposes of this Agreement, “Change in Control” shall mean any of the following:

	 	•	 	A sale, lease or other disposition of all or substantially all of the securities or
assets of the Company;
	 
	 	•	 	A merger or consolidation in which the Company is not the surviving corporation; or
	 
	 	•	 	A reverse merger in which the Company is the surviving corporation but the shares
of Common Stock outstanding immediately preceding the merger are converted by virtue
of the merger into other property, whether in the form of securities, cash or
otherwise.

     The terms described in this letter replace all prior agreements, understandings, and promises
between InterMune and you concerning the terms and conditions of your employment with InterMune.
Any modification of this agreement will be effective only if it is in writing and is signed by both
you and the Chief Executive Officer of InterMune.

 

 

John Hodgman

July 25, 2006

Page 6

     John, I am pleased to extend this offer of employment to you, and hope that your association
with InterMune will be successful and rewarding. Please indicate your acceptance of this offer by
signing this letter below and returning the letter to me as soon as possible. A copy of this
letter is enclosed for your records.

	 	 	 	 	 	 
	 	Sincerely,

InterMune, Inc.

 	 
	  	/s/ Daniel G. Welch

 	 
	 	By:  	Daniel G. Welch 	 
	 	 	President and Chief Executive Officer 	 
	 

I understand and agree to the foregoing terms and conditions of employment with InterMune, Inc.

	 	 	 
	/s/ John Hodgman

	 	 
	 
	 	 
	John Hodgman
	 	 
	 
	 	 
	July 28,
2006 / August 14, 2006
	 	 
	 
	 	 
	Date     Start Dateexv10w1

 

Exhibit
10.1

EAGLE MATERIALS INC.

INCENTIVE PLAN

DIRECTOR RESTRICTED STOCK UNIT AGREEMENT

          This restricted stock unit agreement (the “Restricted Stock Unit Agreement” or “Agreement”)
entered into between Eagle Materials Inc., a Delaware corporation (the “Company”), and
                     (the “Grantee”), a director of the Company, with respect to a right (the “Award”) of
                     restricted stock units (“Restricted Stock Units”) representing shares of Common Stock (as
defined in the Eagle Materials Inc. Incentive Plan, as amended (the “Plan”)) granted to the Grantee
under the Plan on July 27, 2006 (the “Award Date”), such number of units subject to adjustment as
provided in the Plan, and further subject to the following terms and conditions:

          1. Relationship to Plan.

          This Award is subject to all of the terms, conditions and provisions of the Plan and
administrative interpretations thereunder, if any, which have been adopted by the Company’s
Compensation Committee (“Committee”) and are in effect on the date hereof. Except as defined
herein, capitalized terms shall have the same meanings ascribed to them under the Plan. For the
purposes of this Restricted Stock Unit Agreement:

          (a) “Restricted Period” means the period commencing on the Award Date and ending on the date
that the Restricted Stock Units become fully payable in accordance with Section 2.

          (b) “Retirement” means termination of service on the Board at the Company’s mandatory
retirement age in accordance with the Company’s Director Retirement Policy or earlier on such terms
and conditions as approved by the Committee.

          2. Payment.

          (a) The Restricted Stock Units shall become payable as soon as administratively possible
following the earlier of (i) Grantee’s Retirement or (ii) Grantee’s death.

          (b) Change in Control. This Award shall become fully payable without regard to the
limitations set forth in subparagraph (a) above, provided that the Grantee has served as a Director
since the Award Date, upon the occurrence of a Change in Control (as defined in Exhibit A
to this Agreement) unless either (i) the Committee determines that the terms of the transaction
giving rise to the Change in Control provide that the Award is to be replaced within a reasonable
time after the Change in Control with an award of equivalent value of shares of the surviving
parent corporation or (ii) the Award is to be settled in cash in accordance with the last sentence
of this subparagraph (b). Upon a Change in Control, pursuant to Section 16 of the Plan, the
Company may, in its discretion, settle the Award by a cash payment that the Committee shall
determine in its sole discretion is equal to the fair market value of the Award on the date of such
event.

 

 

          3. Forfeiture of Award.

          Except as provided in any other agreement between the Grantee and the Company, if the
Grantee’s service terminates other than by reason of Retirement, death or Change in Control, all
Restricted Stock Units, and all Dividend Equivalent Amounts (as defined in Section 4) attributable
thereto, as of the termination date shall be forfeited.

          4. Dividend Equivalent Payments.

          During the period of time between the Award Date and the earlier of the date the Restricted
Stock Units paid or are settled, the Restricted Stock Units will be evidenced by book entry
registration. As of each date that dividends are paid with respect to Common Stock, the Grantee
shall have a number of additional Restricted Stock Units credited to his account with respect to
such dividends. The additional Restricted Stock Units credited with respect to such dividends
shall be equal to: (i) the amount of the dividend paid per share of Common Stock as of such
dividend payment date multiplied by the number of Restricted Stock Units credited to the Grantee’s
account immediately prior to such dividend payment date divided by; (ii) the Fair Market Value of
the Common Stock on such dividend payment date.

          5. Timing and Form of Payment.

          The Grantee may be given the opportunity to timely elect to receive the Award pursuant to an
election form, and subject to such terms and conditions set forth in such form as prescribed by the
Committee (“Election Form”). The Grantee may timely elect to further defer receipt of the Award in
such time and manner, if any, as prescribed by the Committee in its sole and absolute discretion.

          Notwithstanding anything herein to the contrary including the Grantee’s election pursuant to
an Election Form, the Company reserves the right to pay the value of the vested Restricted Stock
Units, to the extent not yet paid, to the Grantee in the form of shares of Common Stock or an
equivalent cash payment at any time following vesting of the Award.

          6. Delivery of Shares.

          The Company shall not be obligated to deliver any shares of Common Stock if counsel to the
Company determines that such sale or delivery would violate any applicable law or any rule or
regulations of any governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Common Stock is listed or quoted. The
Company shall in no event be obligated to take any affirmative action in order to cause the
delivery of shares of Common Stock to comply with any such law, rule, regulations or agreement.

          7. Notices.

          Notice or other communication to the Company with respect to this Award must be made in the
following manner, using such forms as the Company may from time to time provide:

2

 

          (a) by electronic means as designated by the Committee;

          (b) by registered or certified United States mail, postage prepaid, to Eagle Materials Inc.,
Attention: Secretary, 3811 Turtle Creek Blvd., Suite 1100, Dallas, Texas 75219; or

          (c) by hand delivery or otherwise to Eagle Materials Inc., Attention: Secretary, 3811 Turtle
Creek Blvd., Suite 1100, Dallas, Texas 75219.

          Notwithstanding the foregoing, in the event that the address of the Company is changed, any
such notice shall instead be made pursuant to the foregoing provisions at the Company’s current
address.

          Any notices provided for in this Restricted Stock Unit Agreement or in the Plan shall be given
in writing or by such electronic means, as permitted by the Committee, and shall be deemed
effectively delivered or given upon receipt or, in the case of notices delivered by the Company to
the Grantee, five days after deposit in the United States mail, postage prepaid, addressed to the
Grantee at the address specified at the end of this Agreement or at such other address as the
Grantee hereafter designates by written notice to the Company.

          8. Assignment of Award.

          Except as otherwise permitted by the Committee, the Grantee’s rights under the Plan and this
Restricted Stock Unit Agreement are personal; no assignment or transfer of the Grantee’s rights
under and interest in this Award may be made by the Grantee other than by will, by beneficiary
designation, by the laws of descent and distribution or by a qualified domestic relations order;
and this Award is payable only to the Grantee during his lifetime, except as otherwise provided in
this Agreement.

          After the death of the Grantee, payment of the Award shall be permitted only to the Grantee’s
designated beneficiary or, in the absence of a designated beneficiary, the Grantee’s executor or
the personal representative of the Grantee’s estate (or by his assignee, in the event of a
permitted assignment) and only to the extent that the Award was payable on the date of the
Grantee’s death.

          9. Stock Certificates.

          Certificates representing the Common Stock issued pursuant to the Award will bear all legends
required by law and necessary or advisable to effectuate the provisions of the Plan and this Award.
The Company may place a “stop transfer” order against shares of the Common Stock issued pursuant
to this Award until all restrictions and conditions set forth in the Plan or this Agreement and in
the legends referred to in this Section 9 have been complied with.

          10. Shareholder Rights.

          The Grantee shall have no rights of a shareholder with respect to shares of Common Stock
subject to the Award unless and until such time as the Award has been paid pursuant to Section 5
and shares of Common Stock have been transferred to the Grantee.

3

 

          11. Successors and Assigns.

          This Agreement shall bind and inure to the benefit of and be enforceable by the Grantee, the
Company and their respective permitted successors and assigns (including personal representatives,
heirs and legatees), except that the Grantee may not assign any rights or obligations under this
Agreement except to the extent and in the manner expressly permitted herein.

          12. No Service Guaranteed.

          No provision of this Restricted Stock Unit Agreement shall confer any right upon the Grantee
to continued service with the Company.

          13. Governing Law.

          This Restricted Stock Unit Agreement shall be governed by, construed, and enforced in
accordance with the laws of the State of Texas.

          14. Amendment.

          This Agreement cannot be modified, altered or amended except by an agreement, in writing, signed by
both the Company and the Grantee.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	EAGLE MATERIALS INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 	Steven R. Rowley	 	 
	 

	 	 	 	 	 	Title:
	 	President and CEO	 	 

          The Grantee hereby accepts the foregoing Restricted Stock Unit Agreement, subject to the terms
and provisions of the Plan and administrative interpretations thereof referred to above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	GRANTEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Grantee’s Address:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

4

 

EXHIBIT A

Change in Control

          For the purpose of this Agreement, a “Change of Control” shall mean the occurrence of any of
the following events:

          (a) The acquisition by any Person of beneficial ownership of securities of the Company
(including any such acquisition of beneficial ownership deemed to have occurred pursuant to Rule
13d-5 under the Exchange Act) if, immediately thereafter, such Person is the beneficial owner of
(i) 50% or more of the total number of outstanding shares of any single class of Company Common
Stock or (ii) 40% or more of the total number of outstanding shares of all classes of Company
Common Stock, unless such acquisition is made (a) directly from the Company in a transaction
approved by a majority of the members of the Incumbent Board or (b) by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company;

          (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (or who is otherwise designated as a member of the
Incumbent Board by such a vote) shall be considered as though such individual were a member of the
Incumbent Board, except that any such individual shall not be considered a member of the Incumbent
Board if his or her initial assumption of office occurs as a result of either an actual or
threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board;

          (c) The consummation of a Business Combination, unless, immediately following such Business
Combination, (i) more than 50% of both the total number of then outstanding shares of common stock
of the parent corporation resulting from such Business Combination and the combined voting power of
the then outstanding voting securities of such parent corporation entitled to vote generally in the
election of directors will be (or is) then beneficially owned, directly or indirectly, by all or
substantially all of the Persons who were the beneficial owners, respectively, of the outstanding
shares of Company Common Stock immediately prior to such Business Combination in substantially the
same proportions as their ownership immediately prior to such Business Combination of the
outstanding shares of Company Common Stock, (ii) no Person (other than any employee benefit plan
(or related trust) of the Company or any corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 40% or more of the total number of then outstanding
shares of common stock of the corporation resulting from such Business Combination or the combined
voting power of the then outstanding voting securities of such corporation 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 parent corporation resulting from such Business Combination were members of the
Incumbent Board immediately prior to the consummation of such Business Combination; or

1-A

 

          (d) Approval by the Board and the shareholders of the Company of (i) a complete liquidation or
dissolution of the Company or (ii) a Major Asset Disposition (or, if there is no such approval by
shareholders, consummation of such Major Asset Disposition) unless, immediately following such
Major Asset Disposition, (A) Persons that were beneficial owners of the outstanding shares of
Company Common Stock immediately prior to such Major Asset Disposition beneficially own, directly
or indirectly, more than 50% of the total number of then outstanding shares of common stock and the
combined voting power of the then outstanding shares of voting stock of the Company (if it
continues to exist) and of the Acquiring Entity in substantially the same proportions as their
ownership immediately prior to such Major Asset Disposition of the outstanding shares of Company
Common Stock; (B) no Person (other than any employee benefit plan (or related trust) of the Company
or such entity) beneficially owns, directly or indirectly, 40% or more of the then outstanding
shares of common stock or the combined voting power of the then outstanding voting securities of
the Company (if it continues to exist) and of the Acquiring Entity entitled to vote generally in
the election of directors and (C) at least a majority of the members of the Board of the Company
(if it continues to exist) and of the Acquiring Entity were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board providing for such Major
Asset Disposition.

          For purposes of the foregoing,

     (i) the term “Person” means an individual, entity or group;

     (ii) the term “group” is used as it is defined for purposes of Section
13(d)(3) of the Exchange Act;

     (iii) the terms “beneficial owner”, “beneficially ownership” and
“beneficially own” are used as defined for purposes of Rule 13d-3 under the
Exchange Act;

     (iv) the term “Business Combination” means (x) a merger, consolidation
or share exchange involving the Company or its stock or (y) an acquisition
by the Company, directly or through one or more subsidiaries, of another
entity or its stock or assets;

     (v) the term “Company Common Stock” shall mean the Common Stock, par
value $.01 per share, of the Company;

     (vi) the term “Exchange Act” means the Securities Exchange Act of 1934,
as amended.

     (vii) the phrase “parent corporation resulting from a Business
Combination” means the Company if its stock is not acquired or converted in
the Business Combination and otherwise means the entity which as a result of
such Business Combination owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries;

2-A

 

     (viii) the term “Major Asset Disposition” means the sale or other
disposition in one transaction or a series of related transactions of 50% or
more of the assets of the Company and its subsidiaries on a consolidated
basis; and any specified percentage or portion of the assets of the Company
shall be based on fair market value, as determined by a majority of the
members of the Incumbent Board;

     (ix) the term “Acquiring Entity” means the entity that acquires the
largest portion of the assets sold or otherwise disposed of in a Major Asset
Disposition (or the entity, if any, that owns a majority of the outstanding
voting stock of such acquiring entity entitled to vote generally in the
election of directors or members of a comparable governing body); and

     (x) the phrase “substantially the same proportions,” when used with
reference to ownership interests in the parent corporation resulting from a
Business Combination or in an Acquiring Entity, means substantially in
proportion to the number of shares of Company Common Stock beneficially
owned by the applicable Persons immediately prior to the Business
Combination or Major Asset Disposition, but is not to be construed in such a
manner as to require that the same ratio or number of shares of such parent
corporation or Acquiring Entity be issued, paid or delivered in exchange for
or in respect of the shares of each class of Company Common Stock.

3-A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00107-of-00352.parquet"}]]