RNOW » Topics » (iv) For purposes of this Addendum, the following terms shall have the definitions set forth below:

This excerpt taken from the RNOW 10-Q filed May 10, 2006.

(iv)          For purposes of this Addendum, the following terms shall have the definitions set forth below:

 

i.              “Change in Control” shall mean a change in ownership or control of the Company effected through any of the following transactions:

 

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(i)            a merger, consolidation or other reorganization unless securities representing more than 50% of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Company’s outstanding voting securities immediately prior to such transaction;
 
(ii)           the sale, transfer or other disposition of all or substantially all of the Company’s assets;
 
(iii)          the acquisition, directly or indirectly by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than 50% of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s stockholders; or
 
(iv)          a change in the composition of the Board of Directors over a period of 36 consecutive months or less such that a majority of the directors ceases, by reason of one or more contested elections for directorship, to be comprised of individuals who either (i) have been directors continuously since the beginning of such period or (ii) have been elected or nominated for election as directors during such period by at least a majority of the directors described in clause (i) who were still in office at the time the Board of Directors approved such election or nomination.
 

Following a Change in Control, “Company” shall refer to the successor corporation in the transaction.

 

ii.             “Continuing Director” shall mean any person who is a member of the Board of Directors of the Company, while such a person is a member of the Board of Directors, who is not an Acquiring Person (as hereinafter defined) or an Affiliate or Associate (as hereinafter defined) of an Acquiring Person, or a representative of an Acquiring

 

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Person or of any such Affiliate or Associate, and who (A) was a member of the Board of Directors on the date of this Agreement or (B) subsequently becomes a member of the Board of Directors, if such person’s initial nomination for election or initial election to the Board of Directors is recommended or approved by a majority of the Continuing Directors.

 

iii.            “Acquiring Person” shall mean any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) who or which, together with all Affiliates and Associates of such person, is the “beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities, but shall not include the Company, any subsidiary of the Company; and “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act.

 

iv.            Termination of employment for “Cause” shall mean termination by the Company of Option Holder’s employment based upon (i) the willful and continued failure by Option Holder substantially to perform his or her duties and obligations (other than any such failure resulting from his or her incapacity due to physical or mental illness or any such actual or anticipated failure resulting from Option Holder’s termination for “Good Reason” as defined below), (ii) the Option Holder’s conviction or plea bargain in connection with the commission or alleged commission of any felony or gross misdemeanor involving moral turpitude, fraud or misappropriation of funds, or (iii) the willful engaging by Option Holder in misconduct which causes substantial injury to the Company, its other employees or its clients, whether monetarily or otherwise.  For purposes of this paragraph, no action or failure to act on Option Holder’s part shall be considered “willful” unless done, or omitted to be done, by Option Holder in bad faith and without reasonable belief that his or her action or omission was in the best interests of the Company.

 

v.             “Good Reason” shall mean the occurrence of any of the following events following a Change in Control, except for the occurrence of such an event in connection with the termination of Option Holder’s employment by the Company (or any successor company or affiliated entity

 

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then employing Option Holder) for Cause, Disability or death:

 

(i)            the assignment to Option Holder of employment duties or responsibilities which are not substantially comparable in responsibility and status to the employment duties and responsibilities held by Option Holder immediately prior to the Change in Control;
 
(ii)           a reduction in Option Holder’s base salary as in effect immediately prior to the Change in Control or as the same may be increased from time to time during the term of this Agreement; or
 
(iii)          requiring Option Holder to work in a location more than 50 miles from Option Holder’s office location immediately prior to the Change in Control, except for requirements of temporary travel on the Company’s business to an extent substantially consistent with Option Holder’s business travel obligations immediately prior to the Change in Control.
 

The provisions of this Addendum shall supersede any provisions to the contrary in the Option Agreement.

 

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