EXHIBIT 10.4(a)
EMPLOYMENT AGREEMENT
▇▇▇▇▇ CORPORATION (the "Company") and ▇▇▇▇▇ ▇. ▇▇▇▇ ("Executive") agree to enter
into this EMPLOYMENT AGREEMENT dated as of March 1, 1999, as follows:
1. Employment.
The Executive is currently employed by the Company pursuant to a letter
employment agreement dated January 30, 1990 which the Company and Executive
hereby terminate and enter into this new agreement on such terms and conditions
as set forth herein.
The Company hereby agrees to employ Executive, and Executive hereby agrees to be
employed by the Company, upon the terms and subject to the conditions set forth
in this Agreement.
2. Employment Term.
The period of Executive's employment under this Agreement shall begin as of
March 1, 1999 (the "Effective Date") and shall continue until terminated in
accordance with Section 5 below (the "Employment Term").
3. Duties and Responsibilities.
(a) The Company will employ Executive as its Senior Vice President and General
Counsel. In such capacity, Executive shall perform the customary duties
and have the customary responsibilities of such position and such other
duties as may be assigned to Executive from time to time by the Company's
President and Chief Executive Officer or by the Company's Board of
Directors (the "Board").
(b) Executive agrees to faithfully serve the Company, devote his full working
time, attention and energies to the business of the Company its
subsidiaries and affiliated entities, and perform the duties under this
Agreement to the best of his abilities. Executive may perform services
without direct compensation therefor in connection with the management of
personal investments, or in connection with charitable or civic
organizations. The Executive shall be excused from rendering his service
during reasonable vacation periods and during other reasonable temporary
absences as may be authorized by the Board of Directors of the Company.
(c) Executive agrees (i) to comply with all applicable laws, rules and
regulations, and all requirements of all applicable regulatory,
self-regulatory, and administrative bodies; (ii) to comply with the
Company's Policy of Business Conduct; and (iii) not to engage in any other
business or employment without the written consent of the Company except
as otherwise specifically provided herein.
4. Compensation and Benefits.
(a) Base Salary. During the Employment Term, the Company shall pay Executive a
base salary at the annual rate of $290,000 per year or such higher rate as
may be determined from time to time by the Board ("Base Salary"). Such
Base Salary shall be paid in accordance with the Company's standard
payroll practice for senior executives.
(b) Annual Incentive Bonus. During the Employment Term, the Executive will be
eligible for an annual incentive bonus in such amount as may be determined
by the Board.
(c) Expense Reimbursement. The Company shall promptly reimburse Executive for
the ordinary and necessary business expenses incurred by Executive in the
performance of the duties under this Agreement in accordance with the
Company's customary practices applicable to senior executives, provided
that such expenses are incurred and accounted for in accordance with the
Company's policy.
(d) Other Benefit Plans, Fringe Benefits and Vacations. Executive shall be
eligible to participate in or receive benefits under any pension plan,
profit sharing plan, 401(k) plan, non-qualified deferred compensation
plan, medical and dental benefits plan, life insurance plan, short-term
and long-term disability plans, incentive compensation plans, vacations,
or any other fringe benefit plan, generally made available by the Company
to senior executives. Except as otherwise provided in this Agreement, any
such participation shall be in accordance with the provisions of such
plans and nothing contained in this Agreement is intended to, or shall be
deemed to, affect adversely any of Executive's rights as a participant
under any such plans. Nothing herein shall prevent the Board from
modifying or discontinuing any benefit plan on a consistent and
non-discriminatory basis applicable to all such executives.
5. Termination of Employment.
Executive's employment under this Agreement may be terminated under the
following circumstances:
(a) Death. Executive's employment shall terminate upon Executive's death.
(b) Total Disability. The Company may terminate Executive's employment upon
his becoming "Totally Disabled". For purposes of this Agreement, Executive
shall be "Totally Disabled" if he is physically or mentally incapacitated
so as to render him incapable of performing his usual and customary duties
under this Agreement. Executive's receipt of disability benefits under the
Company's long-term disability plan or receipt of Social Security
disability benefits shall be deemed conclusive evidence of Total
Disability for purpose of this Agreement.
(c) Termination by the Company for Cause. The Company may terminate
Executive's employment for "Cause". Such termination shall be effective as
of the date specified in the written Notice of Termination provided to
Executive.
Termination of employment by the Company for Cause shall be deemed
to have occurred only if such termination directly results from: (A)
an act or acts of dishonesty on Executive's part constituting a
felony; (B) Executive's willful and continued failure to devote the
time, attention, and effort necessary to substantially perform his
duties as an executive officer of the Company in a manner consistent
with Executive's past performance (other than any such failure
resulting from Executive's
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incapacity due to physical or mental illness or total disability),
after a demand for substantial performance is delivered to Executive
by the Board which specifically identifies the manner in which the
Board believes that Executive has not substantially performed his
duties and Executive is given a reasonable time after such demand
substantially to perform his duties; (C) gross misconduct or gross
negligence in connection with the business of the Company or an
affiliate which has a material adverse effect on the Company and its
subsidiaries, taken as a whole; or (D) a material breach of any of
the covenants set forth in Section 7 hereof.
(d) Termination by the Company without Cause. The Company may terminate
Executive's employment under this Agreement without Cause thirty (30) days
after providing Notice of Termination to Executive.
(e) Termination by Executive. Executive may terminate his employment under
this Agreement at any time after providing Notice of Termination to the
Company. Such Notice shall state whether the Executive's termination is
for "Good Reason". Termination of employment by Executive for Good Reason
shall be deemed to have occurred, if Executive provides the Notice of
Termination within 60 days after the occurrence of any of the following:
(i) A change in Executive's responsibilities, status, title, or
position, which, in Executive's reasonable judgment, represents a
diminution of Executive's responsibilities, status, title, or
position offices, or any removal of Executive from, or any failure
to re-elect Executive to, any of such titles, offices, or positions,
provided that this clause shall not apply if Executive's employment
is terminated as a result of: (A) Executive's death, (B) Executive's
Total Disability in accordance with Section 5(b), (C) Cause in
accordance with Section 5(c), or (D) Executive's voluntary
termination in accordance with this Section 5(e) other than for Good
Reason.
(ii) A reduction by the Company in Executive's Base Salary.
(iii) The failure by the Company to pay any material amount of current
compensation owing to Executive, or any material amount of
compensation deferred under any plan, agreement or arrangement of or
with the Company owing to Executive, within 20 days after the
Executive makes written demand for such amount.
(iv) The failure by the Company to obtain an assumption (in form and
substance reasonably satisfactory to the Executive, except in the
case of a merger or consolidation which does not constitute a Change
in Control for which no separate assumption is necessary) of the
obligations of the Company under this Agreement by any successor to
the Company.
(v) Any "Change in Control" of the Company as defined in Appendix A to
this Agreement.
(f) Notice of Termination. Any termination of Executive's employment by the
Company or by Executive (other by reason of Executive's death) shall be
communicated by written Notice of Termination to the other party in
accordance with Section 16 below. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice in writing which shall
indicate the specific termination provision in this Agreement relied upon
to terminate Executive's
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employment and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
(g) Termination Date. Termination Date means (i) if Executive's employment is
terminated because of his death, the date of death, or (ii) if employment
is terminated for any other reason, the date specified in the Notice of
Termination.
6. Compensation Following Termination of Employment.
(a) Termination by Reason of Death. In the event that Executive's employment
is terminated by reason of Executive's death, the Company shall pay the
following amounts to Executive's beneficiary or estate:
(i) Earned But Unpaid Compensation. Any accrued but unpaid Base
Salary for services rendered to the date of death, any accrued but
unpaid expenses required to be reimbursed under this Agreement and
any vacation accrued to the date of death.
(ii) Lump Sum Payment. An amount equal to the Base Salary (at the
rate in effect as of the date of Executive's death) which would have
been payable to Executive if Executive had continued in employment
until the last day of the month in which Executive's death occurs.
Such amount shall be paid in a single lump sum cash payment within
30 days after Executive's death.
(iii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements referred
to in Section 4(d) hereof as determined and paid in accordance with
the terms of such plans, policies and arrangements.
(b) Termination by Reason of Total Disability. In the event that Executive's
employment is terminated by reason of Executive's Total Disability prior
to the last day of the Employment Term as determined in accordance with
Section 5(b), the Company shall pay the following amounts to Executive:
(i) Earned But Unpaid Compensation. Any accrued but unpaid Base
Salary for services rendered to Executive's Termination Date, any
accrued but unpaid expenses required to be reimbursed under this
Agreement, any vacation accrued to the Termination Date.
(ii) Continuation of Base Salary. An amount equal to (A) the Base
Salary (at the rate in effect as of the date of Executive's Total
Disability) which would have been payable to Executive if Executive
had continued in active employment until the end of the 12-month
period following Executive's Termination Date, or such longer period
as may be determined by the Board, (B) reduced by amount of
disability insurance benefits payable to Executive during such
period under any employer-paid disability insurance plan. Payment
shall be made at the same time and in the same manner as such
compensation would have been paid if Executive had remained in
active employment until the end of such period.
(iii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements referred
to in Section 4(d) hereof shall be
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determined and paid in accordance with the terms of such plans,
policies and arrangements.
(c) Termination for Cause or Termination By Executive for Other Than Good
Reason. In the event that Executive's employment is terminated by the
Company for Cause pursuant to Section 5(c), or by Executive pursuant to
Section 5(e) for other than Good Reason, the Company shall pay the
following amounts to Executive:
(i) Earned But Unpaid Compensation. Any accrued but unpaid Base
Salary for services rendered to Executive's Termination Date, any
accrued but unpaid expenses required to be reimbursed under this
Agreement and any vacation accrued to Executive's Termination Date.
(ii) Other Benefits. Any benefits to which Executive may be entitled
pursuant to the plans, policies and arrangements referred to in
Section 4(d) hereof shall be determined and paid in accordance with
the terms of such plans, policies and arrangements.
(d) Termination By the Company Without Cause or Termination by Executive for
Good Reason. Executive shall be entitled to the benefits described in this
Section 6(d) in the event that Executive's employment is terminated (i) by
the Company pursuant to Section 5(d) for reasons other than death, Total
Disability, or Cause, or (ii) by Executive for Good Reason pursuant to
Section 5(e).
(i) Earned But Unpaid Compensation. The Company shall pay Executive
any accrued but unpaid Base Salary for services rendered to
Executive's Termination Date, any accrued but unpaid expenses
required to be reimbursed under this Agreement and any vacation
accrued to Executive's Termination Date.
(ii) Lump Sum Payment. The Company shall pay Executive an amount
equal to the product of five times the sum of (A) and (B) below:
(A) Executive's annualized Base Salary at the highest
annual rate in effect at any time prior to the Termination
Date; and
(B) the highest amount of annual bonus payable to
Executive at any time prior to the Executive's Termination
Date.
This amount will be paid to Executive in a single lump sum
within 30 business days after the Termination Date.
(iii) Other Benefits. Any benefits to which Executive may be
entitled pursuant to the plans, policies and arrangements referred
to in Section 4(d) hereof shall be determined and paid in accordance
with the terms of such plans, policies and arrangements.
(iv) No Mitigation Required. Executive shall not be required to
mitigate the amount of any compensation provided for under this
Section 6(d) by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this
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Agreement be reduced by any compensation earned by the Employee as
the result of employment with another employer after the Termination
Date or by any other compensation.
(v) Non-Competition Covenant Does Not Apply. The restrictive
covenant prohibiting competitive activity set forth in Section 7(b)
below shall not be applicable to Executive and shall be null and
void.
(e) No Other Benefits or Compensation. Except as may be provided under this
Agreement, under the terms of any incentive compensation, employee
benefit, or fringe benefit plan, applicable to Executive at the time of
Executive's termination or resignation of employment, Executive shall have
no right to receive any other compensation, or to participate in any other
plan, arrangement or benefit, with respect to future periods after such
termination or resignation.
7. Restrictive Covenants.
(a) Protected Information. Executive recognizes and acknowledges that he will
have access to various confidential or proprietary information concerning
the Company and entities affiliated with the Company of a special and
unique value which may include, without limitation, (i) books and records
relating to operations, finance, accounting, sales, personnel and
management, (ii) policies and matters relating particularly to operations
such as customer service requirements, costs of providing service and
equipment, operating costs and pricing matters, and (iii) various trade or
business secrets, including business opportunities, marketing or business
diversification plans, business development and bidding techniques,
methods and processes, financial data and the like (collectively, the
"Protected Information"). Executive therefore covenants and agrees that he
will not at any time, either while employed by the Company or afterwards,
knowingly make any independent use of, or knowingly disclose to any other
person or organization (except as authorized by the Company) any of the
Protected Information.
(b) Competitive Activity. Executive covenants and agrees that at all times
during his period of employment with the Company, and for a period of two
(2) years after the date of termination of his employment by reason of (i)
termination by the Company for Cause in accordance with Section 5(c)
above, or (ii) termination by the Executive in accordance with Section
5(e) above for other than Good Reason, he will not, directly or
indirectly, engage in, assist, or have any active interest or involvement
whether as an employee, agent, consultant, creditor, advisor, officer,
director, stockholder (excluding holding of less than 1% of the stock of a
public company), partner, proprietor or any type of principal whatsoever,
in any person, firm, or business entity which is engaged in the same
business as that conducted and principally carried on by the Company on
the Date of Termination and continued thereafter, without the Company's
specific written consent to do so.
(c) Return of Documents and Other Materials. Executive shall promptly deliver
to the Company, upon termination of his employment, or at any other time
as the Company may so request, all customer lists, leads and refunds, data
processing programs and documentation, employee information, memoranda,
notes, records, reports, tapes, manuals, drawings, blueprints, programs,
and any other documents and other materials (and all copies thereof)
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relating to the Company's business or that of its customers, and all
property associated therewith, which Executive may then possess or have
under his control.
8. Enforcement of Covenants.
(a) Right to Injunction. Executive acknowledges that a breach of the covenants
set forth in Section 7 hereof will cause irreparable damage to the Company
with respect to which the Company's remedy at law for damages will be
inadequate. Therefore, in the event of breach or anticipatory breach of
the covenants set forth in this section by Executive, Executive and the
Company agree that the Company shall be entitled to the following
particular forms of relief, in addition to remedies otherwise available to
it at law or equity, injunctions, both preliminary and permanent,
enjoining or retraining such breach or anticipatory breach and Executive
hereby consents to the issuance thereof forthwith and without bond by any
court of competent jurisdiction.
(b) Separability of Covenants. The covenants contained in Section 7 hereof
constitute a series of separate covenants, one for each applicable State
in the United States and the District of Columbia, and one for each
applicable foreign country. If in any judicial proceeding, a court shall
hold that any of the covenants set forth in Section 7 exceed the time,
geographic, or occupational limitations permitted by applicable laws,
Executive and the Company agree that such provisions shall and are hereby
reformed to the maximum time, geographic, or occupational limitations
permitted by such laws. Further, in the event a court shall hold
unenforceable any of the separate covenants deemed included herein, then
such unenforceable covenant or covenants shall be deemed eliminated from
the provisions of this Agreement for the purpose of such proceeding to the
extent necessary to permit the remaining separate covenants to be enforced
in such proceeding. Executive and the Company further agree that the
covenants in Section 7 shall each be construed as a separate agreement
independent of any other provisions of this Agreement, and the existence
of any claim or cause of action by Executive against the Company whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by the Company of any of the covenants of Section 7.
9. Certain Proprietary Rights.
Executive agrees to and hereby does assign to the Company all his right, title
and interest in and to all inventions, whether or not patentable, which are made
or conceived solely or jointly by him:
(a) at any time during the term of his employment by the Company in an
executive, managerial, or planning capacity (including development and
sales); or
(b) during the course of or in connection with his duties during the
Employment Term; or
(c) with the use of time or materials of the Company.
Executive agrees to communicate to the Company or its representatives all facts
known to him concerning such inventions, to sign all rightful papers, make all
rightful oaths and generally to do everything possible to aid the Company in
obtaining and enforcing proper patent protection for all such inventions in all
countries and in vesting title to such inventions in all countries and in
vesting title to such inventions and patents in the Company. For the purpose of
this Agreement, the subject matter of any application for patent naming Employee
as a sole or joint inventor filed during the course of
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employment or within one year subsequent to the termination thereof shall be
deemed to be an invention made or conceived by him during the course of his
employment by the Company and assignable to the Company hereunder, unless
Executive establishes by a preponderance of the evidence that such invention was
made or conceived by him subsequent to termination of his employment hereunder.
At the Company's request (during or after the term of this Agreement) and
expense, Executive will promptly execute a specific assignment of title to the
Company, and perform any other acts reasonably necessary to implement the
foregoing assignment.
10. Withholding of Taxes.
The Company shall withhold from any compensation and benefits payable under this
Agreement all applicable federal, state, local, or other taxes.
11. Source of Payments.
All payments provided under this Agreement, other than payments made pursuant to
a plan which provides otherwise, shall be paid from the general funds of the
Company, and no special or separate fund shall be established, and no other
segregation of assets made, to assure payment. Executive shall have no right,
title or interest whatever in or to any investments which the Company may make
to aid the Company in meeting its obligations under this Agreement. To the
extent that any person acquires a right to receive payments from the Company
under this Agreement, such right shall be no greater than the right of an
unsecured creditor of the Company and its affiliates.
12. Successor and Binding Agreement.
(a) Company Successor. The Company shall require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, by agreement
in form and substance satisfactory to Executive, expressly to assume and
agree to perform this Agreement in the same manner and to the same extent
as the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to compensation from the Company in the same
amount and on the same terms as Executive would be entitled to under this
Agreement if Executive had given Notice of Termination for Good Reason as
of the day immediately before such succession became effective and had
specified that day in the notice of termination. As used in this
Agreement, "Company" shall mean the Company as defined in the first
sentence of this Agreement and any successor to all or substantially all
its business or assets or which otherwise becomes bound by all the terms
and provisions of this Agreement, whether by the terms hereof, by
operation of law or otherwise.
(b) Executive's Successor. This Agreement shall inure to the benefit of and be
enforceable by Executive and his personal or legal representatives and
successors in interest under this Agreement.
(c) Facility of Payment. In the event of Executive's legal incapacity, the
Company may make any payments due under this Agreement to his legal
representative. In the event of Executive's death, the Company may make
any payment due under this Agreement to his surviving spouse or, if none,
to Executive's estate. Any payment made in accordance with this provision
fully discharges the obligation of the Company therefor.
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13. Assignment by Executive.
The rights and benefits of Executive under this Agreement are personal to him
and no such right or benefit shall be subject to voluntary or involuntary
alienation, assignment or transfer; provided, however, that nothing in this
Section 13 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death. In the event of a
dispute arising under this Agreement, the Company agrees to pay any and all
reasonable legal fees incurred by Executive in connection therewith.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York applicable to agreements made and to be performed in that
State, without regard to its conflict of laws provisions.
15. Notices.
Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by registered or certified mail, return receipt
requested, or by facsimile or by hand delivery, to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:
To the Company:
▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
To Executive:
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
16. Miscellaneous.
(a) Waiver. The failure of a party to insist upon strict adherence to any term
of this Agreement on any occasion shall not be considered a waiver thereof
or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(b) Separability. If any term or provision of this Agreement is declared
illegal or unenforceable by any court of competent jurisdiction and cannot
be modified to be enforceable, such term or provision shall immediately
become null and void, leaving the remainder of this Agreement in full
force and effect.
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(c) Headings. Section headings are used herein for convenience of reference
only and shall not affect the meaning of any provision of this Agreement.
(d) Rules of Construction. Whenever the context so requires, the use of the
singular shall be deemed to include the plural and vice versa.
(e) Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
and such counterparts will together constitute but one Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year set forth below.
▇▇▇▇▇ CORPORATION EXECUTIVE
By /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------- -------------------------
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇
President, Chief Executive
Officer and Chairman of
the Board
Date: March 9 , 1999 Date: March 9, 1999
------------------------------- -------------------
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APPENDIX A
DEFINITION OF CHANGE IN CONTROL
The following definition of "Change in Control" shall apply for purposes of
Paragraph 5(e)(v) of the Employment Agreement between ▇▇▇▇▇ Corporation and
▇▇▇▇▇ ▇. ▇▇▇▇.
Change in Control. A "Change in Control" of the Company shall be deemed to have
occurred as of the first day any one or more of the following conditions shall
have been satisfied:
(a) Any person (other than a trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or a corporation owned
directly or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company), becomes
the beneficial owner, directly or indirectly, of securities of the
Company, representing more than twenty-five percent (25%) of the combined
voting power of the Company's then outstanding securities;
(b) Individuals who, as of May 20, 1998, constitute the Board of Directors of
the Company (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 May 20, 1998, whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or
(c) The stockholders of the Company approve: (i) a plan of complete
liquidation of the Company; or (ii) an agreement for the sale or
disposition of all or substantially all the Company's assets; or (iii) a
merger, consolidation, or reorganization of the Company with or involving
any other corporation, limited liability entity or similar person, other
than a merger, consolidation, or reorganization that would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least
seventy-five percent (75%) of the combined voting power of the voting
securities of the Company (or such surviving entity) outstanding
immediately after such merger, consolidation, or reorganization.
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