CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of
July __,1996 is between Egghead, Inc. and DJ & J Software Corporation, a wholly
owned subsidiary of Egghead, Inc. (jointly and severally, the "Company"), and
___________________ (the "Executive").
1.0 EMPLOYMENT
1.1 CERTAIN DEFINITIONS
(a) "EFFECTIVE DATE" shall mean the first date during the Change of
Control Period (as defined in Section 1.1(b)) on which a Change of Control
occurs.
(b) "CHANGE OF CONTROL PERIOD" shall mean the period commencing on the
date hereof and ending on the second anniversary of such date; PROVIDED,
HOWEVER, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), the Change of Control
Period shall be automatically extended so as to terminate two years from such
Renewal Date, unless at least 60 days prior to the Renewal Date the Company
shall give notice to the Executive that the Change of Control Period shall not
be so extended.
1.2 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, for the period commencing on the
Effective Date and ending on the expiration of the Change of Control Period (the
"Employment Period").
1.3 POSITION AND DUTIES
During the Employment Period, the Executive's position (including status,
offices, titles and reporting requirements), 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 90-day period immediately preceding the Effective Date.
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1.4 LOCATION
During the Employment Period, the Executive's services shall be performed
at the Company's headquarters on the Effective Date or any office which is
subsequently designated as the headquarters of the Company and is less than 50
miles from such location.
2.0 COMPENSATION
During the Employment Period, the Company agrees to pay or cause to be paid
to Executive, and the Executive agrees to accept in exchange for the services
rendered hereunder by him, the following compensation.
2.1 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") for the
fiscal year in which the Effective Date occurs. The Annual Base Salary shall be
paid in substantially equal installments and at the same intervals as the
salaries of other officers of the Company are paid. During the Employment
Period, the Board or the Compensation Committee shall review the Annual Base
Salary at least annually and shall determine any increases in future years.
3.0 BENEFITS
3.1 INCENTIVE, RETIREMENT AND WELFARE BENEFIT PLANS; VACATION
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 provided 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; the Company's
Voluntary Investment Plan and any other incentive, savings and retirement plan,
practice, policy or program; and all welfare benefit plans, practices, policies
and programs (including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life, accidental death and
travel accident insurance plans and programs.
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3.2 EXPENSES
During the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him 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.
4.0 TERMINATION
Employment of the Executive during the Employment Period may be terminated
as follows but, in any case, the nondisclosure provisions set forth in Section 7
hereof shall survive the termination of this Agreement and the termination of
the Executive's employment with the Company.
4.1 BY THE COMPANY OR THE EXECUTIVE
Upon giving Notice of Termination (as defined below), the Company may
terminate the employment of the Executive with or without Cause (as defined
below). Upon giving Notice of Termination, the Executive may terminate his or
her employment with or without Good Reason.
4.2 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 or without 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 1.3 hereof for a period or periods aggregating
120 calendar days in any 12-month 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 Executive's ability to
perform the duties specified in Section 1.3 hereof is of the essence of this
Agreement.
4.3 NOTICE OF TERMINATION
Any termination by the Company during the Employment Period shall be
communicated by Notice of Termination to the other party given in accordance
with Section 10 hereof. The "Notice of Termination" shall mean a written notice
which
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(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 Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company hereunder or precede the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
4.4 DATE OF TERMINATION
During 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 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, five days after the date of mailing of the Notice of Termination.
The Executive's employment and performance of services will continue during such
five-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 his duties during such period.
5.0 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 5.
5.1 TERMINATION BY THE COMPANY FOR OTHER THAN CAUSE OR BY THE EXECUTIVE FOR
GOOD REASON
If the Company terminates the Executive's employment other than for Cause
or the Executive terminates his or her employment for Good Reason prior to the
end of the Employment Period, the Executive shall be entitled to receive:
(a) payment of the following accrued obligations (the "Accrued
Obligations"):
(i) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid;
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(ii) any compensation previously deferred by the Executive (together
with accrued interest or earnings thereon, if any) and any accrued vacation pay,
in each case to the extent not theretofore paid;
(b) payment of the Executive's Annual Base Salary for the period from the
Date of Termination through the expiration of the Employment Period;
(c) payment of the Executive's Annual Base Salary for a period of one
year/six months following the Date of Termination; and
(d) for the period from the Date of Termination through the expiration of
the Employment Period or for a period of one year/six months following the Date
of Termination, whichever is longer, benefits to the Executive and/or the
Executive's family at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described in
Section 3 hereof if the Executive's employment had not been terminated;
PROVIDED, HOWEVER, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility (such continuation of such benefits for the
period herein set forth shall be hereinafter referred to as the "Welfare Benefit
Continuation").
5.2 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
If the Executive's employment shall be terminated by the Company for Cause
or by the Executive for other than Good Reason during the Employment Period,
this Agreement shall terminate without further Obligation to the Executive other
than the Accrued Obligations.
5.3 EXPIRATION OF TERM
In the case of a termination of the Executive's employment as a result of
the expiration of the term of this Agreement, the Executive not be entitled to
receive any payment hereunder, other than the Accrued Obligations.
5.4 TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY
If the Executive's employment is terminated by reason and the Executive's
death or total Disability during the Employment Period, the Company shall make
the payments and assume the obligations set forth in Section 5.1 to the
Executive or his or her legal representative (which payments shall be made to
the Executive's estate or
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beneficiary, as applicable in the case of the Executive's death), and the timely
payment or provision of the Welfare Benefit Continuation.
5.5 LIMITATIONS TO PAYMENTS
Notwithstanding any other provisions of this Section 5, if either the
Company or the Executive receives confirmation from the Company's certified
public accounting firm, or such other accounting firm retained as independent
certified public accountants for the Company, that any payment by the Company
under this Section 5 would be considered to be an "excess parachute payment"
within the meaning of Section 28OG of the Internal Revenue Code of 1986, as
amended, or any successor statute then in effect, then the aggregate payments by
the Company pursuant to this Section 5 shall be reduced to an amount which is
$1.00 less than the smallest sum which would be deemed to be such an "excess
parachute payment" and, if permitted by applicable law, such reduction shall be
made to the last payment due hereunder; PROVIDED, FURTHER, that, if permitted by
applicable law, no such adjustment shall be made in any year in which the
Executive authorizes a reduction in the payment otherwise due the Executive
hereunder by an amount equal to any loss to be incurred by the Company because
such payments would not be deductible by the Company as a business expense for
income tax purposes for the reason that such payments constitute an excess
parachute payment in that year.
5.6 PAYMENT SCHEDULE
All payments under this Section 5 shall be made to the Executive at the
same intervals as such payments were made to him immediately prior to
termination, including the Annual Bonus (or pro rata portion thereof), which
shall be payable in a lump sum no later than 90 days after the end of the fiscal
year in which the Date of Termination occurs.
5.7 CAUSE
For purposes of this Agreement, "Cause" means cause given by the Executive
to the and shall include, without limitation, the occurrence of one or more of
the following events:
(a) Failure or refusal to carry out any lawful duties of the Executive
described in Section 1.3 hereof or any directions of the Board reasonably
consistent with the duties herein set forth to be performed by the Executive;
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(b) Violation the Executive of a state or federal criminal law involving
the commission of a crime against the Company or other criminal act involving
moral turpitude;
(c) Current abuse by the Executive of alcohol or controlled substances
deception, fraud, misrepresentation or dishonesty by the Executive; any incident
materially compromising the Executive's reputation or ability to represent the
Company with the public; any act or omission by the Executive which
substantially impairs the Company's business, goodwill or reputation; or any
other misconduct; or
(d) Any other material violation of any provision of this Agreement.
5.8 GOOD REASON
"GOOD REASON" means, without the Executive's express written consent:
(a) (i) the assignment to the Executive of duties, or limitation of the
Executive's responsibilities, inconsistent with the Executive's title, position,
duties, responsibilities and status with the Company as such duties and
responsibilities existed immediately prior to the date of the Change of Control,
or (ii) removal of the Executive from, or failure to re-elect the Executive to,
the Executive's positions with the Company or any Subsidiary that employs the
Executive immediately prior to the Change of Control, except in connection with
the involuntary termination of the Executive's employment by the Company for
Cause or as a result of Executive's death or Disability; or
(b) failure by the Company to pay, or reduction by the Company of, the
Executive's Annual Base Salary, as reflected in the Company's payroll records
for the Executive's last pay period immediately prior to the Change of Control;
(d) the relocation of the principal place of the Executive's employment to
a location that is more than 25 miles further from the Executive's principal
residence than such principal place of employment immediately prior to the
Change of Control; or
(e) the breach of any material provision of this Agreement by the Company,
including, without limitation, failure by the Company to bind any successor to
the Company to the terms and provisions of this Agreement in accordance with
Section 10.
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6.0 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:
6.1 HEALTH
The Executive is in good health and knows of no physical or mental
disability which, with or without any accommodation which may be required by law
and which places no undue burden on the Company, would present him from
fulfilling his obligations hereunder. The Executive agrees, if the Company
requests, to submit to periodic medical examinations by a physician or
physicians by, paid for and arranged by the Company. The Executive agrees that
the examination's medical report shall be provided to the Company.
6.1 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 which the
Executive may be bound.
7.0 NONDISCLOSURE; RETURN OF MATERIALS
7.1 NONDISCLOSURE
Except as required by his 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. In this Section 7, the term "employment" means employment as a regular
independent subcontractor or consultant, as well as a full-time or regular
part-time employee of the Company.
All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time, or in his 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.
The Executive understands that the Company will be relying on this
Agreement in continuing the Executive's employment, paying him compensation,
granting him
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any promotions or raises, or entrusting him with any information which helps the
Company compete with others.
7.2 ASSIGNMENT
The Executive will disclose promptly to the Company in writing all ideas,
inventions and discoveries conceived of and/or developed in whole or in part
during the term of his employment with the Company and relating to any of the
Company's business, whether or not conceived or developed during working hours
or on the property of the Company. Such ideas, inventions and discoveries shall
be the property of the Company and it shall have the right to any patents which
may be issued with respect to the same. The Executive will also, and hereby
does, assign to the Company and/or its nominees all his right, title and
interest in such ideas, inventions and discoveries and all right, title and
interest in any patent applications for patents, assignments and other papers,
and will do such things as the Company may require for establishing and
protecting its ownership and to effectuate the foregoing, either during his
employment or thereafter. There shall he excluded from the operations of this
Agreement the Executive's ideas, inventions and discoveries, patented and
unpatented, which were made prior to the Executive's employment by the Company
and which are specifically listed and described below.
8.0 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 (b), (c) or (d) of Section 5.7 hereof,
before such action is taken, the party asserting the breach of this Agreement
shall give the other party at least ten 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 ten-day period.
9.0 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:
-------------------------------------------
-------------------------------------------
-------------------------------------------
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If to the Company:
or such other address as shall be provided in accordance with the terms hereof.
Except as set forth in Section 5.4 hereof, if notice is mailed, such notice
shall be effective upon mailing.
10.0 ASSIGNMENT
This Agreement is personal to the Executive and shall not be assignable by
the Executive. The Company may assign its rights hereunder to (a) any
corporation resulting from any merger, consolidation or other reorganization to
which the Company is a party or (b) any corporation, partnership, association or
other person to which the Company may transfer all or substantially all of the
assets and business of the Company existing at such time. 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.
The Company will 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 and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise.
11.0 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.
12.0 AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom, 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,
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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.
13. GOVERNING 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.
14. 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.
15. ENTIRE AGREEMENT
This Agreement on and as of the date hereof 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 hereby superseded and nullified in their entireties,
except that the Employee Agreement, dated _____________, between the Executive
and the Company shall continue in full force and effect to the extent not
superseded by Section 7 hereof.
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16. 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.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EXECUTIVE
---------------------------
COMPANY
EGGHEAD, INC.
By
------------------------
Its
------------------------
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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT BETWEEN EGGHEAD, INC.,
AND DJ & J SOFTWARE CORPORATION, A WHOLLY
OWNED SUBSIDIARY OF EGGHEAD, INC.,
AND
____________________
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
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 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) 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) 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 an 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
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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 stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 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, 33% or more of the Outstanding Company
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns directly or indirectly, 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 stockholders 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 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
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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,
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, 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 assets of
the Company.
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