after your receipt of written notice thereof from the Board setting forth in reasonable detail
the matters constituting such pattern; or (B) have been convicted of a felony.
(ii) “
Change in Control” means: (A) a sale of all or substantially all of the assets of the
Company; (B) a merger or consolidation in which
the Company is not the surviving entity and in
which the holders of
the Company’s outstanding voting stock immediately prior to such transaction
own, immediately after such transaction, securities representing less than fifty percent (50%) of
the voting power of the entity surviving such transaction or, where the surviving entity is a
wholly-owned subsidiary of another entity, the surviving entity’s parent; (C) a reverse merger in
which
the Company is the surviving entity 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 of the surviving entity’s parent, cash or otherwise, and in which the holders of the
Company’s outstanding voting stock immediately prior to such transaction own, immediately after
such transaction, securities representing less than fifty percent (50%) of the voting power of the
Company or, where
the Company is a wholly-owned subsidiary of another entity,
the Company’s parent;
or (D) an acquisition by any person, entity or group within the meaning of Section 13(d) or 14(d)
of the Exchange Act of 1934, as amended (the “
Exchange Act”), or any comparable successor
provisions (excluding any employee benefit plan, or related trust, sponsored or maintained by the
Company or subsidiary of
the Company or other entity controlled by
the Company) of the beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of
the Company representing at least seventy five percent (75%) of
the combined voting power entitled to vote in the election of directors of
the Company; provided,
however, that nothing in this paragraph shall apply to a sale of assets, merger or other
transaction effected exclusively for the purpose of changing the domicile of
the Company.
(iv) “
Good Reason” means you terminate your employment as
the Company’s Chief Executive
Officer following (A) an uncured material breach of your Employment Agreement by
the Company, (B)
the relocation of
the Company’s executive offices or principal business location to a point more
than 30 miles from the San Diego, California area, (C) any action by the Board or direction given
by the Board to you that in the reasonable and good faith belief of you is contrary to applicable
law or accounting standards or constitutes an unethical business practice, or (D) a demotion or, in
the your reasonable and good faith belief, the occurrence of a material reduction in your
authority, functions or responsibilities as Chief Executive Officer without your consent; provided,
however that
the Company shall have thirty (30) days following receipt of written notice by you to
the Company of the material breach described in items (A), (C) and (D) above, setting forth in
reasonable detail the matter constituting such breach, to cure such breach without triggering your
right to resign for Good Reason.
2.