EXHIBIT 99.4
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated January16, 2001, by and between [West, Inc], an
Oregon corporation (the "Company"), [North, Inc.] Corporation, a Delaware
corporation (the "Buyer"), and [EXECUTIVE] (the "Executive").
WHEREAS, Executive is currently serving as [POSITION] of the Company;
WHEREAS, the Company, the Buyer and North Acquisition Corp. (the "Merger
Subsidiary") are simultaneously entering into an Agreement and Plan of Merger
(the "Merger Agreement") pursuant to which the Merger Subsidiary will merge
with and into the Company (the "Merger"), with the Company constituting the
surviving corporation, and with the result that the Company will be a wholly
owned subsidiary of the Buyer;
WHEREAS, each of the Company, the Buyer and the Merger Subsidiary
considers it essential to its best interests and the best interests of its
stockholders to xxxxxx the continued employment of Executive by the Buyer from
and after the effective time of the Merger (the "Effective Time"); and
WHEREAS, Executive is willing so to continue his employment on the terms
hereinafter set forth in this agreement (the "Agreement");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
1. Term of Employment. Executive shall be employed by the Buyer for a
period (the "Employment Term") commencing at the Effective Time and ending on
the date that either the Executive or the Buyer terminates such Executive's
employment. Executive shall be an "at will" employee of Buyer. Notwithstanding
the foregoing, Executive shall continue to serve until the Effective Time as an
employee of the Company in the same capacity and in accordance with the same
terms and conditions as the date immediately preceding the date hereof.
2. Position.
(a) Executive shall serve as [POSITION] of the Buyer. In such
position, Executive shall have such duties and authority as shall be set
forth on Exhibit A hereto (the "Initial Duties").
(b) During the term of his employment hereunder, Executive will
devote substantially all of his business time and best efforts to the
performance of
his duties hereunder and will not engage in any other business, profession
or occupation for compensation or otherwise which would conflict with the
rendition of such services either directly or indirectly, without the
prior written consent of the Board; provided, however, subject to Section
12(b) below, nothing in this Section 2(b) shall preclude the Executive
from serving as a member of any board of directors on which he serves as
of the date of this Agreement and which has been disclosed to Buyer, or as
a member of any board of directors on which he may serve during the term
of this Agreement with the prior consent of the Chief Executive Officer of
Buyer in accordance with Buyer's standard policies regarding such matters
and from receiving compensation in connection therewith.
3. Base Salary. The Buyer shall pay Executive an annual base salary of not
less than $200,000 (the "Base Salary") with the exact amount to be established
by the Buyer's Board of Directors that is commensurate with other similarly
situated executives of the Buyer, payable in regular installments in accordance
with the Buyer's usual payment practices. The Executive shall be entitled to
such increases in his Base Salary as may be determined from time to time in the
sole discretion of the Buyer.
4. Bonus. With respect to each fiscal year all or part of which is
contained in the Employment Term, Executive shall be eligible to receive, in
addition to his Base Salary, a bonus of not less than up to $100,000 (the
"Bonus") for services rendered during such fiscal year, which Bonus shall be
determined and shall be paid in accordance with the Buyer's past practice with
respect to other similarly situated executives of Buyer. The amount and form of
such Bonus shall be determined in the same manner used to determine the amount
and form of bonuses of similarly situated executives of Buyer.
5. Executive Benefits.
(a) Executive shall be provided employee benefits (including fringe
benefits, vacation, pension and profit sharing plan participation and
life, health, accident and disability insurance) (collectively "Executive
Benefits") on the same basis and on the same terms as those benefits are
generally made available to similarly situated executives of the Buyer.
(b) Concurrent with the Effective Time, Buyer and Executive will
enter into Buyer's standard Indemnification Agreement (the
"Indemnification Agreement") and Change of Control Severance Agreement the
"Change of Control Severance Agreement") that Buyer has entered into with
its officers substantially in the forms attached hereto as Exhibit B and
Exhibit C, respectively.
6. Grant of Option. Immediately prior to the Effective Time, the Company
shall grant to Executive an option to purchase 312,500 shares of the Company's
Common Stock pursuant to the terms and conditions of the Company's employee
stock option plan and standard option agreement in place as of the Effective
Time (the "Option"), which
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option shall be assumed by Buyer pursuant to the Merger Agreement. The Option
shall be subject to vesting as follows: 25% of the shares subject to the option
shall become vested on the first anniversary of the Effective Time, 25% of the
shares subject to the option shall become vested on the second anniversary of
the Effective Time, and 50% of the Shares subject to the option shall become
vested on the third anniversary of the Effective Time, in each case subject to
the Executive's continued employment with Buyer.
7. Business Expenses and Perquisites. Reasonable travel, entertainment and
other business expenses incurred by Executive in the performance of his duties
hereunder shall be reimbursed by the Buyer in accordance with Buyer policies
for similarly situated executives of Buyer.
8. Termination. In the event of termination of Executive's employment with
Buyer for any reason, Executive shall be entitled to receive his Base Salary,
Bonus and Executive Benefits earned through the date of termination as well as
that portion of the Option that is vested as of such date of termination.
Except as provided in Section 13(j), all other benefits due Executive following
Executive's termination of employment shall be determined in accordance with
the plans, policies and practices of Buyer. Executive's employment hereunder
shall terminate if Executive becomes physically or mentally incapacitated and
is thereafter unable for a period of six (6) consecutive months or for an
aggregate of six (6) months in any eighteen (18) consecutive month period to
perform his duties (such incapacity is hereinafter referred to as
"Disability").
9. Restrictions on Dispositions of Stock.
(a) Status as Affiliate and Insider. For so long as Executive is
employed by the Buyer in the position set forth in Section 2(a) and has
the Initial Duties, or, if the Executive's role at the Buyer changes, then
for so long as may be determined by Buyer's Board of Directors based upon
the criteria generally applied by it (i) Executive will be deemed an
affiliate of the Buyer, as that term is defined in Rule 144 under the
Securities Act of 1933 and (ii) sales, transfers or other dispositions of
shares of the Buyer's common stock by Executive will be subject to the
restrictions on trading by the Buyer's executive officers set forth in the
Buyer's xxxxxxx xxxxxxx policy (the "Xxxxxxx Xxxxxxx Policy"), a copy of
which has been furnished to Executive. Executive may establish a written
plan of distribution pursuant to Rule 10b5-1 of the Exchange Act of 1934
in order to facilitate the sale of the Quarterly Allowance, as defined in
Section 9(b) below, and to execute sales of Common Stock of Buyer in
accordance therewith (the "10b5-1 Agreement"). The 10b5-1 Agreement shall
include customary terms and shall provide (i) that the agent for the sale
of shares shall generally seek to complete the sale of as much of the
Quarterly Allowance (as defined below) as practicable in the agent's
judgment within the first fifteen trading days from the opening of the
regular quarterly window under the Xxxxxxx Xxxxxxx Policy (the
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"Preferred Trading Period"); (ii) that Buyer will not impose any blackouts
on Executive that would interfere with the Preferred Trading Period; (iii)
that no sales shall occur during the regular quarterly blackout period
under the Xxxxxxx Xxxxxxx Policy; and (iv) that the agent shall observe
other trading blackouts that may be applied by Buyer generally to its
executive officers, subject to the Preferred Trading Period.
(b) Additional Limitations on Dispositions. In addition to the
restrictions set forth in paragraph (a) and applicable laws, until the
earlier to occur of (i) the first anniversary of the Effective Time or
(ii) a Release Date, as defined below (the "Restricted Period"), Executive
may not (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or
dispose of, directly or indirectly, any shares of Buyer Common Stock or
any securities convertible into or exercisable or exchangeable for Buyer
Common Stock or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic
consequences of ownership of Buyer Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by
delivery of Buyer Common Stock or such other securities, in cash or
otherwise (collectively, a "Restricted Transaction"), in any case relating
to more than 250,000 shares of the Buyer Common Stock (as adjusted for
stock splits, stock dividends, stock combinations and the like) in any
single fiscal quarter (the "Quarterly Allowance"). Notwithstanding the
foregoing, if the Executive does not utilize the full Quarterly Allowance
in any fiscal quarter in which the Buyer has restricted Executive from
trading for at least 30 days under the Xxxxxxx Xxxxxxx Policy, exclusive
of Buyer's regular quarterly trading restrictions (such unsold amount, the
"Unsold Shares"), then Executive shall be entitled to utilize the Unsold
Shares in subsequent fiscal quarters in addition to the Quarterly
Allowance for such periods, provided that in no fiscal quarter may the
Executive utilize more than two times the Quarterly Allowance. Nothing
herein shall be construed to limit the ability of a trust or foundation
created by Executive and in existence as of the date hereof to sell,
transfer or otherwise dispose of shares of Buyer's Common Stock issuable
in the merger in respect of Company Common Stock held by such trust or
foundation as of the date hereof. Notwithstanding the foregoing, this
Section 9(b) shall not apply to (i) any bona fide gift of Buyer's Common
Stock by Executive to any of the mother, father, descendants, brother(s),
sister(s) or spouses of Executive or to any trustee(s) for the benefit of
any one or more of the foregoing, (ii) any transfer effected pursuant to
Executive's will or the laws of intestate succession, or (iii) any pledge
of Buyer's Common Stock by Executive that on its terms precludes the sale
of Buyer's Common Stock in the public market during the Restricted Period,
provided that (A) in the event of any transfer made pursuant to Sections
9(b)(i) or 9(b)(iii) above, Executive shall inform Buyer of such transfer
prior to effecting it and (B) in the event of any transfer made pursuant
to 9(b)(i),
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the transferee shall furnish Buyer with a written agreement to be bound by
and complied with all provisions of Section 9.
(c) Conditional Lock-Up. If Executive's employment with the Buyer is
terminated during the Restricted Period (i) by Executive, other than for
Good Reason or by reason of death or Disability, or (ii) by the Buyer for
Cause, then in either case Executive shall not enter into any Restricted
Transaction with respect to any shares of the Buyer's common stock for the
remainder of the Restricted Period and during the Extension Period, if
any. For purposes of this paragraph, the Extension Period shall commence
upon the expiration of the Restricted Period and continue for that number
of months, rounded up the nearest whole number, equal to the quotient
obtained by dividing (A) the difference of the number of shares of the
Quarterly Allowance already sold by Executive in the fiscal quarter in
which Executive's termination occurs minus the product of 83,334
multiplied by the number of complete months elapsed in such quarter prior
to Executive's termination (but in no case shall the difference be less
than zero), divided by (B) 83,334; provided that no Extension Period shall
apply after a Release Date and, in no event, shall the Extension Period
exceed three months. This paragraph shall not apply to any termination of
employment or leave of absence that arises from Executive suffering a
grave family emergency that in Executive's reasonable judgment requires
such a termination or leave of absence.
(d) Release Date. For purposes of this Section, "Release Date" shall
mean the earlier to occur of:
(i) the termination of Executive's employment with the Buyer by
Executive for Good Reason or by reason of death or Disability or by
Buyer for reasons other than Cause, as defined in Section 9(f) below;
and
(ii) in the event of a Change of Control of the Buyer, then the
later to occur of the six month anniversary of the Effective Time and
the consummation of the Change of Control; and
(iii) in the event of a change of Chief Executive Officer of
Buyer after the date hereof (a "Management Change"), then the later
to occur of the six month anniversary of the Effective Time and the
date of the Management Change.
For purposes of this section, a "Change of Control" shall mean (i) a merger or
consolidation in which Buyer is a constituent corporation or the sale or
exchange by the stockholders of Buyer of all or substantially all of the
capital stock of Buyer where the stockholders of Buyer immediately before such
merger or consolidation or sale or exchange do not obtain or retain, directly
or indirectly, at least a majority of the beneficial interest in the voting
stock or other voting equity of the surviving or acquiring corporation or other
surviving or acquiring entity; (ii) the sale or exchange of all or
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substantially all of Buyer's assets (other than a sale or transfer to a
subsidiary of Buyer as defined in section 424(f) of the Internal Revenue Code
of 1986, as amended (the "Code")) where the stockholders of Buyer immediately
before such sale or exchange do not obtain or retain, directly or indirectly,
at least a majority of the beneficial interest in the voting stock or other
voting equity of the corporation or other entity acquiring Buyer's Assets; or
(iii) a transaction in which a majority of the Board of Directors of the Buyer
or a majority of the officers of the Buyer immediately prior to such
transaction do not constitute a majority of the Board of Directors or a
majority of the officers, respectively, of the surviving corporation
immediately after such transaction.
(e) Definition of Cause. For purposes of this Agreement, "Cause"
shall mean (i) Executive's willful and continued failure substantially to
perform his duties hereunder (other than as a result of total or partial
incapacity due to physical or mental illness), (ii) material dishonesty in
the performance of Executive's duties hereunder, (iii) Executive's
conviction of a felony under the laws of the United States or any state
thereof, (iv) willful breach of fiduciary duty or willful breach of a
material term of this agreement or the Standard Employment Agreement, as
defined below or (v) any other willful act or omission which is materially
injurious to the financial condition or business reputation of the Buyer
or any of its subsidiaries or affiliates. If the Executive does any of the
foregoing, Buyer shall give Executive written notice thereof and Executive
shall, if such condition is reasonably susceptible of cure, have ten (10)
days from receipt of such notice to cure any such Cause, which notice
shall state in reasonable detail the facts and circumstances claimed to
constitute such Cause and the intent of Buyer to terminate Executive's
employment upon the failure of the Executive to effect a cure.
(f) Definition of Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (i) reduction in Executive's annual base salary,
incentive programs or Executive Benefits (other than, in the case of such
programs or Executive Benefits, for changes generally affecting executives
similarly situated to Executive), (ii) any material adverse change in
Executive's status, title, position or material responsibilities, or (iii)
relocation, without Executive's consent, of Executive or his office space
at Buyer to a location more than 50 miles from Company's current
facilities in Portland, Oregon.
10. Proprietary Information, Invention Assignment and Arbitration
Agreement. At the Effective Time, Executive shall execute a copy of the Buyer's
standard form of Employment, Confidential Information and Invention Assignment
Agreement (the "Standard Employment Agreement") in the form attached hereto as
Exhibit D.
11. Conflicting Obligations. Executive represents that Executive has no
outstanding agreement or obligation that is in conflict with any of the
provisions of this
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Agreement, or that would preclude Executive from complying with the provisions
hereof, and further agrees that Executive will not enter into any such
conflicting agreement during the term of this Agreement.
12. Covenants Not to Compete or Solicit.
(a) Definitions. As used in this Agreement, "Restricted Company"
shall mean a company that competes, or that has been formed to pursue a
business that would compete, with the business of Buyer immediately after
the Effective Time.
(b) Non-Compete. In consideration of: (i) the payment by the Buyer to
Executive of the Merger Consideration, (ii) the Buyer's willingness to
enter into the Merger Agreement, and (iii) the consideration payable to
Executive hereunder, Executive agrees that: (A) for the period beginning
at the Effective Time and ending on the second anniversary of the
Effective Time or (B) in the event that the period set forth in clause (A)
is determined to be unenforceable by a court of competent jurisdiction,
the maximum lesser period allowable, Executive will not, directly or
indirectly, be employed by (whether as an officer, employee, director
proprietor, partner, consultant or otherwise), or have any ownership
interest in, or participate in the financing, operation, management or
control of, any Restricted Company. It is agreed that ownership of no more
than five percent (5%) of the outstanding voting stock of a
publicly-traded company or ownership of an interest in an investment fund
with respect to which Executive does not make investment decisions shall
not in and of itself, constitute a violation of this Section. It is
further agreed that the foregoing consideration is not intended to
constitute liquidated damages for a violation of this section.
(c) Non-Solicit. Executive agrees that until the expiration of the
non-compete obligations specified above in subsection 12(b), Executive
shall not:
(i) knowingly take any action to, or do anything reasonably
intended to, divert business from the Buyer or any of its
subsidiaries, or influence or attempt to influence any retailer,
dealer, vendor, supplier, customer or potential customer of the Buyer
or any of its subsidiaries, in each case as existing on the date of
Executive's termination, to cease doing business with or compete with
the Buyer or any of its subsidiaries, as the case may be, existing on
the date of Executive's termination; or
(ii) knowingly recruit, solicit or assist others in recruiting,
or soliciting, any person who is an employee of the Buyer or any of
its respective subsidiaries, in each case as of the date of
Executive's termination, or knowingly induce or influence or attempt
to induce or influence any such employee to terminate his or her
employment with the Buyer or any of its respective affiliates, unless
such employee is no longer
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employed by the Buyer (or its subsidiaries) and has not been employed
by Buyer for a period of at least six months prior to being solicited
or recruited; provided however, that a general employment or hiring
advertisement in a publication of general circulation will not be
deemed to be a solicitation.
(d) REMEDIES. THE EXECUTIVE HEREBY RECOGNIZES AND ACKNOWLEDGES THAT A
MATERIAL VIOLATION OF THE TERMS AND PROVISIONS OF THIS SECTION 12 WOULD
CAUSE IRREPARABLE INJURY TO THE BUYER FOR WHICH THE BUYER WOULD HAVE NO
ADEQUATE REMEDY AT LAW. ACCORDINGLY, IN THE EVENT THAT EXECUTIVE SHALL
FAIL TO MATERIALLY COMPLY WITH THE TERMS AND PROVISIONS OF THIS SECTION 12
IN ANY RESPECT, THE BUYER SHALL BE ENTITLED TO PRELIMINARY AND OTHER
INJUNCTIVE RELIEF AND TO SPECIFIC PERFORMANCE OF THE TERMS AND PROVISIONS
HEREOF. IN FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, THE
EXECUTIVE HEREBY WAIVES ANY CLAIM OR DEFENSE THAT DAMAGES WOULD BE
ADEQUATE RELATING TO ANY VIOLATION OR BREACH BY THE EXECUTIVE OF THE TERMS
AND PROVISIONS OF THIS SECTION 12, THAT THE BUYER OR ANY OF ITS RESPECTIVE
AFFILIATES HAVE AN ADEQUATE REMEDY AT LAW OR THAT MONEY DAMAGES WOULD
PROVIDE AN ADEQUATE REMEDY FOR SUCH VIOLATION OR BREACH.
(e) EFFECT OF STANDARD EMPLOYMENT AGREEMENT. Until the expiration of
the covenants contained in this Section 12, such covenants shall supersede
any covenants relating to non-competition and non-solicitation contained
in the Standard Employment Agreement.
(f) Severability. The parties intend that the covenants contained in
the preceding paragraphs shall be construed as a series of separate
covenants, one for each county, city, state and other political
subdivision of each country in which a Restricted Company is located.
Except for geographic coverage, each separate covenant shall be deemed
identical in terms to the covenant contained in the preceding paragraphs.
If, in any arbitration or judicial proceeding, a court or arbitrator shall
refuse to enforce any of the separate covenants (or any part thereof)
deemed included in said paragraphs, then such unenforceable covenant (or
such part) shall be deemed eliminated from this Agreement for the purpose
of those proceedings to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced. It is the intent
of the parties that the covenants set forth herein be enforced to the
maximum degree permitted by applicable law.
13. Miscellaneous.
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(a) Governing Law; No Liability of Executive. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Oregon. Notwithstanding any term of the Standard Employment Agreement to
the contrary, the parties to this Agreement irrevocably agree that any
disputes under this Agreement or the Standard Employment Agreement,
whether related to construction, enforcement or otherwise, shall be
resolved by binding arbitration under the rules and auspices of the
American Arbitration Association to be conducted in Multnomah County,
Oregon, and the parties hereby irrevocably waive any and all objections
thereto. Executive shall not be subject to liability for breach of this
Agreement by reason of his termination of his employment hereunder.
(b) Entire Agreement/Amendments. This Agreement, the Indemnification
Agreement, the Change of Control Severance Agreement, the Option and the
Standard Employment Agreement contain the entire understanding of the
parties with respect to the employment of Executive by the Buyer. In case
of any direct conflicts between this Agreement and any such other
agreements, the provisions of this Agreement shall govern. There are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein and therein
other than those expressly set forth herein and therein. This Agreement
may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
(c) No 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 of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term
of this Agreement.
(d) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Executive
or by the Company and shall be assignable by the Buyer only with the
consent of Executive.
(f) Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
(g) Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid,
addressed to the
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respective addresses set forth on the execution page of this Agreement,
provided that all notices to the Buyer shall be directed to the attention
of the Board with a copy to the Secretary of the Buyer, or to such other
address as any party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
(h) Withholding Taxes. The Buyer may withhold from any amounts
payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
(i) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(j) Term of Agreement; Separation Benefits Upon Termination. This
Agreement shall become effective as of the date of the Merger Agreement
and shall remain in force until the termination of Executive's employment
with the Buyer, provided that if the Merger Agreement is terminated prior
to the Effective Time then this Agreement shall terminate on the date the
Merger Agreement is terminated, and provided further that Sections 7, 8,
9, 12 and 13 shall survive the termination of this Agreement (other than
termination in accordance with the foregoing proviso). In the event of the
termination of Executive's employment with the Buyer prior to the first
anniversary of the Effective Time (i) by the Buyer other than for Cause or
(ii) by Executive for Good Reason, Executive shall be entitled to receive,
in addition to the amounts provided for in Section 8, an amount equal to
Executive's Base Salary on the date of termination, prorated for the
period from the day after employment terminates until the first
anniversary of the Effective Time, and continuation during such period at
no cost to Executive of all of the Executive Benefits on the same terms as
those benefits were available to Executive (and Executive's family)
immediately prior to the termination of Executive's employment with the
Buyer.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
[NAME OF EXECUTIVE]
--------------------------------------------
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[Address of Executive]
[WEST, INC.]
By:
-----------------------------------------
Title:
000 XX Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
[NORTH, INC.]
By:
-----------------------------------------
Title:
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Exhibit A
Xxx Xxxxxxx
Title: Chief Strategy Officer
Initial Duties: Overall Strategy, Mergers & Acquisitions and Integration
Xxxx Xxxx
Title: Chief Information Officer
Initial Duties: Worldwide Infrastructure and Information Systems
Exhibit B
Indemnification Agreement
Exhibit C
Change of Control Severance Agreement
Exhibit D
Standard Employment Agreement
