EXHIBIT 10.29
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into and made
effective as of February 3, 2002 by and between THE MEN'S WEARHOUSE, INC., a
Texas corporation (the "Company"), and XXXXX X. XXXXX ("Employee"), of Saddle
River, New Jersey.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Employee hereby agree as follows:
1. Employment and Duties. The Company hereby agrees to employ Employee
as Vice Chairman of the Board, and Employee hereby accepts such employment and
agrees to serve the Company in such capacity on the terms and subject to the
conditions set forth in this Agreement. Subject to the ultimate direction and
control of the Chairman of the Board and Chief Executive Officer of the Company
and to the Company's Board of Directors, Employee shall be responsible to assist
the Chairman of the Board and Chief Executive Officer of the Company with the
determination and implementation of the strategic direction of the Company and
oversee the implementation of the business plan of the Company and, in
connection therewith, to interact with and provide guidance to the other
executive officers of the Company. During his employment hereunder, Employee
shall devote his full business time, energy, and ability principally to the
business and interests of the Company and shall not, without the Company's prior
written consent, render to others services of any kind for compensation, or
engage in any other business activity that would materially interfere with the
performance of his duties under this Agreement.
2. Compensation and Benefits of Employment.
(a) As compensation for the services to be rendered by
Employee hereunder, the Company shall pay to Employee a base annual salary
("Annual Salary") of $560,000 per year, in equal installments in accordance with
the customary payroll practices of the Company. The parties shall comply with
all applicable withholding requirements in connection with all compensation
payable to Employee. The Company's Board of Directors may, in its sole
discretion, review and adjust upward Employee's Base Salary (as defined below)
from time to time, but no downward adjustment in Employee's Base Salary may be
made during the term of this Agreement.
(b) Employee shall receive annually a stipulated amount of up
to $40,000 ("Discretionary Amount" and together with Annual Salary, collectively
referred to herein as "Base Salary") which will be expended by the Company on
behalf of Employee to cover, or paid to Employee to reimburse Employee for,
various business-related expenses such as monthly dues for country, luncheon or
social clubs, automobile expenses, upgraded travel beyond that of the Company's
regular employee policy and other personal travel expenses not covered by
Section 3 hereof and financial and tax planning expenses. The Company agrees
that Employee shall be
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entitled to reimbursement of all such business-related expenses incurred by
Employee; provided, however, that payment of such reimbursement shall be made
only against proper receipts or other documentary evidence of such expenses. In
the event that less than $40,000 is expended during the course of any one-year
period, Employee shall not be entitled to receive directly the remainder of such
amount. This reimbursement shall be in addition to any reimbursement provided
pursuant to Section 3 below.
(c) At the end of the term of this Agreement, Employee shall
be entitled to receive a bonus of $3,000,000, which shall accrue at the rate of
$50,000 per full month of service hereunder (the "Long-Term Incentive Bonus");
provided, however, that such Long-Term Incentive Bonus shall be subject to a
credit equal to the "Stock Option Value" of (i) those stock options held by
Employee on the date hereof and identified on Exhibit A hereto (the "Existing
Stock Options") and (ii) those stock options issued to Employee subsequent to
the date hereof (the "Subsequent Stock Options"). For purposes of this
Agreement, "Stock Option Value" shall equal the (a) the sum of the products of
the Option Margin for each Existing Stock Option and each Subsequent Stock
Option which has a positive Option Margin at the time of determination of the
Option Margin for each Existing Stock Option and each Subsequent Stock Option
times the number of shares of stock subject to such Existing Stock Options and
Subsequent Stock Options which are exercisable by the Employee at the end of
such five-year period (or the date of Employee's termination, as the case may
be) minus (b) $500,000. For purposes of this Agreement, the Option Margin for
each Existing Stock Option and each Subsequent Stock Option shall mean the
difference between (a) the average closing price for the Company's common stock,
par value $.01 per share, as reported by the New York Stock Exchange, for the
twenty (20) trading days immediately prior to the end of such five-year term (or
the date of Employee's termination, as the case may be) and (b) the applicable
option price of each such Existing Stock Option and Subsequent Stock Option
(d) At any time after the second anniversary of the date
hereof, Employee shall be entitled to an advance of up to $1,200,000 against the
payment of the Long-Term Incentive Bonus. Such advance shall bear interest at
the lowest permissible rate which will not result in imputed interest for
federal income tax purposes. Such advance shall be repaid with interest in the
event the employment of Employee is terminated for cause or is terminated by the
Employee without good reason. Otherwise, the Long-Term Incentive Bonus payable
shall be reduced by the amount of such advance plus accrued interest. To the
extent the Long-Term Incentive Bonus payable is less than such advance plus
accrued interest, such difference shall be paid by Employee to the Company
within five days of when the Long-Term Incentive Bonus would have been payable.
(e) Employee shall be entitled to participate in and have the
benefits under the terms of all life, accident, disability and health insurance
plans, pension, profit sharing, incentive compensation and savings plans and all
other similar plans and benefits which the Company from time to time makes
available to its senior management executives in the same manner and at least at
the same participation level as other senior management executives.
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3. Business Expenses. The Company shall promptly reimburse Employee for
all appropriately documented, reasonable business expenses incurred by Employee
in accordance with the Company's policies related thereto.
4. Term. This Agreement shall commence effective as of the date hereof,
and if not terminated earlier as herein provided, shall terminate on February 2,
2007. Notwithstanding the foregoing, if the Company shall not have offered to
Employee the opportunity to enter into a new employment agreement prior to
February 2, 2006, with terms, in all respects, no less favorable to Employee
than the terms of this Agreement and with a term lasting until at least February
2, 2009, Employee shall have the right to elect by written notice delivered to
the Company prior to April 1, 2006, to terminate his employment effective as of
February 2, 2007. In the event of such termination, Employee shall be entitled
to continue to receive (a) his Base Salary at the then current rate for a period
of one year following the date of termination and (b) all benefits to which
Employee is entitled hereunder for a period of two years following the date of
termination. If the Company offers to Employee a new employment agreement in
accordance with this Section 4 and Employee declines to accept it, Employee's
employment hereunder shall terminate on February 2, 2007, at which time Employee
shall be entitled to all compensation, rights and benefits accrued hereunder at
such date. However, if the Company shall notify Employee prior to February 2,
2006 that it does not wish to enter into a new employment agreement following
the termination of this Agreement, Employee shall be entitled to continue to
receive all benefits to which Employee is entitled hereunder for a period of two
years following Employee's termination at the end of the term of this Agreement.
In addition to any continuation of benefits provided for in this Section 4, the
Company shall continue to maintain those life insurance policies, including the
transferability provisions thereof, maintained by the Company for the benefit of
Employee on the date hereof (the "Existing Life Insurance Policies") for a
period of two years following the date of any such termination.
5. Termination by the Company Without Cause or Termination by Employee
for "Good Reason".
(a) The Company may, by delivering 30 days prior written
notice to Employee, terminate Employee's employment at any time without cause,
and Employee may, by delivering 30 days prior written notice to the Company,
terminate Employee's employment for "good reason", as defined below. If such
termination without cause or for good reason occurs, Employee shall be entitled
(i) to receive a lump sum payment equal to (a) all amounts owed through the date
of termination plus (b) the accrued Long-Term Incentive Bonus reduced by the
Stock Option Value and (ii) to continue to receive (a) his Base Salary at the
then current rate and (b) all benefits to which Employee is entitled hereunder,
for a period of two years following the date of termination. In addition, the
Company shall continue to maintain the Existing Life Insurance Policies for a
period of two years following the date of any such termination.
(b) For purposes of this Section 5, "good reason" shall mean
the occurrence of any of the following events:
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(i) Removal, without the consent of Employee in
writing, from the office of Vice Chairman of the Board or a material reduction
in Employee's authority or responsibility but not termination of Employee for
"cause", as defined in Section 7; or
(ii) The Company otherwise commits a material breach
of this Agreement.
(c) The Company shall pay any attorney fees incurred by
Employee in reasonably seeking to enforce the terms of this Section 5.
6. Termination Upon Death or Disability. If Employee's employment is
terminated because of death or on account of his becoming permanently disabled
(as defined in Section 7), Employee, or his estate, if applicable, shall be
entitled (i) to receive a lump sum payment equal to (a) all amounts owed through
the date of termination plus (b) the accrued Long-Term Incentive Bonus reduced
by the Stock Option Value and (ii) to continue to receive (a) his Base Salary at
the then current rate for a period of two years following the date of
termination and (b) all benefits to which Employee is entitled hereunder through
the end of the term of this Agreement. In addition, in the event Employee
becomes permanently disabled, the Company shall continue to maintain the
Existing Life Insurance Policies through the end of the term of this Agreement.
7. Termination by the Company for Cause. The Company may terminate this
Agreement at any time if such termination is for "cause", as defined below, by
delivering to Employee written notice describing the cause of termination 30
days before the effective date of such termination and by granting Employee at
least 30 days to cure the cause. In the event that the employment of Employee is
terminated for "cause", Employee shall be entitled only to (i) all amounts owed
through the date of termination and (ii) his Annual Salary earned pro rata to
his date of termination, but Employee shall not be entitled to any Base Salary
continuation payments or benefits continuation (except as specifically provided
by the terms of an employee benefit plan of the Company). "For cause" shall be
limited to the occurrence of the following events:
(a) Conviction of or a plea of nolo contendere to the charge
of a felony (which, through lapse of time or otherwise, is not subject to
appeal);
(b) Willful refusal without proper legal cause to perform, or
gross negligence in performing, Employee's duties and responsibilities after 30
days written notice and an opportunity to cure;
(c) Material breach of fiduciary duty to the Company through
the misappropriation of Company funds or property; or
(d) The unauthorized absence of Employee from work (other than
for sick leave or personal disability) for a period of 60 working days or more
during a period of 90 working days.
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For purposes of this Agreement, Employee shall be deemed to
"permanently disabled" if Employee shall be considered to be permanently and
totally disabled in accordance with the Company's disability plan, if any, for a
period of 180 days or more. If there should be a dispute between the Company and
Employee as to Employee's physical or mental disability for purposes of this
Agreement, the question shall be settled by the opinion of an impartial
reputable physician or psychiatrist agreed upon by the parties or their
representatives, or if the parties cannot agree within ten (10) calendar days
after a request for designation of such party, then a physician or psychiatrist
shall be designated by the Valley Hospital in Northern New Jersey. The parties
agree to be bound by the final decision of such physician or psychiatrist.
8. Voluntary Termination by Employee. Employee may terminate this
Agreement at any time upon delivering 30 days written notice to the Company. In
the event of such voluntary termination other than for "good reason" as defined
in Section 5, Employee shall be entitled to (i) all amounts owed through the
date of termination and (ii) his Annual Salary earned pro rata to his date of
termination, but no Base Salary continuation payments or benefits continuation
(except as specifically provided by the terms of an employee benefit plan of the
Company). On or after the date the Company receives notice of Employee's
resignation, the Company may, at its option, pay Employee all amounts owed to
Employee pursuant to this Section 8 through the effective date of his
resignation and terminate his employment immediately.
9. Exclusivity of Termination Provisions. The termination provisions of
this Agreement regarding the parties' respective obligations in the event
Employee's employment is terminated are intended to be exclusive and in lieu of
any other rights or remedies to which Employee or the Company may otherwise be
entitled at law, in equity or otherwise. It is also agreed that, although the
personnel policies and fringe benefit programs of the Company may be
unilaterally modified from time to time, the termination provisions of this
Agreement are not subject to modification, whether orally, impliedly or in
writing, unless any such modification is mutually agreed upon and signed by the
parties.
10. Non-Competition. Employee acknowledges that he has unique and
valuable experience with respect to the retail operations relating to men's
apparel throughout the United States and Canada. Employee hereby covenants and
agrees that during the term of this Agreement and for a period of one year
thereafter, he will not directly or indirectly compete with the business of the
Company or its subsidiaries. For purposes of this Agreement, the term "compete"
shall include Employee's participation in any operations whose primary business
is the sale of menswear at retail, either individually or as an officer,
director, joint venturer, agent, or holder of an interest (except as a holder of
a less than 5% interest in a publicly traded entity or mutual fund) of any
individual, corporation, association, partnership, joint venture or other
business entity so engaged. This non-competition covenant shall be applicable
with respect to that certain geographical territory within the United States and
Canada comprised of those specific cities or counties within which the Company
conducts its business from time to time. Employee and the Company agree that a
monetary remedy for a breach of this Section 10 or of Section 11 below will be
inadequate and will be impracticable and extremely difficult to prove, and
further agree that such a breach would cause the Company irreparable harm, and
that the Company shall be entitled to specific performance and/or temporary and
permanent injunctive relief without the necessity of proving actual damages.
Employee agrees that the Company shall
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be entitled to such specific performance and/or injunctive relief, including
temporary restraining orders, preliminary injunctions and permanent injunctions,
without the necessity of posting bond or other undertaking in connection
therewith. Any such requirement of bond or undertaking is hereby waived by
Employee and Employee acknowledges that in the absence of such a waiver, a bond
or undertaking may be required by the court. In the event of litigation to
enforce this covenant, the courts are hereby specifically authorized to reform
this covenant as and to the extent, but only to such extent, necessary in order
to give full force and effect hereto to the maximum degree permitted by law.
Employee also agrees that if Employee is in breach of this Section 10, the
Company may cease all payments required under this Agreement.
11. Proprietary Information.
(a) Employee acknowledges and agrees that he has acquired, and
may in the future acquire as a result of his employment with the Company or
otherwise, Proprietary Information (as defined below) of the Company which is of
a confidential or trade secret nature, and all of which has a great value to the
Company and is a substantial basis and foundation upon which the Company's
business is predicated. Accordingly, Employee agrees to regard and preserve as
confidential at all times all Proprietary Information and to refrain from
publishing or disclosing any part of it to any person or entity and from using,
copying or duplicating it in any way by any means whatsoever, except in the
course of his employment under this Agreement and in furtherance of the business
of the Company or as required by applicable law or legal process, without the
prior written consent of the Company. In the event of a breach or threatened
breach of this Section 11, the Company shall be entitled to the same remedies as
provided in Section 10 with respect to a breach thereof.
(b) "Proprietary Information" includes all information and
data in whatever form, tangible or intangible, pertaining in any manner to
pricing policy, marketing programs, advertising, employee training, and specific
inventory purchase pricing and any written information, including customer
lists, of the Company or any affiliate thereof, unless the information is or
becomes publicly known through lawful means.
12. Notice. All notices, requests, consents, directions and other
instruments and communications required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered in person, by courier, by overnight delivery service with proof of
delivery or by prepaid registered or certified first-class mail, return receipt
requested, addressed to the respective party at the address set forth below, or
if sent by facsimile or other similar form of communication (with receipt
confirmed) to the respective party at the facsimile number set forth below:
To the Company: The Men's Wearhouse, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Neill X. Xxxxx
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
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To Employee: Xxxxx X. Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Confirm: (000) 000-0000
or to such other address or facsimile number and to the attention of such other
person as either party may designate by written notice. All notices and other
communication shall be deemed to have been duly given when delivered personally
or three days after mailing or one day after depositing such notice with an
overnight courier or transmission of a facsimile or other similar form of
communication.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective heirs, executors,
administrators, successors and assigns; provided, however, that neither the
Company nor Employee may assign any duties under this Agreement without the
prior written consent of the other.
14. Limitation. The Agreement shall not confer any right or impose any
obligation on the Company to continue the employment of Employee in any
capacity, or limit the right of the Company or Employee to terminate Employee's
employment.
15. Further Assurances. Each party hereto agrees to perform such
further actions, and to execute and deliver such additional documents, as may be
reasonably necessary to carry out the provisions of this Agreement.
16. Severability. In the event that any of the provisions, or portions
thereof, of this Agreement are held to be unenforceable or invalid by any court
of competent jurisdiction, the validity and enforceability or the remaining
provisions, or portions thereof, shall not be affected thereby.
17. Arbitration.
(a) Any dispute, controversy, or claim arising out of or
relating to this Agreement, or the breach, termination or invalidity hereof,
including claims for tortious interference or other tortious or statutory claims
arising before, during or after termination, providing only that such claim
touches upon matters covered by this contract, shall be finally settled by
arbitration administered by the American Arbitration Association ("AAA")
pursuant to the Commercial Arbitration Rules as presently in force, except as
modified by the specific provisions of this Agreement. The parties expressly
agree that nothing in this Agreement shall prevent the parties from applying to
a court that would otherwise have jurisdiction over the parties for provisional
or interim measures, including injunctive relief. After the arbitration panel is
empaneled, it shall have sole jurisdiction to hear such applications, except
that the parties agree that any measures ordered by the arbitrators may be
immediately and specifically enforced by a court otherwise having jurisdiction
over the parties. The parties agree that judgment on the arbitration award may
be entered by any court having jurisdiction thereof.
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(b) The parties agree that the federal and state courts
located in Houston, Texas shall have exclusive jurisdiction over an action
brought to enforce the rights and obligations created in or arising from this
agreement to arbitrate, and each of the parties hereto irrevocably submits to
the jurisdiction of said courts. Notwithstanding the above, application may be
made by a party to any court of competent jurisdiction wherever situated for
enforcement of any judgment and the entry of whatever orders are necessary for
such enforcement. Process in any action arising out of or relating to this
agreement may be served on any party to the agreement anywhere in the world by
delivery in person against receipt or by registered or certified mail, return
receipt requested.
(c) The arbitration shall be conducted before a tribunal
composed of three neutral arbitrators drawn from, in the first instance, the
Texas Large Complex Claims panel and then, if necessary, from the Commercial
panel. Each arbitrator shall sign an oath agreeing to be bound by the Code of
Ethics for Arbitrators in Commercial Disputes promulgated by the AAA for Neutral
Arbitrators. It is the intent of the parties to avoid the appearance of
impropriety due to bias or partiality on the part of any arbitrator. Prior to
his or her formal appointment, each arbitrator shall disclose to the parties and
to the other members of the tribunal, any financial, fiduciary, kinship or other
relationship between that arbitrator and any party or its counsel, or between
that arbitrator and any individual or entity with any financial, fiduciary,
kinship or other relationship with any party. For the purpose of this agreement,
"appearance of impropriety" shall be defined as such relationship or behavior as
would cause a reasonable person to believe that bias or partiality on the part
of the arbitrator may exist in favor of any party. Any award or portion thereof,
whether preliminary or final, shall be in a written opinion containing findings
of fact and conclusions of law signed by each arbitrator. The arbitrator
dissenting from an award or portion thereof shall issue a dissent from the award
or portion thereof in writing, stating the reasons for his dissent. The
arbitrators shall hear and determine any preliminary issue of law asserted by a
party to be dispositive of any claim, in whole or part, in the manner of a court
hearing a motion to dismiss for failure to state a claim or for summary
judgment, pursuant to such terms and procedures as the arbitrators deem
appropriate.
(d) It is the intent of the parties that, barring
extraordinary circumstances, any arbitration hearing shall be concluded within
two months of the date the statement of claim is received by the AAA. Unless the
parties otherwise agree, once commenced, hearings shall be held 5 days a week,
with each hearing day to begin at 9:00 A.M. and to conclude at 5:00 P.M. The
parties may upon agreement extend these time limits, or the chairman of the
panel may extend them if he determines that the interests of justice otherwise
requires. The arbitrators shall use their best efforts to issue the final award
or awards within a period of 30 days after closure of the proceedings. Failure
to do so shall not be a basis for challenging the award. The parties and
arbitrators shall treat all aspects of the arbitration proceedings, including
without limitation, discovery, testimony, and other evidence, briefs and the
award, as strictly confidential. The place of arbitration shall be Houston,
Texas, USA unless otherwise agreed by the parties.
(e) The parties agree that discovery shall be limited and
shall be handled expeditiously. Discovery procedures available in litigation
before the courts shall not apply in an arbitration conducted pursuant to this
agreement. However, each party shall produce relevant and non-privileged
documents or copies thereof requested by the other parties within the time
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limits set and to the extent required by order of the arbitrators. All disputes
regarding discovery shall be promptly resolved by the arbitrators. No witness or
party may be required to waive any privilege recognized at law. The parties
hereby waive any claim to any damages in the nature of punitive, exemplary, or
statutory damages in excess of compensatory damages, or any form of damages in
excess of compensatory damages, and the arbitration tribunal is specially
divested of any power to award any damages in the nature of punitive, exemplary,
or statutory damages in excess of compensatory damages, or any form of damages
in excess of compensatory damages. The party prevailing on substantially all of
its claims shall be entitled to recover its costs, including attorneys' fees,
for the arbitration proceedings, as well as for any ancillary proceeding,
including a proceeding to compel arbitration, to request interim measures, or to
confirm or set aside an award.
18. Governing Law. This Agreement shall be governed and construed under
and interpreted in accordance with the laws of the State of Texas without giving
effect to the doctrine of conflict of laws.
19. Entire Agreement; Waiver; Interpretation. This Agreement
constitutes the entire agreement of the parties, and supersede all prior
agreements, oral or written, with respect to the subject matter of this
Agreement. No change, modification or waiver of any provisions of this Agreement
shall be enforceable unless contained in a writing signed by the party against
whom enforcement is sought. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of either party thereafter to enforce
each and every provisions hereof in accordance with its terms. No presumption
shall be construed against the party drafting this Agreement.
20. Employee's Representation. Employee represents and warrants that
(i) he is free to enter into this Agreement and to perform each of the terms and
covenants of it, (ii) he is not restricted or prohibited, contractually or
otherwise, from entering into and performing this Agreement, (iii) his execution
and performance of this Agreement is not a violation or breach of any other
agreement between Employee and any other person or entity and (iv) he has been
advised by legal counsel as to the terms and provisions hereof and the effort
thereof and fully understands the consequences thereof.
21. Company's Representation. The Company represents and warrants that
(i) it is free to enter into this Agreement and to perform each of the terms and
covenants of it, (ii) it is not restricted or prohibited, contractually or
otherwise, from entering into and performing this Agreement, (iii) its execution
and performance of this Agreement is not a violation or breach of any other
agreement between Employee and any other person or entity and (iv) this
Agreement is a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms.
22. Return of Company Property. Employee acknowledges that all
Proprietary Information and other property and equipment of the Company or any
affiliate which Employee accumulates during his employment are the property of
the Company and shall be returned to the Company immediately upon his
termination of employment.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement as of the
date first written above.
THE MEN'S WEARHOUSE, INC.
By: /s/ XXXXXX XXXXXX
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
/s/ XXXXX X. XXXXX
-----------------------------------
XXXXX X. XXXXX
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EXHIBIT A
EXISTING STOCK OPTIONS
Vesting
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15,000 shares @ $15.75 1/6/98
15,000 shares @ $15.75 1/6/99
15,000 shares @ $15.75 1/6/00
15,000 shares @ $15.75 1/6/01
15,000 shares @ $15.75 1/6/02
15,000 shares @ $21.50 1/14/99
15,000 shares @ $21.50 1/14/00
15,000 shares @ $21.50 1/14/01
15,000 shares @ $21.50 1/14/03
15,000 shares @ $21.50 1/14/04
15,000 shares @ $21.50 1/14/05
10,000 shares @ $23.65 2/1/06
10,000 shares @ 23.625 2/1/07
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