Exhibit 10.55
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EMPLOYMENT AGREEMENT
BETWEEN
RADIO ONE, INC.
AND
XXXXX X. XXXXXXX
Dated effective as of January 1, 1999
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated effective as of
January 1, 1999, is made by and between Radio One, Inc., a Delaware corporation
(the "Company"), and Xxxxx X. Xxxxxxx (the "Executive").
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and Executive hereby agree as follows:
1. Definitions.
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"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under common control with, the Company.
"Annual Base Salary" shall mean the annual base salary as described in
Section 5.1 hereof.
"Annual Incentive" shall have the meaning set forth in Section 5.2
hereof.
"Award" shall have the meaning set forth in Section 5.10 hereof.
"Award Date" shall have the meaning set forth in Section 5.10 hereof.
"Award Shares" shall have the meaning set forth in Section 5.10
hereof.
"Award Stock" shall mean (i) the Award Shares and (ii) all shares of
Common Stock issued with respect to the Award Shares by way of stock dividend or
stock split or in connection with any conversion, merger, consolidation or
recapitalization or other reorganization affecting the Common Stock.
"Board" shall mean the board of directors of the Company.
"Cause" shall mean (i) the commission by Executive of a felony, fraud,
embezzlement or an act of serious, criminal moral turpitude which, in case of
any of the foregoing, in the good faith judgment of the Board, is likely to
cause material harm to the business of the Company and the Company Affiliates,
taken as a whole, provided that in the absence of a conviction or plea of nolo
contendere, the Company will have the burden of proving the commission of such
act by clear and convincing evidence, (ii) the commission of an act by Executive
constituting material financial dishonesty against the Company or any Company
Affiliate, provided that in the absence of a conviction or plea of nolo
contendere, the Company will have the burden of proving the commission of such
act by a preponderance of the evidence, (iii) the repeated refusal by Executive
to use his reasonable and diligent efforts to follow the lawful and reasonable
directives
(in light of the terms of this Agreement) of the Board with respect to a matter
or matters within the control of Executive, or (iv) Executive's willful gross
neglect in carrying out his material duties and responsibilities under this
Agreement, provided, that, unless the Board reasonably determines that a breach
described in clause (iii) or (iv) is not curable, Executive will, subject to the
following proviso, be given written notice of such breach and will be given an
opportunity to cure such breach to the reasonable satisfaction of the Board
within thirty (30) days of receipt of such written notice (subject to the
Executive's right to seek arbitration of the cure of such breach as provided in
Section 11 of this Agreement), and, provided further, that Executive will only
be entitled to cure two such defaults during the Term of Employment.
"Change of Control" shall be deemed to have occurred in the event of a
transaction or series of related transactions pursuant to which any Person or
group (as such term is defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended) of Persons, other than Xxxxxxxxx X. Xxxxxx and Xxxxxx
X. Xxxxxxx, III, (a) acquire, whether by merger, consolidation or transfer or
issuance of capital stock, capital stock of the Company (or any surviving or
resulting company) possessing the voting power to elect a majority of the Board
of the Company (or such surviving or resulting company) or (b) acquire all or
substantially all of the Company's assets determined on a consolidated basis.
"Commencement Date" shall have the meaning set forth in Section 3
hereof.
"Common Stock" shall mean all classes of the Company's Common Stock
and any capital stock of the Company distributed after the date of this
Agreement with respect to shares of Common Stock by way of dividend,
distribution, stock split, exchange, conversion, merger, consolidation,
reorganization or other recapitalization.
"Company Affiliate" shall mean any Subsidiary of the Company.
"Confidential Information" shall have the meaning set forth in Section
7 hereof.
"Date of Termination" shall mean the earlier of (a) the date of
termination, if any, specified in the Notice of Termination (which date shall
not be earlier than the date of receipt of such Notice of Termination) or (b)
the date on which Executive's employment under this Agreement actually
terminates.
"Disability" shall mean Executive's inability to render the services
required under this Agreement by reason of a physical or mental disability for
ninety (90) days, which need not be consecutive, during any twelve (12)
consecutive month period, and the effective date of such Disability shall be the
day next following such ninetieth (90/th/) day. A determination of Disability
will be made by a physician satisfactory to both Executive and the Company;
provided that if Executive and the Company cannot agree as to a physician, then
each will select a physician and such physicians shall together select a third
physician, whose determination as to Disability shall be completed within ten
(10) days of the date on which the disagreement between Executive and the
Company arose and the decision of such third physician will be final and binding
on Executive and
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the Company. Executive and the Company shall have the right to present to such
physician such information and arguments as each deems appropriate, including
the opinion of other physicians.
"Equity Financing" shall have the meaning set forth in Section 5.3
hereof.
"Equity Financing Bonus" shall have the meaning set forth in Section
5.3 hereof.
"Exercise Dates" shall have the meaning set forth in Section 5.11(b)
hereof.
"Fair Market Value" per share on any given date means the average for
the preceding ten (10) trading days of the closing prices of the sales of the
Common Stock on all securities exchanges on which such stock may at the time be
listed, or, if there have been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on all such exchanges at the
end of such day, or, if on any day such stock is not so listed, the average of
the representative bid and asked prices quoted on the Nasdaq Stock Market as of
4:00 P.M., New York time, or, if on any day such stock is not quoted on the
Nasdaq Stock Market, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the National
Quotation Bureau, Incorporated, or any similar successor organization. If at
any time the Common Stock is not listed or quoted, the Fair Market Value per
share shall be determined by the Board or a committee of the Board based on such
factors as the members thereof in the exercise of their business judgment
reasonably consider relevant.
"Good Reason" shall be deemed to exist if, without the express written
consent of Executive, (a) Executive's rate of Annual Base Salary (as provided in
Section 5.1 of this Agreement), including any increases, is reduced, (b)
Executive suffers a substantial reduction in his title, duties or
responsibilities, (c) the Company's headquarters shall be located outside the
geographic area described in Section 5.9 hereof, (d) the Company fails to pay
Executive's Annual Base Salary when due or to pay any other material amount due
to Executive hereunder within five (5) days of written notice from Executive,
(e) the Company materially breaches this Agreement (other than a breach
described in the preceding clause (d)) and fails to correct such breach within
thirty (30) days after receiving the Executive's demand that it remedy the
breach, or (f) the Company fails to obtain a satisfactory written agreement from
any successor to assume and agree to perform this Agreement, which successor the
Executive reasonably concludes is capable of performing the Company's financial
obligations under this Agreement.
"Noncompete Period" shall have the meaning set forth in Section 9(a)
hereof.
"Notice of Termination" shall have the meaning set forth in Section
6.5 hereof.
"Option" shall have the meaning set forth in Section 5.11 hereof.
"Option Agreement" shall have the meaning set forth in Section 5.11
hereof.
"Option Shares" shall have the meaning set forth in Section 5.11
hereof.
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"Person" shall mean any natural or legal person including any
individual, partnership, joint venture, corporation, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any department or agency or political subdivision thereof.
"Section 6.1 Severance Period" shall have the meaning set forth in
Section 6.1(a)(i) hereof.
"Section 6.2 Severance Period" shall have the meaning set forth in
Section 6.2(a)(i) hereof.
"Subsidiary" shall mean, with respect to any Person, a corporation of
which the securities having a majority of the voting power in electing directors
are, at the time of determination, owned by such Person, directly or through one
of more Subsidiaries.
"Term of Employment" shall have the meaning set forth in Section 3
hereof.
"Transfer" shall mean a sale, transfer, assignment, pledge,
hypothecation, mortgage or other disposition (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
of any interest in any shares of Award Stock.
"Withholding Amount" shall have the meaning set forth in Section
5.10(b) hereof.
"Work Product" shall have the meaning set forth in Section 8 hereof.
2. Employment. During the Term of Employment, subject to the terms and
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provisions set forth in this Agreement, the Company shall continue to employ
Executive as the Chief Financial Officer and Executive Vice President of the
Company, and Executive hereby accepts such employment.
3. Term of Employment. The term of employment under this Agreement shall
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commence as of the date hereof (the "Commencement Date") and, unless earlier
terminated by the Company or Executive under Section 6 of this Agreement, shall
continue for a period of three years (the "Term of Employment").
4. Positions, Responsibilities and Duties.
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4.1 Duties. During the Term of Employment, Executive, as Chief
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Financial Officer and Executive Vice President of the Company, shall be
responsible, subject to the direction of the Board, for the financial affairs
and operations of the Company and for such other duties and functions of a
senior executive nature, commensurate with his title, responsibility and
remuneration as may be directed from time to time by the Board. Executive shall
report solely to the Chief Executive Officer and President.
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4.2 Attention to Duties and Responsibilities. During the Term of
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Employment, Executive shall devote substantially all of his business time to the
business and affairs of the Company and shall use his best efforts, ability and
fidelity to perform faithfully and efficiently his duties and responsibilities.
5. Compensation and Other Awards.
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5.1 Annual Base Salary. During the Term of Employment, as
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compensation for the services to be provided by Executive under this Agreement,
the Company shall pay Executive an annual base salary of Two Hundred Thousand
Dollars ($200,000), which shall be increased (but not decreased) at the
commencement of each calendar year by an amount which shall be no less than five
percent (5%) of such annual base salary in effect immediately prior to such
increase, or such greater amount as the Board in its sole discretion shall
decide. Such annual base salary shall be payable to Executive in equal
installments at least twice per month in accordance with the Company's regular
payroll practice.
5.2 Annual Incentive Compensation. The Board may, in its sole
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discretion, award an annual incentive cash payment (the "Annual Incentive") to
Executive during each or any year occurring during the Term of Employment based
upon Executive's performance and the Company's operating results during any such
year. The Annual Incentive, if any, shall be due and payable by the Company on
or before February 28 of the year immediately following the year for which such
Annual Incentive is awarded.
5.3 Equity Financing Bonus. Upon completion of the first equity
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financing by the Company following the Commencement Date in which the Company
receives at least Fifty Million Dollars ($50,000,000) in gross proceeds (the
"Equity Financing"), the Company shall pay to Executive a one-time cash bonus of
Sixty Thousand Dollars ($60,000) so long as Executive is employed by the Company
at the time of the completion of such Equity Financing (the "Equity Financing
Bonus"). The Equity Financing Bonus shall be due and payable by the Company
within thirty (30) days after the completion of such Equity Financing.
5.4 Retirement and Savings Plans. During the Term of Employment and
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to the extent eligible, Executive shall participate in all pension, retirement,
savings and other employee benefit plans and programs, if any, generally
applicable to executives of the Company.
5.5 Welfare Benefit Plans and Perquisites. During the Term of
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Employment and to the extent eligible, Executive, Executive's spouse, if any,
and Executive's eligible dependents, if any, shall participate in and be covered
by all welfare benefit plans and programs, if any, and shall be entitled to
receive such perquisites and fringe benefits, if any, generally applicable to
executives of the Company.
5.6 Expense Reimbursement. During the Term of Employment, Executive
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shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by Executive in performing his duties and responsibilities hereunder in
accordance with the policies and procedures
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of the Company as in effect at the time the expense was incurred, as the same
may be changed prospectively from time to time.
5.7 Vacation Benefits. During the Term of Employment, Executive
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shall be entitled to three (3) weeks paid vacation annually at such times which
do not materially interfere with the operations of the Company. Any vacation
not used by Executive during any calendar year during the Term of Employment
shall accumulate to the extent permitted by and in accordance with the Company
policy then in effect.
5.8 Vehicle Allowance. During the Term of Employment, Executive
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shall be entitled to use of an automobile leased by the Company at a cost to
the Company, including the cost of any and all applicable insurance therefore,
not to exceed One Thousand Dollars ($1,000.00) per month. Upon expiration of
the Company's lease, Executive shall have the right to purchase such vehicle in
accordance with the terms of the Company's lease agreement for such vehicle.
5.9 Geographic Location. Executive's services hereunder shall be
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rendered primarily in (a) the Washington, D.C. metropolitan area, or (b) such
other location mutually agreed to by the Company and Executive.
5.10 Restricted Stock Award. The Company has awarded to Executive
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(the "Award") One and Five Hundred and Three One Thousandths (1.503) shares of
the Company's Class C Non-Voting Common Stock, par value $.01 per share (the
"Award Shares"). The Award was effective as of January 25, 1999 (the "Award
Date") and shall be subject to terms and conditions of this Section 5.10.
(a) The Company and Executive agree that as of the Award Date,
the value of the Award Stock was Two Hundred Twenty-Five Thousand Dollars
($225,000). The Company and Executive shall use reasonable efforts to take
accounting and tax positions consistent with such valuation. Executive has made
an election, in the form attached hereto as Exhibit A, to have the Award Shares
taxed under the provisions of (S)83(b) of the Internal Revenue Code.
(b) Executive shall be responsible for the payment of any
withholding tax requirement arising from the Award. The amount of withholding
tax required with respect to the Award (the "Withholding Amount") shall be
determined by the Treasurer or other appropriate officer of the Company, and
Executive shall furnish such information and make such representations as such
officer requires to make such determination. The Company shall notify Executive
of the Withholding Amount and Executive shall pay such Withholding Amount to the
Company, either in cash, by certified cashier's check, or by delivery to the
Company of a full recourse promissory note of the Executive in form and
substance acceptable to the Company. The Company shall remit the Withholding
Amount to the appropriate taxing authority or authorities.
(c) The Award Stock shall incrementally vest during the Term of
Employment pursuant to the following schedule: Twenty-five percent (25%) of the
Award Shares vested on January 25, 1999, and the remaining Award Shares shall
vest in equal portions on the last
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day of each calendar month beginning February 28, 1999, through and including
December 31, 2001.
(d) Upon a Change of Control, all of Executive's unvested Award
Stock shall immediately become fully vested.
(e) During the Term of Employment, and so long as the Company
has never had a class of equity security (other than a class of equity security
that is preferred as to the payment of dividends or upon liquidation of the
Company) registered under the Securities Act of 1933, as amended, Executive may
not Transfer any Award Stock, except that Executive may (i) pledge shares of
Award Stock to the Company, or (ii) if the Company so agrees, sell vested Award
Stock to the Company for its then-current Fair Market Value in accordance with
the provisions of Section 5.12(a) hereof. Any Transfer or attempted Transfer of
any Award Stock in violation of this Section 5.10(e) shall be null and void, and
the Company shall not record such Transfer on its books or treat any purported
transferee of such Award Stock as the owner of such securities for any purpose.
(f) Upon termination of Executive's employment hereunder, and so
long as the Company has never had a class of equity security (other than a class
of equity security that is preferred as to the payment of dividends or upon
liquidation of the Company) registered under the Securities Act of 1933, as
amended, the Company may, at its sole option and in accordance with the
provisions of Section 5.12(b) hereof, elect to purchase from Executive all but
not less than all of the vested Award Stock held by Executive for its then-
current Fair Market Value.
(g) Upon termination of Executive's employment hereunder, the
Company may repurchase from Executive any unvested Award Stock for the value of
such unvested Award Stock as set forth in the election under (S)83(b) of the
Internal Revenue Code referred to in Section 5.10(a) hereof.
(h) Executive hereby acknowledges that the Award Stock has not
been registered under the Securities Act of 1933, as amended, and accordingly,
such Award Stock may be subject to certain transfer restrictions (in addition to
the transfer restrictions on Award Stock set forth in Section 5.10(e) hereof).
The certificate(s) representing such Award Stock will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY ALSO BE SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS, AND CERTAIN OTHER
AGREEMENTS SET FORTH IN AN EMPLOYMENT AGREEMENT BETWEEN THE COMPANY AND THE
SIGNATORY THERETO DATED AS OF JANUARY 1, 1999.
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A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE
COMPANY'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.
(i) Executive (i) agrees, if requested by the Company and the
managing underwriter(s) for the Company's initial public offering, not to sell
or otherwise transfer or dispose of any Award Stock or Option Shares held by him
for up to 180 days following the effective date of a registration statement
relating to such offering; and (ii) acknowledges that the Company may impose
stop transfer restrictions on any such Award Stock or Option Shares held by
Executive as a means of enforcing the provisions hereof regardless of whether
Executive executes a "lock-up" agreement reflecting the terms hereof; provided,
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however, that the foregoing provisions of this Section 5.10(i) shall only be
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applicable to the extent that, with respect to such registration, (i) the
executive officers of the Company, (ii) all directors of the Company and (iii)
all holders of greater than 2% of the capital stock of the Company on a fully-
diluted basis enter into similar "lock-up" agreements of equal duration to that
imposed on Executive.
5.11 Stock Options. The Company shall grant to Executive options (the
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"Options") to purchase Eighteen Thousand Six-Hundred Forty-Six (18,646) Shares
(subject to adjustment as provided in Section 3) (the "Option Shares") of the
Company's Class A Common Stock, par value $.001 per share, pursuant to an
Agreement Evidencing Grant of Stock Option of even date herewith (the "Option
Agreement"), a copy of which is attached hereto as Exhibit B. Except as set
forth in this Section 5.11, all terms and conditions of such option (and of such
Class A Common Stock to be issued upon the exercise of such option) shall be set
forth in the Option Agreement.
(a) The price payable by Executive for each Option Share shall
be as set forth in Section 2 of the Option Agreement.
(b) The Option to purchase Option Shares shall first become
exercisable in equal increments on and after thirty-two (32) dates ("Exercise
Dates") during the Term of Employment. The first such Exercise Date shall be on
May 31, 1999, and each subsequent Exercise Date shall be on the last day of each
calendar month thereafter, through and including December 31, 2001.
(c) Upon a Change of Control, all of Executive's Options shall
become fully and immediately exercisable.
(d) Upon termination of Executive's employment hereunder, any
then unexercisable Option shall expire and be immediately forfeited. Executive's
right to exercise any exercisable Option following termination of his employment
shall also expire and be forfeited to the extent that such Options are not
exercised on or before the ninetieth (90/th/) day following such termination.
(e) All unexercised Options to acquire Option Shares shall
expire on the tenth anniversary of their respective dates of grant.
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(f) During the Term of Employment, and so long as the Company
has never had a class of equity security (other than a class of equity security
that is preferred as to the payment of dividends or upon liquidation of the
Company) registered under the Securities Act of 1933, as amended, Executive may
not Transfer any Options, whether or not exercised, or Option Shares except that
Executive may (i) pledge Option Shares to the Company, (ii) deliver Option
Shares to the Company or direct the Company to withhold Option Shares otherwise
issuable upon exercise of the Option in satisfaction of withholding tax
requirements as described in Section 6(b) of the Option Agreement, or (iii) if
the Company so agrees, sell Option Shares to the Company for the then-current
Fair Market Value of such Option Shares in accordance with the provisions of
Section 5.12(a) hereof. Any Transfer or attempted Transfer of any Option Shares
in violation of this Section 5.11(f) shall be null and void, and the Company
shall not record such Transfer on its books or treat any purported transferee of
such Option Shares as the owner of such securities for any purpose.
(g) Upon termination of Executive's employment hereunder, and so
long as the Company has never had a class of equity security (other than a class
of equity security that is preferred as to the payment of dividends or upon
liquidation of the Company) registered under the Securities Act of 1933, as
amended, the Company may, at its sole option and in accordance with the
provisions of Section 5.12(b) hereof, elect to purchase from Executive all but
not less than all of the Option Shares held by Executive, or thereafter acquired
by Executive in accordance with Section 5.11(d) hereof, for the then-current
Fair Market Value of such Option Shares.
(h) Executive hereby acknowledges that until such time as the
Option Shares have been registered under the Securities Act of 1933, as amended,
(which registration the Company will file promptly after its Common Stock first
becomes so registered) such Option Shares shall be subject to certain transfer
restrictions (in addition to the transfer restrictions on the Option Shares
forth in Section 5.11(f) hereof) and will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
The certificate(s) representing the Option Shares will also bear the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ALSO BE SUBJECT TO
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS, AND CERTAIN OTHER
AGREEMENTS SET FORTH IN AN EMPLOYMENT AGREEMENT AND AN AGREEMENT EVIDENCING
GRANT OF A STOCK OPTION, BOTH BETWEEN THE COMPANY AND THE SIGNATORY THERETO
AND DATED AS OF JANUARY 1, 1999. A COPY OF
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SUCH AGREEMENTS MAY BE OBTAINED BY THE HOLDER HEREOF AT THE COMPANY'S
PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.
5.12 Purchase/Repurchase by Company of Award Stock/Options Shares
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(a) During Term of Employment. At any time during the Term of
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Employment, Executive may submit a written proposal to the Company offering to
sell to the Company some or all of the vested Award Stock and/or Option Shares
held by Executive at the time of such offer. The Company may, at its sole
option, elect to purchase some or all of such vested Award Stock and/or Option
Shares for its then-current Fair Market Value. If the Company does not elect to
purchase some or all of such vested Award Stock and/or Option Shares, and so
long as the Company has never had a class of equity security (other than a class
of equity security that is preferred as to the payment of dividends or upon
liquidation of the Company) registered under the Securities Act of 1933, as
amended, the Company may, in it sole and absolute discretion, elect to waive the
transfer restrictions imposed by Section 5.10(e) and Section 5.11(f ) to permit
the Transfer of such vested Award Stock and/or Option Shares to a third party.
(b) Upon Termination of Executive's Employment. In accordance with
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Section 5.10(f) and Section 5.11(g), upon termination of the Executive's
employment under this Agreement, and so long as the Company has never had a
class of equity security (other than a class of equity security that is
preferred as to the payment of dividends or upon liquidation of the Company)
registered under the Securities Act of 1933, as amended, the Company shall have
the right, but not the obligation, to purchase from Executive all or any portion
of the vested Award Stock and Option Shares held by Executive upon such
termination (and any Option Shares thereafter acquired by Executive in
accordance with Section 5.11(d) hereof) (the "Call Stock") for the Fair Market
Value of such Call Stock. The Company shall exercise the right to purchase such
Call Stock by written notice to the Executive within sixty (60) days of such
termination (the "Call Period"). Within thirty (30) days of such exercise, the
Company shall pay to Executive the purchase price for such Call Stock and the
Executive shall surrender such Call Stock to the Company. If the Company does
not provide notice of its intent to purchase the Call Stock during the Call
Period, upon expiration of such Call Period, the transfer restrictions of this
Section 5.12(b) shall expire.
6. Termination. Executive's employment hereunder may be terminated under
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the following circumstances:
6.1 Termination Upon Expiration of Term of Employment or by Executive
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Upon Change of Control.
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(a) In the event of a termination by the Company of Executive's
employment under this Agreement upon expiration of the Term of Employment in
accordance with Section 3 hereof (except as provided in Section 6.2 hereof) or
pursuant to Section 6.1(b) hereof, the Term of Employment shall end and,
notwithstanding Section 5 hereof, Executive shall only be entitled to:
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(i) the continuation of the Annual Base Salary at the
rate then in effect (as provided in Section 5.1 of this Agreement) on the
Date of Termination for a period of six (6) months commencing on such Date
of Termination (the "Section 6.1 Severance Period").
(ii) any Annual Base Salary accrued to the Date of
Termination and any Annual Incentive relating to a prior year actually
awarded or, relating to any year, objectively determinable, but not yet
paid as of the Date of Termination;
(iii) reimbursement for all expenses (under Sections
5.6 and 5.8 of this Agreement) incurred as of the Date of Termination, but
not yet paid as of the Date of Termination;
(iv) to the extent applicable, and as so permitted by
applicable law, the continuation of Executive's welfare benefits (as
described in Section 5.5 of this Agreement) at the level in effect on the
Date of Termination during the Section 6.1 Severance Period or beyond as
the law requires, and any other compensation and benefits as may be
provided in accordance with the terms and provisions of applicable plans
and programs, if any, generally applicable executives of the Company or
specifically applicable to Executive;
(v) such rights as Executive may have under any other
written agreement between the Company and the Executive which is then
currently in effect.
(b) The amounts owed under Section 6.1(a)(i) shall be payable in
equal bi-weekly installments from the Date of Termination through the expiration
of the Section 6.1 Severance Period. The amounts owed under Section 6.1(a)(ii)
shall be paid within fifteen (15) days of the Date of Termination, and the
amounts owed under Section 6.1(a)(iii), unless otherwise expressly specified
herein, shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred. Any amounts
owed under Section 6.1(a)(iv) shall be payable in accordance with the terms of
the applicable plans and programs.
(c) At any time during the six (6) month period immediately
following a Change of Control, the Executive may, in his sole discretion and
upon thirty (30) days' prior written notice to the Board, terminate his
employment under this Agreement and receive the benefits provided under Section
6.1(a) hereof.
6.2 Termination by the Company Without Cause or Upon Change of Control or
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by Executive for Good Reason.
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(a) In the event that the Company terminates Executive's
employment without Cause, or in accordance with Section 3 hereof at any time
during the six month period
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immediately following a Change of Control, or if the Executive terminates his
employment for Good Reason, Executive shall only be entitled to:
(i) the continuation of the Annual Base Salary at the rate
then in effect (as provided in Section 5.1 of this Agreement) on the Date
of Termination for a period of twelve (12) months commencing on such Date
of Termination (the "Section 6.2 Severance Period").
(ii) any Annual Base Salary accrued to the Date of
Termination and any Annual Incentive relating to a prior year actually
awarded or, relating to any year, objectively determinable, but not yet
paid as of the Date of Termination;
(iii) reimbursement for all expenses (under Sections 5.6 and
5.8 of this Agreement) incurred as of the Date of Termination, but not yet
paid as of the Date of Termination;
(iv) to the extent applicable, and as so permitted by
applicable law, the continuation of Executive's welfare benefits (as
described in Section 5.5 of this Agreement) at the level in effect on the
Date of Termination during the Section 6.2 Severance Period or beyond as
the law requires, and any other compensation and benefits as may be
provided in accordance with the terms and provisions of applicable plans
and programs, if any, generally applicable executives of the Company or
specifically applicable to Executive;
(v) such rights as Executive may have under any other
written agreement between the Company and the Executive which is currently
in effect.
(b) The amounts owed under Section 6.2(a)(i) shall be payable in
equal bi-weekly installments from the Date of Termination through the expiration
of the Section 6.2 Severance Period. The amounts owed under Section 6.2(a)(ii)
shall be paid within fifteen (15) days of the Date of Termination, and the
amounts owed under Section 6.2(a)(iii), unless otherwise expressly specified
herein, shall be paid in accordance with the policies and procedures of the
Company in effect at the time the applicable expenses were incurred. Any amounts
owed under Section 6.2(a)(iv) shall be payable in accordance with the terms of
the applicable plans and programs.
(c) Upon thirty (30) days' prior written notice to the Board,
Executive may terminate his employment under this Agreement for Good Reason and
such notification shall specify the act, or acts, on the basis of which
Executive has found Good Reason. The Board shall then be provided the
opportunity, within thirty (30) days of its receipt of such notification, to
meet with Executive to discuss such act or acts. If Executive does not rescind
his termination of employment at such meeting, Executive's employment by the
Company shall be terminated for Good Reason pursuant to this Section 6.2,
subject to the Company's right to seek arbitration of the existence of Good
Reason as provided in Section 11 of this Agreement, and the Executive shall
receive the
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benefits provided under Section 6.2(a) hereof. The Company agrees that the
Executive's continuation of his employment during the initial six-month period
following the occurrence of a Good Reason shall not constitute a waiver of his
rights to resign for Good Reason, which shall be preserved during such period.
6.3 Termination Due to Death or Disability, by the Company for Cause
----------------------------------------------------------------
or by Executive without Good Reason.
-----------------------------------
(a) In the event of Executive's death, or a termination of
Executive's employment under this Agreement by either the Company or Executive
due to Disability, or the termination by the Company of Executive's employment
under this Agreement for Cause, or if Executive terminates his employment with
the Company without Good Reason, the Term of Employment shall end and,
notwithstanding Section 5 hereof, Executive, his estate or other legal
representative, as the case may be, shall only be entitled to:
(i) any Annual Base Salary accrued to the Date of
Termination and any Annual Incentive relating to a prior year actually
awarded or, relating to any year, objectively determinable, but not yet
paid as of the Date of Termination;
(ii) reimbursement for all expenses (under Sections 5.6 and
5.8 of this Agreement) incurred as of the Date of Termination, but not yet
paid as of the Date of Termination;
(iii) any other compensation and benefits as may be provided
in accordance with the terms and provisions of applicable plans and
programs, if any, generally applicable to executives of the Company or
specifically applicable to Executive;
(iv) such rights as Executive may have under any other
written agreement between the Company and the Executive which is currently
in effect.
(b) The amounts owed under Section 6.3(a)(i) shall be paid
within fifteen (15) days of the Date of Termination, and the amounts owed under
section 6.3(a)(ii), unless otherwise expressly specified herein, shall be paid
in accordance with the policies and procedures of the Company in effect at the
time the applicable expenses were incurred. Any amounts owed under section
6.3(a)(iii) shall be payable in accordance with the terms of the applicable
plans and programs.
(c) The Company may terminate the Executive for Cause. In each
case, the existence of Cause must be confirmed by the Board prior to any
termination therefor. In the event of such a confirmation, the Company shall
notify Executive that the Company intends to terminate Executive's employment
for Cause under this Section 6.3. Such notification shall specify the act, or
acts, on the basis of which the Board has so confirmed the existence of Cause.
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6.4 No Mitigation; No Offset. In the event of any termination of
------------------------
employment, Executive shall be under no obligation to seek other employment and
there shall be no offset against any amounts due Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that
Executive may obtain. Any amounts due under this Section 6 are in the nature of
severance payments, or liquidated damages, or both, and are not in the nature of
a penalty.
6.5 Notice of Termination. Any termination of Executive's employment
---------------------
under Section 3 or this Section 6 shall be communicated by a notice of
termination (the "Notice of Termination") to the other party hereto given in
accordance with Section 13.3 of this Agreement. Such notice shall (a) indicate
the specific termination provision in this Agreement relied upon, (b) set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated, and (c)
if the termination date is other than the date of receipt of such notice,
specify the date on which Executive's employment is to be terminated (which date
shall not be earlier than the date on which such notice is actually received).
7. Confidential Information. Executive acknowledges that the
------------------------
confidential or proprietary information obtained by him while employed by the
Company concerning the business or affairs of the Company or any Affiliate of
the Company ("Confidential Information") is the property of the Company or such
Affiliate, as the case may be. For purposes of this Agreement, the term
"Confidential Information" does not include information that Executive can
demonstrate (a) was in Executive's possession prior to first being employed by
the Company, provided that such information is not known by Executive to be
subject to another confidentiality agreement with, or other obligation of
secrecy to, the Company or another party, (b) is generally available to the
public and became generally available to the public other than as a result of a
disclosure in violation of this Agreement, (c) became available to Executive on
a non-confidential basis from a third party, provided that such third party is
not known by Executive to be bound by a confidentiality agreement with, or other
obligation of secrecy to, the Company or another party or is otherwise
prohibited from providing such information to Executive by a contractual, legal
or fiduciary obligation or (d) Executive is required to disclose pursuant to
applicable law or regulation (as to which information, Executive will provide
the Company with prior notice of such requirement and, if practicable, an
opportunity to obtain an appropriate protective order). Executive agrees that he
will not during the Term of Employment and for the two-year period following the
Term of Employment, willfully disclose Confidential Information to any Person
(other than employees of the Company or any Subsidiary thereof or any other
Person expressly authorized by the Board to receive Confidential Information or
otherwise as required in the course of his duties during the Term of Employment)
or use for his own account any Confidential Information without the prior
written consent of the Board. Executive shall deliver to the Company at the
termination of the Term of Employment, or at any other time the Board may
request in writing, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) containing
Confidential Information or Work Product which he may then possess or have under
his control. The Company shall, upon Executive's request, provide to Executive a
copy of such documents as
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may be reasonably necessary for Executive to exercise his rights under Section
11 hereof, or to defend himself in any third party or shareholder disputes, and
which shall otherwise remain subject to the provisions of this Section 7.
8. Work Product. Executive agrees that all inventions, innovations,
------------
improvements, developments, methods, designs, analyses, reports and all similar
or related information which relate to the Company's or its Subsidiaries' actual
business, research and development or existing products or services and which
are conceived, developed or made by Executive while employed with the Company
("Work Product") belong to the Company or such Subsidiary, provided that
Executive shall have a perpetual, non-exclusive, royalty-free license (without
the right to sub-license) to use any business modeling programs he creates so
long as such use would not violate the provisions of Section 9 hereof. Upon the
written request of the Board, Executive will promptly disclose such Work Product
to the Board and perform all actions reasonably requested by the Board (whether
during or after the Term of Employment) to establish and confirm such ownership.
9. Noncompete, Non-Solicitation.
----------------------------
(a) Executive acknowledges that in the course of his employment
with the Company he will become familiar with the trade secrets and other
confidential information of the Company and the Subsidiaries of the Company and
that his services will be of special, unique and extraordinary value to the
Company. Therefore, Executive agrees that, during the Term of Employment and for
an additional period (the "Noncompete Period") equal to (i) in the event that
Executive's employment is terminated pursuant to Section 6.1 hereof, for a
period of six (6) months thereafter or (ii) in the event that Executive's
employment terminated pursuant to Section 6.3 hereof, for a period of one (1)
year thereafter, he shall not directly or indirectly own, manage, control,
participate in, consult with, or render services for any "Competing Business"
(as defined below) in any "Competing Market" (as defined below). For purposes of
this section, a "Competing Business" is one in which the predominant activities
of the business are classified under the same principal Standard Industrial
Classification category (using the categories as in effect on April 1, 1999) as
any of the "Material Lines" (as defined below) of the Company and the Company
Affiliates. A division or subsidiary of a diversified business will be treated
as a Competing Business only if (i) the diversified business falls within the
preceding sentence and (ii) either (I) Executive directly provides services to
that division or subsidiary as his primary employment within the diversified
business or (II) that division or subsidiary would be a Material Line on a
consolidated basis as defined below for the potentially competing diversified
business. A "Competing Market" is a geographic market (as defined by The
Arbitron Company) in which the Company or any Company Affiliate has, on or
before the Date of Termination, with respect to one or more Material Lines, (i)
commenced material operations or (ii) determined before such date to commence
such material operations and committed substantial resources to either
determining the feasibility of such commencement or actually commencing such
operations. A geographic market in which the Company or any Company Affiliate
operates a Material Line will only be treated as a Competing Market for the
Material Line in that market, and not for other Material Lines or other
operations of the Company and its Company Affiliates. A "Material Line" is a
division, subsidiary, or business line from which
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the Company and its Company Affiliates derived at least 25% of audited
consolidated gross revenues for the Company's fiscal year ended before the Date
of Termination. The Company agrees that entities primarily engaged in conducting
business or providing services or goods through the Internet (whether wireline
or wireless) including the Internet transmission of music, are expressly
excluded from the intended scope of this provision and thus not Competing
Businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 4.9% of the outstanding stock of any class of a corporation
which is publicly traded, so long as Executive has no active participation in
the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another Person (i) induce or attempt to induce any
employee of the Company or any Subsidiary of the Company to leave the employ of
such Person, (ii) hire any individual who was an executive of the Company or its
Subsidiaries, a station or regional manager of the Company or its Subsidiaries
or a radio personality employed by the Company or its Subsidiaries at any time
during the Term of Employment (other than individuals who have not been employed
by the Company or a Subsidiary of the Company for a period of at least six
months prior to employment by Executive directly or indirectly through another
Person), or (iii) induce or attempt to induce any customer, supplier, licensee
or other Person having a business relationship with the Company or any
Subsidiary of the Company to cease doing business with the Company or such
Subsidiary of the Company, or interfere materially with the relationship between
any such customer, supplier, licensee or other Person having a business
relationship with the Company or any Subsidiary of the Company.
(c) If, at the time of enforcement of this Section 9, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
10. Non-Exclusivity of Rights. Nothing in this Agreement shall limit or
-------------------------
otherwise prejudice such rights as Executive may have under any future
agreements with the Company.
11. Resolution of Disputes. Any disputes arising under or in connection
----------------------
with this Agreement shall be resolved by arbitration, to be held in Baltimore,
Maryland, in accordance with the Commercial Arbitration Rules and procedures of
the American Arbitration Association. Such arbitration shall be before a single
arbitrator who shall be a retired federal or Maryland State judge acceptable to
the Company and Executive. In the event that Executive and the Company cannot
agree upon an arbitrator within thirty (30) days of a notice demanding such
agreement from one to the other, the arbitrator shall be chosen by the American
Arbitration Association in accordance with its Commercial Arbitration Rules. The
decision of the arbitrator shall be final, conclusive and binding upon the
Company and Executive. All costs, fees and expenses, including attorney fees, of
any arbitration in connection with this Agreement, which results in any final
decision of the arbitrator requiring the Company to make a payment to Executive
beyond what was offered to
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Executive by the Company, shall be borne by, and be the obligation of, the
Company. In no event shall Executive be required to reimburse the Company for
any of the costs and expenses incurred by the Company relating to any
arbitration. If Executive has had an opportunity to be heard by the Board and
the Board has made a good faith determination to terminate Executive hereunder,
the Company may suspend payments to Executive of his Annual Base Salary;
provided that in the event that an arbitrator finds in favor of Executive, the
Company shall pay such suspended Annual Base Salary payments to Executive,
together with interest thereon at the greater of 8% or prime plus 3% per annum
from the date such payments were due to the date actually paid. The obligation
of the Company and Executive under this Section 11 shall survive the termination
for any reason of the Term of Employment (whether such termination is by the
Company, by Executive, or upon the expiration of the Term of Employment).
12. Successors.
----------
12.1 Executive. This Agreement is personal to Executive and, without
---------
the prior express written consent of the Company, shall not be assignable by
Executive, except that Executive's rights to receive any compensation or
benefits under this Agreement may be transferred or assigned pursuant to
testamentary disposition, intestate succession or pursuant to a qualified
domestic relations order. This Agreement shall inure to the benefit of and be
enforceable by Executive's heirs, beneficiaries and/or legal representatives.
12.2 The Company. This Agreement shall inure to the benefit of and be
-----------
binding upon the Company and its successors and assigns, provided that the
Company may only transfer or assign this Agreement with the Executive's prior
written consent.
13. Miscellaneous.
-------------
13.1 Applicable Law. The corporate law of the State of Delaware will
--------------
govern all questions concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maryland.
13.2 Amendments/Waiver. This Agreement may not be amended or modified
-----------------
other than by a written agreement executed by the parties hereto or their
respective successors and legal representatives. No waiver by any party to this
Agreement of any breach of any term, provision or condition of this Agreement by
the other party shall be deemed a waiver of a similar or dissimilar term,
provision or condition at the same time, or any prior or subsequent time.
13.3 Notices. All notices, waivers and other communications hereunder
-------
shall be in writing and shall be given by hand-delivery to the other party, by
facsimile (with appropriate confirmation of transmission), by reputable
overnight courier, or by registered or certified mail, return receipt requested,
postage prepaid, and shall be deemed delivered when actually delivered by
-17-
hand, upon receipt of confirmation of facsimile transmission, three days after
mailing, or one day after dispatch by overnight courier, addressed as follows:
If to Executive:
Xx. Xxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
If to the Company:
Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, 0/xx/ Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, III
Facsimile: 000-000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
13.4 Withholding. Notwithstanding anything else to the contrary
-----------
herein, the Company may withhold from any amounts payable under this Agreement
such taxes as shall be required to be withheld pursuant to any applicable law or
regulation. Where amounts are payable to Executive pursuant to this Agreement
both in cash and in a form other than cash, the Company may, at its option and
upon prior notice to Executive, withhold from such cash payments, or withhold
from such payments in a form other than cash, or withhold from both.
13.5 Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby: (a) such provision will be fully
severable; (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof; (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom; and (d) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as shall be agreed upon by the
Company and Executive.
13.6 Captions. The captions of this Agreement are not part of
--------
the provisions hereof and shall have no force or effect.
13.7 Entire Agreement. This Agreement contains the entire agreement
----------------
between the parties concerning the subject matter hereof and supersedes all
prior agreements, understandings,
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discussions, negotiations and undertakings, whether written or oral, between the
parties with respect thereto.
13.8 Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
13.9 Representation. Executive represents and warrants that the
--------------
performance of Executive's duties and obligations under this Agreement will not
violate any agreement between Executive and any other Person.
13.10 Survivorship. The respective rights and obligations of the
------------
parties under this Agreement shall survive any termination of this Agreement or
Executive's employment hereunder for any reason to the extent necessary to the
intended preservation of such rights and obligations.
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Executive has hereunto set his hand, and the
Company has caused this Agreement to be executed in its name and on its behalf
by its authorized representative, all as of the day and year first above
written.
RADIO ONE, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxx, III
--------------------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Executive Officer and President
EXECUTIVE:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxxxx
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