Executive Employment Agreement for Craig H. Studwell
for Xxxxx X.
Xxxxxxxx
THIS
AGREEMENT shall be effective as of the 19th day of October, 2010 (the “Effective
Date”), by and between Fushi Copperweld, Inc., a Nevada corporation (“Company”),
and Xxxxx X. Xxxxxxxx, an individual resident of California, USA
(“Executive”).
WITNESSETH:
WHEREAS,
Company is engaged in the manufacture, distribution, and sale of bimetallic wire
and stranded products; and
WHEREAS,
Company desires to employ Executive as Executive Vice President and Chief
Financial Officer of the Company consistent with the terms and conditions set
forth herein and Executive desires to accept employment with the Company
consistent with such terms and conditions;
NOW,
THEREFORE, in consideration of the mutual promises contained herein, the parties
agree as follows:
1. Employment. Company
hereby employs Executive, and Executive hereby accepts employment on the terms
and conditions hereinafter set forth.
2. Term of
Employment. The initial term of employment under this
Agreement shall be for a three-year period commencing on the Effective Date and
terminating on the third anniversary of the Effective Date (the
“Term”) unless the Agreement is terminated earlier consistent with the
provisions herein.
3. Nature of
Employment. Executive shall be employed as Executive Vice
President and Chief Financial Officer and as such, Executive shall perform
duties consistent with such positions and duties assigned by and subject to the
direction of the Co- Chief Executive Officers or any other such executive
officer as may be designated
in writing from time to time. If requested, Executive agrees to serve
as an executive officer or director of the Company or other entity affiliated
with the Company for no additional compensation. Executive shall be
based at the location of the Company in Beijing, China. During the
Term (including any extensions or renewals thereof), Executive shall have no
other employment or provide services to any other person other than the Company
and any affiliated entities without the prior written consent of the board of
directors. Accordingly, Executive agrees to devote his full working
time to the business of the Company; provided, however, nothing herein contained
shall restrict or prevent Executive from owning and dealing in stocks, bonds,
securities, real estate, commodities, or other investment properties for his own
benefit or the benefit of his family. Further, nothing herein
contained shall restrict or prevent Executive, subject to the prior approval of
the Executive Committee, from serving on the board of directors of any entity,
including any charitable, religious or civic entity, which does not directly or
indirectly compete with the Company and does not materially interfere with his
duties and responsibilities with the Company.
4. Compensation.
(a) Annual Base
Salary. Executive’s annual salary for the services rendered on
behalf of the Company during the Term shall be no less than $180,000.00 per
year, subject to applicable withholdings and deductions, payable in equal
Semi-monthly installments. From time to time during the Term,
Executive’s base salary may be increased at the discretion of the Compensation
Committee, but shall in no event be decreased from the amount of the base salary
in effect at that time. The Compensation Committee shall review
Executive’s base salary at least on an annual basis.
(b) Annual Cash
Bonus. In addition to Executive’s base salary, Executive will
be entitled to participate during the Term in an annual cash bonus plan and
equity incentive plans sponsored by the Company for Executives as developed and
administered by the Compensation Committee. Any annual cash bonus shall be paid to
Executive within thirty days of the date on which Executive’s bonus, if any, is
determined. Executive shall be entitled to payment of any
annual cash bonus only if the Executive is employed by the Company on the date
that the bonus is paid.
(c) Equity
Awards. The
Compensation Committee has approved a non-qualified stock option (the “Option”)
to be granted to Executive for 150,000 shares of common stock of the Company
(“Shares”) as of the Effective Date under the Fushi Copperweld, Inc. 2007 Stock
Incentive Plan (the “Stock Incentive Plan”) and a stock option agreement to be
provided by the Company. Subject to the terms of the Plan and the
option agreement, the Option shall have an exercise price per share equal to the
minimum exercise price permitted under the terms of the Plan for a U.S.
taxpayer, and shall vest in tranches on each anniversary of the Effective Date
for a five year period. as set forth on Exhibit A attached
hereto. The Board has also approved a restricted stock award to
Executive for 30,000 Shares as of the Effective Date under the Stock Incentive
Plan and a restricted stock agreement to be provided by the
Company. Subject to the terms of the Plan and the restricted stock
award agreement, the restricted Shares shall vest in tranches on each
anniversary of the Effective Date for a five year period as set forth
on Exhibit A-1 attached hereto. Notwithstanding the foregoing,
in the event of any conflict between the terms of this Agreement and the terms
of the Plan, option agreement or restricted stock agreement (the “Equity
Contracts”), the Equity Contracts shall control.
5. Expenses. Executive
is authorized to incur reasonable expenses in connection with the business of
Company, including reasonable expenses for business travel and similar items, in
accordance with Company’s business expense policy in effect from time to
time. Company will reimburse Executive for all such expenses during
any calendar year upon the presentation by Executive, from time to time, of an
itemized account of expenditures applicable to such calendar year, but in no
event later than the end of the calendar year following the calendar year in
which such expenditures occurred.
2
6. Vacation. Executive
shall be entitled to paid vacations during each calendar year of the Term at
such times and for such duration as may be determined by the Co-Chief Executive
Officer(s) taking into consideration the needs and requirements of Company for
Executive’s services; provided, however, the maximum paid vacation to which
Executive shall be entitled in any calendar year is three (3) weeks, and
Executive is not entitled to payment for or to carryover any unused vacation as
of the end of any calendar year.
7. Additional
Benefits. During the Term, the Company shall pay for and
provide Executive with a term life insurance policy in an amount of $180,000.00
at standard, non-smoking insurance premium rates (or such lesser amount that can
be provided at the same cost as such policy). During the Term,
Executive and, subject to the terms of the applicable plan, his eligible
dependents shall have the right to participate in any Executive employee pension
or welfare benefit plans provided by Company to its U.S.-based officers
generally, including any group life, hospitalization, medical, dental,
accidental death and disability, long-term disability income replacement
insurance, and retirement plans.
8. Death During
Employment. If Executive dies during the Term, Company shall
pay to the estate of Executive within 30 days of death (i) any accrued and
unpaid salary and (ii) any accrued and unpaid bonus for any prior fiscal year,
and (iii) a pro rata amount of any bonus payable with respect to the fiscal year
of service in which death occurs (such pro rata amount determined by multiplying
the bonus that would have been paid, if any, for the full fiscal year had the
Executive survived by a ratio, the numerator of which is the number of days
since the beginning of the fiscal year until the date of death and the
denominator of which is 365). This Agreement shall thereupon
terminate, and Company shall have no further obligation to the estate of
Executive.
9. Permanent Disability During
Employment. If Executive becomes permanently disabled during
the Term, Company shall terminate Executive’s employment as a result of such
disability and pay to Executive on his otherwise base salary payment date as if
he had not been terminated, any accrued and unpaid base salary as of Executive’s
termination date. . Thereafter, the Executive shall continue to
receive his then base salary at the same time as if he had not been terminated,
minus any disability payments provided by the Company’s benefit plans (including
disability benefits paid pursuant to Section 7 above) and by any government
sponsored program, for a six (6) month period from the date of permanent
disability. This Agreement shall thereupon terminate and Company
shall have no further obligation to Executive except as may be provided under
Company’s long-term disability plans during the term of such disability and any
pro rata portion of any bonus or incentive plan. Permanent disability
for purposes of this Agreement shall mean a physical or mental condition of
Executive that renders Executive incapable of performing the essential duties of
his job and which condition shall be medically determined to be of permanent
duration as same is construed under Company’s disability plans.
3
10. Termination for
Cause. Company may terminate Executive’s employment at any
time “for Cause.” The term “for Cause” shall mean any act or failure
to act on the part of the Executive which constitutes: (i) an
unauthorized use or disclosure by Executive of the Company’s confidential
information or trade secrets, which use or disclosure causes material harm to
the Company; (ii) a material breach by Executive of any agreement
between Executive and the Company; (iii) a material failure by
Executive to comply with the Company’s written policies in compliance with the
laws of the United States or any state thereof which causes material harm to the
Company; (iv) Executive’s indictment of, or plea of “guilty” or “no contest” to, a
felony under the laws of the United States or any state thereof or any foreign
jurisdiction in which the Company conducts business which if occurring in the
United States would constitute a felony under its laws or the laws of any state
thereof; (v) Executive’s negligence or misconduct that results in material harm
to the Company; or (vi) a continual failure by Executive to perform lawful
assigned duties after receiving written notification of such failure from the
board of directors. Company shall be entitled to terminate the
employment relationship hereunder upon thirty (30) days’ prior written notice to
Executive, which notice shall state the reason for such termination, and during
such notice period Executive shall be removed from his duties and
responsibilities. In the event of a termination for cause, Company
shall pay Executive any accrued and unpaid salary within one month of the
termination date, and Company shall have no further obligation or liability to
Executive under this Agreement.
11. Termination for Good
Reason. If any of the following events occurs after the
Effective Date, the Executive may resign from his employment for Good Reason by
giving written notice of resignation within 60 days following such
event:
(a) a
material reduction in the scope of the Executive’s assigned duties and
responsibilities from those in effect under this Agreement on the Effective Date
or the assignment of duties or responsibilities that are inconsistent with the
Executive’s
(b) any
material breach of this Agreement by the Company.
Any
written notice of resignation for Good Reason shall describe in reasonable
detail the circumstances believed to constitute Good
Reason. Notwithstanding Executive’s provision of a notice of
resignation for Good Reason, the Company has a right to remedy or cure for a
period of 30 days following its receipt of such notice the circumstances
described by the Executive as constituting Good Reason and Executive’s
resignation shall become effective on the 31st day following notice to the
Company if the Company fails to remedy or cure the circumstances constituting
Good Reason within such 30-day period.
4
12. Severance upon Termination
Without Cause or for Good Reason. If, during the Term, Company
terminates Executive’s employment with the Company and its subsidiaries for any
reason other than for Cause or Executive’s death or disability, or Executive
terminates his employment for Good Reason (not including Company’s or
Executive’s non-renewal of the Term) and Executive executes and delivers to the
Company a valid and effective release of all claims against the Company and its
affiliates in a form and format as prepared and provided by the Company, the
Executive shall be entitled to receive a lump sum cash payment in the amount of
(i) any accrued and unpaid salary as of his date of termination within thirty
days of the date of termination, (ii) any accrued and unpaid bonus for any prior
fiscal year, and (iii) an amount equal to the sum of (a) 50% of his
then current annual base salary and (b) 50% of the average annual cash bonus
payments paid by the Company to the Executive during the preceding three (3)
fiscal years of the Company, and such sum shall be payable in six (6)
substantially equal monthly payments; provided that each payment is intended to
constitute a separate payment within the meaning of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code”). Notwithstanding anything
to the contrary heretofore contained in this Agreement, no payment of
compensation under this Agreement shall be made to the Executive in connection
with his termination during the period lasting six (6) months from the date of
termination unless the Company determines that there is no reasonable basis for
believing that making such payment would cause the Executive to suffer any
adverse tax consequences pursuant to Section 409A of the Code. If any
payment to the Executive is delayed pursuant to the foregoing sentence, such
payment instead shall be made on the first business day following the expiration
of the six-month period referred to in the prior
sentence. Notwithstanding the immediately preceding sentence,
provided that all such payments are to be made by no later than the last day of
the second taxable year in which occurs the termination of the Executive’s
employment with the Company, no delay shall be required to the extent that such
payments (i) are payable to Executive during the short-term deferral period set
forth in Treasury Regulation Section 1.409A-1(b)(4), and/or (ii) (A) do not
exceed an amount equivalent to two hundred percent (200%) of the lesser of (1)
Executive's annualized compensation from the Company for Executive's taxable
year immediately preceding his taxable year in which the termination of
Executive’s employment with the Company occurs, or (2) the maximum amount of
compensation that may be taken into account under a tax-qualified retirement
plan pursuant to Section 401(a)(17) of the Code, for the calendar year in which
Executive's termination of employment with the Company occurs, and (B) will be
fully paid by no later than the last day of the second (2nd) taxable
year of Executive following the taxable year of Executive in which the
termination of Executive’s employment with the Company occurs. Moreover, in the
event the Executive is required to execute a Release, no amount payable pursuant
to Section 12 that is subject to Section 409A shall be paid prior to the
expiration of the revocation period without regard to whether the Executive
waives such revocation right prior to the expiration of such
period. Further, the Company shall continue the medical benefits
under COBRA at the Company’s expense, except to the extent of the Executive’s
portion which shall be paid by the Executive, and life insurance benefits which
Executive was receiving on the date of his termination, with any related costs
to be paid by Executive being no more than what Executive had been paying prior
to the date of termination, for a period of six (6) months after the date of his
termination; provided such continued coverage shall end on the date Executive
has commenced employment elsewhere and becomes eligible for participation in a
similar type of benefit program of his successor employer, and Executive hereby
covenants to provide notice to the Company of such
eligibility. Except as provided in this Section 12, Executive shall
not be entitled to any other severance benefits from the Company or any of its
subsidiaries or affiliates, and the Company shall have no other obligation or
liability to Executive under this Agreement.
5
13. Board/Committee
Resignation. Upon termination of Executive’s employment for
any reason, Executive agrees to resign, as of the date of such termination and
to the extent applicable, from the Board (and any committees thereof) and the
Board of Directors (and any committees thereof) of any of the Company’s
affiliates for which he may serve as a Director.
14. Property of
Company. Executive agrees that upon the termination of his
employment he will turn over to Company all property and confidential
information of Company which has come into his possession while an Executive of
Company.
15. Confidentiality,
Non-Competition, Non-Solicitation and Non-Interference, Patent and Trademark
Assignment. As a separate document, Executive agrees to sign
Fushi Copperweld’s Employee Confidentiality & Unfair Competition
Agreement. Executive understands that the execution of such agreement
is a condition of the effectiveness of this Executive Employment
Agreement.
16. Waiver of
Breach. The waiver by Company or Executive of any breach of a
provision of this Agreement shall not operate or be construed as, a waiver of
any subsequent breach by the parties.
17. Notice. All
notices, requests, demands, payments, or other communications hereunder shall be
deemed to have been duly given if in writing and hand delivered or sent by
certified or registered mail, return receipt requested, to the appropriate
address indicated below or to such other address as may be given in a notice
sent to all parties hereto:
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(a)
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If
to Company, to:
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Xxxxxx
X. Xxxxxxxx
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TYG
Xxxxxx Xxxxx X, Xxxxx 0000
Xxxxxxxxxxx
Xxx Xx, Xxxx 2
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Xxxxxxx,
X.X.X. 000000
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b)
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If
to Executive, to:
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Xxxxx
X. Xxxxxxxx
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000
00xx
Xxxxxx
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Xxxxxxxxx
Xxxxx, XX 00000
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18. Entire
Agreement. This Agreement supersedes any and all other
understandings and agreements, either oral or in writing, between the Executive,
on one hand, and the Company, or any subsidiary of the Company, on the other
hand, with respect to the subject matter hereof and constitutes the sole and
only agreement between such persons with respect to said subject matter;
provided, however that the Employee Confidentiality & Unfair Competition
Agreement, dated as of the date hereof between the Company and the Executive
shall not be superseded by this Agreement or any supplement or amendment to this
Agreement. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by any
party or by anyone acting on behalf of any party, which are not embodied herein,
and that no agreement, statement, or promise not contained in this Agreement
shall be valid or binding or of any force or effect. No change or
modification of this Agreement shall be valid or binding upon the parties hereto
unless such change or modification is in writing and is signed by the parties
hereto.
19. Severability. If
any one or more of the provisions contained in this Agreement shall be held by a
court of competent jurisdiction to be invalid, illegal, or unenforceable in any
respect for any reason, that invalidity, illegality, or unenforceability shall
not affect any other provisions hereof, and this Agreement shall be construed as
if that invalid, illegal, or unenforceable provision had never been contained
herein.
20. Parties
Bound. The terms, promises, covenants, and agreements
contained in this Agreement shall apply to, be binding upon, and inure to the
benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement may not be assigned by Company or
Executive without the prior written consent of the other party.
21. Arbitration. With
the exception of any claims not subject to arbitration pursuant to applicable
law (e.g., claims for
workers compensation and unemployment insurance), any controversy relating to
this Agreement or Executive’s employment shall be settled by binding arbitration
according to the applicable employment dispute resolution rules of the American
Arbitration Association Employment Arbitration Rules and Mediation Procedures
(available at xxxx://xxx.xxx.xxx). Such arbitration shall be presided
over by a single arbitrator in New York, New York. Such binding
arbitration is applicable to any and all claims under state and federal
employment related statutes including without limitation, Title VII of the Civil
Rights Act, as well as any claims related to a claimed breach of this
Agreement. The Company shall bear all costs uniquely associated with
the arbitration process, including the arbitrator’s fees, where required by
applicable law. The arbitrator shall have the authority to award any
damages authorized by law, including, without limitation, costs and attorneys’
fees. The arbitrator shall award to the prevailing party in the
arbitration, if any, as determined by the arbitrator, all costs and fees
incurred by it/him in connection with the arbitration, except where prohibited
by statute or applicable law. The arbitrator shall base his or her
award on applicable law and judicial precedent and, unless all parties agree
otherwise, shall include in such award the findings of fact and conclusions of
law upon which the award is based. Judgment on the award rendered by
the arbitrator may be entered in any court having jurisdiction
thereof.. The parties shall be entitled to
seek injunctive relief upon application to a court of competent
jurisdiction without the requirement of posting a bond). The parties acknowledge and agree
they are giving up their right to a trial in a court of law.
7
22. Set
Off. Company’s obligation to pay Executive the amounts
provided and to make arrangements provided hereunder shall be subject to
set-off, counterclaim or recoupment of amounts owed by Executive to the Company
or its affiliates.
23. Withholding
Taxes. Company 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.
24. Section 409A of the
Code. It is the intention of the parties to this Agreement
that no payment or entitlement pursuant to this Agreement will give rise to any
adverse tax consequences to the Executive under Section 409A of the Code and
Department of Treasury regulations and other interpretative guidance thereunder,
including that issued after the date hereof (collectively, “Section
409A”). The Agreement shall be interpreted to that end and,
consistent with that objective and notwithstanding any provision herein to the
contrary, Executive and the Company agree to amend this Agreement in order to
avoid, if practicable, the application of such taxes or interest under Section
409A and in a manner to preserve the economic benefits of this Agreement from
Executive’s perspective at no additional cost to the
Company. Further, no effect shall be given to any provision herein in
a manner that reasonably could be expected to give rise to adverse tax
consequences under that provision. Although the Company shall consult
with the Executive in good faith regarding implementation of this Section 26,
neither the Company nor its employees or representatives shall have liability to
the Executive with respect to any additional taxes that the Executive may be
subject to in the event that any amounts under this Agreement are determined to
violate Section 409A. For purposes of compliance with the
requirements of Section 409A, and notwithstanding anything herein to the
contrary, (i) no payment shall be made hereunder in connection with Executive’s
termination of employment with the Company unless and until Executive has a
“separation from service” with the Company and its affiliates, as defined under
Section 409A, and (ii) each payment of compensation by the Company to Executive
under this Agreement shall be treated as a separate payment, and Executive’s
entitlement to receive compensation from the Company under this Agreement in a
series of installment payments shall be treated as Executive’s entitlement to
recover a series of separate payments.
25. Executive
Representation. Executive hereby represents to the Company
that the execution and delivery of this Agreement by Executive and the Company
and the performance by the Executive of Executive’s duties hereunder shall not
constitute breach of, or otherwise contravene, the terms of any employment
agreement or other agreement or policy to which Executive is a party or
otherwise bound.
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26. Cooperation. Executive
shall provide Executive’s reasonable cooperation in connection with any action
or proceeding (or any appeal from any action or proceeding) which relates to
events occurring during Executive’s employment hereunder. This
provision shall survive any termination of this Agreement or Executive’s
employment.
27. Captions. Captions
to the Sections of this Agreement are inserted solely for the convenience of the
parties, are not a part of this Agreement, and in no way define, limit, extend
or describe the scope thereof or the intent of any of the
provisions.
28. 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.
29. Applicable
Law. This Agreement shall be construed and the legal
relationship between the parties determined in accordance with the laws of the
State of Tennessee without application of its choice of law rules.
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IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals as
of the day and year first above written, the corporate party acting through duly
authorized officers.
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By:
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Xxxxxx X. Xxxxxxxx | ||
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Title:
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Co-Chief Executive Officer
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EXECUTIVE
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/s/ Xxxxx X. Xxxxxxxx
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Xxxxx
X. Xxxxxxxx
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10
EXHIBIT
A
STOCK OPTION
VESTING AND EXERCISE PRICE SCHEDULE
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Number of Shares underlying
Options
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Vesting
Date
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30,000
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October 19,
2011
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|
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30,000
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October 19,
2012
|
|
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30,000
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October 19,
2013
|
|
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30,000
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October 19,
2014
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30,000
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October 19,
2015
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EXHIBIT
A-1
RESTRICTED
STOCK VESTING SCHEDULE
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Number of
Shares
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Vesting
Date
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6,000
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October 19,
2011
|
|
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6,000
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October 19,
2012
|
|
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6,000
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October 19,
2013
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6,000
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October 19,
2014
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6,000
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October 19,
2015
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11
