EXHIBIT 10.56
2002 EXECUTIVE EMPLOYMENT AGREEMENT
2002 EMPLOYMENT AGREEMENT (the "Agreement") made as of March 4, 2002 by and
between ARIAD Pharmaceuticals, Inc. (the "Company") a Delaware corporation, and
Xxxxxx X. Xxxxx, Esq. (the "Employee").
1. EMPLOYMENT, DUTIES AND ACCEPTANCE.
1.1 The Company hereby employs the Employee, for the Term (as
hereinafter defined), to render full-time services to the Company,
and to perform such duties as she shall reasonably be directed by
the Chief Executive Officer of the Company to perform. The
Employee's title shall be designated by the Chief Executive
Officer and initially shall be Senior Vice President, Chief Legal
Officer, and Secretary.
1.2 The Employee hereby accepts such employment and agrees to render
the services described above.
1.3 The principal place of employment of the Employee hereunder shall
be in the greater Boston, Massachusetts area, or other locations
reasonably acceptable to the Employee. The Employee acknowledges
that for limited periods of time she may be
1.4 Notwithstanding anything to the contrary herein, although the
Employee shall provide services as a full-time employee, it is
understood that the Employee may (a) have an academic appointment,
(b) participate in professional activities, and c) provide limited
consulting services from time to time to Alexandria Real Estate
Equities, Inc. ("Alexandria"), including attendance at its Board
of Director meetings (collectively, "Permitted Activities'),;
PROVIDED, HOWEVER, that such Permitted Activities do not interfere
with the Employee's duties to the Company and that the consulting
services to Alexandria be agreed upon by the Company in advance.
2. TERM OF EMPLOYMENT.
The term of the Employee's employment under this Agreement (the "Term")
shall commence on March 4, 2002 or such other date as agreed upon by the
parties (the "Effective Date") and shall end on December 31, 2004 unless
sooner terminated pursuant to Section 4 or 5 of this Agreement; PROVIDED,
HOWEVER, that this Agreement shall automatically be renewed for
successive one-year terms (the Term and, if the period of employment is
so renewed, such additional period(s) of employment are collectively
referred to herein as the "Term"), unless terminated by written notice
given by either party to the other at least 90 days prior to the end of
the applicable Term.
3. COMPENSATION.
3.1 As full compensation for all services to be rendered pursuant to
this Agreement, the Company agrees to pay the Employee, during the
Term, a base salary at the fixed rate of $225,000 per annum during
the first year of the Term and increased each year thereafter, by
amounts, if any, to be determined by the Board of Directors of the
Company (the "Board"), in its sole discretion, payable in equal
biweekly installments, less such deductions or amounts to be
withheld as shall be required by applicable law and regulations.
3.2 Each year, the Employee shall be eligible for a discretionary
bonus of up to 30% of base salary, which bonus shall be determined
annually by the Board. The bonus, if any, may be paid in the form
of stock options, stock awards, cash, or deferred compensation, as
determined by the Board.
3.3 The Company shall pay or reimburse the Employee for all reasonable
expenses actually incurred or paid by her during the Term in the
performance of her services under this Agreement, upon
presentation of expense statements or vouchers or such other
supporting information as it may require.
3.4 The Employee shall be eligible under any incentive plan, stock
award plan, bonus, deferred or extra compensation plan, pension,
group health, disability and life insurance or other so-called
"fringe" benefits which the Company provides for its senior
executives at a comparable level to the Employee. All stock
options and stock awards granted to the Employee shall be subject
to a vesting schedule which shall be determined by the
Compensation Committee of the Board. Stock options and stock
awards, if any, to be granted to the Employee shall also be
subject to the terms of a stock option plan and certificate or
stock award plan and certificate, as the case may be.
3.5 The Company shall grant the Employee an option to purchase 100,000
shares of the Company's Common Stock at the fair market value on
the date of the Board's approval of such grant (the "2002 Stock
Options"), in accordance with the Company's 2001 Stock Plan. The
Employee agrees that all such options shall be subject to a
four-year vesting schedule, vesting in equal increments of 25% on
each anniversary of their issuance.
3.6 All options to purchase shares of the Company's Common Stock held
by the Employee prior to the date hereof pursuant to that certain
consulting agreement, dated January 2, 2000, by and between the
Company and the Employee (the "Consulting Agreement"), (that is,
options to purchase 135,000 shares of the Company's Common Stock)
(the "Prior Stock Options") shall continue to vest and be
exercisable subject to the Company's 1991 Stock Option Plan for
Employees, as amended, and the relevant certificates. As of the
Effective Date of this Agreement, the Consulting Agreement shall
terminate, except as provided in Section 8.8 herein.
3.7 Except as specified in Section 6.1, any unvested options shall be
forfeited to the Company in the event (a) this Agreement is
terminated by the Company for Cause pursuant to Section 4 herein,
or (b) either party elects not to renew this Agreement pursuant to
Section 2 herein.
4. TERMINATION BY THE COMPANY.
The Company may terminate this Agreement, if any one or more of the
following shall occur:
(a) The Employee shall die during the Term; PROVIDED, HOWEVER, the
Employee's legal representatives shall be entitled to receive the
compensation provided for in Section 3 to the last day of the
month in which her death occurs.
(b) The Employee shall become physically or mentally disabled, whether
totally or partially, so that she is unable substantially to
perform her services hereunder for (i) a period of 180 consecutive
days, or (ii) for shorter periods aggregating 180 days during any
twelve month period.
(c) The Employee acts, or fails to act, in a manner that provides
Cause for termination. For purposes of this Agreement, the term
"Cause" means (i) the conviction of the Employee of any felony
involving moral turpitude, (ii) any acts of fraud or embezzlement
by the Employee involving the Company or any of its Affiliates,
(iii) the failure by the Employee to perform any of her material
duties hereunder, (iv) violation of any federal, state or local
law, or administrative regulation, (v) conduct that results in
negative publicity, (vi) failure to comply
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with the policies of the Company, or (vii) a material breach of
the terms of this Agreement by the Employee (including, without
limitation, actions taken by Employee which create a conflict of
interest for Employee between the Company and a competitor). As
the term "Cause" applies to clauses (iii) through (vii), such
acts, conduct, or failure, as the case may be, must materially
adversely affect the Company's business. The Company shall provide
the Employee written notice of termination pursuant to this
Section 4, and Employee shall have 30 days to cure or remedy such
failure or breach, in which case this Agreement shall not be
terminated.
5. TERMINATION BY THE EMPLOYEE.
5.1 The Employee may terminate this Agreement, if any one or more of
the following shall occur:
(a) a material breach of the terms of this Agreement by the
Company and such breach continues for 30 days after the
Employee gives the Company written notice of such breach;
(b) the Company shall make a general assignment for benefit of
creditors; or any proceeding shall be instituted by the
Company seeking to adjudicate it as bankrupt or insolvent,
or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition
of it or its debts under law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking entry of an order for relief of the appointment of
a receiver, trustee, or other similar official for it or
for any substantial part of its property or the Company
shall take any corporate action to authorize any of the
actions set forth above in this Section 5.1(b);
(c) an involuntary petition shall be filed or an action or
proceeding otherwise commenced against the Company seeking
reorganization, arrangement or readjustment of the
Company's debts or for any other relief under the Federal
Bankruptcy Code, as amended, or under any other bankruptcy
or insolvency act or law, state or federal, now or
hereafter existing and remain undismissed or unstayed for a
period of 30 days;
(d) a receiver, assignee, liquidator, trustee or similar
officer for the Company or for all or any part of its
property shall be appointed involuntarily, or
(e) a Change in Control, as such term is defined in Section 14.
6. SEVERANCE.
6.1 If (i) the Company terminates this Agreement without Cause or (ii)
the Employee terminates this Agreement pursuant to Section 5.1(a),
then: (1) except in the case of death or disability, the Company
shall continue to pay the Employee her then-current base salary
for the remaining period of the applicable Term; (2) all stock
options granted pursuant to this Agreement that would have vested
during the Term shall vest immediately prior to such termination;
and (3) the Company shall continue to provide all benefits subject
to COBRA at its expense for up to one year. Notwithstanding the
foregoing, if the Company elects not to renew this Agreement
pursuant to Section 2 herein or this Agreement is terminated
according to this Section 6.1, prior to March 4, 2006, all 2002
Stock Options, shall vest immediately.
6.2 In the event of a consummation of a Change in Control of the
Company, and if the Employee gives notice of termination within 90
days after such occurrence, then (i) all stock options, stock
awards, similar equity rights, and deferred compensation awards
granted to the Employee shall immediately vest and remain fully
exercisable through their original term
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with all rights; (ii) the relocation loan provided pursuant to
Section 7 (f) shall be considered fully paid, and all loan
obligations shall be forgiven; and (iii) the Company shall
continue to pay Employee her then-current base salary for the
shorter of (a) six months, or (b) the remaining period of the
applicable Term.
7. OTHER BENEFITS.
In addition to all other benefits contained herein, the Employee shall be
entitled to:
(a) Relocation expenses for the Employee and her family, consisting of
(i) all reasonable direct out-of-pocket costs of transporting the
Employee, the Employee's family and household items from the
Employee's current residence to a new residence in the greater
Boston, Massachusetts area; (ii) reasonable travel and lodging to
visit the greater Boston, Massachusetts area to search for a new
residence; (iii) the cost of storing household items in the
greater Boston, Massachusetts area (and transporting them to and
from storage) for up to six months from the Employee's date of
employment; and (iv) except as described in the next succeeding
sentence and subject to prior approval, the reasonable closing
costs associated with the Employee's purchase of a new residence
in the greater Boston, Massachusetts area within one year of the
Employee's date of employment. The following closing (settlement)
costs will NOT be paid by the Company: (1) real --- estate and
other taxes, (2) insurance premiums other than title insurance,
and (3) commitment fees and prepaid interest (i.e., "points") in
excess of 2%. If any payments made to or in respect of the
Employee pursuant to this Section 7(a) become subject to any tax
(taking into account relevant deductions), the Company shall make
a special payment to her sufficient, on an after-tax basis (taking
into account federal, state, and local taxes), to put her in the
same position as would have been the case had no such taxes been
applicable to any payments of benefits provided in this
subsection. This special payment will be made to the Employee at
the time such taxes actually are paid.
(b) Vacation time of four weeks per year taken in accordance with the
vacation policy of the Company during each year of the Term.
(c) After six years of employment, one three-month period of fully
paid leave of absence in accordance with Company policies in place
at that time; it being understood that such policies may restrict
the Employee from taking such leave of absence until a time that
is acceptable to the Company and may include other such
limitations.
(d) Group health, disability and life insurance.
(e) The Company shall provide the Employee with an automobile
allowance of $750 per month and standard tax preparation and
planning services.
(f) To facilitate the Employee's relocation, the Company will provide
the Employee with a one-time relocation loan (the "Loan") in the
amount of $75,000 to be used towards the purchase of the
Employee's new principal residence (the "Residence"), payable at
the time of closing on such residence. The Loan will be secured by
a second mortgage on the Residence (the "Secured Note"). The
principal of the Loan shall be repaid within thirty days of the
occurrence of the following events: (a) the Employee terminates
this Agreement prior to the third anniversary of execution of the
Secured Note, except as provided pursuant to Section 5.1 herein,
or (b) the Company terminates this Agreement for Cause pursuant to
Section 4 herein. Upon the third anniversary of the execution of
the Secured Note, the Loan obligation shall be fully forgiven.
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8. CONFIDENTIALITY.
8.1 The Employee acknowledges that, during the course of performing
her services hereunder, the Company shall be disclosing
information to the Employee related to the Company's Field of
Interest, Inventions, projects and business plans, as well as
other information (collectively, "Confidential Information"). The
Employee acknowledges that the Company's business is extremely
competitive, dependent in part upon the maintenance of secrecy,
and that any disclosure of the Confidential Information would
result in serious harm to the Company.
8.2 The Employee agrees that the Confidential Information only shall
be used by the Employee in connection with her activities
hereunder as an employee of the Company, and shall not be used in
any way that is detrimental to the Company.
8.3 The Employee agrees not to disclose, directly or indirectly, the
Confidential Information to any third person or entity, other than
representatives or agents of the Company. The Employee shall treat
all such information as confidential and proprietary property of
the Company.
8.4 The term "Confidential Information" does not include information
that (a) is or becomes generally available to the public other
than by disclosure in violation of this Agreement, (b) was within
the Employee's possession prior to being furnished to such
Employee, (c) becomes available to the Employee on a
nonconfidential basis or (d) was independently developed by the
Employee without reference to the information provided by the
Company.
8.5 The Employee may disclose any Confidential Information that is
required to be disclosed by law, government regulation or court
order. If disclosure is required, the Employee shall give the
Company advance notice so that the Company may seek a protective
order or take other action reasonable in light of the
circumstances.
8.6 Upon termination of this Agreement, the Employee shall promptly
return to the Company all materials containing Confidential
Information, as well as data, records, reports and other property,
furnished by the Company to the Employee or produced by the
Employee in connection with services rendered hereunder.
Notwithstanding such return or any of the provisions of this
Agreement, the Employee shall continue to be bound by the terms of
the confidentiality provisions contained in this Section 8 for a
period of three years after the termination of this Agreement.
8.7 In connection with her employment by the Company, the Employee
hereby acknowledges that she may enter into more than one
agreement with regard to (a) the confidentiality of certain books,
records, documents and business, (b) rights to certain inventions,
proprietary information, and writings, (c) publication of certain
materials, and (d) other related matters (the "Confidential
Matters") of the Company (the "Confidentiality Agreements"). In
order to clarify any potential conflicts between certain
respective provisions of such Confidentiality Agreements, the
Employee and the Company hereby agree that, as among such
Confidentiality Agreements, the provision (or part thereof) in any
such Confidentiality Agreement which affords the greatest
protection to the Company with respect to the Confidential Matters
shall control.
8.8 The Employee hereby acknowledges that she has previously entered
into one or more Confidentiality Agreements (as such term is
defined in Section 8.7 hereof) with the Company. Notwithstanding
any of the provisions of this Agreement, the Employee acknowledges
and agrees that Section 8.7 of the Executive Employment Agreement
by and between the Company and the Employee, dated as of November
25, 1998, as amended (the "Executive
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Employment Agreement"), Section 6.7 of the Consulting Agreement,
defined above, and her obligations under such Confidentiality
Agreements shall continue to survive any termination of the
Executive Employment Agreement, the Consulting Agreement or this
Agreement.
9. INVENTIONS DISCOVERED BY THE EMPLOYEE WHILE PERFORMING SERVICES
HEREUNDER.
During the Term, the Employee shall promptly disclose to the Company any
invention, improvement, discovery, process, formula, or method or other
intellectual property, whether or not patentable, whether or not
copyrightable (collectively, "Inventions") made, conceived or first
reduced to practice by the Employee, either alone or jointly with others,
while performing service hereunder. The Employee hereby assigns to the
Company all of her right, title and interest in and to any such
Inventions. During and after the Term, the Employee shall execute any
documents necessary to perfect the assignment of such Inventions to the
Company and to enable the Company to apply for, obtain, and enforce
patents and copyrights in any and all countries on such Inventions. The
Employee hereby irrevocably designates the Chief Patent Counsel to the
Company as her agent and attorney-in-fact to execute and file any such
document and to do all lawful acts necessary to apply for and obtain
patents and copyrights and to enforce the Company's rights under this
paragraph. This Section 9 shall survive the termination of this
Agreement.
10. NON-COMPETITION AND NON-SOLICITATION.
During the Term and, in the event of an earlier termination of this
Agreement by Employee during the Term (other than any termination by
Employee pursuant to Section 5.1(a)), for a period of one year following
the date of such termination by Employee (the "Section 10 Period"): (a)
Employee shall not compete with the Company or any subsidiary or
affiliate of the Company for whom she is an employee or officer during
the Term (each, an "Interested Entity") by (i) entering the employ of, or
rendering services to, any biopharmaceutical entity which is engaged in a
business competitive with the Company's Field of Interest in such a
capacity as to create, on the date of such employment, a potential
conflict of interest for Employee between such biopharmaceutical entity
and an Interested Entity, (ii) engaging, during the Section 10 Period, in
any business for her own account which would be competitive with the
Company's Field of Interest, or (iii) acquiring, during the Section 10
Period, an equity or financial interest in any business which is
competitive with the Company's Field of Interest, directly or indirectly,
as an individual, partner, shareholder, director, officer, principal,
agent, employee, trustee, consultant, or any other relationship or
capacity as to create, on the date of acquisition of such interest, a
potential conflict of interest for Employee between such business and an
Interested Entity; PROVIDED, HOWEVER, that nothing contained in this
Section 10 shall be deemed to prohibit Employee during the Section 10
Period from providing approved consulting services to Alexandria,
accepting a position with a law firm, investment bank, venture capital or
investment fund or other professional or financial services firm or from
acquiring, solely as an investment, shares of capital stock of any public
corporation; (b) neither the Employee nor any Affiliate of the Employee
shall solicit or utilize, or assist any person in any way to solicit or
utilize, the services, directly or indirectly, of any of the Company's
directors, consultants, members of the Board of Scientific and Medical
Advisors, officers or employees (collectively, "Associates of the
Company") in any manner which is directly or indirectly competitive with
the Company's business . This non-solicitation and non-utilization
provision shall not apply to Associates of the Company who have
previously terminated their relationship with the Company.
10.1 If the Employee commits a breach, or threatens to commit a breach,
of any of the provisions of this Section 10, the Company shall
have the following rights and remedies:
10.1.1 The right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any
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such breach or threatened breach shall cause irreparable
injury to the Company and that money damages shall not
provide an adequate remedy to the Company; and
10.1.2 The right and remedy to require the Employee to account
for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits
(collectively "Benefits") derived or received by the
Employee as the result of any transactions constituting a
breach of any of the provisions of the preceding
paragraph, and the Employee hereby agrees to account for
and pay over such Benefits to the Company.
Each of the rights and remedies enumerated above shall be
independent of the other, and shall be severally
enforceable, and all of such rights and remedies shall be
in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity.
10.2 If any of the covenants contained in Section 8, 9 or 10, or any
part thereof, is hereafter construed to be invalid or
unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect without
regard to the invalid portions.
10.3 If any of the covenants contained in Section 8, 9 or 10, or any
part thereof, is held to be unenforceable because of the duration
of such provision or the area covered thereby, the parties agree
that the court making such determination shall have the power to
reduce the duration and/or area of such provision and, in its
reduced form, such provision shall then be enforceable.
10.4 The parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in Sections 8, 9 and 10 upon the
courts of any state within the geographical scope of such
covenants. In the event that the courts of any one or more of such
states shall hold any such covenant wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of
the parties hereto that such determination not bar or in any way
affect the Company's right to the relief provided above in the
courts of any other states within the geographical scope of such
covenants, as to breaches of such covenants in such other
respective jurisdictions, the above covenants as they relate to
each state being, for this purpose, severable into diverse and
independent covenants.
11. INDEMNIFICATION.
The Company shall indemnify the Employee, to the maximum extent permitted
by applicable law, against all costs, charges and expenses incurred or
sustained by her in connection with any action, suit or proceeding to
which she may be made a party by reason of her being an officer, director
or employee of the Company or of any subsidiary or affiliate of the
Company. The Company shall provide, subject to its availability upon
reasonable terms (which determination shall be made by the Board) at its
expense, directors and officers insurance for the Employee in reasonable
amounts. Determination with respect to (a) the availability of insurance
upon reasonable terms and (b) the amount of such insurance coverage shall
be made by the Board in its sole discretion.
12. NOTICES.
All notices, requests, consents and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed
to have been duly given if sent by prepaid telegram (confirmed delivery
by the telegram service), private overnight mail service (delivery
confirmed by such service), registered or certified mail (return receipt
requested), or delivered
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personally, as follows (or to such other address as either party shall
designate by notice in writing to the other in accordance herewith):
If to the Company:
ARIAD Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Employee:
Xxxxxx X. Xxxxx, Esq.
00000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
13. GENERAL.
13.1 This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts
applicable to agreements made and to be performed entirely in
Massachusetts.
13.2 The Section headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation
of this Agreement.
13.3 Except as set forth in Section 8.8 of this Agreement with respect
to Confidentiality Agreements, this Agreement sets forth the
entire agreement and understanding of the parties relating to the
subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the
subject matter hereof. No representation, promise or inducement
has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any
alleged representation, promise or inducement not so set forth.
13.4 This Agreement and the Employee's rights and obligations hereunder
may not be assigned by the Employee or the Company; PROVIDED,
HOWEVER, the Company may assign this Agreement to a
successor-in-interest.
13.5 This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be
waived, only by a written instrument executed by the parties
hereto, or in the case of a waiver, by the party waiving
compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the
right at a later time to enforce the same. No waiver by a party of
the breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
14. DEFINITIONS. As used herein the following terms have the following
meaning:
(a) "Affiliate" means and includes any corporation or other business
entity controlling, controlled by or under common control with the
corporation in question.
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(b) The "Company's Field of Interest" is the discovery, development
and commercialization of pharmaceutical products based on (a)
intervention in signal transduction pathways and (b) gene and cell
therapy. The Company's Field of Interest may be changed at any
time at the sole discretion of the Company and upon written notice
to Employee.
(c) "person" means any natural person, corporation, partnership, firm,
joint venture, association, joint stock company, trust,
unincorporated organization, governmental body or other entity.
(d) "Subsidiary" means any corporation or other business entity
directly or indirectly controlled by the corporation in question.
(e) "Change in Control" means the occurrence of any of the following
events (without the consent of the Employee):
(i) Any corporation, person or other entity makes a tender or
exchange offer for shares of the Company's Common Stock
pursuant to which such corporation, person or other entity
acquires more than 50% of the issued and outstanding shares
of the Company's Common Stock;
(ii) The stockholders of the Company approve a definitive
agreement to merge or consolidate the Company with or into
another corporation or to sell or otherwise dispose of all
or substantially all of the Company's assets; or
(iii) Any person within the meaning of Section 3 (a) (9) or
Section 13 (d) of the Securities Exchange Act of 1934
acquires more than 50% of the combined voting power of
Company's issued and outstanding voting securities entitled
to vote in the election of the Board.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ARIAD PHARMACEUTICALS, INC.
By: /s/ Xxxxxx X. Xxxxxx, M.D.
------------------------------------------------
Xxxxxx X. Xxxxxx, M.D.
Chairman and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx X. Xxxxx, Esq.
-------------------------------------------------
Xxxxxx X. Xxxxx, Esq.
Date:
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