Contract
Exhibit
10.6
Exhibit
10.6: Form of Change In Control Agreement between Hampden Bank, Hampden Bancorp,
Inc. and the individuals listed below
Hampden
Bancorp, Inc. and Hampden Bank extended the term of the change in control
agreements with the individuals listed below, previously entered into on January
16, 2007, for a period of one year as allowed under the agreements. The
agreements are substantially identical in all material respects (except as noted
below) as the attached Form of Change in Control Agreement.
Parties to Change In Control
Agreement:
Hampden
Bancorp, Hampden Bank and Xxxxxxx X. XxXxxxx
Hampden
Bancorp, Hampden Bank and Xxxxxxx X. Xxxxx, III
Hampden
Bancorp, Hampden Bank and Xxxxxx X. Xxxxxx
Hampden
Bancorp, Hampden Bank and Xxxxxx X. Xxxxxx (1)
Hampden
Bancorp, Hampden Bank and Xxxxxx X. Xxxxx
Hampden
Bancorp, Hampden Bank and Xxxxx X. Xxxxxx
Hampden
Bancorp, Hampden Bank and Xxxx Xxxxxxx Xxxxx
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(1)
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Xx.
Xxxxxx’x Change In Control Agreement is substantially identical to Exhibit
10.6 except as to the lump-sum cash payment upon termination, which is
equal to two (2) times the Employee’s average “Annual Compensation” over
the five most recently completed calendar
years.
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This
Change in Control Agreement (the “Agreement”) is made and entered into by and
between
(the “Employee”), HAMPDEN BANK, a Massachusetts-chartered savings bank, with its
principal administrative office at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX 00000
(the “Bank”), and HAMPDEN BANCORP, INC., a corporation organized under the laws
of the State of Delaware, the holding company for the Bank (the “Holding
Company”), effective as of the latest date set forth by the signatures of the
parties hereto below (the “Effective Date”).
WHEREAS,
it is expected that the Bank and/or the Holding Company from time to time will
consider the possibility of an acquisition by another company or other change in
control. The Board of Directors of the Bank (the “Board”) recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities. The Board has determined that it
is in the best interests of the Bank and its shareholders to assure that the
Bank will have the continued dedication and objectivity of the Employee,
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined below) of the Bank or the Holding Company.
WHEREAS,
the Board believes that it is in the best interests of the Bank and its
shareholders to provide the Employee with an incentive to continue his
employment and to motivate the Employee to maximize the value of the Bank upon a
Change in Control for the benefit of its shareholders.
WHEREAS,
the Board believes that it is imperative to provide the Employee with certain
severance benefits upon Employee’s termination of employment following a Change
in Control that provides the Employee with enhanced financial security and
provides incentive and encouragement to the Employee to remain with the Bank
notwithstanding the possibility of a Change in Control.
NOW,
THEREFORE, in consideration of the mutual promises, terms, provisions, and
conditions contained in this Agreement, the parties hereby agree as
follows:
1.
TERM OF AGREEMENT. The initial term of this Agreement shall commence as of the
Effective Date and shall continue for two (2) years. The Board may extend the
term of this Agreement for a successive one (1) year term at the end of the
initial term, in its discretion.
2.
AT-WILL EMPLOYMENT. The Bank and the Employee acknowledge that the Employee’s
employment is and shall continue to be at-will, as defined under Massachusetts
law at the time of the execution of this Agreement. If the Employee’s employment
terminates (a) for any reason before a Change in Control (defined below), (b)
for Cause (defined below) following a Change in Control, (c) without Good Reason
(defined below) following a Change in Control, or (d) as a result of the
Employee’s Death or Disability (defined below), the Employee shall not be
entitled to any payments, benefits, damages, awards or compensation other than
as provided by this Agreement or as may otherwise be available in accordance
with the Bank’s established employee plans and practices or pursuant to other
agreements with the Bank.
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3.
PAYMENTS IN CONNECTION WITH A CHANGE IN CONTROL.
(a)
For purposes of this Agreement, a “Change in Control” shall mean any of
the following events:
(1)
MERGER. The Bank or the Holding Company merges into or consolidates with
another entity, or merges another corporation into the Bank or Holding Company,
and as a result, less than a majority of the combined voting power of the
resulting corporation immediately after the merger or consolidation is held by
persons who were stockholders of the Bank or the Holding Company immediately
before the merger or consolidation;
(2)
ACQUISITION OF SIGNIFICANT SHARE OWNERSHIP. There is filed, or is
required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended, if the schedule discloses that the
filing person or persons acting in concert has or have become the beneficial
owner of 25% or more of a class of the Bank or the Holding Company’s voting
securities, but this clause (ii) shall not apply to beneficial ownership of Bank
or Holding Company voting shares held in a fiduciary capacity by an entity of
which the Bank or the Holding Company directly or indirectly beneficially owns
50% or more of its outstanding voting securities.
(3)
CHANGE IN BOARD COMPOSITION. During any period of two consecutive years,
individuals who constitute the Bank’s or the Holding Company’s Board of
Directors at the beginning of the two-year period cease for any reason to
constitute at least a majority of the Bank’s or the Holding Company’s Board of
Directors; provided, however, that for purposes of this clause (iii), each
director who is first elected by the board (or first nominated by the board for
election by the members) by a vote of at least two-thirds (2/3) of the directors
who were directors at the beginning of the two-year period shall be deemed to
have also been a director at the beginning of such period; or
(4)
SALE OF ASSETS. The Bank or the Holding Company sells to a third party
all or substantially all of its assets.
(5)
TENDER OFFER. A tender offer is made for 25% or more of the voting
securities of the Bank or the Holding Company.
(b)
For purposes of this Agreement, “Termination for Cause” shall mean
termination because of, in the good faith determination of the Board,
Employee’s:
(1)
Act of dishonesty, falsification of Bank or Holding Company documents, or
other intentional misrepresentation related to business matters of the Bank or
the Holding Company;
(2)
Incompetence;
(3)
Willful misconduct or action in bad faith;
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(4)
Breach of fiduciary duty;
(5)
Failure to substantially perform his stated duties and obligations to the
Bank, including, but not limited to, one or more acts of gross
negligence;
(6)
Willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) that reflects adversely on the reputation of the
Bank or the Holding Company, any felony conviction, any violation of law
involving moral turpitude, or any violation of a final cease-and-desist
order;
(7)
Commission of any tortious act, unlawful act or malfeasance that causes
or reasonably could cause harm to the Bank or the Holding Company;
(8)
Material breach of any provision of this Agreement, or the written
policies of the Bank and/or Holding Company (including, but not limited to the
Hampden Bank Code of Ethics and Conflict of Interest Policy);
and/or
(9)
Violation of the Securities Act of 1933 or the Securities Exchange Act of
1934.
(c)
For purposes of this Agreement, “Good Reason” shall exist if, without
Employee’s express written consent, the Bank or the Holding Company materially
breaches any of its obligations under this Agreement. Such a material breach
shall be deemed to occur upon any of the following:
(1)
A material reduction in Employee’s responsibilities or authority in
connection with his employment with the Bank or the Holding
Company;
(2)
Following a Change in Control, any material reduction in salary or
benefits below the amounts Employee was entitled to receive before the Change in
Control; or
(3)
A requirement that Employee relocate his principal business office or his
principal place of residence outside of the area consisting of a thirty-five
(35) mile radius from the current main office of the Bank and any branch of the
Bank, or the assignment to Employee of duties that would reasonably require such
a relocation.
Notwithstanding
the foregoing, a reduction or elimination of Employee’s benefits under one or
more benefit plans maintained as part of a good faith, overall reduction or
elimination of such plans or benefits, applicable to all participants in a
manner that does not discriminate against Employee (except as such
discrimination may be necessary to comply with law), will not constitute an
event of Good Reason or a material breach of this Agreement, provided that
benefits of the same type or to the same general extent as those offered under
such plans before the reduction or elimination are not available to other
officers of the Bank or any affiliate under a plan or plans in or under which
Employee is not entitled to participate.
(d)
For purposes of this Agreement, “Disability” shall have the same meaning
given to such term under the Bank’s Long-Term Disability plan as in effect from
time to time, or, if no such plan is then in effect, the meaning described in
Section 22(c)(3) of the Internal Revenue Code (the “Code”).
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(e)
In the event that, upon a change in ownership or control within the
meaning of Section 409A(a)(2)(A)(v) of the Code, Employee is offered employment
with the Bank or its successor that is comparable in terms of compensation and
responsibilities, and Employee stays for six (6) months after the change in
ownership or control is completed, Employee shall receive a lump sum payment in
the amount of three (3) months base salary.
(f)
TERMINATION. If within the period ending two (2) years after a Change in
Control, (i) the Bank or the Holding Company terminates Employee’s employment
Without Cause (defined in Section 3(b)), or (ii) Employee voluntarily terminates
his employment With Good Reason (defined in Section 3(c)), the Bank will pay
Employee, not later than ten (10) calendar days after the date of termination of
Employee’s employment:
(1)
Employee’s base salary through the effective date of termination, and
payment for any accrued but unpaid compensation;
(2)
one lump-sum cash payment equal to one (1) times Employee’s average
“Annual Compensation” over the five (5) most recently completed calendar
years, ending with the year immediately preceding the effective date of the
Change in Control. In determining Employee’s average “Annual Compensation”,
“Annual Compensation” will include base salary and any other taxable income
including, but not limited to, amounts related to the granting, vesting or
exercise of restricted stock or stock option awards, commissions, bonuses,
retirement benefits, director or committee fees and fringe benefits paid or
accrued for Employee’s benefit. Annual compensation will also include profit
sharing, Employee stock ownership plan and other retirement contributions or
benefits, including to any tax-qualified plan or arrangement (whether or not
taxable) made or accrued on behalf of Employee for such year; and
(3)
directly, or by reimbursing the Employee for, the monthly premium for
continuation coverage under the Bank’s health, dental and disability insurance
plans, to the same extent that such insurance is provided to persons currently
employed by the Bank, provided that the Employee makes a timely election for
such continuation coverage under the Consolidate Omnibus Budget Reconciliation
Act of 1985 (“COBRA”). The “qualifying event” under COBRA shall be deemed to
have occurred on the termination date. The Bank’s obligation under this
paragraph shall end 18 months after the termination date or at such earlier date
as the Employee becomes eligible for comparable coverage under another
employer’s group coverage. The Employee agrees to notify the Bank promptly and
in writing of any new employment and to make full disclosure to the Bank of the
health and dental insurance coverage available to him through such new
employment.
(g)
VOLUNTARY RESIGNATION; TERMINATION FOR CAUSE. If the Employee’s
employment terminates by reason of the Employee’s voluntary resignation (and is
not for Good Reason), or if the Employee is terminated for Cause, then the
Employee shall not be entitled to receive severance or other benefits except for
those (if any) as may then be established under the Bank’s then existing
severance and benefits plans and practices or pursuant to other written
agreements with the Bank.
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(h)
DISABILITY; DEATH. If the Bank terminates the Employee’s employment as a
result of the Employee’s Disability, or such Employee’s employment is terminated
due to the death of the Employee, then the Employee shall not be entitled to
receive severance or other benefits except for those (if any) as may then be
established under the Bank’s then existing severance and benefits plans and
practices or pursuant to other written agreements with the Bank.
4.
LIMITATION ON PAYMENTS. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i)
constitute “parachute payments” within the meaning of Section 280G of the Code
and (ii) but for this Section 4, would be subject to the excise tax imposed by
Section 4999 of the Code, then the Employee’s severance benefits shall be
either:
(a)
delivered in full, or
(b)
delivered as to such lesser extent which would result in no portion of
such severance benefits being subject to excise tax under Section 4999 of the
Code,
whichever
of the foregoing amounts, taking into account the applicable federal. state and
local income taxes and the excise tax imposed by Section 4999, results in the
receipt by the Employee on an after-tax basis, of the greatest amount of
severance benefits, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Unless the Bank and the
Employee otherwise agree in writing, any determination required under this
Section 4 shall be made in writing by the Bank’s independent public accountants
immediately prior to Change in Control (the “Accountants”), whose determination
shall be conclusive and binding upon the Employee and the Bank for all purposes.
For purposes of making the calculations required by this Section 1, the
accountants may make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Sections 280G and 4999 of the Code. The Bank and
the Employee shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make a determination under
this Section. The Bank shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 4.
5.
CONFIDENTIALITY AND NON-SOLICITATION.
(a)
CONFIDENTIALITY.
(1)
“Confidential Information” is information however delivered, disclosed,
or discovered during the term of Employee’s employment, which Employee has, or
in the exercise of ordinary prudence should have, reason to believe is
confidential, or which the Bank designates as confidential including, but not
limited to:
(i)
BANK INFORMATION: Bank or Holding Company proprietary information,
technical data, trade secrets or know-how, including, but not limited to:
research, processes, pricing strategies, communication strategies, sales
strategies, sales literature, sales contracts, product plans, products,
inventions, methods, services, computer codes or instructions, software and
software documentation, equipment, costs, customer lists, business studies,
business procedures, finances and other business information disclosed to
Employee
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by the
Bank or the Holding Company, either directly or indirectly in writing, orally or
by drawings or observation of parts or equipment and such other documentation
and information as is necessary in the conduct of the business of the Bank
and/or the Holding Company; and
(ii)
THIRD PARTY INFORMATION: confidential or proprietary information received
by the Bank or the Holding Company from third parties.
(2)
The Bank’s failure to xxxx any of the Confidential Information as
confidential or proprietary will not affect its status as Confidential
Information.
(3)
Employee also agrees that the terms, conditions and subject matter of
this Agreement are considered Confidential Information.
(4)
Confidential Information does not include information that has ceased to
be confidential by reason of any of the following: (i) was in Employee’s
possession prior to the date of his or her initial employment with the Bank,
provided that such information is not known by Employee to be subject to another
confidentiality agreement with, or other obligation of secrecy to, the Bank, the
Holding Company, or another party; (ii) 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; (iii) became available to Employee on a
non-confidential basis from a third party, provided that such third party is not
known by Employee to be bound by a confidentiality agreement with, or other
obligation of secrecy to, the Bank, the Holding Company, or another party or is
otherwise prohibited from providing such information to Employee by a
contractual, legal or fiduciary obligation; or (iv) Employee is required to
disclose pursuant to applicable law or regulation (as to which information,
Employee will provide the Bank with prior notice of such requirement and, if
practicable, an opportunity to obtain an appropriate protective
order).
(5)
Employee shall not, either during or after the termination of his or her
employment with the Bank, communicate or disclose to any third party the
substance or content of any Confidential Information (defined above), or use
such Confidential Information for any purpose other than the performance of
Employee’s obligations hereunder. Employee acknowledges and agrees that any
Confidential Information obtained by Employee during the performance of his or
her employment concerning the business or affairs of the Bank, or any
subsidiary, affiliate or joint venture of the Bank is the property of the Bank,
or such subsidiary, affiliate or joint venture of the Bank, as the case may
be.
(6)
Employee agrees to return all Confidential Information, including all
copies and versions of such Confidential Information (including, but not limited
to, information maintained on paper, disk, CD-ROM, network server, or any other
retention device whatsoever) and other property of the Bank, to the Bank within
two (2) business days of his or her separation from the Bank (regardless of the
reason for the separation).
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(7)
RECOGNITION OF GOOD WILL. Employee further recognizes and acknowledges
that in the course of employment he is and will be introduced to customers and
others with important relationships to the Bank. Employee acknowledges and
agrees that any and all “goodwill” associated with any existing or prospective
customer, account or business partner belongs exclusively to the Bank including,
but not limited to, any goodwill created as a result of direct or indirect
contacts or relationships between Employee and any existing or prospective
customers, accounts, business partners and other key relationships of the
Bank.
(b)
NON-SOLICITATION. In view of the covenants above, and as a material
inducement to the Bank to enter into this Agreement and to pay to Employee the
compensation stated in Section 3, Employee agrees that during his employment and
for a period of six (6) months thereafter (the “Non-Solicitation Period”),
Employee shall not, either individually or on behalf of or through any third
party, directly or indirectly, engage in the following activities:
(1)
CUSTOMER, CLIENT AND VENDOR NON-SOLICITATION. Solicit, divert,
appropriate or take away, or attempt to solicit, divert, appropriate or take
away, the business or patronage of any of the clients, customers or vendors of
the Bank that were clients, customers or vendors of the Bank while Employee was
employed by the Bank and that were serviced by Employee, or prospective clients,
customers or vendors with which Employee had written or oral communications
while Employee was employed by the Bank.
(2)
EMPLOYEE NON-SOLICITATION. Hire, retain, recruit, entice, induce, solicit
or encourage any employee or consultant to terminate their employment with, or
otherwise cease their relationship with, the Bank or its parent, subsidiaries or
affiliates. This section 5(c)(2) shall prohibit the aforesaid actions by
Employee with respect to any person both while such person is a current employee
or consultant of the Bank or such related entities, and for the ninety (90) day
period after such person’s employment or consultancy with the Bank
terminates.
The terms
of this Section 5 of the Agreement are in addition to, and not in lieu of, any
other contractual, statutory or common law obligations that Employee may have
relating to the protection of the Bank’s Confidential Information or its
property. The terms of this section shall survive indefinitely Employee’s
employment with the Bank, provided that the Confidential Information of the Bank
remains confidential and is not a matter of public knowledge.
6.
POST-TERMINATION OBLIGATIONS. Any and all payments and benefits due to
Employee under this Agreement are subject to his compliance with Section 5 of
this Agreement. Upon a good faith finding by the Board that Employee breached
Section 5 of this Agreement, the Bank shall be excused from making any and all
payments under this Agreement and Employee shall return to the Bank all previous
payments made to him under this Agreement.
7.
SUCCESSORS.
(a)
SUCCESSOR TO BANK. The Bank shall require any successor or assignee,
whether direct or indirect, by purchase, merger, consolidation or otherwise, to
all or substantially all of the business or assets of the Bank or the Holding
Company, expressly and unconditionally to assume
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and agree
to perform the Bank’s obligations under this Agreement, in the same manner and
to the same extent that the Bank would be required to perform if no such
succession or assignment had taken place.
(b)
SUCCESSOR TO THE EMPLOYEE. Neither this Agreement nor any right or
interest hereunder will be assignable or transferable by the Employee, his
beneficiaries or legal representatives, except by will or by the laws of descent
and distribution. This Agreement will inure to the benefit of and be enforceable
by the Employee’s legal personal representative.
8.
NOTICES.
All
notices, requests, demands and other communications in connection with this
Agreement shall be made in writing and shall be deemed to have been given when
delivered by hand or 48 hours after mailing at any general or branch United
States Post Office, by registered or certified mail, postage prepaid, addressed
to the Bank at its principal business offices and to Employee at his home
address as maintained in the records of the Bank.
9.
SOURCE OF PAYMENTS. All payments provided in this Agreement shall be paid
in from the general funds of the Bank. In the event, however, that the Bank is
unable to make such payments to the Employee, such amounts shall be paid or
provided by the Holding Company.
10.
MISCELLANEOUS PROVISIONS.
(a)
NO DUTY TO MITIGATE. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such payment
be reduced by any earnings that the Employee may receive from any other
source.
(b)
WAIVER. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by an authorized officer of the Bank (other than
the Employee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time. Further, the Bank’s waiver of its right to enforce
similar conditions or provisions in another employee’s agreement (employment or
other) shall not operate as a waiver of its right to enforce any of the
conditions or provisions in this Agreement.
(c)
ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties hereto and supersedes in their entirety all prior undertakings and
agreements of the parties.
(d)
CHOICE OF LAW; ENFORCEABILITY; WAIVER OF JURY TRIAL.
(1)
THE LAW OF MASSACHUSETTS APPLIES TO THIS AGREEMENT. This Agreement and
all transactions contemplated by this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Massachusetts, without regard to principles of conflicts of law.
(2)
ANY DISPUTE REGARDING THIS AGREEMENT WILL TAKE PLACE IN MASSACHUSETTS.
The Parties agree that this Agreement shall be enforced by the Business
Litigation
9
Session
of the Massachusetts Superior Court located in Suffolk County, which retains
exclusive jurisdiction and venue for any actions or proceedings, demand, claim
or counterclaim relating to, or arising under, the terms and provisions of this
Agreement, or to its breach. The Parties further acknowledge that material
witnesses and documents would be located in Massachusetts.
(e)
SEVERABILITY. If a court of competent jurisdiction determines that any portion
of this Agreement is illegal, invalid or unenforceable, then that portion shall
be considered to be removed from the Agreement and it shall not affect the
legality, validity or enforceability of the remainder of the Agreement and the
remainder of the Agreement shall continue in full force and effect. Similarly,
if the scope of any restriction or covenant contained herein should be or become
too broad or extensive to permit enforcement thereof to its full extent, then
the court is specifically authorized by the parties to enforce any such
restriction or covenant to the maximum extent permitted by law, and Employee
hereby consents and agrees that the scope of any such restriction or covenant
may be modified accordingly in any judicial proceeding brought to enforce such
restriction or covenant.
(f)
WITHHOLDING. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.
(g)
COUNTERPARTS. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.
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SIGNATURES
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement
on ,
2007.
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ATTEST:
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HAMPDEN
BANK
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By:
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Corporate
Secretary
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For
the Entire Board of Directors
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ATTEST:
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By:
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Corporate
Secretary
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For
the Entire Board of Directors
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WITNESS:
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EMPLOYEE:
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Corporate
Secretary
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