EMPLOYMENT AGREEMENT
EXHIBIT
10.3
EXHIBIT
A-1
AND EXHIBIT
A-2
THIS AGREEMENT (this “Agreement”), dated
__________, 2010 and effective as of _________, 2010 (the “Effective Date”), by
and between OAK TREE
EDUCATIONAL PARTNERS, INC., a Delaware corporation (“the Company”), the other
corporations and entities who have executed this Agreement on the signature page
hereof, and [XXXXXX XXXXXX]
[XXXXXX XXXXXX], an individual residing at
_______________________________________ _____ (“the Executive”).
1. Term. The Company
hereby employs the Executive, and the Executive hereby accepts employment, for
term commencing on Effective Date hereof and, subject to earlier termination as
provided in Section
5 hereof, continuing through December 31, 2013 (the “Initial Term”); which
Initial Term may be renewed annually or extended by mutual agreement of the
Company and the Executive (such Initial Term, as the same may be so renewed or
extended, being hereinafter sometimes called the “Term of
Employment”). The Executive shall perform the services
specified herein, all upon the terms and conditions hereinafter
stated. This Agreement may be extended only upon the written consent
of the parties hereto.
2.
Duties
and Responsibilities.
a. General. The
Executive shall serve as both (a) an Executive Vice President of the Company,
and (b) as the [President][Chief Operating Officer] of certain direct and
indirect subsidiaries of the Company, including without limitation, (i) Educational Training Institute,
Inc., a New York corporation, (“ETI”), (ii) Culinary Tech Center LLC, a
New York limited liability company (“CTC”), (iii) Professional Culinary Institute
LLC, a New York limited liability company (“PCI”), and (iv) Training Direct LLC, a New
York limited liability company (“TDI”). Subject
to the general direction and control of the Board of Directors of the Company
(the “Board of
Directors”), the Executive shall, together with [Xxxxxx Xxxxxx][Xxxxxx
Xxxxxx], have responsibility for the overall operation of ETI, CTC,
PCI and TDI (collectively, the “Culinary
Group”). In addition, the Executive shall have such other
duties as are normally associated with and inherent in the executive capacity in
which the Executive will be serving. The Executive also agrees to
perform, without additional compensation (other than reimbursement of reasonable
travel expenses), such services for the Culinary Group as the Board of Directors
shall from time to time reasonably specify.
b. Time. The
Executive shall devote substantially all of his professional and business time,
attention and energy to the Business (as defined herein) of the Culinary Group
as necessary and appropriate to further the interests of the Culinary
Group. As used herein, the term “Business” shall mean
and include the collective reference to the ownership and operation of the
existing businesses of the Culinary Group and/or other businesses that provide
instruction and academic, financial or vocational educational services to
consumers, whether through lectures, on-line Internet courses or classroom
streaming, or textbooks.
3. Salary
and Bonus.
a. During
the period commencing on the Effective Date and ending December 31, 2010, the
Company shall cause the Culinary Group to pay to the Executive a salary (the
“Base Salary”)
at an annual rate of One Hundred and Fifty Thousand ($150,000)
Dollars. Commencing January 1, 2011 such Base Salary shall be paid at
the annual rate of Two Hundred Thousand Dollars ($200,000) and commencing
January 1, 2012 and through and including December 31, 2013, such Base Salary
shall be paid at the annual rate of Two Hundred and Fifty Thousand Dollars
($250,000). The Base Salary shall be payable in accordance with
the regular payroll policies of the Company or the Culinary Group with respect
to executive officers, in effect from time to time during the Term of
Employment, which at a minimum, shall at least be on a monthly
basis. If the Executive’s Term of Employment shall be extended by
mutual agreement of the parties beyond the Initial Term, the Base Salary shall
be as mutually agreed between the Executive and the Company. In
addition, the Company shall have the right at any time to increase (but not
decrease) the Base Salary, all as shall be determined by the independent members
of the Board of Directors of the Company in the exercise of their sole
discretion.
b. In
addition to the Base Salary, the Executive shall be entitled to receive an
annual bonus (the “Bonus”) in such
amounts as shall be determined in the sole discretion of the independent members
of the Board of Directors of the Company following the end of each fiscal year
of the Culinary Group.
c. The
Company acknowledges that all compensation set forth herein shall be in addition
to any and all consideration issuable to the Executive pursuant to the
Acquisition Agreements, as defined herein.
4. Incentive
Awards and Fringe Benefits.
a. Stock Options. In
addition to (and not in lieu of) the Base Salary and Bonus, the compensation
committee of the Board of Directors of the Company may elect, in the exercise of
their sole discretion, to grant options to purchase shares of Common Stock of
the Company pursuant to any stock option or stock incentive plan(s) now or
hereafter adopted by the Company. The Company has adopted a stock
option plan which is subject to approval and ratification by the shareholders of
the Company. The Company has filed an Information Statement on Form
14C with the Securities and Exchange Commission and will use its best efforts to
obtain such shareholder approval by the Effective Date or as soon thereafter as
is practicable.
b. Benefit
Plans. In addition to the other compensation payable to the
Executive hereunder, and except as otherwise set forth herein, the Executive
shall be eligible to participate in all pension, profit sharing, retirement
savings plan, 401K or other similar benefit, medical, disability and other
employee benefit plans and programs generally provided by the Company to its
senior staff from time to time hereafter (other than those provided pursuant to
separately negotiated individual employment agreements or arrangements), subject
to, and to the extent the Executive is eligible for the respective terms of such
benefit plans and programs. Notwithstanding the foregoing, the
Executive shall be entitled to retain and receive such health benefits and
automobile allowance that he currently receives from ETI, PCI and CTC, and a
non-accountable expense allowance not to exceed $3,000 per
month.
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c. Expenses. During
the Term of Employment, the Culinary Group shall pay or reimburse the Executive,
upon submission of appropriate documentation by him, for all out-of-pocket
expenses for entertainment, travel, meals, hotel accommodations, and the like
incurred by him in the interest of the Business.
d. Vacation. The
Executive shall be entitled to three weeks annual paid vacations per calendar
year in accordance with Company policies.
e. Insurance.
During the Term of Employment, the Executive shall be entitled to participate in
any group insurance plan, including health insurance, term life insurance, and
disability insurance policies (collectively, “Company Plans”) from
time to time maintained by the Company; provided that such insurance can be
obtained on economically reasonable terms. Should the Company not have an
applicable Company Plan, the Executive shall be reimbursed for any economically
reasonable medical insurance premiums paid by the
Executive. Notwithstanding the foregoing, the Executive shall be
entitled to such Insurance that he currently receives from ETI, PCI and
CTC.
5.
Termination; Change of
Control.
a. Death.
If the Executive shall die prior to the expiration of the Term of Employment,
the Company and the Culinary Group shall have no further obligation hereunder to
the Executive or his estate except to pay to the Executive’s estate the amount
of the Executive’s Base Salary accrued to the date of his death, plus any
accrued but unpaid Bonus for fiscal year(s) preceding the Executive’s death.
Such payment shall be made promptly after the date of death to the Executive’s
estate, except for payment of the current fiscal year Bonus which shall be made
at the end of the fiscal year in which death occurred.
b. Disability. If prior
to the expiration of the Term of Employment, the Executive shall be prevented,
during a continuous period of ninety (90) days (the “Disability Period”),
from performing his duties by reason of “disability,” the Company may terminate
this Agreement, in which event the Executive shall receive: (i) his Base Salary
accrued to the date upon which any determination of disability shall have been
made as hereinafter provided, which Base Salary payment may be reduced by the
amount of any disability income payments the Executive may receive in connection
with such occurrence of disability during the Disability Period under any policy
or plan carried or maintained by or on behalf of the Company and under which the
Executive is a beneficiary or participant, and (ii) any Bonus that would have
been payable at the time of such termination for disability pursuant to Section 3(b). The
Executive shall continue to have the right to receive the greater of his Current
Benefits, or benefits, if any, under any Company Plans, but only in accordance
with the terms of such plan or policy as they apply to persons whose employment
has been terminated as a result of an employee’s permanent
disability. Such payment shall be made to the Executive within five
days of the end of the Disability Period, except for payment of the current
fiscal year Bonus which shall be made at the end of the fiscal year in which the
Disability Period arose.
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For
purposes of this Agreement, the Executive shall be deemed to have become
disabled when the Board of Directors of the Company (excluding the Executive or
any of his affiliates), upon the diagnosis of a reputable, licensed physician of
the Company’s choice, in consultation with the Executive’s primary physician,
shall have determined that the Executive shall have become unable to perform his
duties under this Agreement, whether due to physical or mental incapacity or to
infirmity caused by chronic alcoholism or drug use (excluding infrequent and
temporary absences due to ordinary illness); provided that such
incapacity shall have continued uninterrupted for a period of not less than
ninety (90) days.
c. Cause. Notwithstanding
any other provision of this Agreement, if prior to the expiration of the Term of
Employment, the Company shall have the right to discharge the Executive “for
Cause,” as defined below, then this Agreement shall terminate effective upon
such discharge, and upon such termination, neither the Company nor any other
member of the Culinary Group shall have any further obligation to the Executive
or his estate, except that the Company will cause the Culinary Group to pay to
the Executive, within thirty (30) days of such termination, or in the event of
his subsequent death, his estate, an amount equal to the Executive’s Base
Salary, as provided in Section 3 hereof,
accrued to the date of termination. In addition, the Executive shall
not, after the date of termination, be entitled to receive any further Current
Benefits, or other benefits, if any, under any Company Plans. In the event of
termination of the Executive’s employment for Cause, neither the Company nor any
member of the Culinary Group shall be obligated to pay, and the Executive shall
not be entitled to receive, any Bonus.
For the
purposes hereof, the term “Cause” shall mean and
be limited to a discharge resulting from any one of the following:
(i) the
Executive’s conviction of a felony or any other crime involving moral
turpitude,
(ii) a
final determination by a court of competent jurisdiction that the Executive has
breached his fiduciary duties to the Company or any member of the Culinary
Group, or
(iii) the
Executive’s breach of any of his covenants and obligations that are contained in
Section 9.2 (Non-Competition, Non-Solicitation and Non-Disclosure) of the
Agreement and Plan of Merger, dated May 19, 2010 among the Company, ETI
Acquisition Corp., ETI, Xxxxxx Xxxxxx, Xxxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxxxxx
Xxxxxx (the “Merger
Agreement”) or Section 9.2 (Non-Competition, Non-Solicitation and
Non-Disclosure) of the Membership Interest Purchase Agreement, dated May 19,
2010 among the Company, ETI, CTC, PCI , Xxxxxx Xxxxxx and Xxxxxx Xxxxxx (the
“Purchase
Agreement” and with the Merger Agreement, the “Acquisition
Agreements”);
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(iv) the
Executive’s breach of any of his material covenants and obligations that are
contained in this Agreement; or
(v)
the Executive’s willful failure or refusal to follow
written lawful polices or directives established by the Board of
Directors;
provided that in the
case of clauses (iii), (iv) or (v) above, the Board of Directors shall have
first given written notice thereof to the Executive on each occasion describing
in reasonable detail the alleged material breach, failure or refusal, and such
breach or willful failure or refusal to follow written lawful policies or
directives shall remain uncured for a period of twenty (20) days following
receipt of each such notice.
d. Other Reasons for
Termination.
(i) By the
Executive.
The Executive may terminate this
Agreement prior to the end of the Term of Employment either (A) upon ten (10)
days written notice with Good Reason (“Termination With Good
Reason”), or (B) for any or no reason by providing three months’ advance
written notice to the Company.
As used
herein, the term “Good
Reason” shall mean: (a) a material reduction in the scope of the
Executive’s title, authority, duties or responsibilities in effect as of the
Effective Date, which reduction has (i) not been approved in good faith and for
proper business purposes by the Board of Directors, and (ii) is not remedied by
the Company within twenty (20) days after notification to the Company containing
a reasonably detailed description of such reduction; (b) a demand by the Company
that the Executive relocate his principal residence, or (c) the Company’s breach
of any material obligation owed to the Executive under this Agreement, including
any Base Salary or Bonus payment obligations; provided that the
Executive has given the Company notice thereof describing in reasonable detail
the alleged breach or failure, and the Company has failed to cure such breach or
failure within a period of twenty (20) days following receipt of such
notice.
(ii) By the
Company.
The
Company may terminate this Agreement prior to the end of the Term of Employment,
other than as provided in paragraphs (a), (b) and (c) of this Section 5, by
providing three (3) months’ advance written notice to the
Executive.
A
termination initiated by the Company pursuant to paragraph (d)(ii) or the
Executive pursuant to paragraph (d)(i)(B), shall be referred to as a “Termination Without
Cause”.
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In the
event of a Termination Without Cause initiated by the Executive, the Company
shall pay to the Executive, or in the event of his death, to his estate, the
amount of the Executive’s Base Salary accrued to the date of
termination. In the event of a Termination Without Cause initiated by
the Company or a Termination With Good Reason initiated by the Executive, the
Company shall additionally pay to the Executive (i) any accrued but unpaid Bonus
for fiscal year(s) preceding the fiscal year of termination, (ii) the Bonus that
would have been paid to the Executive in the fiscal year in which his
termination occurred, prorated as to the number of days the Executive was
employed pursuant to this Agreement in the year of his termination, and (iii) an
additional amount which shall be equal to the greater of (A) one-third (1/3) of
the Base Salary which would have been paid to the Executive for the Term of
Employment remaining uncompleted at the time of such termination, or (B) one
full year’s Base Salary. The amounts set forth in clauses (i) and
(iii) above shall be paid in full within thirty (30) days of the date of
termination, while the amount set froth in clause (ii) above shall be paid at
the end of the fiscal year in which the Termination Without Cause
occurred. In the event of a Termination with Good Reason or a
Termination Without Cause pursuant to Section 5(d)(ii), the
Executive shall continue to have the right to receive benefits, if any, under
any Company Plans, but only in accordance with the terms of such plan or policy
as they apply to persons whose employment has been terminated without
cause.
6. Certain
Covenants of the Executive
a. Confidential
Information. The
Executive acknowledges that in the course of his employment with the Company he
may receive certain information, knowledge and data concerning the Business of
the Culinary Group and its affiliates or pertaining to any individual, firm,
corporation, partnership, joint venture, business, organization, entity or other
person which the Culinary Group may do business with during the Term of
Employment, which is not in the public domain, including but not limited to
trade secrets, employee records, names and lists of suppliers and customers,
programs, statistics, processes, techniques, pricing, marketing, software and
designs, or any other matters, and all other confidential information of the
Culinary Group and its and affiliates acquired in connection with your
employment (hereinafter referred to collectively as "Confidential
Information”), which the Culinary Group and its affiliates desire to
protect. The
Executive understands that such Confidential Information is confidential, and he
agrees not to reveal or disclose or otherwise make accessible such Confidential
Information to anyone outside of the Company or any affiliate and their
respective officers, employees, directors, consultants or agents, so long as the
confidential or secret nature of such Confidential Information shall continue,
whether or not he is employed by the Company, except as may be required by law,
regulation or court order.
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b. Return of
Information. At such time as the Executive shall cease to be
employed by the Company or the Culinary Group for whatever reason or at any
other time the Company may reasonably request, he shall promptly deliver and
surrender to the Company all papers, memoranda, notes, records, reports,
sketches, specifications, designs and other documents, writings (and all copies
thereof), and other property produced by him or coming into his possession by or
through his employment hereunder and relating to the Confidential Information
referred to in this Section 6 or
otherwise to the Business, and the Executive agrees that all such materials will
at all times remain the property of the Company.
c. Non-Competition
Agreements. The Executive further
agrees that during the Term of Employment and thereafter, he will comply at all
times with his covenants and agreements contained in Section 9(a) of each of the
Acquisition Agreements, and not use such information to compete with the
Culinary Group or any affiliate or for any other personal gain. By
his execution of this Agreement, the Executive covenants and agrees that all of
the terms and conditions set forth in Section 9(a) in each of the Acquisition
Agreements shall remain in full force and effect and are also incorporated by
this reference in this Agreement.
d. Agreement Not to
Solicit. For so long as the Executive shall be employed with
the Company and for a period of four (4) years following the termination of this
Agreement for any reason, the Executive agrees that he will not, either directly
or indirectly, through any person, firm, association, corporation, partnership,
agency or other business entity or person with which he is now or may hereafter
become associated, (i) cause or induce any present or future employee of the
Culinary Group to leave the employ of the Company or any affiliate to accept
employment with the Executive or with such person, firm, association or
corporation, agency or other business entity or (ii) solicit any person or
entity which is a customer of the Culinary Group for the purpose of directly or
indirectly furnishing services competitive with the Culinary Group.
e. Scope. It
is expressly agreed that if any restrictions set forth in this Section 6 are found
by any court having jurisdiction to be unreasonable because they are too broad
in any respect, then and in each such case, the remaining restrictions herein
contained shall, nevertheless, remain effective, and this Agreement, or any
portion thereof, shall be considered to be amended so as to be considered
reasonable and enforceable by such court, and the court shall specifically have
the right to restrict the business or geographical scope of such restrictions to
any portion of the business or geographic areas described above to the extent
the court deems such restriction to be necessary to cause the covenants to be
enforceable, and in such event, the covenants shall be enforced to the extent so
permitted.
f. Specific Performance.
The Executive
acknowledges that a remedy at law for any breach or attempted breach of Section 6 of this
Agreement may be inadequate, agrees that the Company shall be entitled to seek
specific performance and injunctive and other equitable relief in case of any
such breach or attempted breach, and further agrees to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
injunctive or any other equitable relief.
7. Severability. In case of any
term, phrase, clause, paragraph, section, restriction, covenant, or agreement
contained in this Agreement shall be held to be invalid or unenforceable, the
same shall be deemed, and it is hereby agreed that the same are meant to be
several, and shall not defeat or impair the remaining provisions
hereof.
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8. Waiver. The waiver by the
Company of a breach of any provision of this Agreement by the Executive shall
not operate or be construed as a waiver of any subsequent or continuing breach
of this Agreement by the Executive.
9. Assignment; Binding Affect.
This Agreement may not be assigned under any circumstances by either
party. Neither the Executive nor his estate shall have any right to
commute, encumber or dispose any rights to receive payments hereunder, it being
agreed that such payment and the right thereto are nonassignable and
nontransferable. Subject to the provisions of this Section 11, this
Agreement shall be binding upon and inure to the benefit of the parties hereto,
the Executive’s heirs and personal representatives, and the successors and
assigns of the Company.
10. Amendments. This Agreement may
not be changed, amended, terminated or superseded orally, but only by an
agreement in writing, nor may any of the provisions hereof be waived orally, but
only by an instrument in writing, in any such case signed by the party against
whom enforcement of any change, amendment, termination, waiver, modification,
extension or discharge is sought.
11. Entire Agreement;
Amendment; Governing Law. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the matters covered
hereby. Only an instrument in writing executed by the parties hereto
may amend this Agreement.
12. Governing Law; Jurisdiction.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. All actions and proceedings arising out of or
relating to this Agreement shall be brought by the parties and heard and
determined only in a Federal or state court located in the Borough of Manhattan
in the City and State of New York and the parties hereto consent to jurisdiction
before and waive any objections to the venue of such Federal and New York
courts. The parties hereto agree to accept service of process in
connection with any such action or proceeding in any manner permitted for a
notice hereunder.
13. Attorneys’ Fees. In
the event that any suit or other legal proceeding is brought for the enforcement
of any of the provisions of this Agreement, the parties hereto agree that the
prevailing party or parties shall be entitled to recover from the other party or
parties upon final judgment on the merits reasonable attorneys’ fees, including
attorneys’ fees for any appeal and costs incurred in bringing such suit or
proceeding.
14. Termination of Consulting
Agreement. Each of the parties
hereto do hereby agree that the consulting agreement, dated December 31, 2009
between Educational Investors Inc. and Xxxxxx Xxxxxx, be and the same hereby is
terminated and rendered null and void, ab
initio.
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15. Headings. All
descriptive headings of the several Sections or paragraphs of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
16.
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and same instrument. Facsimile and pdf signatures hereto shall
have the same validity as original signatures hereto.
16. Representations and
Warranties. (a) Executive represents and warrants to Company that (i)
Executive is under no contractual or other restriction or obligation which is
inconsistent with his execution of this Agreement or performance of his duties
hereunder, (ii) Executive has no physical or mental disability that would hinder
his performance of his duties under this Agreement, and (iii) he has had the
opportunity to consult with an attorney of his choosing in connection with the
negotiation of this Agreement.
17. Notices. Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be sent by certified mail, by personal delivery or by
overnight courier to the Executive at his residence (as set forth in Company’s
corporate records) or to the Company at its principal office and shall be
effective upon receipt, if by personal delivery, three (3) business days after
mailing, if sent by certified mail or one (1) business day after deposit with an
overnight courier.
[SIGNATURE
PAGE FOLLOWS]
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IN WITNESS WHEREOF, the
parties hereto have executed this agreement as of the date and year first above
written.
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OAK
TREE EDUCATIONAL PARTNERS, INC.
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(formerly,
Florham Consulting Corp.)
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By:
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Name: Xxxx Xxxxxx
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Title: President
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EDUCATIONAL
TRAINING INSTITUTE, INC.
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By:
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Name: Xxxxxx
Xxxxxx
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Title: Chairman
and CEO
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CULINARY TECH CENTER
LLC,
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By:
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Name: Xxxxxx
Xxxxxx
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Title: Chairman
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PROFESSIONAL
CULINARY INSTITUTE LLC
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By:
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Name: Xxxxxx
Xxxxxx
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Title: Chairman
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TRAINING
DIRECT LLC
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By:
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Name: Xxxxxx
Xxxxxx
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Title: Chairman
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EXECUTIVE:
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[XXXXXX
XXXXXX] [XXXXXX
XXXXXX]
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