EXHIBIT 10.4
DATAMAX CORPORATION
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of February 23, 1997, between Datamax
Corporation, a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx
("Executive").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment; Signing Bonus.
(a) The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth in this
Agreement for the period beginning as of the date hereof and ending as provided
in paragraph 5 hereof (the "Employment Period").
(b) Upon the execution and delivery of this Agreement by the Company and
Executive, the Company shall pay Executive a bonus of $100,000 (the "Signing
Bonus").
(c) Immediately after the execution and delivery of this Agreement by the
Company, Executive shall resign his position with Galef, Xxxxxxxx & Xxxxxxxx.
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Company and shall have the normal duties,
responsibilities and authority of the Chief Executive Officer, subject to the
power of the Company's Board of Directors (the "Board") to expand or limit such
duties, responsibilities and authority and to override actions of officers of
the Company. Subject to the powers of the Board, during the Employment Period,
Executive shall have the authority to manage the Company's day-to-day business
and conduct its operations and shall perform, on behalf of the Company, all
duties and services as are customarily incident to the position of Chief
Executive Officer.
(b) During the Employment Period, Executive shall report to the Board and
devote his best efforts and his full business time and attention (except for
permitted vacation periods and reasonable periods of illness or other
incapacity) to the business and affairs of the Company and its Subsidiaries.
Executive shall perform his duties and responsibilities to the Company and its
Subsidiaries hereunder to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner. Notwithstanding anything to the contrary
contained herein, during the Employment Period, Executive may (i) continue to
give speeches and make presentations on business topics to the same extent
Executive currently gives speeches and makes presentations, (ii) serve on the
advisory board of the Paladin Fund and perform duties incident thereto, provided
that Executive does not participate as an active manager of the Paladin Fund,
and (iii) serve on other advisory boards and other boards
of directors as approved by the Board from time to time and perform duties
incident thereto, in each case so long as such activities do not conflict in any
material respect with Executive's performance hereunder.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company, directly
or through one of more Subsidiaries.
3. Compensation and Benefits.
(a) During the Employment Period, Executive's base salary shall be $500,000
per annum or such higher rate as the Board may designate from time to time (the
"Base Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices. The Base Salary shall
be reviewed at least annually by the Board and shall be subject to upward
adjustment at the sole discretion of the Board.
(b) During the Employment Period, Executive shall be entitled to
participate in all of the Company's employee benefit programs for which senior
executive employees of the Company and its Subsidiaries are generally eligible,
and Executive shall be entitled to four weeks of paid vacation each year, which
if not taken during any year may not be carried forward to any subsequent year.
(c) During the Employment Period, the Company shall reimburse Executive for
all reasonable expenses incurred by him in the course of performing his duties
and responsibilities under this Agreement which are consistent with the
Company's policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's requirements
with respect to reporting and documentation of such expenses.
(d) In addition to the foregoing, during the Employment Period, the Company
shall reimburse Executive for all reasonable expenses incurred by him in
connection with (i) commuting to Orlando from his permanent residence in Georgia
or his summer residence in New York up to five times during each month, (ii)
renting an apartment in Orlando, Florida for a cost not to exceed $2,000 per
month, and (iii) renting or leasing an automobile in Orlando, Florida for a cost
not to exceed $1,000 per month, in each case subject to the Company's
requirements with respect to reporting and documentation of such expenses.
(e) For each fiscal year of the Company ending during the Employment
Period, Executive shall be entitled to receive an annual performance bonus (the
"Performance Bonus") based upon the Company's achievement of the annual plan
adopted by the Board for each such fiscal year. For each such year, the Company
shall pay Executive a Performance Bonus of $150,000 if the Company achieves 100%
or more of the annual plan or a bonus in an amount determined at the discretion
of the Board on the same basis as other upper-level executives if the Company
achieves less than 100% of the annual plan. The Performance Bonus (if any)
payable for each fiscal year shall
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be paid by the Company to Executive within 30 days after the completion of the
audit of the Company's financial statements for such fiscal year.
(f) All amounts payable to Executive hereunder shall be subject to
customary withholding by the Company.
4. Board Membership. With respect to all regular elections of directors
during the Employment Period, the Company shall nominate, and use its reasonable
efforts to cause the election of, Executive to serve as a member of the Board.
Upon the termination of the Employment Period, Executive shall resign as a
director of the Company and its Subsidiaries, as the case may be.
5. Term.
(a) The Employment Period shall terminate on December 31, 1999 (the
"Expiration Date"). Notwithstanding the foregoing, (i) the Employment Period
shall terminate prior to the Expiration Date immediately upon Executive's
resignation, death or permanent mental or physical disability or incapacity (as
determined by the Board in its good faith judgment), and (ii) the Employment
Period may be terminated by the Company at any time prior to the Expiration Date
for Cause (as defined below) or without Cause. Notwithstanding any provision in
this Agreement to the contrary, if requested by the Company, Executive shall not
resign and shall remain Chief Executive Officer of the Company under the terms
of this Agreement for the one year period following a Sale of the Company and,
if necessary, the Employment Period shall be extended accordingly. "Sale of the
Company" means a merger or consolidation effecting a change in control of
Datamax International Corporation, a Delaware corporation (the "Parent") or the
Company, a sale of all or substantially all of the Parent's or the Company's
assets or a sale of a majority of the Parent's of the Company's outstanding
voting securities except in connection with a public offering under the
Securities Act of 1933, as amended.
(b) If the Employment Period is terminated by the Company without Cause,
Executive shall be entitled to receive his Base Salary through the end of the
Employment Period then in effect (the "Severance Period"), if and only if
Executive has not breached the provisions of paragraphs 6, 7 and 8 hereof. The
Base Salary payable to Executive pursuant to this paragraph 5(b) shall be
payable in the same periodic installments as it would have if the Employment
Period had not been terminated and shall be reduced by 50% the amount of any
compensation Executive receives or earns with respect to any other employment
during the Severance Period. Upon request from time to time, Executive shall
furnish the Company with a true and complete certificate specifying any such
compensation received or earned by him during the Severance Period.
(c) If the Employment Period is terminated by the Company for Cause or by
reason of Executive's resignation, death or disability or incapacity, or if the
Employment Period expires and is not renewed or extended, Executive shall be
entitled to receive his Base Salary only through the date of termination or
expiration.
(d) Except as otherwise provided under paragraph 5(b) during the Severance
Period, all of Executive's rights to salary, bonuses, fringe benefits and other
compensation hereunder
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which accrue or become payable after the termination or expiration of the
Employment Period shall cease upon such termination or expiration. The Company
may offset any amounts Executive owes it, the Parent or their Subsidiaries
against any amounts the Company owes Executive hereunder.
(e) For purposes of this Agreement, "Cause" shall mean (i) the commission
of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud with respect to the
Company, the Parent or any of their Subsidiaries or any of their customers or
suppliers, (ii) chronic drug or alcohol abuse causing the Company, the Parent or
any of their Subsidiaries substantial harm, (iii) gross negligence or willful
misconduct with respect to the Company, the Parent or any of their Subsidiaries
or (iv) failure to perform duties as reasonably directed by the Board or any
other material breach of this Agreement which is not cured to the Board's
reasonable satisfaction within 15 days after written notice thereof to
Executive.
6. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while employed by, or retained as a
consultant to, the Company and its Subsidiaries concerning the business or
affairs of the Company, the Parent or any of their Subsidiaries ("Confidential
Information") are the property of the Company, the Parent and their
Subsidiaries. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the Confidential Information becomes generally known to and available for use by
the public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the termination or expiration of the Employment
Period, or at any other time the Company may reasonably request, all memoranda,
notes, plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company, the Parent or their Subsidiaries which he may then possess or have
under his control.
7. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary. Executive shall promptly disclose such Work Product to the Board
and, at the Company's expense, perform all actions reasonably requested by the
Board (whether during or after the Employment Period) to establish and confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
8. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the
Company and its Subsidiaries he shall become familiar with the Company's trade
secrets and with other Confidential Information concerning the Company, the
Parent and their Subsidiaries and that his services have been and shall be of
special, unique and extraordinary value to the Company and its Subsidiaries.
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Therefore, Executive agrees that, during the Employment Period and for two years
thereafter (the "Noncompete Period"), he shall not directly or indirectly own
any interest in, manage, control, participate in, consult with, render services
for, or in any manner engage in any business competing with the businesses of
the Company or its Subsidiaries, as such businesses exist or are in process on
the date of the termination or expiration of the Employment Period, within any
geographical area in which the Company or its Subsidiaries engage or have a
demonstrable plan in effect prior to such termination to engage in such
businesses. Nothing herein shall prohibit Executive from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as Executive has no active participation in the
business of such corporation.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee or
business relation and the Company or any Subsidiary (including, without
limitation, making any negative or disparaging statements or communications
regarding the Company or its Subsidiaries).
(c) Executive acknowledges that the restrictions contained in this
paragraph 8 are reasonable.
9. Enforcement. If, at the time of enforcement of paragraph 6, 7 or 8 of
this Agreement, a court of competent jurisdiction holds that the restrictions
stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope or
area. Because Executive's services are unique and because Executive has access
to Confidential Information and Work Product, the parties hereto agree that
money damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns, in addition to other rights and remedies
existing in their favor, shall be entitled to specific performance and/or
injunctive or other equitable relief from a court of competent jurisdiction in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security). In addition, in the event of an alleged
breach or violation by Executive of paragraph 8, the Noncompete Period shall be
tolled until such breach or violation has been duly cured.
10. Executive's Representations. Executive hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
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confidentiality agreement with any other person or entity, and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.
11. Survival. Paragraphs 6 through 20, inclusive, shall survive and
continue in full force in accordance with their terms notwithstanding any
termination or expiration of the Employment Period.
12. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:
Notices to Executive:
Xxxxxx X. Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
with a copy to:
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Notices to the Company:
Datamax Corporation
0000 Xxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
13. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
14. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
15. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
16. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
17. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.
18. Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Florida, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Florida or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Florida.
19. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company (as approved by the
Board) and Executive, and no course of conduct or failure or delay in enforcing
the provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
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20. Arbitration. Except with respect to disputes or claims under
paragraphs 6, 7, 8 and 9 hereof (for which each party shall bear the cost of its
own attorney's fees and expenses), each party hereto agrees that the arbitration
procedure set forth in Exhibit A hereto shall be the sole and exclusive method
for resolving any claim or dispute ("Claim") arising out of or relating to the
rights and obligations acknowledged and agreed to in this Agreement, whether
such Claim arose or the facts on which such Claim is based occurred prior to or
after the effective date of adoption of this Agreement. The parties agree that
the result of any arbitration hereunder shall be final, conclusive and binding
on all of the parties. Nothing in this paragraph 20 shall prohibit a party
hereto from instituting litigation to enforce any Final Determination (as
defined in Exhibit A hereto). Each party hereto hereby irrevocably submits to
the jurisdiction of any United States District Court or Florida state court of
competent jurisdiction sitting in Orange County, Florida. Each party hereto
irrevocably consents to service of process by registered mail or personal
service and waives any objection on the grounds of personal jurisdiction, venue
or inconvenience of the forum. Each party hereto further agrees that each other
party hereto may initiate litigation in any court of competent jurisdiction to
execute any judicial judgment enforcing a Final Determination.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
DATAMAX CORPORATION
By /s/ Xxxx X. Ring, Jr.
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Its Chairman
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/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
EXHIBIT A
ARBITRATION PROCEDURE
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1. Notice of Claim. A party asserting a Claim (the "Claimant") shall
deliver written notice to each party against whom the Claim is asserted
(collectively, the "Opposing Party"), with a copy to the persons required to
receive copies of notices under the Agreement (the "Additional Notice Parties"),
specifying the nature of the Claim and requesting a meeting to resolve same.
The Additional Notice Parties shall be given reasonable notice of and invited
and permitted to attend any such meeting. If final resolution of all matters
with respect to the Claim is not reached within ten business days after delivery
of such notice, the Claimant or the Opposing Party may, within 45 days after
delivery of such notice, invoke the arbitration procedure provided herein by
delivering to each Opposing Party and the Additional Notice Parties a Notice of
Arbitration, which shall specify the Claim as to which arbitration is sought,
the nature of the Claim, the basis for the Claim, and the nature and amount of
any damages or other compensation or relief sought. Each party agrees that no
punitive damages may be sought or recovered in any arbitration, judicial
proceeding or otherwise. Failure to deliver a Notice of Arbitration within such
45 day period shall constitute a waiver of any right to relief for the matters
asserted in the notice of claim. Any Claim shall be forever barred, and no
relief may be sought therefor, if written notice of such Claim is not made as
provided above within one year after the date such Claim accrues.
2. Selection of Arbitrator. Within 20 business days after delivery of the
Notice of Arbitration, the Executive and the Board shall meet and attempt to
agree on an arbitrator to hear and decide the Claim. If the Executive and the
Board cannot agree on an arbitrator within such 20-day period, they shall
request the American Arbitration Association (the "AAA") to appoint an
arbitrator experienced in the area of dispute who does not have an ongoing
business relationship with any of the parties to the dispute. If the arbitrator
selected informs the parties he cannot hear and resolve the Claim within the
time periods specified below, the Executive and the Board shall request the
appointment of another arbitrator by the AAA subject to the same requirements.
3. Arbitration Procedure. The following procedures shall govern the
conduct of any arbitration under this Agreement. All procedural matters
relating to the conduct of the arbitration other than those specified below
shall be discussed among counsel for the parties and the arbitrator. Subject to
any agreement of the parties, the arbitrator shall determine all procedural
matters not specified herein.
(a) Within 30 days after the delivery of a Notice of Arbitration, each
party shall provide the other, or its counsel, with reasonable access to
documents relating directly to the issues raised in the Notice of Arbitration.
All documents produced and all copies thereof shall be maintained as strictly
confidential, shall be used for no purpose other than the arbitration hereunder
and shall be returned to the producing party upon completion of the arbitration.
There shall be no other discovery, except that if a reasonable need is shown,
limited depositions may be allowed in the discretion of the arbitrator, it being
the expressed intention and agreement of each party to have the
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arbitration proceedings conducted and resolved as expeditiously, economically
and fairly as reasonably practicable and with the maximum degree of
confidentiality.
(b) All written communications regarding the proceeding sent to the
arbitrator shall be delivered simultaneously to each party or its counsel, with
a copy to the Additional Notice Parties. Oral communications between any of the
parties or their counsel and the arbitrator shall be conducted only when all
parties or their counsel are present and participating in the conversation.
(c) Within 20 days after selection of the arbitrator, the Claimant shall
submit to the arbitrator a copy of the Notice of Arbitration, along with a
supporting memorandum and any exhibits or other documents supporting the Claim.
(d) Within 20 days after delivery of the Claimant's submission, the
Opposing Party shall submit to the arbitrator a memorandum supporting its
position and any exhibits or other supporting documents. If the Opposing Party
fails to respond to any of the issues raised by the Claimant within 20 days
after delivery of the Claimant's submission, then the arbitrator may find for
the Claimant on any such issue and bar any subsequent consideration of the
matter.
(e) Within 20 days after delivery of the Opposing Party's response, the
Claimant may submit to the arbitrator a reply to the Opposing Party's response,
or notification that no reply is forthcoming.
(f) Within 10 days after the latest submission as provided above, the
arbitrator shall notify the parties and the Additional Notice Parties of the
date of the hearing on the issues raised by the Claim. Scheduling of the
hearing shall be within the sole discretion of the arbitrator, but in no event
more than 30 days after the last submission by the parties and shall take place
within 75 miles of the corporate headquarters of the Company at a place selected
by the arbitrator or such other place as is mutually agreed by the parties.
Both parties shall be granted substantially equal time to present evidence at
the hearing. The hearing shall not exceed one business day, except for good
cause shown.
(g) Within 30 days after the conclusion of the hearing, the arbitrator
shall issue a written decision to be delivered to both parties and the
Additional Notice Parties (the "Final Determination"). The Final Determination
shall address each issue disputed by the parties, state the arbitrator's
findings and reasons therefor and state the nature and amount of any damages,
compensa tion or other relief awarded.
(h) The award rendered by the arbitrator shall be final and non-appealable
and judgment may be entered upon it in accordance with applicable law in such
court as has jurisdiction thereof.
4. Costs of Arbitration. As part of the Final Determination, the
arbitrator shall determine the allocation of the costs and expenses of the
arbitration, including the arbitrator's fee and both parties' attorneys' fees
and expenses, based upon the extent to which each party prevailed in the
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arbitration. In the event that any relief which is awarded is non-monetary,
then such costs and expenses shall be allocated in any manner as may be
determined by the arbitrator.
5. Satisfaction of Award. If any party fails to pay the amount of the
award, if any, assessed against it within 30 days after the delivery to such
party of the Final Determination, the unpaid amount shall bear interest from the
date of such delivery at the lesser of (i) prime lending rate announced by
Citibank N.A. plus three hundred basis points and (ii) the maximum rate
permitted by applicable usury laws. In addition, such party shall promptly
reimburse the other party for any and all costs or expenses of any nature or
kind whatsoever (including attorneys' fees) reasonably incurred in seeking to
collect such award or to enforce any Final Determination.
6. Confidentiality of Proceedings. The parties hereto agree that all of
the arbitra tion proceedings provided for herein (including any notice of claim,
the Notice of Arbitration, the submissions of the parties, and the Final
Determination issued by the arbitrator) shall be confidential and shall not be
disclosed at any time to any person other than the parties, their
representatives, the arbitrator and the Additional Notice Parties; provided that
this provision shall not prevent the party prevailing in the arbitration from
submitting the Final Determination to a court for the purpose of enforcing the
award, subject to comparable confidentiality protections if the court agrees;
and further provided that the foregoing shall not prohibit disclosure to the
minimum extent reasonably necessary to comply with (i) applicable law (or
requirement having the force of law), court order, judgment or decree,
including, without limitation, disclosures which may be required pursuant to
applicable securities laws, and (ii) the terms of contractual arrangements (such
as financing arrangements) to which the Company or any Additional Notice Party
may be subject so long as such contractual arrangements were not entered into
for the primary purpose of permitting disclosure which would otherwise be
prohibited hereunder.
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