AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), is made and entered into as of May 8, 2024 (the “Effective Date”), by and between Griffon Corporation, a Delaware corporation, with its principal office located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 (together with its successors and assigns permitted under this Agreement, “Griffon”) and Xxxxxx X. Xxxxxx (“Xxxxxx”).
W I T N E S S E T H:
WHEREAS, Xxxxxxx has determined that it is in the best interests of Griffon and its stockholders to continue to employ Xxxxxx as its President and Chief Operating Officer;
WHEREAS, Xxxxxxx wishes to assure itself of the services of Xxxxxx for the period hereinafter provided, and Xxxxxx is willing to be employed by Xxxxxxx for said period, upon the terms and conditions provided in this Agreement; and
WHEREAS, Xxxxxxx and Xxxxxx desire to replace and supersede, in its entirety, that certain Employment Agreement between Griffon and Xxxxxx dated December 2, 2012, as amended by that certain Amendment No. 1 to Employment Agreement dated November 14, 2022 (collectively, the “Prior Agreement”);
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which is mutually acknowledged, Xxxxxxx and Xxxxxx (individually a “Party” and together the “Parties”) agree as follows:
1.DEFINITIONS.
(a)“Affiliate” means any person or entity controlling, controlled by or under common control with Griffon.
(b)“Board” shall mean the Board of Directors of Griffon.
(c)“Cause” shall mean:
(i)Xxxxxx’x willful refusal to perform his material duties as defined herein (other than as a result of total or partial incapacity due to physical or mental illness),
(ii)theft or embezzlement of Griffon property or dishonesty in the performance of Xxxxxx’x duties,
(iii)Xxxxxx’x conviction of, or plea of guilty or nolo contendere to (x) a felony under the laws of the United States or any state thereof or (y) a crime involving moral turpitude,
(iv)Xxxxxx’x willful misconduct or gross negligence in connection with Xxxxxx’x duties hereunder or any act or omission which, in each case, is materially injurious to the financial condition or business reputation of Griffon or any of its subsidiaries or Affiliates. For purposes of Section 1(c)(i) and (iv), no act or failure to act on the part of Xxxxxx shall be considered “willful” unless it is committed, or omitted to be done, by him in bad faith or without reasonable belief that his action or omission was in the best interests of Griffon, and/or
(v)any material breach of the Agreement by Xxxxxx.
Notwithstanding the foregoing, no act or failure to act (to the extent curable) shall constitute Cause unless Griffon gives Xxxxxx written notice within one hundred and twenty (120) days after the Board (or, as applicable, the Post-CIC Board, as defined below) acquires actual knowledge of the occurrence of the act or failure to act which Xxxxxxx believes constitutes the basis for Cause, specifying the particular act or failure to act which Xxxxxxx believes constitutes the basis for Cause. If Xxxxxx fails to cure such act or failure to act within thirty (30) days after receipt of such notice, Xxxxxx’x employment shall be deemed terminated for Cause; provided, however, that notwithstanding the foregoing, during the 24 months immediately following a Change in Control, a termination of Xxxxxx’x employment will not be deemed to be for “Cause” unless (i) Xxxxxx has had an opportunity to be heard, with counsel, by the board of directors or other governing body of the corporation or other entity surviving such Change in Control (or the board of the applicable parent entity of such surviving entity) (the “Post-CIC Board”) and (ii) the Post-CIC Board has approved the classification of Xxxxxx’x termination as being for “Cause” by a vote of at least two-thirds of the members of the Post-CIC Board.
(d)“Change in Control” shall mean the occurrence of any of the following events after the Effective Date:
(i)any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then-outstanding shares of common stock of Griffon (“Outstanding Common Stock”) or (B) the combined voting power of the then-outstanding voting securities of Xxxxxxx entitled to vote generally in the election of directors (“Outstanding Voting Securities”); provided, however, that for purposes of this Section 1(d)(i), the following acquisitions shall not constitute a Change in Control: (w) any acquisition directly from Griffon or any Affiliate, (x) any acquisition by Griffon or any Affiliate, (y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by Griffon or any of its Affiliates or (z) any acquisition pursuant to a transaction that meets the conditions of each of Sections 1(d)(iii)(A), 1(d)(iii)(B) and 1(d)(iii)(C);
(ii)individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual whose election to the Board, or nomination for election by Xxxxxxx’s stockholders, is approved by a vote of at least a majority of the
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directors then comprising the Incumbent Board shall be considered as though such individual was a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(iii)the consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving Griffon or any of its subsidiaries, or a sale or other disposition of all or substantially all of the assets of Griffon, in a single transaction or series of related transactions, or the acquisition of assets or securities of another entity by Griffon or any of its subsidiaries (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the Outstanding Common Stock and the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 70% of the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors (or, for a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting from such Business Combination (including, without limitation, an entity that, as a result of such transaction, owns Griffon or all or substantially all of Griffon’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Common Stock and the Outstanding Voting Securities, as the case may be, (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of Griffon or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, 30% or more of, respectively, the then-outstanding shares of common stock (or, for a non-corporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then-outstanding voting securities of such entity, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or
(iv)approval by the stockholders of Griffon of a complete liquidation or dissolution of Griffon, or a sale (whether direct or indirect) of all or substantially all of the assets of Griffon or of Griffon’s subsidiaries in a single transaction or series of related transactions (except pursuant to an acquisition described in Sections 1(d)(i)(x) or 1(d)(i)(y)).
Notwithstanding the foregoing, a Change in Control shall not include any event, circumstance or transaction that results from an action of any Person, entity or group
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which includes, is affiliated with or is wholly or partly controlled by one or more executive officers of Xxxxxxx and in which Xxxxxx participates directly or actively (other than a renegotiation of his employment arrangements or in his capacity as an employee of Griffon or any successor entity thereto or to the business of Griffon).
(e)“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
(f)“Combined Bonus,” with respect to any Fiscal Year, shall mean the sum of (i) the bonus (or bonuses) paid to Xxxxxx in respect of, or during, such Fiscal Year, and (ii) any long-term bonus paid to Xxxxxx with respect to a period ending with such Fiscal Year; provided that a bonus paid in respect of a Fiscal Year, or with respect to a period ending with a Fiscal Year, shall be part of the Combined Bonus for such Fiscal Year, and shall not be part of the Combined Bonus for the next succeeding Fiscal Year (notwithstanding when such bonus is actually paid).
(g)“Committee” shall mean the Compensation Committee of the Board.
(h)“Employment Term” shall have the meaning specified in Section 2(b) below.
(i)“Disability” shall mean the Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months or is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of Griffon.
(j)“Fiscal Year” shall mean the 12-month period beginning on October 1 and ending on the next subsequent September 30, or such other 12-month period as may constitute Griffon’s fiscal year at any time hereafter.
(k)“Good Reason” shall mean the occurrence of any of the following events without Xxxxxx’x prior written consent:
(i)the failure of Griffon to pay Xxxxxx’x Salary or annual bonus when due and if earned, other than an inadvertent administrative error or failure,
(ii)a reduction by Griffon in Xxxxxx’x Salary, target annual bonus amount or target long-term bonus amount, other than a percentage reduction applied equally to all senior executives that does not exceed 10% of any such component of compensation,
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(iii)a material diminution in Xxxxxx’x authority, position (including status, office, title or reporting requirement) or responsibilities from those described herein (whether or not occurring solely as a result of Griffon ceasing to be a publicly traded entity or a Change in Control; provided, however, that a continuation by Xxxxxx as the President and Chief Operating Officer of Xxxxxxx (or a successor company) following the consummation of a transaction of the type described in the last sentence of Section 1(d) of this Agreement shall not, by itself, be deemed to be a material diminution in Xxxxxx’x authority, position or responsibilities that would constitute “Good Reason” as set forth in this clause 1(k)(iii)), including, without limitation, (A) the appointment of another person to the position of President or Chief Operating Officer or (B) Xxxxxx ceasing to report to the Chief Executive Officer of Griffon,
(iv)a requirement that Xxxxxx provide services on a regular basis at a location that is more than 35 miles from the Griffon offices at which Xxxxxx currently works,
(v)any material breach of the Agreement by Xxxxxxx, or
(vi)a failure of Xxxxxxx to have any successor assume in writing the obligations under the Agreement, unless such obligations are otherwise assumed by the successor by operation of law.
Notwithstanding the foregoing, none of these events shall constitute Good Reason unless Xxxxxx gives Xxxxxxx written notice within ninety (90) days after the occurrence of the event which Xxxxxx believes constitutes the basis for Good Reason, specifying the particular act or failure to act which Xxxxxx believes constitutes the basis for Good Reason. If Xxxxxxx fails to cure such act or failure to act within thirty (30) days after receipt of such notice, Xxxxxx may terminate his employment for Good Reason.
(l)“Salary” shall mean the annual salary provided for in Section 3 below, as adjusted from time to time.
2.EMPLOYMENT TERM, POSITIONS AND DUTIES.
(a)Employment of Xxxxxx. Griffon hereby employs Xxxxxx, and Xxxxxx hereby accepts employment with Xxxxxxx, in the positions and with the duties and responsibilities set forth below and upon such other terms and conditions as are hereinafter stated. Xxxxxx shall render services to Griffon principally at Griffon’s corporate headquarters, but he shall do such traveling on behalf of Xxxxxxx as shall be reasonably required in the course of the performance of his duties hereunder.
(b)Employment Term. The terms of this Agreement shall be effective as of the Effective Date, and Xxxxxx’x employment with Xxxxxxx shall continue until terminated by either Party in accordance with the provisions of Section 9. The entire duration of Xxxxxx’x employment with Xxxxxxx hereunder shall hereinafter be referred to as the “Employment Term.”
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(c)Titles and Duties. During the Employment Term, Xxxxxx shall (i) have the titles of President and Chief Operating Officer, (ii) report to Xxxxxxx’s Chief Executive Officer, (iii) be responsible for, and, along with Xxxxxxx’s Chief Executive Officer, have authority over all operational activities, including, without limitation (A) developing Griffon’s operational business strategies and tactics, (B) establishing best practices, and guiding and aligning Griffon’s personnel with those best practices and Xxxxxxx’s business goals and strategies, (C) monitoring staffing, facility planning, knowledge skills, expectations and motivation to fulfill Griffon’s organizational needs, including planning and prioritizing customer, employee and organizational requirements, (D) driving performance and the related measurement thereof and coordinating environmental, health and safety compliance and (E) coordinating due diligence and related activities in connection with acquisitions and divestitures and (iv) have such other duties and responsibilities as are assigned to Xxxxxx by Xxxxxxx’s Chief Executive Officer or Xxxxxxx’s Board of Directors (not inconsistent in any significant respect with the duties and responsibilities typically assigned to the president and chief operating officer of a publicly-traded corporation).
(d)Time and Effort. Xxxxxx shall devote his best efforts and abilities, and all of his business time, to the performance of his duties under the Agreement; provided that he shall, to the extent same does not substantially interfere with the performance of his duties hereunder, be permitted to: (i) serve on civic boards and committees and, with the prior written consent of the Board, corporate boards, (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (iii) manage personal and family investments.
3.SALARY.
(a)Xxxxxx shall receive from Griffon a Salary, payable in accordance with the regular payroll practices of Griffon, in an amount of $1,114,074 per annum. During the Employment Term, Xxxxxx shall be eligible for periodic annual increases in Salary, in the sole discretion of the Committee.
4.BONUSES.
(a)Annual Bonus. For the Fiscal Year ending September 30, 2024 and for each subsequent Fiscal Year during Xxxxxx’x employment, Xxxxxx will be eligible to receive a performance based bonus as determined by Xxxxxxx’s Compensation Committee (the “Committee”) based upon the achievement of specified performance objectives, as established and certified by the Committee in accordance with Xxxxxxx’s 2016 Performance Bonus Plan, or any successor plan. The Chief Executive Officer will recommend to the Committee that, under the 2016 Performance Bonus Plan, or any successor plan, Xxxxxx’x potential annual bonus awards at the specified minimum, target, superior and maximum performance levels be no less than 25% of the potential bonus award amounts established for the Chief Executive Officer (and that in no event will Xxxxxx’x (i) target bonus opportunity for any fiscal year, when added together with any target long-term performance bonus opportunity for which Xxxxxx is eligible with respect to which the relevant performance period ends with such fiscal year, be less than 100% of Xxxxxx’x Salary (the “Target Bonus”) and (ii) maximum bonus opportunity for any fiscal year, when added together with any target long-term performance bonus opportunity for
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which Xxxxxx is eligible with respect to which the relevant performance period ends with such fiscal year, be less than 200% of Xxxxxx’x Salary). Actual bonus amounts shall be subject to determination, certification and approval of the Committee prior to payment. Such performance-based bonus, if any, shall be paid following the close of the Fiscal Year to which it relates at such time as Griffon pays bonuses with respect to such Fiscal Year to its executives generally, but in no event later than March 15 of the immediately following calendar year.
(b)Discretionary Bonus. Xxxxxx shall be eligible to receive additional bonuses during the Employment Term. The amount and the occasion for payment of such bonuses, if any, shall be determined by the Committee in its sole discretion.
5.EQUITY AWARDS.
Xxxxxx will be eligible to receive annual grants of restricted stock and/or options, the amount and frequency of which shall be determined by the Committee in its sole discretion.
6.BUSINESS AND TRAVEL EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.
Xxxxxx shall be entitled to prompt reimbursement by Xxxxxxx for all reasonable business expenses incurred by him during the Employment Term in performing services under this Agreement, upon his proper submission of such accounts and records as may be reasonably required by Xxxxxxx. All reimbursements under this Section 6 shall be made as soon as practicable following submission of a reimbursement request, but no later than the end of the year following the year during which the underlying expense was incurred. The amount of such expenses reimbursable or in-kind benefits provided in any one calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits to be provided in any other calendar year, and no right to reimbursement of expenses or in-kind benefits under this Agreement shall be subject to liquidation or exchange for any other benefit.
7.PERQUISITES.
During the Employment Term, Griffon shall provide Xxxxxx with an automobile allowance of $2,000 per month and shall reimburse or pay all other reasonable or necessary expenses related to the operation of such automobile, including, without limitation, insurance, maintenance and parking, subject to Xxxxxx’x prompt submission of such accounts and records as may be reasonably required by Xxxxxxx. All reimbursements or payments under this Section 7 shall be made as soon as practicable following submission of a reimbursement request, but no later than the end of the year following the year during which the underlying expense was incurred. The amount of such expenses reimbursable or in-kind benefits provided in any one calendar year shall not affect the expenses eligible for reimbursement or the in-kind benefits to be provided in any other calendar year, and no right to reimbursement of expenses or in-kind benefits under this Agreement shall be subject to liquidation or exchange for any other benefit.
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8.BENEFITS.
(a)General. During the Employment Term, Xxxxxx will be eligible to participate in all welfare benefit plans and tax-qualified pension plans of Griffon as are generally available to Griffon’s other similarly situated executives in accordance with the terms and provisions of such plans, including without limitation, profit-sharing plans, savings and similar plans, group life insurance, accidental death and dismemberment insurance, travel accident insurance, hospitalization insurance, surgical insurance, major medical insurance, dental insurance, short-term and long-term disability insurance, sick leave, holidays, vacation (four weeks per calendar year, to be taken in accordance with Xxxxxxx’s policy) and any other employee benefit plans or programs that may be sponsored by Griffon from time to time; provided, however, that Xxxxxx shall not be eligible to receive benefits or payments under any severance plan, program or arrangement of Griffon other than those benefits Xxxxxx may become entitled to receive, as the case may be, under this Agreement.
(b)Life Insurance Benefit. During the Employment Term, in addition to the group life insurance available to employees generally, Griffon shall provide Xxxxxx with company-paid term life insurance coverage with a face amount equal to three times his Salary.
9.TERMINATION OF EMPLOYMENT.
(a)Voluntary Termination. Xxxxxx may terminate his employment voluntarily at any time during the Employment Term. If he does so, except for Good Reason, he shall be entitled to receive only the compensation and benefits specified in Section 9(b).
(b)General. Notwithstanding anything to the contrary herein, in the event of any termination of Xxxxxx’x employment during the Employment Term (including by reason of his death), he shall be entitled to receive as soon as administratively feasible following such termination, but in any event, except as provided below, within fifteen (15) days thereafter (in addition to the applicable payments and benefits he may also be entitled to receive under subsections (c) through (h) below, as applicable):
(i)accrued but unpaid Salary through the date of termination;
(ii)any accrued but unused vacation;
(iii)any annual bonus earned for the Fiscal Year completed prior to the year of termination but not yet paid to him; and
(iv)reimbursement in accordance with Sections 6 and 7 above of any expenses incurred by him through the date of termination but not yet paid to him.
Additionally, Xxxxxx shall receive any other compensation or benefits, including, without limitation, benefits under any outstanding equity grants and awards granted pursuant to Section 5 above and employee benefits under plans described in Section 8 above, that have vested through
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the date of termination or to which he may then be entitled in accordance with the applicable terms and conditions of each grant, award or plan.
(c)Termination Due to Disability. If, during the Employment Term, Xxxxxx’x employment is terminated by Griffon due to Disability, he shall be entitled, in addition to the compensation and benefits specified in Section 9(b), to receive:
(i)a pro-rata bonus for the year of termination equal to the Target Bonus multiplied by a fraction, the numerator of which is the number of completed days in the Fiscal Year of Xxxxxx’x termination of employment during which Xxxxxx was employed by Xxxxxxx and the denominator of which is 365, as soon as administratively feasible following such termination, but in any event within fifteen (15) days thereafter;
(ii)severance equal to nine months’ Salary payable in nine (9) equal monthly installments and commencing on the first payroll period following such termination; provided, however, that, if and to the extent necessary to avoid the imposition of any taxes imposed under Section 409A of the Code, such nine months of continued Salary shall be payable over eighteen months (instead of over nine months); and
(iii)if Xxxxxx (or his beneficiaries) elects continued medical coverage under COBRA, Griffon shall pay for coverage under COBRA for nine (9) months following such termination.
(d)Termination due to Death. If, during the Employment Term, Xxxxxx’x employment is terminated due to Xxxxxx’x death, he shall be entitled, in addition to the compensation and benefits specified in Section 9(b), to receive a pro-rata bonus for the year of termination equal to the Target Bonus multiplied by a fraction, the numerator of which is the number of completed days in the Fiscal Year of Xxxxxx’x termination of employment during which Xxxxxx was employed by Xxxxxxx and the denominator of which is 365, as soon as administratively feasible following such termination, but in any event within fifteen (15) days thereafter.
(e)Termination by Griffon for Cause. Griffon may terminate Xxxxxx’x employment hereunder for Cause. In the event that Xxxxxx’x employment is terminated for Cause, he shall be entitled to receive only the compensation and benefits specified in Section 9(b).
(f)Termination by Griffon Without Cause or by Xxxxxx for Good Reason. Xxxxxxx may terminate Xxxxxx’x employment hereunder without Xxxxx and Xxxxxx may terminate his employment hereunder for Good Reason. If, during the Employment Term, Xxxxxxx terminates Xxxxxx’x employment without Cause or Xxxxxx terminates his employment for Good Reason, in either such case, other than within two years after a Change in Control, he shall be entitled to receive, subject to the execution and non-revocation of a release substantially in the form attached hereto as Exhibit B no later than sixty (60) days after such termination and
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to Xxxxxx’x continued compliance with the restrictive covenants contained in Sections 12 and 13, in addition to the compensation and benefits specified in Section 9(b):
(i)continued Salary for eighteen (18) months payable in eighteen (18) equal monthly installments and commencing as soon as administratively feasible following the date on which the release becomes effective, but in any event within ten (10) days thereafter;
(ii)an amount equal to one and one-half (1.5) times the average of the Combined Bonuses paid to Xxxxxx in the three-year period immediately prior to such termination, which amount will be paid in eighteen (18) equal monthly installments commencing as soon as administratively feasible following the date on which the release becomes effective, but in any event within ten (10) days thereafter; and
(iii)if Xxxxxx (or his beneficiaries) elect continued medical coverage under COBRA, Griffon will pay for coverage under COBRA for 18 months following such termination.
(iv)Notwithstanding the foregoing, if the sixty (60) day period described above begins in one calendar year and ends in the next calendar year, then any payments or benefits described above that, but for this subsection (iv), would have been paid in the first calendar year will instead be paid in a lump sum on or within ten (10) days following the first day of the second calendar year, with any other payments to be made as though no such delay had occurred.
(g)Termination by Griffon Without Cause or by Xxxxxx for Good Reason Within Two Years After a Change in Control. If, during the Employment Term, Xxxxxxx terminates Xxxxxx’x employment without Cause or Xxxxxx terminates his employment for Good Reason, in either such case, within two years after a Change in Control, he shall be entitled to receive, subject to the execution and non-revocation of a release substantially in the form attached hereto as Exhibit B no later than sixty (60) days after such termination and to Xxxxxx’x continued compliance with the restrictive covenants contained in Sections 12 and 13, in addition to the compensation and benefits specified in Section 9(b):
(i)(x) if the Change in Control satisfies the requirements of Section 1.409A-3(i)(5)(v), (vi) or (vii) of the Code (a “409A Change in Control”), a lump sum payment, as soon as administratively feasible following the date on which the release becomes effective, but in any event within ten (10) days thereafter, equal to two and one-half (2.5) times the sum of (A) the Salary (but in no event less than Xxxxxx’x Salary in effect immediately prior to the Change in Control) plus (B) the average of the Combined Bonuses paid to Xxxxxx in each of the three Fiscal Years prior to such termination; provided that the amount calculated for purposes of this clause (B) shall not be less than the amount as if such calculation were performed immediately prior to the Change in Control; or (y) if the Change in Control does not qualify as a 409A Change in Control, Xxxxxx will receive the amount described in the foregoing clause (x) payable in eighteen (18) equal monthly installments commencing as soon as administratively feasible
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following the date on which the release becomes effective, but in any event within ten (10) days thereafter;
(ii)a pro-rata portion of the higher of (A) the Combined Bonus for the most recently completed Fiscal Year, provided that the amount of the bonuses used for calculating the amount due under this clause (A) shall not be less than the Combined Bonus for the complete Fiscal Year immediately prior to the Change in Control; or (B) the Target Bonus, to be paid as soon as administratively feasible following the date on which the release becomes effective, but in any event within ten (10) days thereafter; and
(iii)for the period commencing on the date of Xxxxxx’x termination of employment and continuing until December 31 of the second calendar year following the calendar year in which Xxxxxx’x employment terminates (the “Continuation Period”), either (x) subject to Xxxxxx making a timely election and continued eligibility to elect benefits under COBRA and Xxxxxx’x continued payment of premiums at active employee rates, continued medical and other group health coverage for Xxxxxx and his eligible dependents under Griffon’s medical and group health plans (which expressly include Griffon’s Group Health Plan, the ArmadaCare Ultimate Health Plan and the Supplemental Health Benefits Plan for Senior Executives) or (y) if Griffon determines in its sole discretion that any such coverage cannot be provided under the governing plan documents or that providing such coverage would result in a fine, penalty or other violation of law, monthly payments equal to the premium amounts (including both employer and employee portions) or other claims paid by Griffon under such coverages; provided, however, that in the event that any such coverage is discontinued following a Change in Control or Griffon or any successor otherwise fails to provide Xxxxxx access to such coverage following a Change in Control, Griffon shall either provide equivalent coverage, provide Xxxxxx an amount in cash to procure equivalent coverage on an individual basis or otherwise continue to pay applicable claims that would have been reimbursed under such coverage.
Notwithstanding the foregoing, if the sixty (60) day period described above in this Section 9(g) or Section 9(f) begins in one calendar year and ends in the following calendar year, then any payments or benefits described above that, but for this subsection (iv), would have been paid in the first calendar year will instead be paid in a lump sum on or within ten (10) days after the first day of the second calendar year, with any other payments to be made as though no such delay had occurred.
(h)Specified Employee. Notwithstanding any other provision of this Agreement, if (i) Xxxxxx is to receive payments or benefits under Section 9 by reason of his separation from service (as such term is defined in Section 409A of the Code) other than as a result of his death, (ii) Xxxxxx is a “specified employee” within the meaning of Code Section 409A for the period in which the payment or benefits would otherwise commence, and/or (iii) such payment or benefit would otherwise subject Xxxxxx to any tax, interest or penalty imposed under Section 409A of the Code (or any regulation promulgated thereunder) if the payment or benefit would commence within six months after the termination of Xxxxxx’x employment, then
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such payment or benefit required under Section 9 shall not commence until the first day which is at least six months and one day after the termination of Xxxxxx’x employment. Each severance installment contemplated under this Section 9 shall be treated as a separate payment in a series of separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii). Such payments or benefits, together with simple interest calculated at the Secured Overnight Financing rate (SOFR) as of the date of such separation from service, which would otherwise have been required to be made over such six-month period, shall be paid to Xxxxxx in one lump sum payment or otherwise provided to Xxxxxx as soon as administratively feasible after the first day which is at least six months after the termination of Xxxxxx’x employment. Thereafter, the payments and benefits shall continue, if applicable, for the relevant period set forth above as if no such delay had occurred. For purposes of this Agreement, all references to “termination of employment” and other similar language shall be deemed to refer to Xxxxxx’x “separation from service” as defined in Treasury Regulation Section 1.409A-1(h), including, without limitation, the default presumptions thereof.
(i)Miscellaneous. For the avoidance of doubt, if applicable, Xxxxxx shall only be entitled to receive the payments and benefits provided under Section 9(f) or 9(g), whichever is applicable, but not under both such sections.
10.NO DUTY TO MITIGATE.
In the event of a termination of employment under Sections 9(c), 9(f) or 9(g), Xxxxxx shall not be required to mitigate damages or the amount of any payment provided for under this Agreement by seeking other employment or otherwise, nor will any payment hereunder be subject to offset in the event Xxxxxx does receive compensation for any reason from any other source.
11.PARACHUTES.
Upon a Change in Control during the Employment Term, notwithstanding any other provisions of this Agreement to the contrary, in the event that any payments or benefits received or to be received by Xxxxxx in connection with his employment with Xxxxxxx (or termination thereof) would subject Xxxxxx to the excise tax imposed under Section 4999 of the Code (the “Excise Tax”), and if the net-after tax amount (taking into account all applicable taxes payable by Xxxxxx, including any Excise Tax) that Xxxxxx would receive with respect to such payments or benefits does not exceed the net-after tax amount Xxxxxx would receive if the amount of such payment and benefits were reduced to the maximum amount which could otherwise be payable to Xxxxxx without the imposition of the Excise Tax, then, to the extent necessary to eliminate the imposition of the Excise Tax, such payments and benefits shall be reduced in the following order: (i) first, any future cash payments (if any) shall be reduced (if necessary, to zero); (ii) second, any current cash payments shall be reduced (if necessary, to zero); (iii) third, all non-cash payments (other than equity or equity derivative related payments) shall be reduced (if necessary, to zero); and (iv) fourth, all equity or equity derivative payments shall be reduced. Xxxxxx and Xxxxxxx hereby agree that the calculation of any reduction in payments contemplated by this Section 11 and any tax withholding due in connection with any Excise Tax shall be made by Golden Parachute Tax Solutions LLC (or another nationally
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recognized certified public accounting or professional firm that is recognized as an expert in determinations and calculations for purposes of Section 280G of the Code, selected by Xxxxxxx and consented to by Xxxxxx, such consent not to be unreasonably withheld or delayed) (the “Calculating Firm”) and the determination of any such reduction in payments or Excise Tax withholding shall be conclusive and binding on Xxxxxx absent manifest error. All fees and expenses of the Calculating Firm shall be borne solely by Xxxxxxx. Prior to any reduction in payments contemplated by this Section 11, Griffon shall provide Xxxxxx with a report setting forth its calculations and the amount of such reduction, along with adequate supporting information.
12.CONFIDENTIAL INFORMATION.
Xxxxxx acknowledges that during his employment by Xxxxxxx he will be in close contact with many confidential affairs of Griffon or of any of its Affiliates, including, without limitation, trade secrets, other private or secret information including secrets and information relating to corporate strategy, business development plans, product designs, intellectual property, business contacts, names and addresses of actual and potential customers and/or suppliers and their requirements, terms of business with such customers and potential customer and/or suppliers, annual budgets, management accounts, other financial information, and other business affairs, methods and other information not readily available to the public (collectively, “Confidential Information”). Notwithstanding the foregoing, Confidential Information does not include any information which (a) is or becomes publicly known or available other than as a result of wrongful disclosure by Xxxxxx, (b) becomes available to Xxxxxx on a non-confidential basis from a source which, to his knowledge, is not prohibited from disclosing such Confidential Information to him, or (c) is generally known in the industry in which Griffon or its Affiliates operate and pertains to activities or business not specific to Griffon or its Affiliates. Xxxxxx agrees to use all reasonable efforts to protect Xxxxxxx’s Confidential Information and will keep secret all such Confidential Information and will not intentionally disclose such Confidential Information to anyone outside of Griffon except (x) as required in the performance of his duties hereunder; (y) as required by a lawful order of a court of competent jurisdiction, any governmental authority or agency, or any recognized subpoena power; or (z) with Xxxxxxx’s prior written consent. Additionally, Xxxxxx will deliver promptly to Griffon upon any termination of employment, all agreements, memoranda, notes, records, reports and other documents (and all copies thereof) relating to Xxxxxxx’s business and all other property of Xxxxxxx, which he may then possess or have under his control other than publicly available documents. Xxxxxx understands and agrees that the rights and obligations set forth in this Section 12 shall extend beyond the Employment Term.
13.OTHER RESTRICTIVE COVENANTS.
(a)Non-Solicitation of Employees. During Xxxxxx’x employment by Xxxxxxx and for the eighteen (18) month period following any termination of employment, Xxxxxx will not, for any reason, solicit, assist or encourage the solicitation of, or employ any person who was a full-time employee of, or independent contractor to, Xxxxxxx at the date of such termination or within six (6) months prior thereto to work for Xxxxxx or for any entity with
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which Xxxxxx is affiliated. For this purpose, the term “solicit” will mean contacting, or providing information to others who may be reasonably expected to contact, any employee of Xxxxxxx regarding such employee’s interest in seeking employment with any entity other than Griffon or for any entity with which Xxxxxxx is affiliated.
(b)Non-Solicitation of Clients or Customers/Non-Interference with Vendors. During Xxxxxx’x employment by Xxxxxxx and for the twelve (12) month period following any termination of employment, Xxxxxx will not, for any reason, solicit or encourage any vendor, Client or Prospective Client to cease any relationship with Griffon or any of its Affiliates, or service in any way any Client or Prospective Client. For this purpose, the term “solicit” will mean contacting, or providing information to others who may be reasonably expected to contact, any such vendor, Client or Prospective Client of Griffon regarding such Client or Prospective Client’s interest in receiving Xxxxxx’x services or the services of any entity with which Xxxxxx is affiliated or the cessation of any such relationship. The term “Client” will mean all persons for whom Xxxxxxx maintains an active account or file in the active records of Griffon, or for whom Xxxxxxx has otherwise performed or performs any services or provided products within the twelve (12) month period preceding Xxxxxx’x termination of employment. The term “Prospective Client” means those persons and entities who have been approached by or on behalf of Xxxxxxx to become a client or who have been entered into the internal records of Xxxxxxx as a prospective or potential client.
(c)Non-Compete. Xxxxxx expressly covenants and agrees that during his employment by Xxxxxxx and for the twelve (12) month period following any termination of employment, he will not directly or indirectly, own, manage, operate, join, control, receive compensation or benefits from, or participate in the ownership, management, operation, or control of, or be employed or be otherwise connected in any manner with, any business which directly or indirectly competes in any material manner with any of the businesses of Griffon or any of its Affiliates, as conducted or planned by Griffon or any Affiliate during Xxxxxx’x employment with Griffon.
(d)Non-Disparagement. Xxxxxx agrees that, during his employment by Xxxxxxx and thereafter, he will not defame, disparage or publicly criticize Xxxxxxx and/or its Affiliates and/or their management to any person or entity. Subsequent to Xxxxxx’x termination of employment for any reason, he will not speak in a negative or disparaging manner about Griffon (and/or its Affiliates, management and/or its business), to the media, whether electronic, print or otherwise, without the prior written approval of Griffon. Nothing herein, however, will prohibit Xxxxxx from making truthful statements to the extent legally compelled or otherwise required by applicable laws or governmental regulations or judicial or regulatory proceedings.
(e)Survival. Xxxxxx understands and agrees that the rights and obligations set forth in this Section 13 shall extend beyond the Employment Term.
14.REMEDIES/SANCTIONS.
Xxxxxx acknowledges that the services he is to render under this Agreement are of a unique and special nature, the loss of which cannot reasonably or adequately be compensated for
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in monetary damages, and that irreparable injury and damage may result to Griffon in the event of any breach of this Agreement or default by Xxxxxx. Because of the unique nature of the Confidential Information and the importance of the prohibitions against competition and solicitation, Xxxxxx further acknowledges and agrees that Xxxxxxx will suffer irreparable harm if he fails to comply with his obligations under Section 12 above and/or Section 13 above and that monetary damages would be inadequate to compensate Griffon for any such breach. Accordingly, Xxxxxx agrees that, in addition to any other remedies available to either Party at law, in equity or otherwise, Xxxxxxx will be entitled to seek injunctive relief or specific performance to enforce the terms, or prevent or remedy the violation, of any provisions of this Agreement.
15.WITHHOLDING TAXES.
Xxxxxx will be solely responsible for any applicable federal, state, local or other taxes, resulting from any taxable income paid to him hereunder or otherwise by Xxxxxxx, including without limitation any taxes imposed under Section 409A or Section 4999 of the Code. Notwithstanding the foregoing, Xxxxxxx will be entitled to withhold from any payments made to Xxxxxx hereunder, and to report to appropriate federal, state and local taxing authorities, all amounts required to be withheld or reported.
16.ASSIGNABILITY; BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs (in the case of Xxxxxx) and assigns. No rights or obligations of the Parties under this Agreement may be assigned without the written consent of both Parties, except by will or the laws of descent and distribution.
17.ENTIRE AGREEMENT.
Except to the extent otherwise provided herein, this Agreement contains the entire understanding and agreement between the Parties concerning the subject matter hereof and supersedes any prior agreements, whether written or oral, between the Parties concerning the subject matter hereof (including, without limitation, the Prior Agreement). Unless otherwise expressly determined by the Board or the Committee in its sole discretion after the Effective Date, payments and benefits provided under this Agreement are in lieu of any payments or other benefits under any severance program or policy of Griffon to which Xxxxxx would otherwise be entitled.
18.AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such amendment is agreed to in writing and signed by both Xxxxxx and an authorized officer of Griffon. No waiver by either Party of any breach by the other Party of any condition or provision contained in this Agreement to be performed by such other Party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and
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signed by the Party to be charged with the waiver. No delay by either Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof.
19.SEVERABILITY.
In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law.
20.SURVIVAL.
The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement, the termination of the Employment Term and the termination of Xxxxxx’x employment with Griffon for any reason, to the extent necessary to the intended provision of such rights and the intended performance of such obligations.
21.GOVERNING LAW/JURISDICTION.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of New York State, without reference to principles of conflict of laws. Any action or proceeding not subject to arbitration under Section 25 must be brought solely in a state or federal court in New York County, New York. The Parties consent to the personal jurisdiction of such courts, and waive any objections based on forum non conveniens.
22.NO CONFLICTS.
Xxxxxx represents and warrants that (a) his employment hereunder and performance of his duties hereunder will not conflict with or result in the breach by him of any agreement to which he is a party or by which he may be bound; (b) his employment with Xxxxxxx will not violate any non-competition, non-solicitation or other similar covenant or agreement by which he is bound; and (c) in connection with his employment with Xxxxxxx, he will not use any confidential or proprietary information he may have obtained in connection with his employment with any prior employer. Xxxxxx further represents and warrants that there are no facts or circumstances that would, or could reasonably be expected to, impede Xxxxxx’x ability to obtain any and all government contractor security clearances and/or approvals, and other governmental clearances and/or approvals, necessary or desirable to perform Xxxxxx’x duties as Xxxxxxx’s President and Chief Operating Officer, including, without limitation, any facts or circumstances pertaining to personal finances, substance abuse, excessive gambling or personal behavior or activities, foreign influence or relationships, or the misuse of technology or confidential, classified or proprietary information.
23.ARBITRATION; COSTS OF DISPUTES.
If any contest or dispute arising with respect to the terms of employment under this Agreement, such contest or dispute shall be submitted to binding arbitration for resolution in
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New York, New York, in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect; provided, however, that Griffon may bring an action to specifically enforce any confidentiality, non-compete, non-interference, non-disparagement or non-solicitation covenant. Judgment upon any award rendered by the arbitrators may be entered in any court having jurisdiction. The costs of commencing such arbitration will be borne equally by Xxxxxx and Xxxxxxx. Notwithstanding the foregoing of this Section 23, each of the Parties agrees that, prior to submitting a dispute under this Agreement to arbitration, the Parties agree to submit, for a period of 60 days, to non-binding voluntary mediation before a jointly selected neutral third party mediator under the auspices of JAMS, New York, NY, Resolutions Center or such other dispute resolution firm as is mutually agreed upon by the Parties, pursuant to the procedures of JAMS International Mediation Rules, or the procedures of such other dispute resolution firm, in each such case to the extent not inconsistent herewith, and conducted in the State of New York (however, such mediation or obligation to mediate shall not apply to, or suspend or otherwise delay, any action of Griffon to specifically enforce any confidentiality, non-compete, non-interference, non-disparagement or non-solicitation covenant).
24.INDEMNIFICATION.
During the Employment Term, Xxxxxxx will provide Xxxxxx with indemnification rights and protections to the same extent as is provided from time to time to the other senior executives of Griffon, including, without limitation, the advancement of expenses, and on the same terms and conditions applicable to such senior executive officers. During the Employment Term, Xxxxxx will be covered at all times by such directors’ and officers’ liability insurance as Xxxxxxx will from time to time obtain, if any, and such coverage will be substantially similar to that provided to the other senior executive officers of Xxxxxxx.
25.NOTICES.
Any notice given to either Party shall be in writing and shall be deemed to have been given when delivered either personally, by fax, by overnight delivery service (such as Federal Express) or sent by certified or registered mail postage prepaid, return receipt requested, duly addressed to the Party concerned at the address indicated below or to such changed address as the Party may subsequently give notice of.
If to Griffon or the Board:
Griffon Corporation
000 Xxxxx Xxxxxx
000 Xxxxx Xxxxxx
E-mail: xxxxxx@xxxxxxx.xxx
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With a copy to:
Xxxxxx Xxxxx, Esq.
Xxxxxxx LLP
Xxxxxxx LLP
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Xxxxxxxxxxxx, XX 00000
E-mail: xxxxxx.xxxxx@xxxxxxx.xxx
If to Xxxxxx, the address Griffon has on file.
26.HEADINGS.
The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
27.COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when so executed and delivered shall be an original, but all such counterparts together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set forth above.
GRIFFON CORPORATION By: /s/ Xxxx X. Kaplan__________ Xxxx X. Xxxxxx Senior Vice President EXECUTIVE By: _/s/ Xxxxxx X. Mehmel_______ Xxxxxx X. Xxxxxx | |||||
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EXHIBIT A
General Release
IN CONSIDERATION OF good and valuable consideration, the receipt of which is hereby acknowledged, and in consideration of the terms and conditions contained in the Amended and Restated Employment Agreement, dated as of May 8, 2024, (the “Agreement”) by and between Xxxxxx X. Xxxxxx (the “Executive”) and Griffon Corporation (the “Company”), the Executive on behalf of himself and his heirs, executors, administrators, and assigns, releases and discharges the Company and its past, present and future subsidiaries, divisions, affiliates and parents, and their respective current and former officers, directors, employees, agents, and/or owners, and their respective successors, and assigns and any other person or entity claimed to be jointly or severally liable with the Company or any of the aforementioned persons or entities (the “Released Parties”) from any and all manner of actions and causes of action, suits, debts, dues, accounts, bonds, covenants, contracts, agreements, judgments, charges, claims, and demands whatsoever (“Losses”) which the Executive and his heirs, executors, administrators, and assigns have, had, or may hereafter have, against the Released Parties or any of them arising out of or by reason of any cause, matter, or thing whatsoever from the beginning of the world to the date hereof, relating to the Executive’s employment by the Company and the cessation thereof, and any and all matters arising under any federal, state, or local statute, rule, or regulation, or principle of contract law or common law relating to the Executive’s employment by the Company and the cessation thereof, including but not limited to, the Family and Medical Leave Act of 1993, as amended, 29 U.S.C. §§ 2601 et seq., Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000 et seq., the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et seq. (the “ADEA”), the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§ 12101 et seq., the Worker Adjustment and Retraining Notification Act of 1988, as amended, 29 U.S.C. §§2101 et seq., the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001 et seq., the New York State and New York City Human Rights Laws, the New York Labor Laws, the Florida Civil Rights Act; the Florida Equal Pay Law; the Florida Private Whistleblower Protection Law; the Florida Unpaid Wages Law; the Florida Minimum Wage Act, and any other equivalent or similar federal, state, or local statute; provided, however, that the Executive does not release or discharge the Released Parties from (i) any rights to any payments, benefits or reimbursements due to the Executive under the Agreement; (ii) any rights of the Executive to indemnification under the Agreement (or the standard form of agreement, if any, entered into with the Executive pursuant to the Agreement) or under any applicable directors’ and officers’ liability insurance policies maintained by the Company; (iii) any rights to any vested benefits due to the Executive under any employee benefit plans sponsored or maintained by the Company; (iv) any rights of the Executive as a shareholder of the Company; or (v) any rights to indemnification or advancement of costs under applicable law or the Company’s (or any of its subsidiaries’) governing instruments or rights under any applicable director’s and officer’s liability insurance policy. It is understood that nothing in this general release is to be construed as an admission on behalf of the Released Parties of any wrongdoing with respect to the Executive, any such wrongdoing being expressly denied.
The Executive represents and warrants that he fully understands the terms of this General Release, that he has been encouraged to seek, and has sought, the benefit of advice of legal counsel, and that he knowingly and voluntarily, of his own free will, without any duress, being fully informed, and after due deliberation, accepts its terms and signs below as his own free act. Except as otherwise provided herein, the Executive understands that as a result of executing this General Release, he will not have the right to assert that the Company or any other of the Released Parties unlawfully terminated his employment or violated any of his rights in connection with his employment or otherwise.
The Executive further represents and warrants that he has not filed, and will not initiate, or cause to be initiated on his behalf any complaint, charge, claim, or proceeding against any of the Released Parties before any federal, state, or local agency, court, or other body relating to any claims barred or released in this General Release thereof, and will not voluntarily participate in such a proceeding. However, nothing in this General Release shall preclude or prevent the Executive from filing a claim, which challenges the validity of this General Release solely with respect to the Executive’s waiver of any Losses arising under the ADEA. The Executive shall not accept any relief obtained on his behalf by any government agency, private party, class, or otherwise with respect to any claims covered by this General Release.
The Executive may take twenty-one (21) days to consider whether to execute this General Release. Upon the Executive’s execution of this general release, the Executive will have seven (7) days after such execution in which he may revoke such execution. In the event of revocation, the Executive must present written notice of such revocation to the office of the Company. If seven (7) days pass without receipt of such notice of revocation, this General Release shall become binding and effective on the eighth (8th) day after the execution hereof (the “Effective Date”).
INTENDING TO BE LEGALLY BOUND, I hereby set my hand below:
______________________
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Dated:_________________
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