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Exhibit 10.30
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT dated and effective as of April 24, 2001,
by and between ALLIANCE GAMING CORPORATION, a Nevada corporation, 0000 Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 (the "Company"), and XXXXXX X. XXXXXXXXX
(the "Executive").
The parties agree as follows:
1. EMPLOYMENT. The Company employs the Executive, and the Executive
accepts employment by the Company, on the terms and conditions set forth in this
Agreement.
2. TERM. The term of the Executive's employment under this Agreement
(the "Term") shall commence on execution of this Agreement and, unless
terminated earlier pursuant to this Agreement, shall expire on December 31,
2004.
3. POSITION AND DUTIES. The Executive shall serve as Chief Executive
Officer and Chief Operating Officer of the Company and/or as the senior-most
officer of the Company, President of Bally Gaming, Inc., and President of United
Coin Machine Co., and shall report to the Board of Directors. The Executive
shall perform the duties contemplated by such title and such other duties,
consistent with his experience and abilities, as may be assigned to the
Executive by the Board of Directors. The Executive shall devote his full time
and efforts to the business and affairs of the Company, use his best efforts to
further the interests of the Company, and at all times conduct himself in a
manner that reflects credit on the Company. It is contemplated that the
Executive shall render services to the Company from the Company's principal
place of business; however, the parties acknowledge and agree that the Executive
may be required to travel extensively in fulfilling his duties hereunder.
4. COMPENSATION.
(a) Salary. The Company shall pay the Executive a base salary of
$400,000 a year in installments on the regularly recurring paydays in accordance
with the Company's practice. Increases in the base salary shall be considered by
the Company at least annually, beginning with the completion of the first year
of employment and will be based on criteria applicable to other senior
executives of the Company, provided, however, that the award of any such
increase shall be at the sole discretion of the Company.
(b) Bonuses. The Executive shall be eligible to receive a cash bonus
from the Company each year. It is contemplated but not certain that such annual
bonus shall be between 50% and 100% of Executive's base salary, based upon
performance of the Company; it being understood, however, that the Company shall
not be obligated to pay any bonus, and the payment, if any, and amount and
timing of any such bonus shall be solely within the discretion of the Company
and may be based on any criteria the Company deems relevant.
(c) Reimbursement of expenses. In accordance with established policies
and procedures of the Company as in effect from time to time, the Company shall
pay to or reimburse the Executive for all reasonable and actual out-of-pocket
expenses including but not limited to travel, hotel, and similar expenses,
incurred by the Executive from time to time in performing his obligations under
this Agreement.
(d) Vacation. The Executive shall be entitled to annual paid vacation
time, prorated for any partial employment year, consistent with the Company's
policy applicable to its senior executives. The Executive also may accumulate
and carry forward unused vacation days from year to year consistent with Company
policy. The Executive shall also be entitled to reasonable periods of sick leave
with compensation and all paid holidays given by the Company to its senior
executive officers.
(e) Other benefits. The Executive shall be entitled to other employment
benefits, including but not limited to life insurance, medical and
hospitalization, disability, and retirement benefits, consistent with the
benefits provided to other senior executives of the Company.
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(f) No Reduction. There shall be no material reduction or diminution of
the benefits provided in this section during the term of this Agreement unless
(i) the Executive consents, (ii) an equitable arrangement (embodied in a
substitute or alternative benefit or plan) is made with respect to such benefit
or plan, or (iii) the reduction is part of a program of across-the-board benefit
reductions similarly affecting the senior executive officers of the Company.
(g) Notice of Nonrenewal. No later than 180 days before the scheduled
expiration date set forth in paragraph 2, the Company shall notify Executive
whether or not the Company wishes to renew this Agreement for an additional term
after its expiration. If the Company notifies Executive that it does not wish to
renew this Agreement after its expiration, the Company shall also notify
Executive whether it intends to enforce the restrictive covenants of
paragraph 6(a)(2) after the expiration of the Agreement pursuant to paragraph
6(a) and, if so, for how long it will so enforce the covenants.
5. TERMINATION.
(a) Disability. If the Executive, because of illness or incapacity,
fails to discharge his duties under this Agreement for six or more consecutive
months or for noncontinuous periods aggregating to twenty-two weeks in any
twelve-month period, the Company may terminate this Agreement on thirty days'
notice, whereupon the obligations of the Company and the rights of the Executive
under this Agreement shall terminate, except that:
(1) The Company shall pay the Executive's salary on a pro-rata
basis through the date of termination, offset by any benefits payable to the
Executive under any disability insurance policy paid for by the Company; and
(2) One-half of any unvested Options shall vest and become
exercisable by the Executive's estate for two years after the date of the
Executive's death; and
(3) The Executive shall have the right, at the Executive's
expense, to the assignment of any and all insurance policies or health
protection plans in accordance with the terms and conditions of those plans.
(b) Death. In the event of the Executive's death, this Agreement shall
terminate as of the date of his death, in which case the obligations of the
Company and the rights of the Executive under this Agreement shall terminate
except that:
(1) The Company shall continue to pay the Executive's salary for
six months after the date of death, offset by any benefits payable to the
Executive or the Executive's estate under any life insurance policy paid for by
the Company; and
(2) The Company shall reimburse the Executive's estate for all
expenses incurred and reimbursable under section 4(c); and
(3) One-half of any unvested Options shall vest and become
exercisable by the Executive's estate for two years after the date of the
Executive's death.
(c) Termination by Company for Cause.
(1) The Company may terminate this Agreement for cause at any
time immediately on notice to the Executive, in which case the Company's
obligations and the Executive's rights under this Agreement shall terminate. For
purposes of this provision, the term "cause" includes, but is not limited to:
(A) The Executive's insubordination, fraud, disloyalty,
dishonesty, willful misconduct, or gross negligence in the performance of the
Executive's duties under this Agreement, including willful failure to perform
such duties as may properly be assigned to the Executive under this Agreement.
(B) The Executive's material breach of any provision of
this Agreement.
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(C) The Executive's failure to qualify (or having so
qualified being thereafter disqualified) under any suitability or licensing
requirement of any jurisdiction or regulatory authority to which the Executive
may be subject by reason of his position with the Company and its affiliates or
subsidiaries.
(D) The Executive's commission of a crime against the
Company or violation of any law, order, rule, or regulation pertaining to the
Company's business.
(E) The Executive's inability (other than because of death
or disability under Sections 5(a) and 5(b)) to perform the job functions and
responsibilities assigned in accordance with standards established, whether or
not in writing, from time to time by the Company, in its sole discretion.
(F) The Company obtains from any source information with
respect to the Executive or this Agreement that would, in the opinion of the
Company, jeopardize the gaming licenses, permits, or status of the Company or
any of its subsidiaries or affiliates with any gaming commission, board, or
similar regulatory or law enforcement authority.
(2) Any termination by the Company for cause shall not be in
limitation of any other right or remedy the Company may have under this
Agreement or otherwise.
(d) Termination by Company without cause. The Company may terminate this
Agreement at any time without cause (as defined in paragraph 5(c)(1)), whereupon
the Company's obligations and the Executive's rights under this Agreement shall
terminate, except that the Company shall continue to pay the Executive's salary
and furnish the benefits described in paragraph 4(e) for twelve months after the
date of termination, offset by any compensation and benefits received by the
Executive from other employment during that period.
(e) Termination by Executive with cause. If the Executive resigns with
cause, the Company's obligations and the Executive's rights under this Agreement
shall terminate, except that the Company shall continue to pay the Executive's
salary and furnish the benefits described in paragraph 4(e) for twelve months
after the date of termination, offset by any compensation and benefits received
by the Executive from other employment during that period. As used in this
provision, "cause" is limited to the Company's failure to cure either of the
following within thirty days after demand by the Executive: (i) the Company's
failure to pay any portion of the base salary within thirty days after it is
due, and (ii) the assignment to the Executive of duties materially inconsistent
with the duties and position set forth in this Agreement.
(f) Termination by Executive without cause. If the Executive resigns
without cause (as defined in paragraph 5(e)), this Agreement shall terminate as
of the date of his resignation, and the Company's obligations and the
Executive's rights under this Agreement shall terminate.
(g) Survival of restrictive covenants. Notwithstanding the expiration or
termination of this Agreement for any reason, the Executive's covenants in
Section 6 and his obligations under that section shall survive the termination
of this Agreement as set forth in that section.
6. RESTRICTIVE COVENANTS.
(a) Covenant not to compete.
(1) During the term of this Agreement and for twelve months
after its termination for any reason (other than its expiration at the end of
its term pursuant to paragraph 6(a)(2), except as otherwise provided in
paragraph 2), the Executive will not, directly or indirectly, whether as
employee, owner, partner, agent, employee, officer, consultant, advisor,
stockholder (except as the beneficial owner of not more than 5 percent of the
outstanding shares of a corporation, any of the capital stock of which is listed
on any national or regional securities exchange or quoted in the daily listing
of over-the-counter market securities and, in each case, in which the Executive
does not undertake any management or operational or advisory role) or in any
other capacity, for the Executive's own account or for the benefit of any person
or entity, establish, engage, or be connected with any person or entity that is
at the time engaged in a business then in competition with the business of the
Company (which, for purposes of this paragraph, shall include any of the
Company's subsidiaries or affiliates) in any area
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where the Company is doing business at the time of termination. The Company and
the Executive acknowledge and agree that the Company's market is unlimited
geographically and that the scope and duration of the covenant in this paragraph
are reasonable and fair; however, if a court of competent jurisdiction
determines that this covenant is overbroad or unenforceable in any respect, the
Company and the Executive acknowledge and agree that the covenant shall be
enforced to the greatest extent any such court deems appropriate, and such court
may modify this covenant to that extent.
(2) At the expiration of this Agreement at the end of its term
under paragraph 2, the Company may, in its sole and absolute discretion,
continue to pay the Executive the base salary set forth in paragraph 4(a) and
the other benefits set forth in paragraph 4(e), in which case, and for so long
as the Company continues to do so (and provided the Company has complied with
the notice requirement of paragraph 4(g)), the Executive shall be bound by the
covenant set forth in paragraph 6(a)(4).
(b) Covenant not to solicit customers, employees, or consultants.
Executive shall not, directly or indirectly, during the term of this Agreement
and for twelve months after its expiration or termination for any reason, (i)
solicit the trade or patronage of any of the customers or prospective customers
of the Company (which, for purposes of this paragraph, shall include any of the
Company's subsidiaries or affiliates) or of anyone who has heretofore traded or
dealt with the Company, regardless of the location of such customers or
prospective customers of the Company with respect to any technologies, services,
products, trade secrets, or other matters in which the Company is active, or
(ii) aid or endeavor to solicit or induce any other employee or consultant of
the Company to leave the Company to accept employment of any kind with any other
person or entity.
(c) Confidential Information and Non-Disparagement.
(1) In accordance with NRS 600A.010 et seq. (the so-called
Uniform Trade Secrets Act), the Executive shall hold in a fiduciary capacity for
the benefit of the Company and its stockholders all secret, confidential, and
proprietary information, knowledge, and data relating to the Company (and any of
its subsidiaries or affiliates), obtained by the Executive during or by reason
of the Executive's employment by the Company. During the term of this Agreement
and after its expiration or termination for any reason, the Executive shall not,
without the prior written consent of the Company or except as may be required by
law, communicate or divulge any such information, knowledge, or data to any
person or entity other than the Company (or as applicable its subsidiaries or
affiliates) and those designated by them that would result in any
misappropriation under and as defined in such Act, except that, while employed
by the Company, in furtherance of the business and for the benefit of the
Company, the Executive may provide confidential information as appropriate to
attorneys, accountants, financial institutions, and other persons or entities
engaged in business with the Company from time to time.
(2) Each of the Executive and the Company agrees that during the
Term and for a period of three years following any applicable termination date,
neither shall, publicly or privately, disparage or make any statements (written
or oral) that could impugn the integrity, acumen (business or otherwise), ethics
or business practices, of the other, except, in each case, to the extent (but
solely to the extent) (i) necessary in any judicial or arbitral action to
enforce the provisions of this Agreement or (ii) in connection with any
judicial, regulatory or administrative proceeding to the extent required by
applicable laws. For purposes of this Section 6(c)(2), references to the Company
include its officers, directors, employees, consultants and shareholders (which
are reasonably known as such to the Executive) on the date hereof and hereafter.
(d) Standstill. During the term of this Agreement and for twelve months
after its expiration or termination for any reason, the Executive shall not,
singly or with any other person, directly or indirectly:
(1) Propose, enter into, agree to enter into, or encourage any
other person to propose, enter into, or agree to enter into (i) any form of
business combination, acquisition, or other transaction relating to the Company
or any of its subsidiaries or affiliates, or (ii) any form of restructuring,
recapitalization, or similar transaction with respect to the Company or any of
its subsidiaries or affiliates; or
(2) Acquire, or offer, propose, or agree to acquire, by tender
offer, purchase, or otherwise, any voting securities of the Company or of its
subsidiaries or affiliates, except through the exercise of options or warrants
beneficially owned as of the date of this Agreement; or
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(3) Make or in any way participate in any solicitation of proxies
or written consents with respect to voting securities of the Company or any of
its affiliates or subsidiaries (it being understood that the mere execution of a
proxy or written consent for his own securities beneficially owned shall not be
treated as constituting participation in such a solicitation); or
(4) Become a participant in any election contest with respect to
the Company or a nominee to or member of its board of directors or the board of
directors of any affiliate or subsidiary of the Company or any of its affiliates
or subsidiaries; or
(5) Seek to influence any person with respect to the voting or
disposition of any voting securities of the Company or any of its affiliates or
subsidiaries; or
(6) Demand a copy of the list of stockholders or other books and
records of the Company or any of its subsidiaries or affiliates; or
(7) Participate in or encourage the formation of any partnership,
syndicate, or other group that owns or seeks or offers to acquire beneficial
ownership of any voting securities of the Company or any of its affiliates or
subsidiaries or that seeks to affect control of the Company or any of its
affiliates or subsidiaries or for the purpose of circumventing any provision of
this Agreement; or
(8) Propose or support any director or slate of directors for
nomination, appointment, or election to the board of directors of the Company or
any of its affiliates or subsidiaries (it being understood that the mere
execution of a proxy or written shareholder consent for his own securities
beneficially owned shall not be treated as constituting such support); or
(9) Otherwise act to seek or to offer to control or influence, in
any manner, the management, the board of directors, or the policies of the
Company or any of its affiliates or subsidiaries; or
(10) Seek to amend or change this provision.
(e) The Executive acknowledges that the Company will suffer irreparable
injury, not readily susceptible of valuation in monetary damages, if the
Executive breaches any of his obligations under this section. Accordingly, the
Executive agrees that the Company will be entitled, at the Company's option, to
injunctive relief without the necessity of posting a bond against any breach or
prospective breach by the Executive of the Executive's obligations under this
section in any federal or state court of competent jurisdiction sitting in the
State of Nevada, in addition to monetary damages and any other remedies
available at law or in equity. The Executive hereby submits to the jurisdiction
of such courts for the purposes of any actions or proceedings instituted by the
Company to obtain such injunctive relief, and agrees that process may be served
on the Executive by registered mail, addressed to the last address of the
Executive known to the Company, or in any other manner authorized by law.
(f) Material Inducements. The restrictive covenants and other provisions
in this section are material inducements to the Company entering into and
performing this Agreement. Accordingly, in the event of any breach of the
provisions of this section by the Executive, in addition to all other remedies
at law or in equity possessed by the Company, (i) the Company shall have the
right to terminate and not pay any amounts payable to the Executive under this
Agreement, (ii) all Options that are unexercised shall be immediately forfeited
and returned to the Company, and (iii) the Executive shall immediately account
to the Company and return to the Company an amount in cash equal to all profits
or benefits obtained or realized by the Executive by virtue of the ownership or
disposition of the Options.
(g) For a period of two (2) years after the closing date of any
transaction in which the Company shall have sold, whether by merger, stock
purchase, asset purchase or other acquisition, all or substantially all of the
stock or assets of United Coin Machine Co., or the remaining term of the
non-competition provisions of paragraph 6(a), whichever is shorter, the
Executive shall not, directly or indirectly, whether as employee, owner,
partner, agent, officer, consultant, advisor, stockholder (except as the
beneficial owner of not more than 5 percent of the outstanding shares of a
corporation, any of the capital stock of which is listed on any national or
regional securities exchange or quoted in the daily listing of over-the-counter
market securities and, in each case, in which the Executive does not undertake
any management or operational or advisory role) or in any other capacity, for
the Executive's own account or for the benefit of any person or entity, be
connected with United Coin Machine Co., any
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successor company or any person or entity that acquires United Coin Machine Co.,
nor any other person or entity that is engaged in a business then in competition
with United Coin Machine Co. in any area where United Coin Machine Co. is doing
business during the time set forth above.
7. INDEMNIFICATION AND LIABILITY INSURANCE. If the Executive is or
during the term of this Agreement becomes a director of or holds a corporate
office with the Company:
(a) Indemnification. The Company shall indemnify and hold the Executive
harmless, to the fullest extent legally permitted by Section 78.751 of the
Nevada Corporation Code (as amended and in effect from time to time) against any
and all expenses, liabilities, and losses (including without limitation,
reasonable attorneys' fees and disbursements of counsel reasonably satisfactory
to the Company), incurred or suffered by him in connection with his service as a
director or officer of the Company under this Agreement, in each case, except to
the extent of the Executive's intentional misconduct, fraud, or knowing
violation of law.
(b) Insurance. The Company shall maintain, for the benefit of the
Executive, a directors' and officers' liability insurance policy insuring the
Executive's service as a director or officer or both of the Company (or any
affiliate or subsidiary of the Company) during the term of this Agreement in
accordance with its customary practices as in effect from time to time. The
parties acknowledge and agree that the policy may cover other officers and
directors of the Company in addition to the Executive.
8. LICENSES AND APPROVALS. This Agreement is contingent on any necessary
approvals and licenses from any regulatory authorities having jurisdiction over
the parties or the subject matter of this Agreement. Each party shall promptly
apply to the appropriate regulatory authorities for any licenses and approvals
necessary for that party to perform under this Agreement, shall diligently
pursue its applications and pay all associated costs and fees, and shall
otherwise cooperate with any requests, inquiries, or investigations of any
regulatory authorities or law enforcement agencies in connection with the
Company, its affiliates, or this Agreement. If any license or approval necessary
for either party to perform under this Agreement is denied, suspended, or
revoked, this Agreement shall be void, provided, however, that if the denial,
suspension, or revocation affects performance of the Agreement in part only, the
parties may be mutual agreement continue to perform under this Agreement to the
extent it is unaffected by the denial, suspension, or revocation.
9. COMPLIANCE PROGRAM. The parties acknowledge that Alliance Gaming
Corporation, as a company that operates and as the parent of companies that
operate under privileged licenses in a highly regulated industry, maintains a
compliance program to protect and preserve the name, reputation, integrity, and
good will of Alliance and its subsidiaries and affiliates through a thorough
review and determination of the integrity and fitness, both initially and
thereafter, of any person or company that performs work for those companies or
with which those companies are otherwise associated, and to monitor compliance
with the requirements established by gaming regulatory authorities in various
jurisdictions around the world. This Agreement and the association of the
Company and its affiliates with the Executive are contingent on the continued
approval of Alliance and its compliance committee under the Alliance compliance
program. The parties shall cooperate with Alliance and its compliance committee
as reasonably requested by Alliance or the committee and shall provide the
committee with such information as it may request. If Alliance, acting on the
recommendation of the committee, withdraws its approval of this Agreement or one
or more of the other parties, then this Agreement shall be void and neither
party shall have any rights thereunder.
10. GENERAL PROVISIONS.
(a) Arbitration. Any controversy or claim arising out of or relating to
this Agreement or its breach (except, at the option of the Company, a
controversy or claim arising out of or relating to section 6, which the Company
may choose to be adjudicated in a federal or state court sitting in Las Vegas,
Nevada), shall be settled by arbitration in Las Vegas, Nevada, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment on the award rendered by the arbitrator or arbitrators may be
entered in any court having jurisdiction thereof. If any arbitration or other
legal or equitable action or proceeding is instituted to enforce any provisions
of this Agreement, the prevailing party shall be entitled to recover as costs
such amounts as the court or arbitrator may judge to be reasonable, including
costs and attorneys' fees.
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(b) Further assurances. Each party shall execute all documents and take
all other actions necessary to effect the provisions and purposes of this
Agreement.
(c) Entire agreement. This Agreement contains the entire agreement
between the parties and supersedes all other oral and written agreements
previously entered into by the parties concerning the same subject matter,
including but not limited to the Amended and Restated Executive Employment
Agreement dated November 4, 1999.
(d) Modification, rescission, and assignment. This Agreement may be
modified or rescinded only with the written consent of both parties. Neither
this Agreement nor any right or interest under this Agreement shall be
assignable by either party without the written consent of the other, provided,
that (i) if the Executive dies during the term of this Agreement, the
Executive's estate and his heirs, executors, administrators, legatees, and
distributees shall have the rights and obligations as provided in this
Agreement, and (ii) nothing contained in this Agreement shall limit or restrict
the Company's ability to merge or consolidate or effect any similar transaction
with any other entity, irrespective of whether the Company is the surviving
entity (including a split up, spin off, or similar type transaction), provided
that one or more of such surviving entities continues to be bound by the
provisions of this Agreement now binding on the Company.
(e) Controlling law; severability. Nevada law shall govern this
Agreement and its interpretation. If any provision is unenforceable for any
reason, it shall be deemed stricken from the Agreement but shall not otherwise
affect the intention of the parties or the remaining provisions of the
Agreement.
(f) Binding effect. This Agreement shall bind and inure to the benefit
of each of the parties and their respective heirs, successors, administrators,
executors, and assigns.
(g) No third party benefits. This Agreement is for the benefit of the
parties and their permitted successors and assigns. The parties intend neither
to confer any benefit hereunder on any person, firm, or corporation other than
the parties hereto, nor that any such third party shall have any rights under
this Agreement.
(h) Indulgence. Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power, or privilege preclude any other or further exercise of
the same or of any other right, remedy, power, or privilege, nor shall any
waiver of any right, remedy, power, or privilege with respect to any occurrence
be construed as a waiver of such right, remedy, power, or privilege with respect
to any other occurrence.
(i) Notices. All notices required by this Agreement must be in writing
and must be delivered, mailed, or telecopied to the addresses given above or
such other addresses as the parties may designate in writing.
(j) Counterparts; facsimiles. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which, taken
together, shall constitute one and the same instrument. This Agreement may be
executed and delivered by exchange of facsimile copies showing the signatures of
the parties, and those signatures need not be affixed to the same copy. The
facsimile copies so signed will constitute originally signed copies of the same
consent requiring no further execution.
(k) Captions; construction; drafting ambiguities. The captions in this
Agreement are for convenience only and shall not be used in interpreting it. In
interpreting this Agreement any change in gender or number shall be made as
appropriate to fit the context. Each party has reviewed and revised this
Agreement with independent counsel or has had the opportunity to do so. The rule
of construction that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement or of any
amendments or exhibits to this Agreement.
11. CONDITION PRECEDENT. This Agreement is subject to approval by the
Company's board of directors and shall be of no force and effect until that
approval is given and is evidenced by a written resolution of the board.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
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"COMPANY" "EXECUTIVE"
Alliance Gaming Corporation
/s/ XXXXXX X. XXXXXXXXX
-------------------------------------
By: /s/ XXXX XXXXXX Xxxxxx X. Xxxxxxxxx
------------------------------
Xxxx Xxxxxx, General Counsel
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