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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 12th day
of May, 1998, by and between QUINCY JOIST COMPANY, a Florida corporation (the
"Company"), XXXXXX STEEL COMPANY, a Delaware Corporation (the "Parent"), and XXX
XXXXXXX, an individual ("Executive").
RECITALS
Company desires to employ Executive, and Executive desires to be
employed by Company, on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Definitions. As used herein:
(a) "Parent Confidential Information" shall mean confidential,
proprietary information or trade secrets of Parent and its
subsidiaries, whether now existing, or acquired, developed, or made
available anytime in the future to or by Parent or its subsidiaries,
including, without limitation, the following: (1) customer and vendor
lists and related information as compiled by Parent and its
subsidiaries, including name, address, contact persons, pricing, sale
and contract terms and conditions, and contract expirations; (2)
Parent's and its subsidiaries' internal practices and procedures; (3)
Parent's and its subsidiaries' financial condition and financial
results of operation; (4) information relating to Parent's and its
subsidiaries' strategic planning, sales, financing, bonding and
insurance, purchasing, marketing, promotion, distribution, and selling
activities; (5) all information which Executive has a reasonable basis
to consider confidential or which is treated by Parent or its
subsidiaries as confidential; and (6) any and all information having
independent economic value to Parent or its subsidiaries that is not
generally known to, and not readily ascertainable by proper means by,
persons who can obtain economic value from its disclosure or use.
Executive acknowledges that such information is Parent Confidential
Information whether disclosed to or learned by Executive or originated
by Executive during his employment by Company or any of its
subsidiaries. To the extent that information is not publicly available,
it shall be presumed to be confidential.
(b) "Termination" shall mean termination of Executive's
employment with Company pursuant to Sections 15 to 19 hereof.
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2. Term of Agreement. This Agreement will commence as of the Closing of
the acquisition (the "Acquisition") of Addison Structural Services, Inc. by
Parent and shall terminate five (5) years from such date, unless earlier
terminated in accordance with, and subject to, the other provisions hereof (the
"Term"). The parties may extend the Term for additional one-year terms by mutual
written agreement.
3. Position with Company. During the Term, Executive shall serve as
President of Company, shall devote his full business time and efforts to the
affairs of Company, and shall faithfully and diligently perform all duties
commensurate with such position, including, without limitation, those duties
reasonably requested by Company's Board of Directors; provided that (i) unless
agreed to by Executive (including appropriate additional compensation), such
duties shall not materially vary from the type and scope of duties that
Executive has performed for the Company prior to the date of this Agreement,
(ii) in no event will Executive be required to relocate from his current place
of employment, and (iii) Executive shall be required to travel to the home
office of Parent periodically, but not in excess of reasonable requirements.
Executive shall be subject to and comply with all of Company's policies and
procedures that are generally applicable to Company's officers and employees.
Executive will report directly to Xxxxx Xxxxxx or his successor.
4. Salary/Bonus.
(a) Through June 30, 1998, Executive shall continue to be
compensated in accordance with existing policies, as described on
Schedule A hereto. Effective July 1, 1998, Executive shall be entitled
to receive a minimum base salary from Company in the amount of $300,000
annually, payable in equal installments in accordance with Company's
general salary payment policies in effect during the Term hereof (the
"Minimum Base Salary"). The Minimum Base Salary shall be reviewed
annually in December and may be increased (but not decreased) at such
times and in such amounts as Company's Board of Directors shall
determine taking into account Executive's performance and duties, and
such other factors as it deems appropriate.
(b) Executive shall be entitled to receive a bonus for the year
ended June 30, 1998, determined and paid in accordance with existing
policies, as described on Schedule A. Effective July 1, 1998, Executive
shall be entitled to receive a bonus, payable on or before the 90th day
after the end of Company's fiscal year during each year of this
Agreement (pro rated for partial years during the Term) equal to two
percent (2%) of Company's income before taxes for the most recent
twelve month period ending on the last day of Company's fiscal year (or
the applicable prorated period, as appropriate), after a mutually
agreed upon home office charge and before any goodwill arising from the
acquisition of Company by Parent as more fully described on Schedule B
(the "Annual Bonus"). Company's income before taxes shall be as
determined by Company's independent auditors in accordance with
generally accepted accounting principles as in effect on the date of
such determination and in conjunction with Company's fiscal year end
audit. Notwithstanding the foregoing, in the event the Annual Bonus for
any year (pro
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rated as appropriate) does not equal or exceed $100,000 (the "Minimum
Bonus"), then Company shall pay to Executive, at the time required for
payment of the Annual Bonus, the amount by which $100,000 exceeds the
Annual Bonus. In its discretion, the Company may award additional
bonuses to Executive from time to time.
5. Stock Options. On the date hereof, Parent shall grant Executive an
option to acquire 20,000 shares of Parent common stock, par value $.001 per
share, under the existing option plan of Parent at the closing market price of
such shares, as reported on the Nasdaq National Market on the Closing Date of
the Acquisition. In addition, Executive shall be entitled to additional options
if Company's income before taxes (calculated in accordance with the applicable
provisions of paragraph 4 above) in any year exceeds $5,500,000, as set forth on
Schedule C attached hereto and entitled "Incentive Stock Option Plan." In
addition, the Board of Directors of Parent will review Executive's option
position annually and in its discretion may award Executive additional options.
6. Benefit Plans / Other Benefits. Executive shall be entitled to
participate in the Company's health, life and disability insurance programs
generally applicable to Company's officers or employees and the Company shall
pay all related insurance premiums; provided, however, that, while it is not the
Company's (or Parent's ) present intention to do so, nothing herein shall
restrict Company's ability to terminate or modify any benefit plan or
arrangement.
7. Expenses and Related Matters. Company shall pay for or reimburse
Executive for all business expenses incurred or paid by Executive in furtherance
of Company's business, provide Executive with a Company automobile or an
automobile allowance and reimburse Executive for country club dues and expenses
relating to the existing memberships listed on Schedule D attached hereto, all
subject to and in accordance with Parent's policies and procedures of general
application and applicable tax laws.
8. Covenants of Employee. Executive hereby covenants and agrees that,
during the term of employment and for a period of twelve months after any
Termination of employment, Executive will not:
(a) Engage, directly or indirectly, either as principal, partner,
joint venturer, director, officer, employee, consultant or independent
contractor, agent, or proprietor or in any other manner participate in
the ownership, management, operation, or control of any person, firm,
partnership, limited liability company, corporation, or other entity
which engages in joist manufacturing, or any other business of the
Company over which Executive has at the time of termination or has had
within six (6) months of termination managerial authority within any
jurisdiction in which Parent or its subsidiaries does or proposes to do
business.
(b) Directly or indirectly solicit for employment (whether as an
employee, consultant, independent contractor, or otherwise) any person
who is or was at any time within six (6) months of Termination an
employee, consultant, independent contractor or
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the like of Parent or any of its subsidiaries, unless Parent gives its
written consent to such employment or offer of employment which (in the
case of consultants, independent contractors and the like) will not be
unreasonably withheld.
(c) Call on or directly or indirectly solicit or divert or take
away from Parent or any of its subsidiaries (including, without
limitation, by divulging to any competitor or potential competitor of
Parent or its subsidiaries) any person, firm, corporation, or other
entity who is, or during the preceding twelve months was, a customer or
prospective customer of Parent or any of its subsidiaries, for the
purpose of providing products and services that are competitive with
the services offered by Parent and its subsidiaries .
9. Confidentiality and Nondisclosure. It is understood that in the
course of Executive's employment with Company, Executive will become acquainted
with Parent Confidential Information. Executive recognizes that Parent
Confidential Information has been developed or acquired at great expense, is
proprietary to Parent or its subsidiaries, and is and shall remain the exclusive
property of Parent. Accordingly, Executive hereby covenants and agrees that he
will not, without the express written consent of Parent, during Executive's
employment with Company or its subsidiaries and thereafter or until such time as
Parent Confidential Information becomes generally known, or readily
ascertainable by proper means, by persons unrelated to Parent or its
subsidiaries, disclose to others, copy, make any use of, or remove from Parent's
or its subsidiaries' premises any Parent Confidential Information, except as
Executive's duties for Company or its subsidiaries may specifically require.
10. Acknowledgment; Relief for Violation. Executive hereby agrees that
the period of time provided for in Sections 8 and 9 and the territorial
restrictions and other provisions and restrictions set forth therein are
reasonable and necessary to protect Parent, its subsidiaries and its and their
successors and assigns in the use and employment of the good will of the
business conducted by Parent and its subsidiaries. Executive further agrees that
damages cannot compensate Parent in the event of a violation of Section 8 or 9,
and that, if such violation should occur, injunctive relief shall be essential
for the protection of Parent, its subsidiaries, and its and their successors and
assigns. Accordingly, Executive hereby covenants and agrees that, in the event
any of the provisions of Sections 8 and 9 shall be violated or breached, Parent
and any subsidiary shall be entitled to obtain injunctive relief against
Executive, without bond but upon due notice, in addition to such further or
other relief as may appertain at equity or law. Obtainment of such an injunction
by Parent shall not be considered an election of remedies or a waiver of any
right to assert any other remedies which Parent has at law or in equity. No
waiver of any breach or violation hereof shall be implied from forbearance or
failure by Parent to take action thereon. Executive hereby agrees that he has
such skills and abilities that the provisions of Sections 8 and 9 will not
prevent him from earning a living.
11. Extension During Breach. Executive agrees that the time period
described in Sections 8 and 9 shall be extended for a period equal to the
duration of any breach of such provisions by Executive.
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12. No Conflicts of Interest.
(a) During the period of Executive's employment with Company,
Executive will not independently engage in the same or a similar line
of business as Parent or its subsidiaries, or, directly or indirectly,
serve, advise, or be employed by any individual, firm, partnership,
association, corporation, or other entity engaged in the same or
similar line or lines of business.
(b) Executive is not a promoter, director, employee, or officer of,
or consultant or independent contractor to, a business organized for
profit, nor will Executive become a partner, promoter, director,
employee, or officer of, or consultant to, such a business while
employed by Company or its subsidiaries without first obtaining the
prior written approval of Parent. Executive disclaims any such
relationship or position with any such business. Should Executive
become a promoter, director, employee, or officer of, or a consultant
to, a business organized for profit upon obtaining such prior written
approval, Executive understands that Executive has a continuing
obligation to advise Parent at such time of any activity of Parent or
such other business that presents Executive with a conflict of interest
as an employee of Company.
(c) Should any matter of dealing in which Executive is involved, or
hereafter becomes involved, on his own behalf or as an employee of
Company, appear to present a possible conflict of interest under any
policy of Parent or any subsidiary then in effect, Executive will
promptly disclose the facts to Parent's Board of Directors so that a
determination can be made as to whether a conflict of interest does
exist. Executive will take whatever action is requested of Executive by
Parent or its Board of Directors to resolve any conflict which it finds
to exist, including severing the relationship which creates the
conflict.
13. Return of Company Materials and Parent Confidential Information.
Upon Termination, Executive shall promptly deliver to Company the originals and
all copies of any and all materials, documents, notes, manuals, or lists
containing or embodying Parent Confidential Information or relating directly or
indirectly to the business of Parent or its subsidiaries in the possession or
control of Executive.
14. No Agreement With Others. Executive represents, warrants, and
agrees that Executive is not a party to any agreement with any other person or
business entity, including former employers, that in any way affects Executive's
employment by Company or relates to the same subject matter of this Agreement or
conflicts with his obligations under this Agreement, or restricts Executive's
services to Company.
15. Termination for Cause. Company shall have the right to terminate
Executive for Cause at any time if any of the following events have occurred:
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(a) Executive wilfully fails to perform his duties hereunder
(whether by reason of drug or alcohol addiction or otherwise), or
otherwise materially breaches this Agreement;
(b) Executive refuses or fails to follow any lawful direction of
Company's Board of Directors or violates any lawful policy established
by Company from time to time regarding the conduct of its businesses
and such refusal, failure or violation has had or is reasonably likely
to have a material adverse effect on or be materially disruptive to
Company; or
(c) Executive (i) is charged with or convicted of committing a
felony, (ii) engages in conduct involving fraud, embezzlement or theft,
or (iii) engages in other illegal or unethical conduct (such as
dishonesty or moral turpitude) that has been or is likely to be
materially detrimental to Company or has had or is reasonably likely to
have a material adverse impact on the standing or reputation of
Executive or Company.
Company shall provide written notice of a termination for Cause hereunder and,
with respect to a purported violation of subsection (a) or (b) above that is
curable in such time period, shall afford Executive an opportunity to cure or
disprove the purported violation for the twenty-day period following such
notice. Upon a termination for Cause, Executive shall be entitled to receive
only his Minimum Base Salary, the amount of any unpaid Annual Bonus earned in
any complete fiscal year of the Company preceding the date of Termination, and
any benefits as are due Executive through the effective date of such
Termination.
16. Termination Upon Voluntary Resignation. Executive may resign his
employment with Company at any time and shall provide Company with not less than
90 days prior written notice thereof. In the event Executive voluntarily resigns
his employment with Company, Executive shall be entitled to receive only such
Minimum Base Salary, the amount of any unpaid Annual Bonus earned in any
complete fiscal year of the Company preceding the date of Termination, and any
benefits as are due Executive through the effective date of such resignation.
17. Termination Upon Death of Executive. If during the term of this
Agreement Executive dies, then this Agreement shall terminate and Company shall
pay to the estate of Executive only the Minimum Base Salary due Executive
through the date of his death, the amount of any unpaid Annual Bonus earned in
any complete fiscal year of the Company preceding the date of Termination, and
any benefits (including any life insurance benefits provided to Executive's
estate under Company's standard policies as in effect).
18. Termination Upon Disability of Executive. If during the term of
this Agreement Executive is unable to perform the services required of Executive
pursuant to this Agreement for a continuous period of 180 days due to disability
or incapacity by reason of any physical or mental illness or in the event
Executive becomes permanently disabled or incapacitated (in each case, as
reasonably determined by Parent's Board of Directors), then Company shall have
the right to
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terminate this Agreement at the end of such 180-day period or upon such
determination of permanent disability, whichever occurs earlier, by giving
written notice to Executive. Executive shall be entitled to receive only such
Minimum Base Salary, the amount of any unpaid Annual Bonus earned in any
complete fiscal year of the Company preceding the date of Termination, and any
benefits as are due Executive through the effective date of such Termination.
19. Termination by Company Other than for Cause, Death, Disability, or
Voluntary Resignation. Company may elect at any time following ten (10) days
prior written notice to terminate Executive for any reason other than for Cause,
death, disability, or voluntary resignation of Executive. If such Termination
occurs, Executive shall be entitled to receive the Minimum Base Salary and the
Minimum Bonus over the twelve month period following such Termination or
remainder of the Term, whichever is less.
20. Change of Control. In the event that (i) any person or entity (or
related group of persons or entities) other than Parent acquires direct or
indirect control of securities representing 50% or more of the total voting
power of all outstanding securities of Company or (ii) any person or entity (or
related group of persons or entities) other than the Xxxxxx family acquires
direct or indirect control of securities representing 50% or more of the total
voting power of all outstanding securities of Parent, Executive will have the
right to terminate this Agreement within 30 days thereafter by giving written
notice to the Company, in which event the provisions of Section 8(a) shall not
apply to Executive and Executive will be entitled to only those benefits
described in Section 16.
21. Arbitration. Any dispute, controversy, or claim, whether
contractual or non-contractual, between the parties hereto arising directly or
indirectly out of or connected with this Agreement, relating to the breach or
alleged breach of any representation, warranty, agreement, or covenant under
this Agreement, unless mutually settled by the parties hereto, shall be resolved
by binding arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "AAA"). Any arbitration shall be
conducted by arbitrators approved by the AAA and mutually acceptable to Company
and Executive. All such disputes, controversies, or claims shall be conducted by
a single arbitrator, unless the dispute involves more than $50,000 in the
aggregate in which case the arbitration shall be conducted by a panel of three
arbitrators. If the parties hereto are unable to agree on the arbitrator(s),
then the AAA shall select the arbitrator(s). The resolution of the dispute by
the arbitrator(s) shall be final, binding, nonappealable, and fully enforceable
by a court of competent jurisdiction under the Federal Arbitration Act. The
arbitrator(s) shall award compensatory damages to the prevailing party. The
arbitrator(s) shall have no authority to award consequential or punitive or
statutory damages, and the parties hereby waive any claim to those damages to
the fullest extent allowed by law. The arbitration award shall be in writing and
shall include a statement of the reasons for the award. The arbitration shall be
held in Miami, Florida. The arbitrator(s) shall award reasonable attorneys' fees
and costs to the prevailing party.
22. Severability; Reformation. In the event any court or arbiter
determines that any of the restrictive covenants in this Agreement, or any part
thereof, is or are invalid or unenforceable,
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the remainder of the restrictive covenants shall not thereby be affected and
shall be given full effect, without regard to invalid portions. If any of the
provisions of this Agreement should ever be deemed to exceed the temporal,
geographic, or occupational limitations permitted by applicable laws, those
provisions shall be and are hereby reformed to the maximum temporal, geographic,
or occupational limitations permitted by law. In the event any court or arbiter
refuses to reform this Agreement as provided above, the parties hereto agree to
modify the provisions held to be unenforceable to preserve each party's
anticipated benefits thereunder.
23. Notices. All notices and other communications hereunder shall be in
writing and shall be sufficiently given if made by hand delivery, by telecopier,
or by registered or certified mail (postage prepaid and return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by it by like notice):
If to Parent
or Company : Xxxxxx Steel Company
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attention: President
With a copy to: Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
If to Executive: Xxx Xxxxxxx
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
FAX: None
With a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Phone: (000) 000-0000
FAX: (000) 000-0000
Attn: Xxxxxxx X. Xxxx III, Esq.
All such notices and other communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if delivered by mail; and
when receipt is acknowledged, if telecopied.
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24. Counterparts. This Agreement may be executed in any number of
counterparts, and each counterpart shall constitute an original instrument, but
all such separate counterparts shall constitute one and the same agreement.
25. Governing Law. The validity, construction, and enforceability of
this Agreement shall be governed in all respects by the laws of the State of
Florida, without regard to its conflict of laws rules.
26. Assignment; Third Party Beneficiaries. This Agreement shall not be
assigned by operation of law or otherwise, except that Company may assign all or
any portion of its rights under this Agreement to any subsidiary or affiliate of
the Company, but no such assignment shall relieve Company of its obligations
hereunder, and except that this Agreement may be assigned to any corporation or
entity with or into which Company may be merged or consolidated or to which
Company transfers all or substantially all of its assets, and such corporation
or entity assumes this Agreement and all obligations and undertakings of Company
hereunder. Parent and its subsidiaries are third party beneficiaries hereof and
each may enforce this Agreement.
27. Further Assurances. At any time on or after the date hereof, the
parties hereto shall each perform such acts, execute and deliver such
instruments, assignments, endorsements and other documents and do all such other
things consistent with the terms of this Agreement as may be reasonably
necessary to accomplish the transaction contemplated in this Agreement or
otherwise carry out the purpose of this Agreement.
28. Gender, Number and Headings. The masculine, feminine, or neuter
pronouns used herein shall be interpreted without regard to gender, and the use
of the singular or plural shall be deemed to include the other whenever the
context so requires.
29. Waiver of Provisions. The terms, covenants, representations,
warranties, and conditions of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. The failure of any party at
any time to require performance of any provisions hereof shall, in no manner,
affect the right at a later date to enforce the same. No waiver by any party of
any condition, or breach of any provision, term, covenant, representation, or
warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation, or warranty of this Agreement.
30. Attorneys' Fees and Costs. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of an alleged dispute, breach, default, or misrepresentation in connection with
any of the provisions of this Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable attorneys' fees, accounting
fees, and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled.
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31. Section and Paragraph Headings. The Article and Section headings in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
32. Amendment. This Agreement may be amended only by an instrument in
writing executed by all parties hereto.
33. Expenses. Except as otherwise expressly provided herein, each party
shall bear its own expenses incident to this Agreement and the transactions
contemplated hereby, including without limitation, all fees of counsel,
consultants, and accountants.
34. Entire Agreement. This Agreement constitutes and embodies the full
and complete understanding and agreement of the parties hereto with respect to
the subject matter hereof, and supersedes all prior understandings or
agreements, whether oral or in writing.
35. Withholding. Executive acknowledges and agrees that payments made
to Executive by Company pursuant to the terms of this Agreement may be subject
to tax withholding and that Company may withhold against payments due Executive
any such amounts as well as any other amounts payable by Executive to Company.
36. Release. Receipt of any of the benefits to be provided to Executive
under this Agreement following termination of Executive's employment hereunder
shall be subject to execution and delivery by Executive of a release reasonably
satisfactory to Company of any and all claims that Executive may have against
Company or any related person, except for the continuing obligations provided
herein, and an agreement that Executive shall not disparage Company or any of
its directors, officers, employees or agents.
37. Guarantee. Xxxxxx Steel Company hereby guarantees the obligations
of the Company under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement or caused this Agreement to be duly executed on their respective
behalf, by their respective officers thereunto duly authorized, all as of the
day and year first above written.
QUINCY JOIST COMPANY, a Florida corporation
By: /s/ X.X. Xxxxxxx
---------------------------------------
Name: X.X. Xxxxxxx
Its: Chairman
XXXXXX STEEL COMPANY, a
Delaware corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Its: President and Chief Executive Officer
/s/ Xxx Xxxxxxx
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XXX XXXXXXX
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SCHEDULES
Existing Compensation Policies through June 30, 1998...........................A
New Cash Bonus Policy..........................................................B
Incentive Stock Option Plan....................................................C
Existing Country Club Memberships..............................................D
* The registrant hereby agrees to furnish the above Schedules to the Securities
and Exchange Commission upon request.
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