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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Employment Agreement, dated as of September 16, 1997 between XXXXXX
X. XXXXX of 0 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("the
Employee") and C.P. CLARE CORPORATION, a Massachusetts Corporation with its
principal office at 00 Xxxxxx Xxxx Xxxxx, Xxxxxxx, XX 00000-0000 (the
"Company"). Unless the context otherwise requires, the term "Company" shall
include all subsidiary corporations of the Company.
WHEREAS, the Company and the Employee are party to an Employment
Agreement dated February 2, 1995; and,
WHEREAS, the parties hereto have agreed to amend and restate such
agreement effective as of the date hereof.
NOW THEREFORE, in consideration of the terms and mutual covenants
herein contained, the Employee and the Company agree as follows:
In consideration of the terms and mutual covenants herein contained,
the Employee and the Company agree as follows:
1. Term of Employment.
(a) Employment. The Company hereby employs the Employee, and the
Employee hereby accepts employment by the Company, for the period commencing
February 2, 1995 and ending on February 1, 1996 (the "Initial Term"), subject to
extension in accordance with the provisions of subparagraph (b), below, unless
terminated earlier in accordance with the terms hereof (the "Employment
Period").
(b) Extension of Term. In the event that on or before the date of
expiration of the Initial Term, the employment of the Employee shall not have
been terminated pursuant to the provisions of Paragraph 7 hereof, the term of
the employment of the Employee under this Agreement shall be automatically
renewed for successive one year terms thereafter until such time as the
employment of the Employee shall be terminated pursuant to the provisions of
Paragraph 7 hereof.
2. Capacity. The Employee shall serve as Vice President and Chief
Financial Officer of the Company and shall perform such duties and functions
with respect to such position as are assigned from time to time by the Board of
Directors or by the Chief Executive Officer of the Company.
3. Full-Time Employment. The Employee shall devote his entire
business and professional time, attention and energies to the performance of his
duties to the Company and of any of its subsidiaries by which he may be employed
and shall not, directly or indirectly, actively engage in or concern himself
with any other activities or commitments which interfere with the performance of
his duties hereunder or which, even if non-interfering, may be inimical or
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contrary to the best interests of the Company. Notwithstanding the foregoing,
the Employee may at all times during the Employment Period (i) subject in each
case to the approval of the Chief Executive Officer of the Company, serve as an
officer, director. trustee, or committee member of any religious, professional,
civic, charitable or educational organization, or as a director of any
corporation whose business is not competitive with that of the Company; and (ii)
engage in, and devote time and effort to, any and all personal investments or
business ventures unrelated to the business or affairs of the Company, in each
case so long as such activities do not materially interfere with his obligations
set forth in this Paragraph 3 and provided that such activities are permitted
under Paragraph 12 of this Agreement.
4. Compensation and Benefits. For all services rendered by the
Employee to the Company, the Company shall pay to the Employee during the
Employment Period the following compensation:
(a) Base Salary. The Employee shall be entitled to an annual base
salary of One Hundred Thirty Thousand Dollars ($130,000) from the date of this
Agreement until the expiration of the Employment Period. The base salary may be
increased (but may not be reduced) by the Board of Directors of the Company for
any fiscal year of the Company during the Employment Period. To that end, the
Employee shall receive a performance review at least once a year, in connection
with which he shall be eligible for such merit increases and other salary
adjustments as the Board of Directors of the Company shall approve.
(b) Annual Bonus. In addition to his regular salary, the Employee
shall be eligible (subject to the provisions of Paragraph 7(f) hereof) to
receive a bonus with respect to each fiscal year or portion thereof during the
Employment Period.
(c) Payment of Salary and Bonus. The Employee's base salary under
subparagraph (a) of this Paragraph 4 shall be payable in substantially equal
installments in accordance with the Company's existing payroll practices for its
executives. Any annual bonus payable under subparagraph (b) of this Paragraph 4
shall be paid to the Employee within 60 days following the end of the fiscal
year with respect to which such bonus relates.
(d) Equity Compensation Arrangements. The Employee shall also be
eligible to participate during the term of his employment under this Agreement
in such equity compensation arrangements as are provided by the Company for its
executives. In that regard, the Employee will be granted incentive stock options
under the Company's Amended and Restated 1994 Employee, Director and Consultant
Stock Option Plan which shall entitle the Employee to acquire up to 150,000
shares of the Company's common stock for a purchase price equal to the fair
market value of such shares on the date of grant of such options as determined
by the Company's Board of Directors based upon a valuation of the Company to be
obtained from Price Waterhouse & Co., such options to vest ratably over a period
of five (5) years; provided that the vesting of the right to exercise all such
options granted to the Employee shall be accelerated in the event that there
shall be a Change of Control of the Company (as hereafter defined).
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(e) Withholding Taxes. The Employee agrees that the Company shall
withhold from any and all payments required to be made to the Employee pursuant
to this Agreement all federal, state, local and/or other taxes which the Company
determines are required to be withheld in accordance with applicable statutes
and/or regulations from time to time in effect.
5. Fringe Benefits; Vacations.
(a) Employee Benefit Plans. The Employee shall be eligible to
participate during the Employment Period in such of the employee benefit and
health plans and other fringe benefit programs as the Company shall establish or
maintain for its employees from time to time (commensurate with the Employee's
position and compensation).
(b) Life and Disability Insurance. The Company shall provide to the
Employee at the expense of the Company and keep in force during the Employment
Period a policy of term life insurance with a death benefit in the amount of two
(2) times base salary, in accordance with the policy in effect from time to
time. Additionally, the Employee shall be entitled to participate in the
Company's group disability insurance program during the Employment Period.
(c) Car Allowance. The Employee shall be entitled to a car allowance
of $650 per month during the Employment Period.
(d) Vacations. The Employee shall be entitled to vacation time in
each year consistent with the Company's vacation policy for its senior
executives as in effect from time to time. A copy of the Company's current
vacation policy has been provided to the Employee. The Employee shall also be
entitled to all paid holidays and personal days given by the Company to its
executives.
6. Reimbursement. The Company shall promptly reimburse the Employee
for all reasonable business expenses incurred by him in connection with his
performance of his duties to the Company, upon substantiation of such expenses
in accordance with the policies of the Company in effect from time to time
during the Employment Period.
7. Termination of Employment.
(a) Termination Without Cause. The Company expressly reserves the
right to terminate the employment of the Employee hereunder other than for cause
as provided in subparagraph (b), and other than as provided in subparagraphs (c)
and (d), of this Paragraph 7. In the event that the Employee's employment shall
have been so terminated by the Company other than for cause, the Employee shall
be entitled to receive for the period of one (1) year following such termination
his base salary as provided for in Paragraph 4(a) hereof at the rate in effect
on the date of such termination of employment, payable in equal installments in
the same amounts and in the same periodic intervals as his base salary was paid
immediately prior to such termination.
(b) Voluntary Termination and Termination for Cause. The Employee's
employment may be voluntarily terminated by him at any time by giving not less
than two (2) weeks' written
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notice thereof to the Company. Additionally, the Employee's employment may be
terminated at any time for cause (as hereinafter defined) effective upon the
giving of written notice of such termination for cause by the Company to the
Employee. If at any time during the term of this Agreement (i) the Employee
shall have voluntarily terminated his employment with the Company (other than as
contemplated by subparagraph (e) of this Paragraph 7), or (ii) the Company shall
have terminated the employment of the Employee for cause (as hereinafter
defined) the Employee shall be entitled to receive only his base salary as
provided in Paragraph 4(a) hereof to the date of such termination and no other
benefits, including, without limitation, those provided for under Paragraphs
4(b) and 5 of this Agreement (except those that cannot be divested pursuant to
the Employee Retirement Income Security Act of 1974, as amended or other
applicable law), under this Agreement.
For purposes of this Agreement, the term "cause" shall mean (i)
conviction of the Employee of any criminal offense involving dishonesty or
breach of trust or any felony or crime of moral turpitude, (ii) willful
misconduct in the performance of his duties, (iii) the willful continuous
neglect of the duties and responsibilities of his office (other than failure to
perform his duties and fulfill his responsibilities resulting from the
Employee's incapacity due to a physical or mental illness), or (iv) the
Employee's failure to perform any term, covenant or condition required to be
performed by the Employee pursuant to this Agreement, all to be finally
determined in the sole discretion of the Board of Directors of the Company.
(c) Disability. In the event that the Employee shall sustain a
disability and be unable to perform his duties and responsibilities during the
term of this Agreement, as shall have been certified by at least two (2) duly
licensed and qualified physicians approved by the Board of Directors of the
Company (the "Examining Physicians"), the Company shall continue to pay to the
Employee while such disability continues the full amount of his base salary as
set forth in Paragraph 4(a) hereof for a period following the date upon which
such disability shall have been so certified equal to the lesser of (i) six
months or (ii) the period ending upon the date of inception of the payment of
benefits under any disability insurance to which the Employee may become
entitled pursuant to Paragraph 5(b) hereof. Thereafter, if the Employee's
disability shall continue (as evidenced by the continued absence of the Employee
from his duties), the employment of the Employee under this Agreement shall
terminate and all obligations of the Employee shall cease and the Employee shall
be entitled to receive only the benefits, if any, as may be provided by any
insurance to which he may have become entitled pursuant to Paragraph 5(b) hereof
and the payment of any amounts of the Employee's base salary then remaining to
be paid under Paragraph 4(a) hereof through the date of the termination of the
Employee's employment. "Disability" means the complete disability of the
Employee resulting from injury, sickness, disease, or infirmity due to age,
whereby the Employee is unable to perform his usual services for the Company;
the "Date of Disability" shall be deemed to be the date on which the Board of
Directors of the Company receives written notice from the Examining Physicians
stating that the Employee is suffering a Disability as defined herein.
(d) Death. In the event of the Employee's death during the term of
this Agreement, the Employee's employment hereunder shall immediately terminate
and, in such event, the Employee's estate shall be entitled to receive the
Employee's base salary as provided
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in Paragraph 4(a) hereof to the last day of the month during which the
Employee's death shall have occurred and such additional benefits, if any, as
may be provided by any insurance to which the Employee may have become entitled
pursuant to Paragraph 5(b) hereof.
(e) Termination for Good Reason Following Change of Control. The
Employee's employment may be terminated by him by written notice for a Good
Reason (as hereinafter defined), effective upon the giving of such notice, at
any time within one hundred eighty (180) days following a Change of Control (as
hereinafter defined), in which event, notwithstanding the provisions of
Paragraph 7(b) hereof, the Employee shall be entitled to receive the severance
payments provided for in Paragraph 7(a) hereof to the same extent as if the
employment of the Employee had been terminated by the Company without cause
pursuant to said Paragraph 7(a).
For purposes of this Agreement, the term "Good Reason" means any of
the following:
(i) A material diminution by the Company in the Employee's
authority, functions, duties or responsibilities in the capacity specified in
Paragraph 2 hereof; provided that such material diminution is not in connection
with a termination of the Employee's employment hereunder by the Company in
accordance with Paragraph 7(a); or
(ii) A failure by the Company to comply with any material
provision of this Agreement which has not been cured within thirty (30) days
after notice of such noncompliance has been given by the Employee to the
Company.
For purposes of this Agreement, a "Change of Control" means that any
of the following events has occurred:
(i) any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended, (the "Act") (other than the
Company, any of its Subsidiaries (as hereinafter defined), or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries), together with
all "affiliates" and "associates" (as such terms are defined in Rule 12b-2 under
the Act) of such person, shall become the "beneficial owner" (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 50% or more of either (A) the combined voting power of
the Company's then outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting Securities") or (B) the
then outstanding shares of Stock (as hereinafter defined) of the Company (in
either such case other than as a result of an acquisition of securities directly
from the Company); or
(ii) persons who, as of the Effective Date, constitute the
Company's Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the Company subsequent to the
Effective Date whose election or nomination for election was approved by a vote
of at least a majority of the Incumbent Directors shall, for purposes of this
Plan, be considered an Incumbent Director; or
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(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company or any Subsidiary where the shareholders
of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is
defined in Rule 13d-3 under the Act), directly or indirectly, shares
representing in the aggregate 60% or more of the voting shares of the
corporation issuing cash or securities in the consolidation or merger (or of its
ultimate parent corporation, if any), (B) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the
assets of the Company or (C) any plan or proposal for the liquidation or
dissolution of the Company;
Notwithstanding the foregoing, a "Change of Control" shall not be
deemed to have occurred for purposes of the foregoing clause (i) solely as the
result of an acquisition of securities by the Company which, by reducing the
number of shares of Stock or other Voting Securities outstanding, increases (x)
the proportionate number of shares of Stock beneficially owned by any person to
50% or more of the shares of Stock then outstanding or (y) the proportionate
voting power represented by the Voting Securities beneficially owned by any
person to 50% or more of the combined voting power of all then outstanding
Voting Securities; provided, however, that if any person referred to in clause
(x) or (y) of this sentence shall thereafter become the beneficial owner of any
additional shares of Stock or other Voting Securities (other than pursuant to a
stock split, stock dividend, or similar transaction), then a "Change of Control"
shall be deemed to have occurred for purposes of the foregoing clause (i).
For purposes of the foregoing definition of "Change of Control":
(A) the term "Stock" means the Common Stock, par value $.01 per
share, of the Company, subject to adjustment or change as a result of any
merger, consolidation, sale of all or substantially all of the assets of the
Company, or any reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split or similar transaction; and
(B) the term "Subsidiary" means any corporation or other entity
(other than the Company) in any unbroken chain of corporations or entities,
beginning with the Company if each of the corporations or entities (other than
the last corporation or entity in the unbroken chain) owns stock or other
interests possessing 50% or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
(f) Treatment of Annual Bonus on Termination.
(i) Current Year's Bonus. In the event of the termination of the
employment of the Employee for any reason, the Employee shall not be entitled to
receive any annual bonus payment pursuant to Paragraph 4(b) hereof in respect of
the fiscal year of the Company in which the termination shall take place.
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(ii) Previous Year's Bonus. In the event that at the time of his
termination, the Employee is due, but has not yet received, payment of an annual
bonus in respect of the preceding fiscal year of the Company, such bonus shall
be paid to the Employee at the time it is paid to the other employees of the
Company, except that, notwithstanding the foregoing, if the Employee shall have
been terminated for cause as provided in subparagraph (b) of this Paragraph 7,
the Employee shall forfeit and shall not be entitled to receive payment of any
such annual bonus in respect of the preceding fiscal year which the Employee
shall not have received on or before the date of such termination for cause.
8. Inventions and Patents.
(a) Disclosure of Developments. The Employee will promptly and fully
disclose to the Company any and all inventions, discoveries, trade secrets and
improvements, whether or not patentable and whether or not they are made,
conceived or reduced to practice during working hours or using the Company's
data or facilities, which the Employee develops, makes, conceives or reduces to
practice during his employment by the Company, either solely or jointly with
others (collectively, "Developments"). All such Developments shall be the sole
property of the Company, and the Employee hereby assigns to the Company, without
further compensation, all his right, title and interest in and to such
Developments and any and all related patents, patent applications, copyrights,
copyright applications, trademarks and trade names in the United States and
elsewhere.
(b) Maintenance of Records. The Employee will keep and maintain
adequate and current written records of all Developments (in the form of notes,
sketches, drawings and as may be specified by the Company), which records shall
be available to and remain the sole property of the Company at all times.
(c) Assistance in Obtaining Patents. The Employee will assist the
Company in obtaining and enforcing patent, copyright and other forms of legal
protection for the Developments in any country. Upon request, the Employee will
sign all applications, assignments, instruments and papers and perform all acts
necessary or desired by the Company to assign all such Developments fully and
completely to the Company and to enable the Company, its successors, assigns and
nominees, to secure and enjoy the full and exclusive benefits and advantages
thereof. During his employment, the Employee will perform his obligations under
this subparagraph (c) without further compensation, except for reimbursement of
expenses incurred at the request of the Company. If the Employee is not employed
by the Company as an the Employee at the time he is requested to perform any
obligations under this subparagraph, he shall receive for such performance a
reasonable per diem fee, as well as reimbursement of any expenses incurred at
the request of the Company.
9. Proprietary Information.
(a) Obligation to Keep Confidential. The Employee recognizes that his
relationship with the Company is one of high trust and confidence by reason of
his access to and contact with the trade secrets and confidential and
proprietary information of the Company. The Employee will not at any time,
either during his employment with the Company or thereafter, disclose to others,
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or use for his own benefit or the benefit of others, any confidential or
proprietary information, and all other knowledge, information, documents or
materials, owned, developed or possessed by the Company, whether in tangible or
intangible form, the confidentiality of which the Company takes reasonable
measures to protect, and which pertains, in any manner, to subjects which
include, but are not limited to, the Company's research operations, customers
(including identities of customers and prospective customers, identities of
individual contacts at business entities which are customers or prospective
customers, preferences, businesses or habits), business relationships, products
(including prices, costs, sales or content), financial information or
measurements, business methods, future business plans, data bases, computer
programs, marketing plans, forecasts, licenses, pricing information and other
information owned, developed or possessed by the Company ("Proprietary
Information").
(b) Exceptions. The Employee's undertakings and obligations under the
Paragraph 9 will not apply to any Proprietary Information which: (a) is or
becomes generally known to the public through no action on the part of the
Employee, (b) is generally disclosed to third parties by the Company without
restriction on such third parties, (c) is approved for release by written
authorization of the Board of Directors of the Company, or (d) is the subject
matter of a lawful request or subpoena by and within the authority of a court or
governmental agency or other body.
(c) Return of Proprietary Information. Upon termination of the
employment of the Employee with the Company or at any other time upon request,
the Employee will promptly deliver to the Company all notes, memoranda,
notebooks, drawings, records, reports, files and other documents (and all copies
of reproductions of such materials) in his possession or under his control,
whether prepared by him or others, which contain Proprietary Information. The
Employee acknowledges that the material is the sole property of the Company.
10. Absence of Restrictions Upon Disclosure and Competition. The
Employee represents that his performance of all the terms of this Agreement does
not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or in trust prior
to the date of this Agreement, and he will not disclose to the Company or induce
the Company to use any confidential or proprietary information or material
belonging to any previous Company or others.
11. Other Obligations Regarding Proprietary Information. The Employee
acknowledges that the Company from time to time may have agreements with other
persons or with the U.S. Government, or agencies thereof, which impose
obligations or restrictions on the Company regarding inventions made during the
course of work under such agreements or regarding the confidential nature of
such work. The Employee agrees to be bound by all such obligations and
restrictions which are made known to him and to take all action necessary to
discharge the obligations of the Company under such agreements.
12. Noncompetition.
(a) During the Employment Period, the Employee agrees not to compete
in any manner, either directly or indirectly, with the Company, or to assist any
other person or entity to compete
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with the Company. Further, while an employee of the Company, the Employee agrees
not to engage in any other employment or business enterprise without the written
permission of the Chief Executive Officer of the Company.
(b) After the termination, for any reason, of his employment with the
Company, the Employee agrees that for a period of one (1) year following such
termination, the Employee will not compete with the Company by developing,
marketing, or assisting others to develop or market a product or service which
is competitive with the products or services of the Company then existing or
planned for the future, which the Employee learns of or develops while an the
Employee of the Company. The Employee further agrees that for the same period
following such termination, for any reason, the Employee will not accept
employment from or have any other professional relationship with any entity
which is competitive with the products or services of the Company then existing
or which were known by the Employee to be planned for the future. The foregoing
restrictions shall apply in all geographical areas where the Employee performed
services for the Company prior to such termination, and at all other places
where the Company does business and/or did business during the term of his
employment, and at all places where, during his employment with the Company, the
Company had plans or reasonable expectations to do business in the future.
(c) During the Employment Period and for one (1) year following the
termination, for any reason, of his employment, the Employee agrees either on
his behalf or on behalf of any other person or entity, directly or indirectly,
not (i) to hire, solicit, or encourage to leave the employ of the Company any
person who is then an the Employee of the Company, or (ii) to solicit, entice
away or divert any person or entity who is then a client of the Company and who
was a client of the Company at the time of employment. The Employee agrees that
customer or client lists, business contracts and related items are the property
of the Company. The restrictions described herein shall apply to the activities
of the Employee in any state or other jurisdiction in which the Company engaged
in business during the term of employment.
Furthermore, for one (1) year following the termination, for any
reason, of his employment (except following termination of the employment of the
Employee pursuant to the Company's termination of business and liquidation of
assets), the Employee agrees that he will not (i) solicit or accept work or
provide services which is direct follow-up to work or services under contract
performed or being performed by the Company or being actively solicited by the
Company at the time of termination of the employment of the Employee, or (ii)
directly or indirectly recruit the employees of the Company (or any successor
thereto).
The restrictions against competition set forth in this Paragraph 12
are considered by the parties to be reasonable for the purposes of protecting
the business of the Company. However, if any such restriction is found by any
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
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13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Employee and their respective heirs,
executors, administrators, legal representatives, successors and assigns. This
Agreement and the rights and obligations of the parties hereunder are personal
to the Company and the Employee and are not assignable or transferable to any
other person, firm or corporation without the consent of the other party,
provided, however, that the Company may assign its rights and obligations
hereunder to any person or entity who or which succeeds to all or substantially
all of the Company's business and assets. This Agreement is intended to take
effect as a sealed instrument.
14. Notices. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or upon deposit in
the United States mails, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address set forth in the introductory
paragraph of this Agreement, or at such other address or addresses as either
party shall designate to the other in accordance with this Paragraph 14.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.
16. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
17. Headings. The Paragraph and subparagraph headings used in this
Agreement are for convenience only and shall not be deemed to be a party of this
Agreement.
18. Severability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
19. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of The Commonwealth of Massachusetts
applicable to agreements made to be performed entirely within such state,
without giving effect to the conflicts of laws principles thereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
C.P. CLARE CORPORATION
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
its:
EMPLOYEE:
/s/ Xxxxxx X. Xxxxx
--------------------------------------------
Xxxxxx X. Xxxxx
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