EXHIBIT 10(K)
Employment Agreement, dated as of May 19, 1995,
among Xxxxx'x Miracle-Gro Products, Inc. (nka
Scotts' Miracle-Gro Products, Inc.), The Scotts
Company and Xxxx Xxxxxx
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of May 19, l995, by
and among Xxxxx'x Miracle-Gro Products, Inc., a New Jersey corporation (the
"Company"), The Scotts Company, an Ohio corporation ("Scotts"), and Xxxx Xxxxxx
(the "Employee").
WHEREAS, the Company and Scotts have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of January 26, 1995, and
amended as of May 1, 1995;
WHEREAS in connection with the transactions contemplated by the Merger
Agreement and in recognition of the Employee's experience and abilities, the
Company desires to assure itself of the employment of the Employee in accordance
with the terms and conditions provided herein; and
WHEREAS, the Employee wishes to continue to perform services for the
Company in accordance with the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Employee,
and the Employee hereby agrees to perform services for the Company, on the terms
and conditions set forth herein.
2. TERM. This Agreement is for the three-year period (the "Term")
commencing as of the "Effective Time," as defined in the Merger Agreement, and
terminating on the third anniversary of such date, or upon the Employee's
earlier death, disability or other termination of employment pursuant to
Section 7 hereof; PROVIDED, HOWEVER, that commencing on the second anniversary
of the Effective Time and each anniversary thereafter the Term shall
automatically be extended for one additional year beyond its otherwise scheduled
expiration unless, not later than 30 days prior to any such anniversary, either
the Employee or the Company shall have notified the other parties hereto in
writing that such extension shall not take effect.
3. POSITIONS. During the Term, the Employee shall serve as the
President of the Company.
4. DUTIES AND REPORTING RELATIONSHIP.
(a) During the Term, the Employee shall, on a full time basis,
use his skills and render services to the best of his abilities in supervising
and conducting the operations of the Company; PROVIDED, HOWEVER, that, subject
to Section 10 hereof, the foregoing shall not prevent the Employee from devoting
a portion of his time and efforts to his personal business affairs so long as
they do not materially interfere with the performance of his duties hereunder.
The Employee shall report directly to the Chief Executive Officer of the
Company.
(b) The Employee shall be permitted to serve on the boards of
other for-profit and not-for-profit organizations so long as such activities do
not materially interfere with the performance of his duties hereunder.
5. PLACE OF PERFORMANCE. The Employee shall perform his duties and
conduct his business at the offices of the Company, located in Port Washington,
New York, except for required travel on the Company's business.
6. COMPENSATION AND RELATED MATTERS.
(a) ANNUAL BASE SALARY. Commencing on the Effective Time, the
Company shall pay to the Employee an annual base salary (the "Base Salary") at a
rate not less than $195,000, such salary to be paid in conformity with the
Company's payroll policies relating to its senior executive officers. The Base
Salary may, from time to time, be increased, subject to and in accordance with
the performance review procedures for senior executive officers of the Company
or Scotts; PROVIDED, HOWEVER, if the Employee's Base Salary is increased, it
shall not thereafter be decreased during the Term.
(b) EXECUTIVE BENEFIT PLANS. During the Term, the Employee
shall be entitled to participate in those incentive plans, programs and
arrangements which are available to other senior executive officers of the
Company or Scotts (the "Benefit Plans"), including, but not limited to,
(i) annual and long-term bonus plans (payments in any given year with respect
thereto, collectively, the "Bonus") and (ii) stock option and other equity-based
compensation plans now or hereinafter maintained by the Company or Scotts. The
Employee shall be provided benefits under the Benefit Plans substantially
equivalent (in the aggregate) to the benefits provided to other senior executive
officers of the Company or Scotts and on substantially similar terms and
conditions as such benefits are provided to other senior executive officers of
the Company or Scotts.
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(c) PENSION AND WELFARE BENEFITS. During the Term, the Employee
shall be eligible to participate in the pension and retirement plans (the
"Pension Plans") provided to other senior executive officers of the Company or
Scotts (including, without limitation, Scotts' Pension Plan and Scotts' Excess
Benefit Plan), and participate fully in all health benefits, insurance programs
and other similar employee welfare benefit arrangements available to other
senior executive officers of the Company or Scotts and shall be provided
benefits under such plans and arrangements substantially equivalent (in the
aggregate) to the benefits provided to other senior executive officers of the
Company or Scotts and on substantially similar terms and conditions as such
benefits are provided to other senior executive officers of the Company or
Scotts. All service with the Company accrued by the Employee during his
employment therewith shall be preserved and maintained for eligibility and
vesting purposes under the Pension Plans that are maintained by Scotts. This
Section 6(c) is not intended to provide the Employee with a duplication of
benefits.
(d) STOCK OPTIONS. Effective as of the Effective Time, Scotts
shall grant to the Employee a non-qualified stock option (the "Option") to
acquire 24,000 of Scotts' common shares without par value ("Common Stock"),
pursuant to the terms and conditions of Scotts' 1992 Long Term Incentive Plan,
or any successor or replacement plan there to (the "Plan"), and pursuant to a
stock option agreement which shall provide terms and conditions no less
favorable to the Employee than any stock option agreement entered into by and
between Scotts and its other senior executive officers.
(e) FRINGE BENEFITS AND PERQUISITES. During the Term, the
Company shall provide to the Employee all of the fringe benefits and perquisites
that are provided to other senior executive officers of the Company or Scotts,
and the Employee shall be entitled to receive any other fringe benefits or
perquisites that become available to other senior executive officers of the
Company or Scotts subsequent to the Effective Time. Without limiting the
generality of the foregoing, the Company or Scotts shall provide the Employee
with the following benefits during the Term: (i) paid vacation, paid holidays
and sick leave in accordance with the Company's or Scotts' standard policies for
its senior executive officers, which policies shall provide the Employee with
benefits no less favorable (in the aggregate) than those provided to other
senior executive officers of the Company or Scotts, and (ii) an automobile
allowance no less than any such allowance provided to any other senior executive
officer of the Company or Scotts.
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(f) BUSINESS EXPENSES. The Employee will be reimbursed for all
ordinary and necessary business expenses incurred by him in connection with his
employment (including without limitation, expenses for travel and entertainment
incurred in conducting or promoting business for the Company) upon submission by
the Employee of receipts and other documentation in accordance with the
Company's normal reimbursement procedures.
7. TERMINATION. The Employee's employment hereunder may be
terminated without breach of this Agreement only under the following
circumstances:
(a) DEATH. The Employee's employment hereunder shall terminate
upon his death.
(b) DISABILITY. If, as a result of the Employee's incapacity
due to physical or mental illness, the Employee shall have been absent from his
duties hereunder for the entire period of six consecutive months, and within
thirty (30) days after written Notice of Termination (as defined in paragraph
(e) below) is given, shall not have returned to the performance of his duties
hereunder, the Company may terminate the Employee's employment hereunder for
"Disability."
(c) CAUSE. The Company may terminate the Employee's employment
hereunder for "Cause." For purposes of this Agreement, the Company shall have
"Cause" to terminate the Employee's employment hereunder (i) upon the Employee's
conviction for the commission of an act or acts constituting a felony under the
laws of the United States or any state thereof, or (ii) upon the Employee's
willful and continued failure to substantially perform his duties hereunder
(other than any such failure resulting from the Employee's incapacity due to
physical or mental illness), after written notice has been delivered to the
Employee by the Company, which notice specifically identifies the manner in
which the Employee has not substantially performed his duties, and the
Employee's failure to substantially perform his duties is not cured within ten
business days after notice of such failure has been given to the Employee. For
purposes of this Section 7(c), no act, or failure to act, on the Employee's part
shall be deemed "willful" unless done, or omitted to be done, by the Employee
not in good faith and without reasonable belief that the Employee's act, or
failure to act, was in the best interest of the Company.
(d) TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment hereunder for "Good Reason." "Good Reason" for termination by the
Employee of the Employee's employment shall mean the occurrence (without the
Employee's express
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written consent) of any one of the following acts by the Company, or failures
by the Company to act, unless, in the case of any act or failure to act
described in paragraph (i), (v), (vi), or (vii) below, such act or failure to
act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(i) the assignment to the Employee of any duties inconsistent
with the Employee's status as a senior executive officer of the Company or
a substantial adverse alteration in the nature or status of the Employee's
responsibilities;
(ii) a reduction by the Company of the Base Salary as in effect
on the date hereof or as the same may be increased from time to time;
(iii) the relocation of the Employee's place of performance, by
the Company, outside of the New York City metropolitan area;
(iv) the failure by the Company or Scotts, without the Employee's
consent, to pay to the Employee any portion of the Employee's current
compensation, or to pay to the Employee any portion of an installment of
deferred compensation under any deferred compensation program of the
Company or Scotts, within seven (7) days of the date such compensation is
due;
(v) the failure by the Company or Scotts to continue in effect
any compensation or benefit plan in which the Employee is entitled to
participate which is material to the Employee's total compensation, unless
an equitable arrangement has been made with respect to such plan, or the
failure by the Company or Scotts to continue the Employee's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits provided
and the level of the Employee's participation relative to other
participants;
(vi) the failure by the Company or Scotts to continue to provide
the Employee with benefits substantially similar to those enjoyed by the
Employee under any of the Company's or Scotts' pension, life insurance,
medical, health and accident, or disability plans in which the Employee is
entitled to participate, the taking of any action by the Company or Scotts
which would directly or indirectly materially reduce any of such benefits
or deprive the Employee of any material fringe benefit or perquisite
enjoyed by the Employee, or the failure by the Company or
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Scotts to provide the Employee with the number of paid vacation days to
which the Employee is entitled pursuant to this Agreement; or
(vii) any purported termination of the Employee's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirement of paragraph (e) below; for purposes of this Agreement, no such
purported termination shall be effective.
The Employee's right to terminate the Employee's employment for Good
Reason shall not be affected by the Employee's incapacity due to physical or
mental illness. The Employee's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(e) NOTICE OF TERMINATION. Any termination of the Employee's
employment by the Company or by the Employee (other than termination under
Section 7(a) hereof) shall be communicated by written Notice of Termination to
the other parties hereto in accordance with Section 12 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated. Further, a Notice of Termination for Cause is required to include
a copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board (after
reasonable notice to the Employee and an opportunity for the Employee, together
with the Employee's counsel, to be heard before the Board) finding that, in the
good faith opinion of the Board, the Employee was guilty of conduct set forth in
the definition of Cause herein, and specifying the particulars thereof.
(f) DATE OF TERMINATION. "Date of Termination" shall mean
(i) if the Employee's employment is terminated by his death, the date of his
death, (ii) if the Employee's employment is terminated pursuant to paragraph (b)
above, thirty (30) days after Notice of Termination is given (provided that the
Employee shall not have returned to the performance of his duties on a full-time
basis during such thirty (30)-day period), and (iii) if the Employee's
employment is terminated pursuant to paragraph (c) or (d) above, the date
specified in the Notice of Termination; PROVIDED, HOWEVER, that if within thirty
(30) days after any Notice of Termination is given the party receiving such
Notice of Termination notifies the other parties that a dispute exists
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concerning the termination, the Date of Termination shall be the date on which
the dispute is finally determined. If within fifteen (15) days after any Notice
of Termination is given, or, if later, prior to the Date of Termination (as
determined without regard to this Section 7(f)), the party receiving such Notice
of Termination notifies the other parties that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally resolved, either by mutual written agreement of the parties or by a
final judgment, order or decree of a court of competent jurisdiction (which is
not appealable or with respect to which the time for appeal therefrom has
expired and no appeal has been perfected); provided further that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence.
(g) COMPENSATION DURING DISPUTE. If a purported termination
occurs during the term of this Agreement, and such termination is disputed in
accordance with Section 7(f) hereof, the Company or Scotts shall continue to pay
the Employee the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, Base Salary) and. continue the
Employee as a participant in all compensation, benefit and insurance plans in
which the Employee was participating when the notice giving rise to the dispute
was given, until the dispute is finally resolved. Amounts paid under this
Section 7(g) are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement.
8. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) DISABILITY OR DEATH. During any period that the Employee
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness, the Employee shall continue to receive his full Base Salary,
as well as other applicable employee benefits provided to other senior
executives of the Company or Scotts, as provided in this Agreement, until his
employment is terminated pursuant to Section 7(b) hereof. In the event the
Employee's employment is terminated pursuant to Section 7(a) or 7(b) hereof,
then as soon as practicable thereafter, the Company or Scotts shall pay the
Employee or the Employee's Beneficiary (as defined in Section 11(b) hereof), as
the case may be, (i) all unpaid amounts, if any, to which the Employee was
entitled as of the Date of Termination under Section 6(a) hereof and (ii) all
unpaid amounts to which the Employee was then entitled under the Benefit Plans,
the Pension Plans and any other unpaid employee benefits, perquisites or
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other reimbursements (the amounts set forth in clauses (i) and (ii) above being
hereinafter referred to as the "Accrued Obligation").
(b) TERMINATION FOR CAUSE; VOLUNTARY TERMINATION WITHOUT GOOD
REASON. If the Employee's employment is terminated by the Company for Cause or
by the Employee other than for Good Reason, then the Company or Scotts shall pay
all Accrued Obligations to the Employee and neither the Company nor Scotts shall
have any further obligations to the Employee under this Agreement.
(c) TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON. If
(i) the Company shall terminate the Employee's employment, other than for
Disability or for Cause, or (ii) the Employee shall terminate his employment for
Good Reason, then:
(1) the Company or Scotts shall pay to the Employee, within ten
(10) days after the Date of Termination, the Accrued
Obligations;
(2) the Company or Scotts shall pay to the Employee, within ten
(10) days after the Date of Termination, a lump sum amount
in cash equal to three (3) multiplied by the sum of (i) the
Employee's Base Salary as in effect immediately prior to the
circumstances giving rise to the Notice of Termination plus
(ii) the highest annual Bonus paid to the Employee in
respect of the three years preceding the Date of
Termination;
(3) to the extent permitted under the terms and conditions of
each applicable plan or arrangement, the Company or Scotts
shall pay to the Employee a lump sum payment, in cash,
within ten (10) days after the Date of Termination, equal to
the Employee's accrued benefits (or the actuarial equivalent
if applicable) as of the Date of Termination under the
Pension Plans and the Benefit Plans. In addition, to the
extent permitted under the terms and conditions of each
applicable plan or arrangement, for purposes of computing
the benefits payable to the Employee under the Pension Plans
and Benefit Plans in which the Employee participated as of
the Date of Termination, the Employee shall be treated as if
he had continued in
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employment for three (3) years following the Date of
Termination; and
(4) for a period of three (3) years following the Date of
Termination the Company or Scotts shall pay all costs and
expenses associated with the continuation of coverage of the
Employee (as contemplated under Section 4980B of the
Internal Revenue Code of 1986, as amended) under all
applicable medical, disability and life insurance plans as
existed immediately prior to the circumstances giving rise
to the Notice of Termination; PROVIDED, HOWEVER, that such
coverage shall be reduced to the extent that the Employee
obtains similar coverage paid by a subsequent employer.
9. NON-DISCLOSURE. The parties hereto agree, recognize and
acknowledge that during the Term the Employee shall obtain knowledge of
confidential information regarding the business and affairs of the Company. It
is therefore agreed that the Employee will respect and protect the
confidentiality of all confidential information pertaining to the Company, and
will not (i) without the prior written consent of the Company, (ii) unless
required in the course of the Employee's employment hereunder, or (iii) unless
required by applicable law, rules, regulations or court, governmental or
regulatory authority order or decree, disclose in any fashion such confidential
information to any person (other than a person who is a director of, or who is
employed by, the Company or any subsidiary or who is engaged to render services
to the Company or any subsidiary) at any time during the Term.
10. COVENANT NOT TO COMPETE. (a) Employee hereby agrees that for a
period of three (3) years following the termination of this Agreement (other
than a termination of the Employee's employment (i) by the Employee for Good
Reason, or (ii) by the Company other than for Cause or Disability) (the
"Restricted Period") the Employee shall not, directly or indirectly, whether
acting individually or through any person, firm, corporation, business or any
other entity:
(i) engage in, or have any interest in any person, firm,
corporation, business or other entity (as an officer, director, employee, agent,
stockholder or other security holder, creditor, consultant or otherwise) that
engages in any business activity where any aspect of the business of the Company
is conducted, or planned to be conducted, at any time during the Restricted
Period, which business activity is the same as,
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similar to or competitive with the Company as the same may be conducted from
time to time;
(ii) interfere with any contractual relationship that may exist
from time to time of the business of the Company, including, but not limited to,
any contractual relationship with any director, officer, employee, or sales
agent, or supplier of the Company; or
(iii) solicit, induce or influence, or seek to induce or
influence, any person who currently is, or from time to time may be, engaged or
employed by the Company (as an officer, director, employee, agent or independent
contractor) to terminate his or her employment or engagement by the Company.
(b) Notwithstanding anything to the contrary contained herein,
Employee, directly or indirectly, may own publicly traded stock constituting not
more than three percent (3%) of the outstanding shares of such class of stock of
any corporation if, and as long as, Employee is not an officer, director,
employee or agent of, or consultant or advisor to, or has any other relationship
or agreement with such corporation.
(c) Employee acknowledges that the non-competition provisions
contained in this Agreement are reasonable and necessary, in view of the nature
of the Company and his knowledge thereof, in order to protect the legitimate
interests of the Company.
11. SUCCESSORS; BINDING AGREEMENT.
(a) The Company and Scotts shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or Scotts, by
agreement in form and substance reasonably satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company and Scotts would be required to perform it if
no such succession had taken place. Failure of the Company or Scotts to obtain
such assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Company and/or Scotts in the same amount and on the same
terms as he would be entitled to hereunder if he terminated his employment for
Good Reason, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, each of "Company" and "Scotts" shall
mean the Company and Scotts; respectively, in each case as hereinbefore defined
and any of their respective
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successors to their businesses and/or assets as aforesaid that executes and
delivers the agreement provided for in this Section 11 or that otherwise
becomes bound by all the terms and provisions of this Agreement by operation
of law.
(b) This Agreement and all rights of the Employee hereunder shall
inure to the benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Employee should die while any amounts would still
be payable to him hereunder if he had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee's devisee, legatee, or other designee or, if
there be no such designee, to the Employee's estate (any of which is referred to
herein as a "Beneficiary").
12. NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to the Company:
Xxxxx'x Miracle-Gro Products, Inc.
000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxx 00000
Attn: General Counsel
If to Scotts:
The Scotts Company
00000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxx 00000
Attn: General Counsel
If to the Employee:
Xxxx Xxxxxx
00 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxx 00000
or to such other address as each party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such waiver,
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modification or discharge is agreed to in writing signed by the Employee and
such officer of the Company as may be specifically designated by the Board.
No waiver by a party hereto at any time of any breach by another party hereto
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by the
parties which are not set forth expressly in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the state of Ohio without regard to its conflicts of
law principles.
14. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. To the extent that any of the provisions hereof are inconsistent with
the provisions of the Agreement Containing Consent Order and the Agreement to
Hold Separate (collectively, the "Consent Order") between Scotts and the Federal
Trade Commission, the provisions of the Consent Order shall govern in all
respects.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes any and all other prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto; and any
prior agreement of the parties hereto in respect of the subject matter contained
herein is hereby terminated and cancelled.
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IN WITNESS WHEREOF, the parties have executed Agreement as of the date and
year first above written.
XXXXX'X MIRACLE-GRO PRODUCTS, INC.
By/s/ XXXXX XXXXXXXX
-------------------------------------
Name:
Title: Exec. V.P.
THE SCOTTS COMPANY
By:/s/ XXXXX XXXXXX
------------------------------------
Name:
Title:
EMPLOYEE
By:/s/ XXXX XXXXXX
------------------------------------
XXXX XXXXXX
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