CLECO CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT (Level 1)
EXHIBIT
10(g)(8)
CLECO
CORPORATION
(Level
1)
THIS
AGREEMENT (the
“Agreement”) is entered into as of this 5th
day of May, 2005,
by and between Xxxxxx X. Xxxxxxxxx (“Executive”), and Cleco
Corporation, a Louisiana corporation (the “Company”).
Notwithstanding
the foregoing,
Executive shall not be prevented from (a) engaging in any civic or charitable
activity for which Executive receives no compensation or other pecuniary
advantage, (b) investing his personal assets in businesses which do not compete
with the Company, provided that such investment will not require any services
on
the part of Executive in the operation of the affairs of the businesses in
which
investments are made and provided further that Executive’s participation in such
businesses is solely that of an investor, or (c) purchasing securities in
any
corporation whose securities are regularly traded, provided that such purchases
will not result in Executive owning beneficially at any time 5% or more of
the
equity securities of any corporation engaged in a business competitive with
that
of the Company.
Commencing
on the second anniversary of
the Effective Date and each anniversary thereafter, Executive’s employment shall
automatically be extended for an additional one-year period; provided, however,
that either party may provide written notice to the other that the Employment
Term will not be further extended, such notice to be provided not later than
30
days prior to the end of the then current Employment Term.
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2
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a.
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Executive’s
Base Compensation accrued but not yet paid as of the date of his
termination.
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b.
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Executive’s
Base Compensation payable until the Termination Date (determined
without
regard to the automatic renewal provisions of Section 1.4 hereof),
but not
less than 100% of such annual Base
Compensation.
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c.
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Executive’s
Incentive Bonus payable with respect to the year of his termination,
prorated to reflect Executive’s actual period of service during such
year.
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d.
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Executive’s
Incentive Bonus payable in the target amount for the year in which
his
termination of employment occurs.
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e.
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If
Executive’s principal office is located in Pineville, Louisiana, the
Company shall, at the written request of
Executive:
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i.
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Purchase
his principal residence if such residence is located within 60
miles of
the Company’s Pineville, Louisiana office (the “Principal Residence”) for
an amount equal to the greater of (1) the purchase price of such
Principal
Residence plus the documented cost of any capital improvements
to the
Principal Residence made by Executive, or (2) the fair market value
of
such Principal Residence as determined by the Company’s usual relocation
practice; and
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ii.
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Pay
or reimburse Executive for the cost of relocating Executive, his
family
and their household goods and other personal property, in accordance
with
the Company’s usual relocation practice, to any location in the United
States.
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Notwithstanding
the foregoing, the Company shall not be obligated hereunder, unless, within
12
months after the termination of his employment with the Company (and its
Affiliates), the Company is requested to purchase such
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Principal
Residence or Executive has actually relocated from the Pineville, Louisiana
area.
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f.
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If
Executive and/or his dependents elects to continue group medical
coverage,
within the meaning of Code Section 4980B(f)(2), with respect to
a group
health plan sponsored by the Company or an Affiliate (other than
a health
flexible spending account under a self-insured medical reimbursement
plan
described in Code Sections 125 and 105(h)), the Company shall pay
the
continuation coverage premium for the same type and level of group
health
plan coverage received by Executive and his electing dependents
immediately prior to such termination of Executive’s employment for the
maximum period provided under Code Section 4980B or until the Executive
secures other employment where group health insurance is provided,
whichever period is shorter.
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g.
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Executive
shall be fully vested for purposes of any service or similar requirement
imposed under the Cleco Utility Group Inc. Supplemental Executive
Retirement Plan (the "Supplemental Plan"), regardless of the actual
number
of years of service attained by
Executive.
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Except
as expressly provided in Section 3.3 hereof, Executive shall also be entitled
to
receive such compensation or benefits as may be provided under the terms
of a
separate plan or amendment maintained by the Company (or its Affiliates)
to the
extent such compensation or benefits are not duplicative of the compensation
or
benefits described above.
For
purposes of this Section 3.2,
Executive shall be deemed “disabled” if he is actually receiving benefits or is
eligible to receive benefits under the Company’s (or an Affiliate’s) separate
long-term disability plan. The Board shall determine whether Executive is
disabled hereunder.
For
purposes of this Agreement “Cause”
means that Executive has:
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a.
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Committed
an intentional act of fraud, embezzlement or theft in the course
of his
employment or otherwise engaged in any intentional misconduct which
is
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materially
injurious to the Company’s (or an Affiliate’s) financial condition or
business reputation;
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b.
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Committed
intentional damage to the property of the Company (or an Affiliate)
or
committed intentional wrongful disclosure of Confidential Information
(as
defined in Section 5.2) which is materially injurious to the Company’s (or
an Affiliate’s) financial condition or business
reputation;
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c.
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Intentionally
refused to perform the material duties of his
position;
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d.
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Failed
to fully cooperate to the extent requested by the Company (or an
Affiliate) with investigations by government or independent agencies
involving the Company (or an Affiliate);
or
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e.
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Committed
a material breach of this Agreement by
Executive.
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No
act or failure to act on the part of Executive will be deemed “intentional” if
it was due primarily to an error in judgment or negligence, but will be deemed
“intentional” only if done or omitted to be done by Executive not in good faith
and without reasonable belief that his action or omission was in the best
interest of the Company (or an Affiliate).
The
Board, acting in good faith, may
terminate Executive’s employment hereunder on account of Cause (or may determine
that any termination by the Company is on account of Cause). The
Board shall provide written notice to Executive, including a description
of the
specific reasons for the determination of Cause. Executive shall have
the opportunity to appear before the Board, with or without legal
representation, to present arguments and evidence on his
behalf. Following such presentation (or upon Executive’s failure to
appear), the Board, by an affirmative vote of not less than 66% of its members,
shall confirm that the actions or inactions of Executive constitute Cause
hereunder.
For
purposes of this Agreement,
“Constructive Termination” means:
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a.
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A
material reduction (other than a reduction in pay uniformly applicable
to
all officers of the Company) in the amount of Executive’s Base
Compensation;
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b.
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A
material reduction in Executive’s authority, duties or responsibilities
from those contemplated in Section 1.1 of this Agreement;
or
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c.
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A
material breach of this Agreement by the Company or its
Affiliates.
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No
event or condition described in this Section 3.4 shall constitute a Constructive
Termination unless (a) Executive promptly gives the Company notice of his
objection to such event or condition, which notice may be provided orally
or in
writing to the Chief Executive Officer or his designee, (b) such event or
condition is not corrected by the Company promptly after receipt of such
notice,
but in no event more than 30 days after receipt of notice, and (c) Executive
resigns his employment with the Company (and all Affiliates) not more than
15
days following the expiration of the 30-day period described in subparagraph
(b)
hereof.
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The
term “Good Reason,” when used
herein, shall mean that in connection with a Change in Control:
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a.
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Executive’s
Base Compensation in effect immediately before such Change in Control
is
reduced or there is a significant reduction or termination of Executive’s
rights to any employee benefit in effect immediately prior to the
Change
in Control;
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b.
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Executive’s
authority, duties or responsibilities are significantly reduced
from those
contemplated in Section 1.1 hereof or Executive has reasonably
determined
that, as a result of a change in circumstances that significantly
affects
his employment with the Company (or an Affiliate), he is unable
to
exercise the authority, power, duties and responsibilities contemplated
in
Section 1.1 hereof;
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c.
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Executive
is required to be away from his office in the course of discharging
his
duties and responsibilities under this Agreement significantly
more than
was required prior to the Change in Control;
or
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d.
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Executive
is required to transfer to an office or business location located
more
than 60 miles from the location to which he was assigned prior
to the
Change in Control.
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No
event or condition described in this Section 4.1 shall constitute Good Reason
unless (a) Executive gives the Company notice of his objection to such event
or
condition within a reasonable period after Executive learns of such event,
which
notice may be delivered orally or in writing to the Chief Executive Officer
(or
his designee), (b) such event or condition is not promptly corrected by the
Company, but in no event later than 30 days after receipt of such notice,
and
(c) Executive resigns his employment with the Company (and its Affiliates)
not
more than 60 days following the expiration of the 30-day period described
in
subparagraph (b) hereof.
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a.
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The
Company shall pay to Executive the amount described in Section
3.1a in the
form of a single-sum not later than three days after such
termination.
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b.
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The
Company shall pay an amount equal to three times Executive’s “base
amount,” payable in the form of a single-sum not later than 30 days after
such termination. For purposes of this agreement, “base amount”
is defined as the Executive’s current annual base compensation and target
annual bonus.
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c.
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The
Company shall provide to Executive and his dependents coverage
under the
Company’s or an Affiliate’s group medical plan for the same type and level
of health benefits received by Executive and his dependents immediately
prior to such termination for a period of three years or until
Executive
and/or his dependents obtain coverage under a reasonably satisfactory
group health plan with no applicable preexisting condition limitation,
whichever comes first; such coverage to be in addition to any coverage
available to Executive and his dependents under Code Section
4980B.
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d.
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Vesting
shall be accelerated, any restrictions shall lapse, and all performance
objectives shall be deemed satisfied as to any outstanding grants
or
awards made to Executive under the 2000 Long-Term Incentive Compensation
Plan and/or the 1990 Long-Term Incentive Compensation
Plan. Executive shall be entitled to such additional benefits
or rights as may be provided in the documents evidencing such plans
or the
terms of any agreement evidencing such grant or
award.
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e.
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Executive
shall be fully vested for purposes of any service or similar requirement
imposed under the Supplemental Plan, regardless of the actual number
of
years of service attained by Executive. Executive shall be
credited with an additional three years of age for purposes of
determining
his benefit percentage under the Supplemental Plan, but in no event
shall
such benefit percentage be less than 50%; and Executive shall be
credited
with an additional three years of age for purposes of determining
any
reduction taken with respect to benefits commencing before Executive's
normal retirement date (as defined in such
plan).
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f.
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If
Executive’s principal office is located in Pineville, Louisiana, the
Company shall, at the written request of
Executive:
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i.
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Purchase
his principal residence if such residence is located within 60
miles of
the Company’s Pineville, Louisiana office (the “Principal Residence”) for
an amount equal to the greater of (1) the purchase price of such
Principal
Residence plus the documented cost of any capital improvements
to the
Principal Residence made by Executive, or (2) the fair market value
of
such Principal Residence as determined by the Company’s usual relocation
practice; and
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ii.
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Pay
or reimburse Executive for the cost of relocating Executive, his
family
and their household goods and other personal property, in accordance
with
the Company’s usual relocation practice, to any location in the United
States.
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Notwithstanding
the foregoing, the Company shall not be obligated hereunder, unless, within
12
months after the termination of his employment with the Company (and its
Affiliates), the Company is requested to purchase such Principal Residence
or
Executive has actually relocated from the Pineville, Louisiana
area.
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g.
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The
Company shall pay to Executive an amount equal to the Company’s (including
all Affiliates) maximum matching contribution obligation under
the Cleco
Corporation 401(k) Savings and Investment Plan, as the same may
be amended
from time to time, for each of the three years immediately following
Executive’s termination of employment, determined as if Executive was
credited with at least 1,000 hours of service in each such plan
year, was
employed as of the last day of each plan year, and contributed
the maximum
permissible amount under Code Section 402(g) in each such year,
but
determined using the amount in effect as of the date of Executive's
termination of employment; such amount shall be paid in the form
of a
single-sum not later than 30 days after Executive’s termination of
employment hereunder.
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4.4 Tax
Payment. If any payment to Executive pursuant to this Agreement or any
other payment or benefit from the Company or an Affiliate in connection with
a
Change in Control or Business Transaction is subject to the excise tax imposed
under Code Section 4999 or any similar excise or penalty tax payable under
any
United States federal, state, local or other law, the Company shall pay an
amount to Executive such that, after the payment by Executive of all taxes
on
such amount, there remains a balance sufficient to pay such excise or penalty
tax. Executive shall submit to the Company the amount to be paid
under this Section 4.4, together with supporting documentation. If
Executive and the Company disagree as to such amount, an independent public
accounting firm agreed upon by Executive and the Company shall make such
determination.
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information
concerning the Company and its Affiliates, which may include, without
limitation, (a) books and records relating to operations, finance, accounting,
personnel and management, (b) price, rate and volume data, future price and
rate
plans, and test data, (c) information related to product design and development,
(d) computer software, customer lists, information obtained on competitors,
and
sales tactics, and (e) various other non-public trade or business information,
including business opportunities, marketing or business diversification plans,
methods and processes, and financial data and the like (collectively, the
“Confidential Information”). Executive agrees that he will not at any
time, either while employed by the Company or afterwards, make any independent
use of, or disclose to any other person or organization (except as authorized
by
the Company or pursuant to court order) any of the Confidential
Information.
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a.
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Hire
or offer to hire any of the Company’s (or Affiliate’s) officers, employees
or agents;
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b.
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Persuade
or attempt to persuade in any manner any officer, employee or agent
of the
Company (or an Affiliate) to discontinue any relationship with
the
Company; or
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c.
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Solicit
or divert or attempt to divert any customer or supplier of the
Company or
an Affiliate.
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The
provisions of this Section 5.3 shall apply in the locations set forth on
Exhibit
A hereto, as the same may be amended from time to time. Executive
acknowledges that the Company (or its Affiliates) is presently doing business
in
such locations and that during the Employment Term Executive will be required
to
provide services to or for the benefit of the Company (or its Affiliates)
in
such locations.
The
parties agree that each of the
foregoing prohibitions is intended to constitute a separate restriction.
Accordingly, should any such prohibition be declared invalid or unenforceable,
such prohibition shall be deemed severable from and shall not affect the
remainder thereof. The parties further agree that each of the
foregoing restrictions is reasonable in both time and geographic
scope.
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After
a Change in Control or Business
Transaction has occurred, Executive shall not be required to incur legal
fees
and the related expenses associated with the interpretation, enforcement
or
defense of Executive’s rights under this Agreement by litigation or
otherwise. Accordingly, if, following a Change in Control or Business
Transaction, the Company has failed to comply with any of its obligations
under
this Agreement or the Company or any other person takes or threatens to take
any
action to declare this Agreement void or unenforceable or in any way reduce
the
possibility of collecting the amounts due hereunder, or institutes any
litigation or other action or proceeding designed to deny or to recover from
Executive the benefits provided or intended to be provided under this Agreement,
Executive shall be entitled to retain counsel of Executive’s choice, at the
expense of the Company, to advise and represent Executive in connection with
any
such interpretation, enforcement or defense, including without limitation
the
initiation or defense of any litigation, arbitration or other legal action,
whether by or against the Company or any director, officer, stockholder or
other
person affiliated with the Company, in any jurisdiction. The Company
shall pay and be solely financially responsible for any and all attorneys’ and
related fees and expenses incurred by Executive in connection with any of
the
foregoing, without regard to whether Executive prevails, in whole or in
part.
In
no event shall Executive be required
to reimburse the Company for any of the costs and expenses incurred by the
Company relating to arbitration, litigation or other legal action in connection
with this Agreement.
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6.8 Choice
of Law. The validity of this Agreement, the construction of
its terms, and the determination of the rights and duties of the parties
hereto
shall be governed by and construed in accordance with the internal laws of
the
State of Louisiana applicable to contracts made to be performed wholly within
such state.
If
to
Executive: Xxxxxx
X. Xxxxxxxxx
4800
Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx,
Xxxxxxxxx
00000
If
to the
Company: Cleco
Corporation
2000
Xxxxxxx Xxxxx Xxxx
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Xxxxxxxxx,
XX 00000
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Attention:
Chief Executive
Officer
Telecopier: (000)
000-0000
or
to such other addresses as a party may designate by notice to the other
party.
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to
Executive’s surviving spouse or other assigns and such person thereafter dies,
such payment will revert to Executive’s estate.
THIS
AGREEMENT is
executed in multiple counterparts as of the dates set forth below, each of
which
shall be deemed an original, to be effective as of the Effective Date designated
above.
CLECO
CORPORATION EXECUTIVE
By: /s/ Xxxxxxx
X. Xxxxxxx /s/ Xxxxxx
X. Xxxxxxxxx
XXXXXX
X.
XXXXXXXXX
Its: President
and CEO
Date:
6/27/05 Date:
6/27/05
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CLECO
CORPORATION
EXHIBIT
A
This
Exhibit A is intended to form a
part of that certain Executive Employment Agreement by and between Cleco
Corporation and Xxxxxx X. Xxxxxxxxx, first effective as of May
5, 2005. The parties agree that the proscriptions set forth in
Section 5.3 thereof shall apply in the State of Louisiana, Parishes
of:
Acadia Parish
Xxxxx
Xxxxxx
Avoyelles
Parish
Xxxxxxxxxx
Parish
Calcasieu
Parish
Catahoula
Parish
Desoto
Parish
Xxxxxxxxxx
Xxxxxx
Xxxxx
Xxxxxx
Iberia
Parish
Xxxxxxxxx
Xxxxx Parish
Lafayette
Parish
Lasalle
Parish
Natchitoches
Parish
Rapides
Parish
Red
River Parish
Xxxxxx
Xxxxxx
St.
Xxxxxx Xxxxxx
St.
Xxxxxx Xxxxxx
St.
Xxxx Xxxxxx
St.
Tammany Parish
Xxxxxx
Xxxxxx
Washington
Parish
Executive
and the Company agree that the Company shall amend this Exhibit A, from time
to
time, to eliminate Parishes in which the Company is no longer doing business
and
to add Parishes in which the Company is currently doing business.
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