AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of March 11, 2009 (this CURTIS L. GARNER, JR. (the “Employee”).
Exhibit
10.2
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT dated as of March 11, 2009 (this
“Agreement”), among
OTELCO INC., a Delaware corporation
(the “Company”)
and
XXXXXX X. XXXXXX, XX. (the
“Employee”).
WHEREAS, the Employee and
Otelco Telephone LLC, a Delaware limited liability company and a wholly-owned
subsidiary of the Company, have entered into that certain Employment Agreement,
dated as of June 9, 2004, as amended on December 19, 2008 (as amended, the
“Prior
Agreement”).
WHEREAS, the Company and the
Employee desire to amend and restate the terms of the Prior
Agreement.
NOW THEREFORE, in
consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section
1. Effective
Date.
This
Agreement shall be effective as of January 1, 2009 (the “Effective
Date”).
Section
2. Employment
Period.
Subject
to Section 4,
the Company hereby agrees to employ the Employee, and the Employee hereby agrees
to be employed by the Company, in accordance with the terms and provisions of
this Agreement, for the period from the Effective Date through the Termination
Date (the “Employment
Period”).
Section
3. Terms of
Employment.
(a) Position. During
the Employment Period, the Employee shall serve as Chief Financial Officer of
the Company and certain of its subsidiaries (collectively, the “Company Entities”)
and shall report to the Chief Executive Officer and to the Board of Directors of
the Company (the “Board”) and each such
subsidiary. The Employee shall have such powers and duties as may
from time to time be prescribed by the Board or the Chief Executive Officer of
the Company.
(b) Full
Time. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Employee is entitled, the Employee
agrees to devote his full business time and efforts, to the best of his ability,
experience and talent, to the business and affairs of the Company Entities.
During the Employment Period, it shall not be a violation of this Agreement for
the Employee to serve on corporate, civic or charitable boards or committees or
manage personal investments (including serving as a member of boards of
directors or similar bodies of entities not engaged in competition with the
Company Entities (as determined by the Board in its reasonable discretion)), in
each case, so long as such activities do not interfere with the performance of
the Employee’s responsibilities as an employee of the Company Entities in
accordance with this Agreement.
(c) Compensation.
(i) Base
Salary. During the Employment Period, the Employee shall
receive an annual base salary of $185,000 which Annual Base Salary shall be
subject to annual increase by an amount equal to at least the increase in the
cost of living, if any, between the date of the immediately preceding increase
and the date of each such adjustment, based upon the Consumer Price Index for
Urban Consumers, or if that index is discontinued, a similar index prepared by a
department or agency of the United States government (as so adjusted, the “Annual Base Salary”).
The Annual Base Salary shall be paid in accordance with the customary payroll
practices of the Company, subject to withholding and other payroll
taxes.
(ii) Bonus. For each
fiscal year during the Employment Period, the Employee will be entitled to
receive a bonus (the “Bonus”). The Bonus
shall be based upon the Company achieving operating and/or financial goals to be
established by the Board or any duly appointed committee thereof in good faith,
in its sole discretion.
(iii)
Benefits.
During the Employment Period, the Employee shall be entitled to participate in
all incentive (including any long term incentive plan), savings and retirement
plans, practices, policies and programs applicable generally to other employees
of the Company Entities and shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices, policies and
programs provided by the Company Entities to the extent applicable generally to
other employees of the Company Entities. In addition, the Employee will be
entitled to coverage under any directors’ and officers’ liability insurance
maintained by the Company.
(iv) Automobile.
During the Employment Period, the Company shall provide the Employee with the
use of a Company automobile (or, at the Company’s option, shall lease an
automobile for the Employee’s use) and shall reimburse the Employee for all
reasonable expenses incurred by the Employee in connection with the use and
maintenance of such automobile.
(v) Expenses. The
Employee shall be entitled to receive reimbursement for all reasonable expenses
incurred by the Employee during the Employment Period in connection with the
performance of his duties hereunder, in accordance with the policies, practices
and procedures of the Company as in effect from time to time.
(vi) Vacation and
Holidays. During the Employment Period, the Employee shall be
entitled to up to 5 weeks paid vacation per year in accordance with the policies
of the Company applicable to other employees of the Company
generally.
Section
4. Termination of
Employment.
(a) Death or
Disability. The Employee’s employment shall terminate automatically
upon the Employee’s death or Disability. For purposes of this Agreement, “Disability” shall
mean the Employee’s inability to perform his duties and obligations hereunder
for any 90 days during a period of 180 consecutive days due to mental or
physical incapacity as determined by a physician selected by the Company or its
insurers.
(b) Termination by the
Employee. The Employee may terminate his employment with the
Company Entities at any time, without prior notice.
(c) Termination by the
Company. The Company may terminate the Employee’s employment with
the Company or any Company Entity at any time, with or without Cause and without
prior notice. “Cause” will mean that
any of the following will have occurred: (i) the Employee has been convicted of
a felony, stolen funds or otherwise engaged in fraudulent conduct, (ii) the
Employee has engaged in willful misconduct or has been grossly negligent, in
each case, which has been materially injurious to the Company, (iii) the
Employee has failed or refused to comply with directions of the Board that are
reasonably consistent with the Employee’s current position, or (iv) the Employee
has breached the terms of this Agreement. “Without Cause” shall
mean a termination by the Company of the Employee’s employment during the
Employment Period for any reason other than a termination based upon Cause,
death or Disability.
-2-
Section
5. Obligations of the Company
upon Termination.
(a) Without Cause; Death or
Disability. If, during the Employment Period, the Company shall
terminate the Employee’s employment Without Cause or due to death or Disability,
then the Company will provide the Employee with the following severance payments
and/or benefits:
(i) The
Company shall pay to the Employee a lump sum in the amount of the Employee’s
accrued but unpaid Annual Base Salary through the Termination Date (“Accrued
Obligations”);
(ii) The
Employee, if applicable, and members of his family shall be entitled to continue
their participation in the Company Entities’ welfare and benefit plans until the
Termination Date;
(iii)
The
Company shall pay to the Employee a lump sum in the amount of his Annual Base
Salary within six months following termination but not later than March 14 of
the calendar year following termination; and
(iv) The
Company shall pay to the Employee a lump sum amount equal to the Bonus the
Employee would have received had he remained employed by the Company through the
end of the fiscal year in which the termination occurred, pro rated for the
number of days Employee was employed by the Company during such fiscal year, to
be paid at the same time that similar bonuses are paid to the Company’s other
employees.
(b) Cause; by the Employee;
Death or Disability. If the Employee’s employment shall be
terminated by the Company for Cause, by the Employee for any reason, or due to
death or Disability, then the Company shall have no further payment obligations
to the Employee (or his heirs or legal representatives) other than for (i)
payment of Accrued Obligations and (ii) the continuance of the Employee’s and
his family’s participation in the Company Entities’ welfare and benefit plans
through the Termination Date.
(c) Condition:
Remedies. The Employee acknowledges and agrees that, (a) the
Company’s obligations to make payments under Section 5(a) will be
conditioned on the Employee executing and delivering a customary general release
in form and substance reasonably satisfactory to the Company.
Section
6. Nondisclosure and Nonuse of
Confidential Information.
(a) The
Employee shall not disclose or use at any time, either during the Employment
Period or thereafter, any Confidential Information (as hereinafter defined) of
which the Employee is or becomes aware as a consequence of or in connection with
his employment with a Company, whether or not such information is developed by
him, except (i) to the extent that such disclosure or use is in furtherance of
the Employee’s performance in good faith of his duties as Chief Financial
Officer of the Company Entities or (ii) to the extent required by law or legal
process; provided that (A) the
Employee agrees to provide the Company with prompt written notice of any such
law or legal process and to assist the Company, at the Company’s expense, in
asserting any legal challenges to or appeals of such law or legal process that
the Company in its sole discretion pursues, and (B) in complying with any such
law or legal process, the Employee shall limit his disclosure only to the
Confidential Information that is expressly required to be disclosed by such law
or legal process. The Employee will take all commercially reasonable steps to
safeguard Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft. The Employee shall deliver to the Company at the
termination of the Employment Period, or at any time the Company may request,
all memoranda, notes, plans, records, reports, computer tapes and software and
other documents and data (and copies thereof) relating to the Confidential
Information or the Work Product (as hereinafter defined) of the Company Entities
which the Employee may then possess or have under his control.
-3-
(b) The
Employee agrees that all Work Product belongs in all instances to the Company
Entities. The Employee will promptly disclose such Work Product to the Board and
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) to establish and confirm the Company Entities’ ownership
of the Work Product (including, without limitation, the execution and delivery
of assignments, consents, powers of attorney and other instruments) and to
provide reasonable assistance to the Company Entities (whether during or after
the Employment Period), at the Companies’ sole expense, in connection with the
prosecution of any applications for patents, trademarks, trade names, service
marks or reissues thereof or in the prosecution or defense of interferences
relating to any Work Product. The Employee recognizes and agrees that the Work
Product, to the extent copyrightable, constitutes works for hire under the
copyright laws of the United States.
(c) “Confidential
Information” means information that is not generally known to the public
and that is used, developed or obtained by a Company Entity in connection with
its business, including, but not limited to, information, observations and data
obtained by the Employee while employed by the Company or any predecessors
thereof (including those obtained prior to the date of this Agreement)
concerning (i) the business or affairs of the Company Entities and their
Affiliates and (ii) products, services, fees, costs, pricing structures,
analyses, drawings, photographs and reports, computer software (including
operating systems, applications and program listings), data bases, accounting
and business methods, inventions, devices, new developments, methods and
processes (whether patentable or unpatentable and whether or not reduced to
practice), customers and clients and customer and client lists, all technology
and trade secrets, and all similar and related information in whatever form.
Confidential Information will not include any information that (A) is or becomes
generally available to the public other than through disclosure by the Employee
in violation of this Section 6, (B) was
provided to the Employee prior to the date hereof a nonconfidential basis from a
Person who was not otherwise bound by a confidentiality agreement or duty with a
Company Entity or an Affiliate thereof, or (C) becomes available to the Employee
on a nonconfidential basis from a Person who is not otherwise bound by a
confidentiality agreement or duty with a Company Entity or its Affiliates or is
not otherwise prohibited from transmitting the information to the
Employee.
(d) “Work Product” means
all inventions, innovations, improvements, technical information, systems,
software developments, methods, designs, analyses, drawings, reports, service,
marks, trademarks, trade names, trade dress, logos and all similar or related
information (whether patentable or unpatentable) which relates to a Company
Entity’s actual or anticipated business, research and development or existing or
future products or services and which are conceived, developed or made by the
Employee (whether or not during usual business hours and whether or not alone or
in conjunction with any other person) during the Employment Period together with
all patent applications, letters patent, trademark, trade name and service xxxx
applications or registrations, copyrights and reissues thereof that may be
granted for or upon any of the foregoing.
-4-
Section
7. Non-Compete and
Non-Solicit.
(a) The
Employee acknowledges that, in the course of his employment with the Company
Entities, he has become familiar, or will become familiar, with the Company
Entities’ and their Affiliates’ trade secrets and with other confidential
information concerning the Company Entities and their Affiliates and that his
services have been and will be of special, unique and extraordinary value to the
Company Entities and their Affiliates. Therefore, the Employee agrees that,
during the Employment Period and for 6 months thereafter (the “Restricted Period”),
he shall not directly or indirectly (i) engage, within the Restricted Territory,
in any telephone or communications business, including, but not limited to,
incumbent local exchange carrier, long distance telephone business, cable
television, Internet access, or other business that the Company or any of its
Affiliates is engaged in during the Employee’s employment by the Company (the
“Company
Business”), (ii) compete or participate as agent, employee, consultant,
advisor, representative or otherwise in any enterprise engaged in a business
which has any operations engaged in the Company Business within the Restricted
Territory; or (iii) compete or participate as a stockholder, partner, member or
joint venturer, or have any direct or indirect financial interest, in any
enterprise which has any material operations engaged in the Company Business
within the Restricted Territory; provided, however, that nothing
contained herein will prohibit the Employee from (A) owning, operating or
managing any business, or acting upon any business opportunity, after obtaining
approval of a majority of the Board; or (B) owning no more than five
percent (5%) of the equity of any publicly traded entity with respect to which
the Employee does not serve as an officer, director, employee, consultant or in
any other capacity other than as an investor. The term “Restricted Territory”
means all states within the United States in which the Company or any of its
Affiliates conducts or is pursuing or analyzing plans to conduct Company
Business as of the Termination Date.
(b) As a
means reasonably designed to protect Confidential Information, the Employee
agrees that, during the period commencing on the Effective Date and ending on
the expiration of the Restricted Period, he will not (i) solicit or make any
other contact with, directly or indirectly, any customer of a Company Entity or
any of their Affiliates as of the date that the Employee ceases to be employed
by the Company with respect to the provision of any service to any such customer
that is the same or substantially similar to any service provided to such
customer by the Company Entities or their Affiliates or (ii) solicit or make any
other contact with, directly or indirectly, any employee of a Company Entity or
any of their Affiliates on the date that the Employee ceases to be employed by
the Company (or any person who was employed by a Company Entity or any of their
Affiliates at any time during the three-month period prior to the Termination
Date) with respect to any employment, services or other business
relationship.
Section
8. Remedies.
The
Employee acknowledges that irreparable damage would occur in the event of a
breach of the provisions of Section 6 or Section 7 by the
Employee. It is accordingly agreed that, in addition to any other remedy to
which its is entitled at law or in equity, the Company will be entitled to an
injunction or injunctions to prevent breaches of such sections of this Agreement
and to enforce specifically the terms and provisions of such
sections.
Section
9. Definitions.
“Accrued Obligations”
has the meaning set forth in Section
5(a)(i).
“Affiliate” means,
with respect to any Person, any other Person that is controlled by, controlling
or under common control with, such Person. Notwithstanding anything to the
contrary contained herein, with respect to each Company Entity (and each member
thereof), the term “Affiliate” will include, without limitation, each Person
with an ownership interest in a Company Entity (and each member, stockholder or
partner of each such Person), each Person in which the member of a Company
Entity (and member, stockholder or Partner of each such Person) holds or has the
right to acquire, collectively, more than 25% of the voting equity
interests.
-5-
“Agreement” has the
meaning set forth in the Caption.
“Annual Base Salary”
has the meaning set forth in Section
3(c)(i).
“Board” has the
meaning set forth in Section
3(a).
“Bonus” has the
meaning set forth in Section
3(c)(ii).
“Business Day” means
any day that is not a Saturday, Sunday, legal holiday or other day on which
banks are required to be closed in New York, New York.
“Cause” has the
meaning set forth in Section
4(c).
“Company” has the
meaning set forth in the Caption.
“Company Business” has
the meaning set forth in Section
7(a).
“Company Entity” has
the meaning set forth in Section
3(a).
“Confidential
Information” has the meaning set forth in Section
6(c).
“Disability” has the
meaning set forth in Section
4(a).
“Employment Period”
has the meaning set forth in Section
1.
“Employee” has the
meaning set forth in the Caption.
“Person” means an
individual, partnership, corporation, limited liability company, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
“Restricted Period”
has the meaning set forth in Section
7(a).
“Restricted Territory”
has the meaning set forth in Section
7(a).
“Termination Date”
means the effective date of the termination of the Employee’s employment with
the Company, for any reason, by any party, or by death or
Disability.
“Without Cause” has
the meaning set forth in Section
4(c).
“Work Product” has the
meaning set forth in Section
6(d).
Section
10. General
Provisions.
(a) Severability. It
is the desire and intent of the parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
-6-
(b) Entire
Agreement. This Agreement amends, restates and supersedes the
Prior Agreement and embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof. This Agreement
supersedes and preempts any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof in any way.
(c) Survival.
Notwithstanding anything to the contrary contained herein, the provisions of
Section 6,
Section 7 and
Section 8 shall
survive the termination of this Agreement.
(d) Counterparts.
This Agreement may be executed in separate counterparts, each of which is deemed
to be an original and all of which taken together constitute one and the same
agreement.
(e) Successors and Assigns;
Beneficiaries. This Agreement is personal to the Employee and
without the prior written consent of the Company shall not be assignable by the
Employee other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee’s
heirs and legal representatives and the successors and assigns of the Company.
The Company reserves the right to assign this Agreement in whole or in part to
any of its Affiliates and upon any such assignment, the term “Company” will be
deemed to be such Affiliate.
(f) Governing
Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK
OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER
THAN THE STATE OF NEW YORK TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE
INTERNAL LAW OF THE STATE OF NEW YORK WILL CONTROL THE INTERPRETATION AND
CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW
OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.
(g) Waiver of Jury
Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS
RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE
SUBJECT MATTER HEREOF.
(h) Amendment and
Waiver. The provisions of this Agreement may be amended and waived
only with the prior written consent of the Employee and the Company and no
course of conduct or failure or delay in enforcing the provisions of this
Agreement shall be construed as a waiver of such provisions or affect the
validity, binding effect or enforceability of this Agreement or any provision
hereof.
(i) Notices. All
notices, requests, demands, claims, consents and other communications which are
required or otherwise delivered hereunder shall be in writing and shall be
deemed to have been duly given if (i) personally delivered or transmitted by
electronic mail, (ii) sent by nationally recognized overnight courier,
(iii) mailed by registered or certified mail with postage prepaid, return
receipt requested, or (iv) transmitted by facsimile (with a copy of such
transmission concurrently transmitted by registered or certified mail with
postage prepaid, return receipt requested), to the parties hereto at the
following addresses (or at such other address for a party as shall be specified
by like notice):
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(a)
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If
to the Board or the Company, to:
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000X
Xxxxxxx Xxxxxx
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Xxxxxx,
Xxxxx 00000
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Attention: Xxxxxxx
Xxxxxx
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000
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with
a copy to:
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Xxxxxx
& Whitney LLP
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000
Xxxx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx
Xxxxxxx, Esq.
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000; and
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(b)
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if
to the Employee to:
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Xxxxxx
X. Xxxxxx, Xx.
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000
Xxxxx Xxxxxx Xxxx
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Xxxxxxx,
Xxxxxxx 00000
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Telephone
No.: (000) 000-0000
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Facsimile
No.: (000) 000-0000
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or to
such other address as the party to whom such notice or other communication is to
be given may have furnished to each other party in writing in accordance
herewith. Any such notice or communication shall be deemed to have been received
(i) when delivered, if personally delivered or transmitted by electronic mail,
with receipt acknowledgment by the recipient by return electronic mail, (ii)
when sent, if sent by facsimile on a Business Day during normal business hours
(or, if not sent on a Business Day during normal business hours, on the next
Business Day after the date sent by facsimile), (iii) on the next Business Day
after dispatch, if sent by nationally recognized, overnight courier guaranteeing
next Business Day delivery, and (iv) on the 5th
Business Day following the date on which the piece of mail containing such
communication is posted, if sent by mail.
(j) Descriptive Headings.
The descriptive headings of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
(k) Construction.
Where specific language is used to clarify by example a general statement
contained herein, such specific language shall not be deemed to modify, limit or
restrict in any manner the construction of the general statement to which it
relates. The language used in this Agreement shall be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.
-8-
(l) Nouns and
Pronouns. Whenever the context may require, any pronouns used
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and
vice-versa.
[signature
page follows]
-9-
IN WITNESS WHEREOF, the
parties hereto have executed this Amended and Restated Employment Agreement as
of the date first written above.
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By:
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/s/
Xxxxxxx X. Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
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Title:
President and Chief Executive Officer
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EMPLOYEE
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/s/
Xxxxxx X. Xxxxxx, Xx.
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XXXXXX
X. XXXXXX, XX.
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