EMPLOYMENT AGREEMENT
EXHIBIT 10.1
This
Agreement (the “Agreement”), dated as of February 8, 2011 (the “Effective
Date”), is by and between SANSWIRE CORP. (the “Company”) and XXXXXXX XXXXXXX (the
“Employee”).
Introduction
The
Company desires to retain the services of the Employee pursuant to the terms and
conditions set forth herein and the Employee wishes to be employed by the
Company on such terms and conditions.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Employment. Pursuant
to the terms and conditions herein, the Company shall employ the Employee from
the Effective Date until terminated as provided herein.
2. Duties. The
Employee will initially serve as the Chief Financial Officer and Treasurer of
the Company and shall have such duties as the Chief Executive Officer shall
determine from time to time. The Employee will report to the Chief
Executive Officer. The Employee will be located at the Company’s
offices at Xxxxxxx Space Center, Florida.
3. Full Time; Best
Efforts. The Employee shall use the Employee’s best efforts to
promote the interests of the Company and its affiliated companies and shall
devote the Employee’s full business time and efforts to their business and
affairs. Notwithstanding the foregoing, Employee may serve on other
boards of directors, with the approval of the Board, or engage in religious,
charitable or other community activities as long as such services and activities
do not materially interfere with the Employee’s performance of the Employee’s
duties to the Company as provided in this Agreement.
4. Compensation and
Benefits. During the term of Employee’s employment with the
Company under this Agreement, the Employee shall be entitled to compensation and
benefits as follows:
(a) Base Salary. The
Employee will receive a salary at the rate of $100,000 annually (the “Base
Salary”), payable in accordance with the Company’s normal payroll practices and
subject to applicable taxes and withholding. The Employee’s Base Salary may from
time to time be increased, but not decreased, by the Board.
(b) Bonus. The Employee
will be eligible for an annual bonus for each fiscal year at the discretion of
the Board (the “Bonus”). The Bonus for a particular fiscal year will
be payable within 75 days of the end of such fiscal year. The payment
of any Bonus shall be prorated for any partial fiscal year during the term of
this Agreement. The Board shall determine in good faith the amount of
the Bonus, and such determination shall be binding and conclusive on the
Employee.
(c) Stock Options. On or promptly
following the Effective Date, the Company will grant Employee stock options to
purchase 1,500,000 shares of common stock, par value $0.00001 per share (the
“Common Stock”) of the Company (the “Option”). The Option shall be issued
pursuant to, and subject to the terms and conditions of, the Company’s 2004
Employee Stock Option Plan (the “Equity Plan”) and shall have an exercise price
set as the Fair Market Value per share (as defined in the Equity Plan) as of the
grant date. The Option granted to Employee shall vest as follows:
500,000 shares of the Option shall vest immediately upon the Effective Date and
during the period from the Effective Date through the eighteen month anniversary
of the Effective Date, the Option shall become vested with respect to an
additional 166,666 shares for each full quarter Employee continues to be
employed by the Company (provided, however, the final quarter of vesting shall
be as to 166,670 shares such that on the eighteen month anniversary of the
Effective Date, the full 1,500,000 shares shall be vested). The
vesting on the Options shall accelerate in full and be fully vested and
exercisable upon a Change of Control of the Company. For purposes hereof, a
“Change of Control” shall mean the consummation of a reorganization, merger,
share exchange, consolidation, or sale or disposition of all or substantially
all of the assets of the Company unless, in any case, the persons or entities
who or which Beneficially Own the Voting Securities of the Company immediately
before that transaction Beneficially Own, directly or indirectly, immediately
after the transaction, at least 75% of the Voting Securities of the Company or
any other corporation or other entity resulting from or surviving the
transaction (including a corporation or other entity which, as the result of the
transaction, owns all or substantially all of Voting Securities of the Company
or all or substantially all of the Company's assets, either directly or
indirectly through one or more subsidiaries) in substantially the same
proportion as their respective ownership of the Voting Securities of the Company
immediately before that transaction (capitalized terms as defined in the
Securities Exchange Act of 1934, as amended). Employee is also
eligible to receive future grants of stock options to purchase shares of Common
Stock of the Company at the discretion of the Board of Directors.
(d) Benefits. In
addition to the Base Salary and any Bonus, the Employee shall be entitled to
receive fringe benefits that are generally available to the Company’s employees
in accordance with the then existing terms and conditions of the Company’s
policies, including healthcare (which in 2011 is fully paid by the
Company).
(e) Vacation. The
Employee shall be entitled to fifteen (15) business days of paid vacation per
fiscal year in accordance with the Company’s vacation policies.
(f) Business
Expenses. The Company shall reimburse the Employee for all
reasonable expenses incurred by the Employee in the ordinary course of business
on behalf of the Company, subject to the presentation of appropriate
documentation, including the fees for professional memberships and continuing
education expenses incurred by Employee up to an annual aggregate of
$2,000.
(g) Withholding. The
Company will withhold from compensation payable to the Employee all applicable
federal, state and local withholding taxes.
(h) Directors and Officers Insurance;
Indemnity. The Company does not currently have Directors and
Officers Liability Insurance, but the Company hereby agrees to purchase such
insurance to cover all officers and directors as soon as
practicable. To the fullest extent permitted by law, the Company will
indemnify Employee against, and will hold the Employee harmless from, and pay
any expenses (including without limitation, all legal fees and court costs),
judgments, fines, penalties, settlements, damages and other amounts arising out
of or in connection with any act or omission of the Employee performed or made
in good faith on behalf of the Company, regardless of negligence. The
foregoing provisions will survive termination of the Employee’s employment with
the Company for any reason whatsoever and regardless of fault.
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5. Confidentiality; Intellectual
Property. The Employee agrees that during the Employee’s
employment with the Company, whether or not under this Agreement, and
thereafter:
(a) The
Employee will not at any time, directly or indirectly, disclose or divulge any
Confidential Information (as hereinafter defined), except as required in
connection with the performance of the Employee’s duties for the Company, and
except to the extent required by law (but only after the Employee has provided
the Company with reasonable notice and opportunity to take action against any
legally required disclosure). As used herein, “Confidential
Information” means all trade secrets and all other information of a business,
financial, marketing, employment, technical or other nature relating to the
business or employees of the Company including, without limitation, any customer
or vendor lists, prospective customer names, financial statements and
projections, know-how, pricing policies, operational methods, methods of doing
business, technical processes, formulae, designs and design projects,
inventions, computer hardware, software programs, business plans and projects
pertaining to the Company and including any information of others that the
Company has agreed to keep confidential; provided, that
Confidential Information shall not include any information that has entered or
enters the public domain through no fault of the Employee or any information
known to the Employee before the Effective Date.
(b) The
Employee shall make no use whatsoever, directly or indirectly, of any
Confidential Information at any time, except as required in connection with the
performance of the Employee’s duties for the Company.
(c) Upon
the Company’s request at any time and for any reason, the Employee shall
immediately deliver to the Company, or destroy if directed by the
Company, all materials (including all soft and hard copies) in the
Employee’s possession which contain or relate to Confidential
Information.
(d) All
inventions, modifications, discoveries, designs, developments, improvements,
processes, software programs, works of authorship, documentation, formulae,
data, techniques, know-how, secrets or intellectual property rights or any
interest therein (collectively, the “Developments”) made by the Employee, either
alone or in conjunction with others, at any time or at any place during the
Employee’s employment with the Company, whether or not reduced to writing or
practice during such period of employment, which relate to the business in which
the Company is engaged shall be and hereby are the exclusive property of the
Company without any further compensation to the Employee. In
addition, without limiting the generality of the prior sentence, all
Developments which are copyrightable work by the Employee are intended to be
“work made for hire” as defined in Section 101 of the Copyright Act of 1976, as
amended, and shall be and hereby are the property of the Company.
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(e) The
Employee shall promptly disclose all Developments to the Company. If
any Development is not the property of the Company by operation of law, this
Agreement or otherwise, the Employee will, and hereby does, assign to the
Company all right, title and interest in such Development, without further
consideration, and will assist the Company and its nominees in every way, at the
Company’s expense, to secure, maintain and defend the Company’s rights in such
Development. The Employee shall sign all instruments necessary for
the filing and prosecution of any applications for, or extension or renewals of,
letters patent (or other intellectual property registrations or filings) of the
USA or any foreign country which the Company desires to file and relates to any
Development. The Employee hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as such Employee’s agent
and attorney-in-fact (which designation and appointment shall be deemed coupled
with an interest and shall survive the Employee’s death or incapacity), to act
for and in the Employee’s behalf to execute and file any such applications,
extensions or renewals and to do all other lawfully permitted acts to further
the prosecution and issuance of such letters patent, other intellectual property
registrations or filings, or such other similar documents with the same legal
force and effect as if executed by the Employee.
(f) Attached
hereto as Exhibit
A is a list of all inventions, modifications, discoveries, designs,
developments, improvements, processes, software programs, works of authorship,
documentation, formulae, data, techniques, know-how, secrets or intellectual
property rights or any interest therein made by the Employee prior to the
Employee performing services for the Company (collectively, the “Prior
Inventions”) which (i) the Employee owns or has interest therein, (ii) relate to
the business of the Company and (iii) are not assigned to the Company hereunder;
or, if no such list is attached, Employee represents that there are no such
Prior Inventions. If in the course of the Employee performing
services for the Company, the Employee incorporates into a Company product,
process or machine a Prior Invention owned by the Employee or in which the
Employee has an interest, the Company is hereby granted and shall have a
non-exclusive, royalty-free, irrevocable, perpetual, transferable, worldwide
license to make, have made, modify, use, sell and otherwise exploit such Prior
Invention as part of or in connection with such product, process or machine and
any and all enhancements and extensions thereof.
6. Noncompetition;
Nonsolicitation. The Employee agrees that:
(a) during
the Employee’s employment with the Company, whether or not under this Agreement,
and thereafter during the Noncompetition Period (as hereinafter defined), the
Employee will not, directly or indirectly, individually or as a consultant to,
or an employee, officer, director, manager, stockholder (except as the owner of
less than 1% of the stock of a publicly traded company), partner, member or
other owner or participant in any business entity other than the Company, engage
in or assist any other person or entity to engage in any business which competes
with any business in which the Company is then engaging anywhere in the USA or
the world where the Company does business.
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(b) during
the Employee’s employment with the Company, whether or not under this Agreement,
and thereafter during the Noncompetition Period, the Employee will not, directly
or indirectly, individually or as a consultant to, or an employee, officer,
director, manager, stockholder (except as the owner of less than 1% of the stock
of a publicly traded company), partner, member or other owner or participant in
any business entity, offer employment or any consulting arrangement to, hire, or
otherwise interfere with the business relationship of the Company with, any
person or entity who is, or was within the six month period immediately prior
thereto, employed by, associated with or a consultant to the
Company.
(c) during
the Employee’s employment with the Company, whether or not under this Agreement,
and thereafter during the Noncompetition Period, the Employee will not, directly
or indirectly, individually or as a consultant to, or an employee, officer,
director, manager, stockholder (except as the owner of less than 1% of the stock
of a publicly traded company), partner, member or other owner or participant in
any business entity, solicit away from the Company or endeavor to entice away
from the Company, or otherwise interfere with the business relationship of the
Company with, any person or entity who is, or was within the six month period
immediately prior thereto, a customer, dealer, distributor or client of,
supplier, vendor or service provider to the Company.
(d) As
used herein, “Noncompetition Period” means 12 months from the date of the
termination of Employee’s employment with the Company, provided, however,
that such period shall only be 6 months if the Company terminates the Employee’s
employment without Cause.
7. Remedies; Applicability to Affiliated
Companies. Without limiting the remedies available to the
Company, the Employee acknowledges that a breach of any of the covenants
contained in Sections 5 or 6 herein could result in irreparable injury to the
Company for which there might be no adequate remedy at law, and that, in the
event of such a breach or threat thereof, the Company shall be entitled to
obtain a temporary restraining order and/or a preliminary injunction and a
permanent injunction restraining the Employee from engaging in any activities
prohibited by Sections 5 or 6 herein or such other equitable relief as may be
required to enforce specifically any of the covenants of Sections 5 or 6
herein. The foregoing provisions and the provisions of Sections 5 and
6 herein shall survive the term of this Agreement and the termination of the
Employee’s employment with the Company, and shall continue thereafter in full
force and effect in accordance with their terms. For purposes of
Sections 5, 6 and 7 of this Agreement, the term “Company” shall include the
Company, each of its affiliated companies, subsidiaries and parent company, as
applicable, and their respective successors and assigns.
8. Termination.
(a) General. The
Employee’s employment with the Company may be terminated at any time by the
Company with Cause or without Cause (which in the case of a termination without
Cause shall be effective after at least thirty (30) days prior written notice
thereof from the Company to the Employee), or in the event of the death or
Disability of the Employee. The Employee’s employment with the
Company may also be terminated by the Employee after at least thirty (30) days
prior written notice thereof from the Employee to the Company. Upon
receipt of such notice, the Company may elect, in its discretion, to terminate
the employment of Employee at any time following such notice; provided however
that in the event the Company elects to terminate the Employee following notice,
Employee’s Base Salary and benefits including any vesting of equity shall
continue to be paid and accrued during the notice period.
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(b) Definitions. As
used herein, the following terms shall have the following meanings:
“Cause”
means that the Employee has (i) willfully breached in any material respect any
fiduciary duty or legal or contractual obligation to the Company or any of its
affiliated companies, which breach in the case of a contractual obligation to
the Company, if curable, is not cured within thirty (30) days after written
notice to the Employee thereof, (ii) willfully failed to perform satisfactorily
the Employee’s material job duties, which failure, if curable, is not cured
within thirty (30) days after written notice to the Employee thereof, (iii)
engaged in gross negligence, willful misconduct, fraud, embezzlement, or acts of
dishonesty that has resulted in material injury to the Company or any of its
affiliated companies, or (iv) been convicted of or pleaded nolo contendere to
(A) any misdemeanor relating to the affairs of the Company or any of its
affiliated companies or (B) any felony.
“Disability”
means illness (mental or physical), which results in the Employee being unable
to perform the Employee’s duties as an employee of the Company for a period of
three (3) consecutive months, or an aggregate of six (6) months in any twelve
(12) month period, as determined in the reasonable judgment of an independent
physician mutually agreed upon by the Employee, or her personal representative
(as the case may be), and the Company. Nothing in this Section 9(b)
shall be construed to waive the Employee’s rights, if any, under existing law
including, without limitation, the Family and Medical Leave Act of 1993, 29
U.S.C. s.2601 et seq.
and the Americans with Disabilities Act, 42 U.S.C. s.12101 et seq.
Effects of
Termination. If the Employee’s employment is terminated during
the term of this Agreement, the Company shall have no further obligation to make
any payments or provide any benefits to the Employee hereunder after the date of
termination except for (i) payments of Base Salary, Bonus and expense
reimbursement that had accrued, but had not yet been paid, and any vested
benefits the Employee may have under any employee benefit plans, through the
date of termination, (ii) payments for any accrued but unused vacation time in
accordance with Company policy and (iii) if the Employee’s employment with the
Company is terminated by the Company without Cause (other than as a result of
the death or Disability of the Employee, or as contemplated by Section 8(c)
below) (A) continuation for a period of six (6) months (the “Severance Period”)
of payments of Base Salary at the rate in effect at the date of termination, and
(B) all health benefits, including the cost of COBRA continuation coverage for
Employee and his eligible dependents during the Severance Period, payable
beginning on the first payroll day following the termination date.
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(c) Conditions and Limitations to
Severance. Notwithstanding the foregoing, the Company’s
obligations to make payments to the Employee under subsection (iii) of the above
paragraph regarding “Effects of Termination” of this Agreement shall be subject
to the following provisions and conditions:
(i) General Release of
Claims. The Company’s obligation to make payments under
subsection (iii) of the above paragraph regarding “Effects of Termination” of
this Agreement shall be contingent upon the Employee executing a general release
of claims in a customary and reasonable form.
(ii) Consequences of
Breach. If the Employee breaches the Employee’s obligations
under Sections 5 or 6 of this Agreement, the Company may immediately cease all
payments payable to the Employee under subsection (iii) of the above paragraph
regarding “Effects of Termination” of this Agreement. The cessation
of these payments shall be in addition to, and not as an alternative to, any
other remedies at law or in equity available to the Company, including without
limitation the right to seek specific performance or an injunction.
(d) Survival. The
provisions of Sections 5 through 20 of this Agreement shall survive the term of
this Agreement and the termination of the Employee’s employment with the
Company, and shall continue thereafter in full force and effect in accordance
with their terms.
9. Enforceability. This
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision hereof shall be prohibited or invalid
under any such law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating or nullifying the remainder of
such provision or any other provisions of this Agreement. If any one
or more of the provisions contained in this Agreement shall for any reason be
held to be excessively broad as to duration, geographical scope, activity or
subject, such provisions shall be construed by limiting and reducing it so as to
be enforceable to the maximum extent permitted by applicable law.
10. Notices. Any
notice, demand or other communication given pursuant to this Agreement shall be
in writing and shall be personally delivered, sent by nationally recognized
overnight courier or express mail, or mailed by first class certified or
registered mail, postage prepaid, return receipt requested, or otherwise
actually delivered as follows: (a) if to the Employee: Xxxxxxx Xxxxxxx, 000
Xxxxxxxx Xxxxxxx Xxxx, Xxxxxxx, XX 00000, (b) if
to the Company: Sanswire Corp., Xxxxx Xxxx 000, Xxxxxxxx X0-000X, Xxxx 0000,
Xxxxxxx Xxxxx Xxxxxx, XX 00000, or if by mail, to Sanswire Corp., Mail Code:
SWC, Xxxxxxx Xxxxx Xxxxxx, XX 00000, Attention: General Counsel, or (c) at such
other address as may have been furnished by such person in writing to the other
parties.
11. Governing Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Florida, without regard to its conflict of law
provisions.
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12. Section 409A. This Agreement
is intended to comply with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) and the regulations
thereunder. To the extent that any provision in this Agreement is
ambiguous as to its compliance with Section 409A of the Code, the provision
shall be interpreted in a manner so that no payment due to Employee shall be
subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of
the Code. To the extent that any provision in the Agreement is
ambiguous as to its compliance with Section 409A of the Code, or to the extent
any provision in the Agreement must be modified to comply with Section 409A of
the Code, such provision shall be read, or shall be modified (with the mutual
consent of the parties), as the case may be, in such a manner so that no payment
due to Employee shall be subject to an “additional tax” within the meaning of
Section 409A(a)(1)(B) of the Code.
For
purposes of Section 409A of the Code, each payment made under this Agreement
shall be treated as a separate payment. In no event may Employee,
directly or indirectly, designate the calendar year of any
payment. All reimbursements provided under this Agreement shall be
made or provided in accordance with the requirements of Section 409A of the
Code, including, where applicable, the requirement that (i) any reimbursement be
for expenses incurred during Employee’s lifetime (or during a shorter period of
time specified in this Agreement), (ii) the amount of expenses eligible for
reimbursement during a calendar year may not affect the expenses eligible for
reimbursement in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to reimbursement
is not subject to liquidation or exchange for another benefit.
Notwithstanding
anything to the contrary herein, if a payment or benefit under this Agreement is
due to a “separation from service” for purposes of the rules under Treas. Reg. §
1.409A-3(i)(2) (payments to specified employees upon a separation from service)
and Employee is determined to be a “specified employee” (as determined under
Treas. Reg. § 1.409A-1(i)), such payment or benefit shall, to the extent
necessary to comply with the requirements of Section 409A of the Code, be made
or provided on the later of the date specified by the foregoing provisions of
this Agreement or the date that is six months after the date of Employee’s
separation from service (or, if earlier, the date of Employee’s
death). Any installment payments that are delayed pursuant to this
Section 12 shall be accumulated and paid in a lump sum on the first day of the
seventh month following Employee’s separation from service, and the remaining
installment payments shall begin on such date in accordance with the schedule
provided in this Agreement.
13. Amendments and
Waivers. This Agreement may be amended or modified only by a
written instrument signed by the Company and the Employee. No waiver
of this Agreement or any provision hereof shall be binding upon the party
against whom enforcement of such waiver is sought unless it is made in writing
and signed by or on behalf of such party. The waiver of a breach of
any provision of this Agreement shall not be construed as a waiver or a
continuing waiver of the same or any subsequent breach of any provision of this
Agreement. No delay or omission in exercising any right under this
Agreement shall operate as a waiver of that or any other right.
14. Binding
Effect. This Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective heirs, executors and
administrators, successors and assigns, except that the rights and obligations
of the Employee hereunder are personal and may not be assigned without the
Company’s prior written consent. Without limiting the generality of
the prior sentence, it is understood that the Company’s successors and assigns
shall have the right to enforce Sections 5, 6 and 7 of this
Agreement. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would be
required to perform it if no succession had taken place. Failure of
the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a material breach of this
Agreement. Any assignment of this Agreement by the Company shall not
constitute a termination of the Employee’s employment. Each
affiliated company, subsidiary and parent company of the Company shall be an
intended third party beneficiary of Sections 5, 6 and 7 of this
Agreement.
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15. Entire
Agreement. This Agreement constitutes the final and entire
agreement of the parties with respect to the matters covered hereby and replaces
and supersedes all other agreements and understandings relating hereto and to
the Employee’s employment.
16. Counterparts. This
Agreement may be executed in any number of counterparts, including counterpart
signature pages or counterpart facsimile signature pages, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
17. No Conflicting
Agreements. The Employee represents and warrants to the
Company that the Employee is not a party to or bound by any confidentiality,
noncompetition, nonsolicitation, employment, consulting or other agreement or
restriction which could conflict with, or be violated by, the performance of the
Employee’s duties to the Company or obligations under this
Agreement.
18. Review of
Agreement. The Employee acknowledges that the Employee (a) has
carefully read and understands all of the provisions of this Agreement and has
had the opportunity for this Agreement to be reviewed by counsel, (b) is
voluntarily entering into this Agreement and (c) has not relied upon any
representation or statement made by the Company (or its affiliates, equity
holders, agents, representatives, employees or attorneys) with regard to the
subject matter or effect of this Agreement. The Employee further
acknowledges that the provisions in Sections 5, 6 and 7 of this Agreement are
reasonable and necessary to protect the goodwill, customer relationships,
legitimate business interests and Confidential Information of the Company and
its affiliated companies, and the Company would not have entered into this
Agreement or the restricted stock agreement without the benefit of such
provisions.
19. Captions. The
captions of the sections of this Agreement are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section of
this Agreement.
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20. No Strict
Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises under any provision of
this Agreement, this Agreement shall be construed as if drafted jointly by the
parties thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of authoring any of the provisions of this
Agreement.
[Remainder of Page Intentionally Left
Blank.]
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This
Agreement has been executed and delivered as a sealed instrument as of the date
first above written.
By:
/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx
X. Xxxxxxxx
Title:
President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx
EXHIBIT
A
