Exhibit 10.33
XXXXXX, INC. WITH XXXXXX X. XXXXXXXXXX
EXECUTIVE EMPLOYMENT AGREEMENT
Executive Employment Agreement (this "Agreement"), dated as of the 16th
day of February, 2004 by and between Xxxxxx, Inc., a Delaware corporation,
("Xxxxxx," which term, as used herein, includes all subsidiaries of Xxxxxx,
whether now existing or hereafter organized or acquired), and Xxxxxx X.
Xxxxxxxxxx (the "Executive").
Whereas, Xxxxxx desires to employ the Executive as Chief Financial Officer
of Xxxxxx, and the Executive desires to serve Xxxxxx in such capacity and in
such other offices as the Board of Directors may determine hereafter from time
to time, all upon the terms and subject to the conditions hereinafter provided;
Now, Therefore, in consideration of the mutual covenants and agreements
herein contained, the parties hereto, intending to be legally bound, agree as
follows:
1. Employment.
Xxxxxx agrees to employ the Executive, and the Executive agrees to be
employed by Xxxxxx, upon the terms and subject to the conditions of this
Agreement.
2. Term.
The term of the Executive's employment under this Agreement shall be at
will and shall be terminable by either party on 30 days' prior written notice
(the "Term"), unless earlier terminated as hereinafter provided.
3. Duties; Efforts.
(a) During the Term of this Agreement, the Executive shall serve as
the Chief Financial Officer and Vice President of Xxxxxx (including, if
requested, any one or more of its subsidiaries), and shall perform all duties
customary to and commensurate with his position and such other duties as may be
assigned to him by the president and chief executive officer or the Board of
Directors of Xxxxxx. The Executive shall report directly to the chief executive
officer.
(b) The Executive shall devote all of his business time, attention
and energies to the business and affairs of Xxxxxx and its affiliated
corporations and shall use his best efforts to advance the best interests of
Xxxxxx; provided, however, that, it shall not be a violation of this Agreement
for the Executive to (i) subject to approval by the Board in its sole
discretion, serve on professional, industry, civic or charitable boards,
committees or organizations, and (ii) manage passive personal investments, so
long as any such activities do not interfere with the performance of the
Executive's responsibilities as an employee of Xxxxxx in accordance with this
Agreement.
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4. Compensation and Benefits.
(a) Base Salary. Commencing on the date hereof, Xxxxxx shall pay to
the Executive a base salary (the "Base Salary") of $155,000 per year during the
Term as compensation for the performance of services under this Agreement and
the Executive's observance and performance of all of the provisions hereof.
(b) Annual Bonus. At the Board's discretion, the Executive shall be
eligible to receive, with respect to each calendar year, a cash bonus (the
"Bonus"), in addition to and separate from the Executive's Base Salary.
(c) Stock Options. In addition to the Executive's Base Salary and
Annual Bonus (if any), upon approval of this Agreement by Xxxxxx'x Compensation
Committee and Board of Directors, Xxxxxx shall xxxxx to the Executive options to
purchase 50,000 shares of its common stock (the "Options") under Xxxxxx'x 2001
Stock Incentive Plan (the "Incentive Plan"), at an exercise price equal to 100%
of the fair market value per share of the Xxxxxx common stock as of the date of
grant, such fair market value and the terms of such options to be determined in
accordance with the provisions of the Incentive Plan. The options are intended
to be "incentive stock options" under the Internal Revenue Code of 1986, as
amended ("Code") and shall vest and become exercisable in 3 equal annual
tranches commencing on the first anniversary of the date of grant of the
Options. The Options shall be subject in all respects to the terms and
conditions of the Plan and Xxxxxx'x standard stock option agreement pursuant to
which such options will be granted. During the term of the Executive's
employment with Xxxxxx, the Executive shall not sell, assign, or otherwise
transfer any of the shares of common stock of Xxxxxx, whether received upon
exercise of the Option or otherwise acquired, without the prior written consent
of the Board. Prior to any such proposed sale, assignment, or other transfer,
the Executive shall notify the Board in writing of the terms thereof. Upon the
consent of the Board, the Executive may sell, assign, or transfer such shares in
accordance with such terms within the thirty (30) days following the grant of
such consent.
(d) Out-of-Pocket Expenses. Xxxxxx shall promptly reimburse the
Executive the reasonable expenses incurred by him in the performance of his
duties hereunder, including, without limitation, those incurred in connection
with business related travel or entertainment, or in accordance with Xxxxxx'x
expense policy.
(e) Participation in Benefit Plans. The Executive, subject to the
terms, conditions and eligibility requirements thereof, shall be entitled to
participate in or receive benefits under any pension plan, health and accident
plan or any other employee benefit plan or arrangement made available now or in
the future by Xxxxxx to its employees, including, without limitation, 401(k)
plans, medical, dental, life and disability plans of Xxxxxx. Nothing herein
shall be deemed to require Xxxxxx to establish or retain any such plans.
(f) Vacation. The Executive shall be entitled to vacation in
accordance with Xxxxxx'x vacation policy for senior management, which shall in
no event be less than three weeks, and to all paid holidays given by Xxxxxx to
its employees. No more than two consecutive weeks of vacation shall be taken at
any one time without the approval of the chief executive
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officer, and the Executive shall schedule vacations in a manner consistent with
Xxxxxx'x seasonal or other significant business requirements.
5. Termination and Termination Payments.
The Executive's employment hereunder shall terminate, or may be
terminated, as follows:
(a) For Cause. Xxxxxx shall have the right to terminate the
Executive's employment for Cause (as hereinafter defined), and, subject to
Xxxxxx'x obligations under Section 6(c), without Cause. A termination for
"Cause" is a termination by the chief executive officer or by the Board, if the
chief executive officer or the Board makes a finding that the Executive has:
(i) breached, failed or refused to comply with any of the
material terms of this Agreement (which shall include Section 4(d)), for
reasons other than Disability (as defined in Section 5(b)) or Good Reason
(as defined in Section 5(c)); or
(ii) refused, neglected or failed to perform his material
duties under this Agreement, for reasons other than Good Reason or
Disability; or
(iii) willfully or intentionally failed to carry out, in any
material respect, instructions of the President and Chief Executive
Officer or the Board which are not inconsistent with his position; or
(iv) been convicted of or admitted to (including by a plea of
nolo contendere) any act of fraud, larceny, misappropriation of funds or
embezzlement or to or of a crime other than traffic offenses; or
(v) has committed an act constituting sexual harassment or
employment discrimination; or
(vi) repeatedly engaged in substance abuse; provided, however,
that
(A) in the case of clauses (i), (ii) and (iii) above,
the Executive shall have received written notice at least 30 days prior to
such termination specifying the actions constituting Cause, during which
period he shall have failed or refused to cure such conduct; provided,
nevertheless, that the Executive may be terminated if such notice has been
given more than 2 times; and
(B) in the case of paragraphs (iv), (v), and (vi) above,
the chief executive officer or the Board may terminate the Executive
immediately upon delivery of a notice of termination.
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(b) Other than For Cause. Xxxxxx shall have the right to terminate
Executive's employment with Xxxxxx at any time without Cause upon thirty (30)
days' prior written notice to the Executive.
(c) Upon Death or For Disability. The Executive's employment with
Xxxxxx shall immediately terminate upon his death without any further action.
Xxxxxx shall have the right to terminate the Executive's employment immediately
upon delivery of notice to the Executive as a result of the Executive's
Disability. For purposes of this Agreement, a "Disability" shall be deemed to
have occurred if:
(i) the Executive has been unable, due to any physical or
mental illness or injury, substantially to perform his duties hereunder
for at least 45 consecutive days, and; or
(ii) Xxxxxx delivers a written notice to the Executive
("Disability Notice") following such period stating that the Board intends
to terminate the Executive by reason of Disability but no earlier than the
60th day following the onset of such Disability.
(d) By the Executive for Good Reason. The Executive shall have the right to
terminate his employment with Xxxxxx for Good Reason within 60 days after the
occurrence of an event constituting Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:
(i) Removal from his position as Chief Financial Officer
(other than for Cause or by reason of the Executive's death or
Disability);
(ii) Material diminution in the Executive's title, position,
duties or responsibilities, or the assignment to the Executive of duties
that are inconsistent, in a material respect, with the scope of duties and
responsibilities associated with the position of Chief Financial Officer,
excluding for this purpose an isolated and insubstantial action not taken
in bad faith;
(iii) Reduction in the Executive's Base Salary without his
consent or failure to award the 50,000 stock options contemplated by this
Agreement; provided, however, that Good Reason shall not exist pursuant to
subsection (i), (ii) and (iii) of this Section 5(d) unless (A) the
Executive shall have delivered to the Board written notice at least thirty
(30) days prior to such termination, specifying the actions constituting
Good Reason, and Xxxxxx shall have failed or refused to cure such conduct
within 30 days after Xxxxxx'x receipt of such notice; or
(iv) The breach, failure or refusal of Xxxxxx to comply with
any of its material obligations under this Agreement, in any case other
than an isolated, insubstantial and inadvertent failure not cured by
Xxxxxx within thirty (30) days after receiving written notice from the
Executive setting forth the nature of such breach; or
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(e) By the Executive other than for Good Reason. The Executive shall
have the right to terminate his employment with Xxxxxx at any time without Good
Reason upon thirty (30) days' prior written notice to Xxxxxx.
6. Payments Upon Termination.
(a) Death or Disability. In the event of the termination of the
Executive's employment as a result of his death or Disability, Xxxxxx shall:
(i) pay to the Executive or his estate, as the case may be,
the Base Salary through the date of his death or date of termination of
employment on account of Disability, as the case may be (pro rated for any
partial month);
(ii) treat the Options as set forth in the Stock Option
Agreement;
(iii) reimburse the Executive, or his estate, as the case may
be, for any expenses reimbursable pursuant to Section 4(d) (the amounts
payable pursuant to clause (i) and this clause (iii) being hereafter
referred to as the "Accrued Obligations"); and
(iv) provide to the Executive and/or his family, as the case
may be, at the expense of the Executive or his heirs, successors and
assigns, only such continued coverage under welfare, medical, accident,
life or other disability plans and programs in which the Executive and his
family participated immediately prior to his death or Disability as may be
required by COBRA or other applicable law, if any.
(b) By Xxxxxx for Cause or by the Executive other than for Good Reason. If
the Executive's employment is terminated by Xxxxxx for Cause or by the Executive
other than for Good Reason, Xxxxxx shall (i) pay to the Executive the Accrued
Obligations, and (ii) subject to the provisions of the following sentence, treat
the Options as set forth in the Stock Option Agreement, and the Executive shall
have no further entitlement to any other compensation or benefits from Xxxxxx.
Without limiting the generality of the foregoing, all vested and unvested
options held by the Executive shall be cancelled and of no effect. In addition,
the Executive shall be deemed to have offered any shares of Common Stock
purchased by him pursuant to the Stock Option Agreement to Xxxxxx at a price per
share equal to the lower of the Exercise Price or the fair market value (as
determined pursuant to the 2001 Stock Incentive Plan) of the Common Stock at the
time of such termination. Xxxxxx shall have 30 days from the date of termination
to deliver written notice to the Executive electing to purchase such shares.
(c) By the Executive for Good Reason or by Xxxxxx other than for Cause or the
Executive's Death or Disability. In the event that the Executive's employment is
terminated by the Executive for Good Reason or by Xxxxxx other than for Cause or
the Executive's death or Disability, then Xxxxxx shall:
(i) pay to the Executive the Accrued Obligations, within
thirty (30) days of termination of his employment;
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(ii) if the termination is by Xxxxxx without Cause effective
after the first anniversary of this Agreement, continue to pay Executive
his Base Salary in effect on the date of termination, at the regular
intervals when payroll would have been payable to the Executive, for a
period of six (6) months;
(iii) if the termination is by Xxxxxx without Cause effective
after the first anniversary of this Agreement, pay or reimburse the
Executive for continued coverage under all welfare benefit including
medical, accident, life or other disability plans and programs in which
the Executive participated immediately prior to his termination, (provided
that the Executive will share the cost of such benefit coverage in the
same proportion as was in effect for the Executive immediately prior to
his termination), for six (6) months.
(d) The Executive acknowledges that upon the termination of his
employment pursuant to Sections 6(a), 6(b) or 6(c), he shall not be entitled to
any payments or benefits that are not explicitly provided herein.
7. Covenant Regarding Inventions.
The Executive shall disclose promptly to Xxxxxx any and all
inventions, discoveries, improvements and patentable or copyrightable works
developed, initiated, conceived or made by him, either alone or in conjunction
with others, during the Term hereof and for a period of six months after the
Executive's termination of employment, all of which shall be considered "work
for hire," and he assigns and shall assign, without additional consideration,
all of his right, title and interest therein to Xxxxxx or its nominee. Whenever
requested to do so by Xxxxxx, the Executive shall execute any and all
applications, assignments or other instruments that Xxxxxx shall deem necessary
to apply for and obtain letters patent, trademarks or copyrights of the United
States or any foreign country, or otherwise protect Xxxxxx'x interest therein.
These obligations shall continue beyond the conclusion of the Term with respect
to inventions, discoveries, improvements or copyrightable works made by the
Executive during the Term and shall be binding upon the Executive's assigns,
executors, administrators and other legal representatives.
8. Protection of Confidential Information.
As an inducement to Xxxxxx to enter into and perform its obligations
under this Agreement, the Executive acknowledges that he has been and will be
provided with information about, and his employment by Xxxxxx will, throughout
the Term, bring him into close contact with, many confidential affairs of
Xxxxxx, including proprietary information about the business including, without
limitation, costs, profits, finances, internal financial statements,
projections, markets, sales, customers, advertisers, vendors, products, key
personnel, pricing policies, operational methods, technical processes and
methods, plans for future developments, software, data bases, computer programs,
specifications, documentation, designs, trade secrets, technology, know-how,
research and development, inventions, patents and copyrights (and any renewals,
reissues, extensions, divisions, continuations and continuations in part thereof
and registrations, applications, patents of addition and inventors certificates)
and other information not available to
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the public (collectively "Confidential Information"), all of which are
confidential and proprietary and which were developed or otherwise acquired by
Xxxxxx at its own effort and expense. The Executive further acknowledges that
the services to be performed by him under this Agreement are of a special
unique, unusual, extraordinary and intellectual character and that the nature of
the relationship of the Executive with Xxxxxx is such that the Executive is
capable of competing with Xxxxxx. In recognition of the foregoing, the Executive
covenants and agrees during the Term and thereafter he will:
(a) keep secret all Confidential Information and not disclose any
Confidential Information to anyone outside of Xxxxxx, either during or
after the Term, except (i) with Xxxxxx'x prior written consent; (ii) if
required to be disclosed by law or by any government, regulatory or
self-regulatory agency or body, except with respect to Confidential
Information which the Executive is advised in writing by counsel to Xxxxxx
is not required to be disclosed, provided that Executive shall have given
Xxxxxx prompt notice of any such order or subpoena so that Xxxxxx may
contest any such production; or (iii) for such Confidential Information
which is or becomes generally available to the public other than as a
result of the Executive's breach of this Section 8;
(b) not make use of any of any Confidential Information for his own
purposes or the benefit of anyone other than Xxxxxx; and
(c) deliver promptly to Xxxxxx on termination of this Agreement, or
at any time Xxxxxx may so request, all Confidential Information, including
but not limited to memoranda, notes, records, computer software discs,
reports and other confidential documents (and all copies thereof) relating
to the business, that he may then possess or have under his control,
except that he may retain personal notes, notebooks, journals and diaries
provided that such materials do not contain confidential information.
9. Restriction of Competition; Interference; Non-Solicitation.
(a) As an inducement to Xxxxxx to enter into and perform its
obligations under this Agreement, the Executive covenants and agrees that,
during the period of his employment and, for a period of one (1) year after the
termination of his employment under any circumstances, neither the Executive nor
his affiliates will, directly or indirectly, for their account or on behalf of
any other Person (as defined in Section 9(b) below) or as an employer, employee,
consultant, manager, agent, broker, contractor, stockholder, director or officer
of a corporation, investor, owner, lender, partner, joint venturer, licensor,
licensee, sales representative, distributor, or otherwise:
(i) Solicit or engage in any business that engages in the
business of Xxxxxx (each, a "Competitive Business");
(ii) Directly or indirectly for his own account or the benefit
of others solicit, hire or retain any employee of Xxxxxx or its affiliates
or persuade or entice any employee of Xxxxxx or its affiliates to leave
the employ of Xxxxxx or its affiliates;
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(iii) Molest or interfere with the goodwill and relationship
with any of the customers or suppliers of Xxxxxx or its affiliates;
(iv) Persuade, accept, induce or solicit any of the customers,
subscribers or accounts of Xxxxxx or its affiliates, now existing or
hereafter obtained, to engage anyone, other than Xxxxxx or its affiliates,
to design, manufacture or market foot and gait-related biomechanical
products for such customers, subscribers or accounts; or
(v) Invest in, lend money or give financial support to any
Competitive Business.
(b) Nothing contained in this Section 9 shall be deemed to prohibit the
Executive from directly acquiring or holding, solely for investment, securities
of any entity some of the activities of which constitute a Competitive Business
so long as such securities do not, in the aggregate, constitute more than five
percent (5%) of any class or series of outstanding securities of such entity.
For the purpose of this Agreement, "Person" shall mean any individual, entity or
group within meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
(c) Notwithstanding the foregoing, if Xxxxxx shall fail to make any
payment due to the Executive under Section 6(c) which failure shall continue for
ten (10) days after delivery to Xxxxxx of written notice of non-payment, the
restrictions set forth in subsection (a) above shall terminate.
10. Specific Remedies.
It is understood by the Executive and Xxxxxx that the covenants
contained in this Section 10 and Sections 7, 8 and 9 are essential elements of
this Agreement and that, but for the agreement of the Executive to comply with
such covenants, Xxxxxx would not have agreed to enter into this Agreement. If
the Executive commits a material breach of any of the provisions of Sections 7,
8 or 9 hereof, which is not cured or rectified within the time periods set forth
in Section 5(a) above, such breach shall be grounds for termination for Cause.
In addition, the Executive acknowledges that Xxxxxx may have no adequate remedy
at law if he violates any of the terms thereof. The Executive therefore
understands and agrees that Xxxxxx shall have, without prejudice as to any other
remedies, the right upon application to any court of proper jurisdiction and
without posting of any bond or other security whatsoever, to a temporary
restraining order, preliminary injunction, injunction, specific performance or
other equitable relief, it being acknowledged and agreed that any such breach
will cause irreparable injury to Xxxxxx and that money damages will not provide
an adequate remedy to Xxxxxx.
11. Acknowledgments of the Executive and Xxxxxx.
(a) The Executive represents that (i) he has the right to enter into
this Agreement, and this Agreement constitutes a valid and binding obligation
enforceable in accordance with its terms, (ii) his execution and delivery of
this Agreement, and the performance of his obligations hereunder are not in
violation of, and do not conflict with or constitute a
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default under, any agreement by which he is bound or any order, decree or
judgment to which he is subject; and (iii) the provisions of Section 7, 8 and 9
will not impose a hardship, financial or otherwise, on the Executive nor prevent
him from being gainfully employed.
(b) Xxxxxx represents that (i) it has all requisite corporate power
and authority to enter into and perform its obligations under this Agreement,
(ii) the execution and delivery of this Agreement by Xxxxxx and the performance
by Xxxxxx of the transactions contemplated herein have been duly and validly
authorized by all necessary corporate action, (iii) this Agreement is a legal,
valid and binding obligation of Xxxxxx and (iv) the execution and delivery of
this Agreement by Xxxxxx and the performance of its obligations hereunder are
not in violation of, and do not conflict with or constitute a default under any
agreement by which Xxxxxx is bound or any order, decree or judgment to which
Xxxxxx is subject.
12. Notices.
Any notice or other communications required or permitted hereunder shall
be in writing and shall be deemed effective (a) upon personal delivery, if
delivered by hand, (b) upon receipt of electronic confirmation, if sent by
facsimile transmission, (c) three (3) days after the date of deposit in the
mails, if mailed by certified or registered mail (return receipt requested), or
(c) on the next business day, if mailed by an overnight mail service to the
parties:
if to Xxxxxx: if to the Executive:
Xxxxxx, Inc. Xx. Xxxxxx X. Xxxxxxxxxx
000 Xxxxxxx Xxxx 00 Xxxxx Xxxx Xxxx
Xxxx Xxxx, Xxx Xxxx 00000 Xxxxxxx, Xxx Xxxx 00000
Att'n: Xx. Xxxxxx Xxxxxx, Chief Executive Facsimile:________________________
Officer
Facsimile: (000) 000-0000
Copies of all notices to Xxxxxx or the Executive under this Agreement shall be
sent to:
Xxxx Xxxxxxx, P.C.
1350 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
or at such other address or facsimile number as either party may from time to
time specify to the other.
13. Miscellaneous.
(a) Successors; Binding Effect; Third Party Beneficiaries. This
Agreement is personal to the Executive and, without the prior written consent of
Xxxxxx, shall not be assignable by the Executive otherwise than by will or the
laws of descent and distribution with
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respect to the Executive's rights, if any, to be paid or receive benefits
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives. Except for the foregoing, this Agreement
shall not create any rights in favor of any party other than the parties hereto
or their respective successors and assigns.
(b) Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York (without
giving effect to the principles of conflicts of law). Xxxxxx and the Executive
each agrees that the federal or state courts located in the County of New York
shall have exclusive jurisdiction in connection with any dispute arising out of
this Agreement. Any litigation proceeding under this Agreement shall be
confidential in nature to the fullest extent permitted by applicable law.
(c) Severability. If any provision of this Agreement, or any part of
any of them, is hereafter construed or adjudicated to be invalid or
unenforceable, the same shall not affect the remainder of the covenants or
rights or remedies which shall be given full effect without regard to the
invalid portions. If any of the covenants set forth herein is held to be invalid
or unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision and in its
reduced form said provision shall then be enforceable.
(d) Headings. The headings of this Agreement are for convenience of
reference only and shall not affect in any manner any of the terms and
conditions hereof.
(e) Acts and Documents. The parties agree to do, sign and execute
all acts, deeds, documents and corporate proceedings reasonably necessary or
desirable to give full force and effect to this Agreement.
(f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
(g) Modifications and Waivers. No term, provision or condition of
this Agreement may be modified or discharged unless such modification or
discharge is authorized by the Board and is agreed to in writing and signed by
the Executive. No waiver by either party hereto of any breach by the other party
hereto of any term, provision or condition 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.
(h) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter herein and
supersedes all prior agreements, negotiations and discussions between the
parties hereto. This Agreement may be amended only in writing executed by the
parties hereto affected by such amendment.
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In Witness Whereof, the parties hereto have executed this Executive
Employment Agreement on the day and year first set forth above.
Xxxxxx, Inc., a New York corporation
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: Chief-Executive Officer
/s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
