EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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This agreement (the "Agreement) is made and effective as of October
23, 2002, by and between Bioenvision Ltd, a private limited company organized
under the laws of the United Kingdom and a wholly owned subsidiary of
Bioenvision, Inc, a Delaware Corporation (the "Company"), and Xxxx X Xxxxxxxx
(the "Executive").
WHEREAS, the Company desires to continue to retain the Executive in
its employ as Commercial Director (Europe) of the Company for the period
provided in this Agreement and the Executive has agreed to continued employment
with the Company in accordance with the contractual terms and conditions set
forth below; and
WHEREAS, this Agreement is intended to, and shall, set forth the
definitive agreement of the parties.
NOW, THEREFORE, for and in consideration of these recitals and
premises, and the respective promises, covenants and agreements contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
Section 1. Employment. The Company hereby employs the Executive, and
the Executive hereby accepts such employment with the Company, for the term of
employment set forth in Section 2 hereof, all upon the terms and conditions
hereafter set forth.
Section 2. Term. Employment shall be for a term commencing on
October 6, 2002, and, subject to prior termination under Section 8, Section 9,
Section 10, Section 12 or Section 13 hereof expiring on the one-year anniversary
of such date (October 6, 2003); provided, however, that if the Company has not
delivered to Executive written notice of termination no less than thirty (30)
days prior to October 6, 2003, the term shall extend beyond such date and the
following sentence shall apply. Following October 6, 2003, the term of this
Agreement automatically shall be extended for additional six-month terms unless
and until terminated by the Company giving the Executive no less than 6 months
prior written notice or the Executive giving the Company no less than 3 months
prior written notice, which notice shall be delivered in accordance with Section
19 hereof For purposes of this Agreement, any reference to the "term" of this
Agreement shall include the original term and any extension thereof.
Section 3. Duties of the Executive. The Executive shall serve as Commercial
Director (Europe) of the Company. The Executive shall perform such executive
duties as a Commercial Director (Europe) would normally perform or as otherwise
specified in the By-Laws of the Company as in effect on the date of this
Agreement, and shall perform in addition thereto, such other reasonable duties
as the Board of Directors of the Company (together with any applicable
sub-committee or sub-committees thereof, the "Board") may request consistent
with Executive's position and title. Except as may otherwise be approved in
advance by the Board and except during vacation periods and periods of absence
due to sickness, personal injury or other disability, the Executive shall devote
all of his working time and his best efforts to the performance of his duties
hereunder. Notwithstanding the foregoing, nothing contained herein shall
preclude the Executive from (a) serving on the boards of directors or other
companies or organizations with the approval of the Board (not to be
unreasonably withheld) or serving on the boards of directors of not-for-profit
companies or organizations without the approval of the Board, (b) investing in
and managing passive investments or (c) pursuing his personal, financial and
legal affair provided that such activity does not materially interfere with the
performance of the Executive's obligations hereunder.
Section 4. Compensation
(a) For the period commencing on the date of this Agreement, the
Executive's base salary shall be (pound)120,000 (and during the term of this
Agreement, not less than (pound)120,000) on an annualized basis. During the term
of the Agreement the Executive's salary shall be reviewed at least annually by
the Board to determine whether any further increase is warranted and
appropriate. Except as set forth in this Section 4, such compensation shall be
payable at the times and in the manner consistent with the Company's general
policies regarding compensation of executive employees, but in no event less
frequently than once each calendar month.
(b) The Company hereby grants and issues to the Executive, incentive
stock options (subject to stockholder approval of the related option plan,
otherwise such options shall be non-qualified stock options under the Internal
Revenue Code) with terms commensurate with the terms of options previously
issued to the Company's management to purchase 300,000 share of common stock at
an exercise price equal to $1.45 per share (the average of the high and low bid
price of shares of the Company's common stock on
the date hereof (the "Grant" Date")); 100,000 of which options vest on each of
the first, second and third anniversaries of October 23, 2002 or earlier upon
Executive's departure for good reason (pursuant to one or more of the events set
forth in Sections 9 (i) or 9 (ii)), a Change of Control (as defined in Section
9) or termination other than for Cause (as defined in Section 8). If Executive
resigns other than for good reason, Executive shall forfeit all unvested stock
options issuable hereunder as of the effective date of such resignation. If
Executive is terminated for Cause, Executive shall forfeit all vested and
unvested stock options issued or issuable hereunder as of the effective date of
such termination. If a Change of Control (as defined under Section 9) occurs
which prevents any incentive stock options of Executive from receiving
favourable tax treatment under Section 422 of the Internal Revenue Code of 1986,
Executive shall be held harmless from any loss of such favourable tax treatment.
(c) In addition to the base salary provided by Section 4(a) hereof
and the incentive stock options provided in Section 4 (b) hereof, the Executive
shall be eligible annually to receive any incentive bonus (the "Bonus") that the
Board may grant to him based on the Company's executive compensation plan then
in effect, based on the Board's assessment of the Executive's individual
performance, which decision shall be made by the Board in its sole discretion.
The Board shall give written notice to the Executive of the grant of any such
Bonus and the amount thereof upon direction of the Board. Such Bonus shall be
payable on the next date on which the Executive is entitled to receive a payment
of his base compensation. The Board may from time to time authorize such
additional compensation to the Executive, in cash, property, options or warrants
as the Board may determine in its sore discretion to be appropriate. Payment of
any bonus, if any, is in the sole and absolute discretion of the Board.
Section 5. Executive Benefits.
(a) In addition to the compensation described in Section 4, the
Company shall make available to the Executive and his eligible dependants such
benefits which are comparable to those provided to other executive and
management employees of the Company, including without limitation, any medical,
group hospitalization, health, dental care or sick leave plan, life or other
insurance or death benefit plan, travel or accident insurance or other present
or future group employee benefit plan or program of the Company for which key
executives are or shall become eligible.
(b) The Executive shall also be entitled to the benefit of a vehicle
to be provided by the Company, of a type appropriate to the Executive's position
within the company, in the discretion of the Chairman of the Board, for use by
the Executive in carrying out his duties and also for his reasonable personal
use (which such reasonable personal use shall be determined in the sole
discretion of the Chairman of the Board).
(c) The Executive shall be entitled to 4 weeks paid vacation per
year, which shall be pro-rated for partial years. The Executive may carry over
from year to year up to 1 month of unused vacation time. Notwithstanding
anything herein to the contrary, the Executive may not take more than two (2)
weeks vacation during any twelve (12) week period without the prior written
permission of the Board, which shall not be unreasonably withheld. Upon a Change
of Control (as defined in Section 9), Executive promptly shall receive a
one-time cash payment for accrued vacation time at his then-current base salary
for up to 1 month of unused vacation time.
Section 6. Expenses. The Company shall also pay or reimburse the
Executive for all reasonable and necessary expenses incurred by the Executive in
connection with his duties on behalf of the company in accordance with the
general policies of the Company and his employment by the Company pursuant to
this Agreement.
Section 7. Place of Performance. In connection with his employment
by the Company, unless otherwise agreed by the Executive, the Executive shall be
based at the principal executive offices of the Company in Edinburgh, UK, except
for travel reasonably required for Company business.
Section 8. Termination. (a) The Company may terminate Executive's
employment hereunder for "Cause" which shall mean:
(1) The Executive is indicted for any crime involving moral
turpitude or punishment by imprisonment;
(2) Executive's commission of an act of fraud;
(3) Executive's continuing repeated wilful failure or refusal to
perform his duties as required by this Agreement, provided, that
termination of Executive's employment pursuant to this subparagraph (c)
shall not constitute valid termination for Cause unless Executive shall
have first received written notice from the Board stating with
reasonable specificity the nature of such failure or refusal and
affording Executive at least fifteen (15) days to correct the act or
omission complained of;
(4) Gross negligence, insubordination, or material violation by
Executive of any duty of loyalty to the Company or any other material
misconduct on the part of Executive; or
(5) A material breach of this Agreement by the Executive.
(b) In addition, the Company may terminate Executive's employment
hereunder without "Cause" (as defined in Section 8(a) above).
Section 9. Resignation. (a) In the event that during the term of
this Agreement:
(i) the Company shall (A) fail to continue the Executive as
Commercial Director (Europe); (B) reduce the Executive's base salary below the
minimum amount specified in Section 4(a) without the Executive's prior written
consent; (C) materially violate any material term of this Agreement (each, a
"Permitted Resignation"); or
(ii) there shall occur a "Change of Control", which shall mean the
occurrence during the term of this Agreement of any of the following events:
(A) the Company is merged, consolidated or reorganized into or with
another corporation or other legal persona, and as a result of such merger,
consolidation or reorganization less than fifty percent (50%) of the combined
voting power of the then outstanding securities entitled to vote generally in
the election of directors ("Voting Stock") of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
Voting Stock of the Company immediately prior to such transaction, or
(B) The Company sells or otherwise transfers all or substantially all of
its assets to another corporation or other legal person, and as a result of such
sale or transfer less than fifty percent (50%) of the combined voting power of
the then outstanding Voting Stock of such corporation or person immediately
after such sale or transfer is held in the aggregate by the holders of Voting
Stock of the Company immediately prior to such sale or transfer, or
(C) Any change in the constitution of the Board of Directors of the
Company in conjunction with a transaction contemplated by Sections 9(ii)(A) or
9(ii)(B) above;
then, in each case outlined above in this Section 9, the Executive, at his sole
option, may give notice to the Company at any time within ten (10) days after
the occurrence of any such event of his election to resign and terminate this
Agreement effective immediately upon receipt of such notice (delivered in
accordance with Section 19 hereof), or effective upon such other date (not later
than (10) days following such notice) that the Executive may designate in such
notice (the "Effective Date") and Executive shall receive the payments and other
compensation provided in Section 4(b) and Section 11.
(b) In addition to the foregoing, Executive shall have the right to
resign other than such resignations as would constitute a Permitted Resignation
or other than upon a Change of Control, in each case, in accordance with the
terms set forth in Section 2 above.
Section 10. Death. The term of this Agreement shall terminate on the
death of Executive.
Section 11. Termination Payment. If the Executive's employment hereunder is
terminated by the Executive by Permitted Resignation, upon a Change of Control
or by the Company other than for Cause, prior to the end of the term of this
Agreement then the Company shall be obligated to pay to the Executive certain
termination payments and make available certain benefits, as follows:
(a) Termination Payment. The Company shall pay to the Executive a
lump sum in cash, payable within ten (10) business days after the effective date
of such termination, equal to the sum of (i) 0.5 multiplied by the Executive's
base salary pursuant to Section 4, and (ii) a payment equal to six (6) months of
Executive's then current base salary in complete satisfaction of the Company's
obligation to provide no less than six (6) months prior written notice under
Section 2 above.
(b) Options. Notwithstanding any provision to the contrary in any
option agreement or other agreement or in any plan, except for a termination for
Cause pursuant to Section 8 or a resignation by Executive under Section 9 which
does not constitute a Permitted Resignation or does not occur upon a Change of
Control, all of the Executive's outstanding stock options shall immediately vest
and become exercisable and the Executive shall have the full term of the option
to exercise any of the Executive's stock options.
Section 12. No other Termination Compensation. Except as specifically provided
above, upon termination of this Agreement for any reason the Executive shall not
be entitled to any severance pay or to any other compensation or payments (by
way of salary, damages or otherwise) of any nature relating to this Agreement or
otherwise relating to or arising out of his employment by the Company.
Section 13. Mitigation Obligation. The Executive shall mitigate damages by
seeking other employment or otherwise; provided, however, that the Executive is
under no obligation to mitigate any amount provided for by insurance policies
under this Agreement.
Section 14. Forum Selection. Any disputes related to the subject matter hereof
shall be litigated in the Scottish Courts.
Section 15. Indemnification. To the maximum extent permitted under the Laws of
the State of Delaware (USA), By-Laws and Certificate of Incorporation of the
Company as in effect from time to time:
(a) The Executive shall be indemnified and held harmless by the
Company, as provided under such corporate laws or such By-Laws, as applicable,
for any and all actions taken or matters undertaken, directly or indirectly, in
the performance of his duties and responsibilities under This Agreement or
otherwise on behalf of the Company, and
(b)without limiting clause (a), the Company shall indemnify and hold
harmless the Executive from and against (i) any claim, loss, liability,
obligation, damage, cost, expense, action, suit, proceeding or cause of action
(collectively , "Claims".) arising from or out of or relating to the Executive's
performance as an officer, director, employee or agent of the Company or any of
its affiliates or in any other capacity, including, without limitation, any
fiduciary capacity, in which the Executive serves at the request of the Company,
and (ii) any cost or expense (including, without limitation, fees and
disbursements of counsel) (collectively, "Expenses") incurred by the Executive
in connection with the defence or investigation thereof. If any Claim is
asserted or other matter arises with respect to which the Executive believes in
good faith the Executive is entitled to indemnification as contemplated hereby,
the Company shall pay the Expenses incurred by the Executive in connection with
the defence or investigation of such Claim or matter (or cause such Expenses to
be paid) on a monthly basis, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the then currently
prime rate as reported in the Wall Street Journal as in effect from time to
time, compounded annually, if the Executive shall be found, as finally
judicially determined by a court of competent jurisdiction not to have been
entitled to Indemnification hereunder.
Notwithstanding the foregoing, the Company's obligation to indemnify Executive
hereunder shall be subject to (i) timely notification by Executive hereunder of
any claims that are subject to indemnification under this Section 15 (and any
failure of Executive to so notify the Company which shall cause the Company to
compromise any defence to such claim will cause the
Company not to be obligated to indemnify Executive hereunder) and (ii) the
Company will have the right to undertake the defence of and compromise, settle
or otherwise dispose of any claim for which it may be subject to indemnify
Executive hereunder.
Section 16. Agreement. This Agreement supersedes any and all other agreements,
either oral or written, between the parties hereto with respect to the subject
matter hereof, and contains all of the covenants and agreements between the
parties with respect to such subject matter, and Executive has received legal
counsel regarding the entirety of the Agreement.
Section 17. Withholding of Taxes. The Company may withhold from any amounts
payable under this agreement all foreign, federal, state, city or other taxes as
the Company is require to withhold pursuant to any law or government regulation
or ruling.
Section 18. Successors and Binding Agreement.
(a) The Company will reasonably require any successor (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) to all or substantially all of the business or assets of the Company
by agreement in form and substance satisfactory to the Executive acting
reasonably, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent the Company would be required to perform if no
such succession had taken place. This Agreement will be binding upon and inure
to the benefit of the Company and any successor to the Company, including,
without limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by purchase,
merger, consolidation, reorganization or otherwise (and such Successor shall
therefore be deemed the "Company" for the purposes of this Agreement).
(b) This Agreement will inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributes and legatees.
(c) The rights of the Company under this Agreement may without the
consent of the Executive, be assigned by the Company in its sole and unfettered
discretion (i) to any person, firm, corporation or other business entity which
at any time, whether by purchase, merger, or otherwise, directly or indirectly,
acquires all or substantially all of the assets of business of the Company, or
(ii) to any subsidiary or affiliate of the Company (the "Company Group"), or any
transferee, whether by purchase, merger or otherwise, which directly or
indirectly acquires all or substantially all of the assets of the Company or any
other member of the Company Group.
Section 19. Notices. For all purposes of this Agreement, all
communications, including, without limitation, notices, consents, request or
approvals, required or permitted to be given hereunder will be in writing and
will be deemed to have been duly given when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof confirmed), or five
business days after having been mailed by registered or certified mail, return
receipt requested, postage prepaid, or three business days after having been
sent by a nationally recognized overnight courier service such as Federal
Express, UPS, or Purolator, addressed to the Company (to the attention of the
Secretary of the Company) at its principal executive offices and to the
Executive at his principal residence, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that
notices or changes of address shall be effective only upon receipt.
Section 20. Governing Law. Except as expressly set forth in this
Agreement, the validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive
laws of Scotland,.
Section 21. Severability and Reformation. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of the parties under this Agreement
would not be materially and adversely affected thereby, such provision shall be
fully separable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part thereof,
the remaining provisions of this Agreement shall remain in full force and effect
and shall not be affected by the illegal, invalid or unenforceable provision or
by its severance there from, and, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible, and the parties
hereto request the court or any arbitrator to
whom disputes relating to this Agreement are submitted to reform the otherwise
illegal, invalid or unenforceable provision in accordance with this Section 21.
Section 22. Survival of Provisions. Notwithstanding any other
provision of this Agreement, the parties respective rights and obligations under
Sections 4, 5, 11, 12, 13, 14, 15, 16, 17 and 19 hereof, and under any other
Sections that provide a party with rights (including without limitation, rights
to receive payments) that have not been fully satisfied as of such termination
or expiration, will survive any termination or expiration of this Agreement or
the termination of the Executive's employment for any reason whatsoever.
Section 23. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Unless otherwise
noted, references to "Sections" are to sections of this Agreement. The captions
used in this Agreement are designed for convenient reference only and are not to
be used for the purpose of interpreting any provision of this Agreement.
Section 24. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same Agreement. The delivery by
facsimile of an executed counterpart of this Agreement shall be deemed to be an
original and shall have the full force and effect of an original copy.
Section 25. Confidentiality.
(a) As used herein, the term "Confidential Information" with respect
to any person means all trade secrets and confidential information and know-how
of such person.
(b) Executive acknowledges that in the course of his employment by
the Company he will acquire Confidential Information of the Company and that
such information constitutes a valuable asset of the Company. Executive shall
not, without the prior written consent of the Company, while employed by the
Company or any time thereafter, use or disclose or enable anyone else to use or
disclose any Confidential Information of the Company (whether or not developed
by Executive), except in the normal course of performing his duties for the
Company.
(c) In the event that Executive shall at any time receive any
Confidential Information of any third party in connection with his employment by
the Company, he shall maintain such Confidential Information in confidence in
accordance with the Company's obligations to such third party.
(d) While employed by the Company, Executive shall not use, or
disclose to other employees of the Company, any Confidential Information of his
former employers, former business associated or any other third parties, unless
(i) written permission has been given by such third parties to Executive
permitting Executive to use and/or disclose such information and (ii) the
Company approves in writing of such use and/or disclosure.
Section 26. Return of Materials. Upon termination of Executive's
employment with the Company for any reason (or prior thereto if requested by the
Company), Executive shall promptly deliver to the Company all documents and
other materials in his possession, custody or control (whether prepared by
Executive or others) that relate in any manner to the past, present or
anticipated business and affairs of the company, including, without limitation,
any such documents and materials that contain or constitute Confidential
Information.
Section 27. Disclosure of Works and Invention/Assignment of Patents.
Executive shall promptly disclose to the Company or its nominee any and all
works, inventions, discoveries and improvements that are authored, conceived or
made by Executive while employed by the Company and that relate to the business
or activities of the Company, and Executive hereby assigns and agrees to assign
all of his interest therein to the Company or its nominee. Whenever requested to
do so by the Company, Executive shall execute any and all applications,
assignments or other instruments which the Company shall deem necessary to apply
for and obtain Letters Patent or Copyrights of the United States or any foreign
country or to otherwise protect the Company's interest therein with respect to
such Letters of Patent or Copyrights which relate to the business or activities
of the Company. Such obligations shall continue after Executive's employment
with the Company terminates with respect to works, inventions, discoveries, and
improvements authored, conceived or made by Executive during the period of his
employment by the company, and shall be binding upon Executive's assigns,
executors, administrator and other legal representatives.
Section 28. Work Made for Hire. Executive acknowledges that his
duties at the Company may include the preparation of materials, including
written or graphic materials, and agrees that any such materials conceived or
written by him shall be done as "work made for hire" as defined and used in the
copyright Act of 1976, 17 U.S.C 1 et seq. In the event of publication of such
materials, Executive understands that since work is a "work made for hire" the
Company will solely retain and own all rights in such materials, including right
of copyright.
Section 29. Non-Solicitation and Non-Competition. Executive shall
not, while employed by the Company and during the six month period following the
date on which Executive's employment with the Company terminates for any reason
(the "Specified Period"), directly or indirectly.
(i) solicit or induce, or attempt to solicit or induce, any employee
of the Company to leave the employ of the Company;
(ii) employ, or solicit for employment, on his behalf or on behalf
of any other person (other than the Company), any person that is or was at any
time an employee of the Company (excluding clerical employees); (provided,
however, that the foregoing restriction shall cease to apply to a former
employee of the Company months after he ceases to be employed by the Company);
or
(iii) take any other action detrimental to the relationship of the
Company with its employees, customers or suppliers.
In addition to the foregoing, while employed by the Company,
Executive shall not (A) solicit the trade of, or trade with, any customer or
prospective customer of the Company (except for the benefit of the Company) or
(B) engage in any business in the Specified Areas that is competitive with any
aspect of the business that is being conducted (or planned) by the Company.
Section 30. Other Restrictions on Competition. During the Specified
Period, Executive shall not, whether alone or in association with any other
person, directly or indirectly have any interest or association (including,
without limitation, as a shareholder partner, director, officer, employee,
consultant, sales representative, supplier, distributor, agent or lender) in or
with any person engaged in a business in the Specified Areas that is in
competition with the Company, provided, however, that the foregoing shall not
prohibit Executive from owning securities of any publicity traded company that
is engaged in any such business as long as Executive does not own at any time 5%
or more of any class of the equity securities of such company.
For purposes of the foregoing, the "Specified Areas" means
worldwide.
Section 31. Equitable Relief. Executive acknowledges that any remedy
at law for any breach of any of the covenants contained in Section 25, 26, 27,
28, 29, 30 hereof may be inadequate. Accordingly, the Company shall be entitled
(without the necessity of showing any actual damage or posting a bond or
furnishing other security) to specific performance or any other mode of
injunctive and/or equitable relief to enforce its rights under Sections or any
other relief a court might aware, such rights to be cumulative with and not
exclusive of any other remedy.
Section 32. Underwriting. Whereas the payments and compensation
contained within this Agreement are due to be paid by Bioenvision Limited, the
UK subsidiary of Bioenvision Inc., in the event of the dissolution,
receivership, administration, liquidation or other action leading to the
cessation of business of Bioenvision Limited, Bioenvision Inc. hereby agrees to
pay any salary, bonus, compensation or any other benefits which may be due to
the Executive and shall indemnify him against any loss sustained as a result of
any of the above actions relating to Bioenvision Limited.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereof have executed this Agreement
as of the day and year first-above written.
/s/ Xxxx X. Xxxxxxxx
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Xxxx X Xxxxxxxx
BIOENVISION, LIMITED
By: /s/ Xxxxxxxxxxx X. Xxxx
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Name: Xxxxxxxxxxx X. Xxxx
Title: Director
ACKNOWLEDGED AND AGREED TO
(solely with respect to Section 32 hereof):
BIOENVISION, INC.
By: /s/ Xxxxx X. Xxxx
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Name: Xxxxx X. Xxxx
Title: Director of Finance, General Counsel
