Exhibit 10.15
EMPLOYMENT AGREEMENT
WITH XXXXXX X. XXXXXXX
AGREEMENT executed as of the 1st day of September, 1996 by and
between Micros-To-Mainframes, Inc. (the "Company") and Xxxxxx X.
Xxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is the Chief Executive Officer and President
of the Company and has served the Company since May, 1986.
WHEREAS, the Company desires to employ, retain and make secure
for itself the experience, abilities and services of the Employee for a
period of not less than five (5) years from the effective date of this
Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the adequacy and receipt of which
is hereby acknowledged, the Company and the Employee do hereby agree as
follows:
1. Employment. The Company hereby employs the Employee as Chief
Executive Officer and President, and the Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth.
2. Term. Subject to the provisions of Paragraphs 10 and 11
hereof, the term of Employee's employment shall commence on
September 1, 1996 (the "Commencement Date") and continue for an initial
period of five (5) years from the Commencement Date.
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3. Compensation and Certain Other Benefits. For services
rendered by the Employee hereunder, the Company shall pay to the
Employee the following compensation:
(a) Fixed Compensation. Fixed compensation, payable in
accordance with the normal payroll practices of the Company during
the term hereof, initially at the rate of Two Hundred Thousand
($200,000) Dollars per annum plus, on each anniversary of the
Commencement Date during the term of this Agreement, a cumulative
annual cost of living increase equal to the greater of (i) the
percentage increase indicated by the Consumer Price Index for all urban
consumers (New York, Northeastern New Jersey) as promulgated
by the U.S. Department of Labor (the "CPI") for the year then ended;
and (ii) $10,000 ("Fixed Compensation"); provided, however,
there shall be no increase in Employee's Fixed Compensation in any year
in which the Company's Board of Directors freeze all executive
employee salaries for economic reasons.
(b) Incentive Compensation. Such incentive compensation
("Incentive Compensation") in the form of a cash bonus, pursuant to
the Company's Incentive Bonus Program, as shall be determined by the
Compensation Committee of the Board of Directors from time to time.
(c) Other. In addition to the Fixed Compensation and
Incentive Compensation (Fixed Compensation and Incentive Compensation
are collectively herein referred to as "Total Compensation") which
Employee shall receive pursuant to subparagraphs (a) and (b) of this
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Paragraph 3, the Employee shall receive the following items of
reimbursement, compensation or benefits:
(i) Expenses. Employee is authorized hereunder to incur
reasonable expenses for promoting the business and
affairs of the Company, including, without limitation by
specification, expenses for entertainment, travel and
similar items. The Company will promptly reimburse
Employee for all such expenses upon presentation from
time to time by Employee to the Company of an itemized
account of such expenditures.
(ii) Stock Options. Employee shall partici- xxxx in the
Company's Incentive Stock Option Plan in accordance
with the provisions of Paragraph 5 hereof.
(iii) Life Insurance. The Company shall maintain either a
whole-life life insurance policy or policies or a
minimum deposit life insurance policy or policies (or
the equivalent thereof) on the life of the Employee
having an aggregate face value of not less
than One Million ($1,000,000) Dollars (collectively, the
"Policy"); provided, however, that the Company shall not
expend in excess of $10,000 per annum, on a cumulative
basis, for the Policy; provided further, however, that
to the extent the cost of the Policy exceeds $10,000 per
annum, on a cumulative basis, then, at Employee's
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option, either Employee shall pay all costs of the
Policy in excess of $10,000 or the face value of the
Policy shall be reduced to the amount of life insurance
which may be purchased for $10,000 per annum. The
proceeds of the Policy shall be payable to any
beneficiary or beneficiaries designated at any
time or from time to time by Employee. The Policy shall
be in addition to any key-man policy or group term
policy or policies insuring the life of Employee
maintained by the Company.
(iv) Automobile. The Company shall provide Employee with an
automobile compatible with his position and
responsibility hereunder or, in lieu thereof, at the
option of the Employee, a monthly stipend equal
to the cost of leasing such an automobile.
(v) Medical Benefits. The Company shall provide Employee
with such health and medical benefits as the Company
normally accords its executive officers.
(vi) Vacations. Employee shall be entitled during each
fiscal year during the period of his employment
hereunder to such vacation time as the Company normally
accords its executive officers who have been employed by
it for a length of time similar to the length of
Employee's employment. Employee may take
such vacation over such period or periods of time as
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Employee in his discretion shall select. While on
vacation, the compensation to which Employee is entitled
shall be paid in full.
(d) The Company agrees that nothing contained herein is
intended to or shall be deemed to be granted to the Employee in lieu of
or as a limitation upon any rights and privileges which the Employee
may otherwise be entitled to as an executive employee of the Company
under any retirement, pension, insurance, hospitalization or other
employee benefit plan of any type (including, without limitation by
specification, any incentive, profit sharing, bonus or stock option
plan), which may now be in effect or which may hereafter be adopted by
the Company, it being understood that the Employee shall have the same
rights and privileges to participate in such Company benefit plans as
any other executive employee of the Company.
4. Duties; Time and Effort
(a) During the period of his employment hereunder Employee,
subject to the supervision and control of the Board of Directors of the
Company, shall supervise the operations of the Company. Employee
presently is Chief Executive Officer of the Company and holds the title
of President of the Company, and the parties contemplate that Employee
will continue to serve in such capacity throughout the period of his
employment hereunder.
(b) Employee agrees to devote his full time and effort to
the business of the Company during the term of his employment hereunder
and, if elected, to serve as a member of the Company's Board of
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Directors. The Employee shall perform his duties faithfully,
diligently and to the best of his ability. Employee, at all times,
shall use his best efforts to preserve, protect, enhance and maintain
the trade, business and goodwill of the Company and shall not act or
conduct himself at any time in a manner inimical or in any way contrary
to the best interests of the Company.
5. Incentive Stock Options.
(a) Simultaneously with the execution of this Agreement
and pursuant to the Company's 1996 Stock Option Plan (the "Plan"),
the Company does hereby grant to the Employee incentive stock options
(the "Option") to purchase a total of 50,000 shares of the
Common Stock, $.001 par value per share, of the Company (the "Stock")
at $4.43 (one hundred ten (110%) percent of the fair market value the
Stock as of the date of this Agreement). The Employee may exercise the
Option for up to twenty (20%) percent of the Stock immediately
upon the execution of this Agreement. Thereafter, Employee may exercise
the Option for an additional twenty (20%) percent of the Stock on each
of the first through the fourth anniversaries of this Agreement.
Subject to the terms of the Plan, any portion of the Option, once
exercisable shall remain exercisable until the fifth anniversary
of the date of this Agreement. The remaining terms governing the Option
granted hereby are described in the Stock Option Agreement attached
as Exhibit A hereto. The Option granted hereby is granted pursuant to
the Plan , and in the event of any inconsistency between the terms
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hereof and the terms of the Plan, the terms of the Plan shall govern.
(b) During the term hereof, from time to time, the Employee
shall receive options under the Plan in a number, to be determined by
the Compensation Committee, competitive with the option package given
to senior executives by comparably sized companies. The Company agrees
to take such steps, if any, as shall be necessary to amend the Plan
from time to time to increase the number of shares of Common Stock of
the Company which may be issued thereunder to its employees so as to
enable the Company to fulfill its commitments hereunder.
6. Covenants and Restrictions. Subject to the provisions o f
Paragraph 10(e) hereof, Employee covenants that, except in carrying
out his duties hereunder, during the term of his employment and for a
period of five (5) years following the date of termination of
employment hereunder (unless such longer period of time is specifically
set forth herein):
(a) Employee will not directly or indirectly, own any
interest in, participate or engage in, assist, render any services
(including advisory services) to, become associated with, work for,
serve (in any capacity whatsoever, including, without limitation, as an
employee, consultant, advisor, agent, independent contractor , officer
or director) or otherwise become in any way or manner connected with
the ownership, management, operation, or control of , any business,
firm, corporation, partnership or other entity (collectively referred
to herein as a "Person") that engages in, or assists others in
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engaging in or conducting any business, which deals, directly or
indirectly, in products or services similar to or competitive with the
Company's product line or services in the United States, Canada, or
Western Europe; provided, however, the above shall not be deemed to
exclude Employee from acting as director of a corporation for the
benefit of the Company with the consent of the Company's Board of
Directors; provided further, however, that the above shall not be
deemed to prohibit Employee from owning or acquiring securities issued
by any corporation which neither directly nor indirectly competes with
the Company and whose securities are listed with a national securities
exchange or are traded in the over-the-counter market, provided that
Employee at no time owns, directly or indirectly, beneficially or
otherwise, five (5%) percent or more of any class of any such
corporation's outstanding capital stock.
(b) Employee will not knowingly provide or solicit to
provide to any Person or individual (i) any goods or services which
are competitive with those provided by the Company or which would be
competitive with the goods or services that the Company has planned to
provide, or (ii) any goods or services to any customer of the Company.
The term "customer" shall mean any Person or individual to whom the
Company has provided goods or services within the twenty-four (24)
month period prior to the termination of Employee's employment
hereunder. Notwithstanding anything herein to the contrary, no
limitation shall be imposed on Employee hereunder with respect to
any goods and services that the Company has planned to provide and
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which are not actually being provided at the time of the termination
of Employee's employment hereunder or which are not actually
provided within eighteen (18) months following the termination
of Employee's employment hereunder.
(c) Employee agrees that he shall not divulge to others,
nor shall he use to the detriment of the Company or in any business or
process of manufacture competitive with or similar to any business or
process of manufacture engaged in by the Company or an y of its
subsidiary or affiliated companies, at any time during his employment
with the Company or thereafter, any confidential or trade secret
information obtained by him during the course of his employment with
the Company relating to sales, salesmen, sales volume or strategy,
customers, formulas, processes, methods, machines, manufactures,
compositions, ideas, improvements or inventions belonging to or
relating to the business of the Company , or its subsidiary or
affiliated companies.
(d) Employee will neither solicit, hire or seek to solicit
or hire any of the Company's personnel in any capacity whatsoever nor
shall Employee induce or attempt to induce any of the Company's
personnel to leave the employ of the Company to work for Employee
or otherwise.
(e) Employee acknowledges that his breach of any of the
restrictive covenants contained in this Paragraph 6 may cause
irreparable damage to the Company for which remedies at law would be
inadequate. Accordingly, if Employee breaches or threatens to breach
any of the provisions of this Paragraph 6, the Company shall
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be entitled to appropriate injunctive relief, including, without
limitation, preliminary and permanent injunctions, in the Supreme Court
of the State of New York located in the County of New York or the
United States District Court, Southern District of New York,
restraining Employee from taking any action prohibited hereby. This
remedy shall be in addition to all other remedies available to the
Company at law or equity. If any portion of this Paragraph 6 is
adjudicated to be invalid or unenforceable, this Paragraph 6 shall be
deemed amended to delete therefrom the portion so adjudicated, such
deletion to apply only with respect to the operation of this Paragraph
6 in the jurisdiction in which such adjudication is made.
7. Proprietary Property. Subject to the provisions of Paragraph
10(e) hereof:
(a) The Employee agrees that any and all inventions or
improvements as well as any and all ideas, creations, know-how and
methods of applying and putting into practice any inventions or
improvements (all of the foregoing being hereinafter called
"Proprietary Property" and being more fully defined in subparagraph
(b) below) that are created, developed, conceived of or discovered
either (i) by the Employee (solely or jointly with others) either in
the course of his employment, on the Company's time, with the Company's
materials or facilities, relating to any subject matter with which his
work for the Company is or may be concerned, or relating to any
business in which the Company or any of its subsidiaries or affiliated
companies is involved, or (ii) by or for r the Company, or (iii) by any
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independent individual or Person and thereafter acquired by the
Company, and which are within the Employee's knowledge or possession in
the case of (i) above or that come into the Employee's knowledge or
possession during and in the course of the Employee's employment
hereunder in the case of (ii) or (iii) above, shall be, if created,
developed, conceived of or discovered by the Employee, promptly disclosed
to the Company, or shall be, if otherwise developed or acquired by the
Company, received by the Employee as an employee of the Company
and not in any way for his own benefit. Employee shall neither
have nor obtain any right, title or interest in or to such
Proprietary Property unless and until the Company shall expressly
and in writing waive the rights that it has therein and
thereto under the provisions of this sentence. With respect
to any and all Proprietary Property that is invented, created,
written, developed , furnished or produced by the Employee, or
suggested by the Employee to the Company, during the term of the
Employee's employment under this Agreement, Employee does hereby agree
that all such Proprietary Property shall be the exclusive property
of the Company, and that the Employee shall neither have interest,
of any kind therein and thereto or in and to any results or
proceeds therefrom. At any time, whether during or after the
term of this Agreement, the Employee will, upon the request and at
the expense of the Company, (A) obtain patents or copyrights on, or
(B) permit the Company to patent or copyright, any such Proprietary
Property, whichever (A) or (B) is appropriate, and/or (C) execute,
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acknowledge and deliver any and all assignments, instruments of
transfer, or other documents, that the Company deems necessary or
appropriate to transfer to and vest in the Company all right, title
and interest in and to such Proprietary Property and to evidence the
Company's ownership of such Proprietary Property, including, without
limitation, taking all steps necessary to enable the Company to publish
or protect said Proprietary Property by patents or otherwise
in any and all countries and to render all such assistance
as the Company may require in any patent office proceeding or
litigation involving said Proprietary Property. The Employee
shall not, without limitation as to time or place, use any
Proprietary Property except on Company business, during or after his
period of employment, nor disclose the same to any other Person or
individual except for disclosure on Company business or as may be
required by law.
(b) As used in this Agreement, "Proprietary Property" means
proprietary technical information not generally known in the
Company's industry and which is disclosed to Employee or known or
developed by Employee as a consequence of or through his employment
with the Company.
(c) During or subsequent to the Employee's employment by
Company, Employee will never, directly or indirectly, lecture upon ,
publish articles concerning, use, disseminate, disclose, sell or offer
for sale any Proprietary Property without the Company's prior written
permission.
8. Disability
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(a) Subject to the terms of subparagraph (b) hereof, in
the event Employee becomes disabled during the term of this Agreement,
he shall continue to receive one hundred (100%) percent
of the Fixed Compensation to which he was entitled at the time he
became disabled for any period of disability not in excess of twelve
(12) consecutive calendar months. Immediately following the twelfth
consecutive calendar month of disability, the term hereof shall end,
and no further compensation shall be due hereunder. For the purpose
of this subparagraph (a), the terms "disabled" and "disability" shall
mean disability which, in the opinion of a doctor reasonably
satisfactory to the Company, renders the Employee unable to perform
his duties hereunder. The date such disability commences shall be the
date Employee first absents himself from work during a continuous
period of disability as so determined by the doctor hereinabove set
forth.
(b) The Company agrees to provide long-term disability
benefits or disability insurance coverage to Employee in an amount
which shall be, when added to all social security benefits receive d or
to be received by Employee as a result of the permanent disability,
equal to $150,000 per annum; provided, however, that event shall the
premiums paid by the Company for maintaining the Disability Policy (as
such term is defined below) exceed $15,000 per annum. The Employee's
entitlement to disability benefits shall be pursuant to the terms of
this Agreement and a disability insurance policy (the "Disability
Policy") to be obtained and maintained by the Company, naming the
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Employee as the insured thereunder. Notwithstanding the foregoing, in
the event Employee' s disability is either not covered under the
Disability Policy or Employee is covered for less than $150,000 per
annum or if coverage under the Disability Policy terminates during the
period of disability for any reason whatsoever, then for the balance of
Employee's then current term of employment the Company will pay
Employee $150,000 per annum or, if Employee is receiving benefits under
the Disability Policy, the Company will supplement the insurance
payments which Employee is entitled to receive so that Employee
receives a total of $150,000 per annum and, thereafter, the Company
will pay to Employee, or supplement the benefits Employee receives
under said Disability Policy, so that Employee receives the lesser of
(i) $150,000 per annum or (ii) fifty (50%) percent of Employee's Fixed
Compensation until Employee attains the age of 65. Once Employee
reaches age 66, the Company shall have n o further obligation to make
disability payments to Employee or to otherwise supplement the amounts
Employee receives under the Disability Policy except to the extent that
it is the Company's then current policy to continue to cover or provide
benefits to permanently disabled executive officers beyond age 66.
Notwithstanding anything to the contrary set forth in this subparagraph
(b), in the event the Employee reassumes the full performance of his duties
hereunder prior to the first anniversary of disability, the Employee shall
be entitled to one hundred (100%) percent of his Total Compensation from the
date of his return.
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(c) Payments of disability compensation under subparagraphs
(a) and (b) above shall be reduced by the amounts actually received by
the Employee under any policy or policies of disability, health,
accident, or wage continuation insurance paid for by the Company as
well as by all social security benefits actually received by Employee.
9. Severability of Provisions. In the event any court of
competent jurisdiction determines that any term or provision of this
Agreement shall be unenforceable, the invalidity of such term
or provision shall not affect the validity of the remainder hereof.
10. Termination; Severance; Death
(a) The Employee's employment shall terminate upon his
death, and may be terminated, at the option of (i) the Employee, for
"Good Reason" as defined in Paragraph 11 below, or (ii) the Company,
upon proper written notice to the Employee (A) upon 12 consecutive
months of disability, as defined in Paragraph 8(b) hereof, or (B) for
cause. Termination "for cause" shall mean termination only for (x)
willful misconduct by Employee during the course of his employment
which injures the Company; or acts of moral turpitude, including
the conviction of Employee for any felony offense, the admission
by Employee of drug and/or alcohol abuse or addiction or upon
clear and convincing proof that Employee has become addicted to
or abuses drugs and/or alcohol, unless, in the judgment of the Board of
Directors, the Executive is substantially able to perform his duties to
the Company.
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(b) If Employee's employment is terminated by the Company
for cause, the Company shall have no further obligation to
pay compensation or benefits to Employee, other than those accrued
through the date of termination.
(c) If Employee dies during the term of his employment
hereunder, the Company shall promptly pay to the Employee's estate
or promptly distribute to the beneficiary or beneficiaries named by
Employee all life insurance proceeds under the Policy, if received by
the Company for any reason, as well as any term life insurance policy
or policies which the Company maintained on the life of and for
the benefit of the Employee; provided, however, all fringe benefits
shall cease, upon Employee's death.
11. Termination by Employee. This Agreement may be terminated by
the Employee at any time after three years, for any reason, or may be
terminated at any time by him for Good Reason. If the Employee
terminates this Agreement for Good Reason, the executive will receive
2.9 times his Fixed Compensation as then in effect. "Good Reason"
shall mean any one or more of the following (unless the Employee
consents thereto in writing):
(a) The assignment of duties not comparable to his present
duties, or any material reduction in responsibilities or status.
(b) Reduction in salary or the non-payment of a bonus
pursuant to the Incentive Compensation Plan.
(c) The Company's requiring the executive to be based at a
location in excess of 50 miles from Valley Cottage, New York.
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(d) Failure of the Company to obtain a satisfactory
agreement from any successor to the Company to assume and agree to
perform this Agreement.
(e) A "change of control" of the Company during Employee's
employment hereunder. A "change of control" shall be deemed to occur
when any person, corporation, partnership, association or entity,
directly or indirectly (through a subsidiary or otherwise), (i)
acquires or is granted the right to acquire, directly or through a
merger or similar transaction, a majority of Company's outstanding
voting securities, or (ii) acquires all or substantially all of
the Company's assets; provided that a "change of control" is not
deemed to exist if Employee agrees to the transaction as an officer,
director or shareholder of the Company.
In the event that any of the above events takes place, then, if
Employee elects to terminate his employment pursuant to this Paragraph
11, the Company shall promptly pay two and nine-tenths (2.9) times his
current Fixed Compensation within thirty (30) days of receipt
of Employee's resignation notice; provided, however, that in
no event shall the amount paid to Employee pursuant to this Paragraph
11 exceed the maximum payment permitted by Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") and to the extent any
"excess parachute payment", as that phrase is defined in Section
280G(b) of the Code would result from the application of the formulas
set forth in (a) or (b) above, then the amount Employee would otherwise
receive shall be reduced so that no "excess parachute payment" is made
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by the Company or received by Employee; provided further, however, this
Paragraph 11 shall not apply to any change in control supported by the
Employee either as an officer, a director or as a stockholder of the
Company.
12. Arbitration. Except as specifically provided above, any
dispute, controversy or claim arising out of or pursuant to this
Agreement or the breach hereof shall be settled by arbitration in the
City of New York, State of New York. Such arbitration shall be
effected by arbitrators selected as hereinafter provided and shall
be conducted in accordance with the Rules, existing at the date
thereof, of the American Arbitration Association. The dispute,
controversy or claim shall be submitted to three arbitrators, one
arbitrator to be selected by the Company, one arbitrator to be selected
by the Employee and the third arbitrator to be selected b y the two so
selected by the Company and Employee, or if they cannot agree on
a third, by the American Arbitration Association. In the
event that either the Company or Employee, within one month after
notification of any demand for arbitration hereunder, shall not have
selected its arbitrator and given notice thereof to the other
party, the arbitrator for such party shall be selected by the American
Arbitration Association. Meetings of the arbitrators shall be held in
New York City, New York at such place or places a s may be agreed upon
by the arbitrators. The results of final determination of any such
arbitration proceedings shall be binding on the parties hereto
and a judgment may be entered in any court having jurisdiction.
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13. Notices. Any notice required or permitted to be given
pursuant to the provisions hereof shall be deemed given when personally
delivered, on the third day after being sent by registered or certified
mail, return receipt requested, or the day after being sent by overnight
courier to the Company or Employee at their respective addresses
set forth above or to such other address as may be given by similar
notice by the Company or Employee.
14. Waiver of Breach. The waiver by the Company or Employee
of a breach of any provision hereof by the other shall not operate
or be construed to operate as a waiver by such party of any subsequent
breach by the other of the same or any other provision hereof.
15. Benefits and Burdens. The rights and obligations hereunder
shall inure to the benefit of and shall be binding upon the Company,
the Employee and their respective legal or personal representatives,
successors and assigns.
16. Entire Agreement, Modification and Construction. This
Agreement contains the entire understanding between the Company and
Employee with respect to the subject matter hereof. The terms and
conditions hereof may be changed only by an agreement in writing signed
by the Company and Employee. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York,
applicable to contracts made and to be performed therein,
without giving effect to the principles thereof relating to conflicts
of law.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
signed and its seal affixed by a duly authorized officer and the
Employee has signed this Agreement as of the day and year firs t above
written.
MICROS-TO-MAINFRAMES,INC.
By: /s/Xxxxxx Xxxxxx
-----------------------
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxx
------------------------
Xxxxxx X. Xxxxxxx
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Exhibit A
STOCK OPTION AGREEMENT
Omitted
Registrant will furnish to the Securities and Exchange Commission
a copy of this Exhibit upon request.
