EXHIBIT 10.11
EMPLOYMENT AGREEMENT
(XXXX XXXXXXX)
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the ____ day of _______________, 2004 (the "Effective Date"), by and between
CORPORATE STRATEGIES, INC., a Delaware corporation ("Employer"), and XXXX
XXXXXXX, an individual residing in Houston, Xxxxxx County, Texas ("Executive").
W I T N E S S E T H:
WHEREAS, Employer and Executive desire to enter into an agreement
regarding Executive's employment with Employer pursuant to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties covenant and agree as follows:
1. EMPLOYMENT. Employer hereby employs Executive and Executive
hereby accepts employment with Employer on the terms and conditions set forth in
this Agreement.
2. TERM OF EMPLOYMENT. The term of Executive's employment
hereunder (the "Term") shall commence as of September 1, 2004 (the "Commencement
Date") and shall continue (subject to extension and termination by either
Employer or Executive, all as hereinafter provided) for an initial term (the
"Initial Term") expiring on August 31, 2007 (the "Expiration Date"). The
Expiration Date shall, unless terminated by Employer or Executive, be
automatically extended for successive one (1)-year periods following the
expiration of the Initial Term. If Employer desires to terminate Executive's
employment under this Agreement at the end of the Initial Term or at the end of
any succeeding one (1)-year term, Employer shall give written notice of such
desire to Executive at least ninety (90) days prior to the expiration of the
Initial Term or any succeeding one (1)-year term. If Executive desires to
terminate Executive's employment under this Agreement at the end of the Initial
Term or at the end of any succeeding one (1)-year term, Executive shall give
written notice of such desire to Employer at least ninety (90) days prior to the
expiration of the Initial Term or any succeeding one (1)-year term. At the
expiration of the then-existing term, Employer shall have no further obligation
to Executive other than payment of any earned and unpaid Base Salary (as
hereafter defined) under Section 3.a., any earned and unpaid Bonus (as hereafter
defined) under Section 3.b. and any earned but unpaid commissions under Section
3.c., and Executive shall have no further obligation to Employer except as set
forth in Sections 8, 9 and 10. Notwithstanding anything in this Agreement to the
contrary, Employer may, during the first year of the Initial term, terminate
Executive without Cause (as defined in Section 5.e. hereof) by written notice to
Executive, and in such event, Executive shall be entitled to receive any earned
and unpaid Base Salary under Section 3.a. through the date of termination, any
earned and unpaid Bonus under Section 3.b. through the date of termination,
earned and unpaid commissions under Section 3.c. through the date of
termination, and three (3) months of Base Salary (payable semi-monthly as if
Employee remained employed with Employer for the three (3)-month period
immediately subsequent to the termination date).
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3. COMPENSATION AND OTHER BENEFITS.
a. As compensation for all services rendered by
Executive in performance of Executive's duties or obligations under this
Agreement, Employer shall pay Executive the following base salary (the "Base
Salary"):
$87,600.00 per year plus increases effective January 1 of each year
commencing January 1, 2006, of no less than 5% of Base Salary or such
greater amount as set by the Compensation Committee.
Executive's Base Salary shall be payable in equal semi-monthly installments or
in the manner and on the timetable which Employer's payroll is customarily
handled or at such intervals as Employer and Executive may hereafter agree to
from time to time.
b. In addition to receiving the Base Salary provided for
in Section 3.a., for the annual periods commencing January 1, 2005, Executive
shall be entitled to a bonus of up to one hundred percent (100%) of Executive's
Base Salary paid during such annual period (the "Bonus"); provided, however,
Executive shall be entitled to such Bonus if, and only if, Executive has met the
performance criteria set by the Compensation Committee of the Board of Directors
of Employer (the "Compensation Committee") for the applicable period. Executive
acknowledges that the performance criteria for Executive's Bonus to be earned
for each annual period shall be set on or before the beginning of each
applicable annual period, and Executive shall have the opportunity to meet with
and discuss such criteria with the Compensation Committee prior to the
finalization of such criteria. Upon completion of the criteria for the
applicable period, such criteria shall be communicated to Executive in writing.
If Executive successfully meets the performance criteria established by Employer
(in the reasonable discretion of Employer), Employer shall pay Executive the
earned Bonus amount within thirty (30) days after the end of such annual period.
c. In addition to receiving the Base Salary provided for
in Section 3.a. and the Bonus provided for in Section 3.b., Executive shall be
entitled to receive fifty percent (50%) of consulting fees received by Employer
from client of Employer for which Executive directly provided the services or
for which Employer is responsible for supervising the consulting services
provided by Employer. Employer shall pay to Executive any amounts earned under
this Section 3.c. on or before the fifteenth day after the month in which such
fees were received.
d. Executive shall be entitled to be reimbursed by
Employer for all reasonable and necessary expenses incurred by Executive in
carrying out Executive's duties under this Agreement in accordance with
Employer's standard policies regarding such reimbursements.
e. Beginning with the Commencement Date, Executive shall
be entitled during the Term, upon satisfaction of all eligibility requirements,
if any, to participate in all health, dental, disability, life insurance and
other benefit programs now or hereafter established by Employer which cover
substantially all other of Employer's employees and shall receive such other
benefits as may be approved from time to time by Employer.
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f. During each twelve (12) month period of this
Agreement, Executive shall be entitled to vacation as permitted by Employer's
policies and practices. In addition, Executive shall be entitled to receive paid
holidays as enjoyed by all other employees of Employer.
g. Upon the request of Executive after the date on which
the shares of Employer are traded on a publicly recognized stock market, the
Employer shall (i) obtain and maintain, during the Term hereof, officers and
directors liability insurance covering Executive in the amount of $5,000,000
containing customary terms and conditions; and (ii) to the extent permitted
under Employer's articles of incorporation and/or bylaws, indemnify and hold
harmless the Executive from and against all costs (including attorneys fees and
costs of suit), losses, liabilities or cause of action arising out of or
relating to his services as Vice Chairman, President and director of the
Employer.
4. DUTIES.
a. Executive is employed to act as Vice Chairman and
President of Employer, and to perform the duties and functions that are normal
and customary to such position.
b. Executive agrees that during the period of
employment, Executive shall devote full-time efforts to Executive's duties as an
employee of Employer and Executive shall use Executive's best efforts to perform
the duties of Executive's position in an efficient and competent manner and
shall use Executive's best efforts to promote the interests of Employer and any
affiliated companies.
c. During the period of employment, Executive agrees not
to (i) solely or jointly with others undertake or join any planning for or
organization of any business activity competitive with the business activities
of Employer, and (ii) directly or indirectly, engage or participate in any other
activities in conflict with the best interests of Employer.
d. Executive agrees that during the period of employment
Executive shall refer to Employer all opportunities to which Executive might
become exposed in carrying out Executive's duties and responsibilities hereunder
that relate to the Employer's business.
5. TERMINATION OF EMPLOYMENT. Executive's employment and this
Agreement shall terminate upon the earliest to occur of any of the following
events (the actual date of such termination being referred to herein as the
"Termination Date"):
a. The expiration or termination of the Agreement
pursuant to Section 2.
b. Except as provided for in Section 2, Employer may
terminate Executive's employment and this Agreement for Cause (as defined
below), provided, however, that Employer may not terminate Executive's
employment for Cause unless:
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(1) No fewer than sixty (60) days prior to the
date of termination (the actual date of such termination being referred
to herein as "Date of Termination"), the Employer provides Executive
with written notice (the "Notice of Consideration") of Employer's
intent to consider termination of Executive's employment for Cause,
which notice shall include a detailed description of the specific
reasons which form the basis for such consideration, and shall specify
a date and time for Executive to appear before the Company's Board of
Directors to present arguments and evidence on Executive's own behalf
with respect to the reasons for consideration identified in the Notice
of Consideration (which date shall not be less than thirty (30) days
after the date the Notice of Consideration is provided by Employer to
Executive) (the "Consideration Date");
(2) Executive shall have the opportunity to
appear before the Company's Board of Directors on the Consideration
Date, with or without legal representation, at Executive's election, to
present such arguments and evidence on Executive's own behalf with
respect to such reasons for consideration; and
(3) Following the presentation to the Company's
Board of Directors as provided in Section 5.b.(2) above or Executive's
failure to appear before the Board of Directors on the Consideration
Date, Executive may be terminated for Cause only if (x) the Company's
Board of Directors, by the affirmative vote of two-thirds (2/3) of the
members of a quorum of the Board of Directors present at such meeting
(excluding Executive if Executive is then a member of the Board of
Directors, and any other member of the Board of Directors reasonably
believed by the Board of Directors to be involved in the events leading
the Board of Directors to terminate Executive for Cause), determines
that the actions or inactions of Executive specified in the Notice of
Termination occurred, that such actions or inactions constitute Cause;
and (y) the Company's Board of Directors provides Executive with a
written determination (a "Notice of Termination for Cause") setting
forth in specific detail the basis of such Termination of Employment,
which Notice of Termination for Cause shall be consistent with the
reasons set forth in the Notice of Consideration. Unless the Employer
establishes both (i) its full compliance with the substantive and
procedural requirements of this Section 5.b. prior to a termination of
employment for Cause, and (ii) that Executive's action or inaction
specified in the Notice of Termination for Cause did occur and
constituted Cause, any termination of employment shall be deemed a
termination by Employer without Cause for all purposes of this
Agreement.
(4) After providing a Notice of Consideration
pursuant to the provisions of Section 5.b.(1), the Employer's Board of
Directors may, by the affirmative vote of two-thirds (2/3) of the
members of a quorum of the Board of Directors present at such meeting
(excluding for this purpose Executive if he is a member of the Board of
Directors, and any other member of the Board of Directors reasonably
believed by the Board of Directors to be involved in the events issuing
the Notice of Consideration), suspend Executive with pay until a final
determination pursuant to this Section 5.b. has been made.
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(5) After receiving a Notice of Consideration
pursuant to the provisions of Section 5.b.(1), Executive may terminate
this Agreement without Good Reason with thirty (30) days prior written
notice.
(6) If Executive's employment is terminated
under this Section 5.b., Executive shall be entitled to receive accrued
but unpaid compensation set forth in Section 3.a. and Section 3.b.
hereof through the Termination Date.
c. In the event of Executive's death or disability of a
permanent nature rendering the Executive unable to perform Executive's duties
hereunder for a period of not less than ninety (90) days during any one hundred
eighty (180) consecutive day period during the Term hereof, Employer shall pay
to Executive or the estate of Executive, as applicable, in the year of death or
disability, compensation which would otherwise be payable to Executive pursuant
to Section 3 hereof up to (i) the end of the one hundred eighty (180) day period
following death, or (ii) the expiration of the one hundred eighty (180) day
period referred to above during which time the Executive was unable to perform
Executive's duties hereunder to the extent described above.
(1) The Term of employment shall end upon
Executive's death or the expiration of such one hundred eighty (180)
day period and a determination by Employer's Board of Directors of
Employer that there is no reasonable accommodation (within the meaning
of the Americans with Disabilities Act) which would enable Executive to
perform the essential functions of Executive's position under this
Agreement despite the existence of such disability.
(2) For purposes of this Agreement, Executive
shall be deemed to be unable to perform Executive's duties hereunder
when the Board of Directors of Employer, upon the advice of a qualified
physician mutually agreeable to the Executive (or, if appropriate,
Executive's representative) and the Board of Directors of Employer,
shall have determined that Executive has become physically or mentally
incapable (excluding infrequent and temporary absences due to ordinary
illness) of performing Executive's duties under this Agreement.
(3) Before making any termination decision
pursuant to this Section 5.c., the Board of Directors of Employer shall
determine whether there is any reasonable accommodation (within the
meaning of the Americans with Disabilities Act) which would enable
Executive to perform the essential functions of Executive's position
under this Agreement despite the existence of any such disability. If
such a reasonable accommodation is possible, Employer shall make that
accommodation and shall not terminate Executive's employment hereunder
based on such disability.
d. Except as set forth in Section 2 hereof, Employer may
terminate Executive's employment without Cause with thirty (30) days prior
written notice and Executive may terminate Executive's employment for Good
Reason (as hereinafter defined) with thirty (30) days prior written notice. In
either event, Employer shall pay Executive any accrued but unpaid, as of the
Termination Date, compensation under Sections 3.a., 3.b. and 3.c., plus all base
salary due for the remainder of the Term of the Agreement.
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e. As used in this Agreement, "Cause" shall mean:
(1) Any embezzlement or wrongful diversion of
funds of Employer or any affiliate of Employer by Executive;
(2) Gross malfeasance by Executive in the
conduct of Executive's duties;
(3) Material breach of this Agreement and the
failure to cure such breach; or
(4) Gross neglect by Executive in carrying out
Executive's duties.
f. As used in this Agreement, "Good Reason" shall mean:
(1) The failure of Executive to be appointed or
reappointed, without cause, to the office of either Vice Chairman or
President of Employer;
(2) A material change by Employer of Executive's
function, duties or responsibilities that would cause Executive's
position with Employer to become of less dignity, responsibility,
importance or scope from the position and attributes thereof described
in Section 4.a.; or
(3) Any other material breach of this Agreement
by Employer that remains uncured for a period of at least thirty (30)
days following written notice from Executive to Employee of such
alleged breach, which written notice describes in reasonable detail the
nature of such alleged breach.
6. [INTENTIONALLY OMITTED]
7. INVENTIONS AND CREATIONS BELONG TO EMPLOYER.
a. Any and all inventions, discoveries, improvements or
creations (collectively, "Creations") which Executive has conceived or made or
may conceive or make during the period of employment in any way, directly or
indirectly, connected with Employer's Business shall be the sole and exclusive
property of Employer. Executive agrees that all copyrightable works created by
Executive or under Employer's direction in connection with Employer's Business
are "works made for hire" and shall be the sole and complete property of
Employer and that any and all copyrights to such works shall belong to Employer.
To the extent any of the works described in the preceding sentence are not
deemed to be "works made for hire," Executive hereby assigns all proprietary
rights, including copyright, in these works to Employer without further
compensation.
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b. Executive further agrees to (i) disclose promptly to
Employer all such Creations which Executive has made or may make solely, jointly
or commonly with others during the period of employment to the extent connected
with Employer's Business, (ii) assign all such Creations to Employer, and (iii)
execute and sign any and all applications, assignments or other instruments
which Employer may deem necessary in order to enable Employer, at Employer's
expense, to apply for, prosecute and obtain copyrights, patents or other
proprietary rights in the United States and foreign countries or in order to
transfer to Employer all right, title and interest in said Creations.
8. CONFIDENTIALITY; OWNERSHIP OF INFORMATION. Employer promises
that Employer will, during the Term, provide Executive with access to such
Confidential Information (as defined in Section 8.a.) owned by Employer and that
is used in the operation of Employer's Business as reasonably necessary to allow
Executive to perform Executive's obligations hereunder. Executive acknowledges
that Employer has agreed to provide Executive with a definite term of employment
and with access to such Confidential Information of Employer during that term of
employment.
a. DEFINITION. For purposes of this Agreement,
"Confidential Information" means any and all information relating directly or
indirectly to Employer that is not generally ascertainable from public or
published information or trade sources and that represents proprietary
information to Employer, excluding, however, (i) Executives' business contacts,
(ii) information already known to Executive prior to Executive's employment with
Employer, and (iii) information required to be divulged in any legal or
administrative proceeding in which Executive is involved. Confidential
Information shall consist of, for example, and not intending to be inclusive,
(A) software (source and object codes), algorithms, computer processing systems,
techniques, methodologies, formulae, processes, compilations of information,
drawings, proposals, job notes, reports, records and specifications, and (B)
information concerning any matters relating to Employer's Business, any of its
customers, prospective customers, customer contacts, licenses, the arrangements
it obtains or has with its clients, or any other information concerning
Employer's Business and Employer's goodwill.
b. NO DISCLOSURE. During the Term and at all times
thereafter, Executive shall not disclose or use in any manner, directly or
indirectly, and shall use Executive's best efforts and shall take all reasonable
precautions to prevent the disclosure of, any such trade secrets or other
Confidential Information, except to the extent required in the performance of
Executive's duties or obligations to Employer hereunder or by express prior
written consent of a duly authorized officer or director of Employer (other than
Executive).
c. OWNERSHIP OF INFORMATION. Such Confidential
Information is and shall remain the sole and exclusive property and proprietary
information of Employer or Employer's customers, as the case may be, and is
disclosed in confidence by Employer or permitted to be acquired from such
customers in reliance on Executive's agreement to maintain such Confidential
Information in confidence and not to use or disclose such Confidential
Information to any other person except in furtherance of Employer's Business.
d. RETURN OF MATERIAL. Upon the expiration or earlier
termination of this Agreement for any reason, Executive shall immediately turn
over to Employer all documents, disks or other magnetic media, or other material
in Executive's possession or under Executive's control that (i) may contain or
be derived from Creations or Confidential Information, or (ii) are connected
with or derived from Executive's services to Employer. Executive shall not
retain any Confidential Information in any form (e.g., computer hard drive,
microfilm, etc.) upon the expiration or earlier termination of this Agreement.
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9. NONCOMPETE; WORKING FOR COMPETITOR. In consideration of
Executive's employment by Employer, Executive will not, at any time during the
Term or, if Executive's employment is terminated pursuant to the provisions of
Section 5 (other than Section 5.a.), for a period of twelve (12) months after
the date of termination, directly or indirectly, in any state in the United
States in which the Employer provided consulting services during the Term or
provides consulting services as of the date of termination, for Executive's own
account or on behalf of any direct competitors of Employer, engage in any
business or transaction the same or similar to Employer's Business (whether as
an employee, employer, independent contractor, consultant, agent, principal,
partner, stockholder, corporate officer, director or in any other individual or
representative capacity), without the prior written consent of Employer, which
consent may be withheld by Employer in Employer's sole and absolute discretion.
10. NON-SOLICITATION OF EMPLOYEES. During the Term and for a
period of twenty-four (24) months after the date of termination of employment,
Executive will not in any way, directly or indirectly (i) induce or attempt to
induce any employee of Employer to quit employment with Employer; (ii) otherwise
interfere with or disrupt Employer's relationship with its employees; (iii)
solicit, entice or hire away any employee of Employer; or (iv) hire or engage
any employee of Employer or any former employee of Employer whose employment
with Employer ceased less than one year before the date of such hiring or
engagement. Executive acknowledges that any attempt on the part of Executive to
induce others to leave Employer's employ, or any effort by Executive to
interfere with Employer's relationship with its other employees would be harmful
and damaging to Employer.
11. EXECUTIVE'S ACKNOWLEDGEMENT. It is the express intention of
Executive and Employer to comply with sections 15.50 et seq. of the Texas
Business and Commerce Code in effect as of the date of execution hereof.
Executive stipulates that the provisions of this Agreement are not oppressive or
overly burdensome to Executive and will not prevent Executive from earning an
income following termination of this Agreement. Executive warrants and
represents that:
a. Executive is familiar with non-compete and
non-solicitation covenants;
b. Executive has discussed or acknowledges the
opportunity to discuss the provisions of the non-compete and non-solicitation
covenants contained herein with Executive's attorney and has concluded that such
provisions (including, without limitation, the right to equitable relief and the
length of time provided for herein) are fair, reasonable and just under the
circumstances;
c. Executive is fully aware of the obligations,
limitations and liabilities included in the non-compete and non-solicitation
covenants contained in this Agreement;
d. The scope of activities covered hereby are
substantially similar to those activities to be performed by Executive under
this Agreement;
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e. The non-compete and non-solicitation periods in
Section 9 and Section 10 are reasonable restrictions, giving consideration to
the following factors: (1) Executive and Employer reasonably anticipate that
this Agreement, although terminable under certain provisions, will continue in
effect for sufficient duration to allow Executive to attain superior bargaining
strength and an ability for unfair competition with respect to the customers
covered hereby; (2) the duration of such non-compete and non-solicitation
periods is a reasonably necessary period to allow Employer to restore its
position of equivalent bargaining strength and fair competition with respect to
those customers covered hereby; and (3) historically, employees of all types
have remained with Employer for a duration of longer than the duration of such
non-compete and non-solicitation periods; and
f. The limitations contained in this Agreement with
respect to geographic area, duration and scope of activity are reasonable;
however, if any court shall determine that the geographic area, duration or
scope of activity of any restriction contained in this Agreement is
unenforceable, it is the intention of the parties that such restrictive
covenants set forth herein shall not thereby be terminated, but shall be deemed
amended to the extent required to render such covenants valid and enforceable.
12. REMEDIES; INJUNCTION. In the event of a breach or threatened
breach by Executive of any of the provisions of this Agreement, Executive agrees
that Employer, in addition to and not in limitation of any other rights,
remedies or damages available to Employer at law or in equity, shall be entitled
to a permanent injunction without the necessity of proving actual monetary loss
in order to prevent or restrain any such breach by Executive or by Executive's
partners, agents, representatives, servants, employees and/or any and all
persons directly or indirectly acting for or with Executive. It is expressly
understood between the parties that this injunctive or other equitable relief
shall not be Employer's exclusive remedy for any breach of this Agreement, and
Employer shall be entitled to seek any other relief or remedy which it may have
by contract, statute, law or otherwise for any breach hereof.
13. NOTICES. Any notice, demand or request which may be permitted,
required or desired to be given in connection therewith shall be given in
writing and directed to Employer and Executive as follows:
If to Employer, at: CORPORATE STRATEGIES, INC.
0000 Xx. Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Chairman of the Board
Facsimile No.: (000) 000-0000
or, if to Executive, at: Xx. Xxxx Xxxxxxx
--------------------------------
Houston, Texas ________
Notices shall be deemed properly delivered and received when and if either: (i)
personally delivered; (ii) delivered by nationally-recognized overnight courier;
(iii) when deposited in the U.S. Mail, by registered or certified mail, return
receipt requested, postage prepaid; or (iv) sent via facsimile transmission with
confirmation mailed by regular U.S. mail. Any party may change its notice
address for purposes hereof to any address within the continental United States
by giving written notice of such change to the other parties hereto at least
fifteen days prior to the intended effective date of such change.
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14. SEVERABILITY. If any provision of this Agreement is rendered
or declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, Employer and
Executive shall promptly meet and negotiate substitute provisions for those
rendered or declared illegal or unenforceable, but all the remaining provisions
of this Agreement shall remain in full force and effect.
15. ASSIGNMENT. This Agreement may not be assigned by any party
without the prior written consent of the other parties.
16. BINDING AGREEMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, and their respective legal
representatives, heirs, successors and permitted assigns.
17. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.
18. AGREEMENT READ, UNDERSTOOD AND FAIR. Executive and Employer
have carefully read and considered all provisions of this Agreement and agree
that all of the restrictions set forth are fair and reasonable and are
reasonably required for the protection of their respective interests.
19. SUBJECT TO BOARD AND SHAREHOLDER APPROVAL. This Agreement is
subject to approval of the Board of Directors of Employer. In connection
therewith, Employer agrees to submit a unanimous written consent of the Board of
Directors approving such agreement on or before August 31, 2004, and to advise
Executive promptly following such meeting as to whether this Agreement was
approved. In the event this Agreement is not approved on or before such date,
this Agreement shall be void and of no further force or effect. The parties
agree that this Agreement shall be of no force and effect unless and until it
has been approved by the Board and executed by both parties.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
____ day of _______________, 2004, effective as of the Effective Date.
EMPLOYER:
CORPORATE STRATEGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxx, Chairman
EXECUTIVE:
/s/ XXXX XXXXXXX
-------------------------------
XXXX XXXXXXX
Signature Page to
Employment Agreement
(Xxxx Xxxxxxx)
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