EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made this ____ day of December, 1999 for a term to begin on
January 1, 2000, by and between Jeremy's Microbatch Ice Creams, Inc., a Delaware
corporation (hereinafter called "Company"), and Xxxxxx X. Xxxxx, an individual
(hereinafter called "Employee").
W I T N E S S E T H:
Employee is currently employed as the President and Chief Executive Officer
of the Company. Company wishes to continue to employ Employee and Employee
wishes to continue such employment on the terms and conditions contained in this
Agreement.
NOW THEREFORE, in consideration of the facts, mutual promises and covenants
contained herein and intending to be legally bound hereby, Company and Employee
agree as follows:
1. Employment. Company hereby employs Employee and Employee hereby accepts
employment by Company for the period and upon the terms and conditions contained
in this Agreement.
2. Office and Duties.
(a) Employee shall service Company as its President and Chief Executive
Officer and shall have such authority and responsibilities as typically accorded
a President and Chief Executive Officer subject to such further duties and
responsibilities granted and restrictions imposed by Company's Board of
Directors, provided that such duties, responsibilities and restrictions are
generally consistent with the position of a President and Chief Executive
Officer in similarly situated companies. Employee shall report directly to the
Board of Directors of the Company. During the term of this Agreement, Employee
shall also provide services to Company's subsidiaries, if any, without
additional compensation, from time to time as determined by the Board of
Directors.
(b) Throughout the term of this Agreement, Employee shall devote his best
efforts and skill to the performance of his duties hereunder in a manner which
will faithfully and diligently further the business and interest of Company.
Employee shall at all times comply with the policies and procedures adopted by
the Company, including those relating to conflicts of interest, to the extent
they are not contradicted by the express terms of this Agreement.
(c) During the term of this Agreement, the Company shall provide Employee
with facilities and staff services reasonably sufficient to discharge his
duties. During the term of this Agreement, the Company's principal office where
Employee is required to perform his duties shall be within the City of
Philadelphia, Pennsylvania or within ten miles of that city, unless Employee
consents to another location
(d) Employee represents to the Company that he is not subject or a party to
any agreement, instrument or restriction which would prohibit, or be violated
by, his execution of this Agreement or the performance of his duties under this
Agreement, or which would in any manner, directly or indirectly, limit or affect
the duties and responsibilities which may now or in the future be assigned to
Employee.
3. Term. This Agreement shall be for a term of three (3) years, commencing
on January 1, 2000, and ending on December 31, 2002, unless sooner terminated as
provided in this Agreement. Unless either party elects to terminate this
Agreement at the end of the original or
any renewal term by giving the other party notice of such election at least
thirty (30) days before the expiration of the then current term, this Agreement
shall be deemed to have been renewed for an additional term of one (1) year
commencing on the day after the expiration of the then current term.
4. Compensation.
(a) For all of the services rendered by Employee to Company and its
subsidiaries, Employee shall receive an annual base salary in the following
amounts:
(i) In the calendar year ending December 31, 2000, One hundred Twenty
Thousand Dollars ($120,000).
(ii) In the calendar year ending December 31, 2001, One hundred Thirty
Thousand Dollars ($130,000).
(iii) In the calendar year ending December 31, 2002, One hundred Forty
Thousand Dollars ($140,000).
Such base salary shall be paid in periodic installments consistent with the
payment of the Company's other employees.
(b) In addition to Employee's salary, the Company will grant Employee stock
options (the "Stock Options") to purchase 10,000 shares of the Company's common
stock on each of January ___, 2000, 2001 and 2002. The stock options will have
an exercise price equal to the market price of the Company's common stock on the
date of issuance. The Stock Options will be exercisable for five (5) years after
the date of issue. The Stock Options will be vested upon issuance, but will
become void if Employee is terminated for "Cause" pursuant to Sections 9 and 10
of this Agreement. The Stock Options will not be transferable during Employee's
lifetime, but will be transferable in the event of Employee's death. The other
terms of the options will be consistent with the terms generally contained in
non-qualified stock options for executive officers. Market price of the common
stock shall be determined by the provisions of the Stock Option documents,
provided that the determination of market price must include an average of at
least ten trading days no more than 30 days prior to the date for which the
determination is made. If there is no market price of the common stock on
January __, 2000, the market price shall be deemed to the initial public
offering price of the common stock.
(c) Throughout the term of this Agreement and as long as they are kept in
force by Company, Employee shall be entitled to participate in and receive such
employee benefits as may now or hereafter be adopted or maintained by the
Company for the benefit of its employees generally or executive officers
specifically. Employee will submit to any required examinations and will exeucte
and assign and/or deliver such applications and policies necessary to effectuate
any insurance benefits provided herein.
(d) All references in this Agreement to compensation to be paid to the
Employee are to the gross amounts thereof which are due hereunder before
deductions for taxes and similar items. The Company shall have the right to
deduct therefrom all taxes and all other amounts which may be required to be
deducted or withheld under any provision of the law (including, but not limited
to, social security payments, income tax withholding and any other deduction
required by law) now in effect or which may become effective at any time during
the term of this Agreement.
5. Vacation and Personal Days. Employee shall be entitled to 15 business
days of vacation and business days of personal or sick leave as required in each
consecutive twelve
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month period commencing on the date hereof. Accrual of vacation time and
scheduling of vacation time shall be subject to the personnel policies adopted
by Company.
6. Expenses. Company will reimburse Employee for all reasonable expenses
incurred by Employee in connection with the performance of Employee's duties
hereunder upon receipt of vouchers therefor, and in accordance with the
Company's reimbursement policies from time to time.
7. Disability.
(a) If Employee becomes unable to perform his duties hereunder due to
partial or total disability or incapacity resulting from a mental or physical
illness or injury, Company will continue the payment of Employee's base salary
at its then current rate for a period of 12 weeks following the date Employee is
first unable to perform his duties due to such disability or incapacity.
Thereafter, Company shall have no obligation for base salary or other
compensation payments to Employee during the continuance of such disability or
incapacity other than such as may be available under any disability policy or
other benefit plan in which Employee is a beneficiary or participant pursuant to
subparagraph 4(d).
(b) If Employee is unable to perform his duties hereunder due to partial or
total disability or incapacity resulting from a mental or physical illness or
injury for a period of one hundred twenty (120) consecutive calendar days or for
a period of two hundred ten (210) calendar days during any twelve-month period,
Company shall have the right to terminate this Agreement, in which event Company
shall have no further obligations or liabilities hereunder after the date of
such termination other than such as may be available under any disability policy
or other benefit plan in which Employee is a beneficiary or participant pursuant
to subparagraph 4(d).
8. Death. This Agreement shall terminate immediately upon Employee's death,
and Company shall have no further obligations or liabilities hereunder to
Employee's estate or legal representative or otherwise except for payment of all
compensation accrued through the date of Employee's death
9. Termination for Cause. (a) If the Board of Directors of the Company
determines in good faith that there is Cause (as hereinafter defined) for the
termination of Employee's employment, the Company may, at any time upon five (5)
days written notice to Employee, terminate this Agreement and Employee's
employment. For purposes of this Agreement, "Cause" shall mean:
(i) continuing willful neglect by Employee of his duties hereunder
except due to illness, accident or other disability;
(ii) willful disregard for or willful violation of any material law,
governmental rule or regulation applicable to the operation of the business
of the Company which has subjected the Company or is likely to subject the
Company to loss;
(iii) Employee' breach of duty to the Company involving personal
profit to Employee or his family or usurpation of an opportunity available
to the Company by Employee to the material detriment of the Company;
(iv) the conviction of Employee for a felony, or any other crime which
is not a felony but involves moral turpitude
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(v) a material breach of any of the terms or covenants contained in
this Agreement;
(vi) any misappropriation of funds, theft, embezzlement or fraud by
Employee involving the Company, or any of its affiliates, customers or
suppliers.
(vii) Without limiting any of the foregoing, if Employee is found by a
court or arbitrator to have sexually harassed any employee of the Company
or Employee admits to such sexual harassment.
(viii) The conviction of Employee for the violation of any state or
federal law relating to the regulation of securities, or a final judgment
is entered by a court of competent jurisdiction in a civil case finding
Employee liable for his violation of any law or regulation relating to the
regulation of securities.
(b) Upon termination for Cause, Employee shall have no right to
compensation or other benefits for any period after such date of termination.
The Company shall have the right to offset any damages caused to Company by
Employee against any amounts owing to Employee.
10. Procedure Upon Termination by Company for Cause. Notwithstanding the
foregoing, termination by the Company for Cause shall not be effective until and
unless
(i) notice of intention to terminate for Cause has been given by the
Company within 30 days after the Company learns of the act, failure or
event constituting "Cause" under Section, and
(ii) the Board of Directors has voted (at a meeting of the Board duly
called and held as to which termination of Employee is an agenda item) by a
majority vote to terminate Employee for Cause after Employee has been given
notice of the particular acts or circumstances which are the basis for the
termination for Cause and has been afforded at least five (5) days notice
of the meeting and an opportunity to attend such meeting with counsel and
present his position orally and/or in writing and the Board has given
notice of termination to Employee within three (3) days thereafter. The
termination of Employee's employment shall be effective immediately upon
receipt of such notice but shall not be deemed a termination of employment
for Cause unless and until all of the conditions set forth in clauses (i)
through (iii) hereof have occurred, and
(iii) if Employee has commenced arbitration in the manner prescribed
in this Agreement within 20 days after such notice of termination,
disputing the Company's right under this Agreement to terminate for Cause,
the Arbitrator shall thereafter have determined that the Employee was
terminated for Cause. If the Arbitrator declines to rule that the Employee
was terminated for Cause, the Employee shall be treated as having been
terminated without cause and the Employee shall be entitled to receive the
Severance Benefit pursuant to Section 11.
11. Termination by Employee; Termination by Company Without Cause.
(a) Employee shall have the right to terminate this Agreement upon ten (10)
days written notice to the Company if the Company fails to timely pay any items
of cash compensation due to Employee which in the aggregate exceed five thousand
dollars ($5,000),
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and the Company does not completely cure such failure within the ten day notice
period. Employee shall have the right to terminate this Agreement upon thirty
(30) days written notice if the Company shall be in material breach of this
Agreement for any reason other than its failure to pay cash compensation and the
Company fails to completely cure such failure within the thirty day notice
period.
(b) The Company may terminate this agreement without Cause upon giving
employee at least thirty days (30) written notice.
(c) If this Agreement is terminated by Employee pursuant to paragraph (a)
of this Section 11, or by the Company pursuant to paragraph (b) of this Section
11, the Company shall be required to pay employee an amount equal to six months
base salary ("Severance Payment"). The base salary payable shall be the base
salary in force immediately prior to the date of termination. One half of the
Severance Payment shall be paid within ten days after the effective date of
Employee's termination and the other half shall be paid within three months
after the effective date of termination.
(d) Notice of non-renewal of this Agreement pursuant to Section 3 of this
Agreement shall not be deemed a termination under either paragraph (a) or (b) of
this Section 10 and shall not entitle Employee to any salary or benefit
continuation under paragraph (c) of this Section 10.
12. Arbitration. In the event of any controversy, dispute or claim arising
out of or related to this Agreement or the Employee's employment by the Company,
either party may submit such controversy, dispute or claim to binding
arbitration in accordance with the National Rules of the American Arbitration
Association governing employment disputes, subject to the following:
(a) The Arbitrator shall be determined from a list of names of five
impartial arbitrators each of whom shall be an attorney experienced in
arbitration matters concerning executive employment disputes, supplied by the
American Arbitration Association (the "Association") chosen by Employee and the
Company each in turn striking a name from the list until one name remains.
(b) The Arbitrator shall determine whether and to what extent any party
shall be entitled to damages under this Agreement. No party shall be entitled to
punitive damages, and each party waives all such rights if any. The arbitrator
may award attorneys fees to any party if the arbitrator determines that the
other party's claims or defenses were without reasonable basis.
(c) The Arbitrator shall not have the power to add to nor modify any of the
terms or conditions of this Agreement. The Arbitrator's decision shall not go
beyond what is necessary for the interpretation and application of the provision
of this Agreement in respect of the issue before the Arbitrator. The Arbitrator
shall not substitute his or her judgment for that of the parties in the exercise
of rights granted or retained by this Agreement. The Arbitrator's award or other
permitted remedy, if any, and the decision shall be based upon the issue as
drafted and submitted by the respective parties and the relevant and competent
evidence adduced at the hearing.
(d) The Arbitrator shall have the authority to award any remedy or relief
provided for in this Agreement, in addition to any other remedy or relief
(including provisional remedies and relief) that a court of competent
jurisdiction could order or grant. The decision reached by the Arbitrator shall
be final and binding upon the parties as to the matter in dispute. To the extent
that the relief or remedy granted by the Arbitrator is relief or remedy on which
a court could enter judgment, a judgment upon the award rendered by the
Arbitrator shall be entered in
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any court having jurisdiction thereof (unless in the case of an award of
damages, the full amount of the award is paid within 10 days of its
determination by the Arbitrator). Otherwise, the award shall be binding on the
parties in connection with their continuing performance of this Agreement and in
any subsequent arbitral or judicial proceedings between the parties.
(e) The arbitration shall take place in Philadelphia County, Pennsylvania.
(f) The arbitration proceeding and all filing, testimony, documents and
information relating to or presented during the arbitration proceeding shall be
disclosed exclusively for the purpose of facilitating the arbitration process
and for no other purpose and shall be deemed to be information subject to the
confidentiality provisions of this Agreement.
(g) The parties shall continue performing their respective obligations
under this Agreement notwithstanding the existence of a dispute while the
dispute is being resolved unless and until such obligations are terminated or
expire in accordance with the provisions hereof.
(i) Notwithstanding the dispute resolution procedures contained in this
Section 12, either party may apply to any court having jurisdiction (i) to
enforce this Agreement to arbitrate, (ii) to seek temporary or preliminary
injunctive relief until the arbitration award is rendered or the dispute is
otherwise resolved, or (iii) to challenge or vacate any final judgment, award or
decision of the Arbitrator that does not comport with the express provisions of
this Section 12.
13. Company Property. All research, advertising, sales, financial,
operating and other materials, reports or articles or information, including
without limitation data processing reports, customer sales analyses, invoices,
price lists or information, samples, computer code or electronic data or any
other materials or data of any kind furnished to Employee by Company or any
subsidiary, or developed by Employee on behalf of Company or any subsidiary
thereof, used by the Company or any subsidiary, or otherwise obtained by
Employee in connection with Employee's employment with the Company, are and
shall remain the sole and confidential property of Company. If Company requests
the return of such materials at any time during or at or after the termination
of Employee's employment, Employee shall immediately deliver the same to
Company.
14. Restrictive Provisions.
(a) The Company is engaged in the conduct of a highly specialized business,
the success of which is due to confidential and proprietary information and
trade secrets. Further, in conducting its business, the Company will disclose to
Employee confidential information, proprietary information and trade secrets
concerning the Company's business. For and in consideration of the compensation
and benefits set forth in this Agreement (including stock options), and as a
material inducement to the Company to disclose confidential information,
proprietary information and trade secrets to Employee and to enter into this
Agreement to employ Employee, Employee hereby covenants and agrees as provided
in the remainder of this Section 14.
(b) During the term of this Agreement and for one (1) year after the date
of termination of Employee's employment with the Company for any reason (the
"Restricted Period"), Employee shall not, directly or indirectly
(i) Solicit for employment or other retention, or hire or retain,
directly or indirectly, any person who is an employee of the Company at the
time of such solicitation, hiring or retention.
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(ii) Solicit any person or entity who is or was a customer, client or
supplier of the Corporation for any business, transaction or other purpose
in any way related, directly or indirectly, to the manufacture or sale of
ice cream.
(iii) Solicit, induce or encourage any customer, consultant,
independent contractor or supplier of Company, or any other person or
entity with which the Company does business, to cease, curtail or otherwise
adversely modify its business relationship with the Company;
(iv) Engage in (without limitation, as a principal, partner, director,
officer, agent, employee, consultant, advisor or otherwise), directly or
indirectly or be financially interested in, the business of manufacturing,
marketing or selling ice cream in the United States or Canada.
Nothing contained in this Section 14, however, shall prevent Employee from
beneficially owning for investment purposes no more than five percent (5%) of
any class of equity securities of a company whose securities are traded on a
national securities exchange or NASDAQ.
(c) Employee acknowledges that because the Company's business, and its
customers, clients and suppliers, are geographically diverse, the restrictions
contained in clause (b) hereof contain no limit as to geographic scope within
the United States and Canada.
(d) During the term of this Agreement and at all times thereafter, Employee
shall not use for his personal benefit, or disclose, communicate or divulge to,
or use for the direct or indirect benefit of any person, firm, association,
corporation or other entity other than the Company, any material referred to in
Section 13 above or any information regarding the business methods, business
policies, finances, procedures, techniques, research or development projects or
results, trade secrets, or other knowledge or processes of or developed by the
Company or any subsidiary thereof or any predecessor of either, or any names of
customers, clients or suppliers of the Company or any data on or relating to
past, present or prospective customers, clients or suppliers of the Company or
any other information relating to or dealing with the business operations or
activities of Company or any subsidiary thereof or any predecessor of either,
made known to Employee or learned or acquired by Employee while in the employ of
Company.
(e) Any and all writings and inventions made, developed or created by
Employee (whether at the request or suggestion of the Company or otherwise,
whether alone or in conjunction with others and whether during regular hours of
work or otherwise), during the term of the Employee's employment by the Company
which are directly or indirectly useful in or related to the ice cream business,
shall be promptly and fully disclosed by Employee the Company, in writing, and
shall be the Company's exclusive property as against Employee, and Employee
shall promptly deliver to the Company all papers, drawings, models, data, and
other material relating to any writing or invention made, developed or created
by Employee as aforesaid. Employee hereby assigns and agrees to assign to the
Company all of his rights to such writings and inventions and to all proprietary
rights therein, based thereon or related thereto, including but not limited to
applications for United States and foreign letters copyright and/or patent.
Employee shall, at the Company's request and expense, execute such documents and
provide such assistance as may be deemed necessary by the Company to apply for,
defend or enforce any United States and/or foreign letters copyright and/or
patent based on or related to such writings or inventions or to vest in the
Company title to such writings or inventions. Employee shall not be entitled to
any additional or special compensation or reimbursement
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regarding any and all such writings and inventions. The provisions of this
paragraph shall be in addition to and shall not be deemed to diminish any rights
which the Company may have at law.
(f) Employee acknowledges that the restrictions contained in the foregoing
subparagraphs (a) through (e) in view of the nature of the business in which
Company is engaged, are reasonable and necessary in order to protect the
legitimate interests of Company, and that any violation thereof would result in
irreparable injuries to Company, and Employee therefore acknowledges that, in
the event of his violation of any of these restrictions, Company shall be
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled.
(g) If the period of time, the area specified or the scope of activity
restricted in paragraph (b) above should be adjudged unreasonable in any
proceeding then the period of time shall be reduced by such number of months or
the area shall be reduced by the elimination of such portion thereof or the
scope of restricted activity shall be modified, or any or all of the foregoing
so that such restrictions may be enforced in such area and for such time as is
adjudged to be reasonable. If Employee violates any of the restrictions
contained in the foregoing subparagraph (b), the restrictive period shall not
run in favor of Employee from the time of the commencement of any such violation
until such time as such violation shall be cured by Employee to the satisfaction
of the Company.
(h) The provisions of this Section 14 shall cease to apply if the Company
fails to pay any installment of the Severance Payment and such failure continues
for ten (10) days after Employee has given the Company written notice of such
failure.
15. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
(b) Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
(c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such as Federal Express, or by other messenger)
or when deposited in the United States mails, registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below.
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(i) If to Employee:
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(ii) If to Company:
Jeremy's Microbatch Ice Creams, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
In addition, notice by mail shall be by air mail if posted outside of the
continental United States.
Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this paragraph for the giving of notice.
(d) Binding Nature of Agreement. This Agreement shall be binding upon and
insure to the benefit of Company and its successors and assigns and shall be
binding upon Employee, his heirs and legal representatives.
(e) Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
(f) Provisions Separable. The provisions of this Agreement are independent
of and separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(g) Entire Agreement. This Agreement contains the entire understanding
among the parties hereto with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings,
inducements or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing.
(h) Paragraph Headings. The paragraph headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
(i) Gender, Etc. words used herein, regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context indicates is appropriate.
(j) Number of Days. In computing the number of days for purposes of this
Agreement, all days shall be counted, including Saturdays, Sundays and holidays;
provided, however, that if the final day of any time period falls on a Saturday,
Sunday or holiday on which federal banks are or may elect to be closed, then the
final day shall be deemed to be the next day which is not a Saturday, Sunday or
such holiday.
(k) Contingency. This Agreement will be of no effect unless and until the
Company closes its contemplated initial public offering. If the initial public
offering is closed later than January 1, 1999, but earlier than March 1, 2000,
the dates set forth in Section 3 hereof
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shall be modified to reflect a three year term beginning on the date of closing
of the initial public offering, and all calendar year periods set forth in
Section 4 shall be modified to be one year periods beginning on the date of such
closing or its anniversary.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written:
EMPLOYEE JEREMY'S MICROBATCH
ICE CREAMS, INC.
BY:
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Xxxxxx Xxxxx Xxxxxx Xxxxx, President
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