New Employee Stock Incentive Plan - Identix Inc.
IDENTIX INCORPORATED NEW EMPLOYEE
STOCK INCENTIVE PLAN
SECTION 1. PURPOSE; DEFINITIONS.
(a) Purpose. The purpose of the Plan is to provide to certain persons
who are not yet employees of the Company a material inducement to become
employees of, or consultants to, Identix Incorporated, a Delaware corporation,
its subsidiaries or affiliates by providing an opportunity to acquire stock in
the Company.
(b) Definitions. For purposes of the Plan, the following terms have the
following meanings:
(i) "Award" means any award under the Plan, including any
Option, Restricted Stock, Stock Purchase Right or Performance Share Award.
(ii) "Award Agreement" means, with respect to each Award, the
signed written agreement between the Company and the Plan participant setting
forth the terms and conditions of the Award.
(iii) "Board" means the Board of Directors of the Company.
(iv) "Change in Control" has the meaning set forth in Section
9(a).
(v) "Change in Control Price" has the meaning set forth in
Section 9(c).
(vi) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute.
(vii) "Commission" means the Securities and Exchange Commission
and any successor agency.
(viii) "Committee" means the Committee referred to in Section 2,
or the Board in its capacity as administrator of the Plan in accordance with
Section 2.
(ix) "Company" means Identix Incorporated, a Delaware
corporation.
(x) "Disability" means permanent and total disability as
determined by the Committee for purposes of the Plan.
(xi) "Non-employee Director" has the meaning set forth in Rule
16b-3 under the Exchange Act, and any successor definition adopted by the
Commission.
(xii) "Exchange Act" means the Securities Exchange Act of 1934,
as amended from time to time, and any successor statute.
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(xiii) "Fair Market Value" means as of any given date (a) if the
Stock is listed on any established stock exchange or a national market system,
the closing sales price for the Stock or the closing bid if no sales were
reported, as quoted on such system or exchange, as reported in the Wall Street
Journal; or (b) in the absence of an established market for the Stock, the fair
market value of the Stock as determined by the Committee in good faith.
(xiv) "Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option, within the meaning of Section 422 of the Code.
(xv) "Option" means an option granted under Section 5.
(xvi) "Performance Period" means the period determined by the
Committee under Section 8(a).
(xvii) "Performance Share" means the equivalent, as of any time
such assessment is made, of the Fair Market Value of one share of Stock.
(xviii)"Performance Share Award" means an Award under Section 8.
(xix) "Plan" means this Identix Incorporated New Employee Stock
Incentive Plan, as amended from time to time.
(xx) "Restricted Stock" means an Award of Stock subject to
restrictions, as more fully described in Section 6.
(xxi) "Restriction Period" means the period determined by the
Committee under Section 6(b).
(xxii) "Rule 16b-3" means Rule 16b-3 under Section 16(b) of the
Exchange Act, as amended from time to time, and any successor rule.
(xxiii)"Stock" means the Common Stock of the Company, and any
successor security.
(xxiv) "Stock Purchase Right" means an Award granted under
Section 7.
(xxv) "Subsidiary" has the meaning set forth in Section 424 of
the Code.
(xxvi) "Tax Date" means the date defined in Section 10(f).
(xxvii) "Termination" means, for purposes of the Plan, with
respect to a participant, that the participant has ceased to be, for any reason,
employed by, or a consultant to, the Company, a subsidiary or an affiliate;
provided, that for purposes of this definition, unless otherwise determined by
the President of the Company, in his sole
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discretion, Termination shall not include a change in status from an employee
of, to a consultant to, the Company or any subsidiary or affiliate, or vice
versa.
SECTION 2. ADMINISTRATION.
(a) Committee. The Plan shall be administered by the Board or, upon
delegation by the Board, by a committee of Non-employee Directors appointed by
the Board. In connection with the administration of the Plan, the Committee
shall have the powers possessed by the Board. The Committee may act only by a
majority of its members, except that the Committee may from time to time select
another committee or one or more other persons to be responsible for any matters
for which Non-employee Director are not required pursuant to Rule 16b-3. The
Board at any time may abolish the Committee and revest in the Board the
administration of the Plan.
(b) Authority. The Committee shall grant Awards only to persons who are
not at the time of the Award employees of the Company for purposes of providing
a material inducement to such persons to become employees of or consultants to
the Company. In particular and without limitation, the Committee, subject to the
terms of the Plan, shall:
(i) select the persons which the Company wishes to attract as an
officer, employee or consultants to whom Awards may be granted;
(ii) determine whether and to what extent Awards are to be
granted under the Plan;
(iii) determine the number of shares to be covered by each Award
granted under the Plan;
(iv) determine the terms and conditions of any Award granted
under the Plan and any related loans to be made by the Company, based upon
factors determined by the Committee; and
(v) determine to what extent and under what circumstances any
Award payments may be deferred by a participant.
(c) Committee Determinations Binding. The Committee may adopt, alter and
repeal administrative rules, guidelines and practices governing the Plan as it
from time to time shall deem advisable, may interpret the terms and provisions
of the Plan, any Award and any Award Agreement and may otherwise supervise the
administration of the Plan. Any determination made by the Committee pursuant to
the provisions of the Plan with respect to any Award shall be made in its sole
discretion at the time of the grant of the Award or, unless in contravention of
any express term of the Plan or Award, at any later time. All decisions made by
the Committee under the Plan shall be binding on all persons, including the
Company and Plan participants.
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SECTION 3. STOCK SUBJECT TO PLAN.
(a) Number of Shares. The total number of shares of Stock reserved and
available for issuance pursuant to Awards under this Plan shall be 1,500,000
shares. Such shares may consist, in whole or in part, of authorized and unissued
shares or treasury shares or shares reacquired in private transactions or open
market purchases, but all shares issued under the Plan, regardless of source
shall be counted against the 1,500,000 share limitation. If any Option
terminates or expires without being exercised in full or if any shares of Stock
subject to an Award are forfeited, or if an Award otherwise terminates without
issuance in full being made to the participant in the form of Stock, the shares
not issued under such Option or Award shall again be available for issuance in
connection with Awards. To the extent an Award is paid in cash, the number of
shares of Stock representing, at Fair Market Value on the date of the payment,
the value of the cash payment shall not be available for later grant under the
Plan. Any Award under this Plan shall be governed by the terms of the Plan and
any applicable Award Agreement.
(b) Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or other change in
corporate structure affecting the Stock, such substitution or adjustments shall
be made in the aggregate number of shares of Stock reserved for issuance under
the Plan, in the number and exercise price of shares subject to outstanding
Options, and in the number of shares subject to other outstanding Awards, as may
be determined to be appropriate by the Committee, in its sole discretion;
provided, however, that the number of shares subject to any Award shall always
be a whole number.
SECTION 4. ELIGIBILITY.
Awards may be granted as a material inducement to accepting employment
or consultancy with the Company only to persons not employed by the Company at
the time of the Award and who the Company wishes to attract as an officer or
other employee of, or consultant to, the Company, its subsidiaries and
affiliates.
SECTION 5. STOCK OPTIONS.
(a) Type. Any Option granted under the Plan shall be in such form as the
Committee may from time to time approve; provided, that only Nonqualified Stock
Options may be granted under the Plan.
(b) Terms and Conditions. Options granted under the Plan shall be
subject to the following terms and conditions:
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(i) Option Term. The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than fifteen (15) years after
the date the Option is granted.
(ii) Grant Date. The Company may grant Options under the Plan at
any time and from time to time before the Plan terminates. The Committee shall
specify the date of grant or, if it fails to, the date of grant shall be the
date the intended optionee is first treated as an employee or consultant for
payroll purposes.
(iii) Exercise Price. Unless approved by the holders of a
majority of the Company's shares present and entitled to vote at a duly convened
meeting of the Company's shareholders, the Company shall not grant any Options
with an exercise price that is less than 100% of the Fair Market Value of the
underlying Stock on the date of grant or reduce the exercise price of any Option
granted under the Plan. Subject to the foregoing sentence, the exercise price
per share of Stock purchasable under an Option shall be equal to at least 85% of
the Fair Market Value on the date of grant.
(iv) Exercisability. Subject to the other provisions of the
Plan, an Option shall be exercisable in its entirety at grant or at such times
and in such amounts as are specified in the Award Agreement evidencing the
Option. Except to the extent otherwise provided in the Award Agreement, in the
event of Termination prior to the Option being exercisable in full, any such
unexercisable portion shall expire as of such Termination. The Committee, in its
absolute discretion, at any time may waive any limitations respecting the time
at which an Option first becomes exercisable in whole or in part.
(v) Method of Exercise; Payment. To the extent the right to
purchase shares has accrued, Options may be exercised, in whole or in part, from
time to time, by written notice from the optionee to the Company stating the
number of shares being purchased, accompanied by payment of the exercise price
for the shares.
SECTION 6. RESTRICTED STOCK.
(a) Price. The Committee may grant to a participant Restricted Stock.
The grantee shall pay the par value per share as consideration therefor.
(b) Restrictions. Subject to the provisions of the Plan and the Award
Agreement, during the Restriction Period set by the Committee, commencing with
and not exceeding ten (10) years from the date of such Award, the participant
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
shares of Restricted Stock. Within these limits, the Committee may provide for
the lapse of such restrictions in installments and may accelerate or waive such
restrictions, in whole or in part, based on service, performance or such other
factors or criteria as the Committee may determine.
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(c) Dividends. Unless otherwise determined by the Committee, with
respect to dividends on shares of Restricted Stock, dividends payable in cash
shall be automatically reinvested in additional Restricted Stock, and dividends
payable in Stock shall be paid in the form of Restricted Stock.
(d) Termination. Except to the extent otherwise provided in the Award
Agreement and pursuant to Section 6(b), in the event of a Termination during the
Restriction Period, all shares still subject to restriction shall be forfeited
by the participant.
SECTION 7. STOCK PURCHASE RIGHTS.
(a) Price. The Committee may grant Stock Purchase Rights which shall
enable the recipients to purchase Stock at a price equal to not less than 85% of
its Fair Market Value on the date of grant.
(b) Exercisability. Stock Purchase Rights shall be exercisable for a
period determined by the Committee not exceeding 30 days from the date of the
grant.
SECTION 8. PERFORMANCE SHARES.
(a) Awards. The Committee shall determine the nature, length and
starting date of the Performance Period for each Performance Share Award, which
period shall be at least one (1) year (subject to Section 9) and not more than
six (6) years. The consideration payable by a participant with respect to a
Performance Share Award shall be an amount determined by the Committee in the
exercise of the Committee's discretion at the time of the Award; provided, that
the amount of consideration may be zero and may in no event exceed 50% of the
Fair Market Value at the time of grant. The Committee shall determine the
performance objectives to be used in awarding Performance Shares and the extent
to which such Performance Shares have been earned. Performance Periods may
overlap and participants may participate simultaneously with respect to
Performance Share Awards that are subject to different Performance Periods and
different performance factors and criteria. At the beginning of each Performance
Period, the Committee shall determine for each Performance Share Award subject
to such Performance Period the number of shares of Stock (which may consist of
Restricted Stock) to be awarded to the participant at the end of the Performance
Period if and to the extent that the relevant measures of performance for such
Performance Share Award are met. Such number of shares of Stock may be fixed or
may vary in accordance with such performance or other criteria as may be
determined by the Committee. The Committee may provide that (i) amounts
equivalent to interest at such rates as the Committee may determine, or (ii)
amounts equivalent to dividends paid by the Company upon outstanding Stock shall
be payable with respect to Performance Share Awards.
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(b) Termination. Except as otherwise provided in the Award Agreement or
determined by the Committee, in the event of a Termination during a Performance
Period, the participant shall not be entitled to any payment with respect to the
Performance Shares subject to the Performance Period.
(c) Form of Payment. Payment shall be made in the form of cash or whole
shares of Stock, as the Committee, in its discretion, shall determine.
SECTION 9. CHANGE IN CONTROL.
(a) Definition of "Change in Control". For purposes of Section 9(b), a
"Change in Control" means the occurrence of any one of the following:
(i) Any "person", as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, a subsidiary, an affiliate,
or a Company employee benefit plan, including any trustee of such plan acting as
trustee) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities;
(ii) the solicitation of proxies (within the meaning of Rule
14a-1 under the Exchange Act and any successor rule) with respect to the
election of any director of the Company where such solicitation is for any
candidate who is not a candidate proposed by a majority of the Board in office
prior to the time of such election; or
(iii) the dissolution or liquidation (partial or total) of the
Company or a sale of assets involving 30% or more of the assets of the Company,
any merger or reorganization of the Company, whether or not another entity is
the survivor, in a transaction pursuant to which the holders, as a group, of all
of the shares of the Company outstanding prior to the transaction hold, as a
group, less than 70% of the shares of the Company outstanding after the
transaction, or any other event which the Board determines, in its discretion,
would materially alter the structure of the Company or its ownership.
(b) Impact of Event. In the event of a "Change in Control" as defined in
Section 9(a), but only if and to the extent so specifically determined by the
Board in its discretion, which determination may be amended or reversed only by
the affirmative vote of a majority of the persons who were directors at the time
such determination was made, acceleration and valuation provisions no more
favorable to participants than the following may apply:
(i) Any Options outstanding as of the date such Change in
Control is determined to have occurred and not then exercisable and vested shall
become fully exercisable and vested.
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(ii) The restrictions and limitations applicable to any
Restricted Stock and Stock Purchase Rights shall lapse, and such Restricted
Stock shall become fully vested.
(iii) The value (net of any exercise price) of all outstanding
Options, Restricted Stock and Stock Purchase Rights, unless otherwise determined
by the Committee at or after grant and subject to Rule 16b-3, shall be cashed
out on the basis of the "Change in Control Price", as defined in Section 9(c),
as of the date such Change in Control is determined to have occurred or such
other date as the Board may determine prior to the Change in Control.
(iv) Any outstanding Performance Share Awards shall be vested
and paid in full as if all performance criteria had been met.
(c) Change in Control Price. For purposes of this Section 9, "Change in
Control Price" means the highest price per share paid in any transaction
reported on the American Stock Exchange or the Nasdaq National Market or paid or
offered in any bona fide transaction related to a potential or actual Change in
Control of the Company at any time during the preceding 60 day period as
determined by the Board.
SECTION 10. GENERAL PROVISIONS.
(a) Award Grants. Any Award may be granted either alone or in addition
to other Awards granted under the Plan. Subject to the terms and restrictions
set forth elsewhere in the Plan, the Committee shall determine the
consideration, if any, payable by the participant for any Award and, in addition
to those set forth in the Plan, any other terms and conditions of the Awards.
The Committee may condition the grant or payment of any Award upon the
attainment of specified performance goals or such other factors or criteria,
including vesting based on continued employment or consulting, as the Committee
shall determine. Performance objectives may vary from participant to participant
and among groups of participants and shall be based upon such Company,
subsidiary, group or division factors or criteria as the Committee may deem
appropriate, including, but not limited to, earnings per share or return on
equity. The other provisions of Awards also need not be the same with respect to
each recipient.
(b) Award Agreement. As soon as practicable after the date of an Award
grant, the Company and the participant shall enter into a written Award
Agreement identifying the date of grant, and specifying the terms and conditions
of the Award. Options are not exercisable until after execution of the Award
agreement by the Company and the Plan participant, but a delay in execution of
the agreement shall not affect the validity of an Option grant.
(c) Certificates. All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock transfer
orders, legends and other restrictions
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as the Committee may deem advisable under the rules, regulations and other
requirements of the Commission, any market in which the Stock is then traded and
any applicable federal, state or foreign securities law.
(d) Termination. Unless otherwise provided in the applicable Award
Agreement or by the Committee, in the event of Termination for any reason other
than death, retirement or Disability, Awards held at the date of Termination
(and only to the extent then exercisable or payable, as the case may be) may be
exercised in whole or in part at any time within three (3) months after the date
of Termination, or such lesser period specified in the Award Agreement (but in
no event after the expiration date of the Award), but not thereafter. If
Termination is due to retirement or to death or Disability, Awards held at the
date of Termination (and only to the extent then exercisable or payable, as the
case may be) may be exercised in whole or in part by the participant in the case
of retirement or Disability, by the participant's guardian or legal
representative or by the person to whom the Award is transferred by will or the
laws of descent and distribution, at any time within two (2) years from the date
of Termination or any lesser period specified in the Award Agreement (but in no
event after the expiration of the Award).
(e) Delivery of Purchase Price. If and only to the extent authorized by
the Committee, participants may make all or any portion of any payment due to
the Company
(i) with respect to the consideration payable for an Award,
(ii) upon exercise of an Award, or
(iii) with respect to federal, state, local or foreign tax
payable in connection with an Award, by delivery of (x) cash, (y) check, or (z)
any property other than cash (including a promissory note of the participant or
shares of Stock or securities) so long as, if applicable, such property
constitutes valid consideration for the Stock under, and otherwise complies
with, applicable law. No promissory note under the Plan shall have a term
(including extensions) of more than five years or shall be of a principal amount
exceeding 90% of the purchase price paid by the borrower.
(f) Tax Withholding. Any shares or other securities so withheld or
tendered will be valued by the Committee as of the date they are withheld or
tendered; provided, however, that Stock shall be valued at Fair Market Value on
such date. The value of the shares withheld or tendered may not exceed the
required federal, state, local and foreign withholding tax obligations as
computed by the Company. Unless the Committee permits otherwise, the participant
shall pay to the Company in cash, promptly when the amount of such obligations
becomes determinable (the "Tax Date"), all applicable federal, state, local and
foreign withholding taxes that the Committee in its discretion determines to
result (i) from the lapse of restrictions imposed upon an Award, (ii) upon
exercise of an Award, or (iii) from a transfer or other disposition of shares
acquired upon
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exercise or payment of an Award, or otherwise related to the Award or the shares
acquired in connection with an Award.
A participant who has received an Award or payment under an
Award may, to the extent, if any, authorized by the Committee in its discretion,
make an election to (x) deliver to the Company a promissory note of the
participant on the terms set forth in Section 10(e), or (y) tender any such
securities to the Company to pay the amount of tax that the Committee in its
discretion determines to be required to be withheld by the Company subject to
any limitations imposed by Section 16(b) of the Exchange Act or other applicable
law.
(g) No Transferability. Unless otherwise provided for in the applicable
Award Agreement or by the Committee, no Award shall be assignable or otherwise
transferable by the participant other than by will or by the laws of descent and
distribution, and during the life of a participant, an Award shall be
exercisable, and any elections with respect to an Award may be made, only by the
participant or participant's guardian or legal representative.
(h) Adjustment of Awards; Waivers. The Committee may adjust the
performance goals and measurements applicable to Awards (i) to take into account
changes in law and accounting and tax rules, (ii) to make such adjustments as
the Committee deems necessary or appropriate to reflect the inclusion or
exclusion of the impact of extraordinary or unusual items, events or
circumstances in order to avoid windfalls or hardships, and (iii) to make such
adjustments as the Committee deems necessary or appropriate to reflect any
material changes in business conditions. In the event of hardship or other
special circumstances of a participant and otherwise in its discretion, the
Committee may waive in whole or in part any or all restrictions, conditions,
vesting, or forfeiture with respect to any Award granted to such participant.
(i) Non Competition. The Committee may condition its discretionary
waiver of a forfeiture, the acceleration of vesting at the time of Termination
of a participant holding any unexercised or unearned Award, the waiver of
restrictions on any Award, or the extension of the expiration period to a period
not longer than that provided by the Plan upon such participant's agreement (and
compliance with such agreement) to (i) not engage in any business or activity
competitive with any business or activity conducted by the Company and (ii) be
available for consultations at the request of the Company's management, all on
such terms and conditions (including conditions in addition to clauses (i) and
(ii)) as the Committee may determine.
(j) Dividends. The reinvestment of dividends in additional Stock or
Restricted Stock at the time of any dividend payment pursuant to Section 6(c)
shall only be permissible if sufficient shares of Stock are available under
Section 3 for such reinvestment (taking into account then outstanding Awards).
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(k) Regulatory Compliance. Each Award under the Plan shall be subject to
the condition that, if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Stock upon any
securities exchange or for trading in any securities market or under any state
or federal law, (ii) the consent or approval of any government or regulatory
body or (iii) an agreement by the participant with respect thereto, is necessary
or desirable, then such Award shall not be consummated in whole or in part
unless such listing, registration, qualification, consent, approval or agreement
shall have been effected or obtained free of any conditions not acceptable to
the Committee.
(l) Rights as Shareholder. Unless the Plan or the Committee expressly
specifies otherwise, an optionee shall have no rights as a shareholder with
respect to any shares covered by an Award until the stock certificates
representing the shares are actually delivered to the optionee. Subject to
Sections 3(b) and 6(c), no adjustment shall be made for dividends or other
rights for which the record date is prior to the date the certificates are
delivered.
(m) Beneficiary Designation. The Committee, in its discretion, may
establish procedures for a participant to designate a beneficiary to whom any
amounts payable in the event of the participant's death are to be paid.
(n) Additional Plans. Nothing contained in the Plan shall prevent the
Company, a subsidiary or an affiliate from adopting other or additional
compensation arrangements for its employees and consultants.
(o) No Employment Rights. The adoption of the Plan shall not confer upon
any employee any right to continued employment nor shall it interfere in any way
with the right of the Company, a subsidiary or an affiliate to terminate the
employment of any employee at any time.
(p) Rule 16b-3. Notwithstanding any provision of the Plan, the Plan
shall always be administered, and Awards shall always be granted and exercised,
in such a manner as to conform to the provisions of Rule 16b-3.
(q) Governing Law. The Plan and all Awards shall be governed by and
construed in accordance with the laws of the State of California.
(r) Use of Proceeds. All cash proceeds to the Company under the Plan
shall constitute general funds of the Company.
(s) Unfunded Status of Plan. The Plan shall constitute an "unfunded"
plan for incentive and deferred compensation. The Committee may authorize the
creation of trusts or arrangements to meet the obligations created under the
Plan to deliver Stock or make payments; provided, however, that unless the
Committee otherwise determines, the
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existence of such trusts or other arrangements shall be consistent with the
"unfunded" status of the Plan.
(t) Assumption by Successor. The obligations of the Company under the
Plan and under any outstanding Award may be assumed by any successor
corporation, which for purposes of the Plan shall be included within the meaning
of "Company".
SECTION 11. AMENDMENTS AND TERMINATION.
The Board may amend, alter or discontinue the Plan or any Award, but no
amendment, alteration or discontinuance shall be made which would impair the
rights of a participant under an outstanding Award without the participant's
consent. Notwithstanding the foregoing, Section 5(a) (iii) of the Plan may be
amended or repealed solely by the affirmative vote of a majority of the
Company's shares present and entitled to vote at a duly convened meeting of the
Company's shareholders.
SECTION 12. EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the date it is adopted by the Board.
SECTION 13. TERM OF PLAN.
No Award shall be granted on or after April 3, 2010, but Awards granted
prior to April 3, 2010 may extend beyond that date.
Plan, as approved by the Board of Directors on April 3, 2000, and as amended by
Unanimous Written Consent of the Board of Directors on June 18, 2001 and on
January 29, 2002.
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