UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report: August 26, 2009
(Date of earliest event reported)
DEERE & COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE |
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1-4121 |
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36-2382580 |
(State or other jurisdiction of
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(Commission File Number) |
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(IRS Employer Identification No.) |
One John Deere Place
Moline, Illinois 61265
(Address of principal executive offices and zip code)
(309) 765-8000
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Items 5.02 |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Change in Control Program
On August 26, 2009, the Compensation Committee of the Board of Directors (the Committee) of Deere & Company (the Company) adopted a Change in Control Severance Program (the Program) to replace the change in control agreements currently in place (Agreements) for the named executive officers and certain other executives of the Company. The Program introduces changes to the terms of the Agreements as summarized below. The adoption of the Program and corresponding changes to existing terms result from the Committees routine review of the Companys executive compensation program and were approved after consultation and review with the Companys independent compensation consultant.
The Committee believes that the Program, like the Agreements it replaces, will serve the following purposes:
· Encourage executives to act in the best interests of stockholders in evaluating a transaction that, without a change in control arrangement, could be personally detrimental;
· Keep executives focused on running the business in the face of real or rumored transactions;
· Protect the value of the Company by retaining key talent in the face of corporate changes;
· Protect the value of the Company after a change in control by including restrictive covenants (such as non-compete provisions) and a general release of the Company; and
· Aid in the attraction and retention of these executives as a competitive practice.
Consistent with the Agreements, the Program retains the Companys double trigger approach, under which participants will receive severance benefits only if both a change in control and qualifying termination occur. A qualifying termination is either:
· The Companys termination of the executive within the six months preceding or within 24 months following a change in control for reasons other than termination for death, disability or cause (defined as the executives willful and continued nonperformance of duties after written demand; willful conduct that is demonstrably and material injurious to the Company; or illegal activity); or
· The executives termination of his or her own employment for good reason (defined as material reductions or alterations in the executives authorities, duties or responsibilities; change in office location of at least 50 miles from current residence; material reductions in the executives participation in certain Company compensation plans; or certain other breaches of the covenants in the Program) within 24 months following a change in control.
The Program will continue to use the same definition of change in control currently applicable under the Agreements and that includes the following change in control events:
· any person, as defined in the Securities Exchange Act (with certain exceptions), acquires 30 percent or more of the Companys voting securities;
· a majority of the Companys directors are replaced without the approval of at least two-thirds of the existing directors or directors previously approved by the then existing directors;
· any merger or business combination of the Company and another company, unless the outstanding voting securities of the Company prior to the transaction continue to represent at least 60% of the voting securities of the new company; or
· the Company is completely liquidated, or all, or substantially all, of the Companys assets are sold or disposed of.
Consistent with the Agreements, the Program will apply to two classes of executives: Tier 1, which includes the Companys named executive officers, and Tier 2. Severance benefits payable under the Program (which were also payable under the Agreements) include:
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· Base salary plus target bonus multiplied by (i) 3 for Tier 1 executives and (ii) 1.5 for Tier 2 executives;
· Pro-rata bonus for year of termination;
· Continuation of welfare benefits (including health, life and disability insurance) for (i) 3 years for Tier 1 executives and (ii) 18 months for Tier 2 executives; and
· Amount equal to employer contributions to the Companys defined contribution plans in the year immediately preceding termination.
The changes between the Program terms and the terms of the Agreements include:
· Elimination of additional service credit under the Companys supplemental retirement benefit program;
· Calculation of severance based on the executives target bonus for the year of termination, rather than on the greater of target or average of the three prior years bonuses;
· Elimination of a gross-up for federal golden parachute excise tax;
· Introduction of a requirement that the executive sign a restrictive covenant and release agreement as a condition to receiving severance benefits under the Program. The covenants are substantially similar to those provided in the current Agreements. The release in favor of the Company is a new requirement and was not contemplated by the Agreements; and
· Clarification that a termination of employment in connection with or following a sale, spin-off or divestiture of a subsidiary, division or business unit of the Company will not create benefit eligibility under the Program unless such transaction occurs in connection with a change in control of the Company and the termination of employment otherwise meets the conditions of a qualifying termination.
Upon implementation of the Program, executives who are identified as Program participants will no longer sign individual Agreements and will instead be subject to the Program terms. All of the Tier 1 executives have voluntarily relinquished their current Agreements in exchange for their participation in the Program. For Tier 2 executives, the Company will provide notice of termination of existing Agreements according to their terms and transition executives to participation in the Program. No executive will receive coverage under the Program until that executives applicable Agreement has been terminated.
The foregoing is qualified in its entirety by reference to the form of the Change in Control Severance Program document filed as an exhibit hereto.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
(10) Change in Control Severance Program of Deere & Company
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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DEERE & COMPANY |
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By: |
/s/ Gregory R. Noe |
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Gregory R. Noe |
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Secretary |
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Dated: September 1, 2009 |
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Exhibit Index
Number and Description of Exhibit
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TABLE OF CONTENTS
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CHANGE IN CONTROL SEVERANCE PROGRAM
OF DEERE & COMPANY
1. Purpose
The purposes of the Program are (i) to provide Participants with severance payments and benefits in the event of a Qualifying Termination, (ii) to assure the Company that it will have the continued dedication of the Participants and the availability of their advice and counsel notwithstanding the possibility, threat, or occurrence of a Change in Control of the Company, and (iii) to provide an additional incentive for the Participants to remain in the employ of the Company. The Program is intended to be a top-hat plan for a select group of management or highly compensated employees of the Company, but is not intended to meet the qualification requirements of Section 401 of the Internal Revenue Code of 1986, as amended (the Code ). The Company intends for the Program to replace, over time, the bilateral change-in-control agreements that the Company has previously entered into with certain key executives and employees and, except for such bilateral agreements, is not intended to affect eligibility for or payment of any other compensation or benefits in accordance with the terms of any applicable plans or programs of the Company.
2. Definitions
Whenever used in the Program, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
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The existence of Good Reason shall not be affected by a Participants temporary incapacity due to physical or mental illness not constituting a Disability. A Participants continued employment shall not constitute a waiver of such Participants rights with respect to any circumstance constituting Good Reason.
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3. Eligibility
4. Severance Benefits
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Participant in the Program in accordance with Section 3(c) shall not be entitled to any Severance Benefits under the Program in connection with his or her termination of Employment for any reason, even if such termination of Employment would have qualified as a Qualifying Termination had the individual been a Participant at the time of his or her termination of Employment. No Severance Benefits shall be payable under the Program to any individual if the Program has been terminated as to such individual in accordance with Section 14(d) at the time of such individuals termination of Employment.
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(d) Description of Severance Benefits . Subject to Section 8, in the event a Participant becomes entitled to receive Severance Benefits, the Company shall pay or provide to the Participant all of the following:
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5. Form and Timing of Severance Benefits
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6. Excise Tax
7. The Companys Payment Obligation
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Notwithstanding anything else herein to the contrary, however, if the Company (or any subsidiary or affiliate of the Company) is obligated by law to pay to a Participant severance pay, a termination indemnity, notice pay, or the like (but excluding for this purpose accrued and unused vacation pay), or is obligated by law to provide to a Participant advance notice of separation ( Notice Period ), then any Severance Benefits hereunder shall be reduced by the amount of any such severance pay, termination indemnity, notice pay or the like, as applicable, and by the amount of any compensation received during any Notice Period.
8. Covenants and Release of the Participants . Notwithstanding any other provision of the Program, a Participants entitlement to Severance Benefits shall be conditioned on the Participants executing a Restrictive Covenant and Release Agreement (the Release ), substantially in the form attached hereto as Exhibit A, within sixty (60) days after the Participants Qualifying Termination (the Release Deadline ) and such Release remaining in effect and becoming irrevocable after the expiration of any statutory period in which the Participant is permitted to revoke a release. If the Participant fails to execute and deliver the Release by the Release Deadline, or if the Participant thereafter effectively revokes the Release, the Company shall be under no obligation to make any further payments or provide any further benefits to the Participant, and the Participant shall promptly repay the Company any payments made to the Participant and the Companys direct cost for any benefits provided to the Participant pursuant to the Program.
9. Funding
Benefits payable under the Program shall be unfunded, as that term is used in Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of ERISA, with respect to
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unfunded plans maintained primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees, and the Administrator shall administer the Program in a manner that will ensure that benefits are unfunded and that Participants will not be considered to have received a taxable economic benefit prior to the time at which benefits are actually payable hereunder. Accordingly, the Company shall not be required to segregate or earmark any of its assets for the benefit of Participants or their spouses or other beneficiaries, and each such person shall have only a contractual right against the Company for benefits hereunder. The Company may from time to time establish a trust and deposit with the trustee thereof funds to be held in trust for the payment of benefits hereunder; provided, that the use of such funds for such purpose shall be subject to the claims of the Companys general creditors as set forth in the agreement establishing any such trust. The rights and interests of a Participant under the Program shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge or encumbrance by a Participant or any person claiming under or through a Participant, nor shall they be subject to the debts, contracts, liabilities or torts of a Participant or anyone else prior to payment. The Administrator may from time to time appoint an investment manager or managers for the funds held in any such trust.
10. Administration
The Program shall be operated under the direction of the Committee and administered by the Administrator. Subject to Section 6(b), the calculation of all benefits payable under the Program shall be performed by the Administrator, subject to the review of the Committee. The Administrator shall have sole and complete discretionary authority and control to manage the operation and administration of the Plan, including but not limited to, the interpretation of all Plan provisions, determination of the amount of benefits payable to any Participant, spouse, heirs or estate, all legal and factual determinations, and construction of disputed or ambiguous term, and all such determinations shall be binding on all parties. Notwithstanding the preceding sentence, all determinations of eligibility for participation and benefits under the Program as a Tier 1 Participant shall be made by the Committee. The Administrator may delegate responsibilities under the Plan. With respect to the eligibility or participation of the Administrator in the Program and in any instance where the Plan is administered relative to the Administrator, the Chief Executive Officer of the Company shall act as Administrator.
11. Claims Procedure
All claims for benefits under the Program shall be determined under the claims procedure in effect under the Companys tax-qualified defined benefit pension plan on the date that such claims are submitted, except that the Administrator shall make initial determinations with respect to claims hereunder and the Committee shall decide appeals of such determinations.
In the event that any dispute under the provisions of the Program is not resolved to the satisfaction of the affected Participant through the Programs claims procedures
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described in the preceding paragraph, any dispute or controversy arising under or in connection with the Program may, at the sole election of the affected Participant, be settled by arbitration, conducted before a panel of three (3) arbitrators sitting in a location selected by the Participant within fifty (50) miles from the location of his employment with the Company, in accordance with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the award of the arbitrator in any court having proper jurisdiction. All expenses of such arbitration, including the fees and expenses of the counsel for a Participant, shall be borne by the Company. If applicable, payment or reimbursement of the Participants reasonable attorneys fees and expenses shall be made not later than December 31 st of the calendar year following the year in which they are incurred.
12. Legal Fees . To the extent permitted by law, the Company shall pay all reasonable legal fees, costs of litigation or arbitration, prejudgment interest, and other expenses incurred in good faith by a Participant as a result of:
If applicable, payment or reimbursement of the Participants reasonable attorneys fees and expenses shall be made not later than December 31 st of the calendar year following the year in which they are incurred.
13. Successors and Assignment
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(c) Assignment by a Participant . The Program shall inure to the benefit of and be enforceable by a Participants personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If a Participant dies while any amount would still be payable to him or her hereunder had he or she continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of the Program to such Participants beneficiary. If a Participant has not named a beneficiary, then such amounts shall be paid to such Participants devisee, legatee, or other designee, or if there is no such designee, to such Participants estate.
14. Miscellaneous
(d) Amend, Modify or Terminate . Subject to the restrictions and limitations set forth in this Section 14(d), the Board (or any committee of the Board to whom the Board delegates it authority hereunder) may amend, modify or terminate the Program at any time in whole or in part without prior notice to, or without the consent of, any Participant or other person. Notwithstanding the previous sentence, without the express written consent of an affected Participant, (i) the Board may not amend, modify or terminate the Program in any respect for a Participant for whom a Qualifying Separation has occurred or (ii) amend, modify or terminate the Program in a manner that is adverse to the Participant in any material respect during the twenty-four month period following a Change in Control or the six month period following a Potential Change in Control. In addition, any amendment, modification or termination of the Program that would be precluded under the previous sentence without the express written consent of an affected Participant on or after a Change in Control shall not be given effect without the express written consent of the affected Participant if it is adopted within six months prior to the occurrence of a Potential Change in Control or a
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Change in Control. Nothing in this Section 14(d) shall preclude a termination or reduction of a Participants status in the Program in accordance with Section 3(c).
(e) Applicable Law . TO THE EXTENT NOT PREEMPTED BY THE LAWS OF THE UNITED STATES OR ANY OTHER LAW MANDATORILY APPLYING TO A PARTICIPANTS EMPLOYMENT, THE LAWS OF THE STATE OF ILLINOIS SHALL BE THE CONTROLLING LAW IN ALL MATTERS RELATING TO THE PROGRAM.
15. Effect on Prior Agreements . By virtue of a Participants participation in the Program, the Participant and the Company acknowledge that: (a) the Program supersedes all prior written or oral agreements between them, including, but not limited to, any Change in Control Agreement or Severance Protection Agreement which a Participant and the Company may have entered into; and (b) as of the Participation Date, any and all such prior agreements are null and void.
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EXHIBIT A
RESTRICTIVE COVENANT AND RELEASE AGREEMENT
This Restrictive Covenant and Release Agreement (this Agreement ) is entered into by the undersigned effective as of [INSERT DATE] 1 ( Effective Date ).
In consideration of the severance benefits to be provided to me under the Change in Control Severance Program of Deere & Company (the Severance Program ), I agree as follows:
1. Return of Property . All Company files, access keys and codes, desk keys, ID badges, computers, records, manuals, electronic devices, computer programs, papers, electronically stored information or documents, telephones and credit cards, and any other property of the Deere & Company or any of its affiliates (the Company ) in my possession must be returned no later than the Effective Date.
2. Non-Disclosure and Non-Solicitations Covenants .
3. General Release and Waiver of Claims .
(a) Release . In consideration of the payments and benefits provided to me under the Severance Program and after consultation with counsel, I and each of my respective heirs, executors, administrators, representatives, agents, insurers, successors and assigns (collectively, the Releasors ) hereby irrevocably and unconditionally release and forever discharge the Company, its subsidiaries and affiliates and each of their respective officers, employees, directors, shareholders and
1 PURSUANT TO SECTION 8 OF PROGRAM, THE EFFECTIVE DATE SHOULD BE NO MORE THAN 60 DAYS FOLLOWING DATE OF QUALIFYING TERMINATION.
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agents ( Releasees ) from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, Claims ), including, without limitation, any Claims under any federal, state, local or foreign law, that the Releasors may have, or in the future may possess, arising out of (i) my employment relationship with and service as an employee, officer or director of the Company or any subsidiaries or affiliated companies and the termination of such relationship or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that I do not release, discharge or waive any rights to (i) payments and benefits provided under the Severance Program that are contingent upon my execution of this Agreement and (ii) any indemnification rights I may have in accordance with the Companys governance instruments or under any director and officer liability insurance maintained by the Company with respect to liabilities arising as a result of my service as an officer and employee of the Company. This Section 3(a) does not apply to any Claims that the Releasors may have as of the date I sign this Agreement arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder ( ADEA ). Claims arising under ADEA are addressed in Section 3(b) of this Agreement.
(b) Specific Release of ADEA Claims . In further consideration of the payments and benefits provided to me under the Severance Program, the Releasors hereby unconditionally release and forever discharge the Releasees from any and all Claims arising under ADEA that the Releasors may have as of the date I sign this Agreement. By signing this Agreement, I hereby acknowledge and confirm the following: (i) I was advised by the Company in connection with my termination to consult with an attorney of my choice prior to signing this Agreement and to have such attorney explain to me the terms of this Agreement, including, without limitation, the terms relating to my release of claims arising under ADEA, and I have in fact consulted with an attorney; (ii) I was given a period of not fewer than 21 days to consider the terms of this Agreement and to consult with an attorney of my choosing with respect thereto; (iii) I knowingly and voluntarily accept the terms of this Agreement; and (iv) I am providing this release and discharge only in exchange for consideration in addition to anything of value to which I am already entitled. I also understand that I have seven days following the date on which I sign this Agreement within which to revoke the release contained in this paragraph, by providing the Company with a written notice of my revocation of the release and waiver contained in this paragraph.
(c) No Assignment . I represent and warrant that I have not assigned any of the Claims being released under this Agreement. The Company may assign this Agreement, in whole or in part, to any affiliated company or subsidiary of, or any successor in interest to, the Company.
4. Proceedings .
(a) General Agreement Relating to Proceedings . I have not filed, and except as provided in Sections 4(b) and 4(c), I agree not to initiate or cause to be initiated on my behalf, any complaint, charge, claim or proceeding against the
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Releasees before any local, state or federal agency, court or other body relating to my employment or the termination of my employment, other than with respect to the obligations of the Company to me under the Severance Program (each, individually, a Proceeding ), and agree not to participate voluntarily in any Proceeding. I waive any right I may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding.
(b) Proceedings Under ADEA . Section 4(a) shall not preclude me from filing any complaint, charge, claim or proceeding challenging the validity of my waiver of Claims arising under ADEA (the ADEA waiver is set forth in Section 3(b) of this Agreement). However, both the Company and I confirm our belief that my waiver of claims under ADEA is valid and enforceable, and my intention is that all claims under ADEA will be waived.
(c) Certain Administrative Proceedings . In addition, Section 4(a) shall not preclude me from filing a charge with or participating in any administrative investigation or proceeding by the Equal Employment Opportunity Commission or another Fair Employment Practices agency. I am, however, waiving my right to recover money in connection with any such charge or investigation. I am also waiving my right to recover money in connection with a charge filed by any other entity or individual, or by any federal, state or local agency.
5. Remedies . In the event I initiate or voluntarily participate in any Proceeding in violation of this Agreement, or if I fail to abide by any of the terms of this Agreement or if I revoke the ADEA release contained in paragraph 3(b) within the seven-day period provided under paragraph 3(b), the Company shall be under no obligation to make any further payments or provide any further benefits to me, and I shall promptly repay the Company any payments made to me and the Companys direct cost for any benefits provided to me pursuant to the Severance Program, without waiving the release granted herein. I acknowledge and agree that the remedy at law available to the Company for breach of any of my obligations under paragraphs 2, 3 and 4 herein would be inadequate and that damages flowing from such a breach may not readily be susceptible to measurement in monetary terms. Accordingly, I acknowledge, consent and agree that, in addition to any other rights or remedies that the Company may have at law or in equity, the Company shall be entitled to seek a temporary restraining order or a preliminary or permanent injunction, or both, without bond or other security, restraining me from breaching my obligations under paragraphs 2, 3 and 4 herein. Such injunctive relief in any court shall be available to the Company, in lieu of, or prior to or pending determination in, any arbitration proceeding.
I understand that by entering into this Agreement I shall be limiting the availability of certain remedies that I may have against the Company and limiting also my ability to pursue certain claims against the Company.
6. Severability Clause . If any provision or part of this Agreement is found to be invalid or unenforceable, only that particular provision or part, and not the entire Agreement, shall be inoperative.
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7. GOVERNING LAW AND FORUM . I acknowledge that this agreement has been executed, in whole or in part, in Illinois. Accordingly, I agree that this Agreement and all matters or issues arising out of or relating to my employment with the Company shall be governed by the laws of the State of Illinois applicable to contracts entered into and performed entirely therein. Any action to enforce this Agreement shall be brought solely in the state or federal courts located in the Moline, Illinois.
I ACKNOWLEDGE THAT I HAVE READ THIS AGREEMENT AND THAT I FULLY KNOW, UNDERSTAND AND APPRECIATE ITS CONTENTS, AND THAT I HEREBY EXECUTE THE SAME AND MAKE THIS AGREEMENT AND THE COVENANTS AND RELEASE PROVIDED FOR HEREIN VOLUNTARILY AND OF MY OWN FREE WILL.
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THE EXECUTIVE |
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[Insert name of Executive] |
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Dated: |
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