Exhibit 10.44
 
[Form of Commerce Group Restricted Stock Unit Agreement]

February 16, 2007

«Employee»
«Street_Address»
«City», «State» «Zip»

Re:    Restricted Stock Unit Agreement Between The Commerce Group, Inc. and
«Employee»

Dear «Employee»:

I am pleased to inform you that the Compensation Committee of the Board of
Directors of The Commerce Group, Inc. (the “Company”) has awarded to you,
effective on February 16, 2007 (the “Award Date”), «number written» («number»)
Restricted Stock Units (each a “Unit” and collectively, the “Units” or “RSUs”),
subject to your execution and delivery to the Company of this Agreement. Each
Unit represents

(i)        the right to receive, after the Vesting Date (as defined below), one
share (each a “Share”) of Company Common Stock, and

(ii)        the right to receive any Dividend Equivalent Payment (as defined
below) that may be payable hereunder.

This RSU Award (the “Award”) is subject to the terms of the Company’s 2002
Amended and Restated Incentive Plan, as amended (the “Plan”), and the terms and
conditions set forth below in this Agreement. A copy of the Plan is attached
hereto and is incorporated herein in its entirety by reference. It is intended
that this Award be treated as nonvested equity share units. Any capitalized term
used in this Agreement and not otherwise defined shall have the meaning assigned
to that term in the Plan. You are sometimes referred to in this Agreement as the
“Participant.”

By delivering to the Company a countersigned version of this Agreement, the
Participant hereby accepts the Award subject to all of the provisions of the
Plan and the terms and conditions set forth below in this Agreement:

1.        Vesting Date. The RSUs shall fully vest upon the earliest to occur of
the following events:

(i)        March 15, 2012, if the Participant has been employed by the Company
continuously from the Award Date through and including March 15, 2012, or

(ii)       a Change in Control (as defined in the Plan or, to the extent more
restrictive, as defined in Section 409A(a)(2)(v) of the Code) of the Company, or

(iii)      the Company’s termination of the Participant’s employment with the
Company without “Cause” (as defined below) or the Participant’s voluntary
resignation as an employee of the Company for “Good Reason” (as defined below),
in each case at a time when there is a “Pending Business Combination” (as
defined below).
 
 
 
 

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«Employee»
February 16, 2007
Page 2 of 10
 
For purposes of the immediately preceding sentence and Section 4(c) of this
Agreement, the term employment shall include engagement in any capacity as a
service provider subject to the requirements of Section 409A of the Code.

The date on which the RSUs vest under this Section 1 is referred to in this
Agreement as the “Vesting Date.” If the Vesting Date will not occur because the
Participant’s employment with the Company has ceased, all of the RSUs will be
forfeited to the Company automatically and without notice or payment to the
Participant effective as of the first date on which the Participant ceases to be
an employee of the Company, and the Participant will have no further rights
under this Agreement.

2.        Restrictions on Transfer. During the period (the “Restricted Period”)
beginning on the Award Date and ending at 11:59 P.M. on the day before the
Vesting Date and including, if applicable, the deferral period under Section
4(b) or 4(c) of this Agreement, the RSUs may not be sold, assigned, transferred,
pledged, hypothecated, margined or otherwise encumbered, except as may be
permitted by the Committee in its sole discretion consistent with the Plan and
with the parties’ intent that this arrangement satisfy the requirements of
Section 409A of the Code with respect to the deferral of compensation subject to
Section 409A. Any attempt to transfer, assign, pledge, hypothecate, margin or
otherwise dispose or encumber the RSUs during the Restricted Period shall be
null and void and without effect.

3.        No Rights as Shareholder. Unless and until the Shares are issued in
satisfaction of the Company’s obligations under this Award in the time and
manner provided in Section 4 of this Agreement, nothing in this Agreement shall
entitle the Participant to any voting, dividend, or other rights of an actual
owner of shares of Common Stock.

4.        Settlement of RSUs.

(a)        Subject to the provisions of Sections 1 and 6 of this Agreement and
the other subsections of this Section 4, the Company shall deliver to the
Participant (or, if applicable, the Participant's Designated Beneficiary or
legal representative) one or more certificates representing in the aggregate
that number of Shares that is equal to the number of RSUs covered by this Award,
which delivery shall be made as soon as administratively practicable after the
Vesting Date, but in no event later than the March 15 first occurring after the
end of the calendar year in which the Vesting Date has occurred.

(b)        Notwithstanding Section 4(a) of this Agreement, if the Vesting Date
occurs by reason of clause (iii) of Section 1 of this Agreement, the
distribution of the Shares in respect of the RSUs shall be deferred for six
months from the Vesting Date if the Participant is, or in the Committee’s sole
opinion may be, a "specified employee" (as that term is defined in
Section 409A(a)(2)(B)(i) of the Code) and such deferral is necessary to avoid
the imposition of taxes to the Participant under Section 409A of the Code.

 
 
 

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«Employee»
February 16, 2007
Page 3 of 10
 
(c)        Notwithstanding Section 4(a) of this Agreement, if the Participant
is, or in the Committee’s sole opinion may be, a "covered employee" within the
meaning of Section 162(m) of the Code for the calendar year in which delivery of
the Shares would otherwise be made to the Participant and if the delivery of the
Shares would otherwise result in any compensation expense attributable to the
Shares being non-deductible by the Company by virtue of Section 162(m), the
distribution of the Shares in respect of the RSUs shall be deferred, and the
Company shall instead deliver the Shares as soon as administratively practicable
after the later of (i) six months after the date of the termination of the
Participant’s employment with the Company (and all members of the controlled
group of entities of which the Company is a member) and (ii) the first day of
the Company’s tax year next following the tax year in which the Participant
ceases to be a covered employee within the meaning of Section 162(m). The
Participant’s right to receive the Shares upon the conclusion of the deferral
period provided in the immediately preceding sentence shall not be affected by
any event occurring after the Vesting Date, including the Company’s termination
of the Employee for Cause or the Participant’s voluntary resignation other than
for Good Reason.

(d)        The Participant shall receive a Dividend Equivalent Payment (as
defined in Section 5) with respect to each Share the delivery of which is
deferred pursuant to Sections 4(b) or 4(c) of this Agreement, determined and
paid in the manner provided in Section 5(d) of this Agreement, and subject to
the tax withholding provisions of Section 6(d) of this Agreement, to the extent
in the Committee’s sole opinion the Company has an obligation to withhold taxes
in connection with such payment.

(e)        Absent willful misconduct by the Company, it shall be exempted from
any responsibility or liability for any failure to deliver or any delay in
delivering the Shares pursuant to this Agreement and for any other act or
omission related to this Agreement, except that if, because of any delay in the
Company’s issuance and delivery of the Shares, the Participant (or the person or
persons to whom rights under this Agreement shall have passed by bequest or
inheritance, as the case may be) fails to receive one or more dividend payments,
the Company shall hold the party harmless by making, at the time the Company
delivers the Shares, a Dividend Equivalent Payment, calculated in the manner
provided in Section 5 of this Agreement and subject to the tax withholding
provisions of Section 6(d) of this Agreement, to the extent in the Committee’s
sole opinion the Company has an obligation to withhold taxes in connection with
such payment.

5.        Dividend Equivalent Payment.

(a)        The Participant shall have the right to receive from the Company, at
the times provided in this Section 5, an amount in cash (the “Dividend
Equivalent Payment”) for each RSU equal to the cash dividend payments made in
respect of one share of Common Stock for which a dividend record date occurs
during the Restricted Period.

(b)        The Company shall make a Dividend Equivalent Payment on or as soon as
administratively practicable after (i) March 15, 2008 in an amount equal to the
dividends paid by the Company per share of Common Stock for which a dividend
record date occurs after the Award Date and through and including March 15,
2008, and (ii) each subsequent March 15 through March 15, 2012, in an amount
equal to the dividends paid by the Company per share of Common Stock for which a
dividend record date occurs during the twelve-month period ending on such March
15.
 
 
 
 

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«Employee»
February 16, 2007
Page 4 of 10
 
(c)        If the Vesting Date occurs before March 15, 2012 and the delivery of
the Shares is not deferred under Section 4(b) or (c) of this Agreement, the
Company shall make a Dividend Equivalent Payment on or as soon as
administratively practicable after the Vesting Date in an amount equal to the
dividends paid by the Company per share of Common Stock for which a dividend
record date occurs after the Award Date or, if later, the March 15 Dividend
Equivalent Payment date immediately preceding the Vesting Date and through and
including the Vesting Date.

(d)        If the delivery of the Shares is deferred pursuant to Section 4(b) or
4(c) of this Agreement, (i) the Company shall make a Dividend Equivalent Payment
on each March 15 occurring during the deferral period, in an amount equal to the
dividend(s) paid by the Company per share of Common Stock for which a dividend
record date occurs during the twelve-month period ending on such March 15, and
(ii) if the deferral period expires other than on a March 15, the Company shall
make a Dividend Equivalent Payment on or as soon as administratively practicable
after the expiration of the deferral period in an amount equal to the
dividend(s) paid by the Company per share of Common Stock for which a dividend
record date occurs during the portion of the deferral period commencing on the
March 15 Dividend Equivalent Payment date immediately preceding the expiration
of the deferral period and through and including the date on which the deferral
period expires.

(e)        Forfeiture of RSUs pursuant to this Agreement shall not create any
obligation to repay any Dividend Equivalent Payment received as to such RSUs.

6.        Tax Withholding.

(a)        The Participant shall be responsible for all taxes and related
amounts due under federal, state and/or local law relating to this Agreement and
the Participant’s receipt of the Shares or any Dividend Equivalent Payment.

(b)        The Participant acknowledges that, under applicable federal law in
effect as of the Award Date, the Participant will generally recognize
compensation income for income tax purposes (i) upon the Participant’s receipt
of the Shares following the Vesting Date in an amount equal to the fair market
value of the Shares at the time of receipt and (ii) upon the receipt of a
Dividend Equivalent Payment in the amount of such payment. The parties hereto
recognize that the Company may be obligated to withhold federal, state and local
income taxes and social security and medicare taxes to the extent that the
Participant realizes compensation income in connection with the Participant’s
receipt of the Shares or any Dividend Equivalent Payment.

(c)        The Participant agrees that whenever the Company is so obligated to
withhold any such taxes on account of the Participant’s receipt of one or more
Shares, the Company shall withhold from the Shares otherwise deliverable to the
Participant that number of Shares having a fair market value, on the Tax
Measurement Date (as defined below), equal to the aggregate of the Company’s
required tax withholding obligation arising in connection with the Participant’s
receipt of the Shares (provided that any fraction of a Share required to satisfy
such tax withholding obligation will be disregarded and the amount due will be
deducted from any payment otherwise due and owing to the Participant as provided
below in this Section 6); and the Company shall thereafter promptly deliver to
the Participant (or the person or persons to whom rights under this Agreement
shall have passed by bequest or inheritance, as the case may be) one or more
stock certificates for the remainder of the Shares. The Participant acknowledges
and agrees that the fair market value of the Shares to be withheld will be
determined using the officially reported closing price for a share of Common
Stock as reported by the New York Stock Exchange (or, if different, the
principal exchange on which the Common Stock then is traded) on the Tax
Measurement Date. As used in this Agreement, the phrase “Tax Measurement Date”
means that date that is the later of (i) the Vesting Date and, if applicable,
(ii) the last day of the deferral period under Section 4(b) or 4(c) of this
Agreement, provided, however, that if the Common Stock did not trade on such
date, then the Tax Measurement Date shall mean the next preceding date for which
there is an officially reported closing price for a share of Common Stock.

 
 
 

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«Employee»
February 16, 2007
Page 5 of 10
 
(d)        The Participant further agrees that (i) the Company or a subsidiary
or an affiliate of the Company may withhold from any payment otherwise due and
owing to the Participant any amount needed to satisfy any other withholding
obligation, including an amount in lieu of withholding a fraction of a Share to
satisfy the Participant’s tax withholding obligation upon the receipt of Shares
after the Vesting Date and any withholding obligation in connection with the
Participant’s receipt of a Dividend Equivalent Payment, and (ii) upon demand by
the Company, the Participant (or the person or persons to whom rights under this
Agreement shall have passed by bequest or inheritance, as the case may be) shall
immediately pay to the Company any additional amount as may be necessary to
satisfy such withholding tax obligation. Such payment shall be made in cash or,
with the Company’s consent, shares of Common Stock.

7.        Certain Definitions

(a)        As used in this Agreement, the term “Cause” means that after the
Award Date and on or before the Vesting Date the Participant

(i)        has been convicted by a court of competent jurisdiction of any
criminal offense, whether a felony or misdemeanor, involving dishonesty, breach
of trust or misappropriation, before or after the Award Date, or has entered a
plea of nolo contendere to any such offense;

(ii)       has been the subject of any action taken by a regulatory body or a
self regulatory organization that, in the Committee’s good faith judgment,
substantially impairs the Participant from performing his or her duties to the
Company or its subsidiaries, as applicable;

(iii)      has been found, in the Committee’s good faith judgment, to have
committed any act of personal dishonesty, before or after the Award Date, in
connection with the Participant’s responsibilities to the Company or any of its
subsidiaries that is intended to result in the Participant’s personal
enrichment;

 
 
 

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«Employee»
February 16, 2007
Page 6 of 10
 
(iv)       has been found, in the Committee’s good faith judgment, to have
willfully committed, before or after the Award Date, a material violation of the
policies or rules of the Company or its subsidiaries, as applicable, including
the Company’s Code of Ethics;

(v)        has been found, in the Committee’s good faith judgment, to have
committed, before or after the Award Date, a willful violation of any law, rule
or regulation applicable to the Company or any of its affiliates (A) which, in
the Committee’s good faith judgment, is a felony or misdemeanor, or (B) which,
in the Committee’s good faith judgment, will likely have or has had a material
adverse effect on the business, interests or reputation of the Company and its
subsidiaries, taken as a whole;

(vi)       has been found, in the Committee’s good faith judgment, to have
committed, before or after the Award Date, a willful and unauthorized disclosure
of material confidential information that the Participant received as a
consequence of the Participant’s employment by or other service with the Company
or any of its subsidiaries, as applicable, which disclosure, in the Committee’s
good faith judgment, will likely have or has had a material adverse effect on
the business, interests or reputation of the Company and its subsidiaries, taken
as a whole; or

(vii)      has been found, in the Committee’s good faith judgment, to have
committed, before or after the Award Date, gross negligence or gross misconduct
in the performance of duties reasonably assigned to the Participant in
accordance with the custom and practices of the Company or its subsidiaries, as
applicable, that, in the Committee’s good faith judgment, will likely be or has
been materially injurious to the Company or any Affiliated Company or any of
their customers; or

(viii)     has been found, in the Committee’s good faith judgment, to have
willfully refused to perform any lawful order or instruction reasonably given to
the Participant after the Award Date in accordance with the custom and practices
of the Company or its subsidiaries, as applicable, other than a refusal
resulting from the Participant’s incapacity because of physical or mental
illness, which refusal continues for more than twenty (20) days after the
Company gives written notice to the Participant pursuant to a vote of the
Committee, such notice and vote setting forth in reasonable detail the nature of
such refusal.

In the case of clauses (ii) through (vii) of this Section 7(a), the Company
shall provide the Participant with written notice making reference to this
Agreement, stating that the Company intends to terminate the Participant for
Cause within the meaning of this Section 7(a), and setting forth in reasonable
detail the facts and circumstances allegedly constituting Cause. The Company
shall give such notice to the Participant not less than thirty (30) days prior
to the Committee’s definitive determination of Cause and not more than three (3)
months after the Company first has actual knowledge of facts and circumstances
allegedly constituting Cause. The Company shall afford the Participant an
opportunity to provide a written rebuttal to the Committee before the Committee
makes a definitive determination of Cause. For purposes of this Section 7(a), no
act or failure to act on the part of the Participant shall be considered
“willful” unless it is done, or omitted to be done, by the Participant in bad
faith or without reasonable belief that the Participant’s act or omission was in
the best interests of the Company. Any act, or failure to act, based upon
express authority given pursuant to a resolution duly adopted by the Board with
respect to such act or omission or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Participant in good faith and in the best interests of the Company.

 
 
 

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«Employee»
February 16, 2007
Page 7 of 10
 
(b)        As used in this Agreement, the term “Good Reason” means the
occurrence of any of the following after the Award Date and on or before the
Vesting Date:

(i)        a substantial and adverse alteration in the nature, status, or
prestige of the Participant’s responsibilities, title, authority, powers,
functions, duties or reporting requirements, taken as a whole, as compared to
the Participant’s responsibilities, title, authority, powers, functions, duties
or reporting requirements, taken as a whole, immediately prior to the
commencement of the Pending Business Combination;

(ii)       a reduction in the Participant’s annual base compensation as compared
to the annual compensation in effect immediately prior to the commencement of
the Pending Business Combination, other than a reduction of not more than ten
percent (10%) that is also applied to substantially all similarly situated
employees;

(iii)      a reduction in the percentage of the Participant’s base salary on
which the Participant’s bonus is based as compared to the average percentage
used during the three years immediately preceding the commencement of the
Pending Business Combination, other than a reduction of not more than ten
percent (10%) that is also applied to substantially all similarly situated
employees;

(iv)       a substantial reduction of the facilities and perquisites (including
office space) available to the Participant as compared to the facilities and
perquisites (including office space) immediately prior to the commencement of
the Pending Business Combination;

(v)        any failure of the Company to provide the Participant with benefits
at least as favorable as those enjoyed by the Participant under any of the
retirement, life insurance, medical, health, and accident, disability or other
employee plans of the Company or any of its subsidiaries in which the
Participant participated immediately prior to the effective date of the
commencement of the Pending Business Combination, taken as a whole, or the
taking of any action that would materially reduce any of such benefits in effect
as of the commencement of the Pending Business Combination, unless the reduction
is part of a reduction applicable to all employees;

(vi)       the Company’s relocation, without the Participant’s prior written
consent, of the Participant’s principal place of employment to any place outside
a twenty-five (25) mile radius of the Participant’s principal place of
employment immediately prior to the commencement of the Pending Business
Combination; or
 
 
 
 

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«Employee»
February 16, 2007
Page 8 of 10
 
(vii)      a breach by the Company of any material obligation to the
Participant;
 
provided, however, that the Participant shall have given the Company written
notice before the Participant’s voluntary resignation, which notice must have
made reference to this Agreement, set forth in reasonable detail the facts and
circumstances allegedly constituting Good Reason, and stated that the
Participant intends to voluntarily resign for Good Reason within the meaning of
this Section 7(b), and that, within twenty (20) days after receipt of such
notice, the Company and its subsidiaries, as applicable, shall not have
rescinded or otherwise cured, and held the Participant harmless against, each of
the events cited in the Participant’s notice as a basis for Good Reason.
 
(c)        As used in this Agreement, the phrase “Pending Business Combination”
means
 
(i)        the Company is a party to a binding definitive agreement providing
for a Business Combination (as defined in the Plan) that, as the result of or in
connection with such transaction or any combination of related transactions,
will result in a Change in Control (as defined in the Plan or, to the extent
more restrictive, as defined in Section 409A(a)(2)(v) of the Code) of the
Company, or

(ii)       a tender offer (for which a filing has been made with the SEC which
purports to comply with the requirements of Section 14(d) of the Exchange Act
and the corresponding SEC rules) has been commenced and not withdrawn for the
stock of the Company and the person (including any entity or group of persons
and/or entities acting in concert) making the tender offer could own, by the
terms of the tender offer plus any shares owned by such person, stock
constituting a majority of the total voting power of the Company’s outstanding
voting securities immediately following the consummation of such tender offer.
 
8.        No Right to Continued Employment; No Restriction on the Company’s
Right to Amend Any Benefit Plan. The Participant acknowledges and agrees that
the Participant shall have no right to continued employment by the Company or
any of its subsidiaries by virtue of this Agreement or the Plan, and the rights
granted hereunder or thereunder, and nothing contained herein shall be construed
to limit the Company's right at any time to terminate the Participant’s
employment or service with or without Cause, subject only to those obligations
the Company may have for unpaid salary and/or expenses, in accordance with
provisions of law. The Participant acknowledges and agrees that nothing in this
Agreement or in the Plan, nor any of the rights granted hereunder or thereunder
to the Participant, shall be construed to restrict in any manner the right of
the Company to modify, amend or terminate any of its employee benefit plans,
except as the Plan may otherwise expressly provide.

9.        Effect on Other Benefit Plans. The grant of the RSUs under this
Agreement, and any delivery of Shares hereunder (but not Dividend Equivalent
Payments), shall constitute special incentive payments to the Participant and
shall not be taken into account in computing the amount of salary or
compensation of the Participant for the purpose of determining any pension,
retirement, death or other benefits under (i) any pension, retirement,
profit-sharing, bonus, life insurance, 401(k) or other employee benefit plan of
the Company, or any of its affiliates or (ii) any agreement between the Company
or any of its affiliates on the one hand, and the Participant on the other hand,
except as such plan or agreement shall otherwise expressly provide. Without
limiting the foregoing, the Participant, on his/her own behalf and on behalf of
his/her executors, heirs, representatives and assigns, waives his/her rights and
claims to any benefit, payment or other thing of value under any such plan or
agreement to the extent computed on the basis of the RSUs or the Shares or any
Dividend Equivalent Payment or any other income generated by the RSUs or Shares,
except as otherwise provided in the immediately preceding sentence.
 
 
 
 

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«Employee»
February 16, 2007
Page 9 of 10
 
10.       Changes in Capitalization. If during the Restricted Period the holders
of Common Stock receive new or additional or different shares or securities
("New Securities") on account of the occurrence of one of the following events,
(i) the Company issues any of its shares of capital stock as a stock dividend
upon or with respect to the Shares, or (ii) the shares of Common Stock (or New
Securities) are subdivided or combined into a greater or smaller number of
shares, or (iii) upon a merger, consolidation, reorganization, split-up,
liquidation, combination, recapitalization or the like of the Company, then the
Participant shall be entitled to receive after the Vesting Date such number of
Shares, other securities of the Company, securities of such other entity, cash
or other property as the Participant would have received if the Participant had
been the holder of the Shares at all times between the Grant Date and the date
on which the Shares would otherwise have been delivered.

11.       Prospectus Delivery. In connection with the delivery of this Agreement
to the Participant, the Company will provide to the Participant a prospectus
meeting the requirements of Section 10(a) of the Securities Act of 1933 (the
“Prospectus”).

12.       Governing Law. This Agreement and all rights under this Agreement
shall be construed in accordance with and governed by the internal laws of the
Commonwealth of Massachusetts, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of this
Agreement to the substantive law of another jurisdiction.

13.       Entire Agreement. This Agreement embodies the entire agreement of the
parties hereto with respect to the RSUs awarded hereby and the Shares that may
be delivered hereunder, and all other matters contained herein. This Agreement
supersedes and replaces any and all prior oral or written agreements with
respect to the subject matter hereof. This Agreement may be amended, and any
provision hereof waived, but only in writing signed by the party against whom
such amendment or waiver is sought to be enforced. A waiver on one occasion
shall not be deemed to be a waiver of the same or any other term or condition on
a future occasion. If there is any inconsistency between the provisions of this
Agreement and of the Plan, the provisions of the Plan shall govern.

IN WITNESS WHEREOF, the Company has caused this Restricted Stock Unit Agreement
to be executed under seal by is duly authorized officer as of the date first set
forth above.
 
 
 
 

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«Employee»
February 16, 2007
Page 10 of 10
 
 

  THE COMMERCE GROUP, INC.                     By:         Name:       Its:  

 
By signing this Restricted Stock Unit Agreement below, the Participant hereby
acknowledges and agrees that the Participant has read, understands and accepts
and agrees to all of (i) the terms and conditions set forth herein, (ii) the
terms and conditions set forth in the Company’s 2002 Amended and Restated
Incentive Plan, a copy of which Plan is attached to this Agreement, and (iii)
acknowledges receipt of the Prospectus accompanying this Agreement.
 

        Participant Signature                 Print Name