Exhibit 10.2

EMPLOYEE RETENTION AND MOTIVATION AGREEMENT
This agreement (the “Agreement”) is effective as of December 7, 2012 (the
“Agreement Date”) by and between (the “Covered Person”) and Progress Software
Corporation, a Massachusetts corporation (the “Company”).
R E C I T A L S
A.    The Covered Person presently serves as an employee or officer of the
Company in a role that is important to the continued conduct of the Company’s
business and operations.
B.    The Board of Directors of the Company (the “Board”) has determined that it
is in the best interest of the Company and its stockholders to assure that the
Company will have the continued dedication and objectivity of the Covered
Person, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company.
C.    The Board believes that it is imperative to provide the Covered Person
with certain benefits following a Change of Control and certain severance
benefits upon the Covered Person’s termination of employment following a Change
in Control.
D.    In order to accomplish the foregoing objectives, the Board has directed
the Company, upon execution of the Agreement by the Covered Person, to commit to
the terms provided herein.
E.    The Covered Party accepts the terms of the Agreement.
F.    Certain capitalized terms used in this Agreement are defined in Section 4
below. In consideration of the mutual covenants herein contained and in
consideration of the continuing employment of the Covered Person by the Company,
the parties agree as follows:
1.    Scope; Term of Agreement. Simultaneously with the execution of this
Agreement, the Company and the Covered Person are also entering into an
Executive Employment Agreement (as amended, the “Employment Agreement”), which
provides the Covered Person, in addition to other benefits set forth therein,
with certain benefits in circumstances following a termination of employment
other than following a Change of Control. This Agreement shall be applicable in
the event an Involuntary Termination (as defined below) occurs upon or within
twelve (12) months following a Change of Control. The parties acknowledge that
the Covered Person’s employment is at will, as defined under applicable law,
except as may otherwise be provided under the terms of the Employment Agreement.
If the Covered Person’s employment terminates for any reason, the Covered Person
shall not be entitled to any payments, benefits, damages, awards or compensation
(collectively,

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“recompense”) other than the maximum recompense as provided by one of the
following: (i) this Agreement, or (ii) the Employment Agreement, or (iii) the
Company’s existing severance guidelines and benefit plans which are in effect at
the time of termination, or (iv) applicable statutory provisions. The provisions
of this Agreement shall terminate upon the earlier of (i) the date that all
obligations of the parties hereunder have been satisfied, or (ii) the date on
which the Covered Person is no longer employed pursuant to the Employment
Agreement. A termination of the provisions of this Agreement pursuant to the
preceding sentence shall be effective for all purposes, except that such
termination shall not affect the payment or provision of compensation or
benefits on account of termination of employment occurring prior to the
termination of the provisions of this Agreement.
2.    Benefits Immediately Following Change of Control.
(a)    Treatment of Outstanding Options and Restricted Equity. Effective
immediately upon a Change of Control, unless the outstanding stock options and
shares of restricted equity held by the Covered Person under the Company’s
equity incentive plans on the date of the Change of Control are continued by the
Company or assumed by its successor entity, all outstanding stock options held
by the Covered Person shall accelerate and become fully exercisable, and all
shares of restricted equity held by the Covered Person shall become
nonforfeitable and all restrictions shall lapse.  If such outstanding stock
options and shares of restricted equity held by the Covered Person are continued
by the Company or assumed by its successor entity, then vesting shall continue
in its usual course.
(b)    Payment of Annual Bonus. Effective immediately upon a Change of Control,
the Covered Person’s annual cash bonus for the year in which the Change of
Control occurs shall be fixed at the Covered Person’s target bonus level as in
effect immediately prior to the Change of Control and the Covered Person shall
be paid a pro-rated portion of such bonus, as of the date of the Change of
Control, based on the number of calendar days in the fiscal year to which the
bonus relates which have elapsed prior to the date of the Change of Control. Any
payment to which the Covered Person is entitled pursuant to this section shall
be paid in a lump sum within thirty (30) days of the event requiring such
payment.
3.    Severance Benefits.
(a)    Termination Following a Change of Control. If the Covered Person’s
employment terminates after a Change of Control, then Covered Person shall be
entitled to receive the Mandatory Payments described in Section 3(a)(ii) below
and, subject to Section 5 below, the Covered Person shall be entitled to receive
severance benefits as follows:
(i)    Involuntary Termination. If the Covered Person’s employment is terminated
within twelve (12) months following a Change of Control as a result of
Involuntary

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Termination, then the Covered Person shall be entitled to receive a lump sum
severance payment in an amount equal to eighteen (18) months of the Covered
Person’s annual Target Compensation; and in addition, for a period of eighteen
(18) months after such termination, the Company shall be obligated to provide
the Covered Person with benefits that are substantially equivalent to the
Covered Person’s benefits (medical, dental, vision and life insurance) that were
in effect immediately prior to the Change of Control. In addition, each
outstanding stock option held by the Covered Person which had been granted prior
to the date of the Change of Control under the Company’s equity incentive plans
shall accelerate and become fully exercisable and all shares of restricted
equity held by the Covered Person which had been granted prior to the date of
the Change of Control under the Company’s equity incentive plans shall become
nonforfeitable and all restrictions shall lapse. Any severance payments to which
the Covered Person is entitled pursuant to this section shall be paid in a lump
sum within thirty (30) days of the effective date of the Covered Person’s
termination. For purposes of this Paragraph 3(a)(i), the term “Target
Compensation” shall mean the highest level of Target Compensation applicable to
the Covered Person from the period of time immediately prior to the Change of
Control through the effective date of the Covered Person’s termination. With
respect to any taxable income that the Covered Person is deemed to have received
for federal income tax purposes by virtue of the Company providing continued
employee benefits to the Covered Person (i.e medical, dental, vision and life
insurance), the Company shall make a cash payment to the Covered Person such
that the net economic result to the Covered Person will be as if such benefits
were provided on a tax-free basis to the same extent as would have been
applicable had the Covered Person’s employment not been terminated. Such cash
payment shall be made no later than March 15 of the following each calendar year
in which such benefits are taxable to the Covered Person.
Anything in this Agreement to the contrary notwithstanding, if at the time of
the Covered Person’s separation from service (within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), the Covered
Person is considered a “specified employee” within the meaning of Section
409A(a)(2)(B)(i) of the Code, and if any payment that the Covered Person becomes
entitled to under this Agreement is considered deferred compensation subject to
interest and additional tax imposed pursuant to Section 409A(a) of the Code as a
result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be payable prior to the date that is the earliest of (A) six
months after the Covered Person’s date of termination, (B) the Covered Person’s
death, or (C) such other date as will cause such payment not to be subject to
such interest and additional tax. The parties agree that this Agreement may be
amended, as reasonably requested by either party and as may be necessary to
comply fully with Section 409A of the Code and all related rules and regulations
in order to preserve the payments and benefits provided hereunder without
additional cost to either party.

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(ii)    Voluntary Resignation. If the Covered Person’s employment terminates by
reason of the Covered Person’s voluntary resignation (and is not an Involuntary
Termination), then the Covered Person shall not be entitled to receive any
severance payments or other benefits except that Covered Person shall be
entitled to the following (the “Mandatory Payments”):
(A)
All accrued but unpaid base salary through the date the Covered Person’s
employment is terminated, to be paid in a lump sum cash payment within thirty
(30) days following the termination date or sooner if required by law;

(B)
Pay for any vacation time earned but not used through the termination date, to
be paid in a lump sum cash payment within thirty (30) days following the
termination date or sooner if required by law;

(C)
Except to the extent that the Covered Person’s employment is terminated for
Cause, any bonus compensation awarded for the fiscal year preceding that in
which the termination occurs, but unpaid on the termination date, to be paid and
provided in accordance with the Board’s standard policies for paying executive
incentive compensation, but in no event later than sixty (60) days after the end
of such fiscal year to which the bonus relates;

(D)
Any unpaid or unreimbursed business expenses incurred and documented in
accordance with the Company’s expense reimbursement policy then in effect by the
Covered Person, to the extent incurred during the term of the Covered Person’s
employment, to be paid in a lump sum cash payment within thirty (30) days
following the termination date; and

(D)
Any accrued but unpaid benefits provided under the Company’s employee benefit
plans, to be paid and provided in accordance with the terms of the applicable
plan.

(iii)    Disability; Death. If the Company terminates the Covered Person’s
employment as a result of the Covered Person’s Disability (as defined below), or
such Covered Person’s employment is terminated due to the death of the Covered
Person, then the

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Covered Person shall not be entitled to receive any severance payments or other
benefits, other than the Mandatory Payments or those (if any) as may then be
established under the Company’s then existing severance guidelines and benefit
plans at the time of such Disability or death.
(iv)    Termination for Cause. If the Company terminates the Covered Person’
employment for Cause (as defined below), then the Covered Person shall not be
entitled to receive any severance payments, bonus payments or other benefits
following the date of such termination, other than the Mandatory Payments
(excluding amounts under (ii)(c) above), and the Company shall have no
obligation to provide for the continuation of any health and medical benefit or
life insurance plans existing on the date of such termination, other than as
specifically required by applicable law.
(b)    Termination Other than in Connection with a Change of Control. If the
Covered Person’s employment is terminated for any reason either prior to the
occurrence of a Change of Control or after the twelve (12) month period
following a Change of Control, then the Covered Person shall be entitled to
receive severance and any other benefits provided under the Employment
Agreement.
4.    Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
(a)    Change of Control. “Change of Control” shall mean the occurrence of any
of the following events:
(i)    Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities,
whether by tender offer, or otherwise; or
(ii)    A majority of the members of the Board are replaced during any twelve
(12) month period by directors whose appointment or election is not endorsed by
a majority of the members of the Board before the date of such appointment or
election; or
(iii)    The consummation of a merger or consolidation of the Company with any
other entity, other than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (B) a merger or consolidation which would result in the voting
securities of the Company

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outstanding immediately prior thereto representing less than 50% of the total
voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; but
the Company is clearly the acquirer considering the totality of the
circumstances, including such factors as whether the president of the Company
will continue as president of the Company or the surviving entity, the majority
of the directors of the Company or the surviving entity will be incumbent
directors, substantially all of the executive officers of the Company will be
retained, etc., all as determined immediately prior to the consummation of the
merger or consolidation by the incumbent directors.
(iv)    The sale or disposition by the Company of all or substantially all of
the Company’s assets.
(b)    Involuntary Termination. “Involuntary Termination” shall mean (i) without
the Covered Person’s express written consent, the assignment to the Covered
Person of any duties or the significant reduction of the Covered Person’s
duties, either of which is materially inconsistent with the Covered Person’s
position with the Company and responsibilities in effect immediately prior to
such assignment, or the removal of the Covered Person from such position and
responsibilities, which is not effected for Disability or for Cause (for the
avoidance of doubt, a material diminution in responsibilities will be deemed to
have occurred if either (A) the Covered Person ceases to hold the position and
title of Chief Executive Officer of the Company (or any successor entity) and
its ultimate parent or (B) the failure of the Covered Person to be nominated or
elected as a member of the Board (or the Board of Directors of any successor
entity) and the Board of Directors of the Company’s (or its successor’s)
ultimate parent); (ii) a material reduction by the Company in the base salary
and/or bonus of the Covered Person as in effect immediately prior to such
reduction; (iii) a material reduction by the Company in the kind or level of
employee benefits to which the Covered Person is entitled immediately prior to
such reduction with the result that the Covered Person’s overall benefit package
is significantly reduced; (iv) the relocation of the Covered Person to a
facility or a location more than fifty (50) miles from the Covered Person’s then
present location, without the Covered Person’s express written consent; (v) any
purported termination of the Covered Person by the Company which is not effected
for death or Disability or for Cause, or any purported termination for Cause for
which the grounds relied upon are not valid; (vi) the failure of the Company to
obtain, on or before the Change of Control, the assumption of the terms of this
Agreement by any successors contemplated in Section 7 below; or (vii) a material
breach of this Agreement by the Company. An Involuntary Termination shall be
effective upon written notice by the Covered Person.
(c)    Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the
Covered Person in connection with his or her responsibilities as an employee and
intended to result in substantial personal enrichment of the Covered Person,
(ii) the conviction of a felony,

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(iii) a willful act by the Covered Person which constitutes gross misconduct and
which is injurious to the Company, (iv) material breach of a material provision
of this Agreement or of the Proprietary Information Agreement (which is not
cured within 30 days following notice) or (v) continued violations by the
Covered Person of the Covered Person’s obligations as an employee of the Company
which are demonstrably willful and deliberate on the Covered Person’s part after
there has been delivered to the Covered Person a written demand for performance
from the Company which describes the basis for the Company’s belief that the
Covered Person has not substantially performed his or her duties.
(d)    Disability. “Disability” shall mean that the Covered Person has been
unable to perform his or her duties as an employee of the Company as the result
of incapacity due to physical or mental illness, and such inability, at least
twenty-six (26) weeks after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and acceptable
to the Covered Person or the Covered Person’s legal representative (such
agreement as to acceptability not to be unreasonably withheld). Termination
resulting from Disability may only be effected after at least thirty (30) days’
written notice by the Company of its intention to terminate the Covered Person’s
employment. In the event that the Covered Person resumes the performance of
substantially all of his or her duties as an employee of the Company before
termination of his or her employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.
(e)    Target Compensation. “Target Compensation” shall mean the total of all
fixed and variable cash compensation due to a Covered Person based upon one
hundred percent (100%) attainment of performance levels.
5.    Limitation on Payments. In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to the Covered Person (i)
constitute “parachute payments” within the meaning of Section 280G of the Code
and (ii) but for this Section 5, would be subject to the excise tax imposed by
Section 4999 of the Code (the “Excise Tax”), then the Covered Person’s severance
benefits under Section 3(a)(i) shall be either
(i)    delivered in full, or
(ii)    delivered as to such lesser extent which would result in no portion of
such severance benefits subject to the Excise Tax, whichever of the foregoing
amounts, taking into account the applicable federal, state and local income
taxes and the Excise Tax, results in the receipt by the Covered Person on an
after tax basis, of the greatest amount of severance payments and benefits,
notwithstanding that all or some portion of such severance payments and benefits
may be taxable under Section 4999 of the Code. Unless the Company and the
Covered Person otherwise agree in writing, any determination required under this
Section 5 shall be made

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in writing in good faith by the accounting firm serving as the Company’s
independent public accountants immediately prior to the Change of Control (the
“Accountants”) in good faith consultation with the Covered Person. In the event
of a reduction in benefits hereunder, unless the Covered Person provides
direction otherwise (which alternative direction shall be subject to the
Company’s consent, which shall not be unreasonably withheld), such benefits
shall be reduced in the following order: (a) cash payments not subject to
Section 409A of the Code; (b) cash payments subject to Section 409A of the Code;
(c) equity compensation; and (d) non-cash forms of benefit. To the extent any
payment is to be made over time, then the payment shall be reduced in reverse
chronological order. For purposes of making the calculations required by this
Section 5, the Accountants, in consultation with the Covered Person, may make
reasonable assumptions and approximations concerning the applicable taxes and
may rely on reasonable good faith interpretations concerning the application of
Sections 280G and 4999 of the Code. The Company and the Covered Person shall
furnish to the Accountants such information and documents as the Accountants may
reasonable request in order to make a determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 5.
6.    Remedy. If Covered Person’s benefits are reduced to avoid the Excise Tax
pursuant to Section 5 hereof and notwithstanding such reduction, the IRS
determines that the Covered Person is liable for the Excise Tax as a result of
the receipt of severance benefits from the Company, then Covered Person shall be
obligated to pay to the Company (the “Repayment Obligation”) an amount of money
equal to the “Repayment Amount.” The Repayment Amount shall be the smallest such
amount, if any, as shall be required to be paid to the Company so that the
Covered Person’s net proceeds with respect to his or her severance benefits
hereunder (after taking into account the payment of the Excise Tax imposed on
such benefits) shall be maximized. Notwithstanding the foregoing, the Repayment
Amount shall be zero if a Repayment Amount of more than zero would not eliminate
the Excise Tax. If the Excise Tax is not eliminated through the performance of
the Repayment Obligation, the Covered Person shall pay the Excise Tax. The
Repayment Obligation shall be discharged within thirty (30) days of either (i)
the Covered Person entering into a binding agreement with the IRS as to the
amount of Excise Tax liability, or (ii) a final determination by the IRS or a
court decision requiring the Covered Person to pay the Excise Tax from which no
appeal is available or is timely taken.
7.    Successors.
(a)    Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) or to all or substantially all of the Company’s business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in

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the absence of a succession. For all purposes under this Agreement, the term
“Company” shall include any successor to the Company’s business and/or assets
which executes and delivers an assumption agreement described in this subsection
(a) or which becomes bound by the terms of this Agreement by operation of law.
(b)    Covered Person’s Successors. The terms of this Agreement and all rights
of the Covered Person’s hereunder shall inure to the benefit of, and be
enforceable by, the Covered Person’s personal or legal representatives,
executors, administrators, successors, heirs, distributes, devisees and
legatees.
8.    Notice.
(a)    General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Covered Person, mailed
notices shall be addressed to him or her at the home address which he or she
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its General Counsel.
(b)    Notice of Termination by the Company. Any termination by the Company of
the Covered Person’s employment with the Company at any time following a Change
of Control shall be communicated by notice of termination to the Covered Person
at least five (5) days prior to the date of such termination, given in
accordance with Section 8(a) of this Agreement. Such notice shall specify the
termination date and whether the termination is considered by the Company to be
for Cause as defined in Section 4(c) in which case the Company shall identify
the specific subsection(s) of Section 4(c) asserted by the Company as the basis
for the termination and shall set forth in reasonable detail the facts and
circumstances relied upon by the Company in categorizing the termination as for
Cause.
(c)    Notice by Covered Person of Involuntary Termination by the Company. In
the event the Covered Person determines that an Involuntary Termination has
occurred at any time following a Change of Control, the Covered Person shall
give written notice that such Involuntary Termination has occurred as set forth
in this Section 8(c). Such notice shall be delivered by the Covered Person to
the Company in accordance with Section 8(a) of this Agreement within sixty (60)
days following the date on which such Involuntary Termination if such
Involuntary Termination occurred as a result of an event set forth in Section
4(b)(i)(A) or (B), (ii)-(vi) or within 120 days of an event set forth in Section
4(b)(i) other than the parenthetical containing (A) or (B) or (vii), shall
indicate the specific provision or provisions in this Agreement upon which the
Covered Person relied to make such determination and shall set

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forth in reasonable detail the facts and circumstances claimed to provide a
basis for such determination. The failure by the Covered Person to include in
the notice any fact or circumstance which contributes to a showing of
Involuntary Termination shall not waive any right of the Covered Person
hereunder or preclude the Covered Person from asserting such fact or
circumstance in enforcing his or her rights hereunder.
9.    Miscellaneous Provisions.
(a)    No Duty to Mitigate. The Covered Person shall not be required to mitigate
the amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that the Covered Person may receive from any other source.
(b)    Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed in writing and
signed by the Covered Person and by an authorized officer of the Company (other
than the Covered Person). No waiver by either party of any breach of, or
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision of the same
condition or provision at another time.
(c)    Entire Agreement. Except with respect to the terms of any written
employment agreement, if any, by and between the Company and the Covered Person
that is signed on behalf of the Company, no agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.
(d)    Choice of Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
(e)    Severability. The invalidity or enforceability of any provisions or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
(f)    Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by final and binding
arbitration in Massachusetts, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction. In the event the Covered
Person prevails in an action or proceeding brought to enforce the terms of this
Agreement or to enforce and collect on any non-de minimis judgment entered
pursuant to

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this Agreement, the Covered Person shall be entitled to recover all costs and
reasonable attorney’s fees.
(g)    No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor’s
process, and any action in violation of this subsection (g) shall be void.
(h)    Employment Taxes. Subject to Section 5, all payments made pursuant to
this Agreement will be subject to withholding of applicable income and
employment taxes.
(i)    Assignment by Company. The Company may assign its rights under this
Agreement to an affiliate and an affiliate may assign its rights under this
Agreement to another affiliate of the Company or to the Company; provided,
however, that no assignment shall be made if the net worth of the assignee is
less than the net worth of the Company at the time of the assignment. In the
case of any such assignment, the term “Company” when used in a section of the
Agreement shall mean the corporation that actually employs the Covered Person.
(j)    Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the date first above
written.
Progress Software Corporation            Covered Person

By:    /s/John R. Egan
 
By:    /s/Philip M. Pead
John R. Egan
 
Philip M. Pead
Chairman of the Board
 
 

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