EXHIBIT 10.3

 

LTC Properties, Inc.

 

2014 EXECUTIVE EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”), is made as of November 12, 2014,
effective as of November 12, 2014 (“Effective Date”) by and between LTC
PROPERTIES, INC., a corporation organized under the laws of the State of
Maryland (“LTC” or the “Company”), and CLINT MALIN (“Executive”) and supersedes
and terminates the 2007 Amended and Restated Employment Agreement between LTC
and Executive.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:

 

1.                                      Effective Date, Appointment, Title and
Duties.  Executive currently serves as its Executive Vice President, Chief
Investment Officer and desires to continue in such position based upon the terms
and conditions set forth herein.  In such capacity, Executive shall report to
the Chief Executive Officer of the Company, and shall have such duties, powers
and responsibilities as are customarily assigned to an Executive Vice President,
Chief Investment Officer of a publicly held corporation, but shall also be
responsible to the Board of Directors and to any committee thereof.  In
addition, Executive shall have such other duties and responsibilities as the
Board of Directors may reasonably assign him, with his consent, including
serving with the consent or at the request of the Board of Directors as an
officer or on the board of directors of affiliated corporations, provided that
such duties are commensurate with and customary for a senior executive officer
bearing Executive’s experience, qualifications, title and position.

 

2.                                      Term of Agreement.  The term of this
Agreement shall commence as of the Effective Date and shall extend such that at
each and every moment of time hereafter, unless and until this Agreement is
terminated in accordance with provisions of this Agreement, the remaining term
always shall be two years.

 

3.                                      Acceptance of Position.  Executive
accepts the position of Executive Vice President, Chief Investment Officer, and
agrees that during the term of this Agreement he will faithfully perform his
duties and, except as expressly approved by the Board of Directors of LTC, will
devote substantially all of his business time to the business and affairs of
LTC, and will not engage, for his own account or for the account of any other
person or entity, in a business which competes with LTC.  It is acknowledged and
agreed that Executive may serve as an officer and/or director of companies in
which LTC owns voting or non-voting stock or other securities.  In addition, it
is acknowledged and agreed that Executive may, from time to time, serve as a
member of the board of directors of other companies which do not compete with
LTC, provided that Executive has provided the Board of Directors of LTC with
notice of election to any such board of directors.  Any compensation or
remuneration which Executive receives in consideration of his service on the
board of directors of other companies shall be the sole and exclusive property
of Executive, and LTC shall have no right or entitlement at any time to any such
compensation or remuneration.  Nothing herein shall preclude Executive from
serving on the board of directors or similar governing body of any not for
profit or philanthropic organization.

 

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4.                                      Salary and Benefits.  During the term of
this Agreement:

 

(a)                                 LTC shall pay to Executive an initial base
salary at an annual rate of not less than Three-hundred seventy Thousand Dollars
($370,000) per annum (“Initial Base Salary”), paid in approximately equal
installments at intervals based on any reasonable Company policy.  LTC agrees
from time to time to consider increases in such base salary in the discretion of
the Board of Directors.  Any increase in his Initial Base Salary, once granted,
shall automatically amend this Agreement to provide that thereafter Executive’s
Base Salary shall not be less than the annual amount of his increased Base
Salary.

 

(b)                                 During the term hereof, Executive shall
participate in all health, retirement, Company paid insurance, sick leave,
disability, expense reimbursement and other benefit programs which LTC makes
available to any of its senior executives.

 

(c)                                  Executive shall be eligible to participate
in and earn an annual bonus pursuant to the terms of the Company’s Annual Cash
Bonus Incentive Plan. Executive also shall be eligible to participate in any LTC
incentive stock, option or bonus plan offered by LTC to its senior executives,
subject to the terms thereof and at the sole discretion of the Board of
Directors.  The Company shall grant Executive 2,500 shares of LTC restricted
stock to vest in one year from the date of this contract as a one-time bonus
payment upon execution of this Agreement.

 

(d)                                 Executive shall be entitled to a minimum of
four (4) weeks paid vacation per year, or such greater amount as approved by the
Chief Executive Officer of the Company or, if there is no Chief Executive
Officer, the Board of Directors, provided that not more than two (2) weeks of
such vacation time may be taken consecutively without prior notice to and
non-objection by the Chief Executive Officer or, if there is no Chief Executive
Officer, the Board of Directors.

 

5.                                      Certain Terms Defined.  For purposes of
this Agreement:

 

(a)                                 Executive shall be deemed to be “disabled”
if both of the following conditions have been satisfied: (i) a physical or
mental condition shall occur and persist which, in the written opinion of a
licensed and qualified physician selected by the Board of Directors in good
faith, has rendered Executive unable to perform the duties set forth in
Section 1 hereof for a period of sixty (60) consecutive days or more, or for
sixty (60) days or more out of any (90) day period, and, (ii) in the written
opinion of such physician, the condition will continue for an indefinite and
long term period of time, rendering Executive unable to return to his duties.

 

(b)                                 A termination of Executive’s employment by
LTC shall be deemed for “Cause” if, and only if, it is based upon (i) conviction
of a felony; or (ii) material disloyalty to the Company such as embezzlement,
misappropriation of corporate assets or (iii) breach of Executive’s agreement
not to engage in business for another enterprise of the type engaged in by the
Company, except as permitted pursuant to Section 3 of this

 

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Agreement; or (iv) the engaging in unethical or illegal behavior which is of a
public nature, brings LTC into disrepute, and results in material damage to the
Company; or (v) a material breach of this Agreement which causes material and
demonstrable harm to the Company.  The Company shall have the right to suspend
Executive with full pay and benefits, for a reasonable period not to exceed 45
days, to investigate allegations of conduct which, if proven, would establish a
right to terminate this Agreement for Cause, or to permit a felony charge to be
tried.  Immediately upon the conclusion of such temporary period, unless Cause
to terminate this Agreement has been established, Executive shall be restored to
all duties and responsibilities as if such suspension had never occurred.

 

(c)                                  A resignation by Executive of his
employment shall not be deemed to be voluntary and shall be deemed to be a
resignation with “Good Reason” if it is based upon (i) a diminution in
Executive’s title, duties, or Base Salary; or (ii) a direction by the Board of
Directors that Executive report to any person or group other than the Chief
Executive Officer;  (iii) a geographic relocation of Executive’s place of work a
distance of more than ten miles (10) from Westlake Village, CA (unless such
relocation results in LTC’s offices being 25 miles or less from Executive’s
primary residence as of the date when the relocation occurs); or (iv) the
material breach of this agreement by LTC.

 

(i)                         Good Reason shall not exist unless the Executive
gives the Company written notice within thirty (30) days after the discovery of
the occurrence of the event which the Executive believes constitutes the basis
for Good Reason, specifying the particular act or failure to act which the
Executive believes constitutes the basis for Good Reason.  If the Company fails
to cure such act or failure to act, if curable, within thirty (30) days after
receipt of such notice, the Executive may terminate his employment for Good
Reason.  However, such termination must occur within 2 years following the
initial existence of the condition specified in Section 5(c) which constitutes
the basis for Good Reason.

 

(ii)                      Cause shall not exist unless the Company gives
Executive written notice within thirty (30) days after the discovery of the
occurrence of the event which the Company believes constitutes the basis for
Cause, specifying the particular act or failure to act which the Company
believes constitutes the basis for Cause.  If the Executive fails to cure such
act or failure to act, if curable, within thirty (30) days after receipt of such
notice, the Company may terminate Executive’s employment for Cause.  For the
avoidance of doubt, if such act is not curable, the Company may terminate
Executive’s employment for Cause upon providing written notice of termination
specifying the reasons therefore.

 

(d)                                 “Affiliate” means with respect to any
Person, a Person who, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control, with the
Person specified.

 

(e)                                  “Base Salary” means, as of any date of
termination of employment, the highest annual base salary of Executive in the
then current calendar year or in any of the last four calendar years immediately
preceding such date of termination of employment.

 

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(f)                                   “Beneficial Owner” shall have the meaning
given to such term in Rule 13d-3 under the Exchange Act.

 

(g)                                  A “Change in Control” occurs if:

 

(i)                         Any Person or related group of Persons (other than
Executive and his Related Persons, the Company or a Person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 30% or more of the combined voting power
of the Company’s then outstanding securities; or

 

(ii)                      The stockholders of the Company approve a merger or
consolidation of the Company with any other corporation (or other entity), other
than 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) more than 66-2/3% of the combined voting power of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger
or consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company’s then outstanding securities shall not
constitute a Change in Control; or

 

(iii)                   The Stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company’s assets; or

 

(iv)                  A majority of the members of the Board of Directors of the
Company cease to be Continuing Directors.

 

(h)                                 “Code” means the Internal Revenue Code of
1986, as amended.

 

(i)                                     “Continuing Directors” means, as of any
date of determination, any member of the Board of Directors who (i) was a member
of such Board of Directors on the date of the Agreement, or (ii) was nominated
for election or elected to such Board of Directors with the approval of a
majority of the Continuing Directors who were members of such Board of Directors
at the time of such nomination or election.

 

(j)                                    “Exchange Act” means the Exchange Act of
1934, as amended.

 

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(k)                                 “Person” means any individual, corporation,
partnership, limited liability company, trust, association or other entity.

 

(l)                                     “Related Person” means any immediate
family member (spouse, partner, parent, sibling or child whether by birth or
adoption) of the Executive and any trust, estate or foundation, the beneficiary
of which is the Executive and/or an immediate family member of the Executive.

 

6.                                      Certain Benefits Upon Termination. 
Executive’s employment shall be terminated upon the earlier of (i) the voluntary
resignation of Executive with or without Good Reason; or (ii) Executive’s death
or permanent disability; or (iii) upon the termination of Executive’s employment
by LTC for any reason at any time.  In the event of any termination of
employment, Executive shall be entitled to receive all accrued and unpaid
salary, expense reimbursements, and benefits through the effective date of
termination. In addition, the following provisions of this Section 6 also shall
apply:

 

(a)                                 Certain Terminations.  If Executive’s
employment by LTC terminates for any reason other than as a result of (i) a
termination for Cause, or (ii) a voluntary resignation by Executive without a
Good Reason ((i) and (ii) collectively, an “Ineligible Termination”), then
Executive shall receive a lump sum severance payment equal to 3  times his Base
Salary (i.e., 300% percent of his Base Salary);  and in such event, all of
Executive’s stock options and/or restricted stock shall automatically vest
concurrently upon such termination of employment, notwithstanding any prior
existing vesting schedules; provided that if his employment terminates by reason
of his death or disability, then such lump sum payment shall be paid only to the
extent of the proceeds payable to the Company through a “key man” life,
disability or similar insurance relating to the death or disability of
Executive.

 

(b)                                 Additional Payment if Termination Occurs in
Connection with a Change in Control.  In the event that Employee has received
the payments described in Section 6(a), and it is determined that the provisions
of Section 6(c) also are applicable (termination in connection with a Change in
Control), then Employee shall be entitled to receive an additional payment equal
to the amounts due to Employee pursuant to Section 6(c), less the amount of
payments previously received by Employee pursuant to Section 6(a).

 

(c)                                  Payment if Termination Occurs in Connection
with a Change in Control.  Notwithstanding the provisions of Section 6(a) above,
in the event Executive’s employment terminates due to a reason other than an
Ineligible Termination, death or disability, and if such termination occurs
within (a) twenty-four (24) months following a Change in Control, or (b) prior
to a Change in Control but in contemplation of a Change in Control which Change
in Control actually occurs, then, in lieu of the severance payment described in
Section 6(a) above, Executive shall instead receive a one-time severance payment
in cash equal to two hundred fifty percent (250%) of his average annual total
Form W-2 compensation for the five calendar years immediately preceding the date
of termination.  In addition, in such event, all of Executive’s stock options
and/or restricted stock shall automatically vest concurrently upon such
termination of employment, notwithstanding any prior existing vesting schedule.

 

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(i)                         For purposes of this Section 6(c), the termination
of Executive’s employment within 180 days preceding a Change of Control (due to
a reason other than an Ineligible Termination, death or disability) will be
deemed to have been a termination of employment in contemplation of a Change in
Control.

 

(ii)                      In determining whether a termination of Executive’s
employment occurring more than 180 days preceding a Change of Control (due to a
reason other than an Ineligible Termination, death or disability) constitutes a
termination of employment in contemplation of a Change in Control, the court or
other tribunal making such determination shall consider the totality of facts
and circumstances surrounding such termination of employment.

 

(iii)                   For purposes of calculating average annual total
Form W-2 compensation for the five years immediately preceding the date of
termination, in the event the Executive’s employment is terminated mid-year, the
then current year’s Form W-2 compensation shall be annualized and shall be taken
into account as the fifth year of the five year measurement period.

 

(d)                                 If Executive’s employment by LTC terminates
for any reason, other than an Ineligible Termination, Executive and his then
covered dependents shall remain eligible to participate in all Company provided
medical and dental plans to the extent Executive elects and remains eligible for
coverage under COBRA and for a maximum period of eighteen (18) months at the
Company’s sole expense.

 

(e)                                  In the event that Executive’s employment
terminates by reason of his death, all benefits provided in this Section 6 shall
be paid to his estate or as his executor shall direct, but payment may be
deferred until Executive’s executor or personal representative has been
appointed and qualified pursuant to the laws in effect in Executive’s
jurisdiction of residence at the time of his death.

 

(f)                                   LTC shall make all payments pursuant to
this Section 6 and all of subsections 6 (a) through and including subsection 6
(e) immediately upon the date of termination of Executive’s employment,
provided, however, that all such payments shall be subject to the Company’s
regular withholding tax and payroll deductions.

 

(g)                                  LTC shall have no liability to Executive
under Section 6(a), (b), (c) or (d) if Executive’s employment pursuant to this
Agreement terminates due to an Ineligible Termination.

 

(h)                                 If any payment or distribution by the
Company to or for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement or the lapse or termination of any restriction on or the vesting
or exercisability of any payment or benefit (each a “Payment”), would be subject
to the excise tax imposed by Section 4999 of the Code (or any successor
provision

 

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thereto) or to any similar tax imposed by state or local law (such tax or taxes
are hereafter collectively referred to as the “Excise Tax”), then the aggregate
amount of Payments payable to Executive shall be reduced to the aggregate amount
of Payments that may be made to the Executive without incurring an excise tax
(the “Safe-Harbor Amount”) in accordance with the immediately following
sentence; provided that such reduction shall only be imposed if the aggregate
after-tax value of the Payments retained by Executive (after giving effect to
such reduction) is equal to or greater than the aggregate after-tax value (after
giving effect to the Excise Tax) of the Payments to Executive without any such
reduction.  Any such reduction shall be made in the following order: (i) first,
any future cash payments (if any) shall be reduced (if necessary, to zero);
(ii) second, any current cash payments shall be reduced (if necessary, to zero);
(iii) third, all non-cash payments (other than equity or equity derivative
related payments) shall be reduced (if necessary, to zero); and (iv) fourth, all
equity or equity derivative payments shall be reduced.

 

7.                                      Clawback Provision.  In the event that
all of the following conditions are satisfied:

 

(a)                                 A mandatory restatement of the Company’s
financial results occurs and is released to the public at a time when the
Company’s securities are traded on any United States securities exchange (a
“Restatement”); and

 

(b)                                 The Restatement is attributable to
misconduct or wrongdoing by the Executive; and

 

(c)                                  Executive has received payment of a cash
bonus or has been issued any shares of LTC as a bonus within three (3) years
preceding the date of the issuance and release to the public of such
restatement;  and

 

(d)                                 The amount of such cash bonus or share grant
has been calculated and awarded pursuant to a specific financial formula;  and

 

(e)                                  Such bonus or share grant would have been
diminished based on the restated financial results had the financial formula
pursuant to which the bonus or share grant has been calculated ( the “Formula”)
been applied to the restated financial results (the amount of such diminution,
is the “Clawback Amount”)

 

then, upon written demand from the Company setting forth in detail the basis for
such demand, the Executive shall remit to the Company the Clawback Amount less
the amount of any taxes paid or payable by Executive in respect of such bonus or
share grant. Provided, however, that if and to the extent that (x) the
Restatement results in the Company increasing expenses or reducing income,
revenues or another component of the Formula during the measurement period
during which the applicable bonus or share grant was calculated, but also
results in (y) the Company increasing or shifting such income, revenues or
expenses into a different fiscal period, such that the net effect of the
Restatement is effectively neutral to the Company over the applicable time
periods, then no Clawback Amount shall be due from the Executive.

 

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8.                                      Indemnification.  LTC shall indemnify,
defend and hold Executive harmless from and against all claims, losses, damages,
expense or liabilities, including expenses of defense and settlement, and
advancement of defense costs as such costs are incurred, (collectively,
“Indemnified Losses”)  to the fullest extent allowable by law and as provided in
any of the LTC by-laws, charter, any indemnification agreement with the
Executive, or as otherwise agreed between the parties and under any applicable
laws, where such claims or Indemnified Losses are based upon or in any way arise
from or are connected with his employment by LTC or his service as an officer or
director of LTC or any LTC Affiliate.  To the fullest extent permitted by law,
LTC shall advance to or on behalf of Executive all expenses incurred in
connection with the defense of any indemnified action or claim pursuant to this
Section 8.  LTC shall investigate in good faith the availability and cost of
directors’ and officers’ insurance and shall include Executive as an insured in
any directors’ and officers’ insurance policy it maintains.  The provisions of
this Section 8 shall survive any termination or expiration of this Agreement. 
Executive shall have the right to elect either (a) to arbitrate in accordance
with Section 13 of this Agreement any claim by Executive to enforce the
provisions of Section 8 of this Agreement, or (b) to litigate any such claim in
the courts of the Company’s state of incorporation.

 

9.                                      Attorney Fees.  In the event that any
action or proceeding is brought to enforce the terms and provisions of this
Agreement, each party shall bear its own attorney’s fees, except that the
Company shall bear all attorney’s fees and litigation costs incurred by
Executive in successfully enforcing the provisions of Section 8 of this
Agreement.

 

10.                               Notices.  All notices and other communications
provided to either party hereto under this Agreement shall be in writing and
delivered by hand, or by certified or registered mail to such party at its/his
address set forth below its/his signature hereto, or at such other address as
may be designated with postage prepaid, shall be deemed given when received.

 

11.                               Construction.  In constructing this Agreement,
if any portion of this Agreement shall be found to be invalid or unenforceable,
the remaining terms and provisions of this Agreement shall be given effect to
the maximum extent permitted without considering the void, invalid or
unenforceable provisions.  In construing this Agreement, the singular shall
include the plural, the masculine shall include the feminine and neuter genders
as appropriate, and no meaning in effect shall be given to the captions of the
sections in this Agreement, which is inserted for convenience of reference
only.  Without limitation to the foregoing, nothing in this Agreement is
intended to violate the Sarbanes-Oxley Act of 2002, the Dodd—Frank Wall Street
Reform and Consumer Protection Act of 2010, the rules and regulations of the
Securities and Exchange Commission or the applicable listing standards of the
NYSE, and to the extent that any provision of this Agreement would constitute
such a violation, such provision shall be modified to the extent required by
such Act, rule, regulation or standard, or, to the extent that such provision
cannot be so modified and is found to be invalid or unenforceable, the remaining
terms and provisions shall be given effect to the maximum extent permitted
without considering the void, invalid or unenforceable provision.

 

Notwithstanding any other provision of the Agreement, to the extent that (i) any
amount paid pursuant to the Agreement is treated as nonqualified deferred
compensation pursuant to Section 409A of the Internal Revenue Code of 1986 (the
“Code”) and (ii) the Executive is a “specified employee” pursuant to
Section 409A(2)(B) of the Code, then such payments shall be made on the date
which is six (6) months after the date of the Executive’s separation from
service. In connection with the payment of any obligation that is delayed

 

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pursuant to this section, the Company shall establish an irrevocable trust to
hold funds to be used for payment of such obligations.  Upon the date that such
amount would otherwise be payable, the Company shall deposit into such
irrevocable trust an amount equal to the obligation.  However, notwithstanding
the establishment of the irrevocable trust, the Company’s obligations under the
Agreement upon the Executive’s termination of employment shall constitute a
general, unsecured obligation of the Company and any amount payable to the
Executive shall be paid solely out of the Company’s general assets, and the
Executive shall have no right to any specific assets of the Company.  The funds,
if any, contained or contributed to the irrevocable trust shall remain available
for the claims of the Company’s general creditors.

 

12.                               Headings.  The section headings hereof have
been inserted for convenience of reference only and shall not be construed to
affect the meaning, construction or effect of this Agreement.

 

13.                               Governing Law.  The provisions of this
Agreement shall be construed and interpreted in accordance with the internal
laws of the State of California as at the time in effect and without regard to
conflict of laws provisions, except that the provisions of Section 8 of this
Agreement shall be construed and interpreted in accordance with the laws of the
state in which LTC is incorporated at the time that any claim under Section 8 is
asserted.  The parties agree that any dispute arising under this Agreement shall
be determined by binding arbitration before the American Arbitration Association
(“AAA”) under the AAA’s commercial arbitration rules. Such arbitration shall be
conducted in Los Angeles, California, before a single, impartial arbitrator
selected by the AAA; provided, however, the parties may mutually agree after the
commencement of a proceeding to hold the arbitration in another jurisdiction. 
In any such arbitration, the Company shall bear and shall be solely responsible
for the costs and fees imposed by the AAA and the arbitrator. The parties agree
to abide by all decisions and awards rendered in such proceedings.  All
decisions and awards rendered by the arbitrator shall be final, binding and
conclusive.  Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof, and the parties consent to the
non-exclusive jurisdiction of the federal and state courts in California for
this purpose.  If at the time any dispute or controversy arises with respect to
this Agreement the AAA is no longer providing arbitration services, then JAMS
shall be substituted for the AAA for purposes of this paragraph, and the
arbitration will be conducted in accordance with the then-existing and
applicable rules and procedures of JAMS.

 

14.                               Entire Agreement.  Except as otherwise
provided herein, this Agreement constitutes the entire agreement and supersedes
all other prior employment agreements and undertakings, both written and oral,
among Executive and the Company, with respect to the subject matter hereof,
except that the separate Indemnification Agreement dated July 30, 2009 between
the parties shall survive the execution of this Agreement. This Agreement may
not be modified or amended except in writing, manually signed in pen and ink by
each of the parties hereto.

 

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IN WITNESS WHEREOF, this Agreement shall be effective as of the date specified
in the first paragraph of this Agreement.

 

 

 

 

LTC PROPERTIES, INC., a Maryland corporation

 

 

 

 

 

Address:                    2829 Townsgate Road, Suite 350

Westlake Village, CA 91361

 

 

 

 

 

 

 

By:

/s/ Timothy Triche

 

 

Timothy Triche
Compensation Committee Representative

 

 

 

 

 

 

 

 

Executive:

 

 

 

 

 

/s/ Clint Malin

 

 

Clint Malin

 

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