Exhibit 10.7

 

EXECUTION VERSION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated as of October 13, 2014 is
entered into between Washington Prime Group Inc., an Indiana corporation (the
“Company”), and Mark E. Yale (“Executive”).

 

WHEREAS, in connection with the employment of the Executive with the Company as
of the Effective Date (as defined below), including Executive providing services
to the Partnership (as defined below) and Glimcher LP (as defined below), the
Company and Executive wish to enter into an agreement provide for such services
and compensation therefor under the terms and subject to the conditions set
forth herein.

 

WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated as
of the date hereof, by and among the Company, Washington Prime Group, L.P. (the
“Partnership”), WPG Subsidiary Holding I, LLC., WPG Subsidiary Holding II Inc.,
Glimcher Realty Trust and Glimcher Properties Limited Partnership (“Glimcher
LP”) (the “Merger Agreement”); and

 

WHEREAS, the Company and the Executive desire to enter into this Agreement to
set forth the terms of the Executive’s employment with the Company from and
following the “Acquisition Effective Time” (as defined in the Merger Agreement);

 

NOW, THEREFORE, in consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

 

1.             Terms of Employment; Compensation.

 

1.1          Term.  The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to serve the Company, the Partnership and Glimcher LP,
subject to the terms and conditions of this Agreement, for the period commencing
on the Acquisition Effective Time on the “Closing Date” (as defined in the
Merger Agreement) (the “Effective Date”) and ending on the three-year
anniversary thereof (the “Employment Period”); provided that, on such three-year
anniversary of the Effective Date and each annual anniversary of such date
thereafter (each such date, a “Renewal Date”), unless previously terminated in
accordance with the terms hereof, the Employment Period shall be automatically
extended so as to terminate one year from such Renewal Date unless, at least 30
days prior to the Renewal Date, either party gives notice to the other that the
Employment Period shall not be so extended.

 

1.2          Title; Reporting.  During the Employment Period, the Executive
shall serve the Company as its Executive Vice President and Chief Financial
Officer and shall perform customary and appropriate duties as may be reasonably
assigned to the Executive from time to time by the Company and shall provide
services to the Partnership.  The Executive shall report to the Chief Executive
Officer of the Company.

 

1.3          Base Salary; Annual Bonus; Other Benefits.  During the Employment
Period, the Executive shall receive an annual base salary at the rate of
$500,000, subject to increase from time to time, less applicable income tax and
other legally required withholding and any deductions that the Executive
voluntarily authorizes in writing. In addition, the Executive will be eligible
for an annual

 

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bonus under the Company’s annual incentive plan, with a target annual bonus
established at 100% to 150% of base salary.  In addition to the long-term awards
described in this Agreement, the Executive will be entitled to participate in
long-term cash and equity incentive plans and programs, if available, applicable
generally to executives of the Company (with the amount and terms of awards, if
any, to be determined by the Compensation Committee of the Company’s Board of
Directors (the “Committee”) in its sole and absolute discretion), and to
participate in welfare benefit and fringe benefit plans, practices, policies and
programs provided by the Company, if available.

 

1.4          Annual LTIP Award.  The Executive shall be granted long-term
incentive plan units (“LTIP Units,” which are units of the Partnership that,
following grant and vesting, are convertible on a one-for-one basis into shares
of common stock of the Company or, at the option of the Company, an equivalent
amount of cash) in respect of each fiscal year during the Employment Period,
commencing with the fiscal year ending (A) December 31, 2014, if the Executive
has not received from Glimcher Realty Trust, Glimcher LP or any of their
affiliates an equity-based compensation award from the date hereof through the
Effective Date, or (B) December 31, 2015, if the Executive has received from
Glimcher Realty Trust, Glimcher LP or any of their affiliates an equity-based
compensation award from the date hereof through the Effective Date (the “Annual
LTIP Award”).  Each Annual LTIP Award shall be granted pursuant to the Company’s
2014 Long Term Incentive Plan, as may be amended from time to time (the
“Plan”).  The Annual LTIP Award in respect of any fiscal year shall be granted
no later than promptly following the completion of audited financials for such
fiscal year (and in any event no later than annual awards of LTIP Units or other
equity-based compensation are granted to other senior executives of the Company
in respect of such fiscal year), with the number of LTIP Units in each Annual
LTIP Award being equal to the “Annual LTIP Award Cash Equivalent,” as defined
below, in respect of such fiscal year, divided by the average closing price of
the Company’s common stock on the primary exchange on which it trades (the
“Closing Price”) for the final 15 trading days of the applicable fiscal year. 
The “Annual LTIP Award Cash Equivalent” shall be an amount established by the
Committee, which shall be not less than one times Annual Base Salary. 
Distributions shall be paid on LTIP Units granted as Annual LTIP Awards from and
after the date of grant in accordance with the terms and conditions of the Plan
and the applicable award agreement; provided, that, there shall be no reduction
to such distributions compared to distributions paid in respect of common units
of the Partnership generally (except that, in order to preserve the intended tax
treatment of such LTIP Units, until such time as is specified in an applicable
certificate of designation or award agreement under the Plan, distributions
designated as a capital gain dividend within the meaning of
Section 875(b)(3)(C) of the Code and any other distributions that the General
Partner of the Partnership determines are not made in the ordinary course
attributable to the sale of an asset of the Partnership shall be distributed in
respect of such LTIP Units only to the extent that the Partnership determines
that such asset has appreciated in value subsequent to the applicable award
date; such exception, the “Distribution Exception”).  LTIP Units granted as the
Annual LTIP Award in respect of any fiscal year shall be subject to terms and
conditions no less favorable than those applicable to LTIP Units generally
granted to the Company’s other senior executives in respect of the same fiscal
year.

 

1.5          Inducement LTIP Units.  Immediately following the 20 consecutive
trading days commencing on the Effective Date, the Executive shall be granted
under the Plan a number of LTIP Units equal to $600,000 divided by the average
Closing Price for the 20 consecutive trading days commencing on the Effective
Date (the “Inducement LTIP Units”).  Distributions will be paid on the
Inducement LTIP Units from and after the date of grant in accordance with, and
subject to, the terms and conditions of the Plan and the applicable award
agreement; provided that, other than the

 

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Distribution Exception, there shall be no reduction to such distributions
compared to distributions paid in respect of common units of the Partnership
generally.  Other than as provided in this Agreement and the Severance Benefits
Agreement, by and between the Executive and the Company, dated as of August 30,
2004, as amended September 8, 2006, April 1, 2011, and as further amended as of
the date hereof (the “Severance Benefits Agreement”), 25% of the Inducement LTIP
Units will become vested on each of the first four anniversaries of the
Effective Date if the Executive is continually employed hereunder through such
date.

 

1.6          Special Performance LTIP Units.

 

i.              Subject to the Executive’s continuous employment hereunder
through each grant date, the Executive shall be granted additional LTIP Units
under the Plan in respect of each performance period (each, a “Special
Performance Period”) consisting of the period from the Effective Date through
(A) December 31, 2016 (the “First Special PP”), (B) December 31, 2017 (the
“Second Special PP”) and (C) December 31, 2018 (the “Third Special PP”)
(collectively, the “Special Performance LTIP Units”).

 

ii.             The Special Performance LTIP Units in respect of each Special
Performance Period shall be granted promptly (and in any event within 15 days)
following the end thereof.  The number of Special Performance LTIP Units granted
in respect of each Special Performance Period shall be the “Performance LTIP
Unit Cash Equivalent,” as defined below, in respect of the Performance Period
divided by the average Closing Price for the 20 consecutive trading days
commencing on the Effective Date.

 

iii.            The Performance LTIP Unit Cash Equivalent for each of the First
Special PP, the Second Special PP and the Third Special PP shall be an amount,
not greater than $300,000, determined based on the achievement of the absolute
and relative (versus the MSCI REIT Index) TSR goals in respect of (A) the First
Special PP and the Second Special PP which are identical to those appended to
the employment agreement of the Executive Chairman of the Board of Directors of
the Company, as in effect on the date hereof, and (B) the Third Special PP as
established by the Committee no later than the first anniversary of the
Effective Date.

 

iv.            Distributions will be paid on Special Performance LTIP Units from
and after the date of grant in accordance with, and subject to, the terms and
conditions of the Plan and the applicable award agreement; provided that, other
than the Distribution Exception, there shall be no reduction to such
distributions compared to distributions paid in respect of common units of the
Partnership generally.

 

v.             Other than as provided in this Agreement and the Severance
Benefits Agreement, Special Performance LTIP Units granted in respect of the
First Special PP and the Second Special PP will become vested on the third
anniversary of the Effective Date if the Executive is continually employed
hereunder through such date.

 

vi.            Other than as provided in this Agreement and the Severance
Benefits Agreement, Special Performance LTIP Units granted in respect of the
Third Special

 

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PP will be immediately vested upon grant if the Executive is continually
employed hereunder through the grant date.

 

2.             Termination of Employment.  Either party to this Agreement may
terminate the Employment Period for any reason.  Any termination of the
Employment Period shall be communicated by written notice to the other party
hereto, given in accordance with Section 5.1 of this Agreement.

 

3.             Obligations of the Company upon Termination.  If the Employment
Period is terminated for any reason, this Agreement shall terminate without
further obligations to either party hereto other than the Company’s obligation
to provide the Executive with a lump sum cash payment within 30 days after the
date of termination of the Employment Period equal to the aggregate of the
following amounts: (i) (A) the Executive’s annual base salary and vacation pay
through the date of termination, (B) the Executive’s accrued annual bonus for
the fiscal year immediately preceding the fiscal year in which the date of
termination occurs (other than any portion of such annual bonus that was
previously deferred, which portion shall instead be paid in accordance with the
applicable deferral election) if such bonus has not been paid as of the date of
termination, and (C) the Executive’s business expenses that have not been
reimbursed by the Company as of the date of termination that were incurred by
the Executive prior to the date of termination in accordance with the applicable
Company policy, in the case of each of clauses (A) through (C), to the extent
not previously paid (the sum of the amounts described in clauses (A) through
(C) shall be hereinafter referred to as the “Accrued Obligations”) and (ii) to
the extent not theretofore paid or provided, any other amounts or benefits
required to be paid or provided or that the Executive is eligible to receive
under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies through the date of termination; provided,
however, that if the Employment Period shall be terminated by the Company for
Cause (as defined in the Severance Benefits Agreement), the term “Accrued
Obligations” shall not be deemed to include the Executive’s annual bonus for the
fiscal year immediately preceding the fiscal year in which the date of
termination occurs.  Except as provided in the immediately preceding sentence,
the Company shall have no obligation to the Executive hereunder upon the
termination of the Employment Period for any reason, and any additional
obligation that the Company may have to the Executive in connection with the
termination of the Executive’s employment with the Company or its affiliates
shall be as provided under, and subject in all respects to the terms and
conditions of, the Severance Benefits Agreement.

 

4.             Restrictive Covenants.

 

4.1          Confidential Information.  During the Employment Period and
thereafter, the Executive shall keep secret and retain in the strictest
confidence, and shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
including without limitation, any data, information, ideas, knowledge and papers
pertaining to the customers, prospective customers, prospective products or
business methods of the Company, including without limitation the business
methods, plans and procedures of the Company, that shall have been obtained by
the Executive during the Executive’s employment by the Company or any of its
affiliated companies and that shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement or the Severance Benefits Agreement).  After termination of
the Employment Period, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process
after reasonable advance written notice to the Company, use communicate or
divulge any such information, knowledge or data, directly or indirectly, to
anyone other than the Company and those

 

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designated by it.  Nothing contained in this Agreement shall prohibit the
Executive from disclosing or using information (i) which is now known by or
hereafter becomes available to the general public through non-confidential
sources; (ii) which became known to the Executive from a source other than
Company, or any of its subsidiaries or affiliates, other than as a result of a
breach (known or which should have been known to the Executive) by such source
of an obligation of confidentiality owed by it to Company, or any of its
subsidiaries or affiliates (but not if such information was known by the
Executive at such time of disclosure or use to be confidential); (iii) in
connection with the proper performance of his duties hereunder, (iv) which is
otherwise legally required (but only if the Executive gives reasonable advance
notice to the Company of such disclosure obligation to the extent legally
permitted, and cooperates with the Company (at the Company’s expense), if
requested, in resisting such disclosure) or (v) which is reasonably appropriate
in connection with a litigation or arbitration related to this Agreement, the
Severance Benefits Agreement, or an award of LTIP Units.

 

4.2          Non-Competition. During the period commencing on the Effective Date
and ending on the first anniversary of the termination of the Employment Period
(the “Covenant Period”), the Executive shall not engage in, have an interest in,
or otherwise be employed by or, as an owner, operator, partner, member, manager,
employee, officer, director, consultant, advisor, lender, or representative,
associate with, or permit his name to be used in connection with the activities
of, any business or organization engaged in the ownership, development,
management, leasing, expansion or acquisition of indoor or outdoor shopping
centers or malls (the “Business”) that, (i) if such business or organization is
a public company, has a market capitalization of greater than $1 billion or,
(ii) if such business or organization is a private company, has assets which may
be reasonably valued at more than $1 billion, in (x) North America or (y) any
country outside of North America in which the Company or any of its affiliates
is engaged in the ownership, development, management, leasing, expansion or
acquisition of indoor or outdoor shopping centers or malls, or has indicated an
intent to do so or interest in doing so as evidenced by a written plan or
proposal prepared by or presented to senior management of the Company prior to
the termination of the Employment Period; other than for or on behalf of, or at
the request of, the Company or any affiliate; provided, that passive ownership
of less than 2% of the outstanding stock of any publicly traded corporation (or
private company through an investment in a hedge fund or private equity fund, or
similar vehicle) shall not be deemed to be a violation of this Section 4.2
solely by reason thereof.

 

4.3          Non-Solicitation.  During the Covenant Period, the Executive shall
not, directly or indirectly, (i) induce or attempt to induce any employee of the
Company to leave the employ of the Company or in any way interfere with the
relationship between the Company, on the one hand, and any employee thereof, on
the other hand, (ii) hire any person who was an employee of the Company until
six months after such individual’s employment relationship with the Company has
been terminated; provided, that, solicitations incidental to general advertising
or other general solicitations in the ordinary course not specifically targeted
at such persons and employment of any person not otherwise solicited in
violation hereof shall not be considered a violation of this Section 4.3. The
Executive shall not be in violation of this Section 4.3 solely by providing a
reference for a former employee of the Company. During the Covenant Period, the
Executive shall not, directly or indirectly, induce or attempt to induce any
customer, supplier, licensee or other business relation of the Company to cease
doing business with the Company, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation, on the one
hand, and the Company, on the other hand

 

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4.4          Non-Disparagement. The Executive agrees not to make any public
disparaging, negative, or defamatory comments about the Company including the
Company’s business, its directors, officers, employees, parents, subsidiaries,
partners, affiliates, operating divisions, representatives or agents, or any of
them, whether written, oral, or electronic.  In particular, the Executive agrees
to make no public statements including, but not limited to, press releases,
statements to journalists, employees, prospective employers, interviews,
editorials, commentaries, speeches or conversations, that disparage or may
disparage the Company’s business, are critical of the Company or its business,
or would cast the Company or its business in a negative light.  In addition to
the confidentiality requirements set forth in this Agreement and those imposed
by law, the Executive further agrees not to provide any third party, directly or
indirectly, with any documents, papers, recordings, e-mail, internet postings,
or other written or recorded communications referring or relating the Company’s
business, that would support, directly or indirectly, any disparaging, negative
or defamatory statement, whether written or oral. This Section 4.4 shall not be
violated by making any truthful statement to the extent (y) reasonably necessary
in connection with any litigation, arbitration, or mediation or (z) required by
law or by any court, arbitrator, mediator or administrative or legislative body
(including any committee thereof) with apparent jurisdiction to order the person
to disclose or make accessible such information.

 

4.5          Prior Notice Required.  The Executive hereby agrees that, prior to
accepting employment with any other person or entity during the Covenant Period,
the Executive will provide such prospective employer with written notice of the
provisions of this Agreement, with a copy of such notice delivered
simultaneously to the General Counsel of the Company.

 

4.6          Return Of Company Property/Passwords.  The Executive hereby
expressly covenants and agrees that following termination of the Executive’s
employment with the Company for any reason or at any time upon the Company’s
written request, the Executive will promptly return to the Company all property
of the Company in his possession or control (whether maintained at his office,
home or elsewhere), including, without limitation, all Company passwords, credit
cards, keys, beepers, laptop computers, cell phones and all copies of all
management studies, business or strategic plans, budgets, notebooks and other
printed, typed or written materials, documents, diaries, calendars and data of
or relating to the Company or its personnel or affairs.  Notwithstanding the
foregoing, the Executive shall be permitted to retain his rolodex (or similar
list of personal contacts), compensation-related data, information needed for
tax purposes and other personal items.

 

4.7          Executive Covenants Generally.

 

i.              The Executive’s covenants as set forth in this Section 4 are
from time to time referred to herein as the “Executive Covenants.” If any of the
Executive Covenants is finally held to be invalid, illegal or unenforceable
(whether in whole or in part), such Executive Covenant shall be deemed modified
to the extent, but only to the extent, of such invalidity, illegality or
unenforceability and the remaining Executive Covenants shall not be affected
thereby; provided, however, that if any of the Executive Covenants is finally
held to be invalid, illegal or unenforceable because it exceeds the maximum
scope determined to be acceptable to permit such provision to be enforceable,
such Executive Covenant will be deemed to be modified to the minimum extent
necessary to modify such scope in order to make such provision enforceable
hereunder.

 

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ii.             The Executive understands that the foregoing restrictions may
limit his ability to earn a livelihood in a business similar to the business of
the Company and its controlled affiliates, but the Executive nevertheless
believes that he has received and will receive sufficient consideration and
other benefits as an employee of the Company and as otherwise provided hereunder
to clearly justify such restrictions which, in any event (given his education,
skills and ability), the Executive does not believe would prevent his from
otherwise earning a living.  The Executive has carefully considered the nature
and extent of the restrictions place upon his by this Section 4, and hereby
acknowledges and agrees that the same are reasonable in time and territory and
do not confer a benefit upon the Company disproportionate to the detriment of
the Executive.

 

4.8          Enforcement.  Because the Executive’s services are unique and
because the Executive has access to confidential information, the parties hereto
agree that money damages would be an inadequate remedy for any breach of this
Section 4.  Therefore, in the event of a breach or threatened breach of this
Section 4, the Company or its respective successors or assigns may, in addition
to other rights and remedies existing in their favor at law or in equity, apply
to any court of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce, or prevent any violations of, the
provisions hereof (without posting a bond or other security) or require the
Executive to account for and pay over to the Company all compensation, profits,
moneys, accruals or other benefits derived from or received as a result of any
transactions constituting a breach of the covenants contained herein, if and
when final judgment of a court of competent jurisdiction is so entered against
the Executive.

 

4.9          Interpretation.  For purposes of this Section 4, references to “the
Company” shall mean the Company as hereinbefore defined and any of its
controlled affiliated companies.

 

5.             General Provisions.

 

5.1          Notices. Any notice required or permitted hereunder shall be made
in writing, addressed as set forth below, (a) by actual delivery of the notice
into the hands of the other party (deemed received on the date of actual
receipt), (b) by the mailing of the notice by first class mail, certified or
registered mail, return receipt requested, postage prepaid (deemed received on
the third business day after the mailing date) or (c) by nationally recognized
overnight delivery service (deemed received on the next business day following
the date of its delivery by the sender to such service). Any notice to the
Company shall be delivered to Washington Prime Group Inc., 180 East Broad
Street, Columbus, Ohio 43215, Attention: General Counsel. Any notice to the
Executive shall be delivered to Executive’s last address on record at the
Company.

 

5.2          Amendment and Waiver; Non-Waiver of Breach. No amendment or
modification of this Agreement shall be valid or binding upon (a) the Company
unless made in writing and signed by a duly authorized officer of the Company or
(b) the Executive unless made in writing and signed by him or her. No failure by
either party to declare a default due to any breach of any obligation under this
Agreement by the other, nor failure by either party to act quickly with regard
thereto, shall be considered to be a waiver of any such obligation, or of any
future breach.

 

5.3          Severability. If any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect.

 

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5.4          Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without reference to
principles of conflict of laws.  Venue for a dispute in respect of this
Agreement shall be the federal courts located in Columbus, Ohio.

 

5.5          Entire Agreement. This Agreement and the Severance Benefits
Agreement contain all of the terms agreed upon by the Company and the Executive
with respect to the subject matter hereof and supersede all prior agreements,
arrangements and communications between the parties dealing with the subject
matter hereof, whether oral or written, and the Executive shall not be entitled
to any severance pay or benefits under any other severance plan, program, or
policy of the Company and its affiliated companies. To the extent this Agreement
or the Severance Benefits Agreement conflicts with any terms, conditions or
agreements set forth in any Company plan, policy or manual, the terms of this
Agreement and the Severance Benefits Agreement shall govern.

 

5.6          Headings; Counterparts. Numbers and titles to paragraphs and
sections hereof are for information purposes only and, where inconsistent with
the text, are to be disregarded. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall be and constitute one and the same instrument.

 

5.7          Knowing and Voluntary Execution. Each of the parties hereto has
carefully read and considered all of the terms of this Agreement. Each of the
parties has freely, willing and knowingly entered into this Agreement with the
intent to be bound by it.

 

5.8          Assignment; Successors and Assigns. This Agreement may, and shall
be, assigned or transferred to, and shall be binding upon and shall inure to the
benefit of, any successor of the Company, and any such successor shall be deemed
substituted for all purposes for the “Company” under the terms of this Agreement
(other than for the purpose of determining whether a Change in Control has
occurred). Notwithstanding such assignment, the Company (if it survives) shall
remain, along with such successor, jointly and severally liable for all its
obligations hereunder. Except as herein provided, this Agreement may not
otherwise be assigned by the Company or Executive.

 

5.9          Effectiveness of Agreement.  This Agreement shall become effective
on the Effective Date.  If the Merger Agreement is terminated in accordance with
its terms or otherwise and, consequently, the Acquisition Effective Time and the
Closing Date does not occur, at the time of such termination this Agreement
shall be null and void ab initio and of no force or effect.  Upon the occurrence
of the Acquisition Effective Time, the Company hereby agrees to employ the
Executive, and the Executive hereby agrees to serve the Company, the
Partnership, and Glimcher LP, subject to the terms and conditions of this
Agreement.

 

5.10        Withholding Tax. The Company may withhold from any payments to the
Executive under this Agreement any required federal, state, city, or other
withholding taxes.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the day and year first above set forth.

 

 

 

WASHINGTON PRIME GROUP INC.

 

 

 

 

 

By:

/s/ Robert P. Demchak

 

 

Name: Robert P. Demchak

 

 

Title: Secretary and General Counsel

 

 

 

 

 

/s/ Mark E. Yale

 

Mark E. Yale

 

[Signature Page to Mark E. Yale Employment Agreement]

 

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