Document:

FRANCESCA’S COLLECTIONS, INC.

 

December 28, 2012

 

Re: Amended and Restated Employment Letter Agreement

 

Dear Kal:

 

This letter agreement (this “Agreement”)
hereby amends and restates in its entirety that certain letter agreement entered into by and between you and Francesca’s
Collections, Inc., a Texas corporation (“Francesca’s”), dated as of July 14, 2011 (the “2011
Letter Agreement”). Francesca’s is the wholly-owned indirect subsidiary of Francesca’s Holdings Corporation,
a Delaware corporation (“Parent”). Parent and Francesca’s are herein collectively referred to as the “Company.”
Subject to the terms and conditions of this Agreement, the Company desires to provide for your continued employment on the terms
and conditions of this Agreement. This Agreement is effective as of January 1, 2013 (the “Effective Date”).

 

		1.	Employment; Compensation and Benefits.

 

(a)     Position
and Duties. Effective as of December 4, 2012 and during the Period of Employment (as defined below), you shall serve both the
Parent and Francesca’s as their respective Executive Vice President, Chief Administrative Officer and General Counsel, and
you shall report to the Chief Executive Officer of Parent and Francesca’s, as applicable. During your Period of Employment
(as defined below) with the Company, you agree to (i) devote substantially all of your business time, energy and skill to
the performance of your duties for the Company, (ii) perform such duties in a faithful, effective and efficient manner and
(iii) hold no other employment.

 

(b)      Period
of Employment. The “Period of Employment” shall be a period of three (3) years commencing on the Effective
Date and ending at the close of business on the third (3rd) anniversary of the Effective Date. Notwithstanding the foregoing,
the Period of Employment is subject to earlier termination as provided in Section 2(a) of this Agreement.

 

(c)      Base
Salary. Your aggregate base salary (the “Base Salary”) shall be at an annualized rate of Three Hundred and
Fifty Thousand Dollars ($350,000) and shall be paid in accordance with the Company’s regular payroll practices in effect
from time to time.

 

(d)      Annual
Bonus. You may be eligible for an annual incentive bonus based on the Company’s annual bonus plan that may exist from
time to time. Your aggregate target annual incentive bonus amount for a particular fiscal year of the Company during the Period
of Employment shall equal Fifty Percent (50%) of your Base Salary for that fiscal year.

 

(e)      Retirement, Welfare and Fringe
Benefits. During the Period of Employment, you shall be entitled to participate in all employee savings and welfare benefit
plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s employees generally,
in accordance with the eligibility and participation provisions of such plans and as such plans or programs may be in effect from
time to time.

 

(f)      Benefits
Allowance. For each fiscal year during the Period of Employment, commencing on the date hereof, the Company shall provide you
with an aggregate allowance of $20,000.00 to apply towards the purchase of additional benefits at your discretion. Such allowance
shall be paid in equal monthly installments (unless a pro-rata payment is to be made) on the closest payroll date on or following
the first day of each month of each calendar year, provided that you are employed with the Company on such date.

 

    	 

    	 

    

 

		2.	Termination and Severance.

 

(a)      Termination.
Your employment by the Company may be terminated by the Company: (i) immediately upon notice, with Cause (as defined below),
or (ii) with no less than thirty (30) days’ advance written notice to you, without Cause, or (iii) immediately
in the event of your Disability (as defined below) or your death. In the event that you are provided with notice of termination
without Cause pursuant to clause (ii) above, the Company will have the option to place you on administrative leave during
the notice period. You may terminate your employment by the Company for any reason with no less than thirty (30) days’
advance written notice to the Company. Any termination of your employment (by you or by the Company) must be communicated by written
notice from the terminating party to the other party. Such notice of termination must be hand delivered (if to the Company, to
the Company’s Chief Executive Officer) and must indicate the specific provision(s) of this Agreement relied upon in effecting
the termination. The date your employment by the Company terminates is referred to herein as your “Severance Date.”

 

(b)      Benefits
upon Termination. Regardless of the reason for the termination of your employment with the Company, in connection with such
termination the Company will pay you (on or within 30 days following your Severance Date) your accrued and unused vacation (if
any) and you will be entitled to any benefits that are due to you under the Company’s 401(k) plan in accordance with the
terms of that plan. If you hold any stock options or other equity or equity-based awards granted by the Company, the terms and
conditions applicable to those awards will control as to the consequences of a termination of your employment on those awards.
In addition to the foregoing, if your employment with the Company terminates as a result of a termination by the Company of your
employment without Cause (as defined below), you will (subject to the other conditions set forth in Section 2(c) below) be
entitled to the following benefits: the Company will pay you, subject to tax withholding and other authorized deductions, an aggregate
amount equal to one (1) times your Base Salary as in effect on the Severance Date (the “Severance Benefit”).
Subject to Section 5, the Company will pay this benefit to you in substantially equal installments (each in the applicable
fraction of the aggregate benefit) in accordance with the Company’s standard payroll practices over a period of twelve (12)
months, with the first installment payable in the month following the month in which your Separation from Service (as such term
is defined below) occurs.

 

(c)      Conditions
for Receipt of Severance Benefit. Notwithstanding anything to the contrary herein, if the Severance Benefit is otherwise due
to you and, at any time, you breach any obligation under Section 6 of this Agreement, from and after the date of such breach
and not in any way in limitation of any right or remedy otherwise available to the Company, you will no longer be entitled to,
and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Benefit. In addition, in order
to receive any Severance Benefit, you must, upon or promptly following (and in all events, within twenty-one (21) days of,
unless a longer period of time is required by applicable law) your Severance Date, provide the Company with a separation agreement
which shall contain a valid, executed general release agreement in a form acceptable to the Company, and such release shall have
not been revoked. In the event a period longer than twenty-one (21) days is required by applicable law, then the first installment
of the Severance Benefit shall remain payable in the month following the month in which your Separation from Service (as such term
is defined below) occurs, provided that if you fail to provide the Company with the executed general release agreement described
above (or have otherwise revoked the release), any further instalments of the Severance Benefit shall cease at such time and shall
no longer be payable to you. You agree and acknowledge that such separation agreement may contain additional restrictive covenants,
including, without limitation, non-solicitation covenants and non-disparagement covenants.

 

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(d)      Exclusive
Remedy. You agree that should your employment by the Company terminate for any reason, the payments and benefits contemplated
by this Agreement with respect to the circumstances of such termination shall constitute the exclusive and sole remedy for any
such termination of your employment and you agree not to assert or pursue any other remedies, at law or in equity, with respect
to any termination of employment. You agree that, in the event of a termination of your employment, you are not and will not be
entitled to severance benefits under any other agreement, plan, program, or policy of the Company.

 

3.      Certain
Defined Terms. As used in this Agreement, the following terms shall be defined as follows:

 

(a)       “Cause”
shall mean that one or more of the following has occurred: (i) you have committed a felony (under the laws of the United States
or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (ii) you
have engaged in acts of fraud, dishonesty or other acts of material misconduct in the course of your duties; (iii) your abuse
of narcotics or alcohol that has or may reasonably harm the Company; (iv) any violation by you of the Company’s written
policies; (v) your failure to perform or uphold your duties and/or you fail to comply with reasonable directives of the Company’s
Chief Executive Officer or Board of Directors, as applicable; or (vi) any breach by you of any provision of Section 6,
or any material breach by you of this Agreement or any other contract you are a party to with the Company.

 

(b)       “Disability”
shall mean a physical or mental impairment which renders you unable to perform the essential functions of your employment with
the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in
any 12-month period, unless a longer period is required by federal or state law, in which case that longer period would apply.

 

(c)       “Separation
from Service” occurs when you die, retire, or otherwise have a termination of employment with the Company that constitutes
a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to
the optional alternative definitions available thereunder.

 

4.      Limitation
on Benefits. Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit
or distribution of any type to you or for your benefit by the Company or any of its affiliates, whether paid or payable, provided
or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Total
Payments”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount
of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to
be subject to the excise tax imposed by Section 4999 of the Code. Unless you shall have given prior written notice to the
Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements
of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or
eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest
in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards,
then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating
any other remaining Total Payments. The preceding provisions of this Section 4 shall take precedence over the provisions of
any other plan, arrangement or agreement governing your rights and entitlements to any benefits or compensation.

 

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5.      Section 409A.
It is intended that any amounts payable under this Agreement and the Company’s and your exercise of authority or discretion
hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This
Agreement shall be construed and interpreted consistent with that intent. If you are a “specified employee” within
the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your Separation from Service and you are entitled
to the Severance Benefit, you shall not be entitled to any payment or benefit pursuant to Section 2(b) until the earlier of
(i) the date which is six (6) months after your Separation from Service for any reason other than your death, or (ii) the
date of your death. The provisions of the preceding sentence shall only apply if, and to the extent, required to avoid the imputation
of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to you upon or in the
six (6) month period following your Separation from Service that are not so paid by reason of such 6-month delay provision
shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is
six (6) months after your Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30)
days, after the date of your death).

 

6.      Non-Competition.

 

(a)      Restriction
on Competition. During your employment with the Company and twelve (12) months following the termination of your employment
with the Company (regardless of the reason for such termination and regardless of whether or not you are entitled to the Severance
Benefit) (the “Restricted Period”), you shall not directly or indirectly, individually or on behalf of any other
person or entity, manage, participate in, work for, consult with, render services for, or take an interest in (as an owner, stockholder,
partner or lender) any Competitor. For purposes of this Agreement, “Competitor” means a Person anywhere in the
world (the “Restricted Area”) that at any time during the period of time during which you are employed by the
Company, or any time during the Restricted Period engages in the business of operating retail stores for the sale of women’s
apparel, jewelry, accessories, gifts, greeting cards, picture frames and related items or any other business that the Company is
engaged in, or reasonably anticipates becoming engaged in. The parties hereto agree that the Company intends to engage in business
throughout the Restricted Area, even if it does not currently do so, and therefore its scope is reasonable. Nothing herein shall
prohibit you from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly
traded, so long as you have no active participation in the business of such corporation. The term “Person” as
used in this Agreement shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited
liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision thereof.

 

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(b)      Understanding
of Covenants. You acknowledge and agree that the Company would not have entered into this Agreement, providing for severance
protections to you on the terms and conditions set forth herein, but for your agreements herein. You agree that during the course
of your employment you were provided with and will be provided with and you became familiar with the trade secrets and confidential
information of the Company and you agree that the foregoing covenant set forth in this Section 6 (the “Restrictive
Covenant”) is reasonable, including in temporal and geographical scope, and in all other respects, and necessary to protect
the Company’s and its affiliates’ trade secrets and other confidential and proprietary information, good will, stable
workforce, and customer relations. The parties hereto intend that Restrictive Covenant shall be deemed to be a series of separate
covenants, one for each county or province of each and every state or jurisdiction within the Restricted Area and one for each
month of the Restricted Period. You understand that the Restrictive Covenant may limit your ability to earn a livelihood in a business
similar to the business of the Company and any of its affiliates, but you nevertheless believe that you have 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 your education, skills and ability), you do not believe would prevent you
from otherwise earning a living. You agree that the Restrictive Covenant does not confer a benefit upon the Company disproportionate
to your detriment.

 

(c)      Enforcement.
You agree that a breach by you of any of the covenants in this Section 6 and Section 11 would cause immediate and irreparable
harm to the Company that would be difficult or impossible to measure, and that damages to the Company for any such injury would
therefore be an inadequate remedy for any such breach. Therefore, you agree that in the event of any breach or threatened breach
of any provision of this Section 6 or Section 11, the Company shall be entitled, in addition to and without limitation
upon all other remedies the Company may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive
relief and/or other appropriate relief (without posting any bond or deposit) in order to enforce or prevent any violations of the
provisions of this Section 6 or Section 11, or require you to account for and pay over to the Company all compensation,
profits, moneys, accruals, increments or other benefits derived from or received as a result of any transactions constituting a
breach of this Section 6 or Section 11, if and when final judgment of a court of competent jurisdiction is so entered
against you.

 

7.      Withholding
Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as
the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income,
employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

8.      Successors
and Assigns. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable
by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable
by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors
and assigns.

 

9.      Governing
Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED.

 

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10.      Severability.
If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable for any reason,
such finding shall not affect, impair or invalidate the remainder of this Agreement. If any aspect of any restriction herein is
too broad or restrictive to permit enforcement to its fullest extent, you and the Company agree that any court of competent jurisdiction
shall modify such restriction to the minimum extent necessary to make it enforceable and then enforce the provision as modified.

 

11.      Survival.
Notwithstanding anything to the contrary herein, (a) Section 6 of that certain Letter Agreement by and between you and
Parent dated as of September 25, 2009 (the “2009 Letter Agreement”) and (b) Sections 2 and 5
of that certain Agreement and First Amendment to Employment Letter Agreement (the “2009 Letter Agreement Amendment”)
shall continue in full force and effect as if set forth herein and you agree that such provisions shall continue to apply to your
employment by the Company as set forth in this Agreement by this reference.

 

12.      Entire
Agreement, Amendment and Waiver. This Agreement constitutes the entire agreement between you and the parties hereto with
respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting
such subject matter, including, without limitation, the 2011 Letter Agreement, the 2009 Letter Agreement and the 2009 Letter Agreement
Amendment, except as expressly provided in Section 11 of this Agreement. This Agreement shall not be modified, amended or
in any way altered except by written instrument signed by you and the Chief Executive Officer of Parent and Francesca’s.
A waiver by any of the parties hereto of any rights or remedies hereunder on any occasion shall not be a bar to the exercise of
the same right or remedy on any subsequent occasion or of any other right or remedy at any time.

 

13.      Waiver
of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

14.      Remedies.
Each of the parties to this Agreement and any such person or entity granted rights hereunder whether or not such person or entity
is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for
any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree
and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that each
party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance, injunctive
relief and/or other appropriate equitable relief (without posting any bond or deposit) in order to enforce or prevent any violations
of the provisions of this Agreement. Each party shall be responsible for paying its own attorneys’ fees, costs and other
expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding or any judgment or verdict
thereon is entered against either party.

 

15.      Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose
signature appears thereon, and all of which together shall constitute one and the same instrument.

 

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[Signature page follows]

 

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IN WITNESS WHEREOF, you, Francesca’s
and Parent have executed this Agreement as of December 28, 2012.

 

	 	Francesca’s Collections, Inc.
	 	a Texas corporation
	 	 
	 	By:	/s/ Neill Davis
	 	Name:	Neill  Davis
	 	Title:	President
	 	 
	 	Francesca’s Holdings Corporation,
	 	a Delaware corporation
	 	 
	 	By:	/s/ Neill  Davis
	 	Name:	Neill  Davis
	 	Title:	President

 

	 	AGREED BY:
	 	 
	 	/s/ Kal Malik
	 	Kal Malik

 

    	8a50519362ex10_1.htm

Exhibit 10.1

 

 

RETIREMENT AND CONSULTING AGREEMENT

 

This Retirement and Consulting Agreement (the “Agreement”) is dated December 28, 2012 (the “Effective Date”), by and between Gulf Island Fabrication, Inc., a Louisiana corporation (the “Company”) and Kerry J. Chauvin (the “Executive”).

 

WHEREAS, Executive has advised the Company of his desire to retire as the Company’s Chief Executive Officer and Chairman of the Company’s board of directors (the “Board”).

 

WHEREAS, the Company has offered, and the Executive has accepted, a consulting agreement to the Executive under which he will provide certain consulting and business services to the Company in order to assist the Company with an orderly transition, subject to the terms and conditions provided herein.

 

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, and intending to be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

EMPLOYMENT TERM

 

1.1   Employment.  Executive agrees to continue to serve as the Company’s Chairman and Chief Executive Officer on a full-time basis until December 31, 2012 (the “Retirement Date”).  The Company shall have the right at any time before the Retirement Date to notify the Executive that his continuing service as Chairman and Chief Executive Officer is no longer required, subject to the Company’s obligation to make the payments and provide the benefits set forth in this Agreement.

 

1.2   Devotion to Responsibilities.  Until the Retirement Date, Executive shall carry on his ordinary and customary duties.  In addition, the Executive shall assist the Company in effecting an orderly transition of his responsibilities to his successor and perform such other duties as may be reasonably requested by the Board.

 

ARTICLE II

CONSULTING PERIOD

 

2.1   Engagement and Term.  The Company hereby engages the Executive and the Executive hereby accepts engagement as a consultant, with such engagement to begin as of the day following the Retirement Date and continuing through December 31, 2015 (the “Consulting Period”).  The Company may opt to extend the Consulting Period for additional one-year periods by giving 60 days’ prior written notice to the Executive.  For avoidance of doubt, any reference in this Agreement to “Consulting Period” includes all period(s) of extension, if any.  The date the Consulting Period ends is referred to in this Agreement as the “Consulting Termination Date.”

 

2.2   Scope of Services and Duties.  During the Consulting Period, the Executive agrees to be reasonably available, either in person, by telephone, or via electronic mail to consult, advise, and assist in connection with such matters as the Company may reasonably request and as are within his area of expertise and prior experience.  The Executive agrees to devote such time as is reasonably necessary to effectively assist the Company with regard to these matters, which the parties expect shall not be less than ten hours per calendar month for the duration of the Consulting Period.  Within sixty (60) days of the end of the calendar year during the term of this Agreement, Executive agrees to furnish the Company with a record of all consulting services performed by Executive during the most recently completed calendar year, including information as to the time devoted by Executive to perform such services.  Executive agrees to provide the Company with such other information regarding Executive’s performance of consulting services under this Agreement as the Company may, from time to time, reasonably request.

 

  

  

  

 

2.3   Independent Contractor Status.  It is the intention of the parties to establish, during the Consulting Period, an independent contractor relationship and not an employer-employee relationship, partnership, or joint venture.  During the Consulting Period, the Executive shall not be deemed employed by the Company for purposes of any federal or state withholding taxes, and the Company shall not be responsible for or required to withhold any such taxes for or on behalf of the Executive.  Unless otherwise specifically agreed upon in writing, the Executive shall not have any authority during the Consulting Period to act as the Company’s agent for any purposes, or to otherwise incur any liability or obligation in the name or on behalf of the Company.

 

2.4   Compliance with Company Policies.  The Executive agrees that, during the Consulting Period, he will continue to comply with all company policies to the extent relevant to his activities, including but not limited to (a) the Code of Business Conduct and Ethics and (b) the Insider Trading Policy, which prohibits, among other things, trading in the Company’s securities while in possession of material nonpublic information.

 

2.5   Date of Separation from Service.  The parties agree that the level of services expected to be provided by the Executive during the Consulting Period shall not exceed the level of services permitted under Treasury Regulations § 1.409A-1(h)(1)(i) under which the Executive is presumed to have had a “Separation from Service” and shall not affect the date of the Executive’s “Separation from Service” from the Company, as such term is defined in the regulations under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”).  The Retirement Date shall be the Executive’s date of Separation from Service.

 

ARTICLE III

COMPENSATION AND BENEFITS

 

3.1   Pre-Retirement Compensation and Benefits.  Executive’s salary and benefits shall remain unchanged through the Retirement Date.  In particular, Executive shall continue to be entitled to receive through the Retirement Date the same base salary that he was paid at the time that he entered into this Agreement.

 

3.2   2012 Bonus Payment.  Executive or his legal representatives shall be eligible to receive a bonus for the 2012 fiscal year (the “2012 Bonus”), which shall be paid out at such time as annual cash bonuses are paid to other senior executives and in accordance with the terms and conditions of the annual bonus plan.

 

  

2

  

 

3.3   Compensation and Benefits During the Consulting Period.

 

(a)   In consideration for the Executive’s services during the Consulting Period, the Company shall pay the Executive a monthly fee (the “Fee”) equal to six thousand six hundred and seventy dollars ($6,670.00).  The Company shall pay the Fee to Executive within 15 days of the end of the preceding calendar month.

 

(b)   During the Consulting Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable and necessary expenses incurred by the Executive in performing consulting services, provided that such expenses are incurred under this Agreement and accounted for in accordance with policies and procedures established by the Company.

 

(c)   In the event that during the Consulting Period, the Executive is required to travel on Company business, he shall be entitled to travel at Company expense on a basis comparable to the basis on which he traveled before his retirement.  In addition, the Executive is permitted to use the Company airplane as needed to receive medical care, provided that the Company’s airplane is not otherwise reserved for Company use during that period.

 

3.4   Indemnification.  To the maximum extent provided by law, the Company shall indemnify and hold Executive harmless from all claims, actions, damages or losses relating in any way to the Executive’s provision of services hereunder.  The benefits provided herein are in addition to any rights to indemnification and defense, including any right to advancement of legal fees and expenses, as are provided to the Executive pursuant to the Company’s Articles of Incorporation and bylaws, and under Louisiana Business Corporation Law.

 

3.5   Post-Retirement Insurance.

 

Subject to any eligibility or participation requirements as may be established pursuant to the terms thereof, Executive shall be entitled to continue individual or family medical insurance coverage under the Company’s medical plan pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (“COBRA”), provided a timely COBRA election is made.  The Agreement is not intended to extend the duration of health insurance coverage under the Company’s medical plan beyond the period provided for via COBRA.  The parties acknowledge that Executive intends to use a portion of the Fee to pay some or all of the cost of COBRA coverage under the Company’s medical plan, although Executive is not required to use any portion of the Fee for such purpose.  For example, Executive may also use the Fee to help cover the cost of Medicare, supplemental, individual, or such other coverage as Executive and his family may elect to purchase, or for any other purpose. 

 

3.6   Restricted Stock.

 

(a)   Any shares of restricted stock previously granted to the Executive for which vesting is solely contingent upon continued service and that are not vested as of the Effective Date shall, without any further action on the part of any party, vest and all restrictions shall be lifted with respect to such shares of restricted stock as of the Effective Date.

 

(b)   To the extent this Section 3.6 changes the terms of restricted stock held by the Executive, this Section 3.6 shall be deemed to be an amendment to the incentive agreements between the Company and the Executive setting forth the terms of such incentives and shall form part of each such agreement.

 

  

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ARTICLE IV

NONDISCLOSURE, NONSOLICITATION OF EXECUTIVES,

PROPRIETARY RIGHTS AND COMPETITION

 

4.1   Certain Definitions.  For purposes of this Agreement, the following terms shall have the following meanings:

 

(a)   “Confidential Information” means confidential and proprietary information, knowledge, or data of any nature and in any form (including information that is electronically transmitted or stored on any form of magnetic or electronic storage media) of the past, current, or prospective business or operations of the Company, its consolidated subsidiaries, and any joint ventures in which the Company participates (the “Gulf Island Group”), that as of the Retirement Date is not publicly known, whether or not marked confidential, including without limitation information relating to any (i) services, projects or jobs; (ii) estimating or bidding procedures; (iii) bidding strategies; (iv) present and future business plans, actual or potential business acquisitions or joint ventures, capital expenditure projects, and cost summaries; (v) trade secrets; (vi) marketing data, strategies, or techniques, (vii) financial reports, budgets, projections, and cost analyses; (viii) pricing information, codes, and analyses; (ix) employee lists; (x) customer records, customer lists, and customer source lists; (xi) confidential filings with any government agency; and (xii) internal notes and memoranda relating to any of the foregoing, provided that Confidential Information shall not include any information, knowledge, or data that is now, or hereafter becomes, known to the public (other than by breach of this Agreement by the Executive or breach by any other party of a confidentiality obligation owed to the Company).

 

(b)   “Restricted Business” means the business of providing fabrication, construction and maintenance services to the oil, gas, and marine industries.

 

4.2   Nondisclosure of Confidential Information.  The Executive shall hold in a fiduciary capacity and for the benefit of the Company all Confidential Information which shall have been obtained by the Executive during the tenure of Executive’s employment or consulting relationship (whether prior to or after the date of this Agreement) and shall use such Confidential Information solely in the good faith performance of his duties for the Company.  Until the second anniversary of the Consulting Termination Date, the Executive agrees (a) not to communicate or make available to any person or entity (other than the Company) any such Confidential Information, except upon the prior written authorization of the Company or as may be required by law or legal process, and (b) to deliver promptly to the Company upon its written request any Confidential Information in his possession.  In the event that the provisions of any applicable law or the order of any court would require the Executive to disclose or otherwise make available any Confidential Information to a governmental authority or to any other third party, the Executive shall give the Company, unless it is unlawful to do so, prompt prior written notice of such required disclosure and, and if possible given the terms of any production order of the judicial governmental or administrative body, an opportunity to contest the requirement of such disclosure or apply for a protective order with respect to such Confidential Information by appropriate proceedings.

 

  

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4.3   Limited Covenant Not to Compete.

 

(a)   The Executive agrees that from the Effective Date until the later of (i) three years from the Effective Date or (ii) the Consulting Termination Date (the “Restricted Period”), the Executive agrees that within any jurisdiction specified in Appendix A in which any member of the Gulf Island Group carries on the Restricted Business, so long as any member of the Gulf Island Group carries on a like line of business therein (collectively, the “Subject Areas”), the Executive will restrict his activities during the Restricted Period as follows:

 

(i)   The Executive will not, directly or indirectly, for himself or others or in association with any other person, own, manage, operate, control, be employed in an executive, managerial, or supervisory capacity by, or otherwise engage or participate in, or allow his skill, knowledge, experience or reputation to be used in connection with, the ownership, management, operation, or control of any company or other business enterprise engaged in the Restricted Business within any of the Subject Areas; provided, however, that nothing contained herein shall prohibit the Executive from making passive investments as long as the Executive does not beneficially own more than 1% of the equity interests of a publicly-traded business enterprise engaged in the Restricted Business within any of the Subject Areas.  For purposes of this paragraph, “beneficially own” shall have the same meaning ascribed to that term in Rule 13d-3 under the Securities Exchange Act of 1934.

 

(ii)   The Executive will not, directly or indirectly, for himself or others or in association with any other person, solicit any customer of the Restricted Business or of any member of the Gulf Island Group, or otherwise interfere, induce, or attempt to induce any customer, supplier, licensee, or business relation of the Gulf Island Group for the purpose of soliciting, diverting, interfering, or enticing away the business of such customer, supplier, licensee, or business relation, or otherwise disrupting any previously-established relationship existing between such customer, supplier, licensee, or business relation and the Gulf Island Group.

 

(b)   The Executive agrees that he will from time to time upon the Company’s request promptly execute any supplement, amendment, restatement, or other modification of Appendix A as may be necessary or appropriate to correctly reflect the jurisdictions which, at the time of such modification, should be covered by Appendix A and this Section 4.3.  Furthermore, the Executive agrees that all references to Appendix A in this Agreement shall be deemed to refer to Appendix A as so supplemented, amended, restated, or otherwise modified from time to time.

 

4.4   Non-solicitation.  The Executive agrees that, during the Restricted Period, he will not, directly or indirectly, for himself or others or in association with any other person, make contact with any of the employees or independent contractors of the Gulf Island Group for the purpose of soliciting such employee for hire, whether as an employee or independent contractor, or for the purpose of inducing such persons to leave the employ of the Gulf Island Group or cease providing services to the Gulf Island Group, or otherwise to disrupt the relationship of such persons with the Gulf Island Group.  In addition, the Executive will not hire, on behalf of himself or any company engaged in the Restricted Business, any employee of the Gulf Island Group, whether or not such engagement is solicited by the Executive.  The provisions of this Section 4.4 shall automatically expire without any requirement of notice or other communication between the parties on the Consulting Termination Date.

 

  

5

  

 

4.5   Proprietary Rights.

 

(a)   The Executive agrees to and hereby does assign to the Company all his right, title, and interest in and to all inventions, business plans, work models, or procedures, whether or not patentable, which are made or conceived solely or jointly by him:

 

(i)   at any time during the term of his employment with the Company or during the Consulting Period, or

 

(ii)          with the use of time or materials of the Company.

 

(b)   The Executive agrees that, to a reasonable extent and through the Consulting Termination Date, he will communicate to the Company or its representatives all facts known to him about such proprietary information, sign all necessary instruments, make all necessary oaths, and generally, at the Company’s expense, do everything reasonably practicable (without expense to the Executive) to aid the Company in obtaining and enforcing proper legal protection for all such matters in all countries and in vesting title to such proprietary information in the Company.  At the Company’s request (during or after the term of this Agreement) and expense, the Executive will promptly execute a specific assignment of title to the Company, and perform any other acts reasonably necessary to implement the foregoing assignment.

 

4.6   Injunctive Relief; Other Remedies.  Executive acknowledges that a breach by Executive of Section 4.2, 4.3, 4.4, or 4.5 would cause immediate and irreparable harm to the Company not fully compensable by money damages or the exact amount of which would be difficult to ascertain, and therefore the Company will not have an adequate monetary remedy at law.  Accordingly, Executive agrees that, in the event of a breach by Executive of the provisions of Section 4.2, 4.3, 4.4, or 4.5, the Company shall be entitled to injunctive relief to prevent or curtail any such breach without the necessity of posting any bond or security or showing proof of actual damage or irreparable injury.  Nothing herein shall be construed as prohibiting the Company from pursuing any other remedy at law or in equity to which the Company may be entitled under applicable law in the event of a breach of this Agreement by Executive, including without limitation the recovery of damages, costs, and expenses, such as reasonable attorneys’ fees, incurred by the Company as a result of any such breach.  In addition to the exercise of the foregoing remedies, the Company shall have the right upon the occurrence of any such breach to cancel the 2012 Bonus and any unpaid salary, bonus, or commissions otherwise outstanding at the time of such breach.  In particular, Executive acknowledges that the payments and benefits provided hereunder are conditioned upon Executive fulfilling any noncompetition and nondisclosure agreements and covenants contained in this Article IV.  In the event Executive shall at any time materially breach any noncompetition or nondisclosure agreements contained in this Article IV, the Company may suspend or eliminate payments under Article III during the period of such breach.  Executive acknowledges that any such suspension or elimination of payments would be an exercise of the Company’s right to suspend or terminate its performance hereunder upon Executive’s breach of this Agreement; such suspension or elimination of payments would not constitute, and should not be characterized as, the imposition of liquidated damages.  Nothing contained herein shall be deemed to impair the Executive’s right to indemnification provided to the Executive pursuant to the Company’s Articles of Incorporation, bylaws, or Louisiana Business Corporation Law.

 

  

6

  

 

4.7   Executive’s Understanding of this Article. Executive acknowledges that the definition of Restricted Business, as well as the geographic and temporal scope of the covenants contained in Article IV are the result of arm’s-length bargaining and are fair and reasonable in light of (i) the importance of the functions performed by Executive, (ii) the nature and wide geographic scope of the operations of the Company and its subsidiaries, and (iii) Executive’s level of control over and contact with the business and operations of the Gulf Island Group.

 

ARTICLE V

WAIVERS AND RIGHT OF REVOCATION

 

5.1   Waiver and Release by Executive.  In consideration of the Company’s agreement to enter into and provide the terms of this Agreement, Executive hereby and forever, irrevocably and unconditionally, waives and releases any and all rights, claims, and causes of action against the Company or any member of the Gulf Island Group (and their respective directors, officers, shareholders, employees, agents, insurers, assigns, predecessors, and successors), of whatever kind or nature, known or unknown, asserted or unasserted, that may have arisen prior to or that may exist as of the date of the Executive’s execution and acceptance of this Agreement, arising or that could be asserted under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; the Age Discrimination in Employment Act and Older Worker Benefits Protection Act, 29 U.S.C. § 621 et seq.; the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq.; the Civil Rights Act of 1991; the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Employee Retirement Income Security Act; the Equal Pay Act, 29 U.S.C. § 206 et seq.; Executive Order 11246 and its implementing regulations; the Occupational Safety and Health Act, as amended, 29 U.S.C. § 651 et seq.; the Family and Medical Leave Act; the Louisiana Employment Discrimination Law, La. R.S. 23:331 et seq.; the Louisiana penalty wage statute, La. R.S. § 631 and 632; federal or state immigrations laws; and any other statutes, laws, rules or regulations of the United States, the State of Louisiana or any other state in the United States or any ordinances of any locality which may have afforded the Executive a cause of action or a legal or equitable claim of any sort based on employment discrimination or his employment relationship with the Company or on any other theory of liability, statutory or non-statutory, in contract or in tort, including, but not limited to, claims of unpaid bonuses, profit-sharing payments, wages, or compensation of any kind under any plan, policy, contract, agreement or practice, personal injury damages, wrongful or constructive discharge, breach of any express or implied employment contract or agreement, breach of any covenant of good faith and fair dealing, fraud, violation of public policy, whistle blowing, breach of contract, libel, slander, defamation, harassment of any kind, intentional infliction of emotional distress, retaliation or employment discrimination on the basis of age, race, color, religion, disability, national origin or sex or on the basis of filing a workers’ compensation claim, asserting or reporting a work-related injury or on the basis of or a cause of action or claim for recovery of back pay, front pay or any other type of wages, vacation pay, severance pay, health insurance, profit sharing benefits, retirement benefits, benefit under any employee benefit plan, unemployment insurance benefits, liquidated damages, punitive damages, compensatory damages, attorneys’ fees, interests, costs, and any other legally recoverable category of damages arising from or concerning, either directly or indirectly, the Executive’s employment with the Company.

 

  

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5.2   Termination of Change of Control Agreement.  On the Retirement Date, the Change of Control Agreement between the Executive and the Company dated January 1, 2012 shall terminate, and all rights of the Executive thereunder shall be extinguished.  Between the Effective Date and the Retirement Date, the Executive, in the event of a change of control (as defined in the Change of Control Agreement), may choose to exercise his rights under either this Agreement or the Change of Control Agreement, but not both.

 

5.3   Review and Consultation.  It is understood and agreed that Executive has entered into and executed this Agreement voluntarily and that such execution by Executive is not based upon any representations or promises of any kind made by the Company or any of its representatives except as expressly recited in this Agreement.  Executive further acknowledges that he has read and fully understands each paragraph of this Agreement, that he was advised in writing by the Company to consult with an attorney prior to executing this Agreement, and that he has availed himself of legal or other counsel to the full extent that he desires.  Executive also agrees and acknowledges that the consideration provided under this Agreement is in addition to any other payments, benefits, or other things of value to which he is entitled, including, but not limited to, payment of accrued vacation, rights under benefit plans of the Company (including, but not limited to, any earned but deferred amounts (bonus bank)) or rights under the Company’s Articles of Incorporation, or bylaws as in effect as of the date of this Agreement and that he would not be entitled to any of the consideration provided under this Agreement in the absence of his execution and acceptance of this Agreement.

 

5.4   Right of Revocation.  Executive shall have seven (7) days following the execution of this Agreement within which to exercise a right of revocation, and this Agreement will not be enforceable or effective, and no payments shall be made hereunder, until the expiration of such seven-day period.  Any such revocation of this Agreement must be communicated in writing and delivered in person or by fax to the Company as specified in Section 6.2 not later than the close of business on the seventh (7th) day following the Executive’s execution of this Agreement.  Otherwise, such revocation shall be of no force or effect.

 

  

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ARTICLE VI

MISCELLANEOUS

 

6.1   Binding Effect; Successors.

 

(a)   This Agreement shall be binding upon and inure to the benefit of the Company and any of its successors or assigns, but the Company may assign this Agreement only (i) to one of its affiliates, provided the Company guarantees such affiliate’s performance of its obligations under this Agreement, or (ii) pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company; and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law.

 

(b)   This Agreement is personal to the Executive and shall not be assignable by the Executive without the consent of the Company (there being no obligation to give such consent) other than such rights or benefits as are transferred by will, the laws of descent and distribution, or succession.

 

6.2   Notices.  All notices hereunder must be in writing and shall be deemed to have given upon receipt of delivery by: (a) hand (against a receipt therefor), (b) certified or registered mail, postage prepaid, return receipt requested, (c) a nationally-recognized overnight courier service (against a receipt therefor) or (d) facsimile transmission with confirmation of receipt.  All such notices must be addressed as follows:

 

If to the Company, to:

Gulf Island Fabrication, Inc.

567 Thompson Road

Houma, Louisiana  70363

Attention:  Roy “Buddy” Breerwood

Email:  rbreerwood@gifinc.com

with a copy to:

Allen E. Frederic, III

Jones Walker LLP

201 St. Charles Ave., Suite 5100

New Orleans, Louisiana  70170-5100

Email:  afrederic@joneswalker.com

If to the Executive, to:

Kerry J. Chauvin

265 Renee Denise Court

Theriot, LA  70397

 

  

9

  

 

or such other address as to which any party hereto may have notified the other in writing.

 

6.3   Governing Law; Consent to Jurisdiction.  This Agreement shall be governed by, interpreted, and enforced in accordance with the laws of the State of Louisiana (without regard to any choice of law principles which might otherwise require the application of the law of another jurisdiction).  The parties hereby agree that any action brought with respect to this Agreement and the transactions contemplated hereunder, including, but not limited, to any action for injunctive relief for the breach of any covenant under Article IV of this Agreement, shall be brought in state or federal court in Terrebonne Parish, Louisiana, and further that such venue shall be the exclusive venue for resolving any such disputes.  The parties consent to personal jurisdiction in state or federal court in Terrebonne Parish, Louisiana, and further waive any objection they may have as to such venue.

 

6.4   Withholding.  The Executive agrees that the Company has the right to withhold, from the amounts payable pursuant to this Agreement, all amounts required to be withheld under applicable income and/or employment tax laws, or as otherwise stated under plans in which the Executive participates.

 

6.5   Amendment, Waiver.  No provision of this Agreement may be modified, amended, or waived except by an instrument in writing signed by both parties.

 

6.6   Waiver of Breach.  The waiver or ratification by either party of a breach of this Agreement shall not be construed as a waiver or ratification of any subsequent breach by either party to this Agreement.

 

6.7   Remedies Not Exclusive.  No remedy specified herein shall be deemed to be such party’s exclusive remedy, and accordingly, in addition to all of the rights and remedies provided for in this Agreement, the parties shall have all other rights and remedies provided to them by applicable law, rule or regulation.

 

6.8   Company’s Reservation of Rights.  The Executive acknowledges and understands that the Executive serves at the pleasure of the board of directors and that the Company has the right at any time to terminate the Executive’s status as an Executive of the Company, or to change or diminish his status, including during the Consulting Period, subject to the rights of the Executive to claim the benefits conferred by this Agreement.

 

6.9           Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 

6.10        Company’s Representations.  The Company represents and warrants that it is fully authorized and empowered to enter into this Agreement, that the Agreement has been duly authorized by all necessary corporate action, that the performance of its obligations under this Agreement will not violate any agreement between it and any other person, firm, or organization or any applicable law or regulation and that this Agreement is enforceable in accordance with its terms.

 

  

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6.11        Entire Agreement.  Except as otherwise noted herein, this Agreement constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, if any, between the parties relating to the subject matter hereof.

 

6.12        Severability.  It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permitted under applicable law, whether now or hereafter in effect and, therefore, to the extent permitted by applicable law, the parties hereto waive any provision of applicable law that would render any provision of this Agreement invalid or unenforceable.  The covenants in this Agreement are severable and separate, including within provisions, subparts, or portions thereof, and the unenforceability of any specific covenant, provision, or subpart in this Agreement is not intended by either party to, and shall not, affect the provisions of any other covenant in this Agreement.  If any court determines that the terms and conditions of this Agreement, including but not limited to the scope, time, or territorial restrictions set forth in Article IV, are unreasonable as applied to Executive, the parties hereto acknowledge their mutual intention and agreement that the offending provision, subparts, or portions therefore be reformed to comply with any applicable law, and the remaining provisions and restrictions be enforced to the fullest extent permitted by law.

 

6.13   Section 409A.  The Agreement is intended to comply with the provisions of Section 409A and, wherever possible, shall be construed and interpreted to ensure that any payments that may be paid, distributed provided, reimbursed, deferred or settled under this Agreement will not be subject to any additional taxation or premium interest under Section 409A.  In the event the parties determine that this Agreement or any payment hereunder does not comply with the applicable provisions of Section 409A, the Company and Executive agree to cooperate to the fullest extent in pursuit of any available corrective relief, as provided under the terms of Internal Revenue Service Notice 2008-113 or any corresponding subsequent guidance, from the Section 409A additional income tax and premium interest.  Notwithstanding the foregoing, the Executive acknowledges and agrees that any and all tax liabilities of the Executive arising from the transactions contemplated by this Agreement are his sole responsibility, including, without limitation, any additional taxes and interest due pursuant to Section 409A.  No acceleration of payments and benefits provided herein shall be allowed, unless permitted by Section 409A.

 

(Signature page(s) follows)

 

 

  

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IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed as of the Effective Date.

 

	  	
GULF ISLAND FABRICATION, INC.

	  	  	  
	  	  	  
	  	
By:

	
/s/ John P. Laborde

	  	  	
John P. Laborde

	  	  	
Chair, Compensation Committee

	  	  	  
	  	  	  
	  	
EXECUTIVE:

	  	  	  
	  	  	  
	  	  	
/s/ Kerry J. Chauvin

	  	  	
Kerry J. Chauvin

 

 

  

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APPENDIX A

SUBJECT AREAS

 

Parishes of the State of Louisiana

Acadia

Allen

Ascension

Assumption

Avoyelles

Beauregard

Calcasieu

Cameron

East Baton Rouge

East Feliciana

Evangeline

Iberia

Iberville

Jefferson

Jefferson Davis

Lafayette

Lafourche

Livingston

Orleans

Plaquemines

Pointe Coupee

Rapides

St. Bernard

St. Charles

St. Helena

St. James

St. John the Baptist

St. Landry

St. Martin

St. Mary

St. Tammany

Tangipahoa

Terrebonne

Vermillion

Washington

West Baton Rouge

West Feliciana

  

A-1

  

 

Jurisdictions Outside Louisiana

Texas Counties:

Harris

Sabine

Orange

Jefferson

Chambers

Galveston

Montgomery

Brazoria

Matagorda

Jackson Calhoun

Victoria

Aransas

Kleberg

San Patricio

Nueces

Kenedy

Willacy

Cameron

Dallas

Tarrant

Johnson

Ellis

Florida Counties:

Broward

Dade

Palm Beach

St. John’s

Duval

Manatee

Pinellas

Hillsborough

Escambia

Okaloosa

Santa Rosa

Alabama Counties:

Mobile

Baldwin

Mississippi Counties:

Hancock

Harrison

Jackson

Pearl River

  

A-2

  

 

The parties acknowledge and agree that Gulf Island Fabrication, Inc. is a company with extensive worldwide operations and it is the parties intent that the noncompetition covenant be given as broad a geographic effect as is lawful. Accordingly, in addition to the foregoing specified locations, it is the parties intent that the noncompetition covenant set forth in the Agreement be given effect throughout the United States and worldwide, to the extent that the Executive would seek to provide services similar to those provided to Gulf Island Fabrication, Inc. to a company in competition with Gulf Island Fabrication, Inc. in any of the jurisdictions in which it operates. To the extent that a court of relevant jurisdiction determines the geographic scope set forth herein to be overbroad, the parties hereby consent to such modification as the court may order such that the broadest possible geographic footprint of the noncompetition covenant is enforceable.

 

 

A-3

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