Document:

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                                                                   EXHIBIT 10.40

                                 AMENDMENT NO. 1
                                       TO
                        MARINA VILLAGE OFFICE TECH LEASE

THIS AMENDMENT NO. 1 TO MARINA VILLAGE OFFICE TECH LEASE is made and entered
into as of July 20, 2001, by and between ALAMEDA REAL ESTATE INVESTMENTS, a
California limited partnership ("Landlord"), and INSITE VISION INCORPORATED, a
Delaware corporation ("Tenant").

Landlord and Tenant have entered into that certain Marina Village Office Tech
Lease dated as of September 1, 1996 with respect to certain premises located in
965 Atlantic Avenue, Suite 100 and 2020 Challenger Drive, Suites 103 & 104,
Alameda, California (the "Lease"). Landlord and Tenant now desire to amend the
Lease effective January 1, 2002 and to make certain other amendments as
hereinafter provided. Accordingly, Landlord and Tenant hereby agree as follows
(unless otherwise defined, all capitalized terms used in this Amendment shall
have the same meanings as set forth in the Lease):

1.      AMENDMENT OF BASIC LEASE INFORMATION. The following provisions as set
        forth in the Basic Lease Information of the Lease are hereby amended to
        read as follows:

        LEASE EXPIRATION:           December 31, 2006

        BASE RENT:                  1/01/02 - 12/31/02    $55,864/month
                                    1/01/03 - 12/31/03    $57,819/month
                                    1/01/04 - 12/31/04    $59,843/month
                                    1/01/05 - 12/31/05    $61,937/month
                                    1/01/06 - 12/31/06    $64,104/month

        BASE YEAR:                  None - Effective January 1, 2002

2.      AMENDMENT OF PARAGRAPH 4 TO THE LEASE. Effective January 1, 2002
        Paragraph 4 of the Lease is hereby deleted in its entirely and restated
        as follows:

        "TAXES AND OPERATING EXPENSES.

        a. Tenant shall pay its percentage share, as specified in the Basic
        Lease Information, of all Property Taxes assessed with respect to the
        Building during the Lease term and its percentage share of all Operating
        Expenses paid or incurred by Landlord during the Lease term. For the
        purposes hereof, "Property Taxes" shall mean all real property taxes and
        assessments or governmentally imposed fees or charges (and any tax
        levied wholly or partly in lieu thereof) levied, assessed, confirmed,
        imposed or which have become a lien against the Building (which for the
        purposes of defining "Property Taxes" shall include the land underlying
        the Building). "Operating Expenses" shall mean: (1) all costs of
        management, operation, maintenance, and repair of the Building, (2) the
        cost of all insurance maintained by Landlord with respect to the
        Building and (3) the share allocable to the Building of dues and
        assessments payable under any reciprocal easement or common area
        maintenance agreements or declaration or by any owners' associations
        affecting the Building. Operating Expenses for each calendar year shall
        be adjusted to equal Landlord's reasonable estimate of Operating
        Expenses had the total rentable area of the Building been 95% occupied.
        Tenant's Share of Property Taxes and Operating Expenses shall not
        include the following (i) any state, local, federal, personal or
        corporate income tax measured by the income of the Landlord from all
        sources or form sources other than rent alone; (ii) any estate or
        inheritance taxes, any franchise, succession, or transfer taxes, or any
        interest on taxes or any penalties resulting from Landlord's failure to
        pay taxes of any kind; (iii) taxes that are separately assess by
        government agencies to, and paid by, other tenants of the Building for
        taxes attributable to tenant improvements or other alterations,
        additions or improvements made by or for other tenants in the Building;
        (iv) any increase in excess of a 12% increase in the total of Property
        Taxes and Assessment Bonds (net of any tax increments received by
        Landlord which increase result from a sale of the Building; (v)
        Landlord's general overhead expenses not related to the Building; (vi)
        brokerage commissions, legal fees, advertising costs and other related
        expenses incurred in connection with the leasing of the Building; (vii)
        repairs, alteration, additions, improvements, or replacements made to
        correct any defect in the design, materials or workmanship of the
        Building or common areas or to comply with any requirements of any
        governmental authority in effect as of the date of this Lease other than
        as may be required pursuant to Tenant's specific use; (viii) damage and
        repairs covered under any insurance policy carried by Landlord in
        connection with the Building; (ix) damage and repairs to the Building
        necessitated by the negligence or willful misconduct of Landlord or
        Landlord's employees, contractors or agents; (x) structural repairs or
        capital nature; (xi) damage and repairs attributable to condemnation,
        fir or other casualty, (xii) damage and repairs necessitated by the
        negligence or willful misconduct of Landlord or Landlord's employees,
        contractors or its; (xiii) executive salaries of Landlord;

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        (xiv) salaries of service personnel to the extend that such service
        personnel perform services not solely in connection with the management,
        operation, repair or maintenance of the Building or common areas; (xv)
        Landlord's general overhead expenses not related to the Building; (xvi)
        payments of principal or interest on any mortgage or other encumbrance
        including ground lease payments and points, commissions and legal fees
        associated with financing; (xvii) depreciation; (xviii) legal fees,
        accountant's fees and other expenses incurred in connection with
        disputes with tenant or other tenants or occupancy of the Building or
        associated with the enforcement of any lease or defense of Landlord's
        title to or interest in the Building or any part thereof; (xiv) costs
        (including permit, license and inspection fees) incurred in renovation
        or otherwise improving, decorating, painting or altering space for the
        other tenants in the building (xx) costs incurred due to violation by
        Landlord or any other tenant in the Building of the terms and conditions
        of any lease; (xxi) the cost of any service provided to Tenant or other
        occupancy of the Building for which Landlord is entitle to be
        reimbursed; (xxii) charitable or political contributions; (xxiii)
        interest, penalties or other costs arising out of Landlord's failure to
        make timely payments of its obligations; (xxiv) property management fee
        of any property management firm in excess of three percent (3%) of the
        gross revenues of the Building; (xxv) costs incurred in advertising and
        promotional activities for the Building; and (xxvi) any other expense
        which under generally accepted accounting principles and practice would
        not be considered a normal maintenance and operating expense.

        b. In the event the Building is not separately assessed for tax
        purposes, then the Property Taxes to be paid by Tenant shall be Tenant's
        percentage share of the product obtained by multiplying the total of the
        real property taxes and assessments levied against the tax parcel of
        which the Building is a part by a fraction, the numerator of which is
        the rentable area of the Building and the denominator of which is total
        rentable area of all improvements located within the tax parcel of which
        the Building is a part.

        c. Tenant shall pay to Landlord each month at the same time and in the
        same manner as monthly Base Rent 1/12th of Landlord's estimate of
        Property Taxes and Operating Expenses for the then current calendar
        year. Within 90 days after the close of each calendar year, or as soon
        after such 90-day period as practicable, Landlord shall deliver to
        Tenant a statement of actual Property Taxes and Operating Expenses for
        such calendar year. If, on the basis of such statement Tenant owes an
        amount that is less than the estimated payments for such calendar year
        previously made by Tenant, Landlord shall credit the overpayment against
        the next monthly installment of property taxes and operating expenses.
        If on the basis of such statement Tenant owes an amount that is more
        than the estimated payments for such calendar year previously made by
        Tenant, Tenant shall pay the deficiency to Landlord within 30 days after
        delivery of the statement. The obligations of Landlord and Tenant under
        this subparagraph with respect to the reconciliation between estimated
        payments and actual Property Taxes and Operating Expenses for the last
        year of the term shall survive the termination of the Lease."

3.      CONDITION OF PREMISES. Landlord shall have no obligation to improve or
        otherwise alter the Premises in connection with the extension of the
        term under Amendment No. 1. Landlord shall reimburse Tenant for its cost
        to complete repainting, carpet replacement and cleaning and other work
        within the Premises with the Landlord's reimbursement not exceeding
        $58,804. Landlord will reimburse Tenant within 30 days following
        Tenant's submittal of copies of Tenant's receipted invoices covering the
        renovation work, together with evidence of lien-free completion.
        Landlord's obligation to reimburse Tenant for the renovation work will
        expire December 31, 2002.

4.      LANDLORD'S WORK. During calendar year 2003 Landlord, at Landlord's
        expense, will replace ten (10) air conditioning package units serving
        their premises, specifically air conditioning unit No. 1 located at 965
        Atlantic Avenue and air conditioning units No. 1 through 3, 9, 10 and 12
        through 14 located at 2020 Challenger Drive, with new air conditioning
        package units. Landlord's replacement of the package units will be done
        in compliance with applicable codes.

5.      OPTION TO EXTEND TERM.

        a. Tenant shall have the option to extend the term of the Lease for a
        period of five (5) years (the "Option Period") from January 1, 2007 to
        December 31, 2011 subject to the following conditions:

                i.      At the time the option is exercised and as of the
                        commencement of the Option Period, the Lease shall be in
                        full force and effect, Tenant shall not be in default
                        thereunder and Tenant shall not have assigned the Lease
                        or sublet the premises; and

                ii.     The option to extend the term must be exercised, if at
                        all, by notice given to Landlord not earlier than
                        January 1, 2006 or no later than March 31, 2006.

        b. In the event the option is timely and effectively exercised the term
        of the Lease shall be extended for the Option Period upon all of the
        terms and conditions of the Lease; provided,

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        however, the monthly Base Rent during the Option Period shall be the
        then fair market rent of the premises, but in no event less than the
        Base Rent for December 2006. Determination of the fair market rent shall
        be as follows:

                i.      For the purposes hereof, the fair market rent of the
                        premises during the option. Shall be the product of the
                        monthly rental rate per square foot of rentable area
                        then prevailing for comparable space in the City of
                        Alameda that is then being offered for lease to
                        prospective tenants multiplied by the rentable area of
                        the premises. Fair market rent may include periodic
                        increases. Within 30 days prior to commencement of the
                        Option Period, Landlord shall provide Tenant with
                        Landlord's determination of fair market rent. Tenant may
                        dispute Landlord's determination of fair market rent by
                        notice given to Landlord within 15 days after Landlord's
                        determination is given to Tenant and Landlord and the
                        parties shall then negotiate in good faith to resolve
                        the dispute. If such dispute is not resolved by
                        negotiation between the parties within 30 days, then
                        fair market rent shall be determined by appraisal. If
                        Tenant does not timely dispute Landlord's determination,
                        then the amount determined by Landlord shall be the fair
                        market rent. If fair market rent has not been determined
                        prior to the commencement of the Option Period, Tenant
                        shall pay monthly Base Rent when due based upon
                        Landlord's determination of fair market rent, subject to
                        retroactive adjustment between the parties if the
                        determination by appraisal is different from Landlord's
                        determination.

                ii.     When fair market rent is to be determined by appraisal,
                        within 10 days after the expiration of the 30-day
                        negotiation period, Landlord and Tenant shall each
                        appoint as an appraiser, a real estate appraiser with at
                        least ten years of experience in appraising commercial
                        real property in Alameda County, and give notice of such
                        appointment to the other. If either Landlord or Tenant
                        shall fail to appoint an appraiser within 10 days after
                        receiving notice of the identity of the other party's
                        appointed appraiser, then the single appraiser appointed
                        shall be the sole appraiser and determine the fair
                        market rent of the premises. In the event each party
                        appoints an appraiser, such appraisers shall, within 30
                        days after the appointment of the last of them to be
                        appointed, complete their determinations of fair market
                        rent and furnish the same to Landlord and Tenant. If the
                        low appraisal varies from the higher appraisal by 5% of
                        the lower appraisal, or less, the fair market rent shall
                        be the average of the two valuations. If the low
                        appraisal varies from the high appraisal by more than
                        5%, the two appraisers shall, within 10 days after
                        submission of the last appraisal report, appoint a third
                        appraiser who shall meet the qualifications set forth in
                        this paragraph. If the two appraisers shall be unable to
                        agree on the selection of a third appraiser in a timely
                        manner then either Landlord or Tenant may request such
                        appointment by the presiding judge of the Superior Court
                        of Alameda County. The third appraiser, however
                        selected, shall be a person who has not previously acted
                        in any capacity for or against either party. Such third
                        appraiser shall, within 30 days after appointment, make
                        a determination of fair market rent and said third
                        appraiser shall select the opinion of fair market rent
                        as determined by the one appraisal, completed by the two
                        appraisers, which most closely matches the third
                        appraiser's opinion of fair market rent. The fair market
                        rent for the premises shall be the fair market rent
                        selected by said third appraiser. All fees and costs of
                        the third appraiser in connection with the determination
                        of fair market rent by appraisal shall be paid one-half
                        by Landlord and one-half by Tenant. Prior to the
                        commencement of the Option Period or if an appraisal is
                        required, as soon thereafter as is practical, Tenant and
                        Landlord shall execute an amendment to this Lease
                        setting forth the monthly Base Rent amounts during the
                        Option Period and the revised date for term expiration.

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6.      RATIFICATION. Landlord and Tenant hereby ratify and confirm all of the
        terms of the Lease as modified by paragraph 1 through 5 above. Except as
        expressly set forth to the contrary in this Amendment, the Lease, as
        amended, remains unmodified and in full force and effect. To the extent
        of any conflict between the terms of this Amendment and terms of the
        Lease, the terms of this Amendment shall control.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 of
the date first set forth above.

TENANT:                             LANDLORD:

INSITE VISION INCORPORATED,         ALAMEDA REAL ESTATE INVESTMENTS,
a Delaware corporation              a California limited partnership

                                    By: Vintage Alameda Investments, LP
                                        a California limited partnership,
                                        operating general partner

                                        By: Vintage Properties-Alameda
                                            Commercial,
                                            a California corporation,
                                            managing general partner

By:                                          By:
  ---------------------------                   --------------------------------

Title:                                       Title: President
      -----------------------

                                       4<PAGE>
                                                                   EXHIBIT 10.37

          AMENDMENT NO. 1 TO IDENTIX INCORPORATED EMPLOYMENT AGREEMENT

        This Amendment No. 1 to Identix Incorporated Employment Agreement is
dated as of August 22, 2001 (the "Amendment") by and between Identix
Incorporated, a Delaware corporation ("Identix" or the "Company"), and Robert
McCashin ("Employee").

        WHEREAS, Identix and Employee entered into that certain Identix
Incorporated Employment Agreement dated as of October 19, 2000 (the "Agreement")
and desire in accordance with Section 5.11 of the Agreement to make certain
amendments thereto;

        NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto hereby agree as follows:

        1. New Section 2.1(j). A new Section 2.1(j) shall be inserted into the
Agreement as follows:

               "(j) "Change in Control" shall mean the occurrence of any one of
the following: (i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Identix, a subsidiary, an affiliate, or an Identix employee benefit
plan, including any trustee of such plan acting as a trustee) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Identix representing fifty percent (50%) or more
of the combined voting power of Identix' then outstanding securities; (ii) the
election to a majority of the seats of the Board of Directors of Identix of
candidates who were not proposed by a majority of the Board in office prior to
the time of such election; or (iii) the dissolution or liquidation (partial or
total) of Identix or a sale of assets involving fifty percent (50%) or more of
the assets of Identix (other than the disposition of a subsidiary) or other
transaction or series of related transactions pursuant to which the holders, as
a group, of all of the shares of Identix outstanding prior to the merger,
reorganization or other transaction hold, as a group, less than fifty percent
(50%) of the shares of Identix outstanding after the merger, reorganization or
other transaction."

        2. Amended Section 2.6. Section 2.6 of the Agreement is hereby amended
to read in its entirety as follows:

               "2.6. EXERCISE OF STOCK OPTIONS. Subject to the following
sentence, upon any termination of employment, all stock options granted to
Employee by the Company which are then exercisable, shall be exercisable for 90
days following termination, and the Company shall be entitled to exercise any
applicable right of repurchase for ninety (90) days following termination. Upon
the effective date of any Termination Other Than For Cause or Resignation for
Good Reason, all options to purchase Common Stock granted to Employee by the
Company shall fully vest (to the extent not yet vested) and be exercisable
immediately and any applicable Company right of repurchase shall lapse
immediately, and notwithstanding any provision of any relevant

<PAGE>

stock option agreement or stock option plan to the contrary, Employee shall have
12 months from the effective date of termination to exercise any such options.
If Employee has exercised any such options pursuant to Section 3.2(b) through
use of a promissory note, such note shall be due and payable in full within
ninety (90) days following termination, except in the event of a Termination
Other Than For Cause or Resignation for Good Reason, in which case such note
shall be due and payable within twelve (12) months following termination.

        3. New Section 6. A new Section 6 shall be inserted into the Agreement
as follows:

               "6. Change in Control. If a Change in Control shall have occurred
during the term of this Agreement, in addition to any rights Employee may have
under applicable stock option plans and/or stock option agreements with the
Company, the following shall apply:

                                    (a) If the Change in Control occurs prior to
that date which is 12 months before the expiration date of this Agreement as set
forth in Section 5.3, then the term of this Agreement shall not be changed.

                                    (b) If the Change in Control occurs on or
after that date which is 12 months before the expiration date of this Agreement
as set forth in section 5.3, then the term of this Agreement shall be extended
to the first anniversary of the Change in Control.

                                    (c)(i) If there is a Termination Other Than
For Cause or Resignation for Good Reason within one year after a Change in
Control, and if any of the payments or benefits received or to be received by
the Employee in connection with a Change in Control or Employee's termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with Identix) (all such payments and benefits,
excluding the Gross-Up Payment, being hereinafter referred to as the "Total
Payments") will be subject to the excise tax (the "Excise Tax") imposed under
Section 4999 of the Internal Revenue Code of 1986, as amended from time to time
(the "Code"), Identix shall pay, at the time specified in Section 2.6(b)(iv), to
the Employee an additional amount (the "Gross-Up Payment") such that the net
amount retained by the Employee, after deduction of any Excise Tax on the Total
Payments and any Federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment, shall be equal to the Total Payments.

                                    (ii) For purposes of determining whether any
of the Total Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (A) all of the Total Payments shall be treated as "parachute
payments" (within the meaning of Section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel ("Tax Counsel") reasonably acceptable to the Employee and
selected by the accounting firm which was, immediately prior to the Change in
Control, Identix' independent auditor (the "Auditor"), such payments or benefits
(in whole or in part) should not be treated by the courts as constituting
parachute payments, including by reason of Section 280G(b)(4)(A)

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of the Code, (B) all "excess parachute payments" within the meaning of Section
280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in
the opinion of Tax Counsel, such excess parachute payments (in whole or in part)
should be treated by the courts as representing reasonable compensation for
services actually rendered (within the meaning of Section 280G(b)(4)(B) of the
Code), or are otherwise not subject to the Excise Tax, and (C) the value of any
noncash benefits or any deferred payment or benefit shall be determined by the
Auditor in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. All fees and expenses of the Tax Counsel and the Auditor shall be borne
solely by Identix.

                                    (iii) For purposes of determining the amount
of the Gross-Up Payment, the Employee shall be deemed to pay Federal income tax
at the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Employee's
residence in the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes, taking into account the reduction in
itemized deduction under Section 68 of the Code.

                                    (iv) The Gross-Up Payment shall be made upon
the payment to the Employee of the Total Payments, unless it is initially
determined by Identix or the Tax Counsel that the Total Payments are not subject
to the Excise Tax but after payment of the Total Payments, it is finally
determined following the proceedings set forth in Section 2.6(b)(v) and (vi)
that the Total Payments are subject to the Excise Tax, in which case it shall be
made upon the imposition upon the Employee of the Excise Tax.

                                    (v) The Employee shall notify Identix in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by Identix of a Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten (10) business days after the
Employee is informed in writing of such claim and shall apprise Identix of the
nature of such claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to the expiration of the thirty (30)
day period following the date on which the Employee gives such notice to Identix
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If Identix notifies the Employee in writing prior
to the expiration of such period that it desires to contest such claim, the
Employee shall:

                      A) give Identix any information reasonably requested by
Identix relating to such claim;

                      B) take such action in connection with contesting such
claim as Identix shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by Identix and reasonably
satisfactory to the Employee;

                      C) cooperate with Identix in good faith in order to
effectively contest such claim; and

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                      D) permit Identix to control any proceedings relating to
such claim as provided below;

provided, however, that Identix shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Employee harmless, on an after-tax
basis, for any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.

                                    (vi) Identix shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Employee agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as Identix
shall determine; provided, however, that if Identix directs the Employee to pay
such claim and sue for a refund, Identix shall advance the amount of such
payment to the Employee on an interest-free basis, and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or other tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided, further, that if the Employee is required to extend the statute of
limitations to enable Identix to contest such claim, the Employee may limit this
extension solely to such claim. Identix' control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder
and the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority. In addition, no position may be taken nor any final resolution be
agreed to by Identix without the Employee's consent if such position or
resolution could reasonably be expected to adversely affect the Employee
(including any other tax position of the Employee unrelated to the matters
covered hereby).

                                    (vii) In the event that the Employee
receives a refund of the Excise Tax previously paid, the Employee shall repay to
Identix, within five (5) business days following the receipt of such refund of
the Excise Tax previously paid, the amount of such refund plus any interest
received by the Employee from the Internal Revenue Service on the refund, and an
amount equal to the reduction in the Employee's Federal, state and local income
tax assuming that the repayment is deductible, using the assumptions set forth
in Section 2.6(b)(iii). If, after the receipt by the Employee of an amount
advanced by Identix in connection with an Excise Tax claim, a determination is
made that Employee shall not be entitled to any refund with respect to such
claim and Identix does not notify the Employee in writing of its intent to
contest the denial of such refund prior to the expiration of thirty (30) days
after such determination, such advance shall be forgiven and shall not be
required to be repaid."

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        4. Effect. Except as expressly provided herein, the Agreement has not
been amended or modified and, as amended hereby, shall remain in full force and
effect.

        5. Counterparts. This Amendment may be executed in duplicate
counterparts, each of which shall be deemed to be an original.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.

IDENTIX INCORPORATED                EMPLOYEE

By /s/ Patrick H. Morton             By /s/ Robert McCashin
  ------------------------             -----------------------
  Name: Patrick H. Morton             Name: Robert McCashin
  Title: Chairman of the
         Compensation Committee
         of the Board of Directors
                                      5

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