Document:

Form of Warrant issued in April and June 2003

  
 
Exhibit 10 (d) 
  
 THIS WARRANT AND THE SECURITIES
ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR UNLESS (i) SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS
AND (ii) THE COMPANY, IF IT SO REQUESTS, HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 ISSUED:                      
  
 HOLDER:
                     
  
 WARRANT FOR THE 
 PURCHASE
OF SHARES OF COMMON STOCK 
 OF 
 SI TECHNOLOGIES, INC. 
  
 THIS CERTIFIES THAT, for valuable consideration, that the undersigned, together with his successors and permitted assigns (the “Holder”) is entitled to purchase, subject to the terms set forth below, up to that number of shares of
duly authorized, validly issued, fully paid and nonassessable shares of common stock, $.01 par value per share (the “Common Stock”) of SI Technologies, Inc., a Delaware corporation (the “Company”), as is equal to one (1) share of
Common Stock for each two and one-half (2-1/2) shares of Common Stock of the Company purchased by the Holder in connection with that certain Subscription Agreement to purchase Common Stock dated
                    among the Company and the Holder (the “Subscription Agreement”). 
  
 1. Exercise of Warrant. The terms and conditions upon which this
Warrant may be exercised, and the Common Stock covered hereby may be purchased, are as follows: 
  

	 	(a)	Term. Subject to the terms hereof, the purchase right represented by this Warrant may be exercised in whole or in part, but not as to a fractional share of Common Stock, at
any time and from time to time until the close of business on                     , the fifth anniversary hereof. 

  

	 	(b)	Number of Shares. The number of shares of Common Stock for which this Warrant is initially exercisable is amount set forth above the Holder’s signature which number is
subject to adjustment pursuant to Section 2 of this Warrant. 

  

	 	(c)	Purchase Price. The per share purchase price for the shares of Common Stock to be issued upon exercise of this Warrant shall be equal to two dollars and fifty cents ($2.50)
per share (the “Warrant Price”). 

  

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	 	(d)	Method of Exercise. The exercise of the purchase rights evidenced by this Warrant shall be effected by (a) the surrender of the Warrant, together with a duly executed copy of
the form of a subscription attached hereto, to the Company at its principal offices at 14192 Franklin Avenue, Tustin, California 92780 (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the
address of the Holder appearing on the books of the Company) and (b) the delivery of the purchase price in an amount equal to the number of shares for which the purchase rights hereunder are being exercised multiplied by the Warrant Price, which
amount may be paid by cashier’s check payable to the Company’s order or by wire transfer to the Company’s account. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the
day on which this Warrant shall have been surrendered to the Company together with the purchase price as provided herein or at such later date as may be specified in the executed form of subscription, and at such time the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall be issuable upon such exercise as provided herein shall be deemed to have become the holder or holders of record thereof. 

  

	 	(e)	Exercise by Exchange. (Cashless Exercise) In addition to and without limiting the rights of the Holder under the terms hereof, at the Holder’s option, and if approved by
the Company, this Warrant may be exercised during the term specified under Section 1(a) by being exchanged in whole or in part prior to its expiration for a number of shares of Common Stock having an aggregate fair market value on the date of such
exercise equal to the difference between (x) the fair market value of the number of shares of Common Stock subject to this Warrant designated by the Holder hereof on the date of the exercise and (y) the aggregate Warrant Price for such shares in
effect at such times. The following formula illustrates how many shares would then be issued upon exercise pursuant to this Section 1(e): 

  

							
				
	Let:	  	FMV	  	=	  	Fair market value per share of Common Stock at date of exercise.
				
	 	  	WP	  	=	  	Warrant Price at date of exercise.
				
	 	  	N	  	=	  	Number of shares desired to be exercised.
				
	 	  	X	  	=	  	Number of shares issued upon exercise.
				
	Therefore:	  	X	  	=	  	(FMV)(N)-(WP)(N)
	 	  	 	  	 	  	   FMV

  
 Upon any such
exercise, the number of shares of Common Stock purchasable upon exercise of this Warrant shall be reduced by such designated number of shares of Common Stock and, if a balance of purchasable shares of Common Stock remains after such exercise, the
Company shall execute and deliver to the Holder hereof a new warrant for such balance of shares of Common Stock. 
  
 No payment to the Company of any cash or other consideration shall be required from 

  

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the Holder of this Warrant in connection with any exercise of this Warrant by exchange pursuant to this Section 1(e). Such exchange shall be effective upon
the date of receipt by the Company of the original Warrant surrendered for cancellation and a written request from the Holder hereof that the exchange pursuant to this section be made, or at such later date as may be specified in such request.

  
 For the purposes of this Warrant, the “fair market
value” of any number of shares of Common Stock shall mean: 
  
 (i) as long as the Common Stock is traded on Nasdaq or the Nasdaq National Market or on the Over-The-Counter Bulletin Board (or equivalent recognized source of quotations), an amount equal to the average of the high
and low reported trading prices of one share of such securities for the three (3) trading days prior to the surrender of this Warrant for exchange in accordance with the terms hereof. 
  
 (ii) in all other cases, the fair value as determined in good faith by the Board of Directors of the Company
and reasonably agreed to by the Holder. 
  

	 	(f)	Issuance of Shares. As soon as reasonably practicable after each exercise of this Warrant, in whole or in part, the Company at its expense will cause to be issued in the name
of and delivered to the Holder hereof or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct, 

  
 (i) a certificate or certificates for the number of duly authorized validly issued, fully paid and nonassessable shares of Common Stock to
which such Holder shall be entitled upon such exercise, and 
  
 (ii) in case such exercise is in part only, a new warrant or warrants of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Common Stock (without giving effect to any
adjustment thereof) to the number of such shares called for on the face of this Warrant minus the number of such shares designated by the Holder upon such exercise as provided herein. 
  
 2. Certain Adjustments. 
  
 (a) Mergers, Consolidations or Sale of Assets. If at any time after the date hereof while this Warrant remains outstanding and
unexpired there shall be a capital reorganization (other than a combination or subdivision of Common Stock otherwise provided for herein), or a merger or consolidation of the Company with or into another corporation, or the sale of the
Company’s properties and assets as, or substantially as, an entirety to any other person, then, as a part of such reorganization, merger, consolidation or sale, lawful provision shall be made so that the Holder shall thereafter be entitled to
receive upon exercise of this Warrant, during the period specified in this Warrant and upon payment of the purchase price, the number of shares of stock or other securities, cash or property of the Company or the successor corporation resulting from
such reorganization, merger, consolidation or sale, to which a Holder of the Common Stock deliverable upon exercise of this Warrant would have been entitled under the provisions of the agreement in such reorganization, merger, consolidation or sale
if this Warrant had been exercised immediately before that reorganization, merger, consolidation or sale. In any such case, appropriate adjustment (as determined reasonably and in good faith by the 

  

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Company’s Board of Directors) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder
after the reorganization, merger, consolidation or sale to the end that the provisions of this Warrant (including adjustment of the Warrant Price then in effect and the number of shares of Common Stock) shall be applicable after that event, as near
as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of this Warrant. 
  
 (b) Splits and Subdivisions; Dividends. In the event the Company should at any time or from time to time while this Warrant remains
outstanding and unexpired effect or fix a record date for the effectuation of a split or subdivision of the outstanding shares of its Common Stock or the determination of the holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or warrants, options or other rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as the “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of distribution, split or subdivision if no record date is fixed), the per share Warrant Price shall be appropriately increased in proportion to such increase (or potential
increase) of outstanding shares. 
  
 (c)
Combination of Shares. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, the per share purchase price shall be appropriately
increased and the number of shares of Common Stock shall be appropriately decreased in proportion to such decrease in outstanding shares. 
  
 (d) Adjustments for Other Distributions. In the event the Company, while this Warrant shall remain outstanding and unexpired, shall
declare a distribution payable in securities of the Company (other than Common Stock Equivalents) or other persons, evidences of indebtedness issued by the Company or other persons, assets (including cash dividends) or options or rights not referred
to in subsection 2(b), then, in each such case for the purpose of this subsection 2(d), upon exercise of this Warrant the Holder hereof shall be entitled to a proportionate share of any such distribution as though such Holder was the Holder of the
number of shares of Common Stock into which this Warrant may be exercised as of the record date fixed for the determination of the holders of securities of the Company entitled to receive such distribution. 
  
 (e) Certificate as to Adjustments. In the case of
each adjustment or readjustment of the Warrant Price pursuant to this Section 2, the Company at its expense will promptly compute such adjustment or readjustment in accordance with the terms hereof and cause a certificate, signed by the
Company’s principal financial officer, setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based to be delivered to the Holder of this Warrant. The Company will furnish or
cause to be furnished to such Holder a certificate setting forth: 
  
 (i) Such adjustments and readjustments; 
  

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 (ii) The purchase price at the time in effect and how it was calculated; and 

 
 (iii) The number of shares of Common Stock and the
amount, if any, of other property at the time receivable upon the exercise of the Warrant. 
  
 (f) Notices of Record Date, etc. In the event of: 
  
 (i) Any taking by the Company of a record of the holders of any class of securities of the Company for the
purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend payable at the same rate as that of the last such cash dividend theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right; or 
  
 (ii) Any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of assets of the Company to any other person or any consolidation or merger involving the Company; or 
  
 (iii) Any voluntary or involuntary dissolution, liquidation or winding-up of the Company; 
  
 the Company will mail to the Holder of this Warrant at least ten (10) business days prior to
the earliest date specified therein, a notice specifying: 
  
 (1) The date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right; and 
  
 (2) The date on which any such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or winding-up is expected to become effective and the record date for determining stockholders entitled to vote thereon and the time. 
  
 3. Fractional Shares. No fractional shares shall be issued in
connection with any exercise of this Warrant. In lieu of the issuance of such fractional share, the Company shall make a cash payment equal to the then fair market value of such fractional share as determined in good faith by the Company’s
Board of Directors. 
  
 4. No Privilege of Stock Ownership.
Prior to the exercise of this Warrant, the Holder shall not be entitled, by virtue of holding this Warrant, to any rights of a shareholder of the Company, including (without limitation) the right to vote, receive dividends or other distributions,
exercise preemptive rights or be notified of shareholder meetings, and such Holder shall not be entitled to any notice or other communication concerning the business or affairs of the Company. Nothing in this Section 4, however, shall limit the
right of the Holder to be provided the notices described in Section 2 hereof, or to participate in distributions described in Section 2 hereof if the Holder exercises this Warrant. 
  

 101 

 5. Limitation of Liability. Except as otherwise provided herein, in the absence of affirmative
action by the Holder hereof to purchase the Common Stock, no mere enumeration herein of the rights or privileges of the Holder hereof shall give rise to any obligation of such Holder to purchase any securities or any liability of such Holder for the
purchase price or as a shareholder of the Company, whether such obligation or liability is asserted by the Company or by creditors of the Company. 
  
 6. Representations and Warranties of the Holder. The Holder represents and warrants to the Company as follows: 
  

	 	(a)	Purchase Entirely for Own Account. This Warrant is made with the Holder in reliance upon such Holder’s representation to the Company, which by such Holder’s
execution of this Warrant such Holder hereby confirms, that the Warrant and Common Stock are being acquired for investment for such Holder’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the federal or state securities laws. 

  

	 	(b)	Investment Experience. The Holder represents that it can bear the economic risk of its investment and has such knowledge and experience in financial or business matters that
it is capable of evaluating the merits and risks of the investment in the Warrant and the Common Stock. If an entity, the Holder also represents it has not been organized solely for the purpose of acquiring the Warrant or the Common Stock.

  

	 	(c)	Restricted Securities. The Holder understands that the Warrant being issued hereunder and the Common Stock to be purchased hereunder are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such laws and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the “Securities Act”), only in certain limited circumstances. In this connection, the Holder represents that it is familiar with Securities and Exchange Commission Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 

  

	 	(d)	Legends. It is understood that the certificates evidencing the Common Stock may bear a legend substantially in the following form: 

  
 “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS (COLLECTIVELY, THE “SECURITIES LAWS”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES LAWS (i) UNLESS SOLD PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES LAWS AND (ii) THE COMPANY, IF IT SO REQUESTS, HAS RECEIVED AN 

  

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OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.” 
  
 In addition, the certificates evidencing the Common Stock may bear any legend required by the
Company’s charter documents or the laws of the State of Washington and any other state in which the securities will be issued. 
  
 7. Transfers and Exchanges. 
  

	 	(a)	The Holder may not sell, hypothecate, pledge or otherwise dispose of any interest in the Warrant or the Common Stock unless such transfer would not violate any provision of this
Section 7. 

  

	 	(b)	Subject to the conditions of this Section 7, upon delivery to the Company of a duly completed and executed Assignment in substantially the form attached hereto, a new warrant shall
be issued to the transferee therein named. All new warrants issued in connection with transfers or exchanges shall not require the signature of the new Holder hereof and shall be identical in form and provision to this Warrant except as to the
number of shares. 

  

	 	(c)	It shall be a condition to any transfer of this Warrant that the transferee shall be an accredited investor, within the meaning of the Securities Act, and that the Company shall
have received, at the time of such transfer or exercise (i) a representation letter, or at the option of the Company, a legal opinion, in form and substance reasonably satisfactory to the Company and its counsel, reciting the pertinent circumstances
surrounding the proposed transfer and stating that such transfer is exempt from the prospectus and registration requirements of the Securities Act and applicable state securities laws and (ii) a statement in writing from, and signed by, any proposed
transferees containing the same representations and warranties as set forth in Section 6 hereof and agreeing to be bound by the provisions of this Section 7, such statement to be in the form of Assignment attached hereto. Notwithstanding the
foregoing, as long as the transfer of this Warrant is in compliance with applicable securities laws and there are no significant issues of fact (such as whether or not the Holder is an “affiliate,” as such term is defined in Rule 144 of
the Securities Act) or unusual questions of law, the requirement of a representation letter or legal opinion shall not apply to (a) the transfer of this Warrant or any part thereof to a partnership of which the Holder is a partner or to the
beneficial owners or affiliates of such partnership, (b) the transfer of this Warrant or any part thereof to beneficial owners, employees or affiliates of the Holder, (c) bona fide gifts to a member of a Holder’s immediate family or trustee for
a member of a Holder’s immediate family, (d) transfers by will upon the death of a Holder, or (e) transfers pursuant to a divorce or dissolution of the marriage of a Holder. 

  

	 	(d)	Ownership of Warrants. The Company may treat the person in whose name any Warrant is registered on the register kept by the Company or its transfer agent as the owner and
Holder thereof for all purposes, notwithstanding any notice to the contrary. A Warrant, if properly assigned, may be exercised by a new Holder without a new Warrant first having been issued. Nothing in this Section 7(d) shall relieve the Holder of
his obligations under Section 7(c) hereof. 

  

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 8. Successors and Assigns. The terms and provisions of this Warrant shall be binding upon the
Company and the Holder and their respective successors and assigns, subject at all times to the restrictions set forth herein. 
  
 9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of evidence reasonably satisfactory to it and its counsel of the
loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to the Company, and upon reimbursement to the Company of all reasonable expenses incidental thereto,
and upon surrender and cancellation of this Warrant, if mutilated, the Company will make and deliver a new warrant of like tenor and dated as of such cancellation, in lieu of this Warrant. 
  
 10. Saturdays, Sundays, Holiday, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted herein shall be a Saturday or Sunday or shall be a legal holiday in the State of Washington, then such action may be taken or such right may be exercised on the next
succeeding day not a Saturday, Sunday or legal holiday. 
  
 11.
Amendments and Waivers. Any term of this Warrant may be amended and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written
consent of the Company and the Holder. Any such amendment or waiver shall be binding on the parties. 
  
 12. Governing Law. The terms and conditions of this Warrant shall be governed by and construed in accordance with the law of the State of
California, without regard to conflict of law provisions. 
  
 13.
Notices. All notices and other communications under this Warrant shall be in writing and shall be delivered in person, via facsimile machine, sent by documented overnight delivery service, or mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed (a) if to any Holder of any Warrant, at the registered address of such Holder as set forth in the register kept at the principal office of the Company, or (b) if to the Company, to the attention of its
President or Chief Financial Officer at its principal offices, provided that the exercise of any Warrant shall be effected in the manner provided in Section 1. Unless otherwise specified in this Warrant, all such notices and other written
communications shall be effective (and considered delivered and received for the purposes of this Agreement) (i) if delivered, upon delivery, (ii) if by facsimile machine during normal business hours upon transmission with confirmation of receipt by
the receiving party’s facsimile terminal and if not sent during normal business hours, then on the next day, (iii) if sent by documented overnight delivery service, on the date following the date on which such notice is delivered to such
overnight delivery service for mailing, or (iv) if mailed via first-class regular mail, three (3) day after depositing in the U.S. Mail. 
  

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 IN WITNESS WHEREOF, the parties have executed this Warrant effective as of the date first written above.

  

			
	 THE COMPANY:
  
 SI TECHNOLOGIES, INC.,
 a Delaware corporation

		
	By:	 	 
	 Name:
	 	R. A. Beets, President and Chief Executive Officer
	 Address:
	 	 14192 Franklin Avenue Tustin, CA 92780

	 Facsimile:
	 	 (714) 573-2034

	  
 Number of
shares for which this warrant is exercisable:
  

	  
 HOLDER:

	
	 
	
	 
		
	By:	 	 
		
	 Address:
	 	 
		
	 Facsimile:
	 	 

  

 105 

 SUBSCRIPTION 
  
 SI Technologies, Inc. 
 14192 Franklin Avenue 
 Tustin, CA 92780 
  
 Ladies and Gentlemen: 
  
 The
undersigned,                     hereby elects to purchase, pursuant to the provisions of the Warrant dated
                    , held by the undersigned,
                    shares of Common Stock of SI Technologies, Inc., a Delaware corporation, and tenders herewith payment of the purchase
price of such shares in full. 
  
 The undersigned hereby confirms
and acknowledges the investment representations and warranties made in Section 6 of the Warrant and accepts such shares subject to the restrictions of the Warrant, copies of which are available from the Secretary of the Company. 
  

									
					
	 Date:
	 	 	 	 	 	By:	 	 
					
	 	 	 	 	 	 	 	 	 
					
	 	 	 	 	 	 	 Address:
	 	 

  

 [FORM OF ASSIGNMENT] 
  
 The undersigned hereby assigns this Warrant to 
  
 _________________________________________________________________ 
  
 _________________________________________________________________ 
  
 _________________________________________________________________ 
 (Print or type name, address and zip code of assignee) 
  
 Please insert
Social Security or other identifying number of assignee: 
  
 _________________________ 
  
 and irrevocably appoints
                     as agent to transfer this Warrant on the books of the Company. The agent may substitute another to act for him or it.

  
 Date:
                     
  
 Signed: 
  

 (Sign exactly as name appears on the front of this Warrant) 
  
 The undersigned assignee hereby confirms and acknowledges the investment representations and warranties made in Section 6 of the Warrant and agrees to be
bound by the obligations set forth in the Warrant, copies of which are available from the Secretary of the Company. 
  

											
					
	 Date:
	 	 	 	 	 	By:	 	 
						
	 	 	 	 	 	 	 	 	Name:	 	 
						
	 	 	 	 	 	 	 	 	Title:	 	 

  

 - 107 -Change of Control Agreement dated September 10, 2004

  
 
Exhibit 10 (e) 
  
 SI TECHNOLOGIES,
INC. 
  
 CHANGE IN CONTROL AGREEMENT 
  
 THIS AGREEMENT is made by and between SI Technologies, Inc., a Delaware
corporation (the “Company”), and Marvin Moist (the “Employee”), as of September 10, 2004 (the “Effective Date”), with reference to the following facts: 
  
 The Company may engage from time to time in discussions concerning transactions which
could result in a change in control of the Company through a merger, sale of stock or assets, or otherwise. 
  
 These discussions and the attendant uncertainties caused by such discussions may have an unsettling effect on key management employees. 
  
 It is in the best interests of the Company that such key management employees, including
Employee, do not terminate employment as a result of such uncertainties but continue to be employed by the Company and, if a transaction is approved by the Board, assist in completing a transaction. 
  
 The Board believes that these key management employees are more likely to remain with the
Company notwithstanding these uncertainties if the Company agrees to provide to them severance compensation if their employment terminates following a Change in Control. 
  
 The Board has also determined that it would be in the best interests of the Company to preclude key employees from competing with the
Company should their employment terminate after a Change in Control. 
  
 As
further consideration for the agreement to provide severance compensation, this Agreement also includes certain restrictive covenants by which the Employee agrees to refrain for a certain time from competition with the Company, from disclosure of
confidential information the Employee possesses concerning the Company, and from any interference with relationships between the Company and other employees and persons and organizations doing business with the Company. 
  
 Such restrictive covenants and the availability to the Company of the services of the
Employee after the date hereof are important considerations in the Company’s decision to provide the severance benefits under this Agreement, and the Company is unwilling to provide the benefits set forth below to Employee unless Employee
executes and delivers this Agreement to the Company. 
  
 NOW,
THEREFORE, in consideration of the mutual covenants and conditions herein contained and in further consideration of services performed and to be performed by the Employee for the Company, the parties hereto agree as follows: 
  

	 	1.	Definitions 

  
 For purposes of this Agreement (including the Recitals), the following terms shall have the meanings set forth below: 
  

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 “Applicable Period” shall equal six months. 
  
 “Board” shall mean the Board of Directors of the Company.

  
 “Cause” shall mean: 
  
 the willful and continued failure by the Employee to substantially perform his material
duties (other than any such failure resulting from the Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a notice of termination by the Employee for Good Reason); or the
willful engaging by the Employee in misconduct which is materially injurious to the Company, monetarily or otherwise; or the material breach by Employee of his obligations under this Agreement. 
  
 No act, or failure to act, on the Employee’s part shall be considered
“willful” unless done or omitted to be done by him not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. 
  
 “Change in Control” of the Company shall occur if: 
  
 any person (as defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than
an Excluded Person, becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated pursuant to the Exchange Act), directly or indirectly, of 35% or more of combined voting power of the Company’s then outstanding securities; the
occurrence within any 12-month period during the term of this Agreement of a change in the Board with the result that the Incumbent Members do not constitute a majority of the Board; the occurrence of any merger, consolidation, reorganization
involving the Company, other than, in the case of any of the foregoing, a transaction in which the shareholders of the Company immediately prior to the transaction hold immediately thereafter, in substantially the same proportion as immediately
prior to the transaction, more than 50% of the combined voting power of the then outstanding securities of the resulting entity; or the occurrence of the sale or other disposition of all or substantially all of the Company’s assets (including a
plan of liquidation). 
  
 “Disability” shall mean
the Employee’s inability to substantially perform his material duties on a full-time basis for 12 consecutive months due to physical or mental illness, if within 30 days after notice of termination is thereafter given by the Company the
Employee shall not have returned to the full-time performance of the Employee’s duties; provided, however, that if Employee shall not agree with a determination to terminate him because of Disability, the question of
Employee’s ability shall be subject to the certification of a qualified medical doctor agreed to by the Company and the Employee or, in the event of the Employee’s incapacity to designate a doctor, the Employee’s legal representative.
In the absence of agreement between the Company and the Employee, each party shall nominate a qualified medical doctor and the two doctors shall select a third doctor, who shall make the determination as to Disability. 
  
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended (or any successor provision). 
  
 “Excluded
Person” shall mean: (i) Ralph Crump, Scott Crump, members of their immediate families, and/or any entity of which the foregoing own beneficially 35% or more of the combined voting power of such entity’s outstanding voting
securities; (ii) any person (as defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act) who at the date of this Agreement is the beneficial owner of 35% or more of the combined voting power of the Company’s outstanding securities at this
date; (iii) any Company employee benefit plan; (iv) any entity the shares of which are held by the 

  

 - 109 - 

 
Company’s shareholders in substantially the same proportion as they held the Company’s stock; and (v) any testamentary trust or estate.

  
 “Good Reason” shall mean termination for one or
more of the following reasons: 
  
 a demeaning or a material adverse
involuntary change in Employee’s duties, status, title or position as an employee or officer of the Company, such as the removal of the Employee as an officer, manager, etc., which position the Employee held at the time of the Change in
Control. For purposes of this section, the fact that the Company is a subsidiary of an acquirer or a division of an acquirer shall not in and of itself be considered a material change to the Employee’s duties, status, title or position and any
change in titles to make such title consistent with those of an acquirer shall not in and of itself be considered a material change to the Employee’s duties, status, titles or position; or a reduction by the Company in the Employee’s base
salary as in effect on the date hereof or as the same may be increased from time to time during the term of this Agreement; or a transfer of the Employee’s place of work to a location which is more than 50 miles from the Employee’s place
of work at the time of the Change in Control; or any failure by the Company to provide the Employee with the number of paid personal leave days or vacation or sick days to which the Employee is entitled at the time of a Change in Control; or any
material breach by the Company of any provision of this Agreement; or any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company. 
  
 “Incumbent Members” shall mean, in respect of any 12-month period, the members of the Board on the date
immediately preceding the commencement of such 12-month period, provided that any person becoming a Director during such 12-month period whose election or nomination for election was approved by a majority of the Directors who, on the date of such
election or nomination for election, comprised the Incumbent Members, shall be considered one of the Incumbent Members in respect of such 12-month period. 
  

“IRC” shall mean the Internal Revenue Code of 1986, as amended (or any successor provision) and any Treasury Regulations issued
thereunder. 
  
 “Person” shall mean any individual,
firm, partnership, association, corporation, limited liability company, trust or other business organization, entity or enterprise. 
  
 “Severance Benefits” shall mean (i) salary continuation payments at the times at which the Company shall have paid salary to its employees
immediately prior to the Change in Control for the Applicable Period at a salary rate equal to the salary of Employee either at the Termination Date or the date of Change in Control, whichever is greater; and (ii) the provision to Employee and his
family during the Applicable Period (or such greater period of time as may be required by law) of all employee welfare benefit plans and perquisite programs in which the Employee was entitled to participate immediately prior to the Termination Date,
provided that the Employee’s continued participation is possible under the general terms and provisions of such plans and programs; if such participation in any such plan or program is barred, the Company shall, at its sole cost and expense,
arrange to provide, at the Company’s cost, the Employee with benefits substantially similar to those which the Employee would otherwise have been entitled to receive under such plans and programs from which his continued participation is
barred; the Company’s obligations hereunder shall be offset by any benefits the Employee receives from a new employer. 
  

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 “Termination Date” shall mean the date of termination of the Employee’s employment with
the Company. 
  
 Term 
  
 This Agreement shall commence on the Effective Date and shall continue in effect until
the earlier to occur of: 
  
 mutual consent of the Company and the
Employee; and not less than 12 months’ prior written notice from the Company to Employee, provided, however, that if a Change in Control occurs during the term of this Agreement, the termination of this Agreement shall not terminate any rights
of Employee which shall have vested prior to termination. 
  
 Severance
Compensation upon a Change in Control and Termination of Employment 
  
 If
(a) a Change in Control shall occur while the Employee is an employee of the Company, and (b) concurrently with or within one year following the Change in Control either (i) the Company shall terminate the Employee’s employment other than for
death, Disability, or Cause (it being understood that a purported termination for Disability or for Cause which is finally determined not to have been proper shall not be a termination for Disability or for Cause), or (ii) the Employee shall
terminate his employment for Good Reason, the Company shall provide the Employee with the Severance Benefits commencing on the Termination Date. 
  
 If (a) the Company terminates the Employee’s employment other than for death, Disability, or Cause, or Employee terminates his employment for Good Reason, during
the period beginning three months before and ending one year after the earlier of (i) public notice of a transaction that, if consummated, would constitute a Change in Control, (ii) a letter of intent regarding a transaction that, if consummated,
would constitute a Change in Control, or (iii) a definitive agreement regarding a transaction that, if consummated, would be a Change in Control, and (b) a Change in Control occurs during such one-year period, the Company shall provide the Employee
with the Severance Benefits commencing with the Change in Control. 
  
 Vesting of Stock Options on a Change in Control 
  
 Upon the occurrence of a Change in Control, the Company shall vest and make immediately exercisable all stock options granted by the Company to the Employee for the acquisition of the Company’s stock. 
  
 Limitation on Benefits 
  
 Notwithstanding any provision of this Agreement to the contrary, if it shall be determined that any benefit, payment or
distribution by the Company to or for the benefit of the Employee (whether payable or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would, if paid, be subject to the excise tax imposed by Section
4999 of the IRC (the “Excise Tax”), the Payment shall be reduced to the extent necessary to eliminate such Excise Tax, provided, however, that such reduction shall not apply to the extent that the Payment to the
Employee of any taxes, including, but not limited to, the excise tax under Section 4999, are, after applying the foregoing reduction, greater than the amount of the Payments net of tax if the foregoing reduction is not applied. The Employee may, to
the extent permitted by law, elect which Payment(s) will be reduced. 
  

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 Mitigation: No Effect on Other Contractual Rights; Cure Period 
  
 The Employee shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under Section 3 of this Agreement be reduced by any compensation earned by the Employee as the result of employment by
another Person after the Termination Date, or otherwise. 
  
 If the
Employee is engaged by the Company or an affiliate as a consultant on or after the Termination Date and during the Applicable Period, the amount payable under Section 3 of this Agreement shall be reduced by the amount paid to the Employee as a
consultant for services to the Company or an affiliate during the Applicable Period. 
  
 Except as expressly provided herein, the provisions of this Agreement, and any payment provided for hereunder, shall not reduce any amounts otherwise payable, or in any way diminish the Employee’s existing
rights, or rights which would accrue solely as a result of the passage of time, under any benefit plan, employment agreement or other contract, plan or arrangement. 
  
 The Company’s termination of the Employee’s employment shall not be deemed for Cause for purposes of this Agreement unless the
Company shall have first given the Employee written notice of the reasons the Company believes it may terminate the Employee’s employment for Cause and the Employee fails to cure the reasons for such termination for Cause within the 30-day
period following such written notice. During any 30-day notice period, the Employee may appeal any proposed termination for Cause to the employee of the Company to whom the Employee’s immediate supervisor or manager reports. If the
Employee’s immediate supervisor is the Chief Executive Officer of the Company, the Employee may appeal to the Board. 
  
 The Employee’s termination of his employment shall not be deemed for Good Reason for purposes of this Agreement unless the Employee shall have first given the
Company written notice of the reasons the Employee believes the Employee may terminate the Employee’s employment for Good Reason and the Company fails to cure the reasons for such termination for Good Reason within the 30-day period following
such written notice to the Company. 
  
 Assumption by Successor to the
Company 
  
 The Company shall require any successor or assign (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor or assign to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this Section 7 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. If at any time during the term of this 

  

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Agreement the Employee is employed by any corporation a majority of the voting securities of which is then owned by the Company,
“Company” as used in this Agreement shall in addition include such corporation. In such event, the Company agrees that it shall pay or shall cause such other company to pay any amounts owed to the Employee pursuant to Section 3
hereof. 
  
 This Agreement shall inure to the benefit of and be enforceable
by the Employee’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts are still payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Employee’s devisee, legatee or other designee or, if there be no such designee, to the Employee’s estate. 
  
 Company’s Right to Terminate Employment 
  
 Notwithstanding anything contained in this Agreement to the contrary, except
to the extent that the Employee has a written employment agreement with the Company which provides to the contrary, the Company may terminate the Employee’s employment at any time, for any reason or no reason, and no provision contained herein
shall affect the Company’s ability to terminate the Employee’s employment at any time, with or without Cause. Except as otherwise expressly provided herein, nothing herein shall in any way require the Company to provide any of the benefits
specified in this Agreement prior to a Change in Control, nor shall this Agreement be construed in any way to establish any policies or other benefits for the Employee or any other employee of the Company whose employment with the Company is
terminated prior to a Change in Control. 
  
 Documents; Confidentially;
Non-Compete Covenants 
  
 Definition. For purposes of this Section
9 the term “Company” shall include SI Technologies, Inc. and its subsidiaries. 
  
 Documents. Employee shall not (except in the performance of his duties for the Company) at any time or in any manner, make or cause to be made any copies, pictures, duplicates, facsimiles or other
reproductions or recordings or any abstracts or summaries of any reports, studies, memoranda, correspondence, manuals, records, plans or other written, printed or otherwise recorded materials of any kind whatever belonging to or in the possession of
the Company or of any affiliate of the Company or any customer or client of the Company. Employee shall have no right, title or interest in any such material, and Employee agrees that (except in the performance of his duties for the Company) he will
not, without the prior written consent of the Company, remove any material from the premises of the Company or any affiliate of the Company and that he will surrender all such material to the Company immediately upon the termination of his
employment or at any time prior thereto upon the request of the Company. 
  
 Proprietary Information, Confidentiality. Without the prior written consent of the Company (which may be withheld with or without reason), Employee shall not at any time (after the date hereof, whether during or after his
employment with the Company), directly or indirectly, use for 

  

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his own benefit or purposes or for the benefit or purposes of any other Person or disclose (except in the performance of his duties for the Company) in
any manner to any Person any trade secrets, information, data, know-how or knowledge (including, but not limited to, that relating to costs, products, equipment, merchandising and marketing methods, suppliers, customers, personnel training programs,
business expansion plans or financing) which is proprietary to the Company or any affiliate of the Company or any client or customer of the Company. This Section 9.3 shall not apply to any such data, information, know-how or knowledge (a) which is
publicly known or which hereafter becomes publicly known through no fault of Employee; or (b) the disclosure of which is legally compelled. Employee acknowledges that the Company intends any and all information referred to above to be proprietary
unless a policy to the contrary is adopted by the Board. 
  
 Improvements and Inventions 
  
 Notification and
Disclosure. Employee shall promptly notify the Company in writing of the existence and nature of, and shall promptly and fully disclose to the Company, any and all ideas, improvements and inventions, whether or not they are believed to be patentable
(all of which are hereinafter sometimes referred to as “Inventions”), which Employee has conceived or first actually reduced to practice and/or may conceive or first actually reduce to practice during the period of Employee’s
employment or which Employee may conceive or reduce to practice within one year after termination of employment, if such Inventions relate to a product or process upon which Employee worked during his last three years of employment by the Company.
An Invention for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on Employee’s own time, and which does not relate to the business of the Company or to the
Company’s actual or demonstrably anticipated research or development, or which does not result from any work performed by Employee for the Company, is not considered to be the property of the Company. 
  
 Ownership of Inventions and Work Product. All such Inventions and all right, title, and
interest of every kind and nature, whether now known or unknown, in and to any intellectual property, including, but not limited to, any computer software programs, trademarks, service marks, copyrights, films, scripts, ideas, creations and
properties invented, created, written, developed, furnished, produced or disclosed by Employee in the course of rendering services to the Company under and pursuant to this Agreement (hereinafter “Work Product”) shall be the sole
and exclusive property of the Company or its nominee, and during the term of his employment and thereafter, whenever requested to do so by the Company, Employee shall execute and assign any and all applications, assignments and other instruments
which the Company shall deem necessary or convenient in order to apply for and obtain Letters Patent or Copyright Registration of the United States and/or of any foreign countries for such Inventions and/or Work Product in order to assign and convey
to the Company or its nominee the sole and exclusive right, title and interest in and to such inventions, and Employee will render reasonable aid and assistance in any interference or litigation pertaining thereto, all expenses reasonably incurred
by Employee at the request of the Company to be borne by the Company, provided such aid assistance does not unreasonably interfere with Employee’s then current employment. In this connection, as to work which requires Employee’s time after
termination of his employment, Employee shall be entitled to compensation for the time requested by the Company at an hourly rate equal to the pro rata hourly rate at which Employee is being paid for a normal pay period immediately prior to the
request for services. All Inventions and Work Product resulting from Employee’s employment by the Company shall be considered “work for hire” for purposes of the United States copyright laws. 
  
 Covenant Not to Compete 
  
 Employee hereby agrees that, during the Applicable Period, the Employee shall not,
without the Company’s prior written consent (which may be withheld with or without reason), “engage or be interested, directly or indirectly” (as hereinafter defined), whether alone or together with or on behalf of or through any
Person, whether as sole proprietor, partner, investor, stockholder or any type of principal whatever, or as agent, officer, director, 

  

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employee, technical advisor (except as he is employed by the Company), lender, trustee, beneficiary or otherwise, in any phase of the Restricted Business
(as hereinafter defined) with any “customer” in the states where the Company engages in its business in the United States or any other country in which the Company has conducted its Restricted Business at any time during the three-year
period prior to the Change in Control (the “Reference Period).” 
  
 The term “Restricted Business” as used herein means any business any part of which consists of (a) manufacturing, sale or distribution of any product substantially similar to or otherwise competitive with a product
manufactured, sold or distributed by any subsidiary, division or business unit of the Company during the Reference Period, and (b) any business of a kind in whole or in part similar to and competitive with that engaged in by the Company during the
Reference Period. 
  
 The term “engage or be interested, directly or
indirectly” as used herein shall include, without limitation, giving advice or technical or financial assistance by loan, guarantees, stock transactions or in any other manner or to any other Person doing or about to do such Restricted Business
in the area covered by this Agreement; but shall not by itself include the ownership of less than 1% of the outstanding stock of a corporation the shares of which are publicly traded. 
  
 The duration of the foregoing covenant shall be extended beyond the time period set forth therein for a period equal to the duration of
any breach or default of such covenant by Employee. 
  
 Notwithstanding the
foregoing, upon request, which request shall not be unreasonably denied, Employee may enter the employment of another Person who was a customer of the Company during the Reference Period, provided that such customer is not engaged in the Restricted
Business in a manner competitive with the Company, and provided that the position would not involve the design or construction of products which would be competitive to the products designed and manufactured by the Company. 
  
 Business Relationships. Employee hereby agrees that, during the Applicable Period,
the Employee shall not, without prior written consent of the Company (which may be withheld with or without reason): 
  
 request, induce, advise or encourage any customer or supplier, or any other Person having business dealings with the Company, to the extent such business dealings are
in connection with the Restricted Business, to withdraw, curtail or cancel such business dealings; or 
  
 hire as employee or independent contractor, or request, induce, advise or encourage a termination of employment by, any other employee of the Company, whether acting directly or indirectly and whether acting alone
or together with or on behalf of or through any other Person. 
  
 Termination of Payments. In addition to any other remedies at law or in equity which the Company may have for breach by Employee of any covenant or agreement in this Section 9, the Company may terminate payment of the Severance
Benefits under Section 3. 
  
 Equitable Relief. Employee agrees that
the covenants and agreements set forth in this Section 9 relate to matters that are of a special, unique and extraordinary character which gives them a peculiar and special value, impossible of replacement, the breach of which the Company cannot
reasonably or adequately be compensated in damages, and that any breach by Employee of any of Section 9 will cause the Company irreparable injury. Employee therefore expressly agrees that in addition to any and all other rights and remedies which
the Company may have at law or in equity, the Company shall be entitled to injunctive and/or other equitable relief to present the continuing breach by Employee of any of the terms or provisions of this Section 9 or to otherwise secure the
enforcement of any of the terms or provisions of this Section 9. 
  

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 Miscellaneous 
  
 Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows: 
  
 If to the Company: 
 SI Technologies, Inc.

 14192 Franklin Avenue 
 Tustin,
CA 92780 
 Attn: Chairman of the Board; Chief Executive Officer 
  
 If to the Employee, to the last known address furnished to the Company by the Employee, or such other address as either
party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
  
 Waiver, Modification. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Employee and such officer of the Company as may be specifically designated by the Board (but in no event may Employee act on behalf of the Company in connection with a modification of this Agreement). No waiver by either party
hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provision or conditions at the
same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which is not set forth expressly in this Agreement. This
Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to such State’s conflict of law principles. 
  
 Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  
 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 will constitute one and the same instrument.

  
 Arbitration. Except as provided herein for injunctive relief, in
the event of any dispute concerning or arising out of this Agreement, such dispute shall be submitted by the parties to arbitration. Arbitration proceedings may be commenced by either party giving the other party written notice thereof and
proceeding thereafter in accordance with the rules and procedures of the American Arbitration Association. Any such arbitration shall take place before a single arbitrator in the city nearest the Employee’s last place of employment with the
Company. Any such arbitration shall be governed by and subject to the applicable laws of the State of California (including the discovery provisions of California and the California Code of Civil Procedure), and the then prevailing rules 

  

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of the American Arbitration Association. The arbitrator’s award in any such arbitration shall be final and binding, and a judgment upon such award
may be enforced by any court of competent jurisdiction. Except as provided above and in the following sentence, one-half of the cost of arbitration shall be paid by each party, except that each party shall be liable for its own attorneys’ fees
and other expenses incurred directly by it. However, the arbitrator may, in his or her discretion, award expenses and attorneys’ fees to the prevailing party as determined by the arbitrator. 
  
 Termination of Prior Agreements; No Double Benefits; Offset. The Employee and the
Company hereby terminate any and all prior agreements providing for the payment of benefits in the event of any change in control (including but not limited to a Change in Control as defined herein), merger, liquidation or sale of substantially all
of the assets of the Company. The Severance Benefits payable under Section 3 of this Agreement are in lieu of any and all other severance, covenant or similar payment or benefit under any agreement with or plan of the Company which would otherwise
be payable as a result of termination of the Employee’s employment such that the Employee shall not be entitled to receive multiple payments as a result of the termination of the Employee’s employment with the Company, which termination
would entitle the Employee to payments pursuant to this Agreement. If an Employee shall receive or be entitled to severance, covenant or other payments under some other agreement or plan as a result of the termination of the Employee’s
employment and thereafter the Employee shall be entitled to a payment hereunder, the payments hereunder shall be reduced by such prior payments. 
  
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date and year first above written. 
  

			
	 SI TECHNOLOGIES, INC.

		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 
	 	 	Employee

  

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