AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended
and Restated Employment Agreement, dated as of October 30, 2008
(the “Agreement”) is made by and between USA Mobility,
Inc., a Delaware corporation (the “Company”) and
Vincent D. Kelly (the “Executive”).
WHEREAS, the
Company and Executive are parties to that certain Employment
Agreement dated November 16, 2004, and amended as of
October 30, 2007, pursuant to which the Executive has been
employed as the Chief Executive Officer and President of the
Company (the “Original Employment Agreement”);
and
WHEREAS, the
Company and the Executive desire to amend and restate in full the
Executive’s Original Employment Agreement with the Company
and, in order to do so, enter into this Agreement.
NOW, THEREFORE,
in consideration of the foregoing and the covenants and agreements
set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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1.
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Employment . The Company shall employ the
Executive as the Chief Executive Officer and President of the
Company based upon the terms and conditions set forth in this
Agreement, for the period of time specified in Section 3. In
such positions, the Executive shall report directly and exclusively
to the Board of Directors of the Company (the
“Board”).
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2.
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Duties and Authority
. During the term of
this Agreement, as the Chief Executive Officer and President of the
Company, under the direction and subject to the control of the
Board (which direction shall be such as is customarily exercised
over a chief executive officer of a public company), the Executive
shall be responsible for the business, affairs, properties and
operations of the Company, and shall have general executive charge,
management and control of the Company, with all such powers and
authority with respect to such business, affairs, properties, and
operations as may be reasonably incident to such duties and
responsibilities, and shall perform such other duties for the
Company as the Board may determine from time to time. The Executive
shall devote the Executive’s reasonable best efforts and full
business time, energies and talents to the performance of the
Executive’s duties and the advancement of the business and
affairs of the Company.
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3.
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Term . The term of this Agreement and the
period of employment of the Executive by the Company hereunder (the
“Agreement Term”) shall commence on November 16,
2008 (the “Effective Date”) and shall end on
December 31, 2012 (the “Expiration Date”), unless
earlier terminated pursuant to Section 7 herein. Provided that
the Executive remains employed by the Company, as of the Expiration
Date the Executive (i) shall become an employee “at
will,” and (ii) provided he remains employed with the
Company after the Expiration Date as its Chief Executive Officer
and President or a person reporting directly to such officer, shall
be entitled on a most favored nations basis to any and all such
benefits and other perquisites as are then available to any
person(s) then reporting directly to the Chief Executive Officer,
including any change of control plans, agreements or programs as
well as any severance plans,
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agreements or programs, on terms and
conditions as to each such perquisite and/or benefit no less
favorable to the Executive than those used for the applicable
person.
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4.
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Compensation and Expenses
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(a)
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Base Salary . In consideration for the
Executive’s services and subject to the terms and conditions
of this Agreement, the Company shall pay to the Executive an annual
base salary (the “Base Salary”) equal to Six Hundred
Thousand Dollars ($600,000), commencing as of the Effective Date.
The Base Salary shall be payable biweekly or in such other
installments as shall be consistent with the Company’s
payroll procedures. The Company shall deduct and withhold all
necessary social security and withholding taxes and any other
similar sums required by law or authorized by the Executive with
respect to the payment of the Base Salary. The Board shall review
the Base Salary annually before December 31 and may, in its
discretion, increase, but not decrease, his Base Salary in any
renewal, extension or replacement of this Agreement. The Board
shall also review the appropriateness of creating additional forms
of nonqualified executive compensation to cover the
Executive.
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(b)
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Annual Bonus . The Executive shall be eligible
for a target annual bonus equal to 200% of Base Salary based on
achievement of certain bonus targets set by the Board or a
committee thereof (the “Annual Bonus”); provided that
the Executive is employed by the Company on December 31 of the
applicable calendar year and Executive has not voluntarily
terminated his employment in the Company pursuant to Section 8(d)
herein prior to the date such Annual Bonus is payable hereunder.
Each Annual Bonus shall be paid upon completion of the annual audit
of the Company’s financial statements for the applicable
annual year or sooner if the Compensation Committee
(“Compensation Committee”) of the Company’s Board
of Directors so agrees, but in any event no later than
March 15 of the next following year. The Annual Bonus for
calendar year 2008 shall be payable in cash. Further, provided that
the Company’s stock is publicly traded on a national
securities exchange on the date an Annual Bonus is actually paid,
such Annual Bonus for calendar years 2009 through 2012 shall be
payable one-half in cash and one-half in unrestricted stock of USA
Mobility, unless the Compensation Committee and the Executive
mutually agree otherwise. The criteria for determining the amount
of any Annual Bonus and the bases upon which such Annual Bonus
shall be payable shall be no less favorable to the Executive than
those used for other senior executives of the Company, such
criteria and bases to be determined in the sole discretion of the
Board (or Compensation Committee, as applicable).
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(c)
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Benefits . To the maximum extent permitted by
applicable state and federal law, the Executive shall be eligible,
at no cost to the Executive, to participate in all of the
Company’s benefit plans, including fringe benefits available
to the Company’s senior executives, as such plans or programs
are in effect from time to time, and use of an automobile. Further,
simultaneously with its execution of this Agreement, the Company
shall execute and deliver to the Executive for counter-signature
the Indemnification Agreement attached hereto as
Exhibit A .
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(d)
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Holidays and Vacation
. The Executive shall be
entitled to (i) time off for all public holidays observed by
the Company and (ii) vacation days in accordance with the
applicable policies for the Company’s senior executives as in
effect from time to time.
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(e)
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Reimbursement of Expenses
. The Company shall
reimburse the Executive for all reasonable expenses the Executive
incurs in accordance with the reasonable policies and procedures
adopted from time to time by the Company.
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5.
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Confidential Information
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(a)
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“Confidential
Information” means any and all Company and Company subsidiary
proprietary information, technical data, patent applications,
inventions or discoveries (whether patentable or not), know-how and
trade secrets, as well as operating, design and manufacturing
procedures disclosed to the Executive, including before the date of
this Agreement. “Confidential Information” further
means, without limitation, research, product development
activities, processes, products, specifications, designs, diagrams,
illustrations, programs, concepts, ideas, marketing plans,
proposals, financial information, confidential reports,
communications and customer lists and data, as well as the nature
and results of the Company’s and its subsidiaries’
research and development activities, and all other materials and
information related to the business or activities of the Company
and its subsidiaries that are not generally known to the public;
provided, however, that the term “Confidential
Information” excludes information that (i) is or becomes
generally available to the public other than through acts by the
Executive in violation of this Agreement, (ii) was legally
within the Executive’s possession prior to disclosure to the
Executive by or on behalf of the Company or its predecessor, which
prior possession can be evidenced by the Executive’s written
records in existence prior to the effective date of any Prior
Employment Document (as defined in Section 10 below), or
(iii) becomes available to the Executive on a non-confidential
basis from a source other than the Company or a subsidiary or
predecessor of the Company, provided that such source is not bound
by a confidentiality agreement with the Company or any of its
subsidiaries, or by any other contractual, legal or fiduciary
obligation of confidentiality to the Company or any of its
subsidiaries, or any other party with respect to such
information.
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(b)
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Except as may be required by the
lawful order of a court or agency of competent jurisdiction, the
Executive covenants and agrees that, during the Agreement Term and
at all times thereafter, the Executive will keep secret and
confidential all Confidential Information, and will not at any
time, without the prior written consent of the Board or a person
authorized by the Board, publish or disclose any Confidential
Information, either directly or indirectly, to any third party, use
for the Executive’s own benefit or advantage, or make
available for others to use (except to third parties in connection
with possible transactions or business with the
Company).
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(c)
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To
the extent that any court or agency seeks to have the Executive
disclose Confidential Information, the Executive shall promptly
inform the Company, and shall take all reasonable steps necessary
to prevent disclosure of any Confidential Information until the
Company has been informed of such requested disclosure, and the
Company has an
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opportunity to
respond to such court or agency. To the extent that the Executive
obtains information on behalf of the Company or any of its
subsidiaries that may be subject to attorney-client privilege as to
the Company’s attorneys, the Executive shall take reasonable
steps necessary to maintain the confidentiality of such information
and to preserve such privilege.
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(d)
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The
Executive acknowledges that the restrictions contained in Section
5(b) and 5(c) are reasonable and necessary, in view of the nature
of the Company’s business, in order to protect the legitimate
interests of the Company, and that any violation thereof would
result in irreparable injury to the Company. Therefore, the
Executive agrees that in the event of a breach or threatened breach
by the Executive of the provisions of Section 5(b) and (c), the
Company shall be entitled to obtain from any court of competent
jurisdiction, preliminary or permanent injunctive relief
restraining the Executive from disclosing or using any such
Confidential Information. The Executive also acknowledges that
nothing in this Section 5 shall be construed as limiting the
Executive’s duty of loyalty to the Company, or any other duty
he may otherwise have to the Company, while he is employed by the
Company.
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6.
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Covenant Not to Compete
. The Executive agrees
that, through his position as Chief Executive Officer and President
of the Company and the various other positions with the Company
that he has held from time to time, the Executive has established
and will continue to establish valuable and recognized expertise in
the paging business and has had and will have access to the
Company’s Confidential Information. The Executive hereby
enters into a covenant restricting the Executive from soliciting
employees of the Company and its subsidiaries and from competing
against the Company upon the terms and conditions described
below:
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(a)
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During the Executive’s
employment and for a period of two (2) years after the Date of
Termination (as defined in Section 7(d) below) for any reason, the
Executive shall not:
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(i)
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induce or attempt to induce any
person who, as of the Date of the Termination, is an employee of
the Company or of any of its subsidiaries to terminate his or her
employment, or refrain from renewing or extending such employment,
with the Company or such subsidiary in order to become an director,
officer, employee, consultant or independent contractor to or for
any other individual or entity other than the Company or its
subsidiaries;
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(ii)
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in
any state or other jurisdiction in the United States in which, as
of the Date of Termination, the Company is engaged in Business (as
defined herein) or has developed plans to engage in Business:
(1) engage or be a part of any Person (including as a
director, consultant, employee, agent, or representative), or have
any direct or indirect financial interest (whether as a partner,
shareholder, or owner (other than ownership of 1% or less of the
outstanding stock of any corporation listed on a national stock
exchange)) in any Person that engages in the business of owning and
operating narrowband one-way paging and wireless messaging
networks, voice mail services or data transmitting services
(the
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“Business”); or
(2) participate as an employee or officer in any enterprise in
which the Executive’s responsibility relates to the
Business;
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(iii)
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directly or indirectly own an equity
interest in any Competitor (other than ownership of 1% or less of
the outstanding stock of any corporation listed on a national stock
exchange). The term “Competitor” means any Person a
portion of the business of which (and during any period in which it
intends to enter into business activities that would be) is
materially competitive in any way with the Business of the Company;
or
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(iv)
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solicit or cause or encourage any
person to solicit any Business in competition with the Company or a
subsidiary from any Person who as of the Date of Termination is, or
at any time during the 1-year period prior to the Date of
Termination was, a client of the Company or of a subsidiary during
the Executive’s employment hereunder.
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(b)
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The
Executive agrees that the restrictions set forth in this
Section 6 are reasonable, proper, and necessitated by
legitimate business interests of the Company and do not constitute
an unlawful or unreasonable restraint upon the Executive’
ability to earn a livelihood. The parties agree that in the event
any of the restrictions in this Agreement, interpreted in
accordance with the Agreement as a whole, are found to be
unreasonable a court of competent jurisdiction, such court shall
determine the limits allowable by law and shall enforce the same.
The parties further agree that nothing in this Section 6 shall
be construed as limiting the Executive’s duty of loyalty to
the Company, or any other duty he may otherwise have to the
Company, while he is employed by the Company.
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(c)
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The
Executive further acknowledges that it may be impossible to assess
the monetary damages incurred by the Executive’s violation of
this Agreement, and that violation of this Agreement will cause
irreparable injury to the Company. Accordingly, the Executive
agrees that the Company will be entitled, in addition to all other
rights and remedies that may be available, to an injunction
enjoining and restraining the Executive and any other involved
party from committing a violation of this Agreement.
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7.
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Termination . Notwithstanding any other
provision of this Agreement, this Agreement (and, thereby, the
Executive’s employment with the Company) shall terminate upon
the death of the Executive, or it may be terminated with thirty
(30) days’ written notice as follows:
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(a)
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The
Company may terminate this Agreement (and, thereby, the
Executive’s employment with the Company):
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(i)
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at
any time if the Executive is Disabled (as defined below) for a
period of six (6) months or more;
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(ii)
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at
any time with “Cause.” For purposes of this Agreement.
“Cause” means (A) dishonesty of a material nature that
relates to the performance of services under this Agreement;
(B) criminal conduct (other than minor infractions and traffic
violations) that relates to the performance of services under this
Agreement, (C)
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the
Executive’s willfully breaching or failing to perform his
duties as described in Section 2 hereof (other than any such
failure resulting from the Executive’s being Disabled),
within a reasonable period of time after a written demand for
substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board
believes that the Executive has not substantially performed his
duties; or (D) the willful engaging by the Executive in
conduct that is demonstrably and materially injurious to the
Company, monetarily or otherwise. No act or failure to act on the
Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that such action or omission was in the
best interests of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to the Executive a
resolution duly adopted by a majority of the members of the
Company’s Board of Directors with no less than the
affirmative vote of all Directors who are not also serving as
officers or employees of the Company, at a meeting of the Board
called and held for such purpose (after reasonable notice to the
Executive and an opportunity for the Executive, together with the
Executive’s counsel, to be heard before the Board), finding
that in the good faith judgment of the Board, the Executive has
engaged in the conduct set forth in this paragraph and specifying
the particulars thereof in detail; or
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(iii)
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at
any time without Cause upon Notice from the Company to the
Executive, which Notice shall be effective immediately or such
later time as is specified in such Notice.
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(b)
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The
Executive may terminate this Agreement (and, thereby, his
employment with the Company) at any time upon sixty
(60) days’ Notice to the Company.
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(c)
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This Agreement may be terminated
(and, thereby, the Executive’s employment with the Company)
at any time by the mutual agreement of the parties. Any termination
of the Executive’s employment by mutual agreement of the
parties shall be memorialized by a written agreement signed by the
Executive and duly-appointed officers of the Company.
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(d)
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Any
purported termination of the Executive’s employment by the
Company or by the Executive shall be communicated by written Notice
of Termination to the other party hereto in accordance with
Section 12. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice that shall indicate the Date
of Termination (which shall not be earlier than the date on which
such Notice is sent), and the specific provision of this Agreement
relied upon and that shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Executive’s employment. The “Date of Termination”
means the last day the Executive is employed by the Company
hereunder (including any successor to the Company as determined in
accordance with Section 15). If the Executive becomes employed
by the entity into which the Company is merged, or the purchaser of
substantially all of the assets of the Company, or a successor to
such entity or purchaser, the Executive shall not be treated as
having terminated employment for purposes of this Agreement until
such time as the
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Executive terminates employment with
the successor (including, without limitation, the merged entity or
purchaser).
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8.
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Compensation Upon
Termination .
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(a)
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Death . If the Executive’s
employment is terminated by the Executive’s death, the
Company shall pay to the Executive’s estate, or as may be
directed by the legal representatives to such estate, (i) the
Executive’s Base Salary in effect on the date immediately
prior to the Executive’s death, through the Executive’s
date of death; (ii) subject to the terms and conditions of the
applicable Company fringe benefit or incentive compensation plan or
program, all other unpaid amounts, if any, to which the Executive
is entitled as of the date of the Executive’s death, under
any Company fringe benefit or incentive compensation plan or
program, at the time such payments would otherwise ordinarily be
due (including, without limitation, any Annual Bonus to the extent
unpaid in respect of the calendar year ending prior to the date of
the Executive’s death); (iii) the Executive’s full
Base Salary that would have been payable to the Executive from the
Executive’s date of death through the Expiration Date, in a
lump sum within forty-five (45) days after his death; and
(iv) an amount equal to the product of the target Annual Bonus
for the calendar year in which the Executive died multiplied by a
fraction the numerator being the number of days Executive was
employed by the Company in the calendar year of his death and the
denominator being 365, in a lump sum within forty-five
(45) days after his death.
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(b)
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Disability . Following the use of all sick days
to which the Executive is entitled under the policies applicable to
the Company’s senior executives, while he is Disabled until
the Date of Termination (the “Disability Period”), the
Company shall, in lieu of payment of his Base Salary, pay the
Executive (i) a disability benefit equal to 50% of the Base
Salary that he would otherwise be entitled to receive for the
Disability Period; (ii) subject to the terms and conditions of
the applicable Company fringe benefit or incentive compensation
plan or program, all other unpaid amounts, if any, to which the
Executive is entitled as of the Executive’s date of
disability, under any Company fringe benefit or incentive
compensation plan or program, at the time such payments are due
(including, without limitation, any Annual Bonus to the extent
unpaid in respect of the calendar year ending prior to the date of
the Executive’s disability); (iii) the Executive’s
full Base Salary that would have been payable to the Executive from
the Executive’s Date of Termination through the Expiration
Date, in a lump sum within forty-five (45) days after such
Date of Termination; and (iv) an amount equal to the product
of the target Annual Bonus for the calendar year in which the
Executive became Disabled multiplied by a fraction the numerator
being the number of days in the calendar year of his termination
due to his becoming Disabled prior to the commencement of the
Disability Period, and the denominator being 365, in a lump sum
within forty-five (45) days after such Date of Termination;
provided , however , that any payments made to the
Executive during the Disability Period shall be reduced by any
amounts paid or payable to the Executive under any Company
disability benefit plans. Subject to the terms of this Agreement,
the Executive shall not be required to perform services under this
Agreement during any period that he is Disabled. The Executive
shall be considered Disabled during any period in which he has an
illness, or a physical or mental disability, or similar incapacity,
that
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