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EXHIBIT 10.10
EXECUTION COPY
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of December 3, 1996, between DONALD J. SHEA, JR.,
an individual residing at 1240 Gregory Street, Wilmette, Illinois 60091
("Executive"), and CREDENTIAL SERVICES INTERNATIONAL, INC., a Delaware
corporation, having its principal place of business at 333 City Boulevard West,
10th Floor, Orange, California 92868 (the "Company").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Executive as Director of
Product Development and to be assured of its right to his services, on the
terms and conditions hereinafter set forth, and Executive desires to become so
employed on such terms and conditions;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Employment Duties. The Company hereby employs Executive and
Executive hereby accepts such employment as Director of Product Development of
the Company, on the terms and subject to the conditions hereinafter set forth.
In his capacity as Director of Product Services of the Company, Executive shall
have responsibility for overseeing all aspects of the Company's marketing
efforts with respect to its new products and other general marketing activities
of the Company and such other matters as the Company's Board of Directors
("Board"), Chief Operating Officer or such other executive of the Company
designated by the Chief Operating Officer shall determine from time to time,
consistent with Executive's position as Director of Product Services of the
Company. Executive shall report and be responsible to the Chief Operating
Officer or such other person as may be designated by the Board or Chief
Operating Officer. Executive shall be based and shall perform his duties at
the Company's offices located in Orange, California and shall travel to the
extent necessary to perform his duties hereunder. Executive shall devote his
full business time and energies to the business and affairs of the Company and
shall not accept other employment, perform any services for any other person,
firm or corporation or permit any of his personal business or investment
affairs to interfere with the performance of his duties hereunder. Executive
shall, upon reasonable notice, furnish such information and proper assistance
to the Company as reasonably may be required by the Company in connection with
any legal action involving the Company or any of its affiliates. Executive
agrees to use his best efforts, skills and abilities to promote and protect the
interests of the Company and, faithfully and to the best of his ability,
perform his duties hereunder. Executive agrees to serve as a director or
officer of any of the Company's subsidiaries or controlled affiliates
requesting his services and to perform such services for such subsidiaries or
controlled affiliates, consistent with his office, as its board of directors
shall request.
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2. Term; Termination.
(a) Executive's employment pursuant hereto shall
commence on the date of this Agreement (the "Employment Date") and shall remain
in effect, subject to renewal pursuant to subparagraph (b) of this paragraph 2
and to earlier termination pursuant to subparagraph (c) of this paragraph 2,
until December 2, 1999 (the "Expiration Date"). The term of employment
hereunder, commencing with the Employment Date and including any renewals or
extensions hereof, is hereinafter referred to as the "Employment Term."
(b) In addition to the expiration of the Employment Term
as hereinabove provided, this Agreement and Executive's employment by the
Company shall terminate on the Date of Termination (as hereinafter defined) as
follows:
(i) automatically upon Executive's death;
(ii) at the Company's option if, as a result of
Executive's incapacity due to physical or mental illness, he is unable to
perform the duties of his employment hereunder for a continuous period of sixty
(60) days or an aggregate of ninety (90) days in any one hundred eighty (180)
day period (each such period being hereinafter referred to as a "Disability
Period");
(iii) at the Company's option at any time for
Cause. "Cause" shall be defined to mean (A) the commission by Executive of any
felony, (B) the commission by Executive of any crime involving dishonesty, (C)
the engagement by Executive in any act of fraud, misappropriation or
misfeasance, (D) the engagement by Executive in any activity constituting a
material breach of paragraphs 9, 10 or 11 of this Agreement or other material
breach by Executive of any provision of this Agreement, (E) Executive's failure
to carry out the reasonable written directives of the Board or Chief Operating
Officer (consistent with the provisions of this Agreement) or his repeated
non-attentiveness to or repeated failure to carry out his duties under this
Agreement, (F) the engagement by Executive in any transaction with the Company
involving a conflict of interest or self-dealing, without the prior written
consent of the Board, or (H) the engagement by Executive in conduct materially
adverse to the interests of the Company or which brings discredit to the
Company and materially adversely affects the Company; and
(iv) at the Company's option at any time without
Cause.
(c) Any termination by the Company pursuant to
subparagraph (b) shall be communicated to Executive by a Notice of Termination.
"Notice of Termination" shall mean a written notice indicating the specific
provision of this Agreement upon which such termination is based and, in the
case of a termination pursuant to subparagraph (b)(iii), setting forth in
reasonable detail the facts and circumstances giving rise to such termination.
(d) As appropriate under the circumstances, "Date of
Termination" shall mean, as applicable: (A) the date of Executive's death; (B)
thirty (30) days after a Notice of Termination is given to Executive if
Executive's employment is terminated pursuant to
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subparagraph (b)(ii) above; or (C) the date specified in the Notice of
Termination if Executive's employment is terminated by the Company pursuant to
subparagraph (b)(iii) or (b)(iv) above.
3. Compensation. [Std. perf. reviews and annual merit increases.
/s/DJS]
(a) The Company shall pay Executive an annual base
salary ("Base Salary") during the Employment Term of $125,000 payable in equal
installments in accordance with the Company's regular payroll practices for
executive level employees, as determined from time to time by the Board, but in
no event less frequently than monthly. The Company shall also pay Executive an
annual bonus in an amount equal to $25,000 (the "Bonus") within thirty (30)
days after the Accountants (as hereinafter defined) issue and deliver their
report with respect to the audited financial statements of the Company for such
year. In addition, the Company shall pay Executive an annual special bonus as
provided in paragraph 3(b) (the "Special Bonus"). The Company and the
Executive shall mutually agree to an equity package for Executive not later
than February 28, 1997 on terms to be approved by the Board.
(b) As long as no Adverse Event (as hereinafter defined)
has occurred and is continuing or would occur as a result of the payment of the
Special Bonus to Executive, Executive shall be entitled to payment of a Special
Bonus equal to that percentage of the Bonus Pool (as hereinafter defined) to be
determined by the Board in the Board's sole discretion. The "Bonus Pool" shall
be an amount determined for each fiscal year of the Company listed on Schedule
A equal to the excess of (A) ten percent (10%) of the amount by which the
Company's EBITDA for such fiscal year exceeds the target EBITDA for such fiscal
year listed on Schedule A over (B) $75,000; provided, however, no Special Bonus
shall be paid in any fiscal year that net revenues and total memberships of the
Company do not exceed the amounts for such items for the periods or dates
listed on Schedule A. "EBITDA" means the Company's consolidated earnings
before interest, taxes, depreciation and amortization (excluding non-recurring
or extraordinary items). The Company's EBITDA for each year shall be
determined by reference to the Company's financial statements for such year
prepared in accordance with generally accepted accounting principles, as
audited by the Company's regular independent accountants (the "Accountants"),
and such determination shall be final and binding on the parties hereto. [Bonus
program at discretion of BOD. /s/DJS]
(c) Any amount payable to Executive on account of the
Special Bonus for any year during the Employment Term will be paid to Executive
by the Company within thirty (30) days after the Accountants issue and deliver
to the Company their report with respect to the audited financial statements of
the Company for such year. In the event the Bonus is not paid to Executive
because an Adverse Event has occurred or would occur as a result of the payment
of the Special Bonus, the Special Bonus shall be paid to Executive on the
earliest date on which the Adverse Event has been cured and would not occur as
a result of the payment of the Special Bonus.
(d) For purposes of this Agreement, the following terms
shall have the following meanings:
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(i) "Adverse Event" shall mean: (x) the failure of
the Company to pay any installment of principal or interest when due under any
Loan Document (as hereinafter defined); or (y) the occurrence of any event
which constitutes, or which, with the giving of notice or the passage of time
will constitute, a default or an event of default under any Loan Document and
with respect to which the lender under such Loan Document has declared an event
of default.
(ii) "Loan Document" shall mean any agreement,
instrument or document executed and delivered by the Company in connection with
its borrowing of funds from, or evidencing the Company's obligation to pay
moneys to, IBJ Schroder Bank & Trust Company ("IBJ"), TRW Inc. ("TRW") or any
affiliate of IBJ or TRW (or any institution which hereafter refinances all or
any portion of the Company's indebtedness to any of such lenders), as any such
agreement, instrument or document may be amended or supplemented from time to
time.
4. Compensation Upon Termination and During Disability.
(a) If Executive's employment shall be terminated by his
death, the Company shall pay to his estate Executive's unpaid Base Salary for
the period through the Date of Termination from the Company's regular payroll.
In addition, the Company shall pay to the Executive's estate any Bonus and
Special Bonus earned prior to the Date of Termination to which the Executive is
unconditionally entitled to be paid at the time that any such Bonus or Special
Bonus is required to be paid under the terms of this Agreement, so long as no
Adverse Event has occurred and is continuing or would occur as a result of the
payment thereof.
(b) In the event of the Executive's physical or mental
disability, the Company shall continue to pay the Executive his Base Salary
during the Disability Period. If the Executive is unconditionally entitled to
any Bonus and Special Bonus earned prior to the end of the Disability Period,
the Company shall pay such Bonus and Special Bonus to the Executive at the time
that such Bonus and Special Bonus is required to be paid under the terms of
this Agreement, so long as no Adverse Event has occurred and is continuing or
would occur as a result of the payment thereof. If the Company terminates the
Executive following the Disability Period, the Company shall pay the Executive
his Base Salary for the period from the Company's regular payroll through the
Date of Termination. The Company shall also pay the Executive any Bonus and
Special Bonus earned prior to the Date of Termination to which the Executive is
unconditionally entitled to be paid, at the time that any such Bonus and
Special Bonus is entitled to be paid under the terms of this Agreement, so long
as no Adverse Event has occurred and is continuing or would occur as a result
of the payment thereof.
(c) If Executive's employment shall be terminated for
Cause, the Company shall continue to pay Executive his Base Salary through the
Date of Termination. The Company shall have no obligation to pay Executive any
Bonus and Special Bonus or any portion of any Bonus and Special Bonus in the
event Executive's employment is terminated for Cause.
(d) If Executive's employment is terminated by the
Company without Cause pursuant to paragraph 2(b)(iv) hereof, the Company shall
continue to pay Executive, at the rate provided in paragraph 3(a) hereof, an
amount equal to his Base Salary for the lesser of twelve (12) months or the
remainder of the Employment Term. In addition, for the period from the Date
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of Termination until the earlier of the Expiration Date or the date twelve (12)
months after the Date of Termination, the Company shall provide Executive, at
the Company's expense, medical insurance coverage for the Executive and
Executive's family substantially equivalent to the medical insurance coverage
provided by the Company to Executive immediately prior to the Date of
Termination. The Company shall also pay the Executive any Bonus and Special
Bonus earned prior to the Date of Termination to which the Executive is
unconditionally entitled to be paid, at the time that any such Bonus and
Special Bonus are required to be paid under the terms of this Agreement, so
long as no Adverse Event has occurred and is continuing or would occur as a
result of the payment thereof. In the event of the termination of this
Agreement by the Company without Cause pursuant to paragraph 2(b)(iv) hereof,
the amounts to be paid to Executive pursuant to this paragraph 4(d) shall
constitute liquidated damages and shall be the exclusive remedy of the
Executive.
(e) Unless otherwise agreed by the Company and
Executive, all payments made to Executive (or his estate, as applicable)
pursuant to this paragraph 4, whether during the Disability Period or after the
Date of Termination, shall be made in the amounts, at the times and subject to
the terms and conditions otherwise applicable to payments to Executive pursuant
to paragraph 3 hereof, as if such payments were made to Executive during the
Employment Term.
5. Reimbursement of Expenses. In addition to the compensation
and benefits provided to Executive pursuant to other provisions of this
Agreement, the Company will reimburse Executive in a manner consistent with
established policies of the Company for reasonable out-of pocket expenses
actually incurred or paid by him in the performance of his services hereunder,
subject to presentation of expense statements, receipts, vouchers or other
supporting information as the Company may reasonably require.
6. Other Benefits. In addition to the compensation and
benefits provided to Executive pursuant to other provisions of this Agreement,
during the Employment Term, Executive shall be entitled to the following:
(a) participation in and receipt of benefits under: (i)
any retirement plan or arrangement for the benefit of executive employees of
the Company; and (ii) any health or other insurance plan or arrangement for the
benefit of executive employees of the Company; all on terms no less favorable
than those offered to other executive level employees of the Company, to the
extent that Executive is otherwise eligible to participate or receive benefits
under any such plan or arrangement; and
(b) a number of paid vacation days, sick days and
personal days which are provided to other executive level employees of the
Company, but in no event shall the number of paid vacation days in any year of
the Employment Term exceed twenty (20).
7. Other Agreements.
(a) Executive represents and warrants to the Company
that he is not a party to any agreement, written or oral, and is not bound by
the terms of any written or oral agreement to which he is not a party which
prohibits him from performing his duties under this agreement
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or of serving the Company in any other capacity. Executive agrees to indemnify
the Company and shall hold the Company harmless from and against any liability,
loss, cost or expense, including reasonable attorneys fees and expenses,
incurred by the Company by reason of the inaccuracy of the representations and
warranties made by Executive in this paragraph 7.
(b) Upon submission of an invoice or invoices for which
supporting information including bills or receipts as the Company may
reasonably require, the Company may reimburse Executive for (i) up to an
aggregate of $25,000 [itemize for D.T. /s/DJS] of reasonable expenses incurred
or to be incurred by Executive in connection with the relocation of Executive's
primary residence from Wilmette, Illinois to southern California and (ii) coach
class round-trip airfare between Chicago, Illinois and southern California for
one person for up to a maximum ten (10) trips during the period commencing with
the Employment Date and terminating on June 30, 1997. In addition, the Company
shall provide Executive until June 30, 1997 (on a non-exclusive basis subject
to availability) with the use (for Executive only) of the house rented by the
Company in Newport Beach, California.
8. Life Insurance. Executive agrees that, if requested by the
Company, he will cooperate with the Company to obtain a policy or policies of
life insurance on his life in such amount(s) as the Company may determine,
including submitting to any appropriate medical examinations and completing and
executing any appropriate application(s) or similar form(s). Any such policy
or policies shall be for the benefit of the Company and the Company shall pay
all premiums thereunder.
9. Inventions, Etc. Executive agrees to promptly disclose in
writing to the Company all ideas, formulae, programs, systems, devices,
processes, business concepts, discoveries and inventions (hereinafter referred
to collectively as "Discoveries"), whether or not patentable, which he, while
employed hereunder, conceives, makes, develops, acquires or reduces to
practice, whether alone or with others and whether during or after usual
working hours, and which are related to the Company's business or interest, or
are used or usable by the Company, or arise out of or in connection with the
duties performed by Executive hereunder. Executive hereby transfers and
assigns to the Company all right, title and interest in and to all Discoveries,
including any and all domestic and foreign patent rights therein and any
renewals thereof. On request of the Company, Executive shall from time to time
during or after the expiration or termination of his employment by the Company,
execute such further reasonable instruments (including, without limitation,
applications for letters patent and assignments thereof) and do all such other
reasonable and legal acts and things as may be deemed necessary or desirable by
the Company to protect and/or enforce its rights in respect of Discoveries.
All expenses of filing or prosecuting any patent application shall be borne by
the Company, but Executive shall cooperate in filing and/or prosecuting any
such application. Executive shall receive no additional compensation for the
performance of his obligations hereunder, except as may be agreed to by the
Company.
10. Covenant Regarding Confidentiality. All information about
the business and affairs of the Company which is not generally available to the
public or disclosed by the Company and any information about the Company which
becomes generally available to the public as a result of a breach by any person
of any confidentiality obligation to the Company
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(including, without limitation, its secrets and information about its business,
financial condition and performance, prospects, products, technology, know-how,
merchandising and advertising programs and plans, and the names of its
suppliers, customers and lenders and the nature of its dealings with them)
constitute "Company Confidential Information." Executive acknowledges that he
will have access to, and knowledge of, Company Confidential Information, and
that improper use or revelation of same by Executive, whether during or after
the termination of his employment by the Company, could cause serious injury to
the business of the Company. Accordingly, Executive agrees that, except as
required to perform his duties under this Agreement, or as required by law, he
will forever keep secret and inviolate all Company Confidential Information
which shall come into his possession, and he will not disclose the same to any
other person or organization for so long as such Company Confidential
Information is not generally known by, or accessible to, the public. Executive
further agrees that he will not use any Company Confidential Information for
his own benefit or directly or indirectly for the benefit of any person or
organization other than the Company and its affiliates.
11. Covenant Not to Compete.
(a) During the Employment Term and for a period of two
(2) years thereafter (whether his employment shall have ended by reason of the
expiration of this Agreement or otherwise), Executive will not: (i) directly or
indirectly, as owner, stockholder, investor, partner, director, officer,
employee, consultant, lender, or otherwise, engage or become interested in any
business, trade or occupation in the Restricted Territory (as hereinafter
defined) which sells products or provides services similar to or competitive
with any business of the Company, as conducted at or within one (1) year prior
to the date of termination of his employment; (ii) directly or indirectly hire
or endeavor to recruit or hire for any purpose any person who is (or was during
the six (6) period [sic] immediately preceding such attempted hiring or
recruitment) employed by the Company or otherwise induce or attempt to induce
any then current employee of the Company to terminate such employment, or (iii)
solicit or attempt to solicit for any business any customer of the Company
which conducted business with the Company at any time during the one (1) year
period immediately preceding such solicitation or otherwise induce or attempt
to induce any customer, supplier or lender of the Company to diminish or
terminate such business relationship; provided, however, that the ownership by
Executive of not more than five percent (5%) of any class of outstanding
securities of an issuer listed on a national securities exchange or regularly
traded in the over-the-counter market shall nor constitute a violation of this
paragraph 11(a); and further provided, however, in the event this Agreement is
terminated by the Company without Cause the prohibition in subparagraph
11(a)(i) shall not survive beyond the Date of Termination. The "Restricted
Territory" shall mean anywhere in the counties of Orange, California, Dallas,
Texas, Fort Worth, Texas, any other locations in the States of California or
Texas or other location in the United States of America and any other region,
county, city or locality therein where the Company is currently transacting, or
during the past five (5) years, has been transacting business. The parties
agree and intend that the covenants contained in this paragraph 11(a) shall be
construed as a series of separate covenants, one for each applicable county,
state or country. Except for geographic coverage, each such separate covenant
shall be deemed identical in terms.
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(b) Executive acknowledges that the operation and
conduct of the business of the Company is special and unique and involves the
use of trade secrets and confidential information and that during the period of
his employment hereunder, Executive will acquire special knowledge and/or skill
that he could effectively utilize in competition with the Company. Executive
further acknowledges that the provisions of paragraphs 9, 10 and 11 hereof are
essential to the goodwill and profitability of the Company and have provided
substantial inducement to the Company's agreement to execute and consummate
this Agreement, and that the application or operation thereof shall not involve
a substantial hardship upon his future business or livelihood. Executive
agrees that remedies at law for any breach by him of the covenants contained in
paragraphs 9, 10 and 11 hereof will be inadequate, and that in the event of a
violation of the covenants therein, in addition to any and all legal and
equitable remedies which may be available to the Company, the said covenants
may be enforced by an injunction in a suit in equity, without the necessity of
proving actual damage, and that a temporary injunction may be granted
immediately upon the commencement of any such suit and without notice. Should
any court determine that any of the separate covenants of this paragraph 11
shall be unenforceable in respect of geographic area, then such covenant shall
be deemed eliminated for the purpose of those proceedings to the extent
necessary to permit the remaining separate covenants to be enforced. If any
other provision of paragraphs 9, 10 and 11 shall be deemed by an appropriate
court to be unenforceable for any reason, then such court shall be empowered to
substitute, to the extent enforceable, provisions similar thereto or other
provisions so as to provide the Company, to the fullest extent permitted by
applicable law, the benefits intended by paragraphs 9, 10 and 11 hereof.
Executive acknowledges that the covenants contained in this paragraph 11 are
intended by the parties to be in addition to and not in lieu of or in
limitation of any other agreement or covenant between Executive and the
Company. Each of the provisions of paragraphs 9, 10 and 11 hereof shall
survive the termination of this Agreement and the termination of Executive's
employment by the Company.
12. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered personally or by facsimile
(followed by first class U.S. mail), or three days after mailing if mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice, except that notice of changes of address
shall be effective upon receipt):
If to the Company:
Credentials Services International, Inc.
333 City Boulevard West, 10th Floor,
Orange, California 92868
Attention: Chief Executive Officer
Telecopy No.: (714) 704-6503
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with a copy to:
Lincolnshire Management, Inc.
780 Third Avenue
New York New York 10017
Attention: T.J. Maloney
Telecopy No.: (212) 755-5457
and to:
Maloney, Mehlman & Katz
405 Lexington Avenue
New York, New York 10174
Attn: Barry T. Mehlman, Esq.
Telecopy No.: (212) 973-6911
If to Executive, to him at his address set forth in the introductory
paragraph of this Agreement.
13. General.
(a) This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California
applicable to contracts made and to be performed entirely within such state
(without regard to principles of conflicts of law of California or of any other
jurisdictions).
(b) The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(c) This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, between the parties.
(d) This Agreement and the benefits hereunder are
personal to the Company and are not assignable or transferable, nor may the
services to be performed hereunder be assigned by the Company to any person,
firm or corporation; provided, however, that this Agreement and the benefits
hereunder may be assigned by the Company to any corporation acquiring all or
substantially all of the assets or stock of the Company or to any corporation
into which the Company may be merged or consolidated.
(e) All references in this Agreement to amounts
to be paid or benefits to be provided to or on behalf of Executive are to the
gross amounts thereof which are due hereunder. Except as otherwise provided
herein, the Company shall have the right to deduct therefrom or collect from
Executive all sums which may be required to be deducted or withheld under any
provision of law, including, but not limited to, social security payments,
income tax
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withholding, any other deduction required by law and any interest, penalties or
additions to tax imposed with respect thereto.
(f) This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived, only by a written instrument executed by both parties hereto, or in
the case of a waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any provision hereof shall
in no manner affect the right of such party at a later time to enforce the
same. No waiver by either party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such breach, or a waiver of the breach of any other term or
covenant contained in this Agreement.
(g) This Agreement may be executed in
counterparts, each of which shall be an original and all of which taken
together shall constitute one and the same instrument.
(h) Subject to the provisions of paragraph 11
hereof, if any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any partner. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
* * * * *
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first above written.
CREDENTIALS SERVICES
INTERNATIONAL, INC.
By: /s/ D. Thompson
-----------------------------
Name: D. Thompson
Title: CEO
/s/ Donald J. Shea, Jr.
---------------------------------
DONALD J. SHEA, JR.
(with changes noted)
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SCHEDULE A
Total
Fiscal Year Ending New Revenues EBITDA Memberships*
- ------------------ ------------ ------ -----------
September 30, 1997 $55,187,000 $9,700,000
September 30, 1998 $77,445,000 $19,827,000
Date
----
September 30, 1997 1,512,000
September 30, 1998 2,035,000
__________________________________
* Can include multi-year memberships (not to exceed three (3) years)
provided the percentage of multi-year memberships to total memberships does not
exceed 15% in any one year. The Company will not sell lifetime memberships
unless approved by the Board of Directors.