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Exhibit 10.30
▇▇▇▇▇▇▇▇ CORPORATION
EMPLOYMENT AGREEMENT
This agreement ("Agreement") has been entered into this 12
day of December, 1997, by and between ▇▇▇▇▇▇▇▇ Corporation,
Missouri corporation ("Company") and ▇▇▇ ▇. ▇▇▇▇▇▇, an individual
("Executive").
For and in consideration of the mutual promises herein
contained, the parties hereto agree as follow:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. For purposes of this Agreement, the
following words and phrases, whether or not capitalized, shall have
the meanings specified below, unless the context plainly requires
a different meaning.
1.1(a) "ACCRUED OBLIGATIONS" has the meaning set forth
in Section 4.1(a) of this Agreement.
1.1(b) "ANNUAL BASE SALARY" has the meaning set forth in
Section 2.4(a) of this Agreement.
1.1(c) "BOARD" means the Board of Directors of the
Company.
1.1(d) "CAUSE" has the meaning set forth in Section 3.3
of this Agreement.
1.1(e) "CHANGE IN CONTROL" means:
(i) The acquisition by any individual, entity or
group, or a Person (within the meaning of Section 13(d)(3) or 14(d)
(2) of the Exchange Act) of ownership of 30% or more of either (a)
the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (b) the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company voting Securities"); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided, however,
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that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, as a member of the Incumbent Board, any such individual
whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act)
or other actual or threatened solicitation or proxies or consents
by or on behalf of a Person other than the Board; or
(iii) Approval by the stockholders of the Company
of reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (a) more
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than 50% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case
may be, (b) no Person beneficially owns, directly or indirectly,
30% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then
outstanding voting securities of such corporation, entitled to vote
generally in the election of directors and (c) at least a majority
of the members of the board of directors of the corporation
resulting from such reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the
initial agreement providing for such reorganization, merger or
consolidation; or
(iv) approval by the stockholders of the Company of
(a) a complete liquidation or dissolution of the Company or (b) the
sale or other disposition of all or substantially all of the assets
of the Company with respect to which following such sale or other
disposition, (1) more than 50% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or
other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (2) no
Person beneficially owns, directly or indirectly, 30% or more of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors and (3) at least a majority of the
members of the board of directors of such corporation were members
of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale of other
disposition of assets of the Company.
1.1(f) "COMPANY" has the meaning set forth in the first
paragraph of this Agreement and, with regard to successors, in
Section 6.2 of this Agreement.
1.1(g) "CODE" shall mean the Internal Revenue code of
1986, as amended.
1.1(h) "CURRENT TARGET BONUS" has the meaning set forth
in Section 4.1(a) of this Agreement.
1.1(i) "DATE OF TERMINATION" has the meaning set forth
in Section 3.6 of this Agreement.
1.1(j) "DISABILITY" has the meaning set forth in Section
3.2 of this Agreement.
1.1(k) "DISABILITY EFFECTIVE DATE" has the meaning set
forth in Section 3.2 of this Agreement.
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1.1(l) "DISPOSITION OF A MAJOR PART" means:
(i) when used with reference to the stock of an
Operating Line of Business that is or becomes a separate
corporation, limited liability corporation, partnership or other
business entity, the sale, exchange, transfer, distribution or
other disposition of the ownership, either beneficially or of
record or both, by the Company of more than 50% of either (a) the
then outstanding shares of common stock (or the equivalent equity
interests) of such Operating Line of Business, or (b) the combined
voting power of the then outstanding voting securities of such
Operating Line of Business entitled to vote generally in the
election of the Board or the equivalent governing body of such
Operating Line of Business;
(ii) when used with reference to the merger or
consolidation of an Operating Line of Business that is or becomes
a separate corporation, limited liability corporation, partnership
or other business entity, any such transaction that results in the
Company owning, either beneficially or of record or both, less than
50% of either (a) the then outstanding shares of common stock (or
the equivalent equity interest) of such Operating Line of Business,
or (b) the combined voting power of the then outstanding voting
securities of such Operating Line of Business entitled to vote
generally in the election of the Board or the equivalent governing
body of such Operating Line of Business: or
(iii) when used with reference to the assets of
an Operating Line of Business, the sale, exchange, transfer,
liquidation, distribution or other disposition of the assets of
such Operating Line of Business (a) having a fair market value (as
determined by the Incumbent Board) aggregating more than 50% of the
aggregate fair market value of all of the assets of such Operating
Line of Business as of the Triggering Transaction Date, (b)
accounting for more than 50% of the aggregate book value (net of
depreciation and amortization) of all of the assets of such
Operating Line of Business, as would be shown on a balance sheet
for such Operating Line of Business, prepared in accordance with
generally accepted accounting principles then in effect, as of the
Triggering Transaction Date, or (c) accounting for more than 50% of
the net income of such Operating Line of Business, as would be
shown on an income statement, prepared in accordance with generally
accepted accounting principles then in effect, for the 12 months
ending on the last day of the month immediately preceding the month
in which the Triggering Transaction Date occurs.
1.1(m) "EFFECTIVE DATE" means January 1, 1998.
1.1(n) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
1.1(o) "EXCISE TAX" has the meaning set forth in Section
4.2(g) of this Agreement.
1.1(p) "GOOD REASON" has the meaning set forth in
Section 3.4 of this Agreement.
1.1(q) "GROSS-UP PAYMENT" has the meaning set forth in
Section 4.2(g) of this Agreement.
1.1(r) "INCENTIVE BONUS" has the meaning set forth in
Section 2.4(b) of this Agreement.
1.1(s) "INCUMBENT BOARD" has the meaning set forth in
Section 1.1(e) of this Agreement.
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1.1(t) "NOTICE OF TERMINATION" has the meaning set forth
in Section 3.5 of this Agreement.
1.1(u) "OPERATING LINES OF BUSINESS" means the following
lines of business of the Company, whether operated as a division or
as a separate subsidiary: (i) textile rental and laundry
services, which provides textiles and laundry services, principally
to health care institutions, and, to a more limited extent, to
hotels, casinos, motels and restaurants in or near major
metropolitan areas of the United States; (ii) uniform and
business apparel manufacturing and marketing, which manufactures
and sells uniforms and business apparel to a wide variety of
institutions and businesses in the United States, Canada and/or the
United Kingdom; and (iii) retail specialty stores, which operates
a nationwide chain of specialty retail stores primarily for a
clientele of nurses and other health care professionals.
1.1(v) "OTHER BENEFITS" has the meaning set forth in
Section 4.1(c) of this Agreement.
1.1(w) "OUTSTANDING COMPANY COMMON STOCK" has the
meaning set forth in Section 1.1(e)(i) of this Agreement.
1.1(x) "OUTSTANDING COMPANY VOTING SECURITIES" has the
meaning set forth in Section 1.1(e)(i) of this Agreement.
1.1(y) "PAYMENT" has the meaning set forth in Section
4.2(g) of this Agreement.
1.1(z) "PERSON" means any "person" within the meaning of
Sections 13(d) and 14(d) of the Exchange Act.
1.1(aa) "TERM" means the period that begins on the
Effective Date and ends on the Date of Termination as defined in
Section 3.6 of this Agreement.
1.1(bb) "TRIGGERING TRANSACTION" means (i) a Change in
Control of the Company or (ii) a Disposition of a Major Part of two
or more of the Company's Operating Lines of Business.
1.1(cc) "TRIGGERING TRANSACTION DATE" shall mean the
date of the Triggering Transaction.
1.2 GENDER AND NUMBER. When appropriate, pronouns in this
Agreement used in the masculine gender include the feminine gender,
words in the singular include the plural, and words in the plural
include the singular.
1.3 HEADINGS. All headings in this Agreement are included
solely for ease of reference and do not bear on the interpretation
of the text. Accordingly, as used in this Agreement, the terms
"Article" and "Section" mean the text that accompanies the
specified Article or Section of the Agreement.
1.4 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri,
without reference to its conflict of law principles.
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2. TERMS AND CONDITIONS OF EMPLOYMENT.
2.1 PERIOD OF EMPLOYMENT. The Executive shall remain in the
employ of the Company throughout the Term of this Agreement in
accordance with the terms and provisions of this Agreement.
2.2 POSITIONS AND DUTIES.
2.2(a) Throughout the Term of this Agreement, the
Executive shall serve as Chairman of the Board, Chief Executive
Officer and President of the Company, subject to the reasonable
directions of the Board. The Executive shall have such authority
and shall perform such duties as are specified by the Bylaws of the
Company for the office to which he has been appointed hereunder and
shall so serve, subject to the control exercised by the Board from
time to time.
2.2(b) Throughout the Term of this Agreement (but
excluding any periods of vacation and sick leave to which the
Executive is entitled), the Executive shall devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and shall use his reasonable best efforts to
perform faithfully and efficiently such responsibilities as are
assigned to him under or in accordance with this Agreement;
provided that, it shall not be a violation of this paragraph for
the Executive to (i) serve on corporate, civic or charitable boards
or committees (as approved by the Board), (ii) deliver lectures or
fulfill speaking engagements, or (iii) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of
the Company in accordance with this Agreement or violate the
Company's conflict of interest policy as in effect immediately
prior to the Effective Date.
2.2(c) It is understood and agreed that nothing
contained in this Agreement shall be deemed to be a guarantee of
continued employment or employment for a specific term.
2.3 SITUS OF EMPLOYMENT. Throughout the Term of this
Agreement, the Executive's services shall be performed in the
greater St. Louis, Missouri area.
2.4 COMPENSATION.
2.4(a) ANNUAL BASE SALARY. For the first year of
employment, the Executive shall receive an annual base salary
("Annual Base Salary") of Three Hundred Seventy Five Thousand
($375,000), which shall be paid in equal or substantially equal
semi-monthly installments. During the Term of this Agreement, the
Annual Base Salary payable to Executive shall be reviewed at least
annually and may be adjusted.
2.4(b) INCENTIVE BONUSES. In addition to Annual Base
Salary, the Executive shall be awarded the opportunity to earn an
incentive bonus on an annual basis ("Incentive Bonus") under any
incentive compensation plan which is generally available to other
similarly situated executives of the Company. The annual target
Incentive Bonus shall be equal to Fifty Percent (50%) of Annual
Base Salary. The annual target Incentive Bonus which the Executive
will have opportunity to earn shall be reviewed at least annually
and may be adjusted at the discretion of the Board dependent upon
the Executive's performance and in accordance with Company policy.
For the fiscal year 1999, the target Incentive Bonus shall be One
Hundred Eighty Seven Thousand, Five Hundred Dollars ($187,500) and
shall be based on target goal formulas mutually agreeable to
Executive and the Board. The Incentive Bonus paid for fiscal 1999
shall not be less than One Hundred Seventy-Five Thousand Dollars
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($175,000) and can reach, based on over-achievement of goals, a
maximum of Eighty Percent (80%) of Annual Base Salary or Three
Hundred Thousand Dollars ($300,000). For fiscal year 1998,
Executive shall receive an incentive bonus of Fourteen Thousand
Five Hundred Eighty Three Dollars ($14,583.00.)
2.4(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS.
Throughout the Term of this Agreement, the Executive shall be
entitled to participate in all incentive, savings and retirement
plans generally available to other similarly situated executives
of the Company. Executive shall participate in the Supplemental
Plan at the maximum percentage of Fifty Percent ("50%") of final
average compensation.
In addition to the incentive, savings and retirement
plans generally available to other similarly situated executives,
Company shall enter into a retirement benefit agreement (the
"Retirement Agreement") attached hereto as Exhibit "A" with
Executive which provides for an annual lifetime benefit of Fifteen
Thousand Dollars ("$15,000") per year for each full year of service
with the Company ("Retirement Benefit"). Such Retirement Benefit
will be offset by any ▇▇▇▇▇▇▇▇ Corporation Pension Plan benefits,
Supplemental Plan benefits, or other noncontributory retirement
plan benefits payable to Executive.
2.4(d) WELFARE BENEFIT PLANS. Throughout the Term of
this Agreement (and thereafter), the Executive and/or the
Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs)
to the extent generally available to other similarly situated
executives of the Company.
2.4(e) RESTRICTED STOCK. Executive shall receive a
grant, effective January 2, 1998, of Twenty-Five Thousand (25,000)
restricted shares of Company Common Stock ("Restricted Shares").
Eight Thousand Three Hundred Thirty Three (8,333) shares of the
Restricted Shares shall vest at the end of each of the first two
years of employment and Eight Thousand Three Hundred Thirty Four
(8,334) shares of the Restricted Shares shall vest at the end of
the third year of employment. In the event Executive's employment
with Company terminates for any reason other than death or
Disability prior to the Restricted Shares vesting, the unvested
Restricted Shares will be forfeited. Executive may not sell any
Restricted Shares until such Restricted Shares are vested,
provided, however, that Executive shall be entitled to full
dividend and voting rights relative to such Restricted Shares. In
the event Executive's employment terminates as a result of death or
Disability, all remaining Restricted Shares shall immediately vest.
2.4(f) STOCK OPTIONS. Executive shall receive,
effective January 2, 1998, an option grant to purchase One Hundred
Thousand (100,000) shares of Company Common Stock ("Stock
Options"). One third of the total Stock Options shall become
exercisable after the completion of each year of service over the
first three years of employment. The options shall expire on
January 2, 2005. The exercise price of the Stock Options shall
be the average of the high and low price of the Company Common
Stock on January 2, 1998. The Stock Options shall be granted in
accordance with the terms and conditions similar to those set out
in the ▇▇▇▇▇▇▇▇ Corporation 1994 Performance Plan. Further grants
of stock options shall be based on the Executive's and the
Company's performance and shall be at the discretion of the
Compensation Committee.
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2.4(g) RELOCATION EXPENSES. Company will reimburse
Executive for the normal expenses associated with relocating
Executive and his family from Atlanta, Georgia, to St. Louis,
Missouri, including transportation of all household furnishings
(including two automobiles) , real estate commissions incurred in
connection with the sale of Executive's residence at 2621 ▇▇▇▇▇▇▇
Drive N.E,. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, provided that such commissions
do not exceed the prevailing real estate commission rate in the
Atlanta metropolitan area, standard closing costs for a home
purchased in the St. Louis area, provided such home is purchased
within one year from the date hereof, reasonable house hunting
trips to St. Louis for Executive and his spouse, and 90 days
temporary housing in St. Louis. Company reserves the right to
employ the services of a national relocation firm's services.
2.4(h) EXPENSES. Throughout the Term of this Agreement,
the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in accordance
with the policies, practices and procedures generally applicable to
other similarly situated executives of the Company.
2.4(i) OFFICE AND SUPPORT STAFF. Throughout the Term of
this Agreement, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and
to personal secretarial and other assistance, at least equal to
those generally provided to other similarly situated executives of
the Company.
2.4(j) VACATION. Throughout the Term of this Agreement,
the Executive shall be entitled to paid vacation in accordance with
the plans, policies, programs and practices generally provided with
respect to other similarly situated executives of the Company.
3. TERMINATION OF EMPLOYMENT.
3.1 DEATH. The Executive's employment shall terminate
automatically upon the Executive's death during the Term of the
Agreement.
3.2 DISABILITY. If the Company determines in good faith that
the Disability of the Executive has occurred during the Term of the
Agreement (pursuant to the definition of Disability set forth
below), the Company may give to the Executive written notice in
accordance with Section 7.2 of its intention to terminate the
Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the thirtieth (30th)
day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this
Agreement, "Disability" shall mean that the Executive has been
unable to perform the services required of the Executive hereunder
on a full-time basis for a period of one hundred eighty (180)
consecutive business days by reason of a physical and/or mental
condition. "Disability" shall be deemed to exist when certified by
a physician selected by the Company and acceptable to the Executive
or the Executive's legal representative (such agreement as to
acceptability not to be withheld unreasonably). The Executive will
submit to such medical or psychiatric examinations and tests as
such physician deems necessary to make any such Disability
determination.
3.3 TERMINATION FOR CAUSE OR NON-PERFORMANCE.
3.3(a) Termination of the Executive's employment by the
Company for " Cause" shall mean termination based upon: (i) the
Executive's willful and continued failure to substantially perform
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his duties with the Company (other than as a result of incapacity
due to physical or mental condition), after a written demand for
substantial performance is delivered to the Executive by the
Company, which specifically identifies the manner in which the
Executive has not substantially performed his duties; (ii) the
Executive's commission of an act constituting a criminal offense
involving moral turpitude, dishonesty or breach of trust; or (iii)
the Executive's material breach of any provision of this Agreement.
For purposes of this Section, no act, or failure to act on the
Executive's part, shall be considered "willful" unless done, or
omitted to be done, without good faith and without reasonable
belief that the act or omission was in the best interest of the
Company.
3.3(b) Termination of the Executive's employment by the
Company for "Non-Performance" shall mean termination based upon
Executive's inability to meet agreed upon reasonable performance
plans, as expressly agreed to in writing.
3.3(c) Notwithstanding the provisions of Sections
3.3(a) and 3.3(b), the Executive shall not be deemed to have been
terminated for Cause or Non-Performance unless and until (i) he
receives a Notice of Termination from the Company, (ii) he is given
the opportunity, with counsel, to be heard before the Board, and
(iii) the Board finds, in its good faith opinion, the Executive
failed to perform in accordance with performance standards or was
guilty of the conduct set forth in the Notice of Termination, as
applicable.
3.4 GOOD REASON. Pursuant to Section 4.2, the Executive may
terminate his employment with the Company for "Good Reason," which
shall mean:
3.4(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
2.2(a) or any other action by the Company which results in a
material diminution in such position, authority, duties or
responsibilities, excluding for this purpose any action not taken
in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
3.4(b) (i) the failure by the Company to continue in
effect any benefit or compensation plan, stock ownership plan, life
insurance plan, health and accident plan or disability plan to
which the Executive is entitled as specified in Section 2.4, (ii)
the taking of any action by the Company which would adversely
affect the Executive's participation in, or materially reduce the
Executive's benefits under, any plans described in Section 2.4, or
(iii) the failure by the Company to provide the Executive with paid
vacation to which the Executive is entitled as described in Section
2.4(j).
3.4(c) a material breach by the Company of any provision
of this Agreement;
3.4(d) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement;
3.4(e) within a period ending at the close of business
on the date two (2) years after the Triggering Transaction Date of
any Change in Control, if the Company has failed to comply with and
satisfy Section 6.2 on or after such Triggering Transaction Date;
or
3.4(f) the Company's requiring the Executive to be based
at any office or location other than that described in Section 2.3.
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For purposes of this Section, any good faith
determination of "Good Reason" made by the Executive shall be
conclusive.
3.5 NOTICE OF TERMINATION. Any termination by the Company
for Cause, Non-Performance or Disability, or by the Executive for
Good Reason, shall be communicated by Notice of Termination to the
other party, given in accordance with Section 7.2. For purposes of
this Agreement, a "Notice of Termination" means a written notice
which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the Date of Termination (as
defined in Section 3.6 hereof) is other than the date of receipt of
such notice, specifies the termination date (which date shall be
not more than ninety (90) days after the giving of such notice).
The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason, Non-Performance, or Cause shall not waive
any right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance
in enforcing the Executive's or the Company's rights hereunder.
3.6 DATE OF TERMINATION. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause
or Non-Performance, or by the Executive for Good Reason, the Date
of Termination shall be the date specified in the Notice of
Termination, (ii) if the Executive's employment is terminated by
reason of death or Disability, the Date of Termination shall be the
date of death of the Executive or the Disability Effective Date, as
the case may be, or (iii) if the Executive's employment is
terminated by the Company other than for Cause, Non-Performance,
death or Disability, or by the Executive for other than Good
Reason, the Date of Termination shall be the date specified in the
Notice of Termination; provided that if within thirty (30) days
after any Notice of Termination is given, the party receiving such
Notice of Termination notifies the other party that a dispute
exists concerning the termination, the Date of Termination shall be
the date on which the dispute is finally determined, either by
mutual written agreement of the parties, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for
appeal therefrom having expired and no appeal having been
perfected).
4. CERTAIN BENEFITS UPON TERMINATION.
4.1 BENEFITS UPON TERMINATION NOT IN CONNECTION WITH A
TRIGGERING TRANSACTION. If, prior to a Triggering Transaction
during the Term of the Agreement (except in the event that one of
the following termination of employment events occurs within the
six-month period prior to the earlier of (a)) a Triggering
Transaction or (b) the execution of a definitive agreement or
contract that eventually results in a Triggering Transaction, which
shall result in the payment of severance benefits set forth in
Section 4.2 of this Agreement): (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason (other than
as a result of the Company requiring the Executive to be based at
any office or location other than that described in Section 2.3, as
set out in Section 3.4(f)), the Executive shall be entitled to the
payment of the benefits provided below as of the Date of
Termination:
4.1(a) Accrued Obligations. Within thirty (30) days
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after the Date of Termination, the Company shall pay to the
Executive the sum of (i) the Executive's Annual Base Salary through
the Date of Termination to the extent not previously paid, and (ii)
any accrued vacation pay; in each case to the extent not previously
paid (the "Accrued Obligations").
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In addition, on the date that Incentive Bonuses are paid
to other similarly situated executives for the year in which the
Executive's employment is terminated, the Executive will be paid an
amount equal to the product of the Current Target bonus multiplied
by a fraction, the numerator of which is the number of days during
the fiscal year for which the Incentive Bonus is paid prior to the
Date of Termination and the denominator of which is 365. For
purposes of this Agreement, the term "Current Target Bonus" means
the Incentive Bonus that would have been paid to the Executive for
the fiscal year in which the termination of employment occurred, if
the Executive's employment had not been so terminated and the
Executive had earned 100% of the Incentive Bonus that he could have
earned for such year.
4.1(b) Severance Payment. The Company shall pay to the
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Executive as severance pay the following amounts:
4.1(b)(i) If termination occurs within the first
year of employment, the company will pay, from the date of
termination, Monthly Target Compensation (Annual Base Salary plus
Current Target Bonus divided by 12) , for the number of months
which, when added to the number of months worked, equals 24.
4.1(b)(ii) If termination occurs during the
second year of employment, the Company will pay 12 months of
Monthly Target Compensation from the date of termination.
4.1(b)(iii) If termination occurs after the
second year of employment, the Company will pay 24 months of
Monthly Target Compensation from the date of termination.
The Company at any time may elect to pay the
balance of such severance payments then remaining in a lump sum, in
which case the total of such payments shall be discounted to
present value on the basis of the applicable Federal short-term
monthly rate as determined according to Code Section 1274(d) for
the month in which the Executive's Date of Termination occurred.
4.1(c) Other Benefits. To the extent not previously
---------------
paid or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other similarly situated executives and their families.
4.1(d) Medical and Health Benefit Continuation. For the
----------------------------------------
remainder of the Employment Period (but in no case less than one
(1) year after the Date of Termination), of such longer period as
any plan, program, practice or policy may provide, the company
shall continue medical and health benefits to the Executive and/or
the Executive's family at least equal to those which would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 2.4(d) if the
Executive's employment had not been terminated, in accordance with
the plans, practices, programs or policies of the Company as those
provided generally to other similarly situated executives and
their families; provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical
or heath benefits under another employer-provided plan, or is
otherwise eligible to receive Medicare or similar medical and
health benefits, the medical and health benefits described herein
shall be secondary to those provided under such other plans during
such applicable period of eligibility.
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4.2 BENEFITS UPON TERMINATION IN CONNECTION WITH A TRIGGERING
TRANSACTION. If (a) a Triggering Transaction occurs during the
Term of the Agreement and within three (3) years after the
Triggering Transaction Date (i) the Company shall terminate the
Executive's employment without Cause, or (ii) the Executive shall
terminate employment with the Company for Good Reason, or,
alternatively, (b) if one of the above-described termination of
employment events occurs within the six-month period prior to the
earlier of (i) a Triggering Transaction or (ii) the execution of a
definitive agreement or contract that eventually results in a
Triggering Transaction, then the Executive shall become entitled to
the payment of the benefits as provided below as of either (y) the
Date of Termination, in the case where the sequence of the
requisite events is as set forth in subsection (a) above or (z) the
Triggering Transaction Date, in the case where the sequence of the
requisite events occurred as set forth in subsection (b) above (the
relevant date for purposes of entitlement to the benefits as set
forth in this Section 4.2 is hereinafter referred to as the
"Entitlement Date"):
4.2(a) Accrued Obligations. Within thirty (30) days
--------------------
after the Date of Termination, the Company shall pay to the
Executive the Accrued Obligations.
In addition, on the date that Incentive Bonuses are paid
to other similarly situated executives for the year in which the
Executive's employment is terminated, the Executive will be paid an
amount equal to the product of the Current Target bonus multiplied
by a fraction, the numerator of which is the number of days during
the fiscal year for which the Incentive Bonus is paid prior to the
Date of Termination and the denominator of which is 365.
4.2(b) Severance Payment. Within thirty (30) days after
-----------------
the Entitlement Date, the Company shall pay to the Executive as
severance pay in a lump sum in cash an amount equal to 2.99 times
his then-current Annual Base Salary and Current Target Bonus.
4.2(c) Stock Options. To the extent not otherwise
--------------
provided for under the terms of the Company's stock option plans or
the Executive's stock option agreements, all stock options held by
the Executive that have not expired in accordance with their
respective terms shall vest and become fully exercisable as of the
Entitlement Date.
4.2(d) Stock Bonus and Incentive Plan Shares. To the
--------------------------------------
extent not otherwise provided for under the terms of the Company's
Stock Bonus and Incentive Plan, all "Matching Shares" (as defined
in such plan) held by or for the benefit of the Executive that are
unvested and restricted at the Date of Termination shall vest and
become unrestricted as of the Entitlement Date and all "Elected
Shares" (as defined in such plan) held by or for the benefit of the
Executive that are restricted at the Date of Termination shall
become unrestricted as of the Entitlement Date.
4.2(e) Medical and Health Benefit Continuation. For a
----------------------------------------
period of ten years after the Entitlement Date and without cost to
the Executive and/or his family, the Company shall continue medical
and health benefits to the Executive and/or the Executive's family
at least equal to those which were being provided to them prior to
the Date of Termination; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive
medical or health benefits under another employer-provided plan,
or is otherwise eligible to receive Medicare or similar medical and
health benefits, the medical and health benefits described herein
shall be secondary to those provided under such other plans during
such applicable period of eligibility.
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4.2(f) Other Benefits. To the extent not previously
---------------
paid or provided, the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided for which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company as those provided generally to
other similarly situated executives and their families.
Any provision in any plan or program of the Company in
which Executive is a participant that precludes Executive from
competing with the Company, or denies Executive entitlement to a
benefit in the event Executive does compete with the Company, shall
be null and void.
4.2(g) Excess Parachute Payment. Anything in this
-------------------------
Agreement to the contrary notwithstanding, in the event that it
shall be determined that any payment or distribution by the Company
to or for the benefit of Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise but determined without regard to any
additional payments required under this Section (a "Payment") would
be subject to the excise tax imposed by Code Section 4999 (or any
successor provision) or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment ( a "Gross-Up
Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes
(and any interest or penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive retains
an amount of the Gross-Up Payment on an after-tax basis equal to
the Excise Tax imposed upon the Payment.
The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after the Executive is informed in writing
of such claim by the Internal Revenue Service and the notification
shall apprise the Company of the nature of the claim and the date
on which such claim is required to be paid. The Executive shall
not pay such claim prior to the expiration of a 30-day period
following the date on which the Executive has given such
notification to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
required). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such
claim, the Executive shall cooperate with the Company in so
contesting; provided, however, that the Company shall bear and pay
-----------------
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest, on an after-
tax basis to the Executive.
4.2(h) Enhanced Supplemental Retirement Plan Benefits.
-----------------------------------------------
The benefit payable to the Executive under the ▇▇▇▇▇▇▇▇ Corporation
Supplemental Plan (as originally effective April 1, 1980 and as
amended from time to time, including a restatement as of January
23, 1990) (the "Supplemental Plan") shall be determined taking into
account the following modifications:
(i) The amount payable to the Executive pursuant to
Section 4 of the Supplemental Plan shall be determined on the basis
of the service with the Company the Executive would have completed
if he had continued to be employed by the Company until retirement
at age 65; provided such additional imputed service shall not
exceed ten years.
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(ii) The Executive may begin to receive payments at any
time after termination without any discount because the payments
commence before the Executive is age 65, regardless of the
provisions of Section 6 of the Supplemental Plan.
(iii) In addition to the benefit payable to the
Executive as determined above, if the Executive has not attained
age 65 as of his Entitlement Date, he shall be entitled to receive
a monthly benefit equal to the amount of old-age insurance benefit
to which he would be entitled at age 65 under the Social Security
Act, based upon the assumption that he will continue to receive
until reaching age 65 compensation that would be treated as wages
for purposes of the Social Security Act at the same rate as he
received such compensation at the time of retirement or severance,
which benefit shall commence on the Executive's Entitlement Date
and shall end when the Executive attains the age of 65 years.
The Executive shall be entitled to receive his entire
benefit, including the enhanced benefits provided by this
Agreement, in a single lump sum cash payment within thirty (30)
days after the Entitlement Date, in which case the total of such
payments shall be discounted to present value on the basis of the
average of the interest rates, as reported in the Wall Street
Journal as of the close of trading for the 20 days that immediately
preceded the Entitlement Date on which the new York Stock Exchange
was open for trading, of the shortest term U.S. Treasury bond that
matures at least 20 years after the Entitlement Date. In the event
enhanced Supplemental Plan benefits are payable pursuant to this
Section on account of a Triggering Transaction, and the Executive
is entitled to a benefit under Section 10 of the Supplemental Plan
on account of a Change in Control (as defined in the Supplemental
Plan), the Executive shall be entitled to the larger of the amounts
computed pursuant to this Section and the amounts computed pursuant
to the Supplemental Plan without regard to this Section. Such
benefit shall be in lieu of any other benefit payable pursuant to
the Supplemental Plan.
4.2(i) Enhanced Retirement Agreement Plan Benefits.
--------------------------------------------
For purposes of determining the amount payable to Executive
pursuant to the Retirement Agreement, as defined in Section 2.4(c)
of this Agreement, the years of service with the Company shall be
determined as if the Executive had continued to be employed by the
Company until age 65 (but not more than ten years of imputed
service.). The Executive shall be entitled to receive such
enhanced benefit in a single lump sum cash payment within thirty
(30) days after the Entitlement Date in an amount equal to the
present value of such Annual Benefit (as defined in the Retirement
Agreement) of the Executive. Such present value shall be
determined on the basis of the average of the interest rates, as
reported in the Wall Street Journal as of the close of trading for
the 20 days that immediately preceded the Entitlement Date on which
the New York Stock Exchange was open for trading, of the shortest
term U.S. Treasury bond that matures at least 20 years after the
Entitlement Date. Such benefit shall be in lieu of any other
benefit payable pursuant to the Retirement Agreement.
4.2(j) Restricted Stock. Any and all Restricted Stock
----------------
issued pursuant to Section 2.4(e) of this Agreement and held by the
Executive shall vest and all restrictions be lifted as of the
Entitlement Date.
4.3 DEATH. If the Executive's employment is terminated by
reason of the Executive's death during the Term of the Agreement
(either prior or subsequent to a Triggering Transaction), this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other than
for (i) payment of Accrued Obligations (as defined in Section
4.1(a)) (which shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within thirty
(30) days of the Date of Termination), and (ii) the timely payment
or provision of Other Benefits
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(as defined in Section 4.1(c)), including death benefits pursuant to
the terms of any plan, policy, or arrangement of the Company.
4.4 DISABILITY. If the Executive's employment is terminated
by reason of the Executive's Disability during the Term of the
Agreement (either prior or subsequent to a Triggering Transaction),
this Agreement shall terminate without further obligations to the
Executive, other than for (1) payment of Accrued Obligations (as
defined in Section 4.1(a)) (which shall be paid to the Executive in
a lump sum in cash within thirty (30) days of the Date of
Termination)and (2) the timely payment or provision of Other
Benefits (as defined in Section 4.1(c) including Disability
benefits pursuant to the terms of any plan, policy or arrangement
of the Company.
4.5 TERMINATION FOR CAUSE; OTHER THAN GOOD REASON. If the
Executive's employment shall be terminated for Cause during the
Term of the Agreement (either prior or subsequent to a Triggering
Transaction), this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to
the Executive his Accrued Compensation (as defined in this
Section), If the Executive terminates employment with the Company
during the Term of the Agreement, (excluding a termination for Good
Reason), this Agreement shall terminate without further obligations
to the Executive, other than for the payment of Accrued
Compensation (as defined in this Section) and the timely payment or
provision of Other Benefits (as defined in Section 4.1(c)). In
such case, all Accrued Compensation shall be paid to the Executive
in a lump sum in cash within thirty (30) days of the Date of
Termination.
For the purpose of this Section, the term "Accrued
Compensation" means the sum of (i) the Executives' Annual Base
Salary through the Date of Termination to the extent not previously
paid, (ii) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon), and (iii)
any accrued vacation pay in each case to the extent not previously
paid.
4.6 NON-EXCLUSIVITY OF RIGHTS: SUPERSESSION OF CERTAIN
BENEFITS. Except as provided in Sections 4.1(d) and 4.2(e) and in
this Section 4.6, nothing in this Agreement shall prevent or limit
the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company and for which
the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any
contract or agreement with the Company. Amounts which are vested
benefits of which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or
agreement with, the Company at or subsequent to the Date of
Termination, shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly
modified by this Agreement.
4.7 FULL SETTLEMENT. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and
except as provided in Sections 4.1(d) and 4.2(e), such amounts
shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay promptly as incurred, to the
full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive
or others of the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the
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Executive regarding the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the
applicable Federal rate provided for in Code Section 7872(f)(2)(A).
4.8 RESOLUTION OF DISPUTES. If there shall be any dispute
between the Company and the Executive (i) in the event of any
termination of the Executive's employment by the Company, whether
such termination was for Cause or Non-Performance, or (ii) in the
event of any termination of employment by the Executive, whether
Good Reason existed, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was
not made in good faith, the Company shall pay all amounts, and
provide all benefits, to the Executive and/or the Executive's
family or other beneficiaries, as the case may be, that the Company
would be required to pay or provide pursuant to Section 4.1 or 4.2
as though such termination were by the Company without Cause or by
the Executive with Good Reason; provided, however, that the
-----------------
Company shall not be required to pay any disputed amounts pursuant
to this Section except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the
Executive is ultimately adjudged by such court not to be entitled.
5. NON-COMPETITION.
5.1 NON-COMPETE AGREEMENT.
5.1(a) It is agreed that during the period beginning on
the date this Agreement terminates and ending two(2) years
thereafter, the Executive shall not, without prior written approval
of the Board, become an officer, employee, agent, partner or
director of any business enterprise in substantial direct
competition (as defined in Section 5.1(b)) with the Company;
provided that, if the Executive is terminated by the Company
without Cause or if the Executive terminated his employment for
Good Reason, then he will not be subject to the restrictions of
this Section.
5.1(b) For purposes of Section 5.1, a business
enterprise with which the Executive becomes associated as an
officer, employee, agent, partner or director shall be considered
in substantial direct competition, if such entity competes with the
Company in any business in which the Company is engaged and is
within the Company's market area as of the date the Agreement
expires.
5.1(c) The above constraint shall not prevent the
Executive from making passive investments, not to exceed five
percent (5%), in any enterprise.
5.2 CONFIDENTIAL INFORMATION. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company
or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company and which shall not be or
become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no
event shall an asserted violation of the provisions of this Section
constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
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6. SUCCESSORS.
6.1 SUCCESSORS OF EXECUTIVE. This Agreement is personal to
the Executive and, without the prior written consent of the
Company, the rights (but not the obligations) shall not be
assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the
benefit of and be enforceable by the Executive's legal
representatives.
6.2 SUCCESSORS OF COMPANY. The Company will require any
successor (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 expressly 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 had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle the Executive to
terminate the Agreement at his option on or after the Triggering
Transaction Date for Good Reason. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any
successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
7. MISCELLANEOUS.
7.1 OTHER AGREEMENTS. The Board may, from time to time in
the future, provide other incentive programs and bonus arrangements
to the Executive with respect to the occurrence of a Triggering
Event that will be in addition to the benefits required to be paid
in the designated circumstances in connection with the occurrence
of a Triggering Transaction. Such additional incentive programs
and/or bonus arrangements will affect or abrogate the benefits to
be paid under this Agreement only in the manner and to the extent
explicitly agreed to by the Executive in any such subsequent
program or arrangement.
7.2 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 certified or registered mail, return receipt
requested, postage prepaid, addressed to the respective addresses
as set forth below; provided that all notices to the Company shall
be directed to the attention of the Chairman of the Board, or to
such other address as one party may have furnished to the other in
writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
Notice to Executive:
--------------------
▇▇▇ ▇. ▇▇▇▇▇▇
Last address of knowledge to the Company
Notice to Company:
------------------
▇▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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7.3 VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
7.4 WITHHOLDING. The Company may withhold from any amounts
payable under this Agreement such Federal, state or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
7.5 WAIVER. The Executive's or the Company's failure to
insist upon strict compliance with any provision hereof or any
other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 3.4 shall not be
deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive and the Company, pursuant to
the authorization from its Board, have caused this Agreement to be
executed in its name on its behalf, all as of the day and year
first above written.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Don W. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ CORPORATION
By /s/ ▇. ▇. ▇▇▇▇▇
-----------------------------
▇. ▇. ▇▇▇▇▇
Chairman, President, and CEO
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