EXHIBIT 10.4
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Dated: May 1, 1996
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EMPLOYMENT AGREEMENT
- by and between -
HOLLYWOOD CASINO CORPORATION
- and -
XXXXXX X. XXXXX III
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TABLE OF CONTENTS
Page
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RECITALS 1
1. DEFINITIONS 2
2. PRIOR EMPLOYMENT 4
3. BASIC EMPLOYMENT AGREEMENT 4
4. DUTIES OF EMPLOYEE 4
5. ACCEPTANCE OF EMPLOYMENT 5
6. TERM 5
7. SPECIAL TERMINATION PROVISIONS 5
8. COMPENSATION TO EMPLOYEE 7
(a) Base Salary 7
(b) Base Salary Adjustment 7
(c) Incentive Bonus 8
(d) Employee Benefit Plans 8
(e) Expense Reimbursement 9
(f) Licensing Expenses 9
(g) Vacations and Holidays 9
9. LICENSING REQUIREMENTS 10
10. CONFIDENTIALITY 11
11. RESTRICTIVE COVENANT 12
12. BEST EVIDENCE 13
13. SUCCESSION 13
14. ASSIGNMENT 13
15. AMENDMENT OR MODIFICATION 14
16. GOVERNING LAW 14
17. NOTICES 14
18. INTERPRETATION 15
i
19. SEVERABILITY 15
20. DISPUTE RESOLUTION 15
21. WAIVER 15
22. PAROL 16
EXECUTION PAGE 17
ii
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
the 1st day of May, 1996, by and between HOLLYWOOD CASINO CORPORATION, a
Delaware corporation ("Employer"), and XXXXXX X. XXXXX III ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer is a corporation, duly organized and existing under the
laws of the State of Delaware, which develops and/or operates land-based,
riverboat and dockside casinos and related support facilities in emerging and
established gaming jurisdictions and which has a need for qualified,
experienced personnel;
WHEREAS, Employee is an adult individual currently residing at 00000 Xxxxx
Xxxx Xxxxx, Xxxxxx, Xxxxx 00000;
WHEREAS, Employee has represented and warranted to Employer that Employee
possesses sufficient qualifications and expertise in order to fulfill the
terms of the employment stated in this Agreement; and
WHEREAS, Employer is willing to employ Employee, and Employee is desirous
of accepting employment from Employer, under the terms and pursuant to the
conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing recitals, and in
consideration of the mutual covenants, agreements, understandings,
undertakings, representations,
1
warranties and promises hereinafter set forth, and intending to be legally
bound thereby, Employer and Employee do hereby covenant and agree as follows:
1. DEFINITIONS. As used in this Agreement, the words and terms
hereinafter defined have the respective meanings ascribed to them herein,
unless a different meaning clearly appears from the context:
(a) "Cause" - means (i) the conviction of Employee of
a felony by a court of competent jurisdiction; (ii) the indictment
of Employee by a state or federal grand jury of competent
jurisdiction for embezzlement or misappropriation of Employer's
funds or for any act of dishonesty or lack of fidelity towards
Employer; (iii) a decree of a court of competent jurisdiction that
Employee is not mentally competent or is unable to handle his own
affairs; (iv) the written confession by Employee of any act of
dishonesty towards Employer or any embezzlement or misappropriation
of Employer's funds; (v) the payment (or, by the operation solely of
the effect of a deductible, the failure of payment) by a surety or
insurer of a claim under a fidelity bond issued to the benefit of
Employer reimbursing Employer for a loss due to the wrongful act or
wrongful omission to act of Employee (the occurrence of which shall
cause Employee to be indebted to Employer for the greater of either
(A) the loss incurred by Employer or (B) the sums paid by Employer
to Employee pursuant to this Agreement); (vi) Employee's breach of
the restrictive covenant set forth in Paragraph 11 of this
Agreement, or (vii) Employee's failure to maintain in force and in
good standing any and all licenses, permits and/or approvals
required of Employee by the relevant governmental authorities for
the discharge of the obligations of Employee under this Agreement,
provided that should Employee's required licenses, permits and/or
approvals be suspended pending a final license, permit or approval
revocation determination, this Agreement shall not terminate but any
compensation which would otherwise be paid by Employer to Employee
under Paragraph 8 of this Agreement shall be suspended and accrued
pending the final resolution of such final license, permit and/or
approval revocation determination, and, in the event such final
resolution of such final license, permit and/or approval revocation
determination does not revoke Employee's licenses, permits and/or
approvals, any compensation which has been so suspended and accrued
shall be paid by Employer to Employee, provided, however, that
Employee's disability due to illness or accident or any other mental
or physical incapacity shall not constitute "Cause" as defined
herein.
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(b) "Complete Disability" - means the inability of Employee, due to
illness or accident or other mental or physical incapacity, to
perform his obligations under this Agreement for a period of three
hundred sixty (360) calendar days in the aggregate over a period of
five hundred (500) consecutive calendar days, such "Complete
Disability" to become effective upon the expiration of such three
hundred sixtieth (360th) day.
(c) "Confidential Information" - means any information in any form,
regardless of the medium or media by which such information is
recorded or communicated, that is in the possession of Employer
being neither in the public domain nor routinely available to third
parties, and if directly or indirectly disclosed to Employer's
competitors (i) would assist such competitors in competing against
Employer, (ii) would diminish or eliminate any competitive advantage
now enjoyed by Employer,(iii) would cause financial injury or loss
to Employer, or (iv) would reveal proprietary information or trade
secrets of Employer.
(d) "Effective Date" - means May 1, 1996.
(e) "Employee" - means Xxxxxx X. Xxxxx III.
(f) "Employer" - means Hollywood Casino Corporation, a Delaware
corporation.
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(g) "Employer's Affiliates" - means any parent, subsidiary,
affiliate or other legal entity of Employer.
(h) "Prior Employment" - means any prior employment Employee has had
with either Employer or Employer's Affiliates.
2. PRIOR EMPLOYMENT. This Agreement supersedes and replaces any and
all prior employment agreements, whether written or oral, by and between
Employee, on the one side, and Employer or Employer's Affiliates, on the other
side. From and after the Effective Date, Employee shall be the employee of
Employer under the terms and pursuant to the conditions set forth in this
Agreement.
3. BASIC EMPLOYMENT AGREEMENT. Subject to the terms and pursuant to
the conditions hereinafter set forth, Employer hereby employs Employee during
the Term hereinafter specified to serve in a managerial or executive capacity,
under a title and with such duties not inconsistent with those set forth in
Paragraph 4 of this Agreement, as the same may be modified and/or assigned to
Employee by Employer from time to time. Notwithstanding the foregoing,
Employer and Employee hereby covenant and agree that, in the absence of mutual
consent of both Employer and Employee, Employee shall not be assigned duties
by Employer which would require that Employee maintain his principal place of
residence or primary place of employment outside of the greater metropolitan
area of Dallas, Texas.
4. DUTIES OF EMPLOYEE. Employee shall perform such duties assigned to
Employee by Employer as are generally associated with the duties of President
and Chief Operating Officer of Employer, or
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such similar duties as may be assigned to Employee by the Chairman of the
Board of Directors of Employer, including but not limited to (i) the efficient
and continuous operation of Employer and Employer's Affiliates; (ii) the
preparation of relevant budgets and allocation of relevant funds; (iii) the
selection and delegation of duties and responsibilities of subordinates; (iv)
the direction, review and oversight of all operations and programs under
Employee's supervision; and (v) such other and further duties specifically
related to such duties as assigned by Employer to Employee. In the
performance of his duties hereunder, Employee shall report directly to the
Chairman of the Board/Chief Executive Officer and the Board of Directors of
Employer. Notwithstanding the foregoing, Employee shall devote such time to
Employer's Affiliates as required by Employer, provided such duties are not
inconsistent with Employee's primary duties to Employer hereunder.
5. ACCEPTANCE OF EMPLOYMENT. Employee hereby unconditionally accepts
the employment set forth hereunder, under the terms and pursuant to the
conditions set forth in this Agreement. Employee hereby covenants and agrees
that, during the Term of this Agreement, Employee will devote the whole of his
normal and customary working time and best efforts solely to the performance
of Employee's duties under this Agreement.
6. TERM. The term of this Agreement shall commence on May 1, 1996 and
expire on 12:00 p.m. on April 30, 2000 (the "Term"), unless sooner terminated
as provided herein.
7. SPECIAL TERMINATION PROVISIONS. Notwithstanding the provisions of
Paragraph 6 above, this Agreement and all parties'
5
rights and obligations hereunder shall terminate upon the occurrence of any of
the following events:
(a) the death of Employee; provided, however, that any and all
employee benefits due and owing to Employee shall be paid to the
spouse of Employee in the event of such death;
(b) the giving of written notice from Employer to Employee of the
termination of this Agreement upon the Complete Disability of
Employee; provided, however, that a termination pursuant to this
Paragraph 7(b) shall not affect Employee's vesting or continued
rights in any stock option plan set forth in Paragraph 8(c) of this
Agreement;
(c) the giving of written notice by Employer to Employee of the
termination of this Agreement upon the discharge of Employee for
Cause;
(d) the giving of written notice by Employer to Employee of the
termination of this Agreement without Cause; provided, however,
that, if Employer gives Employee written notice of termination of
this Agreement without Cause, such notice must be accompanied by
Employer's written tender to Employee of Employer's commitment to
continue to pay to Employee the compensation set forth in Paragraph
8(a) of this Agreement; and/or
(e) a Change of Control (as defined in that certain Indenture dated
as of October 17, 1995, among Employer, HWCC-Tunica, Inc. and
Shawmut Bank, National Association (now Fleet National Bank) as
Trustee); provided, however, that, in the event of such Change of
Control, Employer shall be obligated to pay to Employee an amount
(the "Severance Amount") equal to the aggregate compensation which
would have been paid by Employer to Employee under Paragraph 8(a) of
this Agreement during the period (the "Severance Period") from the
date of termination to the later to occur of the expiration date of
this Agreement or thirty-six (36) months from the date of
termination assuming that such termination had not occurred.
Employee shall have the right, exercisable by written notice to
Employer, to elect to have the Severance Amount paid by
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Employer to Employee in (i) a lump sum payment not later than the
date of occurrence of the Change of Control or (ii) equal monthly
installments during the Severance Period.
8. COMPENSATION TO EMPLOYEE. For and in complete consideration for
Employee's full and faithful performance of his duties under this Agreement,
Employer hereby covenants and agrees to pay to Employee, and Employee hereby
covenants and agrees to accept from Employer, the following items of
compensation:
(a) Base Salary. Employer hereby covenants and agrees to pay to
Employee, and Employee hereby covenants and agrees to accept from Employer, an
annual base salary of Four Hundred Twenty-Five Thousand and No/100 Dollars
($425,000.00), effective January 1, 1996, payable in such equal regular
installments as is Employer's custom and usage. Such base salary shall be
exclusive of and in addition to any other benefits which Employer, in its sole
discretion, may make available to Employee, including, but not limited to, any
pension plans, bonus plans, retirement plans, company life insurance plan,
medical and/or hospitalization plans, or any and all other benefit plans which
may from time to time be in available to executive officers of Employer
generally during the Term of this Agreement.
(b) Base Salary Adjustment. The base salary prescribed in Paragraph
8(a) above may be adjusted at such time and in such manner as the Compensation
Committee of the Board of Directors of Employer may determine in accordance
with the executive
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compensation policy of Employer then in effect; provided, however, that such
base salary shall never be less than $425,000 per annum.
(c) Incentive Bonus. Employee shall be eligible to receive one or
more incentive compensation bonuses based upon such performance and other
criteria as Employer shall determine in its sole discretion. After the
Effective Date of this Agreement, Employer will implement an incentive bonus
program in which Employee will participate and which will be used to determine
Employee's incentive bonus. The incentive bonus shall be payable by Employer
to Employee no later than the first day of March of the year following the
calendar year for which the incentive bonus is accrued (or in accordance with
the terms of any applicable incentive bonus program), and, where applicable,
shall be prorated based upon the number of days Employee was employed by
Employer during such calendar year. Any incentive bonus shall be in addition
to Employee's participation in any and all profit sharing plans, bonus
participation plans, stock options or other incentive compensation to which
Employee is entitled to participate or receive.
(d) Employee Benefit Plans. Employer hereby covenants and agrees
that it shall include Employee, if otherwise eligible, in any pension plans,
retirement plans, company life insurance plans, medical and/or hospitalization
plans, and/or any and all other benefit plans which may be placed in effect by
Employer during the Term of this Agreement.
(e) Expense Reimbursement. During the Term of this Agreement,
Employer shall either pay directly or reimburse Employee
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for Employee's reasonable expenses incurred for the benefit of Employer in
accordance with Employer's general policy regarding reimbursement, as the same
may be amended, modified or changed from time to time. Such reimbursable
expenses shall include, but are not limited to, reasonable entertainment and
promotional expenses, gift and travel expenses, dues and expenses of
membership in clubs, professional societies and fraternal organizations, and
the like. Prior to reimbursement, Employee shall provide Employer with
sufficient detailed invoices of such expenses in accordance with the then
applicable guidelines of the Internal Revenue Service so as to permit Employer
to claim a deduction of such expenses.
(f) Licensing Expenses. Employer hereby covenants and agrees that
Employer shall pay all licensing fees and expenses incurred by Employee in
securing and maintaining such licenses and permits required of Employee in
order to perform his duties under this Agreement.
(g) Vacations and Holidays. Commencing as of the Effective Date of
this Agreement, Employee shall be entitled to (i) annual paid vacation leave
in accordance with Employer's standard policy therefor, to be taken at such
times as selected by Employee and approved by Employer, and (ii) the following
paid holidays (or, at Employer's option, an equivalent number of paid days
off): New Year's Day, Xx. Xxxxxx Xxxxxx Xxxx, Xx.'s Birthday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
9. LICENSING REQUIREMENTS. (a) Employer and Employee hereby
covenant and agree that this Agreement may be subject to the approval of (i)
the New Jersey Casino Control
9
Commission (the "CCC") pursuant to the provisions of the New Jersey Casino
Control Act, as amended (the "New Jersey Gaming Act"), and the regulations
promulgated thereunder, (ii) the Illinois Gaming Board (the "IGB") pursuant to
the provisions of the Illinois Riverboat Gambling Act, as amended (the
"Illinois Gaming Act"), and the regulations promulgated thereunder and/or
(iii) the Mississippi Gaming Commission (the "MGC") pursuant to the provisions
of the Mississippi Gaming Control Act, as amended (the "Mississippi Gaming
Act"), and the regulations promulgated thereunder. If this Agreement is
required by the New Jersey Gaming Act, the Illinois Gaming Act and/or the
Mississippi Gaming Act and the regulations promulgated thereunder to be
approved by the CCC, the IGB and/or the MGC, as applicable, but is not so
approved by any such gaming regulatory authority, this Agreement shall
immediately terminate and shall be null and void and of no further force or
effect; provided, however, should this Agreement be required to be approved
but is not so approved by the CCC, the IGB and/or the MGC, Employer and
Employee hereby covenant and agree that, with the exception of the provisions
of Paragraph 8 of this Agreement, this Agreement shall be modified and amended
so as to receive the appropriate approval from the CCC, the IGB and/or the
MGC.
(b) Employer and Employee hereby covenant and agree that, in order for
Employee to discharge the duties required under this Agreement, Employee shall
hold any necessary and appropriate casino key employee license (the "License")
in gaming jurisdictions in which Employer or Employer's Affiliates may now or
hereafter maintain casino operations. In the event that any applicable
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gaming regulatory authority (the "Authority") objects to the renewal of
Employee's License or refuses to renew Employee's License, Employer, at
Employer's sole cost and expense, shall promptly defend such action and shall
take such reasonable steps as may be required to either remove the Authority's
objections or secure the Authority's approval. Notwithstanding the foregoing,
if the source of the Authority's objections or the Authority's refusal to
renew Employee's License arise as a result of any of the events described in
Paragraph 1(a) of this Agreement, Employer's obligations under this Paragraph
9 shall not be operative and Employee shall promptly reimburse Employer upon
demand for any expenses incurred by Employer pursuant to this Paragraph 9.
10. CONFIDENTIALITY. Employee hereby warrants, covenants and agrees
that, without the prior express written approval of Employer, Employee shall
hold in the strictest confidence and shall not disclose to any person, firm,
corporation or other entity, any and all of Employer's Confidential
Information, including, but not limited to, (i) information, letters,
photographs, graphs, samples, or computer software of a confidential nature;
(ii) information or other documents concerning Employer's business, customers
or suppliers; (iii) Employer's marketing methods, files and credit and
collection techniques and files; or (iv) Employer's trade secrets, technical
information, design, process, procedure, improvement and other "know-how" or
information not of a public nature, regardless of how such information came
into the custody of Employee. The warranty, covenant and agreement set forth
in this
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Paragraph 10 shall not expire, shall survive this Agreement and shall be
binding upon Employee without regard to the passage of time or other events.
11. RESTRICTIVE COVENANT. Employee hereby covenants and agrees that,
during the Term of this Agreement or until April 30, 2000, if Employer
terminates Employee pursuant to Paragraph 7(d) above and is continuing to make
payments to Employee as provided therein, Employee shall not directly or
indirectly, either as a principal, agent, employee, employer, consultant,
partner, shareholder of a closely held corporation or shareholder in excess of
five percent (5%) of a publicly traded corporation, corporate officer or
director, or in any other individual or representative capacity, engage or
otherwise participate in any manner or fashion in any business that is in
competition in any manner whatsoever with the principal business activity of
Employer or Employer's Affiliates, in or about any state in which Employer or
Employer's Affiliates are licensed to conduct casino operations (the
"Operating States"), including without limitation any waterways which are
wholly within the Operating States, which are partly within the Operating
States and partly without the Operating States, or which form a boundary
between the Operating States and any other state or body public. Employee
hereby further acknowledges and agrees that the restrictive covenant contained
in this Paragraph 11 is reasonable as to duration, terms and geographical area
and that the same protects the legitimate interests of Employer and Employer's
Affiliates, imposes no undue hardship on Employee and is not injurious to the
public. Notwithstanding anything express or implied herein to the contrary,
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the restrictive covenant contained in this Paragraph 11 shall not apply in the
event of the termination of this Agreement due to a Change of Control.
12. BEST EVIDENCE. This Agreement shall be executed in original and
"Xerox" or photostatic copies and each copy bearing original signatures in ink
shall be deemed an original.
13. SUCCESSION. This Agreement shall be binding upon and inure to the
benefit of Employer and Employee and their respective successors and assigns.
14. ASSIGNMENT. Employee shall not assign this Agreement or delegate
his duties hereunder without the express written prior consent of Employer
thereto. Any purported assignment by Employee in violation of this Paragraph
14 shall be null and void and of no force or effect. Employer shall have the
right to assign this Agreement freely; provided, however, that in the event of
such an assignment by Employer and the assignee subsequently defaults under
the terms of this Agreement, Employer shall remain liable for compliance with
the terms of Paragraph 8 of this Agreement.
15. AMENDMENT OR MODIFICATION. This Agreement may not be amended,
modified, changed or altered except by a writing signed by both Employer and
Employee.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas in effect on the Effective Date
of this Agreement.
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17. NOTICES. Any and all notices required under this Agreement shall be
in writing and shall either hand-delivered; mailed by certified mail, return
receipt requested; or sent via telecopier addressed to:
TO EMPLOYER: Chairman of the Board
Hollywood Casino Corporation
Two Xxxxxxxx Xxxxx, Xxxxx 0000
00000 Xxxx Xxxx, XX 48
Xxxxxx, Xxxxx 00000
WITH COPY TO: General Counsel
Hollywood Casino Corporation
Two Xxxxxxxx Xxxxx, Xxxxx 0000
00000 Xxxx Xxxx, XX 48
Xxxxxx, Xxxxx 00000
TO EMPLOYEE: Xxxxxx X. Xxxxx III
00000 Xxxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
All notices hand-delivered shall be deemed delivered as of the date actually
delivered. All notices mailed shall be deemed delivered as of three (3)
business days after the date postmarked. All notices sent via telecopier
shall be deemed delivered as of the next business day following the date of
the confirmation of delivery. Any changes in any of the addresses listed
herein shall be made by notice as provided in this Paragraph 17.
18. INTERPRETATION. The preamble recitals to this Agreement are
incorporated into and made a part of this Agreement. Titles of paragraphs are
for convenience only and are not to be considered a part of this Agreement.
19. SEVERABILITY. In the event any one or more provisions of this
Agreement is declared judicially void or otherwise unenforceable, the
remainder of this Agreement shall survive and such provision(s) shall be
deemed modified or amended so as to fulfill the intent of the parties hereto.
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20. DISPUTE RESOLUTION. Except for equitable actions seeking to enforce
the provisions of Paragraphs 10 and 11 of this Agreement, jurisdiction and
venue for which is hereby granted to Dallas County, Texas, any and all claims,
disputes or controversies arising between the parties hereto regarding any of
the terms of this Agreement or the breach thereof, on the written demand of
either of the parties hereto, shall be submitted to and be determined by final
and binding arbitration held in Dallas, Texas, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association.
This Agreement to arbitrate shall be specifically enforceable in any court of
competent jurisdiction.
21. WAIVER. None of the terms of this Agreement, including this
Paragraph 21, or any term, right or remedy hereunder shall be deemed waived
unless such waiver is in writing and signed by the party to be charged
therewith and in no event by reason of any failure to assert or delay in
asserting any such term, right or remedy or similar term, right or remedy
hereunder.
22. PAROL. This Agreement constitutes the entire agreement between
Employer and Employee with respect to the subject matter hereto and this
Agreement supersedes any prior understandings, agreements or undertakings by
and between Employer and Employee with respect to the subject matter hereof.
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IN WITNESS WHERE AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties hereto
have executed and delivered this Agreement as of the year and date first above
written.
EMPLOYER:
ATTEST: HOLLYWOOD CASINO CORPORATION, a
Delaware corporation
/s/ Xxxxxxx X. Xxxxx By:/s/ Xxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx Name: Xxxx X. Xxxxx
Title: Secretary Title: Chairman of the Board
& Chief Executive Officer
EMPLOYEE:
/s/ Xxxxxx X. Xxxxx III
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XXXXXX X. XXXXX III
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