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EXHIBIT (10)EE.(i)
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TERMINATION AGREEMENT
THIS AGREEMENT dated and entered into effective and as of the 29th day
of December, 1986, by and between United Jersey Banks, a New Jersey corporation
(the "Company"), and , residing at
New Jersey (the "Executive").
W I T N E S S E T H:
WHEREAS, should the Company receive a proposal from a third person,
whether solicited by the Company or unsolicited, concerning a possible business
combination with or the acquisition of a substantial share of the equity or
voting securities of, the Company, the Board of Directors of the Company (the
"Board") has deemed it imperative that it and the Company be able to rely on the
Executive to continue to serve in his position, and that the Board and the
Company be able to receive and rely upon his advice, if they request it, as to
the best interests of the Company and its shareholders, without concern that the
Executive might be distracted by the personal uncertainties and risks that such
a proposal might otherwise create; and
WHEREAS, the Company desires to enhance executive morale and its
ability to retain existing management; and
WHEREAS, the Company desires to reward the Executive for his valuable,
dedicated service to the Company or one or more of its subsidiary corporations
(each, a "Subsidiary") should his service be terminated under circumstances
hereinafter described; and
WHEREAS, the Board therefore considers it in the best interests of the
Company and its shareholders for the Company to enter into Termination
Agreements, in form similar to this Agreement, with certain key executive
officers of the Company and one or more of its Subsidiaries; and
WHEREAS, the Executive is presently the duly elected and acting
President and Chief Executive Officer of United Jersey Bank, and is a key
executive with whom the Company has been authorized by the Board to enter into
this Agreement;
NOW, THEREFORE, to assure the Company of the Executive's continued
dedication and the availability of his advice and counsel in the event of any
such proposal, to induce the Executive to remain in the employ of the Company or
a Subsidiary, and to reward the Executive for his valuable, dedicated service to
the Company or a Subsidiary should his service be terminated under circumstances
hereinafter described, and for other good and valuable consideration, the
receipt and adequacy whereof each party acknowledges, the Company and the
Executive agree as follows:
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1. OPERATION, EFFECTIVE DATE, AND TERM OF AGREEMENT.
(a) This Agreement is effective and binding on both parties as of the
date hereof. Notwithstanding its present effectiveness, the provisions of
paragraphs 3 and 4 of this Agreement shall become operative only when, as and if
there has been a "Change in Control" of the Company. For purposes of this
Agreement, a "Change in Control" of the Company shall mean a Change in Control
of a nature that would be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934 ("Exchange Act"); provided that, without limitation, such a Change in
Control shall be deemed to have occurred if (i) any "person" (including as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of securities of the Company
representing thirty-three and one-third percent (33-1/3%) or more of the
combined voting power of the Company's outstanding securities then entitled to
vote for the election of directors; or (ii) during any period of two (2)
consecutive years, individuals who at the beginning of such period constitute
the Board cease for any reason to constitute at least a majority thereof
(excluding, for purposes of this calculation, any director who dies during such
period); or (iii) the Company shall meet the delisting criteria of the New York
Stock Exchange or any successor exchange in respect of the number of
publicly-held shares or the number of stockholders holding one hundred (100)
shares or more; or (iv) the Board shall approve the sale of all or substantially
all of the assets of the Company; or (v) the Board shall approve any merger,
consolidation, issuance of securities or purchase of assets, the result of which
would be the occurrence of any event described in clause (i), (ii) or (iii)
above.
(b) The Company shall be obligated to make the payments referred to in
paragraphs 3 and 4 hereof following, and the provisions of paragraph 2 hereof
shall apply to, a Change in Control of the Company only if such Change in
Control shall have occurred within, or as a result of efforts designed to attain
such and known to the parties hereto to have commenced within, five (5) years
from the date hereof (or such later date as the Board shall determine).
2. EMPLOYMENT OF EXECUTIVE.
Nothing herein shall affect any right which the Executive or the
Company or a Subsidiary may otherwise have to terminate the Executive's
employment by the Company or a Subsidiary at any tine in any lawful manner,
subject always to the Company's providing to the Executive the payments and
benefits specified in paragraphs 3 and 4 of this Agreement to the extent
hereinbelow provided.
In the event any person commences a tender or exchange offer,
circulates a proxy statement to the Company's shareholders or takes other steps
designed to effect a Change in Control of the Company as defined in paragraph 1
of this Agreement, the Executive agrees that he will not voluntarily leave the
employ of the Company or a Subsidiary, and will continue to perform his regular
duties and to render the services specified in the recitals of this Agreement,
until such person has
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abandoned or terminated his efforts to effect a Change in Control or until a
Change in Control has occurred. Should the Executive voluntarily terminate his
employment before any such effort to effect a Change in Control of the Company
has commenced, or after any such effort has been abandoned or terminated without
effecting a Change in Control and no such effort is then in process, this
Agreement shall lapse and be of no further force or effect.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(a) If any of the events described in paragraph 1 hereof constituting a
Change in Control of the Company shall have occurred, the Executive shall be
entitled to the benefits provided in paragraph 4 hereof upon the subsequent
termination of his employment within the applicable period set forth in
paragraph 4 hereof following such Change in Control unless such termination is
(i) due to the Executive's death or Retirement; or (ii) by the Company or a
Subsidiary by reason of the Executive's Disability or for Cause; or (iii) by the
Executive other than for Good Reason.
(b) If following a Change in Control the Executive's employment is
terminated by reason of his death or Disability, the Executive shall be entitled
to death or long-term disability benefits, as the case may be, from the Company
no less favorable than those benefits to which he would have been entitled had
the death or termination for Disability occurred during the six month period
prior to the Change in Control. If prior to any such termination for Disability,
the Executive fails to perform his duties as a result of incapacity due to
physical or mental illness, he shall continue to receive his Base Salary less
any benefits as may be available to him under the Company's or Subsidiary's
disability plans until his employment is terminated for Disability.
(c) If the Executive's employment shall be terminated by the Company or
a Subsidiary for Cause or by the Executive other than for Good Reason, the
Company shall pay to the Executive his full Base Salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
and the Company shall have no further obligations to the Executive under this
Agreement.
(d) For purposes of this Agreement:
(i) "Disability" shall mean the Executive's incapacity due to physical
or mental illness such that the Executive shall have become qualified
to receive benefits under the Company's or Subsidiary's long-term
disability plans or any equivalent coverage required to be provided to
the Executive pursuant to any other plan or agreement, whichever is
applicable.
(ii) "Retirement" shall mean that the Executive shall have reached the
normal retirement date provided in the Company's or Subsidiary's
retirement plans applicable to such Executive or any earlier actual
retirement by the Executive from his employment with the Company or a
Subsidiary.
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(iii) "For Cause" shall mean:
(A) the willful commission by the Executive of a criminal or
other act that causes or will probably cause substantial
economic damage to the Company or a Subsidiary or substantial
injury to the business reputation of the Company or a
Subsidiary:
(B) the commission by the Executive of an act of fraud in the
performance of such Executive's duties on behalf of the
Company or a Subsidiary;
(C) the continuing willful failure of the Executive to perform
the duties of such Executive to the Company or a Subsidiary
(other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after written
notice thereof (specifying the particulars thereof in
reasonable detail) and a reasonable opportunity to be heard
and cure such failure are given to the Executive by the
Personnel Committee of the Board; or
(D) the order of a federal or state bank regulatory agency or
a court of competent jurisdiction requiring the termination of
the Executive's employment.
(iv) "Good Reason" shall mean:
(A) The assignment by the Company or a Subsidiary to the
Executive of duties which (i) are materially different or
require travel significantly more time consuming or extensive
than the Executive's duties or business travel obligations
immediately prior to the Change in Control, or (ii) result,
without the Executive's express written consent, in either a
significant reduction in the Executive's authority and
responsibility as a senior corporate executive of the Company
or a Subsidiary when compared to the highest level of
authority and responsibility assigned to the Executive at any
time during the six (6) month period prior to the Change in
Control, or, (iii) without the Executive's express written
consent, the removal of the Executive from, or any failure to
reappoint or reelect the Executive to, the highest title held
since the date six (6) months before the Change in Control,
except in connection with a termination of the Executive's
employment by the Company or a Subsidiary for Cause, or by
reason of the Executive's death, Disability or Retirement;
(B) A reduction by the Company or a Subsidiary of the
Executive's salary grade or Base Salary, or the failure to
grant increases in the Executive's Base Salary on a basis at
least substantially comparable to those granted to other
executives of the Company or a Subsidiary of comparable title,
salary grade and performance ratings made in good faith;
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(C) The relocation of the Company's principal executive
offices (or in the case of an employee of a Subsidiary, the
principal executive offices of such Subsidiary) to a location
outside the State of New Jersey, or the Company's requiring
the Executive to be based anywhere other than the Company's
principal executive offices (or in the case of an employee of
a Subsidiary, the principal executive offices of such
Subsidiary) except for required travel on the Company's or a
Subsidiary's business to an extent substantially consistent
with the Executive's present business travel obligations, or
in the event of any relocation of the Executive with the
Executive's express written consent, the failure by the
Company or a Subsidiary to pay (or reimburse the Executive
for) all reasonable moving expenses by the Executive relating
to a change of principal residence in connection with such
relocation and to indemnify the Executive against any loss
realized in the sale of the Executive's principal residence in
connection with any such change of residence, all to the
effect that the Executive shall incur no loss on an after tax
basis;
(D) The failure by the Company or a Subsidiary to continue to
provide the Executive with substantially the same welfare
benefits (which for purposes of this Agreement shall mean
benefits under all welfare plans as that term is defined in
Section 3(1) of the Employee Retirement Income Security Act of
1974, as amended) and perquisites, including participation on
a comparable basis in the Company's or a Subsidiary's
retirement plans, Incentive Bonus Plan, Savings Incentive
Plan, Long-Term Performance Stock Plan, Executive Severance
Plan, stock option plans and other plans in which executives
of the Company or a Subsidiary of comparable title and salary
grade participate, as were provided to the Executive
immediately prior to such Change in Control of the Company, or
with a package of welfare benefits and perquisites, that,
though one or more of such benefits or perquisites may vary
from those, including participation on a comparable basis in
the Company's or a Subsidiary's retirement plans, Incentive
Bonus Plan, Savings Incentive Plan, Long-Term Performance
Stock Plan, Executive Severance Plan and stock option plans,
is substantially comparable in all material respects to such
welfare benefits and perquisites, including participation on a
comparable basis in the Company's or a Subsidiary's retirement
plans, Incentive Bonus Plan, Savings Incentive Plan, Long-Term
Performance Stock Plan, Executive Severance Plan and stock
option plans, taken as a whole; or
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(E) The failure of the Company to obtain the express written
assumption of and agreement to perform this Agreement by any
successor as contemplated in subparagraph 5(d) hereof.
(v) "Dispute" shall mean (i) in the case of termination of employment
of an Executive with the Company or a Subsidiary by the Company or a
Subsidiary for Disability or Cause, that the Executive challenges the
existence of Disability or Cause and (ii) in the case of termination of
employment of an Executive with the Company or a Subsidiary by the
Executive for Good Reason, that the Company or a Subsidiary challenges
the existence of Good Reason.
(vi) "Base Salary" shall mean the amount determined by multiplying the
Executive's highest bi-weekly or other periodic rate of base pay paid
to the Executive during the twelve-month period immediately prior to
the giving of the Notice of Termination by the number of pay periods
per year. The following items are not part of base pay, as used herein:
reimbursed expenses, any amount paid on account of overtime or holiday
work, payment on account of insurance premiums or other contributions
made to other welfare or benefit plans, any year-end or other bonuses,
commissions and gifts.
For purposes of this subparagraph (d), no act, or failure to act, on
the Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interests of the Company or a Subsidiary.
(e) Any purported termination of employment by the Company or a
Subsidiary by reason of the Executive's Disability or for Cause, or by the
Executive for Good Reason shall be communicated by written Notice of Termination
to the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice given by the Executive or the Company or a
Subsidiary, as the case may be, which shall indicate the specific basis for
termination and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for determination of any payments under this
Agreement. An Executive shall not be entitled to give a Notice of Termination
that the Executive is terminating his employment with the Company or a
Subsidiary for Good Reason more than six (6) months following the occurrence of
the event alleged to constitute Good Reason.
(f) For purposes of this Agreement, "Date of Termination" shall mean
the date specified in the Notice of Termination, which shall be not more than
ninety (90) days after such Notice of Termination is given. If within thirty
(30) days after any Notice of Termination is given, the party who receives such
Notice of Termination notifies the other party that a Dispute (as heretofore
defined) exists, the Date of Termination shall be the date on which the Dispute
is finally determined, either by
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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); provided that the Date of
Termination shall be extended by a notice of Dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such Dispute with reasonable diligence and provided further that pending the
resolution of any such Dispute, the Company or a Subsidiary shall continue to
pay the Executive the same Base salary and to provide the Executive with the
same or substantially comparable welfare benefits and perquisites, including
participation in the Company's or a Subsidiary's retirement plans, Savings
Incentive Plan, Incentive Bonus Plan, Long-Term Performance Stock Plan,
Executive Severance Plan, and stock option plans that the Executive was paid and
provided immediately prior to the Change in Control of the Company. Should it
ultimately be determined that a challenged termination by the Company or a
Subsidiary by reason of the Executive's Disability or for Cause was justified,
or that a challenged termination by the Executive for Good Reason was not
justified, then all sums paid by the Company or a Subsidiary to the Executive
from the date of termination specified in the Notice of Termination until final
resolution of the Dispute pursuant to this paragraph shall be repaid promptly by
the Executive to the Company or a Subsidiary, with interest at the base rate
charged from time to time by United Jersey Bank, Hackensack, all options, rights
and restricted stock granted to the Executive during such period shall be
cancelled or returned to the Company or Subsidiary, and no service as an
employee shall be credited to the Executive for such period for pension
purposes. The Executive shall not be obligated to pay to the Company or a
Subsidiary the cost of providing the Executive with welfare benefits and
perquisites for such period unless the final judgment, order or decree of a
court resolving the Dispute determines that the Executive acted in bad faith in
giving a notice of Dispute. Should it ultimately be determined that a challenged
termination by the Company or a Subsidiary by reason of the Executive's
Disability or for Cause was not justified, or that a challenged termination by
the Executive for Good Reason was justified, then the Executive shall be
entitled to retain all sums paid to the Executive pending resolution of the
Dispute and shall be entitled to receive, in addition, the payments and other
benefits provided for in paragraph 4 hereof.
4. PAYMENTS UPON TERMINATION.
If within three years after a Change in Control of the Company, the
Company or a Subsidiary shall terminate the Executive's employment other than by
reason of the Executive's death, Disability, Retirement or for Cause or if the
Executive shall terminate his employment for Good Reason then,
(a) the Company or a Subsidiary will pay to the Executive as
compensation for services rendered, on or before the Executive's Date of
Termination, a lump sum cash amount (subject to any applicable payroll or other
taxes required to be withheld computed at the rate for supplemental payments)
equal to the Executive's Base Salary, but in no event greater than 2.99 times
the average of the Executive's annual compensation payable
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by the Company and its Subsidiaries and includible in the Executive's gross
income for Federal income tax purposes for the five calendar years immediately
preceding the Change in Control (or such portion of such period during which the
Executive was an employee of the Company or a Subsidiary);
(b) the Executive will be entitled to receive "Special Retirement
Benefits" as provided herein, so that the total retirement benefits the
Executive receives from the Company will approximate the total retirement
benefits the Executive would have received under all retirement plans (which
shall not include severance plans) and other employment contracts of the Company
and its Subsidiaries in which the Executive participates were the Executive
fully vested under such retirement plans and entitled to all benefits payable
under such other employment contracts and had the Executive continued in the
employ of the Company or a Subsidiary for thirty-six months following Date of
Termination or until his Retirement, if earlier (provided that such additional
period shall be inclusive of and shall not be in addition to any period of
service credited under any severance plan of the Company or a Subsidiary). The
benefits specified in this subparagraph will include all ancillary benefits,
such as early retirement and survivor rights and benefits available at
retirement. The amount payable to the Executive or his beneficiaries under this
subparagraph shall equal the excess of (1) the benefits that would be paid to
the Executive or his beneficiaries, under all retirement plans and other
employment contracts of the Company and its Subsidiaries in which the Executive
participates if (A) the Executive were fully vested under such plans and
entitled to all benefits payable under such other employment contracts, (B) the
thirty-six (36) month period (or the period until his Retirement, if less)
following the Date of Termination were added to his credited service under such
plans and contracts, (C) such plans were hereafter not amended in a way that
adversely affects the Executive, and (D) the Executive's highest average annual
base salary as defined under such retirement plans and other employment
contracts were calculated as if the Executive had been employed by the Company
or a Subsidiary for a thirty-six (36) month period (or the period until his
Retirement, if earlier) following the Date of Termination and had the
Executive's salary during such period been equal to the Executive's Base Salary;
over (2) the benefits that are payable to the Executive or his beneficiaries
under all retirement plans and other employment contracts of the Company and its
Subsidiaries in which the Executive participates. These Special Retirement
Benefits are provided on an unfunded basis, are not intended to meet the
qualification requirements of Section 401 of the Internal Revenue Code and shall
be payable solely from the general assets of the Company. These Special
Retirement Benefits shall be payable at the times and in the manner provided in
the applicable retirement plans and other employment contracts to which they
relate.
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5. GENERAL.
(a) The Executive shall retain in confidence any proprietary or other
confidential information known to him concerning the Company and its business
(including the Company's Subsidiaries and their businesses) so long as such
information is not publicly disclosed and disclosure is not required by an order
of any governmental body or court.
(b) If litigation shall be brought to enforce or interpret any
provision contained herein, the Company shall indemnify the Executive for his
reasonable attorney's fees and disbursements incurred in such litigation and pay
prejudgment interest on any money judgment obtained by the Executive calculated
at the United Jersey Bank, Hackensack, base rate of interest in effect from time
to time from the date that payment should have been made under the Agreement;
provided that the Executive shall not have been found by the court to have acted
in bad faith, which finding must be final with the time to appeal therefrom
having expired and no appeal having been taken.
(c) The Company's obligation to pay the Executive the compensation and
to make the arrangements provided herein shall be absolute and unconditional and
shall not be affected by any circumstance, including, without limitation, any
setoff, counterclaim, recoupment, defense or other right which the company may
have against the Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Except as expressly provided
herein, the Company waives all rights which it may now have or may hereafter
have conferred upon it, by statute or otherwise, to terminate, cancel or rescind
this Agreement in whole or in part. Except as provided in paragraph 3(f) herein,
each and every payment made hereunder by the Company shall be final and the
Company will not seek to recover for any reason all or any part of such payment
from the Executive or any person entitled thereto. The Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement by
seeking other employment or otherwise.
(d) 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, by written agreement in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
paragraph 5 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(e) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts would still be
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payable to the Executive hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee or other designee
or, if there be no such designee, to the Executive's estate. The obligations of
the Executive hereunder shall not be assignable by the Executive.
6. NOTICE.
For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xx. Xxxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxxx, Xxx. 0X
Xxxxxxxxxx, Xxx Xxxxxx 00000
If to the Company:
United Jersey Banks
000 Xxxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Secretary to the Board
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
7. MISCELLANEOUS.
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing, signed by
the Executive and such officer as may be specifically designated by the Board.
No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No assurances or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement. However, this Agreement is in
addition to and not in lieu of any other plan providing for payments to or
benefits for the Executive or any agreement now existing or which hereafter may
be entered into between the Company and the Executive. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New Jersey.
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8. FINANCING
All amounts due and benefits provided under this Agreement shall
constitute general obligations of the Company in accordance with the terms of
this Agreement. The Executive shall have only an unsecured right to payment
thereof out of the general assets of the Company. Notwithstanding the foregoing,
the Company may, by agreement with one or more trustees to be selected by the
Company, create a trust on such terms as the Company shall determine to make
payments to the Executive in accordance with the terms of this Agreement.
9. VALIDITY.
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect. Any provision in this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating or affecting the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
UNITED JERSEY BANKS EXECUTIVE
By: ______________________________ ____________________________
T. Xxxxxx Xxxxxx, Chairman of
the Board and President
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