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EXHIBIT 10
RETENTION AGREEMENT
THIS AGREEMENT ("Agreement"), made and entered into effective this 1st
day of October, 1999 (the "Effective Date"), by and between XXX XXXXXXX, an
individual resident of the State of Georgia ("Executive"), and ROCK-TENN
COMPANY, a corporation organized under the laws of the State of Georgia (the
"Company").
WITNESSETH:
WHEREAS, the Company and Executive desire to set forth the terms of
Executive's continued employment with the Company during the transition to a new
Chief Executive Officer and the terms of Executive's severance from the Company
if Executive does not remain with the Company for this transition period;
NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
agree as follows:
Section 1. Employment.
1.1. Duties and Responsibilities. Subject to the terms hereof, the
Company will continue to employ Executive as President and Chief
Operating Officer. Executive agrees that his duties and
responsibilities in the management of the Company will be as are
assigned to him from time to time by the Company's Chief Executive
Officer or Board of Directors. Executive shall continue to devote his
full business time and best efforts to rendering services on behalf of
the Company. Executive will continue to fulfill his duties and
responsibilities in a reasonable and appropriate manner in light of the
Company's policies and practices and the laws and regulations which
apply to the Company's operation and administration.
1.2. Term. Unless terminated sooner pursuant to the terms hereof, (i)
this Agreement and Executive's employment with the Company hereunder
will continue until October 1, 2002 (the "Term"), and (ii) thereafter,
if Executive's employment has not terminated prior thereto, this
Agreement will terminate and Executive's employment with the Company
will continue at-will.
Section 2. Compensation.
2.1. Annual Salary. The Company will continue to pay Executive his
current annual base salary of $475,000, less applicable withholdings,
through September 30, 2000. Executive's annual base salary for the
remainder of the Term shall be determined by the Company's Compensation
Committee, in its sole and absolute discretion, after a review
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of Executive's performance and responsibilities, but in no event shall
be less than $475,000, less applicable withholdings. Executive's annual
base salary shall be paid in accordance with the Company's standard
payroll practices and policies.
2.2. Bonus. In addition to an annual base salary, Executive will be
eligible to participate in the Company's bonus plan(s) for senior
executives.
2.3. Stock Options. Executive may be granted stock options to purchase
shares of the Company's class A common stock at the sole and absolute
discretion of the Company's Compensation Committee. Any such stock
options granted to Executive will vest in accordance with the vesting
schedule established by the Compensation Committee and shall otherwise
be governed by the terms and conditions of the applicable stock option
plan(s).
2.4. Benefits. Executive, and to the extent applicable, his family
members, may participate in such medical, dental, disability,
hospitalization, life insurance and other benefit plans (including the
Company's pension plan) as the Company shall maintain from time to time
for the benefit of senior executives of the Company, on the terms and
subject to the conditions set forth in such plans.
2.5. Vacation. Executive shall be entitled to vacation in accordance
with the Company's normal vacation policy. Any unused vacation days in
any calendar year may not be carried over to subsequent years.
2.6. Expenses. The Company shall reimburse Executive for all reasonable
and necessary business expenses incurred by Executive at the request of
and on behalf of the Company. All such expenses shall be documented and
submitted in accordance with the Company's business expense policy.
Section 3. Early Termination.
This Agreement and Executive's employment with the Company hereunder
may be terminated prior to the expiration of the Term as follows:
3.1. Termination for Good Cause. The Company may terminate Executive's
employment at any time for Good Cause. For purposes of this Agreement,
"Good Cause" shall exist if Executive (a) is convicted of, pleads
guilty to, or confesses to any felony or commits any act of fraud,
misappropriation or embezzlement; (b) has engaged in a dishonest act to
the damage or prejudice of the Company or any of its affiliated
entities, as determined by the Company in good faith; (c) has engaged
in intentional or willful misconduct or gross negligence in the
performance of his assigned duties and responsibilities for the Company
which materially damages the property, business, or reputation the
Company or any of its affiliated entities, as determined by the Company
in good faith; (d) fails to comply with a material term of the
Company's written policies or fails to follow a reasonable directive of
the Company's Chief Executive Officer or Board
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of Directors, as determined by the Company in good faith, and, within
ten (10) days after written notice from the Company of such failure,
Executive has not corrected such failure to the satisfaction of the
Company, or, having once received such notice of failure and having so
corrected such failure, Executive at any time thereafter again so
fails; (e) violates any of the provisions contained in Section 5 of
this Agreement; or (f) fails to comply with the terms of this Agreement
(other than Section 5 hereof) and, within ten (10) days after written
notice from the Company of such failure, Executive has not corrected
such failure to the satisfaction of the Company, or, having once
received such notice of failure and having so corrected such failure,
Executive at any time thereafter again so fails.
3.2. Termination Without Good Cause. The Company may terminate
Executive's employment at any time without Good Cause upon giving
Executive ten (10) days prior written notice.
3.3. Termination for Death or Disability. Executive's employment shall
terminate immediately upon his death or Disability. For purposes of
this Agreement, "Disability" shall be as defined in the Company's then
current disability policy but, in the absence of such a definition,
shall mean the failure of Executive, even with reasonable
accommodation, to perform the essential duties and responsibilities of
his position for a period of six (6) months during any consecutive
twelve (12) month period during the Term by reason of Executive's
mental or physical disability. In the event Executive's employment
terminates due to Disability, the Company shall provide written notice
to Executive.
3.4. Termination by Executive for Good Reason. Executive may terminate
his employment at any time for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean (a) a reduction in Executive's
title; (b) an involuntary relocation of Executive's place of employment
from the metropolitan Atlanta area unless such relocation is to a
metropolitan area in which the Company or any successor has relocated
or is relocating its corporate headquarters; (c) a reduction in
Executive's benefits unless such reduction is associated with a similar
reduction of general applicability of the benefits afforded to members
of the Company's management committee who report directly to Executive
as of the Effective Date; or (d) the Company fails to comply with the
terms of this Agreement and, within ten (10) days after written notice
from Executive of such failure, the Company has not corrected such
failure to the satisfaction of Executive.
3.5. Termination by Executive Without Good Reason. Executive may
terminate his employment at any time for any reason upon giving the
Company ten (10) days prior written notice.
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Section 4. Severance Benefits Upon Early Termination.
4.1. General. Regardless of the reason for any termination of
Executive's employment, either prior to or at the expiration of the
Term, Executive shall be entitled to: (a) payment of any earned but
unpaid portion of his annual base salary through the effective date of
termination; (b) any earned but unpaid portion of any bonus due
Executive, under the terms and conditions of the applicable bonus
plan(s), on the effective date of termination; (c) any nonforfeitable
insurance or health benefit as required by law; and (d) any other
vested benefits in accordance with the terms of the Company's benefit
plans under which Executive was participating.
4.2. Termination for Good Cause (Except Under Section 3.1(d)) or Due to
Death or Disability. If Executive's employment is terminated prior to
the expiration of the Term for Good Cause (except under Section 3.1(d))
or due to his death or Disability, Executive shall be entitled only to
the payments and benefits provided in Section 4.1.
4.3. Other Termination.
a. If Executive's employment is terminated prior to the expiration
of the Term by the Company without Good Cause or by Executive with
Good Reason, or if Executive's employment is terminated by
Executive for any reason between October 1, 2000 and October 1,
2002, Executive shall be entitled to (in addition to the payments
and benefits provided in Section 4.1): (i) a lump sum severance
payment equal to two (2) times his annual base salary on the
effective date of the termination, les applicable withholdings
(such lump sum payment shall be in lieu of normal severance); (ii)
continuing health, life, and disability benefits for two (2) years
after termination pursuant to the terms and conditions of the
applicable benefit plans; and (iii) immediate vesting of any
unvested stock options of the Company which Executive holds. The
Company shall pay the lump sum payment in Section 4.3(a)(i) within
thirty (30) days after the effective date of termination.
b. If Executive's employment is terminated by Executive between
the Effective Date and October 1, 2000 without Good Reason,
Executive shall be entitled to (in addition to the payments and
benefits provided in Section 4.1) a lump sum severance payment
equal to one (1) time his annual base salary on the effective date
of the termination, less applicable withholdings (such lump sum
payment shall be in lieu of normal severance). The Company shall
pay the lump sum payment in Section 4.3(b) within thirty (30) days
after the effective date of termination.
c. If Executive's employment is terminated prior to the expiration
of the Term by the Company for Good Cause under Section 3.1(d),
Executive shall be entitled to (in addition to the payments and
benefits provided in Section 4.1), at the option of the Company,
depending on whether the Company elects to obligate
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Executive to a one (1) year or a two (2) year non-competition
covenant pursuant to Section 5.5(d), a lump sum severance payment
equal to either one (1) time or two (2) times his annual base
salary on the effective date of the termination, less applicable
withholdings (such lump sum payment shall be in lieu of normal
severance). The Company shall pay the lump sum payment in Section
4.3(c) within thirty (30) days after the effective date of
termination.
Section 5. Protective Covenants.
5.1. Definitions. For the purposes of this Section 5, the following
definitions shall apply:
i. "Company Businesses" shall mean the following businesses of the
Company and its subsidiaries:
1. manufacturing, marketing, and selling recycled
coated or uncoated paperboard or corrugating medium;
2. manufacturing, marketing, and selling laminated
paperboard products;
3. manufacturing, marketing, and selling folding
cartons;
4. manufacturing, marketing, and selling fiber
partitions;
5. manufacturing, marketing, and selling corrugated
displays or providing packout services;
6. manufacturing, marketing, and selling thermoformed
plastic packaging;
7. manufacturing, marketing, and selling corrugated
packaging; and
8. operating recovered paper facilities.
Executive understands and agrees that the scope of the Company
Businesses may change from time to time during his employment and,
therefore, the definition of the Company Businesses should be
modified to reflect such change in scope. Accordingly, Executive
agrees that the Company may amend the definition of the term
"Company Businesses" during his employment by delivering to
Executive written notice of such change and such amendment shall
be effective upon Executive's receipt of such notice.
b. "Confidential Information" shall mean any secret, confidential,
or proprietary data or information of the Company, including
information received
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by the Company or Executive from any customer or client or
potential customer or client of the Company, not otherwise
included in the definition of Trade Secret. The term Confidential
Information shall not include information that Executive can show
by competent proof has become generally known to the public by the
act of one who has the right to disclose such information without
violating any right of the Company or any customer or client to
which such information pertains.
c. "Territories" shall mean the following geographic areas with
respect to the Company Businesses:
9. for the Company Businesses described in Sections
5.1(a)(i)-(ii) and Section 5.1(a)(iv)-(vi): the continental
United States of America, which Executive acknowledges and
agrees is the primary area in which the Company engages in
these business activities;
10. for the Company Businesses described in Sections 5.1(a)(iii):
the continental United States of America and Quebec and
Ontario Provinces, Canada, which Executive acknowledges and
agrees is the primary area in which the Company engages in
these business activities;
11. for the Company Businesses described in Section 5(a)(vii):
Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi,
North Carolina, South Carolina, and Tennessee, which Executive
acknowledges and agrees is the primary area in which the
Company engages in these business activities; and
12. for the Company Businesses described in Section 5(a)(viii):
the continental United States of America and Quebec Province,
Canada, which Executive acknowledges and agrees is a major
area in which the Company engages in these business
activities.
In the event that any of the Company Businesses are conducted
during Executive's employment in a geographic area that is
different from the geographic area set forth above, Executive
agrees that the Company may amend the definition of the term
"Territory" during Executive's employment by delivering to
Executive written notice of such change and such amendment shall
be effective upon Executive's receipt of such notice.
d. "Trade Secret" shall mean information, including, but not
limited to, technical or non-technical data, a formula, pattern,
compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or
potential customers or suppliers, or other information similar to
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any of the foregoing, which derives economic value, actual or
potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can
derive economic value from its disclosure or use and which is
subject to reasonable efforts by the Company to maintain its
secrecy or confidentiality.
5.2. Acknowledgement. Executive acknowledges that during the course of
his employment with the Company he has received and will receive and
have access to Confidential Information and Trade Secrets of the
Company. Executive agrees that the Company has a legitimate interest in
protecting its valuable Confidential Information and Trade Secrets.
Executive also acknowledges that due to the executive nature of his
position with the Company, Executive has performed and will perform his
duties an responsibilities throughout all the Territories. Executive
agrees that the Company's customer and client contacts and relations
are established and maintained at great expense to the Company and that
Executive has had and will have, by virtue of his employment, unique
and extensive exposure to and personal contact with the Company's
customers and clients and that he has been able to establish a unique
relationship with those customers and clients.
5.3. Trade Secrets. In consideration for the promises under this
Agreement and his continued employment by the Company, Executive agrees
and covenants that, both during and after his employment with the
Company, Executive will hold in a fiduciary capacity for the benefit of
the Company, and will not directly or indirectly use or disclose
(whether on his own behalf or on behalf of any other person,
corporation, partnership, venture, or any other entity or form of
business), except as authorized by the Company in connection with the
performance of Executive's duties, any Trade Secret that Executive may
have or acquire during the term of this Agreement for so long as the
such information remains a Trade Secret.
5.4. Confidential Information. In consideration for the promises under
this Agreement and his continued employment by the Company, Executive
agrees and covenants that, during his employment with the Company and
for a term of two (2) years after termination of his employment,
Executive will hold in a fiduciary capacity for the benefit of the
Company and will not directly or indirectly use or disclose (whether on
his own behalf or on behalf of any other person, corporation,
partnership, venture, or any other entity or form of business), except
as authorized by the Company in connection with the performance of
Executive's duties, any Confidential Information that Executive may
have or acquire (whether or not developed or compiled by Executive and
whether or not Executive has been authorized to have access to such
Confidential Information) during the term of this Agreement. Executive
acknowledges and agrees that nothing contained in this Agreement shall
be deemed a waiver, modification, or limitation of any rights the
Company may have under applicable federal, state, or local laws
pertaining to the protection of trade secrets or confidential
information.
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5.5. Non-Competition. In consideration for the promises under this
Agreement, and in order to protect the Company from unfair competition,
Executive covenants and agrees to the following:
a. Executive will not compete with the Company in any manner and
in any capacity (whether on his own behalf or as owner, partner,
stockholder, investor, officer, director, agent, independent
contractor, associate, executive, consultant or licensor) during
his employment with the Company.
b. If Executive's employment terminates as provided in Section
4.3(b), Executive will not directly or indirectly carry on, or be
engaged, concerned or take part in, any activities or services
identical or similar to any of Executive's duties and
responsibilities under this Agreement for himself or for any
corporation, partnership, venture, entity, or any other form of
business which competes with the Company in the Company Businesses
anywhere in the respective Territories in which the Company
engages in the Company Businesses for a period of one (1) year
after the effective date of termination.
c. If Executive's employment terminates as provided in Sections
4.2 and 4.3(a), Executive will not directly or indirectly carry
on, or be engaged, concerned or take part in, any activities or
services identical or similar to any of Executive's duties and
responsibilities under this Agreement for himself or for any
corporation, partnership, venture, entity, or any other form of
business which competes with the Company in the Company Businesses
anywhere in the respective Territories in which the Company
engages in the Company Businesses for a period of two (2) years
after the effective date of termination.
d. If Executive's employment terminates as provided in Section
4.3(c), Executive will not directly or indirectly carry on, or be
engaged, concerned or take part in, any activities or services
identical or similar to any of Executive's duties and
responsibilities under this Agreement for himself or for any
corporation, partnership, venture, entity, or any other form of
business which competes with the Company in the Company Businesses
anywhere in the respective Territories in which the Company
engages in the Company Businesses for a period of one (1) or two
(2) years after the effective date of termination, depending on
whether the Company exercises its option in Section 4.3(c) to pay
Executive a lump sum severance payment equal to one (1) time or
two (2) times his annual base salary on the effective date of the
termination, less applicable withholdings.
5.6 Non-Solicitation of Customers. In consideration for the promises
under this Agreement and his continued employment by the Company, and
in order to protect the Company from unfair competition, Executive
covenants and agrees to the following:
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a. Executive will not solicit or attempt to solicit any customer
and/or client or actively sought prospective client and/or
customer of the Company for any person or entity other than
Company during his employment with the Company.
i. If Executive's employment terminates as provided in Section
4.3(b), Executive will not, for the purpose of competing with the
Company in the Company Businesses (whether on his own behalf or on
behalf of any other person, corporation, partnership, venture, or
any other entity or form of business), directly or indirectly
solicit or attempt to solicit any customer and/or client or
actively sought prospective client and/or customer of the Company
with whom Executive had material business contact any time during
the twelve (12) months prior to such termination, for a period of
one (1) year after the effective date of termination.
ii. If Executive's employment terminates as provided in Sections
4.2, 4.3(a), and 4.3(c), Executive will not, for the purpose of
competing with the Company in the Company Businesses (whether on
his own behalf or on behalf of any other person, corporation,
partnership, venture, or any other entity or form of business),
directly or indirectly solicit or attempt to solicit any customer
and/or client or actively sought prospective client and/or
customer of the Company with whom Executive had material business
contact any time during the twelve (12) months prior to such
termination, for a period of two (2) years after the effective
date of termination.
5.7. Non-Hiring Away of Employees. In consideration for the promises
under this Agreement and his continued employment by the Company, and
in order to protect the Company from unfair competition, Executive
agrees and covenants that both during his employment and for a period
of three (3) years after the termination of his employment, he will
not, for any reason (whether on his own behalf or on behalf of any
other person, corporation, partnership, venture, or any other entity or
form of business), directly or indirectly employ or solicit for
employment any employee of the Company with whom Executive had material
business contact during his employment with the Company or, if this
Agreement is terminated, any time during the twelve (12) months prior
to such termination.
5.8. Reasonable Restrictions. Executive acknowledges and confirms that
the restrictions and covenants contained in Section 5 are reasonably
necessary to protect the good will and legitimate business interests of
the Company, are not overbroad, overlong, or unfair (including in
duration and scope), and are not the result of overreaching, duress or
coercion of any kind. Executive further acknowledges and confirms that
his full, uninhibited, and faithful observance of each of the covenants
contained in this Section 5 will not cause him any undue hardship,
financial or otherwise, and that enforcement of each of the covenants
contained herein will not impair his ability to obtain employment
commensurate with his abilities and on terms fully acceptable to him or
otherwise to obtain income required for the comfortable support of him
and his family and the
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satisfaction of the needs of his creditors. Executive acknowledges and
confirms that his special abilities and knowledge of the Company
Businesses are such that it would cause the Company serious,
irreparable injury or loss if he were to use such abilities and
knowledge to the benefit of a competitor or were to otherwise violate
these covenants. Executive further acknowledges that the restrictions
contained in Section 5 are intended to be, and shall be, for the
benefit of and shall be enforceable by, the Company's successors and
assigns.
5.9 . Legal and Equitable Remedies. Executive agrees that for any
breach or threatened breach of any of the provisions of this Section 5,
the Company shall be entitled to immediate injunctive relief and that a
restraining order and/or an injunction may issue against Executive to
prevent or restrain any such breach or threatened breach, in addition
to any other rights or remedies at law the Company may have.
5.10. Reformation. If any of the covenants in Section 5 is determined
by any court of law or equity, with jurisdiction over this matter, to
be unreasonable or unenforceable, in whole or in part, as written,
Executive hereby consents to and affirmatively requests that said court
reform the covenant so as to be reasonable and enforceable to the
maximum extent permitted by law and that said court enforce the
covenant as reformed. The time periods during which the prohibitions
set forth in this Section 5 shall apply shall be tolled and suspended
for a period equal to the aggregate quantity of time during which
Executive violates such prohibition in any respect; provided, however,
such tolled period shall not exceed a period of one year.
Section 6. Return of Company Property.
All the Company's property, equipment, funds, books, records, files,
memoranda, reports, lists, drawings, plans, sketches, documents, computer files,
and other material (together with all copies thereof) , which Executive shall
use, prepare or come in contact with or possession of during the course of, or
as a result of, his employment shall, as between the parties hereto, remain the
sole property of the Company. Upon the termination of Executive's employment or
upon the prior demand of the Company, Executive shall immediately return all
such property or materials and thereafter shall not remove or cause to be
removed such materials from the premises of the Company.
Section 7. Miscellaneous.
7.1. Assignment. This Agreement is for the personal services of
Executive, and the rights and obligations of Executive under this
Agreement are not assignable or delegable in whole or in part by
Executive without the prior written consent of the Company. This
Agreement is assignable in whole or in part to any parent,
subsidiaries, or affiliates of the Company or to any successor to the
Company, whether by merger, consolidation, sale of stock, sale of
assets or otherwise.
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7.2. Applicable Law. This Agreement has been entered into in and shall
be governed by and construed under the laws of the State of Georgia
(except to the extent that its choice of law rules would apply the laws
of another State).
7.3. Consent to Jurisdiction. Executive consents, and waives any
objection, to personal jurisdiction and venue in the federal and state
courts in Gwinnett County, Georgia in any action by the Company to
enforce this Agreement.
7.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same instrument.
7.5. Headings and Captions. The headings and captions used in this
Agreement are for convenience of reference only, and shall in no way
define, limit, expand or otherwise affect the meaning or construction
of any provision of this Agreement.
7.6. Attorneys Fees. The prevailing party shall be entitled to recover
his or its reasonable costs and attorneys' fees incurred in any action
to enforce this Agreement.
7.7. Modification. Except as provided in Sections 5.10 and 7.8, no
provision of this Agreement may be amended, changed, altered, modified
or waived except in writing signed by Executive and an officer of the
Company, which writing shall specifically reference this Agreement and
the provision which the parties intend to waive or modify.
7.8. Severability. Except as provided in Sections 5.10 and 7.7, should
any provision of this Agreement be declared or determined by any court
of competent jurisdiction to be unenforceable or invalid for any
reason, the validity of the remaining parts, terms or provisions of
this Agreement shall not be affected thereby and the invalid or
unenforceable part, term or provision shall be deemed not to be a part
of this Agreement.
7.9. Waiver. The waiver by any party to this Agreement of a breach of
any of the provisions of this Agreement shall not operate or be
construed as a waiver of any subsequent or simultaneous breach of the
same or different provisions.
7.10. Survival. Any provision of this Agreement which is intended to
survive the termination of this Agreement, including Sections 5 and 6,
shall survive and remain in effect after the termination of this
Agreement 1.
7.11. No Third-Party Beneficiaries. Except as provided in Section 7.1,
nothing herein, expressed or implied, is intended or will be construed
to confer upon or give to any person, firm, corporation or legal
entity, other than the parties hereto and any parent, subsidiary,
affiliate, or successor of the Company, any rights, remedies or other
benefits under or by reason of this Agreement.
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7.12. Entire Agreement. This Agreement constitutes a single integrated
contract expressing the entire agreement of the parties hereto. There
are no other agreements, written or oral, express or implied, between
the parties hereto, concerning the subject matter hereof.
7.13. Notices. Unless otherwise agreed to in writing by the parties
hereto, all communications provided for hereunder shall be in writing
and shall be deemed to be given when delivered if delivered in person,
on the next business day if delivered by facsimile or national
overnight courier service, or five (5) business days after being sent
by first-class mail, registered or certified, return receipt requested,
with proper postage prepaid, addressed as follows:
If to the Company:
Rock-Tenn Company
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive:
or to such other representative or at such other address of a party as
such party hereto may furnish to the other parties in writing.
7.14. Understanding. Executive herewith covenants and agrees that he
has read and fully understands the contents and the effect of this
Agreement. Executive warrants and agrees that he has had a reasonable
opportunity and been advised in writing to seek the advice of an
attorney as to such content and effect. Executive accepts each and all
of the terms, provisions, and conditions of this Agreement, and does so
voluntarily and with full knowledge and understanding of the contents,
nature, an effect of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first above written.
ROCK-TENN COMPANY
/s/ XXXXX X. XXXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxxx
Chief Executive Officer
EXECUTIVE
/s/ XXX XXXXXXX
------------------------------------------
Xxx Xxxxxxx
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