Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as of the 1/st/ day of August 2002, by and between
GETTY IMAGES, INC., a Delaware corporation (the "Company"), whose principal
executive offices are located at 000 X. 00/xx/ Xxxxxx, Xxxxxxx, XX 00000, and
Xxxxxxxxx X. Xxxxxxx, an individual (the "Executive").
WITNESSETH:
WHEREAS, the Executive is presently serving as Senior Vice President,
Chief Financial Officer, of the Company; and
WHEREAS, both parties desire that the terms and conditions of the
Executive's employment with the Company be governed by the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Employment and Duties.
(a) General. With effect from the date set forth above (the
"Effective Date"), Executive agrees upon the terms and conditions herein set
forth to continue to serve as Senior Vice President, Chief Financial Officer, of
the Company and shall perform all duties customarily appurtenant to such
position. In such capacity, the Executive shall report directly and only to the
Chief Executive Officer of the Company. The Executive's principal place of
business shall be 000 X. 00/xx/ Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(b) Services and Duties. For so long as the Executive is employed by
the Company hereunder, and except as otherwise expressly provided in Section
1(c) below, the Executive shall devote Executive's full business time to the
performance of Executive's duties hereunder; shall faithfully serve the Company;
shall in all material respects conform to and comply with the lawful and good
faith directions and instructions given to Executive by Executive's direct
supervisor and shall use Executive's best efforts to promote and serve the
interests of the Company.
(c) No Other Employment. For so long as Executive is employed by the
Company, Executive shall not, directly or indirectly, render services to any
other person or organization for which he receives compensation without the
prior approval of the Executive's direct supervisor. No such approval will be
required if the Executive seeks to perform inconsequential services without
direct compensation therefor in connection with the management of personal
investments or in connection with the performance of charitable and civic
activities, provided that such activities do not contravene the provisions of
Section 6 hereof.
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(d) Payment for Services to be Performed; Obligations. Compensation
to be paid under this Agreement shall be made with regard to all the Executive's
services to be provided to the Company globally.
2. Term of Employment. The term of the Executive's employment under
this Agreement (the "Term") shall commence on the Effective Date and continue
until it is terminated by either party giving the other written notice of
termination. All severance obligations of the Company on the termination of this
Agreement, if any, are set forth in Section 4 below.
3. Compensation and Other Benefits. Subject to the provisions of
this Agreement, the Company shall pay and provide the following compensation and
other benefits to the Executive during the Term as compensation for all services
rendered hereunder:
(a) Salary. The Company shall pay to the Executive an annual salary
(the "Salary") at the initial rate of Three Hundred Thirty Thousand Dollars
($330,000), payable to the Executive in accordance with the normal payroll
practices of the Company for its executive officers as are in effect from time
to time. The amount of the Executive's Salary shall be reviewed annually by
Executive's supervisor on or about April 1 of each year during the Term
beginning in the 2003 calendar year.
(b) Annual Bonus. The Executive shall be eligible for each calendar
year thereafter that begins with the Term to participate in an annual incentive
bonus program established by the Company in accordance with the policies of the
Company and subject to such terms, conditions and performance targets as may be
recommended by the Chief Executive Officer ("CEO") and approved annually by the
Compensation Committee of the Board (the "Compensation Committee"). Under the
terms of the annual incentive bonus program, the Executive will be afforded the
opportunity to earn up to fifty percent (50%) of Executive's Salary (the
"Bonus") in effect for the applicable calendar year.
(c) Expenses. The Company acknowledges that the successful operation
of its business may require Executive to incur reasonable business expenses
while rendering services to the Company for such things as business travel,
lodging, meals and other business expenses. Executive shall be reimbursed by the
Company for such expenses after presentation of appropriate receipts and
statements, according to the procedures established by the Company.
(d) Vacation. The Company shall provide Executive with twenty (20)
days of vacation with pay during each year of Executive's employment under this
Agreement. In the event Executive ceases to be an employee of the Company for
any reason, Executive shall not be paid in lieu of accumulated vacation days.
(e) Other Specific Benefits and Perquisites. Executive and the CEO
shall agree to any benefits to be provided to Executive pursuant to this Section
3(f), subject to approval by the Compensation Committee.
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(f) Medical and Other Related Benefits. The Company shall provide
Executive with Company disability and health insurance and sick leave benefits
consistent with those granted to other senior executives of the Company.
Executive will be eligible to participate in any deferred compensation plan
adopted by the Company for its senior executives.
4. Termination of Employment. Subject to the notice and other
provisions of this Section 4, the Company shall have the right to terminate
Executive's employment hereunder, and Executive shall have the right to resign,
at any time for any reason or for no stated reason.
(a) Termination for Cause; Resignation Without Good Reason.
(i) If the Executive's employment is terminated by the Company
for Cause or if the Executive resigns from Executive's employment hereunder
other than for Good Reason, Executive shall be entitled to payment of
Executive's Salary through and including the date of termination or resignation
as well as any unreimbursed expenses. Except to the extent required by the terms
of any applicable compensation or benefit plan or program or as otherwise
required by applicable law, the Executive shall have no rights under this
Agreement or otherwise to receive any other compensation or to participate in
any other plan, program or arrangement after such termination or resignation of
employment with respect to the year of such termination or resignation and later
years.
(ii) Termination for "Cause" shall mean termination of the
Executive's employment with the Company because of (A) willful, material or
persistently repeated non-performance of the Executive's duties to the Company
(other than by reason of the incapacity of the Executive due to physical or
mental disability) after notice of such failure and the Executive's
non-performance and continued, willful, material or persistent repeated
non-performance after such notice, (B) the indictment of the Executive for a
felony offense, (C) the commission by the Executive of fraud against the Company
or any willful misconduct that brings the reputation of the Company into serious
disrepute or causes the Executive to cease to be able to perform Executive's
duties, or (D) any other material breach by the Executive of any material term
of this Agreement.
(iii) Termination of the Executive's employment for Cause shall
be communicated by delivery to the Executive of a written notice from the
Company stating that the Executive has been terminated for Cause, specifying the
particulars thereof and the effective date of such termination. The date of a
resignation by the Executive without Good Reason (as defined in Section 4(b)(ii)
below) shall be the date specified in a written notice of resignation from the
Executive to the Company. The Executive shall provide at least 30 days' advance
written notice of resignation without Good Reason.
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(b) Involuntary Termination.
(i) If the Company terminates the Executive's employment for
any reason other than Disability or Cause or Executive resigns from Executive's
employment hereunder for Good Reason (collectively hereinafter referred to as an
"Involuntary Termination"), the Company shall pay to the Executive Executive's
Salary and Accrued Bonus through and including the date of termination or
resignation as well as any unreimbursed expenses. For purposes of this
Agreement, "Accrued Bonus" shall be determined based on the maximum amount for
which the Executive is eligible as described in Section 3(b) using the number of
days in the applicable calendar year that the Executive was employed by the
Company (through the date of termination or resignation). In addition, the
Company shall pay to the Executive as severance (the "Severance Payments")
within thirty (30) days after the date of termination a lump sum payment in an
amount equal to the sum of Executive's Salary at the rate in effect immediately
prior to such Involuntary Termination plus fifty percent (50%) of the
Executive's Bonus based on the maximum amount for which the Executive is
eligible as described in Section 3(b) above.
(ii) Resignation for "Good Reason" shall mean resignation by
Executive because of (A) an adverse and material change in the Executive's
duties, (B) a material breach by the Company of a material term of this
Agreement, (C) the failure of the Company to pay the Executive any material
amount of compensation when due, (D) a change in control, or (E) a relocation of
the Executive's principal place of business without Executive's prior written
consent. The Company shall have 30 business days from the date of receipt of
such notice to effect a cure of the material breach described therein and, upon
cure thereof by the Company to the reasonable satisfaction of the Executive,
such material breach shall no longer constitute Good Reason for purposes of this
Agreement.
(iii) The date of termination of employment without Cause shall
be the date specified in a written notice of termination to the Executive. The
date of resignation for Good Reason shall be the date specified in a written
notice of resignation from the Executive to the Company; provided, however, that
no such written notice shall be effective unless the cure period specified in
Section 4(b)(ii) above has expired without the Company having corrected, to the
reasonable satisfaction of the Executive, the event or events subject to cure.
(c) Termination following a Change in Control. In the event of a
Change in Control (defined as it is for purposes of the Getty Images, Inc. 1998
Stock Incentive Plan), the Executive shall have the right to resign Executive's
employment with the Company. The Company shall pay to the Executive Executive's
Salary and Accrued Bonus through and including the date of termination or
resignation as well as any unreimbursed expenses. Executive also will be
entitled to receive within thirty (30) days of the resignation date a lump sum
payment in an amount equal to two times Executive's Salary at the rate in effect
immediately prior to the Change of Control, plus one times the Executive's Bonus
based on the maximum amount for which the Executive is eligible as described in
Section 3(b). As per the terms of the Company's Stock Option Plan, in the event
of a Change in Control, all unvested options then outstanding shall become fully
exercisable as of the date of the Change in Control, whether or not then
exercisable, provided, however, that no stock option shall be exercisable
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after the expiration of ten (10) years after the date the stock option award was
granted (or any earlier expiration period as stated in the applicable award
agreement).
(d) Termination Due to Disability. In the event of the Executive's
Disability (as hereinafter defined), the Company shall be entitled to terminate
Executive's employment on providing the Executive with six months' prior written
notice. In addition to payment of Salary through and including the date of
termination and any unreimbursed business expenses, Executive will be entitled
to receive within thirty (30) days of the termination date a lump sum payment in
an amount equal to Executive's Salary at the rate in effect immediately prior to
the Disability, less any amounts paid to the Executive under any disability plan
of the Company. As used in Section 4(d), the term "Disability" shall mean a
physical or mental incapacity that substantially prevents the Executive from
performing Executive's duties hereunder and that has continued for at least six
of the last twelve months and that can reasonably be expected to continue
indefinitely. Any dispute as to whether or not the Executive is disabled within
the meaning of the preceding sentence shall be resolved by a physician
reasonably satisfactory to the Executive and the Company, and the determination
of such physician shall be final and binding upon both the Executive and the
Company.
(e) Beneficiary. For purposes of this Agreement, "Beneficiary" shall
mean the person or persons designated in writing by the Executive to receive
benefits under a plan, program or arrangement or to receive the balance of the
Severance Payments, if any, in the event of the Executive's death, or, if no
such person or persons are designated by the Executive, the Executive's estate.
No beneficiary designation shall be effective unless it is in writing and
received by the Company prior to the date of the Executive's death.
5. Limitation on Payments.
Notwithstanding any other provisions of this Agreement, if either the
Company or the Executive receives confirmation from the Company's independent
tax counsel or its certified public accounting firm (the "Tax Advisor"), that
any termination benefit granted by the Company to the Executive under this
Agreement or otherwise would be considered to be an "excess parachute payment"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended, or any successor statute then in effect (the "Code"), then the
following rules shall apply:
(i) The Company shall compute the net value to the Executive of all such
termination benefits after reduction of the excise taxes imposed by
Section 4999 of the Code and for any income taxes that would be
imposed on Executive if such termination benefits constituted
Executive's sole taxable income.
(ii) The Company shall next compute the maximum amount of termination
benefits that can be provided without any benefits being characterized
as Excess Parachute Payments and reduce the result by the amount of
any income taxes that would be
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imposed on Executive if such reduced termination benefits constituted
Executive's sole taxable income.
If the result derived in subparagraph (i) is greater than the result
derived in subparagraph (ii), then the Company shall provide Executive the full
amount of termination benefits without reduction. If the result derived from
subparagraph (i) is not greater than the result derived in subparagraph (ii),
then the Company shall provide the Executive the maximum amount of termination
benefits that can be provided without any termination benefits being
characterized as "excess parachute payments."
6. Protection of the Company's Interests.
(a) No Competing Employment. For so long as the Executive is employed
by the Company and, in circumstances where the Executive receives a payment
pursuant to Section 4(b), 4(c) or 4(d) or Executive's employment is terminated
for Cause, but in no other circumstances, and continuing for the remainder of
the Term (such period being referred to hereinafter as the "Restricted Period"),
the Executive shall not, without the prior written consent of the CEO, directly
or indirectly, own an interest in, manage, operate, join, control, lend money or
render financial or other assistance to or participate in or be connected with,
as an officer, executive, partner, stockholder, consultant or otherwise, any
individual, partnership, firm, corporation or other business organization or
entity that competes with the Company by providing any goods or services
provided or under development by the Company at the effective date of the
Executive's termination of employment under this Agreement; provided, however,
that this Section 6(a) shall not proscribe the Executive's ownership, either
directly or indirectly, of either less than five percent of any class of
securities which are listed on a national securities exchange or quoted on the
automated quotation system of the National Association of Securities Dealers,
Inc. or any limited partnership investment over which the Executive has no
control.
(b) No Interference. During the Restricted Period, in circumstances
where the Executive receives a payment pursuant to Section 4(b), 4(c) or 4(d) or
Executive's employment is terminated for Cause, and in no other circumstances,
the Executive shall not, whether for her own account or for the account of any
other individual, partnership, firm, corporation or other business organization
(other than the Company), intentionally solicit, endeavor to entice away from
the Company or otherwise interfere with the relationship of the Company with,
any key person or team who is employed by or otherwise engaged to perform
services for the Company or any key person or team or entity who is, or was
within the then most recent twelve-month period, a customer, client or supplier
of the Company.
(c) Secrecy. The Executive recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of Executive's employment hereunder, Executive may acquire confidential
information and trade secrets concerning the operation of the Company, the use
or disclosure of which could cause the Company substantial losses and damages
which could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, the Executive covenants and agrees with the
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Company that Executive will not at any time, except in performance of the
Executive's obligations to the Company hereunder or with the prior written
consent of the CEO, directly or indirectly disclose to any person any secret or
confidential information that Executive may learn or has learned by reason of
Executive's association with the Company. The term "confidential information"
means any information not previously disclosed to the public or to the trade by
the Company with respect to the Company's, or any of its affiliates' or
subsidiaries', products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including the
revenues, costs or profits associated with any of the Company's products),
business plans, prospects or opportunities.
(d) Exclusive Property. The Executive confirms that all confidential
information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by the Executive relating to
the business of the Company shall be and remain the property of the Company.
Upon the termination of her employment with the Company or upon the request of
the Company at any time, the Executive shall promptly deliver to the Company,
and shall not without the consent of the CEO retain copies of, any written
materials not previously made available to the public, or records and documents
made by the Executive or coming into Executive's possession concerning the
business or affairs of the Company; provided, however, that subsequent to any
such termination, the Company shall provide the Executive with copies (the cost
of which shall be borne by the Executive) of any documents which are requested
by the Executive and which the Executive has determined in good faith are (i)
required to establish a defense to a claim that the Executive has not complied
with her duties hereunder or (ii) necessary to the Executive in order to comply
with applicable law.
(e) Assignment of Developments. All "Developments" (as defined below)
that were or are at any time made, conceived or suggested by Executive, whether
acting alone or in conjunction with others, during Executive's employment with
the Company shall be the sole and absolute property of the Company, free of any
reserved or other rights of any kind on the part of Executive. During
Executive's employment and, if such Developments were made, conceived or
suggested by Executive during Executive's employment with the Company,
thereafter, Executive shall promptly make full disclosure of any such
Developments to the Company and, at the Company's cost and expense, do all acts
and things (including, among others, the execution and delivery under oath of
patent and copyright applications and instruments of assignment) deemed by the
Company to be necessary or desirable at any time in order to effect the full
assignment to the Company of Executive's right and title, if any, to such
Developments. For purposes of this Agreement, the term "Developments" shall mean
all data, discoveries, findings, reports, designs, inventions, improvements,
methods, practices, techniques, developments, programs, concepts, and ideas,
whether or not patentable, relating to the activities of the Company of which
Executive is as of the date of this Agreement aware or of which Executive
becomes aware at any time during the Term, excluding any Development for which
no equipment, supplies, facilities or confidential information of the Company
was used and which was developed entirely on Executive's own time, unless (i)
the Development relates directly to the business of the
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Company, (ii) the Development relates to actual or demonstrably anticipated
research or development of the Company, or (iii) the Development results from
any work performed by Executive for the Company (the foregoing is agreed to
satisfy the written notice and other requirements of Section 49.44.140 of the
Revised Code of Washington).
(f) Injunctive Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of the
covenants contained in this Section 6 may result in material irreparable injury
to the Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this Section
6 or such other relief as may be required to specifically enforce any of the
covenants in this Section 6. Without intending to limit the remedies available
to the Executive, the Executive shall be entitled to seek specific performance
of the Company's obligations under this Agreement.
(g) Compliance with Securities Applicable Laws. The Executive shall
during the continuance of Executive's employment (and shall procure that
Executive's spouse or partner and Executive's minor children shall comply) with
all applicable rules of law, stock exchange regulations and codes of conduct
applicable to employees, officers and directors of the Company and the Company
for the time being in force in relation to dealings in the shares, debentures
and other securities of the Company or any unpublished share price sensitive
information affecting the securities of any other company with which the Company
has dealings (provided that the Executive shall be entitled to exercise any
options granted to Executive under any share option plan established by the
Company or any member of the Company, subject to the rules of such plan).
(h) Compliance with Company Policy. During the continuance of
Executive's employment, Executive shall observe the terms of any policy issued
by the Company in relation to payments, rebates, discounts, gifts, entertainment
or other benefits from any third party in respect of any business transacted or
proposed to be transacted (whether or not by Executive) by or on behalf of the
Company or any member of the Company.
7. General Provisions.
(a) Source of Payments. All payments provided under this Agreement,
other than payments made pursuant to a plan which provides otherwise, shall be
paid in cash from the general funds of the Company, and no special or separate
fund shall be established, and no other segregation of assets made, to assure
payment. Executive shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to receive
payments from the Company hereunder, such right shall be no greater than the
right of an unsecured creditor of the Company; provided, however, that this
provision shall not be deemed to waive or
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abrogate any preferential or other rights to payment accruing to the Executive
under applicable bankruptcy laws by virtue of the Executive's status as an
executive of the Company.
(b) No Other Severance Benefits. Except as specifically set forth in
this Agreement, the Executive covenants and agrees that Executive shall not be
entitled to any other form of severance benefits from the Company, including,
without limitation, benefits otherwise payable under any of the Company's
regular severance policies, in the event Executive's employment hereunder ends
for any reason and, except with respect to obligations of the Company expressly
provided for herein, the Executive unconditionally releases the Company and its
subsidiaries and affiliates, and their respective directors, officers,
executives and stockholders, or any of them, from any and all claims,
liabilities or obligations under this Agreement or under any severance or
termination arrangements of the Company or any of its subsidiaries or affiliates
for compensation or benefits in connection with Executive's employment or the
termination thereof.
(c) Tax Withholding and Gross-Up. Payments to the Executive of all
compensation contemplated under this Agreement shall be subject to all
applicable tax withholding. If it is determined that any payment made or benefit
provided to Executive pursuant to Section 3(c) or 3(f) is subject to any income
tax payable under any United States federal, state, local or other law, then
Executive shall receive a tax gross-up payment with respect to such taxes. The
tax gross-up payment will be an amount such that, after payment of taxes on such
payment, there remains a balance sufficient to pay the taxes being reimbursed.
Any such tax gross-up payments will be made at the time Executive's US federal
income tax return for the applicable calendar year is filed.
(d) Notices. Any notice hereunder by either party to the other shall
be given in writing by personal delivery, or certified mail, return receipt
requested, or (if to the Company) by facsimile, in any case delivered to the
applicable address set forth below:
(i) To the Company: Getty Images, Inc.
Attn: Chief Executive Officer
000 X. 00/xx/ Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Facsimile 0-000-000-0000
(ii) To the Executive: Xxxxxxxxx X. Xxxxxxx
or to such other persons or other addresses as either party may specify to the
other in writing.
(e) Representation by Executive. Executive represents and warrants
that Executive's entering into this Agreement does not, and that Executive's
performance under this Agreement and consummation of the transactions
contemplated hereby will not, violate the
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provisions of any agreement or instrument to which the Executive is a party, or
any decree, judgment or order to which the Executive is subject, and that this
Agreement constitutes a valid and binding obligation of the Executive in
accordance with its terms. Breach of this representation will render all of the
Company's obligations under this Agreement void ab initio.
(f) Limited Waiver. The waiver by the Company or Executive of a
violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(g) Assignment; Assumption of Agreement. No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by Executive in respect of any claim, debt, obligation
or similar process. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and to 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.
(h) Amendment; Actions by the Company. This Agreement may not be
amended, modified or canceled except by written agreement of Executive and the
Company. Any and all determinations, judgments, reviews, verifications,
adjustments, approvals, consents, waivers or other actions of the Company
required or permitted under this Agreement shall be effective only if undertaken
by the CEO.
(i) Severability. If any term or provision hereof is determined to be
invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(j) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Washington (determined without
regard to the choice of law provisions thereof).
(k) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties hereto with respect to the matters covered
hereby and supersedes all prior agreements and understandings of the parties
with respect to the subject matter hereof.
(l) Headings. The headings and captions of the sections of this
Agreement are included solely for convenience of reference and shall not control
the meaning or interpretation of any provisions of this Agreement.
(m) Counterparts. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
GETTY IMAGES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive Officer
EXECUTIVE
By: /s/ Xxxxxxxxx X. Xxxxxxx
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