EXHIBIT 10(m)
TERMINATION BENEFITS AGREEMENT
This Termination Benefits Agreement ("Agreement") is made and
entered into as of October 29, 2002, by and between Integra Bank Corporation, an
Indiana corporation (hereinafter referred to as the "Corporation") and Xxxxxxx
X. Xxxxxxx (hereinafter referred to as "Employee").
W I T N E S S E T H
WHEREAS, Employee is an at-will employee of the Corporation and has
been appointed an executive officer of the Corporation; and
WHEREAS, the Corporation believes that Employee will make valuable
contributions to the productivity and profitability of the Corporation; and
WHEREAS, the Corporation desires to encourage Employee to continue
to make such contributions and not to seek or accept employment elsewhere; and
WHEREAS, the Corporation, therefore, desires to assure Employee of
certain benefits in case of any termination or significant redefinition of the
terms of his employment with the Corporation in connection with any Change in
Control of the Corporation;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants herein contained and the mutual benefits herein provided, the
Corporation and Employee hereby agree as follows:
1. The term of this Agreement shall be from the date hereof through
December 31, 2005; provided, however, that such term shall be automatically
extended for an additional year on December 31, 2002, and on December 31 of each
year thereafter unless either party hereto gives written notice to the other
party not to so extend prior to November 30 of the year for which notice is
given, in which case no further automatic extension shall occur and the term of
this Agreement shall end on December 31 two (2) years subsequent to the date of
the latest preceding automatic extension. Notwithstanding the foregoing, if a
Change in Control of the Corporation (as defined in Section 2 below) shall occur
prior to the expiration of the original term or any extensions of the term of
this Agreement, then the term of this Agreement shall automatically become a
term of two (2) years commencing on the date of any such Change in Control.
2. As used in this Agreement, "Change in Control" of the Corporation
means:
(A) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act as in
effect from time to time) of twenty-five percent (25%) or more of either
(i) the then
outstanding shares of common stock of the Corporation or (ii) the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; provided,
however, that the following acquisitions shall not constitute an
acquisition of control: (i) any acquisition directly from the Corporation
(excluding an acquisition by virtue of the exercise of a conversion
privilege), (ii) any acquisition by the Corporation, (iii) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by
the Corporation or any corporation controlled by the Corporation, or (iv)
any acquisition by any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (i), (ii) and (iii) of subsection (C)
of this Section 2 are satisfied;
(B) Individuals who, as of the date hereof, constitute the Board of
Directors of the Corporation (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board of Directors of the
Corporation (the "Board"); provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination for
election by the Corporation's shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual
or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(C) Approval by the shareholders of the Corporation of a
reorganization, merger or consolidation, in each case, unless, following
such reorganization, merger or consolidation, (i) more than sixty percent
(60%) of, respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation
and the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of directors
is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Corporation common stock and
outstanding Corporation voting securities immediately prior to such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization,
merger or consolidation, of the outstanding Corporation stock and
outstanding Corporation voting securities, as the case may be, (ii) no
Person (excluding the Corporation, any employee benefit plan or related
trust of the Corporation or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization, merger or consolidation,
directly or indirectly, twenty-five percent (25%) or more of the
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outstanding Corporation common stock or outstanding voting securities, as
the case may be) beneficially owns, directly or indirectly, twenty-five
percent (25%) or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the
election of directors and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization,
merger or consolidation were members of the Incumbent Board at the time of
the execution of the initial agreement providing for such reorganization,
merger or consolidation; or
(D) Approval by the shareholders of the Corporation of (i) a
complete liquidation or dissolution of the Corporation or (ii) the sale or
other disposition of all or substantially all of the assets of the
Corporation, other than to a corporation with respect to which following
such sale or other disposition (a) more than sixty percent (60%) of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the outstanding Corporation common stock and
outstanding Corporation voting securities immediately prior to such sale
or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
outstanding Corporation common stock and outstanding Corporation voting
securities, as the case may be, (b) no Person (excluding the Corporation
and any employee benefit plan or related trust of the Corporation or such
corporation and any Person beneficially owning, immediately prior to such
sale or other disposition, directly or indirectly, twenty-five percent
(25%) or more of the outstanding Corporation common stock or outstanding
Corporation voting securities, as the case may be) beneficially owns,
directly or indirectly, twenty-five percent (25%) or more of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors and (c) at least a majority of the members of the board of
directors of such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Corporation.
3. The Corporation shall provide Employee with the benefits set
forth in Section 6 of this Agreement upon any termination of Employee's
employment by the Corporation following a Change in Control during the term of
this Agreement for any reason except the following:
(A) Termination by reason of Employee's death.
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(B) Termination by reason of Employee's "disability." For purposes
hereof, "disability" shall be defined as Employee's inability by reason of
illness or other physical or mental disability to perform the duties
required by his employment for any consecutive One Hundred Eighty (180)
day period, provided that notice of any termination by the Corporation
because of Employee's "disability" shall have been given to Employee prior
to the resumption by him of the performance of such duties.
(C) Termination upon Employee reaching his normal retirement date,
which for purposes of this Agreement shall be deemed to be the end of the
month during which employee reaches sixty-five (65) years of age.
(D) Termination for "cause." As used in this Agreement, the term
"cause" means fraud, dishonesty, theft of corporate assets, or other gross
misconduct by Employee. Notwithstanding the foregoing, Employee shall not
be deemed to have been terminated for cause unless and until there shall
have been delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of
the Corporation's Board at a meeting called and held for the purpose
(after reasonable notice to him and an opportunity for him, together with
his counsel, to be heard before such Board), finding that, in the good
faith opinion of such Board, Employee was guilty of conduct constituting
"cause" and specifying the particulars thereof in detail.
4. The Corporation shall also provide Employee with the benefits set
forth in Section 6 of this Agreement upon any termination of Employee's
employment with the Corporation at Employee's option if any one of the following
events occurs within six (6) months prior to or within two (2) years following a
Change in Control:
(A) Without Employee's express written consent, the assignment of
Employee to any duties which, in Employee's reasonable judgment, are
materially inconsistent with his positions, duties, responsibilities or
status with the Corporation immediately prior to the earlier of
termination of employment or the Change in Control or a substantial
reduction of his duties or responsibilities which, in Employee's
reasonable opinion, does not represent a promotion from his position,
duties or responsibilities immediately prior to the earlier of termination
of employment or the Change in Control.
(B) A reduction by the Corporation in Employee's salary from the
level of such salary immediately prior to the earlier of termination of
employment or the Change in Control or the Corporation's failure to
increase (within twelve (12) months of Employee's last increase in base
salary) Employee's base salary after a Change in Control in an amount
which at least equals, on a percentage basis, the average percentage
increase in base salary for all executive and senior officers of the
Corporation effected in the preceding twelve (12) months.
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(C) The failure by the Corporation to continue in effect any
incentive, bonus or other compensation plan in which Employee
participates, including but not limited to the Corporation's stock option
plans, unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan), with which Employee has consented, has been made
with respect to such plan in connection with the Change in Control, or the
failure by the Corporation to continue Employee's participation therein,
or any action by the Corporation which would directly or indirectly
materially reduce Employee's participation therein.
(D) The failure by the Corporation to continue to provide Employee
with benefits substantially similar to those enjoyed by Employee or to
which Employee was entitled under any of the Corporation's principal
pension, profit sharing, life insurance, medical, dental, health and
accident, or disability plans in which Employee was participating
immediately prior to the earlier of the termination of employment or the
Change in Control, the taking of any action by the Corporation which would
directly or indirectly materially reduce any of such benefits or deprive
Employee of any material fringe benefit enjoyed by Employee or to which
Employee was entitled immediately prior to the earlier of the termination
of employment or the Change in Control, or the failure by the Corporation
to provide Employee with the number of paid vacation and sick leave days
to which Employee is entitled on the basis of years of service or position
with the Corporation in accordance with the Corporation's normal vacation
policy in effect on the date hereof.
(E) The Corporation's requiring Employee to be based anywhere other
than the metropolitan area where the Corporation office at which he was
based immediately prior to the earlier of the termination of employment or
the Change in Control was located, except for required travel on the
Corporation's business in accordance with the Corporation's past
management practices.
(F) Any failure of the Corporation to obtain the assumption of the
obligation to perform this Agreement by any successor as contemplated in
Section 10 hereof.
(G) Any failure by the Corporation or its shareholders, as the case
may be, to reappoint or reelect Employee to a corporate office held by him
immediately prior to the earlier of the termination of employment or the
Change in Control or his removal from any such office including any seat
held at such time on the Corporation's Board of Directors.
(H) The effectiveness of a resignation, tendered at any time, either
before or after a Change in Control and regardless of whether formally
characterized as voluntary or otherwise, by Employee of any corporate
office held by him immediately prior to the Change in Control or of any
seat held at such time on the Corporation's Board of Directors, at the
request of the Corporation or
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at the request of the person obtaining control of the Corporation in such
Change in Control.
(I) Any purported termination of the Employee's employment which is
not effected pursuant to a Notice of Termination satisfying the
requirements of Section 5 hereof (and, if applicable, Section 3(D)
hereof); and for purposes of this Agreement, no such purported termination
shall be effective.
(J) Any request by the Corporation that Employee participate in an
unlawful act or take any action constituting a breach of Employee's
professional standard of conduct.
(K) Any breach by the Corporation of any of the provisions of this
Agreement or any failure by the Corporation to carry out any of its
obligations hereunder.
Notwithstanding anything in this Section 4 to the contrary, Employee's right to
terminate Employee's employment pursuant to this Section 4 shall not be affected
by Employee's incapacity due to physical or mental illness.
5. Any termination of Employee's employment with the Corporation as
contemplated by Section 3 hereof (except subsection 3(A) and 3(C)) or by
Employee as contemplated by Section 4 hereof shall be communicated by written
"Notice of Termination" to the other party hereto. Any "Notice of Termination"
given by Employee pursuant to Section 4 or given by the Corporation in
connection with a termination as to which the Corporation believes it is not
obligated to provide Employee with benefits set forth in Section 6 hereof shall
indicate the specific provisions of this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for such termination.
6. Subject to the conditions and exceptions set forth in Section 3
and Section 4 hereof, the following benefits, less any amounts required to be
withheld therefrom under any applicable federal, state or local income tax,
other tax, or social security laws or similar statutes, shall be paid to
Employee upon any termination of his employment within six (6) months before or
within two (2) years after any Change in Control:
(A) Within thirty (30) days following such a termination or, if
later, such a Change in Control, Employee shall be paid, at his
then-effective salary, for services performed through the date of his
termination. In addition, any earned but unpaid amount of any bonus or
incentive payment (which, for purposes of this Agreement, shall mean that
amount computed in a fashion consistent with the manner in which
Employee's bonus or incentive plan for the year preceding the year of
termination was computed, if Employee received a bonus or incentive
payment during such preceding year in accordance with a plan or program of
the Corporation, or, if not, then the total bonus or incentive payment
received by the Employee during such preceding year, in either case
prorated through the date of
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termination) shall be paid to Employee within thirty (30) days following
the termination of his employment or, if later, such a Change in Control.
(B) Within thirty (30) days following such a termination, Employee
shall be paid a lump sum payment of an amount equal to two and nine-tenths
(2.9) times Employee's "Base Amount." For purposes hereof, Base Amount is
defined as Employee's average includable salary, bonus, incentive payments
and similar compensation paid by the Corporation for the five (5) most
recent taxable years ending before the date on which the Change in Control
occurs (or such shorter period of time that the Employee has been employed
by the Corporation). The definition, interpretation and calculation of the
dollar amount of Base Amount shall be in a manner consistent with and as
required by the provisions of Section 280G of the Internal Revenue Code of
1986, as amended ("Code"), and the regulations and rulings of the Internal
Revenue Service promulgated thereunder. The payments to the Employee under
this Section 6(B) shall be reduced by the full amount that such payment,
when added to all other payments or benefits of any kind to the Employee
by reason of the Change in Control, constitutes an "excess parachute
payment" within the meaning of Section 280G of the Code.
(C) Employee acknowledges and agrees that payment in accordance with
subsections 6(A), 6(B) and 6(C) shall be deemed to constitute a full
settlement and discharge of any and all obligations of the Corporation to
Employee arising out of his employment with the Corporation and the
termination thereof, except for any vested rights Employee may then have
under any insurance, pension, supplemental pension, thrift, employee stock
ownership, or stock option plans sponsored or made available by the
Corporation.
7. The Corporation is aware that upon the occurrence of a Change in
Control the Board of Directors or a shareholder of the Corporation may then
cause or attempt to cause the Corporation to refuse to comply with its
obligations under this Agreement, or may cause or attempt to cause the
Corporation to institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take or attempt to take other action to
deny Employee the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It is the
intent of the Corporation that Employee not be required to incur the expenses
associated with the enforcement of his rights under this Agreement by litigation
or other legal action, nor be bound to negotiate any settlement of his rights
hereunder, because the cost and expense of such legal action or settlement would
substantially detract from the benefits intended to be extended to Employee
hereunder. Accordingly, if following a Change in Control it should appear to
Employee that the Corporation has failed to comply with any of its obligations
under this Agreement or in the event that the Corporation or any other person
takes any action to declare this Agreement void or unenforceable, or institutes
any litigation or other legal action designed to deny, diminish or to recover
from Employee the benefits entitled to be provided to the Employee hereunder,
and that Employee has complied with all of his obligations under this Agreement,
the Corporation
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irrevocably authorizes Employee from time to time to retain counsel of his
choice, at the expense of the Corporation as provided in this Section 7, to
represent Employee in connection with the initiation or defense of any
litigation or other legal action, whether such action is by or against the
Corporation or any director, officer, shareholder, or other person affiliated
with the Corporation, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Corporation and such counsel, the
Corporation irrevocably consents to Employee entering into an attorney-client
relationship with such counsel, and in that connection the Corporation and
Employee agree that a confidential relationship shall exist between Employee and
such counsel. The reasonable fees and expenses of counsel selected from time to
time by Employee as hereinabove provided shall be paid or reimbursed to Employee
by the Corporation on a regular, periodic basis upon presentation by Employee of
a statement or statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of One Hundred Thousand
Dollars ($100,000). Any legal expenses incurred by the Corporation by reason of
any dispute between the parties as to enforceability of or the terms contained
in this Agreement as provided by this Section 7, notwithstanding the outcome of
any such dispute, shall be the sole responsibility of the Corporation, and the
Corporation shall not take any action to seek reimbursement from Employee for
such expenses. Notwithstanding any limitation contained in this Section 7 to the
contrary, Employee shall be entitled to payment or reimbursement of legal
expenses in excess of One Hundred Thousand Dollars ($100,000) if the expenses
were incurred as a result of a dispute under this Agreement in which Employee
obtains a final judgment in his favor from a court of competent jurisdiction or
his claim is settled by the Corporation prior to the rendering of a judgment by
such a court.
8. Employee is not required to mitigate the amount of benefit
payments to be made by the Corporation pursuant to this Agreement by seeking
other employment or otherwise, nor shall the amount of any benefit payments
provided for in this Agreement be reduced by any compensation earned by Employee
as a result of employment by another employer or which might have been earned by
Employee had Employee sought such employment, after the date of termination of
his employment with the Corporation or otherwise.
9. In order to induce the Corporation to enter into this Agreement,
Employee hereby agrees as follows:
(A) He agrees that his employment with the Corporation is terminable
at will by the Corporation and that this Agreement does not alter that
relationship in any way.
(B) He will keep confidential and not improperly divulge for the
benefit of any other party any of the Corporation's confidential
information and business secrets including, but not limited to,
confidential information and business secrets relating to such matters as
the Corporation's finances and operations. All of the Corporation's
confidential information and business secrets shall be the sole and
exclusive property of the Corporation.
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(C) For a period of two years after Employee's employment with the
Corporation ceases, Employee shall not either on his own account or for
any other person, firm or company solicit or endeavor to cause any
employee of the Corporation to leave his employment or to induce or
attempt to induce any such employee to breach any employment agreement
with the Corporation.
In the event of a breach or threatened breach by Employee of the provisions of
this Section 9, the Corporation shall be entitled to an injunction restraining
Employee from committing or continuing such breach. Nothing herein contained
shall be construed as prohibiting the Corporation from pursuing any other
remedies available to it for such breach or threatened breach including the
recovery of damages from Employee. The covenants of this Section 9 shall run not
only in favor of the Corporation and its successors and assigns, but also in
favor of its subsidiaries and their respective successors and assigns and shall
survive the termination of this Agreement.
10. The Corporation shall 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 Corporation, by agreement
in form and substance satisfactory to Employee, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to compensation from the Corporation in the same amount
and on the same terms as Employee would be entitled hereunder if he were to
terminate his employment pursuant to Section 4 hereof, except that for purposes
of implementing the foregoing, the date on which succession becomes effective
shall be deemed the date of termination of Employee's employment with the
Corporation. As used in this Agreement, "Corporation" shall mean the Corporation
as hereinbefore defined and any successor to the business or assets of it as
aforesaid which executes and delivers the agreement provided for in this Section
10 or which otherwise becomes bound by all of the terms and provisions of this
Agreement by operation of law.
11. Should Employee die while any amounts are payable to him
hereunder, this Agreement shall inure to the benefit of and be enforceable by
Employee's executors, administrators, heirs, distributees, devisees and legatees
and all amounts payable hereunder shall be paid in accordance with the terms of
this Agreement to Employee's devisee, legatee or other designee or if there be
no such designee, to his estate.
12. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Employee:
Xxxxxxx X. Xxxxxxx
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000 Xxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
If to the Corporation:
Integra Bank Corporation
00 Xxxxxxxxx Xxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Chief Executive Officer
or to such other address as any party may have furnished to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
13. The validity, interpretation, and performance of this Agreement
shall be governed by the laws of the State of Indiana. The parties agree that
all legal disputes regarding this Agreement will be resolved in Evansville,
Indiana, and irrevocably consent to service of process in such City for such
purpose.
14. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by Employee and the Corporation. No waiver by any party hereto at any
time of any breach by any 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 any prior or subsequent time. No agreements or representation, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by any party which are not set forth expressly in this Agreement.
15. 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.
16. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together will constitute
one and the same Agreement.
17. This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except as provided in Section
10 and Section 11 above. Without limiting the foregoing, Employee's right to
receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent and distribution as set forth in Section 11
hereof, and in the event of any attempted assignment or transfer contrary to
this Section 17, the Corporation shall have no liability to pay any amount so
attempted to be assigned or transferred.
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Any benefits payable under this Agreement shall be paid solely from
the general assets of the Corporation. Neither Employee nor Employee's
beneficiary shall have interest in any specific assets of the Corporation under
the terms of this Agreement. This Agreement shall not be considered to create an
escrow account, trust fund or other funding arrangement of any kind or a
fiduciary relationship between Employee and the Corporation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above set forth.
INTEGRA BANK CORPORATION
("Corporation")
By: /s/ XXXXXXX X. XXX
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Xxxxxxx X. Xxx, Chairman of the Board,
President and Chief Executive Officer
/s/ XXXXXXX X. XXXXXXX
----------------------
Xxxxxxx X. Xxxxxxx ("Employee")
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