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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into effective as
of the 16th day of July, 1999, between Xxxxx X. Xxxx, Ph.D., ("Employee"), and
ILEX Products Incorporated, a Delaware corporation (the "Company"), whose
principal executive offices are located in San Antonio, Texas.
WHEREAS, the Company desires to employ Employee, and Employee desires to
be employed by the Company, on terms hereinafter set forth;
NOW, THEREFORE, in consideration for the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
DUTIES
1.1 Employment. During the term of this Agreement, the Company agrees to
employ Employee, and Employee accepts such employment, on the terms and
conditions set forth in this Agreement.
1.2 Extent of Service. During the term of this Agreement, Employee shall
devote his full-time energy and skill to the affairs of the Company and its
affiliated companies; provided, however, that Employee may serve as a member of
the Board of Directors of other organizations that do not compete with the
Company, pursue personal entrepreneurial ventures which do not compete with the
Company and participate in other professional and civic organizations and
activities so long as none of the Employee's director or such other activities,
individually or taken together, materially affect his ability to perform his
duties hereunder.
1.3 Duties. Employee's duties hereunder shall include acting as a Vice
President of the Company. In this capacity Employee will provide services with
regard to directing the Company's research programs and development programs
relating to Convergence programs, educating investors and business partners
about the scientific programs and such other duties as may be prescribed from
time by Employee's supervisor or the Board of Directors of the Company (the
"Board"). Such duties include, without limitation, the development of
Proprietary Information (defined in Article 5 hereof) for the Company. Employee
shall also perform, without additional compensation, related services for the
Company's subsidiaries and joint ventures.
1.4 Access to and Use of Proprietary Information. Employee recognizes and
the Company agrees that, to assist Employee in the performance of his duties
hereunder, Employee will be provided access to and limited use of proprietary
and confidential information of the Company. Employee further recognizes that,
as a part of his employment with the Company, Employee will benefit from and
Employee's qualifications will be enhanced by additional training, education and
experience which will be provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company in which proprietary and
confidential information of the Company is utilized by Employee.
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ARTICLE 2
TERM OF EMPLOYMENT
The term of this Agreement shall commence on the date hereof and continue
for a period of three years, unless earlier terminated pursuant to Article 4
hereof.
ARTICLE 3
COMPENSATION
3.1 Monthly Base Salary. As compensation for services rendered under this
Agreement, Employee shall be entitled to receive from the Company a monthly base
salary (before standard deductions) equal to $16,666.66, subject to periodic
review and increase by the Board. Employee's monthly base salary shall be
payable at regular intervals (at least semi-monthly) in accordance with the
prevailing practice and policy of the Company.
3.2 Performance Bonus. As additional compensation for services rendered
under this Agreement, Employee shall also be eligible to receive (a) a
performance bonus equal to up to 10% of the sum of all payments of monthly base
salary (before standard deductions) paid to Employee during the 1999 calendar
year based upon the Company and the Employee achieving (as determined by the
Board) certain 1999 goals to be established by the Board and (b) a performance
bonus equal to up to an additional 10% of the sum of all payments of monthly
base salary (before standard deductions) paid to Employee during the 1999
calendar year if the Company and the Employee greatly exceed (as determined by
the Board) the 1999 goals established by the Board. For subsequent calendar
years, Employee shall be eligible to receive a discretionary performance bonus
if, as and when declared by the Board in accordance with the prevailing practice
and policy of the Company.
3.3 Stock Options. Employee shall also be granted an incentive option to
purchase 50,000 shares of Common Stock of the Company at a per-share price of
$________ under the Company's Stock Option Plan. The options will vest over a
4-year period at a rate of 25% per year; provided, however, that all options
granted to Employee hereunder shall become 100% vested in the event (a) Employee
is terminated without cause pursuant to the terms of Section 4.1; (b) Employee
is terminated under the circumstances described in Section 4.4(b); or (c) there
occurs a "change of control" as defined the that certain Incentive Stock Option
Agreement dated as of even date herewith between the Company and the Employee.
The terms of such stock option grant will be set forth in a separate stock
option agreement.
3.4 Benefits. Employee shall, in addition to the compensation provided for
herein, be entitled to the following additional benefits:
(a) Medical, Health, Life and Disability Benefits. Employee shall be
entitled to receive all medical, health, life and disability insurance
benefits that may, from time to time, be provided by the Company to other
officers of the Company of a level of seniority and responsibility similar
to that of Employee on a basis no less favorable.
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(b) Other Benefits. Employee shall also be entitled to receive any
other benefits that may, from time to time, be provided by the Company to
all employees of Company as a group.
(c) Vacation. Employee shall be entitled to an annual vacation
determined in accordance with the prevailing practice and policy of the
Company (initially 3 weeks per year).
(d) Holidays. Employee shall be entitled to holidays in accordance
with the prevailing practice and policy of the Company.
(e) Reimbursement of Business Expenses. The Company shall reimburse
Employee for all expenses reasonably incurred by Employee in conjunction
with the rendering of services at the Company's request, provided that
such expenses are incurred in accordance with the prevailing practice and
policy of the Company and are properly deductible by the Company for
federal income tax purposes. As a condition to such reimbursement,
Employee shall submit an itemized accounting of such expenses in
reasonable detail, including receipts where required under federal income
tax laws.
(f) Reimbursement of Relocation Expenses. The Company shall
reimburse Employee up to a maximum of $50,000 for (i) reasonable
relocation expenses incurred by Employee in connection with a maximum of 2
house-hunting trips by Employee and his spouse to Boston, Massachusetts
from Employee's current residence, (ii) reasonable relocation expenses
incurred by Employee in connection with the moving of Employee's household
goods from Employee's current residence to Boston, Massachusetts
(including temporary storage, if necessary) and (iii) such other
reasonable relocation expenses as may be approved by the Company. As a
condition to such reimbursement, Employee shall submit an itemized
accounting of such expenses in reasonable detail, including receipts. In
the event Employee's employment with the Company is terminated (howsoever
such termination may occur) on or before the first anniversary of the date
of this Agreement, Employee shall immediately pay to the Company an amount
equal to 50% of all amounts paid to Employee by the Company pursuant to
this Section 3.4(f) (which amounts owing, if any, may be offset by the
Company against any amounts then owing by the Company to Employee under
this Agreement).
3.5 Commencement of Compensation. Compensation under this Agreement shall
be payable to Employee commencing on upon Employee's commencement of full-time
service to the Company.
ARTICLE 4
TERMINATION
4.1 Termination Without Cause. This Agreement may be terminated by the
Company or Employee, without cause, upon 30 days prior written notice thereof
given by one party to the other party. In the event of termination pursuant to
this Section 4.1, the Company shall pay Employee a lump-sum equal to (i)
Employee's monthly base salary (subject to standard deductions) earned pro
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rata to the date of such notification of termination plus (ii) twelve (12) times
Employee's then effective base monthly salary (subject to standard deductions),
whereupon the Company shall no further obligations to Employee hereunder.
4.2 Termination For Good Reason . At any time during the term of this
Agreement, the Executive may terminate this Agreement for Good Reason (as
defined below) by giving the Company thirty (30) calendar days written notice of
intent to terminate, which notice sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination. Upon the
expiration of the thirty (30) day notice period, the Good Reason termination
shall become effective, and the Company shall pay and provide to Employee the
benefits set forth in this Section 4.2. "Good Reason" shall mean, without the
Executive's express written consent, the occurrence of any one or more of the
following:
(a) The assignment of the Employee to duties which would result in a
material reduction of the Employee's authorities, duties,
responsibilities, and status (including, without limitation, offices,
titles, and reporting requirements) as an officer of the Company, or a
reduction or alteration in the nature or status of the Employee's
authorities, duties, or responsibilities from those in effect during the
immediately preceding year; or
(b) Without the Employee's consent, the Company's requiring the
Employee to be based at a location which is more than fifty (50) miles
from Boston Massachusetts or San Francisco, California, except for
required travel on the Company's business to an extent consistent with the
Executive's business obligations as of the commencement of the term of
this Agreement.
Upon a termination of the Employee's employment for Good Reason, the
Employee shall be entitled to receive the same payments and benefits as he is
entitled to receive following an involuntary termination of his employment by
the Company without cause, as specified in Section 4.1 herein. The Employee's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any circumstance constituting Good Reason herein.
4.3 Termination For Cause.
(a) This Agreement may be terminated by the Company for "Cause"
(hereinafter defined) upon written notice thereof given by the Company to
the Employee. In the event of termination pursuant to this Section 4.3,
the Company shall pay Employee his monthly base salary (subject to
standard deductions) earned pro rata to the date of such termination and
the Company shall have no further obligations to Employee hereunder.
(b) The term "Cause" shall include, without limitation, the
following, as determined by the Board in its sole judgment: (i) Employee
is convicted of a felony; (ii) Employee commits fraud or theft of personal
or Company property from Company premises; (iii) Employee falsifies
Company documents or records; (iv) Employee engages in acts of gross
carelessness or willful negligence to endanger life or property on Company
premises; or (v) Employee (A) breaches any of the material terms of this
Agreement; (B) Employee fails to satisfactorily perform the reasonable
duties assigned under this Agreement as determined by
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the Chief Executive Officer or the Board; or (c) Employee intentionally
engages in conduct which is demonstrably and materially injurious to the
Company, which breach, failure of course of conduct described in this
subsection (iii) continues for a period of ten (10) days after written
notice from the Company describing such breach, failure or course of
conduct in reasonable detail.
4.4 Termination Upon Death or Disability. In the event that Employee dies,
this Agreement shall terminate upon Employee's death. Likewise, if Employee
becomes "disabled" as determined in accordance with the Company's disability
insurance policies and plans, the Company may, upon notice to Employee,
terminate this Agreement.
(a) In the event of termination pursuant to this Section 4.4 as a
result of Employee's disability or death not occurring under the
circumstances described in Section 4.4(b), Employee (or his legal
representatives) shall be entitled only to his monthly base salary earned
pro rata for services actually rendered prior to the date of such
termination.
(b) that in the event of a termination pursuant to this Section 4.4
as a result of Employee's death occurring within the course and scope of
Employee's employment with the Company, Employee shall be entitled to the
consideration described in Section 4.1 applicable to termination without
cause.
4.5 Change of Control. In the event this Agreement is terminated by the
Company within 3 months following (i) a sale, transfer or disposition of
substantially all of the assets of the Company, (ii) a merger or consolidation
of the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power of the continuing
or surviving entity's securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not
stockholders of the Company immediately prior to such merger, consolidation or
other reorganization (collectively, a "Change of Control"), then Employee shall
be entitled to receive his monthly base salary (subject to standard deductions)
earned pro rata to the date of such termination plus an amount equal to his
monthly base salary multiplied by 15 (subject to standard deductions) and the
Company shall have no further obligations to Employee hereunder. A transaction
shall not constitute a Change in Control if its sole purpose is to change the
state of the Company's incorporation or to create a holding company that will be
owned in substantially the same proportions by the persons who held the
Company's securities immediately before such transaction.
4.6 Survival of Provisions. The covenants and provisions of Articles 5, 6
and 7 hereof shall survive any termination of this Agreement and continue for
the periods indicated, regardless of how such termination may be brought about.
ARTICLE 5
PROPRIETARY PROPERTY; CONFIDENTIAL INFORMATION
5.1 Duties. Employee understands and agrees that during the term of this
Agreement Employee's duties will include involvement with the conception of
improvements and inventions (whether or not ultimately issuing as Letters Patent
in any country), the creation of confidential information protected by the
Company as trade secrets and the authoring of "works" as defined
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under the copyright laws of the United Xxxxxx xx Xxxxxxx xxxxx xx 00 Xxxxxx
Xxxxxx Code. Such information is collectively referred to in this Agreement as "
Proprietary Information".
5.2 Ownership. Employee understands and agrees that for all Proprietary
Information created within the scope of Employee's employment, the Company shall
own all right, title and interest thereto. In the case of works authored or
created by Employee within the scope of Employee's employment, such works are
considered a "work made for hire" under 00 Xxxxxx Xxxxxx Code Section 101 - the
copyright laws. All Proprietary Information, if any, created by Employee prior
to his employment with the Company, and in which Employee claims ownership, is
shown in Schedule 5.2 attached hereto.
5.3 Notice and Assistance. Employee shall give adequate written notice to
the Company as soon as practicable of all Proprietary Information created by
Employee during Employee's employment with the Company, assist the Company in
evaluating the Proprietary Information for trade secret and copyright protection
and sign all documents and do all things necessary at the expense of the Company
to assist the Company in the protection, development, marketing or transfer of
such Proprietary Information.
5.4 Assignment. Except for the Proprietary Information listed on Schedule
5.2 and Proprietary Information based thereon which relates thereto, Employee
hereby assigns and agrees to assign all right, title and interest into such
Proprietary Information to the Company or its nominee. At the request of the
Company, whether during or after the termination of Employee's employment,
Employee shall timely execute or join in executing all papers or documents
required for the filing of patent applications and copyright registrations in
the United States of America and such foreign countries as the Company may in
its sole discretion select, and shall assign all such patent applications and
copyrights to the Company or its nominee, and shall provide the Company or its
agent or attorneys with all reasonable assistance in the preparation and
prosecution of patent applications and copyright registrations, including
drawings, specifications, and the like, all at the expense of the Company, and
shall do all that may be necessary to establish, protect or maintain the rights
of the Company or its nominee in the inventions, patent applications, Letters
Patent and copyrights in accordance with the spirit of this Agreement.
5.5 Confidential Information . Employee agrees to keep confidential all
information protected by the Company as trade secrets during the term of this
Agreement (including any leaves of absence) and will neither use nor disclose
the confidential information without written authorization by the Company for
ten years thereafter. For the purposes of this Agreement, such confidential
information shall include information set forth in any application for Letters
Patent unless and until such information is ultimately published. The Company
and Employee mutually agree that the following types of information shall not be
protected by this Agreement:
(a) Information already in the public domain at the time Employee
received it;
(b) Information which although disclosed in confidence to Employee
is later disseminated by the Company into the public domain;
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(c) Information which although received in confidence by Employee is
subsequently disseminated into public domain by a third party who has not
breached any duty to any other party in disseminating such information;
(d) Information given by the Company in confidence to Employee which
Employee is expressly authorized in writing by the Company to use or
disclose thereafter; and
(e) Information required by law to be disclosed, provided that
Employee will promptly advise the Company of any such required disclosure
and cooperate fully with the Company to avoid such disclosure, if legally
possible, or to obtain confidential treatment of such Information
disclosed.
Employee also understands and agrees that he or she will maintain in confidence
all information known to him by reason of his employment even if such
information is included in a redacted deposit of a work filed with an
application for copyright registration, if such deposit has been abridged in
order to protect the confidentiality of the information deposited with the
Copyright Office. For purposes of this Agreement, a trade secret "...may consist
of any formula, pattern, device or compilation of information which is used in
one's business, and which gives him an opportunity to obtain an advantage over
competitors who do not know or use it. It may be a formula for a chemical
compound, a process of manufacturing, trading or preserving materials, a pattern
for machine or other device, or a list of customers..." as commonly interpreted
by the courts of the State of Texas. Upon the termination of this Agreement,
regardless of how such termination may be brought about, Employee shall deliver
to the Company any and all documents, instruments, notes, papers or other
expressions or embodiments of Proprietary Property or confidential information
which are in Employee's possession or control.
5.6 Publicity. During the term of this Agreement and for a period of two
years thereafter, Employee shall not, directly or indirectly, originate or
participate in the origination of any publicity, news release or other public
announcements, written or oral, whether to the public press or otherwise,
relating to this Agreement, to any amendment hereto, to Employee's employment
hereunder or to the Company, without the prior written approval of the Company.
5.7 Fiduciary Relationship. Employee, by virtue of his high position of
trust and reliance on him by the Company, understands that Employee enjoys a
fiduciary relationship with the Company in carrying out his obligations under
this Article 5. Accordingly, Employee agrees to honor his obligations under this
Agreement by conducting himself with the highest degree of fairness and trust
toward the Company.
ARTICLE 6
RESTRICTIVE COVENANTS
6.1 Non-Competition. Except for the activities set forth on Schedule 6.1
attached hereto (the "Non-Competing Activities"), and in consideration of the
benefits of this Agreement, including Employee's access to and limited use of
proprietary and confidential information of the Company, as well as training,
education and experience provided to Employee by the Company directly and/or as
a result of work projects assigned by the Company with respect thereto, Employee
hereby
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covenants and agrees that during the term of this Agreement and for a period of
one year following termination of this Agreement, regardless of how such
termination may be brought about, Employee shall not, directly or indirectly, as
proprietor, partner, stockholder, director, officer, employee, consultant, joint
venturer, investor or in any other capacity, engage in, or own, manage, operate
or control, or participate in the ownership, management, operation or control,
of any entity which engages, as its primary business, anywhere in the United
States in contract clinical testing or development of pharmaceuticals for
treatment of patients with cancer or any other business activity which the
Company participates during Employee's employment with the Company; provided,
however, the foregoing shall not prohibit Employee from purchasing and holding
as an investment not more than 1% of any class of publicly traded securities of
any entity which conducts a business in competition with the business of the
Company, so long as Employee does not participate in any way in the management,
operation or control of such entity.
6.2 Judicial Reformation. Employee acknowledges that, given the nature of
the Company's business, the covenants contained in Section 6.1 establish
reasonable limitations as to time, geographic area and scope of activity to be
restrained and do not impose a greater restraint than is reasonably necessary to
protect and preserve the goodwill of the Company's business and to protect its
legitimate business interests. If, however, Section 6.1 is determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too long a period of time or over too large a geographic area or by reason
of it being too extensive in any other respect or for any other reason, it will
be interpreted to extend only over the longest period of time for which it may
be enforceable and/or over the largest geographic area as to which it may be
enforceable and/or to the maximum extent in all other aspects as to which it may
be enforceable, all as determined by such court.
6.3 Customer Lists; Non-Solicitation. In consideration of the benefits of
this Agreement, including Employee's access to and limited use of proprietary
and confidential information of the Company, as well as training, education and
experience provided to Employee by the Company directly and/or as a result of
work projects assigned by the Company with respect thereto, Employee hereby
further covenants and agrees that for a period of one year following the
termination of this Agreement, regardless of how such termination may be brought
about, Employee shall not, directly or indirectly, (a) use or make known to any
person or entity the names or addresses of any clients or customers of the
Company or any other information pertaining to them, other than information that
Employee can demonstrate was known to Employee prior to his employment with the
Company and with respect to which the Company has no obligation of
confidentiality, (b) call on, solicit, take away or attempt to call on, solicit
or take away any clients or customers of the Company on whom Employee called or
with whom he or she became acquainted during his employment with the Company,
nor (c) recruit, hire or attempt to recruit or hire any employees of the
Company.
ARTICLE 7
ARBITRATION
Except for the provisions of Articles 5 and 6 of this Agreement dealing
with proprietary property, confidential information and restrictive covenants,
with respect to which the Company expressly reserves the right to petition a
court directly for injunctive and other relief, any claim, dispute or
controversy of any nature whatsoever, including but not limited to tort claims
or contract
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disputes, between the parties to this Agreement or their respective heirs,
executors, administrators, legal representatives, successors and assigns, as
applicable, arising out of or relating to your employment or the termination of
your employment with the Company and/or the terms and conditions of this
Agreement, including the implementation, applicability and interpretation
thereof, shall be resolved as follows: upon the written request of one party
served upon the other, any such claim, dispute or controversy shall be submitted
to and settled by arbitration in accordance with the provisions of the Federal
Arbitration Act, 9 U.S.C. Section 1-15, as amended. If arbitration is requested,
each of the parties to this Agreement shall appoint one person as an arbitrator
to hear and determine any such disputes, and if they should be unable to agree,
then the two arbitrators shall choose a third arbitrator from a panel made up of
experienced arbitrators selected pursuant to the procedures of the American
Arbitration Association (the "AAA") and, once chosen, the third arbitrator's
decision shall be final, binding and conclusive upon the parties to this
Agreement. Each party shall be responsible for the fees and expenses of its
arbitrator and the fees and expenses of the third arbitrator shall be shared
equally by the parties. The terms of the commercial arbitration rules of AAA
shall apply except to the extent they conflict with the provisions of this
paragraph. It is further agreed that any of the parties hereto may petition the
United States District Court for the Western District of Texas, San Antonio
Division, or the United States District Court for the District of Massachusetts,
Boston, MA, for a judgment to be entered upon any award entered through such
arbitration proceedings.
ARTICLE 8
MISCELLANEOUS
8.1 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
mailed by certified mail (return receipt requested) or sent by an overnight
delivery service with tracking procedures or by facsimile to the parties at the
following addresses or at such other addresses as shall be specified by the
parties by like notice: If to Employee, at the address set forth below his name
on the signature page hereof; and if to the Company, at 00000 XX-00 Xxxx, Xxxxx
000, Xxx Xxxxxxx, Xxxxx 00000, Attention: President and Chief Executive Officer.
8.2 Equitable Relief. In the event of a breach or a threatened breach by
Employee of any of the provisions contained in Article 5 or 6 of this Agreement,
Employee acknowledges that the Company will suffer irreparable injury not fully
compensable by money damages and, therefore, will not have an adequate remedy
available at law. Accordingly, the Company shall be entitled to obtain such
injunctive relief or other equitable remedy from any court of competent
jurisdiction as may be necessary or appropriate to prevent or curtail any such
breach, threatened or actual. The foregoing shall be in addition to and without
prejudice to any other rights that the Company may have under this Agreement, at
law or in equity, including, without limitation, the right to xxx for damages.
8.3 Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. Employee's rights under this Agreement are not
assignable and any attempted assignment thereof shall be null and void.
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8.4 Governing Law; Venue. This Agreement shall be subject to and governed
by the laws of the State of Massachusetts. Non-exclusive venue for any action
permitted hereunder shall be proper in San Antonio, Bexar County, Texas, or
Boston, Massachusetts, and Employee and the Company hereby consent to such
venue.
8.5 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties and supersedes all other agreements between the
parties which may relate to the subject matter contained in this Agreement. This
Agreement may not be amended or modified except by an agreement in writing which
refers to this Agreement and is signed by both parties.
8.6 Headings. The headings of sections and subsections of this Agreement
are for convenience only and shall not in any way affect the interpretation of
any provision of this Agreement or of the Agreement itself.
8.7 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
8.8 Waiver. The waiver by any party of a breach of any provision hereof
shall not be deemed to constitute the waiver of any prior or subsequent breach
of the same provision or any other provisions hereof. Further, the failure of
any party to insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement unless such party expressly waives such provision pursuant to
a written instrument which refers to this Agreement and is signed by such party.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ILEX PRODUCTS INCORPORATED
By:
----------------------------------------
Xxxxxxx X. Love,
President and Chief Executive Officer
EMPLOYEE:
-------------------------------------------
Xxxxx X. Xxxx, Ph.D.
Address: 000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
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SCHEDULE 5.2
PROPRIETARY PROPERTY CLAIMED
See attached list.
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SCHEDULE 6.1
NON-COMPETING ACTIVITIES
Non-Competing Activities Claimed:
xxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxx.xxx