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Exhibit 10.22
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective as of July 1, 1995,
by and between Maxus Energy Corporation, a Delaware corporation (the "Company")
and W. Xxxx Xxxxxx (the Executive").
WITNESSETH:
WHEREAS, the Executive is a senior executive of the Company and is
expected to make major contributions to the success of the Company; and
WHEREAS, the Company desires to continue receiving the services of the
Executive; and
WHEREAS, the Executive is willing to continue rendering services to
the Company on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Term of Agreement: The period during which this Agreement shall
be in effect (the "Term") shall commence as of July 1, 1995 and, subject to the
further provisions hereof, shall expire as of the close of business on June 30,
1999.
2. Employment: (a) Subject to the further terms and conditions of
this Agreement, during the Term the Company shall continue the Executive in its
employ at a grade level that is the same as, or is equivalent to, or, in the
Company's discretion is higher than, his grade level immediately prior to the
commencement of the Term. The Company may change the Executive's position,
title, duties and/or responsibilities with the Company
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from time to time during the Term; provided, however, the Company shall not
assign the Executive to a position the base pay of which would generally be
valued in a competitive market as materially less than the Executive's Base Pay
(as that term is hereafter defined). For purposes of this Agreement,
employment with an affiliate of the Company shall be deemed employment with the
Company. Throughout the Term, the Executive shall devote substantially all of
his time during normal business hours (subject to vacations, sick leave and
other absences in accordance with the policies of the Company as in effect for
senior executives) to the business and affairs of the Company, but nothing in
this Agreement shall preclude the Executive from devoting reasonable periods of
time during normal business hours to (i) serving as a director, trustee or
member of or participant in any organization or business so long as such
activity would not constitute Competitive Activity (as that term is hereafter
defined) if conducted by the Executive after the Executive's Termination Date
(as that term is hereafter defined), (ii) engaging in charitable and community
activities, or (iii) managing his personal investments.
(b) During the Term, the Executive shall be subject to reassignment
to any of the Company's foreign or domestic locations at any time. On
reassignment, the Company will attempt to take into account a number of
factors, including the personal goals and desires, experience and performance
of the Executive, and the needs of the Company. While an effort will be made
to consider the needs and requirements of the Executive, the Company does not
represent or promise that the Executive's needs will be accommodated and the
Company reserves the right to select the location of the Executive's work
assignment.
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3. Compensation During Term: (a) During the Term, the Executive
shall (i) receive an annual salary at a rate not less than the Executive's
annual base salary payable monthly or otherwise as in effect immediately prior
to the commencement of the Term or such higher rate as may be determined from
time to time thereafter by the Board of Directors of the Company (the "Board")
or the Compensation Committee thereof (which base salary at such rate is herein
referred to as "Base Pay") and (ii) participate in such incentive pay plan(s)
or program(s) maintained by the Company for its senior executives at a level
commensurate with similarly situated senior executives of the Company;
provided, however, the sum of the Executive's Base Pay and incentive pay (the
"Total Pay") for any year during the Term shall not be less than the sum of (x)
the Executive's Base Pay as of the effective date of this Agreement and (y) the
highest annual cash incentive amount paid to the Executive by the Company with
respect to 1992, 1993 or 1994.
(b) During the Term, the Executive shall be a participant in, and
shall be entitled on the same basis as similarly situated senior executives to
the perquisites, benefits and service credit for benefits as provided under,
any and all employee retirement income and welfare benefit policies, plans,
programs, or arrangements in which similarly situated senior executives of the
Company participate, including, without limitation, any savings, pension,
supplemental executive retirement or other retirement income or welfare
benefit, deferred compensation, group and/or executive life, health,
medical/hospital or other insurance (whether funded by actual insurance or
self-insured by the Company), disability, salary continuation, expense
reimbursement and other employee benefit policies, plans, programs or
arrangements, including, if and for so long as the Executive is assigned to a
work location
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outside the United States, such premiums, allowances and/or other benefits and
any relocation policies afforded to similarly situated senior expatriate
employees at such location on the same terms and subject to the same
limitations afforded to such other senior expatriate employees (collectively,
"Employee Benefits"); provided, however, that the Executive's rights thereunder
shall be governed by the terms thereof and shall not be enlarged hereunder or
otherwise affected hereby.
(c) The Executive shall receive $76,592 within five business days
after signing this Agreement and delivering same to the Company.
(d) If the Executive remains employed with the Company until June 30,
1996, then within five business days following that date the Company shall pay
the Executive $76,592 in a lump sum as a "stay-on" bonus, regardless of whether
the Executive continues his employment following June 30, 1996.
(e) If the Executive remains employed with the Company until June
30, 1997, then within five business days following that date the Company shall
pay the Executive $76,592 in a lump sum as an additional "stay-on" bonus,
regardless of whether the Executive continues his employment following June 30,
1997.
4. Termination: (a) This Agreement may be terminated by the Company
during the Term only upon the occurrence of one or more of the following
events:
(i) If the Executive is unable to perform the essential functions of
his job (with or without reasonable accommodation) because he has
become permanently disabled within the meaning of, and actually begins
to receive disability benefits
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pursuant to, the long-term disability plan in effect for senior
executives of the Company; or
(ii) The Executive refuses to accept a reassignment to a new work
location; or
(iii) For "Cause", which for purposes of this Agreement shall mean
that, prior to any other termination of employment, the Executive
shall have committed:
(A) an intentional act of fraud, embezzlement or theft in
connection with his duties or in the course of his employment with the
Company;
(B) intentional wrongful damage to property of the Company;
(C) intentional wrongful disclosure of secret processes or
confidential information of the Company; or
(D) intentional wrongful engagement in any Competitive
Activity; and any such foregoing act shall have been materially
harmful to the Company. For purposes of this Agreement, an act, or
failure to act, on the part of the Executive shall be deemed
"intentional" only if done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated
for "Cause" hereunder unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the Board then in
office at a meeting of the Board called and held for such purpose
(after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board)
finding that,
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in the good faith opinion of the Board, the Executive had committed an
act set forth above in this Section 4(a)(iii) and specifying the
particulars thereof in detail. Nothing herein shall limit the right
of the Executive or his beneficiaries to contest the validity or
propriety of any such determination.
(b) This Agreement may be terminated by the Executive during the Term
with the right to benefits as provided in Section 5(a) hereof only upon the
occurrence of one or more of the following events:
(i) Any termination of the employment of the Executive by the
Company for any reason other than for Cause, by reason of the
Executive's disability and the actual receipt of disability
benefits as described in Section 4(a)(i) hereof, or due to
the Executive's refusal to accept a reassignment to a new work
location; or
(ii) The occurrence of any of the following events:
(A) A reduction in the Executive's grade level from
his grade level, or its equivalent, immediately prior to the
commencement of the Term, a reduction in the Executive's Total
Pay or the termination of the Executive's ability to
participate in any incentive plan or Employee Benefits in
which other similarly situated senior executives of the
Company continue to be entitled to participate;
(B) The liquidation, dissolution, merger,
consolidation or reorganization of the Company or transfer of
all or a significant portion of its business and/or assets,
unless the successor or successors (by liquidation,
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merger, consolidation, reorganization or otherwise) to which
all or a significant portion of its business and/or assets
have been transferred shall have assumed (directly or by
operation of law) all duties and obligations of the Company
under this Agreement pursuant to Section 10 hereof; or
(C) Any material breach of this Agreement by the
Company or any successor thereto, which is not remedied
within ten business days after written notice of such breach
is given to the Company by the Executive.
(c) This Agreement shall terminate on the date of the Executive's
termination of employment for any reason not covered by Section 4(a) or (b) or
Section 5(b), including, without limitation, the death of the Executive.
(d) Except as provided below, a termination of the Executive's
employment, whether by the Company or by the Executive, shall not affect any
rights which the Executive may have pursuant to any other agreement, policy,
plan, program or arrangement of the Company providing Employee Benefits, which
rights shall be governed by the terms thereof. However, notwithstanding the
foregoing, the Executive hereby agrees and acknowledges that, regardless of the
reason for his termination of employment, the amount of separation or
severance pay and/or benefits he is entitled to receive, if any, under the
Maxus Energy Corporation Separation Pay Plan, the Maxus International Energy
Company Separation Pay Plan For Expatriate Employees or any other severance
plan or program of the Company or its affiliates, as in effect on the date of
termination, shall be reduced by any severance compensation he receives or is
entitled to receive under Section 5 hereof. Moreover, if the Executive is not
eligible to receive separation or severance pay and/or benefits under such
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severance plans and programs, the Company agrees (without duplicaton) to pay
the Executive upon termination a minimum severance payment under this Agreement
in an amount, if any, equal to the amount the Executive would have been
entitled to receive under such separation or severance plans or programs had he
been eligible thereunder in the absence of this Agreement, less any severance
compensation the Executive receives under Section 5 hereof.
5. Severance Compensation: (a) If the Company shall terminate the
Executive's employment during the Term other than pursuant to Section 4(a)
hereof, or if the Executive shall terminate his employment during the Term
pursuant to Section 4(b) hereof, then, subject to the further provisions of
this Section 5, the Company shall pay to the Executive the amount specified in
Section 5(a)(i) hereof within five business days after the date the Executive's
employment is terminated (the "Termination Date") and shall provide for the
Continuing Employee Benefits specified in Section 5(a)(ii):
(i) In lieu of any further payments of Base Pay and incentive
compensation to the Executive for periods subsequent to the
Termination Date, the Company shall pay the Executive a lump sum
amount (the "Severance Payment") equal to his Total Pay calculated
at the highest rate theretofore paid during the Term multiplied by the
number of years (including fractional years) remaining in the Term,
but not to exceed three years (such period being the "Continuation
Period"); and
(ii) For the remainder of the Continuation Period, the Company shall
provide the Executive with Employee Benefits substantially similar to
those which (and
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on the same terms as) the Executive was receiving or entitled to
receive immediately prior to the Termination Date (the "Continuing
Employee Benefits") (and if and to the extent that such benefits
cannot be paid or provided under any policy, plan, program or
arrangement of the Company, then the Company shall itself pay or
provide for the payment to the Executive, his dependents and
beneficiaries, such Continuing Employee Benefits). Without limiting
the generality of the foregoing, the Continuation Period shall be
considered, to the extent permitted by applicable law, service with
the Company for the purpose of service credits under the Company's
qualified retirement plans and supplemental executive retirement and
other nonqualified benefit plans applicable to the Executive or his
beneficiaries immediately prior to the Termination Date. If and to
the extent any such benefits cannot be paid or provided under the
applicable plan solely due to the fact the Executive is no longer an
officer or employee of the Company, the Company shall itself pay or
provide such benefits to the Executive or, if applicable, his
dependents and beneficiaries. Further, without otherwise limiting the
purposes or effect of Section 6 hereof, the Continuing Employee
Benefits provided to or on behalf of the Executive pursuant to this
Section 5(a)(ii) by reason of any "welfare benefit plan" of the
Company (as the term "welfare benefit plan" is defined in Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended)
shall be reduced to the extent comparable welfare benefits are
actually received by the Executive from another employer during the
Continuation Period.
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(b) If the Executive's employment with the Company is terminated
prior to July 1, 1997, whether by the Company or the Executive, due to his
refusal to accept a reassignment to a new work location, the Company shall pay
the Executive within five business days of such Termination Date an amount
equal to (x) one-twelfth of his Base Pay at the rate in effect immediately
prior to the termination ("Final Base Pay") times his total years of service
with the Company and its affiliates, including partial years ("Years of
Service"), if the Executive's work location immediately prior to termination is
in the United States, or (y) one-twelfth of his Final Base Pay times his total
Years of Service times two, if the Executive's work location immediately prior
to termination is outside the United States; provided, however in no event
shall such applicable payment exceed two times the amount of the Executive's
Final Base Pay.
(c) Notwithstanding any provision of this Agreement to the contrary,
in no event shall any payment made or to be made and/or any benefits provided
or to be provided to or on behalf of the Executive pursuant to this Agreement
that constitutes a "parachute payment", within the meaning of section 280G of
the Internal Revenue Code (the "Code"), individually or collectively, or when
aggregated with any other parachute payment to the Executive, whether or not
made pursuant to this Agreement, results in the Executive receiving an "excess
parachute payment," within the meaning of section 280G of the Code which gives
rise to liability for an excise tax under Section 4999 of the Code, and to the
extent it is necessary to avoid such an excess parachute payment, the
applicable payment and/or benefits otherwise due hereunder shall be
automatically reduced in whole or in part so that no such payment or benefit
hereunder constitutes such an excess parachute
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payment. However, in the event of any such reduction, the Executive shall
have the option to elect to receive, in lieu of all or a portion of the
applicable payment, one or more of the Continuing Employee Benefits, provided
that prior to the receipt of such payment, the Executive gives the Company
notice of such election specifying the Continuing Employee Benefit(s) so
elected to be received. Further, in the event the Executive inadvertently
receives a payment and/or benefit hereunder that is subsequently determined to
be such an excess parachute payment, the Executive shall be obligated to
return such portion of the payment, with interest, and/or reimburse the Company
for such Continuing Employee Benefit(s), all in a manner that results in the
Executive not having received such an excess parachute payment.
(d) The determination of whether any amount or benefit otherwise
payable or provided under this Agreement would be such an excess parachute
payment shall be made by tax counsel selected by the Company and reasonably
acceptable to the Executive. The costs of obtaining such determination shall
be borne by the Company. The fact that the Executive shall have his right to a
payment or benefit reduced as a result of the limitations contained in this
Section 5 shall not limit or otherwise affect any rights of the Executive
arising other than pursuant to this Agreement; provided, however, the Company
shall not be obligated to make any payment to the Executive whether under this
Agreement or otherwise, that would constitute an excess parachute payment that
gives rise to liability for an excise tax under Section 4999 of the Code.
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(e) There shall be no right of set-off or counterclaim in respect of
any claim, debt or obligation against any payment to or for the benefit of the
Executive provided for in this Agreement.
6. No Mitigation Obligation: The Company hereby acknowledges that it
will be difficult, and may be impossible, for the Executive to find reasonably
comparable employment following the Termination Date and that the
noncompetition covenant contained in Section 7 hereof will further limit the
employment opportunities for the Executive. In addition, the Company
acknowledges that its severance pay plans applicable in general to its salaried
employees do not provide for mitigation, offset or reduction of any severance
payment received thereunder. Accordingly, the parties hereto expressly agree
that the payment of the severance compensation by the Company to the Executive
in accordance with the terms of this Agreement will be liquidated damages, and
that the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other obligation on
the part of the Executive hereunder or otherwise, except as expressly provided
in Section 5 hereof.
7. Competitive Activity: During a period ending one year following
the Termination Date, if the Executive shall have received or shall be
receiving benefits under Section 5 hereof, the Executive shall not, without the
prior consent of the Company, which consent shall not be unreasonably withheld,
engage in any Competitive Activity. For purposes of this Agreement, the term
"Competitive Activity" shall mean the Executive's
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participation in the management of any business enterprise which is principally
engaged in the exploration for or production of hydrocarbons in Texas,
Oklahoma, Indonesia, Argentina, Bolivia, Colombia, Ecuador, or Venezuela.
"Competitive Activity" shall not include (i) the mere ownership of securities
in any such enterprise and exercise of rights appurtenant thereto or (ii)
participation in management of any such enterprise or business operation
thereof other than in connection with the competitive operation of such
enterprise.
8. Legal Fees and Expenses: (a) It is the intent of the Company
that the Executive not be required to incur the expenses associated with the
enforcement of his rights under this Agreement by litigation or other legal
action because the cost and expense thereof would substantially detract from
the benefits intended to be extended to the Executive hereunder. Accordingly,
if it should appear to the Executive that the Company has failed to comply with
any of its obligations under this Agreement or in the event that the Company or
any other person takes any action to declare this Agreement void and
unenforceable, or institutes any litigation designed to deny, or to recover
from, the Executive the benefits intended to be provided to the Executive
hereunder, the Company irrevocably authorizes the Executive from time to time
to retain counsel of his choice, at the expense of the Company as hereafter
provided, to represent the Executive in connection with the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the
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Executive's entering into an attorney-client relationship with such counsel
(other than Xxxxxxx & Xxxxx L.L.P. or Xxxxx, Day, Xxxxxx & Xxxxx), and in that
connection the Company and the Executive agree that a confidential relationship
shall exist between the Executive and such counsel. The Company shall pay or
cause to be paid and shall be solely responsible for any and all attorneys' and
related fees and expenses incurred by the Executive as a result of the
Company's failure to perform this Agreement or any provision thereof or as a
result of the Company or any person contesting the validity or enforceability
of this Agreement or any provision thereof as aforesaid.
(b) In order to ensure the benefits intended to be provided to the
Executive under Section 8(a) hereof, the Company has established an irrevocable
standby Letter of Credit in favor of the Executive drawn on a bank selected
by the Company (the "Letter of Credit") which provides for a credit amount of
$250,000 being made available to the Executive against presentation at any time
and from time to time of his clean sight drafts, accompanied by statements of
his counsel for fees and expenses, in an aggregate amount not to exceed
$250,000.
(c) The Company's obligations under this Article 8 and specifically
(without limitation) the obligation to maintain the Letter of Credit shall
continue until the later of (A) the earlier of (i) June 30, 1999, or (ii) six
months after the termination of this Agreement under Section 4(a), (b) or (c)
or (B) if any litigation or legal action as contemplated in Section 8(a) is
commenced within six months after the termination of this Agreement under
Section 4(a), (b) or (c), the conclusion of such litigation or other legal
action.
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9. Withholding of Taxes: The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall
be required pursuant to any law or government regulation or ruling.
10. Successors and Binding Agreement: (a) The Company shall require
any successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business and/or
assets of the Company, or any of its affiliates of either the Company or such a
successor that is or becomes the Executive's employer, by agreement in form and
substance satisfactory to the Executive, expressly to assume and agree to
perform this Agreement in the same manner and to the same extent the Company
would be required to perform if no such succession had taken place. This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business and/or assets
of the Company whether by purchase, merger, consolidation, reorganization or
otherwise (and such successor shall thereafter be deemed the "Company" for the
purposes of this Agreement), but shall not otherwise be assignable,
transferable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of the parties
hereto shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Section 10(a) hereof. Without
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limiting the generality of the foregoing, the Executive's right to receive
payments hereunder shall not be assignable, transferable or delegable, whether
by pledge, creation of a security interest or otherwise, other than by a
transfer by his will or by the laws of descent and distribution and, in the
event of any attempted assignment or transfer contrary to this Section 10(c),
the Company shall have no liability to pay any amount so attempted to be
assigned, transferred or delegated.
(d) The Company and the Executive recognize that each party will have
no adequate remedy at law for breach by the other of any of the agreements
contained herein and, in the event of any such beach, the Company and the
Executive hereby agree and consent that the other shall be entitled to a
decree of specific performance, mandamus or other appropriate remedy to enforce
performance of this Agreement.
11. Notices: For all purposes of this Agreement, all communications
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered or five business days after having been mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company (to the attention of the Secretary of the Company) at
its principal executive offices and to the Executive at his principal
residence, or to such other address as any party may have furnished to the
other in writing and in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
12. Governing Law: The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such
State.
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13. Validity: If any provision of this Agreement or the application
of any provision hereof to any person or circumstances is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.
14. Miscellaneous: No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, expressed or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
15. Prior Agreements: This Agreement is voluntarily entered into and
supersedes and takes the place of all prior change in control and employment
agreements, as amended, between the parties hereto. The parties hereto
expressly agree and hereby declare that any and all prior change in control and
employment agreements, as amended, are hereby terminated and of no further
force or effect.
16. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
MAXUS ENERGY CORPORATION
By: /s/ XXXX X. XXXXXX
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Vice President
EXECUTIVE
/s/ W. XXXX XXXXXX
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W. Xxxx Xxxxxx
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