Executive Employment Agreement
Exhibit
10.1
EMPLOYMENT
AGREEMENT (the "Agreement") made as of May 29, 2007 between ARIAD
Pharmaceuticals, Inc. (the "Company") a Delaware corporation, and Xxxxxx X.
Xxxxxx, M.D. (the "Employee").
1. Employment,
Duties
and Acceptance.
1.1 The
Company
hereby employs the Employee, for the Term (as hereinafter defined), to render
full-time services to the Company, and to perform such duties as he shall
reasonably be directed by the Chief Executive Officer of the Company to
perform. The Employee's title shall be designated by the Chief
Executive Officer and initially shall be Senior Vice President,
Oncology.
1.2 The
Employee hereby
accepts such employment and agrees to render the services described
above.
1.3 The
principal
place of employment of the Employee hereunder shall be in the greater Boston,
Massachusetts area, or other locations reasonably acceptable to the
Employee. The Employee acknowledges that for limited periods of time
he may be required to provide services to the Company outside of the Boston,
Massachusetts area.
1.4 Notwithstanding
anything to the contrary herein, although the Employee shall provide services
as
a full-time employee, it is understood that the Employee may (a) have an
academic appointment and (b) participate in professional activities
(collectively, "Permitted Activities'); provided, however, that
such Permitted Activities do not interfere with the Employee's duties to the
Company.
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1.5 The
Employee
represents and affirms that he does not have any other contractual obligations
to any other person or entity that would prohibit or limit his employment with
the Company, except for the duty not to use or disclose another entity’s
confidential information without authorization. Employee further
acknowledges that the Company instructs him not to bring with him, use or
disclose in the course of his employment any confidential information belonging
to another person or entity, without that person or entity’s express
authorization.
2. Term
of
Employment.
The
term
of the Employee's employment under this Agreement (the "Term") shall commence
on
June 11, 2007 (the "Effective Date"), or such other date mutually agreed upon
by
the parties, and shall end on December 31, 2009, unless sooner terminated
pursuant to Section 4 or 5 of this Agreement; provided, however, that
this Agreement shall automatically be renewed for successive one-year terms
(the
Term and, if the period of employment is so renewed, such additional period(s)
of employment are collectively referred to herein as the "Term") unless
terminated by written notice given by either party to the other at least ninety
(90) days prior to the end of the applicable Term.
3. Compensation.
3.1 As
full
compensation for all services to be rendered pursuant to this Agreement, the
Company agrees to pay the Employee, during the Term, a salary at the fixed
rate
of $325,000 per annum during the first year of the Term and increased each
year
thereafter, by amounts, if any, to be determined by the Board of Directors
of
the Company (the "Board"), in its sole discretion, payable in equal biweekly
installments, less such deductions or amounts to be withheld as shall be
required by applicable law and regulations.
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3.2 Each
year,
Employee shall be eligible to receive a discretionary bonus of up to 30% of
base
salary, which bonus shall be determined annually by the Board. The
bonus, if any, may be paid in the form of stock options, restricted stock awards
or units, deferred compensation or cash, as determined by the
Board.
3.3 The
Company
shall pay or reimburse the Employee for all reasonable expenses actually
incurred or paid by him during the Term in the performance of his services
under
this Agreement, upon presentation of expense statements or vouchers or such
other supporting information as it may require.
3.4 The
Employee
shall be eligible under any incentive plan, stock award plan, bonus, deferred
or
extra compensation plan, pension, group health, disability, long-term care,
and
life insurance or other so-called "fringe" benefits which the Company provides
for its executives at the comparable level. All stock options and
restricted stock awards or units granted to the Employee shall be subject to
a
vesting schedule which shall be determined by the Compensation Committee of
the
Board. The stock options and restricted stock awards or units, if
any, granted to the Employee shall also be subject to the terms of the Company’s
long-term incentive plan and certificates. Any unvested stock options
or restricted stock awards or units subject to repurchase shall be forfeited
to
the Company in the event (a) this Agreement is terminated by the Company for
Cause pursuant to Section 4 herein, or (b) either party elects not to renew
this
Agreement pursuant to Section 2 herein.
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3.5 The
Company
shall grant the Employee an option to purchase
100,000 shares of the Company's Common Stock at the fair
market value on the date of the Board's approval of the grant. The
Employee agrees that all such options shall be subject to a four-year vesting
schedule, vesting in equal increments of 25% on each anniversary of their
issuance. Any unvested options shall be forfeited to the Company in
the event (a) this Agreement is terminated by the Company for Cause pursuant
to
Section 4 herein, or (b) either party elects not to renew this Agreement
pursuant to Section 2 herein.
4. Termination
by the
Company.
The
Company may terminate this Agreement, if any one or more of the following shall
occur:
(a) The
Employee
shall die during the Term; provided, however, the Employee's legal
representatives shall be entitled to receive the compensation provided for
hereunder to the last day of the month in which his death occurs.
(b) The
Employee
shall become physically or mentally disabled, whether totally or partially,
so
that he is unable substantially to perform his services hereunder for (i) a
period of 180 consecutive days, or (ii) for shorter
periods aggregating 180 days during any twelve (12) month period.
(c) The
Employee
acts, or fails to act, in a manner that provides Cause for
termination. For purposes of this Agreement, the term "Cause" means
(i) the failure by the Employee to perform any of his material duties hereunder,
(ii) the conviction of the Employee of any felony involving moral turpitude,
(iii) any acts of fraud or embezzlement by the Employee involving the Company
or
any of its Affiliates, (iv) violation of any federal, state or local law, or
administrative regulation related to the business of the Company, (v) a conflict
of interest, (vi) conduct that could result in publicity reflecting unfavorably
on the Company in a material way, (vii) failure to comply with the written
policies of the Company, or (viii) a breach of the terms of this Agreement
by
the Employee. If the conduct constituting Cause hereunder is
susceptible to cure, the Company shall provide the Employee written notice
of
termination pursuant to this Section 4, and Employee shall have thirty (30)
days
to cure or remedy such failure or breach, in which case this Agreement shall
not
be terminated. If the conduct is not susceptible to cure, this Agreement shall
terminate upon written notice by the Company.
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5. Termination
by the
Employee.
5.1 The
Employee
may terminate this Agreement, if any one or more of the following shall
occur:
(a) a
material
breach of the terms of this Agreement by the Company and such breach continues
for thirty (30) days after the Employee gives the Company written notice of
such
breach;
(b) the
Company
shall make a general assignment for benefit of creditors; or any proceeding
shall be instituted by the Company seeking to adjudicate it as bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or
seeking entry of an order for relief or the appointment of a receiver, trustee,
or other similar official for it or for any substantial part of its property
or
the Company shall take any corporate action to authorize any of the actions
set
forth above in this subsection 5(b);
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(c) an
involuntary petition shall be filed or an action or proceeding otherwise
commenced against the Company seeking reorganization, arrangement or
readjustment of the Company's debts or for any other relief under the Federal
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency act
or
law, state or federal, now or hereafter existing and remain undismissed or
unstayed for a period of thirty (30) days; or
(d) a
receiver,
assignee, liquidator, trustee or similar officer for the Company or for all
or
any part of its property shall be appointed involuntarily.
(e) a
Change in
Control as defined in Section 14.
6. Severance.
6.1 If
(i) the
Company terminates this Agreement without Cause or (ii) the Employee terminates
this Agreement pursuant to Section 5.1(a), then: (1) except in the case of
death
or disability, the Company shall continue to pay Employee his then-current
salary for the remaining period of the applicable Term; (2) all stock options
granted pursuant to this Agreement that would have vested during the Term shall
vest immediately prior to such termination; and (3) the Company shall continue
to provide all benefits subject to COBRA at its expense for up to one(1)
year.
6.2 In
the event
of a consummation of a Change in Control of the Company, and if the Employee
gives notice of termination within ninety (90) days after such occurrence,
then
(i) all stock, stock options, restricted stock awards or units, and similar
equity rights granted to the Employee shall immediately vest and remain fully
exercisable through their original term with all rights; and (ii) the Company
shall continue to pay the Employee his then-current salary for the shorter
of
(a) six (6) months, or (b) the remaining period of the applicable
Term.
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7. Other
Benefits.
In
addition to all other benefits contained herein, the Employee shall be entitled
to:
(a) Relocation
expenses for the Employee, consisting of (i) all reasonable direct out-of-pocket
costs of transporting the Employee, the Employee’s immediate family, and the
Employee's household items from the Employee's current residence in New Jersey
to a new residence in the greater Boston, Massachusetts area; (ii) reasonable
travel and lodging to visit the greater Boston, Massachusetts area to search
for
a new residence; (iii) reasonable costs of rent and primary services associated
with temporary housing at an approved location in the greater Boston,
Massachusetts area for a maximum period of ninety (90) days from the Employee’s
start date or until he finds a suitable residence, if earlier, and (iv) except
as described in the next succeeding sentence and subject to prior approval,
the
reasonable closing costs associated with the Employee’s purchase of a new
residence in the greater Boston, Massachusetts area within ten months of the
Employee's date of employment. The following closing (settlement)
costs will not be paid by the Company: (1) real estate and
other taxes, (2) insurance premiums other than title insurance, and (3)
commitment fees and prepaid interest (i.e., "points") in excess of
2%.
(b) Vacation
time
of four (4) weeks per year taken in accordance with the paid time-off policy
of
the Company.
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(c) After
six (6)
years of employment, one three-month period of fully paid leave of absence
in
accordance with Company policies in place at that time; it being understood
that
such policies may restrict the Employee from taking such leave of absence until
a time that is acceptable to the Company and may include other such
limitations.
(d) Group
health,
disability, long-term care and life insurance.
(e) The
Company
shall provide the Employee with an automobile allowance of $750 per month
and
standard tax preparation and planning services.
(f) To
facilitate
the Employee's relocation, the Company will provide the Employee with a one-time
relocation advance (the “Relocation Advance”) in the amount of $100,000 payable
by the Company within thirty (30) days of the start of
employment. The Employee shall be obligated to repay the Relocation
Advance immediately upon the occurrence of any of the following
events: (a) the Employee terminates his employment or this Agreement
prior to December 31, 2007, except as provided pursuant to Section 5.1 herein,
or (b) the Company terminates this Agreement for Cause at any time pursuant
to
Section 4 herein. Notwithstanding the foregoing, if the Employee
terminates this Agreement between January 1, 2008 and June 30, 2009, the
Employee shall be obligated to repay the Relocation Advance, prorated by the
Employee’s months of service prior to termination of employment, within thirty
(30) days of such termination. As of July 1, 2009, the Relocation
Advance shall no longer be subject to repayment by the Employee. The
Employee authorizes the Company to withhold from final wages, expense
reimbursements, or other forms of compensation due to him at the time of
separation any portion of the Relocation Advance that he is required to
repay.
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8. Confidentiality.
8.1 The
Employee
acknowledges that, during the course of performing his services hereunder,
the
Company shall be disclosing information to the Employee related to the Company's
Field of Interest, Inventions, projects and business plans, as well as other
information (collectively, "Confidential Information"). The Employee
acknowledges that the Company's business is extremely competitive, dependent
in
part upon the maintenance of secrecy, and that any disclosure of the
Confidential Information would result in serious harm to the
Company.
8.2 The
Employee
agrees that the Confidential Information only shall be used by the Employee
in
connection with his activities hereunder as an employee of the Company, and
shall not be used in any way that is detrimental to the Company.
8.3 The
Employee
agrees not to disclose, directly or indirectly, the Confidential Information
to
any third person or entity, other than representatives or agents of the
Company. The Employee shall treat all such information as
confidential and proprietary property of the Company.
8.4 The
term
"Confidential Information" does not include information that (a) is or becomes
generally available to the public other than by disclosure in violation of
this
Agreement, (b) was within the Employee's possession prior to being furnished
to
such Employee, (c) becomes available to the Employee on a nonconfidential basis
or (d) was independently developed by the Employee without reference to the
information provided by the Company.
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8.5 The
Employee
may disclose any Confidential Information that is required to be disclosed
by
law, government regulation or court order. If disclosure is required,
the Employee shall give the Company advance notice so that the Company may
seek
a protective order or take other action reasonable in light of the
circumstances.
8.6 Upon
termination of this Agreement, the Employee shall promptly return to the Company
all materials containing Confidential Information, as well as data, records,
reports and other property, furnished by the Company to the Employee or produced
by the Employee in connection with services rendered
hereunder. Notwithstanding such return or any of the provisions of
this Agreement, the Employee shall continue to be bound by the terms of the
confidentiality provisions contained in this Section 8 for a period of three
(3)
years after the termination of this Agreement.
8.7 In
connection
with his employment by the Company, the Employee hereby acknowledges that he
may
enter into more than one agreement with regard to (a) the confidentiality of
certain books, records, documents and business, (b) rights to certain
inventions, proprietary information, and writings, (c) publication of certain
materials, and (d) other related matters (the "Confidential Matters") of the
Company (the "Confidentiality Agreements"). In order to clarify any
potential conflicts between certain respective provisions of such
Confidentiality Agreements, the Employee and the Company hereby agree that,
as
among such Confidentiality Agreements, the provision (or part thereof) in any
such Confidentiality Agreement which affords the greatest protection to the
Company with respect to the Confidential Matters shall control.
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9. Inventions
Discovered by the Employee WhilePerforming Services
Hereunder.
During
the
Term, the Employee shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable, whether or not copyrightable (collectively,
"Inventions") made, conceived or first reduced to practice by the Employee,
either alone or jointly with others, while performing service
hereunder. The Employee hereby assigns to the Company all of his
right, title and interest in and to any such Inventions. During and
after the Term, the Employee shall execute any documents necessary to perfect
the assignment of such Inventions to the Company and to enable the Company
to
apply for, obtain, and enforce patents and copyrights in any and all countries
on such Inventions. The Employee hereby irrevocably designates the
Chief Patent Counsel to the Company as his agent and attorney-in-fact to execute
and file any such document and to do all lawful acts necessary to apply for
and
obtain patents and copyrights and to enforce the Company's rights under this
paragraph. This Section 9 shall survive the termination of this
Agreement.
10. Non-Competition
and Non-Solicitation.
During
the
Term and for a period of one year following the date of termination or
nonrenewal for any reason (other than termination pursuant to Section
5.1(a): (a) the Employee shall not in the United States or in any
country in which the Company shall then be doing business, directly or
indirectly, enter the employ of, or render any services to, any person, firm
or
corporation engaged in any business competitive with the business of the Company
or of any of its subsidiaries or affiliates of which the Employee may become
an
employee or officer during the Term; he shall not engage in such business on
his
own account; and he shall not become interested in any such business, directly
or indirectly, as an individual, partner, shareholder, director, officer,
principal, agent, employee, trustee, consultant, or any other relationship
or
capacity; provided, however, that nothing contained in this Section 10 shall
be
deemed to prohibit the Employee from acquiring, solely as an investment, shares
of capital stock of any public corporation; (b) neither the Employee
nor any Affiliate of the Employee shall solicit or utilize, or assist any person
in any way to solicit or utilize, the services, directly or indirectly, of
any
of the Company's directors, consultants, members of the Board of Scientific
and
Medical Advisors, officers or employees (collectively, "Associates of the
Company"). This nonsolicitation and nonutilization provision shall
not apply to Associates of the Company who have previously terminated their
relationship with the Company.
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10.1 If
the
Employee commits a breach, or threatens to commit a breach, of any of the
provisions of this Section 10, the Company shall have the following rights
and
remedies:
10.1.1 The
right and
remedy to have the provisions of this Agreement specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed that any
such
breach or threatened breach shall cause irreparable injury to the Company and
that money damages shall not provide an adequate remedy to the Company;
and
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10.1.2 The
right and
remedy to require the Employee to account for and pay over to the Company all
compensation, profits, monies, accruals,increments or other benefits
(collectively "Benefits") derived or received by the Employee as the result
of
any transactions constituting a breach of any of the provisions of the preceding
paragraph, and the Employee hereby agrees to account for and pay over such
Benefits to the Company.
Each
of
the rights and remedies enumerated above shall be independent of the other,
and
shall be severally enforceable, and all of such rights and remedies shall be
in
addition to, and not in lieu of, any other rights and remedies available to
the
Company under law or in equity.
10.2 If
any of the
covenants contained in Section 8, 9 or 10, or any part thereof, is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full effect without
regard to the invalid portions.
10.3 If
any of the
covenants contained in Section 8, 9 or 10, or any part thereof, is held to
be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision and, in its
reduced form, such provision shall then be enforceable.
10.4 The
parties
hereto intend to and hereby confer jurisdiction to enforce the covenants
contained in Sections 8, 9 and 10 upon the courts of any state within the
geographical scope of such covenants. In the event that the courts of
any one or more of such states shall hold any such covenant wholly unenforceable
by reason of the breadth of such scope or otherwise, it is the intention of
the
parties hereto that such determination not bar or in any way affect the
Company's right to the relief provided above in the courts of any other states
within the geographical scope of such covenants, as to breaches of such
covenants in such other respective jurisdictions, the above covenants as they
relate to each state being, for this purpose, severable into diverse and
independent covenants.
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11. Indemnification.
The
Company shall indemnify the Employee, to the maximum extent permitted by
applicable law, against all costs, charges and expenses incurred or sustained
by
him in connection with any action, suit or proceeding to which he may be made
a
party by reason of his being an officer, director or employee of the Company
or
of any subsidiary or affiliate of the Company. The Company shall
provide, subject to its availability upon reasonable terms (which determination
shall be made by the Board of Directors) at its expense, directors and officers
insurance for the Employee in reasonable amounts. Determination with
respect to (a) the availability of insurance upon reasonable terms and (b)
the
amount of such insurance coverage shall be made by the Board of Directors in
its
sole discretion.
12. Notices.
All
notices, requests, consents and other communications required or permitted
to be
given hereunder shall be in writing and shall be deemed to have been duly given
if sent by prepaid telegram (confirmed delivery by the telegram service),
private overnight mail service (delivery confirmed by such service), registered
or certified mail (return receipt requested), or delivered personally, as
follows (or to such other address as either party shall designate by notice
in
writing to the other in accordance herewith):
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If
to
the Company:
ARIAD
Pharmaceuticals, Inc.
00
Xxxxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Chief Executive Officer
Telephone: (000)
000-0000
Fax: (000)
000-0000
If
to
the Employee:
Xxxxxx
X.
Xxxxxx, M.D.
0
Xxxxxxx
Xxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000-0000
13. General.
13.1 This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the Commonwealth of Massachusetts applicable to agreements made and
to
be performed entirely in Massachusetts.
13.2 The
Section
headings contained herein are for reference purposes only and shall not in
any
way affect the meaning or interpretation of this Agreement.
13.3 This
Agreement sets forth the entire agreement and understanding of the parties
relating to the subject matter hereof, and supersedes all prior agreements,
arrangements and understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made by
either party that is not embodied in this Agreement, and neither party shall
be
bound by or liable for any alleged representation, promise or inducement not
so
set forth.
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13.4 This
Agreement and the Employee's rights and obligations hereunder may not be
assigned by the Employee or the Company; provided, however, the
Company may assign this Agreement to an Affiliate or a successor-in
interest.
13.5 This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms or covenants hereof may be waived, only by a written instrument
executed by the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of a party at any time or times to require
performance of any provision hereof shall in no manner affect the right at
a
later time to enforce the same. No waiver by a party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed
as,
a further or continuing waiver of any such breach, or a waiver of the breach
of
any other term or covenant contained in this Agreement.
14. Definitions. As
used herein the following terms have the following meaning:
(a) "Affiliate"
means and includes any corporation or other business entity controlling,
controlled by or under common control with the corporation in
question.
(b) The
“Company’s Field of Interest” is the discovery, development and
commercialization of pharmaceutical products based on (a) intervention in signal
transduction pathways and (b) gene and cell therapy. The Company’s
Field of Interest may be changed at any time at the sole discretion of the
Company and upon written notice to Employee.
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(c) "Person"
means any natural person, corporation, partnership, firm, joint venture,
association, joint stock company, trust, unincorporated organization,
governmental body or other entity.
(d) "Subsidiary"
means any corporation or other business entity directly or indirectly controlled
by the corporation in question.
(e) "Change
in
Control” means the occurrence of any of the following events (without the
consent of the Employee):
(i) Any
corporation, person or other entity makes a tender or exchange offer for shares
of the Company's Common Stock pursuant to which such corporation, person or
other entity acquires more than 50% of the issued and outstanding shares of
the
Company's Common Stock;
(ii) The
stockholders of the Company approve a definitive agreement to merge or
consolidate the Company with or into another corporation or to sell or otherwise
dispose of all or substantially all of the Company's assets; or
(iii) Any
person
within the meaning of Section 3 (a) (9) or Section 13 (d) of the Securities
Exchange Act of 1934 acquires more than 50% of the combined voting power of
Company's issued and outstanding voting securities entitled to vote in the
election of the Board.
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IN
WITNESS
WHEREOF, the parties have executed this Agreement
as of the date first above written.
ARIAD
PHARMACEUTICALS, INC.
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By:
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/s/
Xxxxxx X. Xxxxxx, M.D.
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Xxxxxx
X. Xxxxxx, M.D.
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Chairman
and Chief Executive Officer
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EMPLOYEE
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By:
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/s/ Xxxxxx
X. Xxxxxx, M.D.
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Xxxxxx
X. Xxxxxx, M.D.
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