Exhibit 10.14
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") entered into as of
February 20, 2004, by and between Animas Corporation, a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company wishes to continue to employ the Executive as its
Chief Financial Officer, and both parties desire to enter into an employment
agreement to reflect the Executive's present and future position with the
Company upon the terms and conditions set forth herein.
WHEREAS, the Executive has agreed to certain confidentiality,
non-competition and non-solicitation covenants contained hereunder, in
consideration of benefits provided to the Executive under this Agreement.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment
1.1. Position. The Company hereby agrees to continue to employ the
Executive as its Chief Financial Officer and the Executive hereby accepts such
employment and agrees to perform his duties and responsibilities, in accordance
with the following terms, conditions and provisions.
1.2. Employment Term. The term of the Executive's employment under
this Agreement shall commence on the date the Company's registration statement
on a Form S-1 is declared effective by the Securities and Exchange Commission
(the "Effective Date") and shall continue in effect through December 31, 2006
(the "Employment Term"); provided, however, that notwithstanding any other
provision of this Agreement to the contrary, this Agreement shall immediately
become null and void if the Effective Date does not occur on or prior to June
30, 2004.
1.3. Duties and Responsibilities. The Executive shall serve as the
Company's Chief Financial Officer and in such other senior positions, if any, to
which he may be elected by the Board of Directors of the Company (the "Board")
during the Employment Term. During the Employment Term, the Executive shall
perform all duties and accept all responsibilities incident to, and not
inconsistent with, such positions.
1.4. Extent of Service. During the Employment Term, the Executive
agrees to use his best efforts to carry out his duties and responsibilities
under Section 1.3 hereof and, consistent with the other provisions of this
Agreement, to devote substantially all of his business time, attention, and
energy thereto, except to the extent required by the Executive's outside board
memberships and civic or charitable activities held on the date of this
Agreement. The Executive agrees not to become engaged in any additional
business, civic or charitable activity that, in the Board's reasonable judgment,
is likely to interfere materially with his ability to discharge his duties and
responsibilities to the Company.
1.5. Base Salary. For all the services rendered by the Executive
hereunder, the Company shall pay the Executive a base salary at the annual rate
of $220,200, as adjusted pursuant to this Section 1.5, ("Base Salary"), payable
in installments at such times as the Company customarily pays its other senior
level officers (but in any event no less often than monthly). The Executive's
Base Salary shall be reviewed and may be appropriately adjusted by the Board
pursuant to its normal performance review policies for senior level officers.
1.6. Retirement and Benefit Coverages. The Executive shall be
eligible to participate in any pension plans, retirement plans and any health,
life, accident, general liability, directors and officers liability, or
disability insurance, sick leave or other benefit plans or programs made
available to other senior level officers of the Company as long as such plans or
programs are kept in force by the Company ("Plans") and provided the Executive
meets the eligibility requirements and other terms, conditions and restrictions
of the respective Plans. In addition, the Executive shall be entitled to
holiday, vacation and sick leave in accordance with the Company's vacation,
holiday and pay for time not worked policies, as well as any other perquisites
provided by the Company to its senior level officers.
1.7. Stock Options/Stock Awards/Benefits. In the event that the
Executive's employment is terminated by the Company or a successor entity
pursuant to Section 5.2, then that portion of any stock option, restricted stock
or other stock awards granted the Executive that has not yet and would next have
become exercisable or vested during the twelve (12) month period immediately
following the date of such termination shall automatically accelerate and become
exercisable or vested on the effective date of such event and the Executive
shall become entitled to the payments set forth in Section 5.2, as applicable.
Subject to the discretion of the Board, the Executive shall be eligible to
receive additional grants of stock options from time to time in the future, on
such terms and subject to such conditions as the Board shall determine as of the
date of any such grant.
1.8. Incentive Programs. The Executive shall be entitled to
participate in any short-term or long-term incentive compensation programs
established by the Company for its senior level officers generally ("Incentive
Programs"). Payments under such Incentive Programs shall depend upon achievement
of certain business and individual performance targets specified and approved by
the Board.
2. Confidential Information. The Executive acknowledges that, by reason
of his employment by and service to the Company before and during the Employment
Term, he has had and will continue to have access to certain confidential and
proprietary information relating to the Company's business, which may include,
but is not limited to, trade secrets as defined by Pennsylvania Law, customer
information, supplier information, cost and pricing information, marketing and
sales techniques, strategies and programs, proprietary computer programs and
software and financial information (collectively referred to as "Confidential
Information"). The Executive acknowledges that such Confidential Information is
a valuable and unique asset of the Company and the Executive covenants that he
will not at any time during the Employment Term use any Confidential Information
or divulge or disclose any Confidential Information to any person, firm or
corporation except in connection with the Executive's good faith belief as to
the proper performance of his duties for the Company. The Executive also
covenants that, for a period of three (3) years after the termination of his
employment, directly or indirectly, he will
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not use any Confidential Information for any purpose or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of the Executive.
Notwithstanding the foregoing, if the Executive is required to disclose
Confidential Information by a court of law, by any governmental agency having
supervisory authority over the business of the Company or over the Executive or
by any administrative or legislative body (including a committee thereof) that
the Executive reasonably believes has apparent jurisdiction to order his to
divulge, disclose or make accessible such information, the Executive shall
inform the Company in writing promptly of such required disclosure and shall not
disclose any Confidential Information until steps taken by the Company to
preclude such disclosure have been ineffective or the Company authorizes
disclosure.
3. Non-Competition; Non-Solicitation.
3.1. Non-Competition. The Executive agrees that:
(a) During the Employment Term and for a period of two (2)
years thereafter, or, if longer, for the period during which the Executive
receives payments from the Company under Section 5.2, the Executive will not,
except with the prior written consent of the Board, directly or indirectly own,
manage, operate, join, control, finance or participate in the ownership,
management, operation, control or financing of, or be connected as an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit his name to be used in connection with, any
business or enterprise that is engaged in a geographic area in which the Company
or any of its affiliates is operating or has documented plans to operate,
provided the Executive has knowledge of those plans, either during the
Employment Term or on the date the Executive's employment terminates, as
applicable, (whether or not such business is physically located within those
areas) (the "Geographic Area"), in any business that is directly competitive to
a business maintained by the Company or any of its affiliates or to a business
that the Company or any of its affiliates has documented plans to maintain,
provided that the Executive has knowledge of those plans, either during the
Employment Term or on the date the Executive's employment terminates, as
applicable ("Competing Business"). It is recognized by the Executive that the
business of the Company and its affiliates operates throughout the Geographic
Area and that the Executive is involved in such business throughout the
Geographic Area, and therefore, that more limited geographical limitations on
this non-competition covenant are not appropriate.
(b) The foregoing restrictions shall not be construed to
prohibit the ownership by the Executive of less than five percent (5%) of any
class of securities of any corporation that is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), provided that such ownership
represents a passive investment and that neither the Executive nor any group of
persons including the Executive in any way, either directly or indirectly,
manages or exercises control of any such corporation, guarantees any of its
financial obligations, otherwise takes any part in its business, other than
exercising his rights as a shareholder, or seeks to do any of the foregoing.
3.2. Non-Solicitation. The Executive further covenants and agrees
that, during the Employment Term and for the period of two (2) years thereafter,
or, if longer, for the
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period during which the Executive receives payments from the Company under
Section 5.2, the Executive will not, without the prior written consent of the
Company, personally solicit for a Competing Business any customer that was a
customer of the Company or any of its affiliates during the Employment Term or
on the date on which the Executive's employment terminates or any person who is
a managerial or higher level employee of the Company at the date the Executive's
employment terminates. The foregoing covenant of the Executive shall not apply
to any person after twelve months have elapsed subsequent to the date on which
such person's employment by the Company has terminated.
4. Equitable Relief.
4.1. The Executive acknowledges and agrees that (i) the
restrictions contained in Sections 2 and 3 are reasonable and necessary to
protect and preserve the legitimate interest, properties, goodwill and business
of the Company, (ii) the Company would not have entered into this Agreement in
the absence of such restrictions and (iii) the Company will suffer irreparable
injury if the Executive breaches any of the provisions set forth in Sections 2
and 3. The Executive represents and acknowledges that (i) he has been advised by
the Company to consult his own legal counsel in respect of this Agreement, and
(ii) he has had full opportunity, prior to execution of this Agreement, to
review thoroughly this Agreement with his counsel.
4.2. The Executive further acknowledges and agrees that a breach of
any of the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages. The Executive agrees that the Company shall be entitled to
seek preliminary injunctive relief, without the necessity of proving actual
damages. In the event that any of the provisions of Sections 2 or 3 hereof
should ever be adjudicated to exceed the time, geographic, service, or other
limitations permitted by applicable law in any jurisdiction, it is the intention
of the parties that the provision shall be amended to the extent of the maximum
time, geographic, service, or other limitations permitted by applicable law,
that such amendment shall apply only within the jurisdiction of the court that
made such adjudication and that the provision otherwise be enforced to the
maximum extent permitted by law.
4.3. The Executive irrevocably and unconditionally (i) agrees that
any suit, action or other legal proceeding arising out of this Agreement,
including, without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Eastern District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Xxxxxxx County,
Pennsylvania, (ii) consents to the non-exclusive jurisdiction of either such
court in any such suit, action or proceeding, and (iii) waives any objection
that the Executive may have to the laying of venue of any such suit, action or
proceeding in either such court. The Executive also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers at the address set forth in the notice provisions of Section 10
hereof.
5. Termination.
5.1. The Employment Term shall terminate upon the occurrence of any
one of the following events:
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(a) Disability. The Company may terminate Executive's
employment during the Employment Term in compliance with applicable law, if the
Executive is unable substantially to perform the essential duties and
responsibilities hereunder to the full extent required by the Board by reason of
mental or physical illness, injury or any other cause for six consecutive
months, or for more than nine months in the aggregate during any period of
twelve consecutive calendar months (a "Disability"). In the event of termination
pursuant to this Section 5.1(a) during the Employment Term, the Company shall
pay to the Executive an amount equal to the Base Salary to the extent already
earned and accrued but unpaid through the date of such termination and a payment
equal to any unreimbursed expenses and unused vacation time. Otherwise, the
Company shall have no further liability or obligation under this Agreement. In
the event of any dispute under this Section 5.1(a) and to the extent determined
by the Board to be job-related and consistent with business necessity, the
Executive shall submit to a physical examination by a licensed physician
experienced in disability examination selected by the Board and approved by the
Executive, such approval not to be unreasonably withheld.
(b) Death. The Employment Term shall terminate on the date
of the Executive's death. In such event, the Company shall pay to the
Executive's executors, legal representatives or administrators, as applicable,
an amount equal to the Base Salary to the extent already earned and accrued but
unpaid through the date of such termination and a payment equal to any
unreimbursed expenses and unused vacation time. Otherwise, the Company shall
have no further liability or obligation under this Agreement to his executors,
legal representatives, administrators, heirs or assigns or any other person
claiming under or through him.
(c) Cause. The Company may terminate Executive's employment
during the Employment Term at any time for "Cause" upon written notice to the
Executive, in which event all payments under this Agreement shall cease, except
for (i) Base Salary to the extent already earned and accrued but unpaid and a
payment equal to any unreimbursed expenses and unused vacation, which shall be
paid in a single lump sum no later than ten (10) days following the day the
Employment Term terminates, and (ii) any other benefits in accordance with the
terms of any applicable Plans of the Company. For purposes of this Agreement,
the Executive's employment may be terminated for "Cause" if (i) the Executive is
convicted of a felony (ii) in the reasonable determination of the Board, the
Executive has committed an intentional act of fraud, embezzlement, or theft in
connection with the Executive's duties in the course of his employment with the
Company, (iii) in the reasonable determination of the Board, the Executive has
engaged in gross negligence in the course of his employment with the Company
that is materially harmful to the business of the Company, or (iv) the Executive
intentionally breached his obligations under this Agreement, including
inattention to or neglect of duties and shall not have remedied such breach
within thirty (30) days after receiving written notice from the Board specifying
the details thereof and the act or failure to act by the Executive is materially
harmful to the business of the Company. For purposes of this Agreement, an act
or omission on the part of the Executive shall be deemed "intentional" or "gross
negligence" only if it was done by the Executive in bad faith, not merely an
error in judgment, and without reasonable belief that the act or omission was in
the best interest of the Company.
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5.2. Termination Without Cause.
(a) The Company may terminate the Executive's employment
without Cause, at any time, from the position in which he is employed hereunder
(on which date the Employment Term shall be deemed to have ended). Upon such
termination, except as provided in Section 5.2(b) below, the Executive shall be
entitled to receive, as liquidated damages for the failure of the Company to
continue to employ the Executive (i) Base Salary to the extent already earned
and accrued but unpaid and a payment equal to any unused vacation, unreimbursed
expenses, which shall be paid in a single lump no later than ten (10) days
following the date of termination, and (ii) any other benefits in accordance
with the terms of any Plans of the Company.
(b) Notwithstanding the foregoing, upon such termination,
the Company shall prepare and execute a release substantially in the form
attached hereto as Annex I (the "Release") and present the Release to the
Executive for execution. Upon the Executive's execution of the Release and his
agreement to be bound by the terms of and not rescind the Release, he shall be
entitled to receive, commencing on the eighth day following execution of the
Release, in lieu of the Company's obligations described in Subsection (a) of
this Section, which the Executive agrees to waive, as liquidated damages for the
failure of the Company to continue to employ the Executive, (i) continuation for
twelve (12) months of the Executive's then current Base Salary in accordance
with Section 1.5 (without regard to the Executive's removal), (ii) any other
amounts earned, vested, or owing but not yet paid under Section 1.5 through 1.8
above, (iii) a payment equal to any unused vacation and unreimbursed expenses,
(iv) if the Executive and/or his spouse or eligible dependents elect
continuation of medical and/or dental benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), the Company will pay
the full premium cost of such participation for a period of eighteen (18) months
following the date of such termination or until the Executive or his spouse or
dependents cease to be eligible for participation under COBRA, whichever is
shorter. Upon a termination without Cause pursuant to Section 5.2(a), the
Company shall have no liability or obligation to the Executive except as set
forth in this Section 5.2 and in the Release. In the event the Executive refuses
to execute and agree to be bound by the terms of the Release (or revokes the
Release), he shall receive only the amounts and benefits to the same extent and
at the same time as specified in Section 5.2(a).
5.3. Voluntary Termination. The Executive may voluntarily terminate
the Employment Term upon thirty (30) days' prior written notice for any reason.
In such event, the Executive shall be entitled only to (i) Base Salary to the
extent already earned and accrued but unpaid and a payment equal to any unused
vacation, and a payment equal to unreimbursed expense which shall be paid in a
single lump sum no later than ten (10) days following the date of termination,
and (ii) any other benefits in accordance with the terms of any Plans of the
Company. A voluntary termination under this Section 5.3 shall not be deemed a
breach of this Agreement.
5.4. Termination Following the Employment Term. Notwithstanding any
other provision of this Agreement to the contrary, if the Executive's employment
with the Company terminates for any reason at any time following the last day of
the Employment Term, the Company shall pay the Executive (i) Base Salary to the
extent already earned and accrued but
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unpaid and a payment equal to any unused vacation and unreimbursed expense which
shall be paid in a single lump sum no later than ten (10) days following the
date of termination, and (ii) any other benefits in accordance with the terms of
any Plans of the Company. Otherwise, the Company shall have no further liability
or obligation under this Agreement.
6. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's employment and the
Employment Term to the extent necessary to the intended preservation of such
rights and obligations.
7. Settlement of Disputes; Arbitration; Expenses. All claims by the
Executive for benefits under this Agreement shall be directed to and determined
by the Board and shall be in writing. Any denial by the Board of a claim for
benefits under this Agreement shall be delivered to the Executive in writing and
shall set forth the specific reasons for the denial and the specific provisions
of this Agreement relied upon. The Board shall afford a reasonable opportunity
for a review of the decision denying a claim and shall further allow to appeal
to the Board a decision of the Board within sixty (60) days after notification
by the Board that the Executive's claim has been denied. Any further dispute
under the provisions of this Agreement (other than a dispute in which the
primary relief sought is an equitable remedy such as an injunction) shall be
settled by arbitration in the City of Philadelphia, Pennsylvania in accordance
with the National Rules for the Resolution of Employment Disputes then in effect
of the American Arbitration Association, before a panel of three arbitrators,
two of whom shall be selected by the Company and the Executive, respectively,
and the third of whom shall be selected by the other two arbitrators. Any award
entered by the arbitrators shall be final, binding and nonappealable and
judgment may be entered thereon by either party in accordance with applicable
law in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. The arbitrators shall have no authority to modify any
provision of this Agreement or to award a remedy for a dispute involving this
Agreement other than a benefit specifically provided under or by virtue of the
Agreement. If the Executive prevails on any material issue which is the subject
of such arbitration or lawsuit, the Company shall be responsible for all of the
fees of the American Arbitration Association and the arbitrators and any
expenses relating to the conduct of the arbitration as well as the Executive's
reasonable legal fees and expenses. The arbitrators shall, in any other event,
determine who shall pay the Executive's legal fees and expenses.
8. No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
shall preclude the assumption of such rights by executors, administrators or
other legal representatives of the Executive or his estate and their assigning
any rights hereunder to the person or persons entitled thereto.
9. Source of Payment. All payments provided for under this Agreement
shall be paid in cash from the general funds of the Company. The Company shall
not be required to establish a special or separate fund or other segregation of
assets to assure such payments, and, if the Company shall make any investments
to aid it in meeting its obligations hereunder, the
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Executive shall have no right, title or interest whatever in or to any such
investments except as may otherwise be expressly provided in a separate written
instrument relating to such investments. Nothing contained in this Agreement,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship, between the Company and
the Executive or any other person. To the extent that any person acquires a
right to receive payments from the Company hereunder, such right, without
prejudice to rights which employees may have, shall be no greater than the right
of an unsecured creditor of the Company.
10. Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
Animas Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Executive, to the last known address on file with the Company;
or to such other names or addresses as the Company or the Executive, as the case
may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.
11. Contents of Agreement; Amendment and Assignment.
11.1. The amounts and benefits payable hereunder are in addition to
any amounts and benefits payable under that certain Change of Control Agreement
(the "Change of Control Agreement") by and between the Executive and the Company
dated February ____, 2004.
11.2. This Agreement, the Change of Control Agreement and the
Confidentiality and Restricted Covenant Agreement by and between the Company and
Executive supersede all prior agreements and set forth the entire understanding
between the parties hereto with respect to the employment of the Executive by
the Company and cannot be changed, modified, extended or terminated except as
provided herein or upon written amendment approved by the Company and executed
on its behalf by a duly authorized officer and by the Executive. This Agreement
does not amend or modify the provisions of any Plans or Incentive Programs in
which the Executive participates or is eligible to participate except as set
forth in Section 1.7 hereof.
11.3. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of the
Executive hereunder are of a personal nature and shall not be assignable or
delegatable in whole or in part by the Executive. The Company shall require any
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successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, 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 extent the Company would be required to perform if no such
succession had taken place.
12. Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction. If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.
13. Remedies Cumulative; No Waiver. No remedy conferred upon a party by
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given hereunder or now or hereafter existing at law or in equity. No
delay or omission by a party in exercising any right, remedy or power hereunder
or existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by such party from time to time and
as often as may be deemed expedient or necessary by such party in its sole
discretion.
14. Beneficiaries/References. The Executive shall be entitled, to the
extent permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
the Executive's death by giving the Company written notice thereof. In the event
of the Executive's death or a judicial determination of his incompetence,
references in this Agreement to the Executive shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal
15. Miscellaneous. All section headings used in this Agreement are for
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not be necessary in making proof of this Agreement or
any counterpart hereof to produce or account for any of the other counterparts.
16. Withholding. The Company may withhold from any payments under this
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. The Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received hereunder except as
otherwise provided with respect to his restricted stock award.
17. Governing Law. This Agreement shall be governed by and interpreted
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
ANIMAS CORPORATION
/s/ Xxxxxxxxx X. Xxxxxxxx
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By: Xxxxxxxxx X. Xxxxxxxx
Title: President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
By: Xxxxxxx X. Xxxxx
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