EXHIBIT 10.3

TERMINATION PROTECTION AGREEMENT

This Agreement (“Agreement”) is an amendment and restatement made this
             day of                     ,                      of the agreement
made                     ,                      between Esterline Technologies
Corporation, a Delaware corporation, with its principal offices at 500 108th
Avenue N.E., Suite 1500, Bellevue, Washington 98004 (the “Company”) and
                     (the “Executive”).

WHEREAS, the Board of Directors of the Company (the “Board”) determined it is
appropriate to encourage the continued attention and dedication of Company
executives to their assigned duties without distraction in circumstances arising
from a possible change in control of the Company; and

WHEREAS, the Company and Executive deem it appropriate to address the
requirements of Code Section 409A; and

WHEREAS, the Executive is willing to enter into this Agreement for the purposes
and on the terms and conditions described below;

NOW, THEREFORE, the parties agree as follows:

1.        Definitions.

1.1    “Cause” shall mean: (a) the willful and continued failure by the
Executive to substantially perform his or her duties and obligations to the
Company (other than any such failure resulting from illness, sickness, or
physical or mental incapacity) which failure continues after the Company has
given notice to the Executive; or (b) the willful engaging by the Executive in
misconduct that is significantly injurious to the Company, monetarily or
otherwise. For purposes of this definition, no act, or failure to act, on the
Executive’s part shall be considered “willful” unless done, or omitted to be
done, by the Executive in bad faith and without reasonable belief that his or
her action or omission was in the best interests of the Company.

1.2    “Change in Control Event” shall mean the first to occur of the following
events:

(a) an acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (1) the then outstanding shares of common stock of the Company or (2) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors, excluding, however, the
following (i) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege where the
security being so converted was not acquired directly from the Company by the
party exercising the conversion privilege, (ii) any acquisition by the Company,
(iii) any acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any Related Company, or (iv) a Related Party
Transaction; or

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(b) a change in the composition of the Board during any two-year period such
that the individuals who, as of the beginning of such two-year period,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute
at least a majority of the Board; provided, however, that for purposes of this
definition, any individual who becomes a member of the Board subsequent to the
beginning of the two-year period, whose election, or nomination for election by
the Company’s shareholders, was approved by a vote of at least two-thirds of
those individuals who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso) shall be
considered as though such individual were a member of the Incumbent Board; and
provided further, however, that any such individual whose initial assumption of
office occurs as a result of or in connection with an actual or threatened
solicitation of proxies or consents by or on behalf of an Entity other than the
Board shall not be considered a member of the Incumbent Board.

1.3    “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.4    “Contract Period” shall mean the twenty-four (24) month period beginning
on the Effective Date.

1.5    “Disability” shall mean any physical or mental condition for which the
Executive would be eligible to receive benefits under the disability insurance
provisions of (a) the Social Security Act or (b) the Company’s long-term
disability program.

1.6    “Effective Date” shall mean the day preceding a Change in Control Event.

1.7    “Equity Incentive Plan” shall mean the Esterline Technologies Corporation
2004 Equity Incentive Plan, as amended from time to time.

1.8    “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended.

1.9    “Fringe Benefit Program” shall mean any employee benefit plan, program,
or arrangement, including, without limitation, employee benefit plans within the
meaning of the Employee Retirement Income Security Act of 1974, as amended, but
excluding the Equity Incentive Plan and any nonqualified deferred compensation
plan or other incentive compensation plan.

1.10  “Final Fiscal Period” shall mean the number of days the Executive was
employed by the Company during the Fiscal Year in which the Executive’s
Termination Date occurs.

1.11  “Fiscal Year” shall mean the twelve (12)-month period ending on
October 31.

1.12  “Good Reason” shall mean:

(a) A material diminution in the Executive’s authority, duties or
responsibilities, including, for example, assignment to the Executive of duties
inconsistent with, or the reduction of powers or functions associated with, his
or her positions, duties, responsibilities and status with the Company
immediately prior to the Effective Date, or removal of the Executive from or any
failure to re-elect the Executive to any material positions or offices the
Executive held immediately prior to the Effective Date, except in connection
with the termination of the Executive’s employment by the Company for Cause or
for Disability, or a material negative

 

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change in the employment relationship such as the failure to maintain a working
environment conducive to the performance of the Executives’ duties or the
effective exercise of the powers or functions associated with the Executive’s
position, responsibilities and status with Company immediately prior to the
Effective Date; or

(b) The Company’s material breach of the covenants set forth in the third
sentence of Section 2; or

(c) The Company’s mandatory transfer of the Executive to another geographic
location, without the Executive’s consent, outside of a twenty (20) mile radius
from the Executive’s current location, except for required travel on the
Company’s business to an extent substantially consistent with the Executive’s
business travel obligations prior to the Effective Date; or

(d) Failure by the Company to obtain an assumption of the obligations of the
Company to perform this Agreement by any successor, as provided in Section 7.1.

A termination of employment by the Executive shall not be deemed to be “with
Good Reason” unless the Executive shall have provided notice to the Company of
the Good Reason conduct or event within 90 days of its occurrence and the
Company had a 30-day opportunity after such notice to cure such conduct or
event.

1.13  “Minimum Base Salary” shall mean the Executive’s annual rate of salary on
the Effective Date, payable monthly, increased by ten (10)% per annum compounded
annually on each anniversary of the Executive’s most recent raise.

1.14  “Minimum Total Compensation” shall mean a sum equal to the Executive’s
aggregate gross cash compensation (excluding Non-Recurring Compensation) paid to
the Executive by the Company during the twenty-four (24) month period ending on
the Effective Date, divided by two (2).

1.15  “Non-Recurring Compensation” shall mean amounts received by the Executive
(a) under any nonqualified deferred compensation plan or arrangement or, (b) as
the result of the exercise or receipt of stock appreciation rights, stock
options or other equity-based compensation.

1.16  “Related Company” shall have the meaning given such term under the Equity
Incentive Plan.

1.17  “Related Party Transaction” shall have the meaning given such term under
the Equity Incentive Plan

1.18  “Termination Date” shall mean the effective date of the Executive’s
“separation from service” (as that term is defined under Code Section 409A) from
the Company. For purposes of determining whether a “separation from service”
under Code Section 409A has occurred, a “separation from service” is deemed to
include a reasonably anticipated permanent reduction in the level of services
performed by the Executive to less than fifty percent (50%) of the average level
of services performed by the Executive during the immediately preceding 12-month
period (or period of service if less than 12 months).

2.        Scope of Agreement. This Agreement shall apply with respect to any
termination of employment of the Executive that occurs during the Contract
Period. It shall not apply to any

 

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termination of the Executive’s employment that occurs other than during the
Contract Period. In addition, during the Contract Period, the Company shall
(i) pay the Executive a monthly base salary at least equal to the then
applicable Minimum Base Salary; (ii) pay the Executive, within seventy-five
(75) days following the end of a Fiscal Year, compensation with respect to each
such Fiscal Year ending after the Effective Date in an amount at least equal to
the Minimum Total Compensation; and (iii) neither by act nor omission, in its
capacity as a plan administrator or otherwise, adversely affect the Executive’s
participation in any Fringe Benefit Program in effect on the Effective Date, or
materially reduce the value of his or her benefits under any such program,
including benefits under any Company car allowance and vacation policy.

3.        Termination During Contract Period.

3.1    General. During the Contract Period and subject to any employment
agreement between the Company and the Executive, the Company shall have the
right to terminate the Executive’s employment with the Company for any reason or
for no reason, and the Executive may terminate his or her employment with the
Company for any reason or for no reason. In the event of any such termination of
employment, the Executive shall be entitled to such compensation, if any, as
provided for in this Agreement.

3.2    Without Cause or For Good Reason. In the event the Executive’s employment
with the Company is terminated during the Contract Period by the Company without
Cause, or by the Executive with Good Reason, then the Executive shall be
entitled to the compensation and benefits provided in Section 4.

3.3    Other Than For Good Reason. In the event the Executive terminates his or
her employment with the Company during the Contract Period for any reason other
than for Good Reason, the Executive shall not be entitled to any compensation
under this Agreement, other than the Executive’s accrued but unpaid salary and
accrued but unused vacation through his or her Termination Date.

3.4    For Cause, Disability, or Death. In the event the Executive’s employment
with the Company is terminated by the Company during the Contract Period for
Cause or for Disability, or if the Executive’s employment with the Company is
terminated as the result of the Executive’s death, neither the Executive nor his
or her beneficiary, as the case may be, shall be entitled to receive any
compensation or benefits under this Agreement other than the Executive’s accrued
but unpaid salary and accrued but unused vacation through his or her Termination
Date.

4.        Compensation and Benefits Upon Termination by the Company Without
Cause or by Executive for Good Reason.

4.1    If the conditions set forth in Section 3.2 are satisfied, the Executive
shall be entitled to receive the following compensation and benefits:

(a) a pro rata amount of the Minimum Total Compensation, calculated as follows:
the Minimum Total Compensation multiplied by a fraction, the numerator of which
is the Final Fiscal Period and the denominator of which is 365, with the product
thereof reduced (but not below zero) by the base salary and car allowance
previously paid to the Executive with respect to his/her employment during the
Final Fiscal Period;

 

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(b) all other amounts earned by the Executive and unpaid as of the Termination
Date, including any accrued but unpaid vacation;

(c) an amount equal to three (3) times the Minimum Total Compensation;

(d) reimbursement of all legal fees and related expenses as may be incurred by
the Executive in seeking to obtain or enforce any right or benefit provided to
the Executive by this Agreement, provided (1) the Executive’s claims are
determined under Section 9, or by agreement of the parties, to be well-founded
in substantial part, and (2) that fees and expenses are reasonable in light of
the claims at issue; and,

(e) all life insurance, medical, health, dental, accident and disability
coverage provided to the Executive immediately prior to the Termination Date,
until the earliest to occur of (1) the end of the Contract Period, or (2) the
Executive’s commencement of full time employment with a new employer; provided
that the Executive’s continued participation in the plans, programs or
arrangements providing such coverage is practicable under the general terms and
provisions of such plans, programs or arrangements. If the Executive’s
participation in any such plan, program or arrangement is not practicable, the
Company shall in its sole discretion arrange to provide the Executive with:
(3) benefits substantially similar to those the Executive was entitled during
employment to receive under such plans, programs or arrangements; or (4) cash
compensation on an after-tax basis sufficient for the Executive to purchase such
benefits.

4.2    The amounts specified in Sections 4.1(a), (b), (c), and (e)(4) (if
applicable), shall be payable to the Executive in a lump sum as soon as
practicable, but no later than within sixty (60) days of his or her Termination
Date.

4.3    The benefits or amounts specified in Sections 4.1(d) and (if applicable)
the clauses in (e)(1), (2) or (3) shall be provided or payable to the Executive
only to the extent provision or payment of such benefits or amounts would not be
subject to tax under Code Section 409A.

4.4    Except as specifically provided herein, the amount of any compensation or
benefits provided for in this Agreement shall not be subject to mitigation by
the Executive.

5.        Specified Employees. Notwithstanding any provision of this Agreement
to the contrary, to the extent that any payment or benefit pursuant to this
Agreement constitutes a “deferral of compensation” subject to Code Section 409A
(after taking into account to the maximum extent possible any applicable
exemptions) (a “409A Payment”) treated as payable with respect to a Termination
Date, then, if on the Executive’s Termination Date, the Executive is a Specified
Employee (as that term is defined under Code Section 409A of the Code), then to
the extent required for Executive not to incur additional taxes pursuant to Code
Section 409A, no such 409A Payment shall be made to the Executive sooner than
the earlier of (i) six (6) months and one day after the Executive’s Termination
Date; or (ii) the date of Executive’s death. Should this Section 5 otherwise
result in the delay of in-kind benefits, any such benefit shall be made
available to the Executive by the Company during such delay period at
Executive’s expense. If this Section 5 results in a delay in the payment of the
Executive’s benefits under this Agreement, such payments as well as
reimbursement for the amount paid by Executive for benefits pursuant to the
preceding sentence shall be credited with interest for the period commencing on
the

 

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Executive’s Termination Date and ending on the date the Executive’s payments and
benefits under this Agreement and reimbursement for any amount paid pursuant to
the preceding sentence are actually distributed to him based on an annual
interest rate equal to the greater of (a) the interest rate used to determine
participant interest credits under the Company’s defined benefit cash balance
plan for the Fiscal Year in which the Executive’s Termination Date occurs and
(b) the applicable federal rate appropriate for a six-month loan determined as
of the Executive’s Termination Date.

6.        280G Provisions. Notwithstanding any provision of this Agreement to
the contrary, if all or any portion of the amount payable to the Executive
pursuant to this Agreement, alone or together with other payments the Executive
has the right to receive from the Company, constitute “excess parachute
payments” within the meaning of Code Section 280G, as amended, that are subject
to the excise tax imposed by Code Section 4999, such amounts payable hereunder
shall be reduced (in accordance with Code Section 409A) to the extent necessary,
after first applying any similar reduction to payments to be received from any
other plan or program sponsored by the Company from which the Executive has a
right to receive payments subject to Code Sections 280G and 4999, so that the
excise tax imposed by Code Section 4999 does not apply; provided, however, that
this payment reduction shall take place only if such reduction would provide to
the Executive a greater net, after-tax benefit than he or she would receive if
such amounts were not subject to such reduction.

7.        Successors; Binding Agreement.

7.1    The Company will require any successor or successors (whether direct or
indirect, by purchase, merger, consolidation, liquidation or otherwise) to all
or substantially all of the business and/or assets of the Company, upon or prior
to such succession, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. A copy of such assumption and
agreement shall be delivered to the Executive promptly after its execution by
the successor. Failure of the Company to obtain such agreement upon or prior to
the effectiveness of any such succession shall entitle the Executive to
terminate his or her employment for Good Reason, as set forth in
Section 1.12(d). As used in this Agreement “Company” shall include any successor
to its business and/or assets that executes and delivers the agreement provided
for in this Section 7.1 or that otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.

7.2    This Agreement is personal to the Executive and the Executive may not
assign or transfer any part of his or her rights or duties hereunder, or any
compensation due to him hereunder, to any other person, except that this
Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, heirs,
distributees, devisees, legatees or beneficiaries.

8.        Modification; Waiver. 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 by the Chief Executive Officer of the
Company or such other director or officer as may be specifically designated by
the Board. Waiver by any party of any breach of or failure to comply with any
provision of this Agreement by the other party shall not be construed as, or
constitute, a continuing waiver of such provision, or a waiver of any other
breach of, or failure to comply with, any other provision of this Agreement.

 

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9.        Arbitration of Disputes.

9.1    Any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation or validity hereof shall be
settled exclusively and finally by arbitration. It is specifically understood
and agreed that any disagreement, dispute or controversy that cannot be resolved
between the parties, including without limitation any matter relating to the
interpretation of this Agreement, may be submitted to arbitration irrespective
of the magnitude thereof, the amount in controversy or whether such
disagreement, dispute or controversy would otherwise be considered justiciable
or ripe for resolution by a court or arbitral tribunal.

9.2    The arbitration shall be conducted in accordance with the Commercial
Arbitration Rules (the “Arbitration Rules”) of the American Arbitration
Association (the “AAA”).

9.3    The arbitral tribunal shall consist of one arbitrator. The parties to the
arbitration jointly shall directly appoint such arbitrator within 30 days of
initiation of the arbitration. If the parties shall fail to appoint such
arbitrator as provided above, such arbitrator shall be appointed by the AAA as
provided in the Arbitration Rules and shall be a person who (a) maintains his or
her principal place of business in the State of Washington; and (b) has had
substantial experience in business transactions. The Company shall pay all of
the fees, if any, and expenses of such arbitrator.

9.4    The arbitration shall be conducted in Seattle, Washington or in such
other city in the United States of America as the parties to the dispute may
designate by mutual written consent.

9.5    At any oral hearing of evidence in connection with the arbitration, each
party thereto or its legal counsel shall have the right to examine its witnesses
and to cross-examine the witnesses of any opposing party. No evidence of any
witness shall be presented in written form unless the opposing party or parties
shall have the opportunity to cross-examine such witness, except as the parties
to the dispute otherwise agree in writing or except under extraordinary
circumstances where the interests of justice require a different procedure.

9.6    Any decision or award of the arbitral tribunal shall be final and binding
upon the parties to the arbitration proceeding. The parties hereto hereby waive
to the extent permitted by law any rights to appeal or to seek review of such
award by any court or tribunal. The parties hereto agree that the arbitral award
may be enforced against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon the arbitral award
may be entered in any court having jurisdiction.

9.7    Nothing herein contained shall be deemed to give the arbitral tribunal
any authority, power, or right to alter, change, amend, modify, add to, or
subtract from any of the provisions of this Agreement.

10.        Payment Obligations Absolute. Except as otherwise provided in this
Agreement, the Company’s obligation to pay the Executive the amounts provided
for hereunder and to make the arrangements provided for hereunder shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right the Company may have against the Executive or anyone else. Except as
otherwise set forth in this Agreement, all amounts payable by the Company

 

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hereunder shall be paid without notice or demand. Subject to the right of the
Company to seek arbitration under Section 9 and recover any payment made
hereunder, each and every payment made hereunder by the Company shall be final
and the Company will not seek to recover all or any part of such payment from
the Executive or from whosoever may be entitled thereto, for any reason
whatsoever.

11.        Notice. All notices, requests, demands and other communications
required or permitted to be given by either party to the other party by this
Agreement (including, without limitation, any notice under the Arbitration Rules
of an intention to arbitrate) shall be in writing and shall be deemed to have
been duly given when delivered personally or received by certified or registered
mail, return receipt requested, postage prepaid, at the address of the other
party, as follows:

If to the Company, to

Esterline Technologies Corporation

500 108th Avenue N.E.

Suite 1500

Bellevue, Washington 98004

Attention: Board of Directors and Secretary

If to the Executive, to

 

   

 

           

 

           

 

       

Either party may change its address for purposes of this Section 11 by giving
fifteen (15) days’ prior notice to the other party.

12.        Severability. If any term or provision of this Agreement or the
application hereof to any person or circumstances shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
term or provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.

13.        Headings. The headings in this Agreement are inserted for convenience
of reference only and shall not be a part of or control or affect the meaning of
this Agreement.

14.        Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original.

15.        Governing Law. This Agreement shall in all respects be governed by,
and construed and enforced in accordance with, the laws of the State of
Washington, without regard to its conflicts of laws principles.

16.        Payroll and Withholding Taxes. All payments to be made or benefits to
be provided hereunder by the Company shall be subject to reduction for any
applicable payroll-related or withholding taxes.

 

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17.        Compliance with Code Section 409A.

17.1    General. Notwithstanding anything herein to the contrary, this Agreement
is intended to be interpreted and operated to the fullest extent possible so
that the payments and benefits under this Agreement either shall be exempt from
the requirements of Code Section 409A or shall comply with the requirements of
Code Section 409A; provided, however, that notwithstanding anything to the
contrary in this Agreement in no event shall the Company be liable to the
Executive for or with respect to any taxes, penalties or interest which may be
imposed upon the Executive pursuant to Code Section 409A. If under this
Agreement, a 409A Payment is to be paid in two or more installments, for
purposes of Code Section 409A, each installment shall be treated as a separate
payment.

17.2    Reimbursements. For purposes of complying with Code Section 409A and
without extending the payment timing otherwise provided in this Agreement,
taxable reimbursements under this Agreement, subject to the following sentence
and to the extent required to comply with Code Section 409A, will be made no
later than the end of the calendar year following the calendar year in which the
expense was incurred. To the extent required to comply with Code Section 409A,
any taxable reimbursements and any in-kind benefits under this Agreement will be
subject to the following: (a) payment of such reimbursements or in-kind benefits
during one calendar year will not affect the amount of such reimbursement or
in-kind benefits provided during any other calendar year (other than for medical
reimbursement arrangements as excepted under Treasury Regulations
§1.409A-3(i)(1)(iv)(B) solely because the arrangement provides for a limit on
the amount of expenses that may be reimbursed under such arrangement over some
or all of the period the arrangement remains in effect); (b) such right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for
another form of compensation to the Executive; and (c) the right to
reimbursements under this Agreement will be in effect for the lesser of the time
specified in this Agreement or ten years plus the lifetime of the Executive. Any
taxable reimbursements or in-kind benefits shall be treated as not subject to
Code Section 409A to the maximum extent provided by Treasury Regulations
§1.409A-1(b)(9)(v) or otherwise under Code Section 409A.

17.3    Cooperation. If the Company or Executive determines that any provision
of this Agreement is or might be inconsistent with the requirements of Code
Section 409A, the parties shall attempt in good faith to agree on such
amendments to this Agreement as may be necessary or appropriate to avoid
subjecting Executive to the imposition of any additional tax under Code
Section 409A without changing the basic economic terms of this Agreement.
Notwithstanding the foregoing, no provision of this Agreement shall be
interpreted or construed to transfer any liability for failure to comply with
Code Section 409A from Executive or any other individual to the Company. This
Section 17 and Section 5 are not intended to impose any restrictions on payments
or benefits to Executive other than those otherwise set forth in this Agreement
or required for Executive not to incur additional tax under Code Section 409A
and shall be interpreted and operated accordingly. The Company to the extent
reasonably requested by Executive shall modify this Agreement to effectuate the
intention set forth in the preceding sentence.

18.        Entire Agreement. This Agreement supersedes any and all other oral or
written agreements made relating to the subject matter hereof and constitutes
the entire agreement of the parties relating to the subject matter hereof;
provided that this Agreement shall not

 

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supersede or limit or in any way affect (a) the Executive’s rights under the
Company’s Equity Incentive Plan, any other incentive compensation plan, or any
deferred compensation plan as in effect on the Effective Date or with respect to
any awards made pursuant to such plans; (b) any rights the Executive may have
under any other company employee benefit plan, program or arrangement
(including, without limitation, any pension, life insurance, medical, dental,
health, vacation and accident and disability plans, programs and arrangements);
or (c) the Company’s right to amend or terminate its employee benefit plans in
accordance with their terms.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

 

Executive

 

Esterline Technologies Corporation

 

By:

 

Its:

 

 

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