Exhibit 10.1

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (the “Agreement”), is dated as of the 12th day
of June 2009, among Lakeland Bancorp, Inc. (the “Holding Company”), a New Jersey
corporation, and Lakeland Bank (the “Bank”), a New Jersey chartered commercial
bank, having offices at 250 Oak Ridge Road, Oak Ridge, New Jersey 07438 (the
Holding Company and the Bank are collectively referred to herein as the
“Company”) and Ronald E. Schwarz (the “Executive”).

BACKGROUND

WHEREAS, the Executive is employed as Executive Vice President and Chief Retail
Officer of the Company; and

WHEREAS, the Company believes that the future services of the Executive are of
great value to the Company and that it is important for the growth and
development of the Company that the Executive continue in his position; and

WHEREAS, the Board of Directors of the Holding Company (the “Board”) believes it
is imperative that the Company be able to rely upon the Executive to continue in
his position in the event that Holding Company receives any proposal from a
third person concerning a possible business combination with, or acquisition of
equities securities of, the Company, and that they be able to receive and rely
upon his advice, if they request it, as to the best interests of the Company and
its shareholders, without concern that the Executive might be distracted by the
personal uncertainties and risks created by such a proposal; and

WHEREAS, to achieve that goal, and to retain the Executives services prior to
any such activity, the Company and the Executive have agreed to enter into this
Agreement to govern the Executive’s termination benefits in the event of a
Change in Control, as hereinafter defined;

NOW, THEREFORE, to assure the Company that it will have the continued dedication
of the Executive and the availability of his advice and counsel notwithstanding
the possibility, threat or occurrence of a bid to take over control of the
Company, and to induce the Executive to remain in the employ of the Company, and
for other good and valuable consideration, the Company and the Executive, each
intending to be legally bound hereby agree as follows:

1.    Definitions

a.    Cause. For purposes of this Agreement “Cause” with respect to the
termination by the Company of Executive’s employment shall mean: (i) failure by
the Executive to materially perform his duties for the Company under this
Agreement after at least one warning in writing identifying specifically any
such material failure and offering a reasonable opportunity to cure such
failure; (ii) the willful engaging by the Executive in material misconduct which
causes material injury to the Company; or (iii) conviction of a crime (other
than a traffic violation), habitual drunkenness, drug abuse, or excessive
absenteeism other than for illness, after a warning (with respect

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to drunkenness or absenteeism only) in writing to refrain from such behavior. No
act or failure to act on the part of the Executive shall be considered willful
unless done, or omitted to be done, by the Executive not in good faith and
without reasonable belief that the action or omission was in the best interest
of the Company. The Company shall have the burden of proving Cause by clear and
convincing evidence.

b.    Change in Control. For purposes of this Agreement, a “Change in Control”
shall mean the occurrence of any of the following events with respect to the
Holding Company:

(i)    the consummation of any consolidation or merger of the Holding Company in
which the Holding Company is not the continuing or surviving corporation or
pursuant to which shares of the Holding Company’s common stock (“Common Stock”)
would be converted into cash, securities or other property, other than a merger
of the Holding Company in which the holders of the shares of the Holding
Company’s Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation immediately
after the merger; or

(ii)    the consummation of any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Holding Company, other than to a subsidiary or affiliate;
or

(iii)    an approval by the shareholders of the Holding Company of any plan or
proposal for the liquidation or dissolution of the Holding Company; or

(iv)    any action pursuant to which any person (as such term is defined in
Section 13(d) of the Exchange Act), corporation or other entity (other than any
person who owns more than ten percent (10%) of the outstanding Common Stock on
the date this Agreement is entered into, the Holding Company or any benefit plan
sponsored by the Holding Company or any of its subsidiaries) shall become the
“beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of shares of capital stock entitled to vote
generally for the election of directors of the Holding Company (“Voting
Securities”) representing fifty-one (51%) percent or more of the combined voting
power of the Holding Company’s then outstanding Voting Securities (calculated as
provided in Rule 13d-3(d) in the case of rights to acquire any such securities),
unless, prior to such person so becoming such beneficial owner, the Board shall
determine that such person so becoming such beneficial owner shall not
constitute a Change in Control; or

(v)    the individuals (x) who, as of the date on which the Agreement is entered
into, constitute the Board (the “Original Directors”) and (y) who thereafter are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two thirds of the Original Directors
then still in office (such Directors being called “Additional Original
Directors” ) and (z) who thereafter are elected to the Board and whose election
or nomination for election to the Board was approved by a vote of at least two
thirds of the Original Directors and Additional Original Directors then still in
office, cease for any reason to constitute a majority of the members of

 

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the Board.

c.    Contract Period. “Contract Period” shall mean the period commencing the
day immediately preceding a Change in Control and ending on the earlier of:
(i) the second anniversary of the Change in Control; (ii) the date the Executive
would attain age 65; or (iii) the death of the Executive.

d.    Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

e.    Good Reason. When used with reference to a voluntary termination by
Executive of his employment with the Company, “Good Reason” shall mean any of
the following, if taken without Executive’s express written consent:

(i)    The assignment to Executive of any duties inconsistent with, or the
reduction of authority, powers or responsibilities associated with, Executive’s
position, title, duties, responsibilities and status with the Company
immediately prior to a Change in Control (a “Change in Assignment”) or any
removal of Executive from, or any failure to re-elect Executive to, any
position(s) or office(s) Executive held immediately prior to such Change in
Control. A change in position, title, duties, responsibilities and status or
position(s) or office(s) following a Change in Control shall constitute a Change
in Assignment unless the Executive’s new title, duties and responsibilities are
accepted in writing by the Executive, in the sole discretion of the Executive;

(ii)    A reduction by the Company in Executive’s annual base compensation as in
effect immediately prior to a Change in Control;

(iii)    A failure by the Company to continue for Executive any bonus plan in
which Executive participated immediately prior to the Change in Control or a
failure by the Company to continue Executive as a participant in such plan on at
least the same basis as Executive participated in such plan prior to the Change
in Control.

(iv)    After a Change in Control, the Company’s transfer of Executive to
another geographic location outside of New Jersey or more than 25 miles from his
present office location, except for required travel on the Company’s business to
an extent substantially consistent with Executive’s business travel obligations
immediately prior to such Change in Control;

(v)    The failure by the Company to continue in effect for Executive any
employee benefit plan, program or arrangement (including, without limitation any
401(k) plan, pension plan, life insurance plan, health and accident plan,
disability plan, or stock option plan) in which Executive is participating
immediately prior to a Change in Control (except that the Company may institute
or continue plans, programs or arrangements providing Executive with
substantially similar benefits); the taking of any action by the Company after a
Change in Control which would adversely affect Executive’s participation in or
materially reduce Executive’s benefits under, any of such plans, programs or
arrangements, the failure to continue, or the taking of any action which would
deprive

 

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Executive, of any material fringe benefit enjoyed by Executive immediately prior
to such Change in Control; or the failure by the Company to provide Executive
with the number of paid vacation days to which Executive was entitled
immediately prior to such Change in Control; or

(vi)    The failure by the Company to obtain an assumption in writing of the
obligations of the Company to perform this Agreement by any successor to the
Company and to provide such assumption to the Executive upon consummation of the
event giving rise to the Change in Control.

2.    Employment. During the Contract Period, the Company hereby agrees to
employ the Executive, and the Executive hereby accepts employment, upon the
terms and conditions set forth herein.

3.    Position. During the Contract Period, the Executive shall be employed as
Executive Vice President and Chief Retail Officer of the Company or such other
corporate or divisional profit center as shall then be the principal successor
to the business, assets and properties of the Company, with the same title and
the same duties and responsibilities as before the Change in Control. The
Executive shall devote his full time and attention to the business of the
Company, and shall not during the Contract Period be engaged in any other
business activity. This paragraph shall not be construed as preventing the
Executive from managing any investments of his which do not require any service
on his part in the operation of such investments.

4.    Cash Compensation. The Company shall pay to the Executive salary and bonus
compensation for his services during the Contract Period as follows:

a.    Annual Salary. An Annual salary equal to the annual salary in effect
immediately prior to Change in Control. The annual salary shall be payable in
installments in accordance with the Company’s usual payroll method. The annual
salary shall not be reduced during the Contract Period.

b.    Annual Bonus. An Annual cash bonus equal to the highest annual bonus paid
to the Executive during the three most recent fiscal years prior to the Change
in Control. The bonus shall be payable at the time and in the manner which the
Company paid such bonuses prior to the Change in Control

5.    Expenses and Fringe Benefits. During the Contract Period, the Executive
shall be entitled to reimbursement for all business expenses incurred by him
with respect to the business of the Company in the same manner and to the same
extent as such expenses were previously reimbursed to him immediately prior to
the Change in Control. If prior to the Change in Control, the Executive was
entitled to the use of an automobile, he shall be entitled to the same use of an
automobile at least comparable to the automobile provided to him prior to the
Change in Control, and he shall be entitled to vacations and sick days, in
accordance with the practices and procedures of the Company, as such existed
immediately prior to the Change in Control. During the Contract Period, the
Executive also shall be entitled to hospital, health, medical and life
insurance, and any other benefits enjoyed, from time to time, by Executive
officers of the Company, all upon terms as favorable as those enjoyed by other
Executive officers of the

 

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Company. Notwithstanding anything in this section to the contrary, if the
Company adopts any change in the expenses allowed to, or fringe benefits
provided for, Executive officers of the Company, and such policy is uniformly
applied to all Executive officers of the Company (and any successor or acquirer
of the Company, if any), including the chief executive officer of such entities,
then no such change shall be deemed to be contrary to this Section.

All reimbursements provided under this Agreement shall be made or provided in
accordance with the requirements of Section 409A of the Code (as defined in
Section 14 below), including, where applicable, the requirement that (i) any
reimbursement is for expenses incurred during Executive’s lifetime (or during a
shorter period of time specified in this Agreement), (ii) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses
eligible for reimbursement in any other calendar year, (iii) the reimbursement
of an eligible expense will be made on or before the last day of the calendar
year following the year in which the expense is incurred, and (iv) the right to
reimbursement is not subject to liquidation or exchange for another benefit.

6.    Termination for Cause. The Company shall have the right to terminate the
Executive for Cause, upon written notice to him of the termination which notice
shall specify the reasons for the termination. In the event of a valid
termination for Cause, the Executive shall not be entitled to any further
compensation or benefits under this Agreement.

7.    Disability. During the Contract Period, if the Executive becomes
permanently disabled, or is unable to perform his duties hereunder for six
consecutive months, the Company may terminate the employment of the Executive.
In such event, the Executive shall not be entitled to any further benefits under
this Agreement other than payments under any disability policy which the Company
may obtain for the benefit of senior officers generally.

8.    Death Benefits. Upon the Executive’s death during the Contract Period, the
Executive shall be entitled to the benefits of any life insurance policy paid
for by the Company which provides, permits and allows the Executive to name a
beneficiary other than the Company, but his estate shall not be entitled to any
further benefits under this Agreement or any other life insurance policy, except
for such policies or benefits customarily provided to employees of the Bank.

9.    Termination Without Cause or Resignation for Good Reason. The Company may
terminate the Executive without Cause during the Contract Period by written
notice to the Executive, or the Executive may resign for Good Reason during the
Contract Period upon four weeks’ prior written notice to the Company specifying
the Good Reason. If the Company terminates the Executive’s employment during the
Contract Period without Cause or if the Executive resigns for Good Reason, the
Company shall, within 20 business days of the Executive’s termination of
employment, pay the Executive a lump sum equal to two times the highest annual
compensation, including only salary and cash bonus, paid the Executive during
any of the three calendar years immediately prior to the Change in Control (the

 

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“Lump Sum Payment”). During the remainder of the Contract Period, the Company
also shall continue to provide the Executive with and pay for medical and
hospital insurance, disability insurance and life insurance, as were provided
and paid for at the time of the termination of his employment with the Company;
provided, that such insurance coverage shall be provided only to the extent
permitted under the terms and conditions of the Company’s employee benefit
plans. The Executive shall also have the right to purchase from the Company, at
book value price, such automobile of the Company, if any, as was used by the
Executive while employed by the Company; provided, that the Executive exercises
such right within 10 days of his termination of employment and completes the
purchase transaction within 30 days of his termination of employment. The
Executive shall not have a duty to mitigate the damages suffered by him in
connection with the termination by the Company of his employment without Cause
or a resignation for Good Reason during the Contract Period.

The Lump Sum Payment is intended to be administered and interpreted in a manner
such that it shall not be subject to “additional tax” within the meaning of
Section 409A(a)(1)(B) of the Code. Notwithstanding any provision of this
Agreement to the contrary, if and to the extent necessary to comply with the
restriction in Section 409A(a)(2)(B) of the Code concerning payments to
“specified employees,” the Lump Sum Payment shall be paid on the first business
day of the seventh month following the Executive’s separation from service with
the Company, and shall be paid together with interest accrued during the period
of such restriction at a rate, per annum, equal to the applicable federal
short-term rate (compounded monthly) in effect under Section 1274(d) of the Code
on the date of termination. Notwithstanding provision of this Agreement to the
contrary, the Executive shall not be considered to have terminated employment
with the Company for purposes of this Section 9 unless he would be considered to
have incurred a “termination of employment” from the Company within the meaning
of Treasury Regulation §1.409A-1(h)(1)(ii).

The Executive acknowledges that any tax liability incurred by the Executive
under Section 409A of the Code is solely the responsibility of the Executive.

10.    Resignation Without Good Reason. The Executive shall be entitled to
resign from the employment of the Company at any time during the Contract Period
without Good Reason, but upon such resignation the Executive shall not be
entitled to any additional compensation for the time after which he ceases to be
employed by the Company, and shall not be entitled to any of the other benefits
provided hereunder. No such resignation shall be effective unless in writing
with four weeks’ notice thereof.

11.    Non-Disclosure of Confidential Information. In consideration of the
covenants of the Company herein, the Executive agrees as follows:

a.    The Executive hereby agrees and acknowledges that he has and has had
access to or is aware of Confidential Information. The Executive hereby agrees
that he shall keep strictly confidential and will not during and after his
employment with the Company, without the Company’s express written consent,
divulge, furnish or make accessible to any person or entity, or make use of for
the

 

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benefit of himself or others, any Confidential Information obtained, possessed,
or known by him except as required in the regular course of performing the
duties and responsibilities of his employment by the Company while in the employ
of the Company, and that he will, prior to or upon the date on which his
employment with the Company terminates (the “Date of Termination”) deliver or
return to the Company all such Confidential Information that is in written or
other physical or recorded form or which has been reduced to written or other
physical or recorded form, and all copies thereof, in his possession, custody or
control. The foregoing covenant shall not apply to (i) any Confidential
Information that becomes generally known or available to the public other than
as a result of a breach of the agreements of the Executive contained herein,
(ii) any disclosure of Confidential Information by the Executive that is
expressly required by judicial or administrative order; provided however that
the Executive shall have (x) notified the Company as promptly as possible of the
existence, terms and circumstances of any notice, subpoena or other process or
order issued by a court or administrative authority that may require him to
disclose any Confidential Information, and (y) cooperated with the Company, at
the Company’s request, in taking legally available steps to resist or narrow
such process or order and to obtain an order or other reliable assurance that
confidential treatment will be given to such Confidential Information as is
required to be disclosed.

b. For purposes of this Agreement, “Confidential Information” means all
non-public or proprietary information, data, trade secrets, “know-how”, or
technology with respect to any products, designs, improvements, research,
styles, techniques, suppliers, clients, markets, methods of distribution,
accounting, advertising and promotion, pricing, sales, finances, costs, profits,
financial condition, organization, personnel, business systems (including
without limitation computer systems, software and programs), business
activities, operations, budgets, plans, prospects, objectives or strategies of
the Company.

12.    Post-Employment Obligations. In consideration of the covenants of the
Company herein, the Executive agrees as follows:

a.    The Executive agrees that while he is in the employ of the Company and for
a one year period after the Date of Termination (unless such termination is by
the Company without Cause), he shall not, without the prior written consent of
the Company, directly or indirectly, and regardless of the reason for his
ceasing to be employed by the Company, employ, solicit for employment, or advise
or recommend to any other person that they employ or solicit for employment or
retention as a consultant, any person who is, or was at any time within twelve
(12) months prior to the Date of Termination, an employee of, or exclusive
consultant to, the Company.

b.    If the Executive commits a breach or is about to commit a breach, of any
of the provisions of Sections 11 or 12 hereof, the Company shall have the right
to have the provisions of this Agreement specifically enforced by any court
having equity jurisdiction without being required to post bond or other security
and without having to prove the inadequacy of the available remedies at law, it

 

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being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Company that money damages will not provide an
adequate remedy to the Company. In addition, the Company may take all such other
actions and remedies available to them under law or in equity and shall be
entitled to such damages as they can show they have sustained by reason of such
breach.

c.    The parties acknowledge that the type and periods of restriction imposed
in the provisions of Sections 11 anti 12 hereof are fair and reasonable and are
reasonably required for the protection of the Company and the goodwill
associated with the business of the Company; and that the provisions of Sections
11 and 12 have been specifically negotiated by sophisticated parties and are
given as an integral part of this Agreement.

13.    No Effect Prior to Change in Control. This Agreement shall not affect any
rights of the Company or the Executive prior to a Change in Control or any
rights of the Executive granted in any other agreement, plan or arrangements.
The rights, duties and benefits provided hereunder shall only become effective
upon a Change in Control. If the employment of the Executive by the Company is
terminated for any reason prior to a Change in Control, this Agreement shall
thereafter be of no further force and effect.

14. Certain Reduction of Payments by the Company.

a.    Anything in this Agreement to the contrary notwithstanding, prior to the
payment of any compensation or benefits payable under Section 9 hereof, the
certified public accountants of the Company immediately prior to a Change of
Control (the “Certified Public Accountants”) shall determine as promptly as
practical and in any event within 20 business days following the termination of
employment of Executive whether any payment or distribution by the Company to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) (a
“Payment”) would more likely than not be nondeductible by the Company for
Federal income purposes because of Section 280G of the Internal Revenue Code of
1986, as amended (the “Code”), and if it is then the aggregate present value of
amounts payable or distributable to or for the benefit of Executive pursuant to
this Agreement are hereinafter referred to as “Agreement Payments” shall be
reduced (but not below zero) to the Reduced Amount. For purposes of this
paragraph, the “Reduced Amount” shall be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments without
causing any Payment to be nondeductible by the Company because of said
Section 280G of the Code.

b.    If under paragraph a of this section the Certified Public Accountants
determine that any Payment would more likely than not be nondeductible by the
Company because of Section 280G of the Code, the Company shall promptly give the
Executive notice to that effect and a copy of the detailed calculation thereof
and of the Reduced Amount, and the Executive may then elect, in his sole
discretion, which and how much of the Agreement Payments shall be eliminated or
reduced (as long as after such election the aggregate present value of the
Agreement Payments equals the Reduced Amount), and shall

 

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advise the Company in writing of his election within 20 business days of his
receipt of notice. If no such election is made by the Executive within such
20-day period, the Company may elect which and how much of the Agreement
Payments shall be eliminated or reduced (as long as after such election the
aggregate present value of the Agreement Payments equals the Reduced Amount) and
shall notify the Executive promptly of such election. For purposes of this
paragraph, present value shall be determined in accordance with Section 280G
(d) (4) of the Code. All determinations made by the Certified Public Accountants
shall be binding upon the Company and Executive and shall be made within 20 days
of a termination of employment of Executive. The Company may suspend for a
period of up to 30 days after termination of employment the Lump Sum Payment and
any other payments or benefits due to the Executive under Section 9 hereof until
the Certified Public Accountants finish the determination and the Executive (or
the Company, as the case may be) elect how to reduce the Agreement Payments, if
necessary. As promptly as practicable following such determination and the
elections hereunder, the Company shall pay to or distribute to or for the
benefit of Executive such amounts as are then due to Executive under this
Agreement and shall promptly pay to or distribute for the benefit of Executive
in the future such amounts as become due to Executive under this Agreement.

c.    As a result of the uncertainty in the application of Section 280G of the
Code, it is possible that Agreement Payments may have been made by the Company
which should not have been made (“Overpayment”) or that additional Agreement
Payments which will have not been made by the Company could have been made
(“Underpayment” ), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Certified Public Accountants, based upon
the assertion of a deficiency by the Internal Revenue Service against the
Company or Executive which said Certified Public Accountant believe has a high
probability of success, determines that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to Executive which
Executive shall repay to the Company together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code; provided,
however, that no amount shall be payable by Executive to the Company in and to
the extent such payment would not reduce the amount which is subject to taxation
under Section 4999 of the Code. In the event that the Certified Public
Accountants, based upon controlling precedent, determine that an Underpayment
has occurred, any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive together with interest at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.

15.    Severance Compensation and Benefits Not in Derogation of other Benefits.
Anything to the contrary herein contained notwithstanding, the payment or
obligation to pay any monies, or granting of any benefits, rights or privileges
to Executive as provided in this Agreement now has or will have under any plans
or programs of the Company, except that the Executive shall not be in lieu or
derogation of the rights and privileges that the Executive now has or will have
under any plans or programs of the Company, except that the Executive shall not
be entitled to the benefits of any other plan or program of

 

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the Company expressly providing for severance or termination pay if the
Executive is terminated without Cause or resigns for Good Reason after a Change
in Control.

16.    Miscellaneous. The terms of this Agreement shall be governed by, and
interpreted and construed in accordance with the provisions of, the laws of New
Jersey and, to the applicable, federal law. This Agreement supersedes all prior
agreements and understandings with respect to the matters covered hereby. The
amendment or termination of this Agreement may be made only in writing executed
by the Company and the Executive, and no amendment or termination of this
Agreement shall be effective unless and until made in such in writing. This
Agreement shall be binding upon any successor (whether direct or indirect, by
purchase, merge, consolidation, liquidation or otherwise) to all or
substantially all of the assets of the Company. This Agreement is personal to
the Executive and the Executive may not assign any of his rights or duties
hereunder but this Agreement shall be enforceable by the Executive’s legal
representatives, executors or administrators. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.

IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by its
duly authorized representatives pursuant to the authority of its Board, and the
Executive has personally executed this Agreement, all as of the day and year
first written above.

 

LAKELAND BANCORP, INC. By:   /s/  Thomas J. Shara   Thomas J. Shara, President
and CEO LAKELAND BANK By:   /s/  Thomas J. Shara   Thomas J. Shara, President
and CEO

Executive:   /s/   Ronald E. Schwarz   RONALD E. SCHWARZ

 

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