Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”), dated as of March 7, 2017, by and
between DRIL-QUIP, INC. a Delaware corporation (the “Company”), and JEFFREY BIRD
(the “Executive”) shall become effective as of March 13, 2017 (the “Effective
Date”).

WITNESSETH:

WHEREAS, the Company desires to employ the Executive as the Company’s Vice
President and Chief Financial Officer; and

WHEREAS, in entering into this Agreement, the Company desires to provide the
Executive with substantial incentives to serve the Company as one of its senior
executives performing at the highest level of leadership and stewardship; and

WHEREAS, the Executive agrees to be employed by the Company on the terms set
forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, effective
as of the Effective Date, the Company and the Executive hereby enter into this
Agreement:

1.    Employment. The Company agrees that the Company or an Affiliate will
employ the Executive, and the Executive agrees to be employed by the Company or
an Affiliate, for the period set forth in Paragraph 2, in the position and with
the duties and responsibilities set forth in Paragraph 3, and upon the other
terms and conditions herein provided. Unless otherwise defined in another
paragraph of this Agreement, capitalized terms used herein shall have the
meanings set forth in Paragraph 12.

2.    Employment Term. The employment of the Executive by the Company under this
Agreement shall commence as of the Effective Date and shall terminate on
December 8, 2019 (“Renewal Date”), but automatically will be extended for
additional one-year periods unless either the Company or the Executive notifies
the other party at least 90 days in advance of the Renewal Date or next
anniversary of the Renewal Date, as applicable, that it will not be so extended
(and the period of the Executive’s employment under this Agreement being the
“Employment Term”). In the event that one party notifies the other in accordance
with this Paragraph 2 that it does not wish the Employment Term to be extended,
no further extensions of the Employment Term shall occur and this Agreement
shall terminate at the end of the then current Employment Term. The foregoing
notwithstanding, if a Change of Control occurs during the Employment Term, the
Company shall not cause the Employment Term to end pursuant to this Paragraph 2
until after the Change of Control Period ends. During the Employment Term, the
Executive shall be an “at will” employee of the Company.

 

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3.    Positions and Duties.

(a)    During the Employment Term, the Executive shall serve in the position of
Vice President and Chief Financial Officer of the Company and shall have such
duties, functions, responsibilities and authority commensurate with such
position.

(b)    During the Employment Term, the Executive shall devote the Executive’s
full time, skill and attention, and the Executive’s reasonable best efforts,
during normal business hours to the business and affairs of the Company, and in
furtherance of the business and affairs of its Affiliates, to the extent
necessary to discharge faithfully and efficiently the duties and
responsibilities delegated and assigned to the Executive herein or pursuant
hereto, except for usual, ordinary and customary periods of vacation and absence
due to illness or other disability; provided, however, that the Executive may
(i) serve on industry-related, civic or charitable boards or committees,
(ii) with the approval of the Company’s Board of Directors (the “Board”), serve
on corporate boards or committees, (iii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, and (iv) manage the
Executive’s personal investments, so long as such activities do not
significantly interfere with the performance and fulfillment of the Executive’s
duties and responsibilities as an employee of the Company or an Affiliate in
accordance with this Agreement and, in the case of the activities described in
clause (ii) of this proviso, will not, in the good faith judgment of the Board,
constitute an actual or potential conflict of interest with the business of the
Company or an Affiliate.

(c)    In connection with the Executive’s employment hereunder, the Executive
shall be based at the headquarters of the Company in Houston, Texas, subject,
however, to required travel for the business of the Company and its Affiliates.

(d)    All services that the Executive may render to the Company or any of its
Affiliates in any capacity during the Employment Term shall be deemed to be
services required by this Agreement and consideration for the compensation
provided for herein.

4.    Compensation and Related Matters.

(a)    Base Salary. During the Employment Term, the Company shall pay to the
Executive an annual base salary of $450,000.00 (“Base Salary”), payable in
accordance with the Company’s normal payroll practices as in effect from time to
time, less withholding for taxes and deductions for other appropriate items.
During the Employment Term, the Executive’s Base Salary shall be subject to such
increases (but not decreases), if any, as may be determined from time to time by
the Board in its sole discretion; provided, however, that the Executive’s Base
Salary shall be reviewed by the Board at least annually, with a view to making
such upward adjustment, if any, as the Board deems appropriate. The term Base
Salary as used in this Agreement shall refer to the Base Salary as so increased.
Payments of Base Salary to the Executive shall not be deemed exclusive and shall
not prevent the Executive from participating in any employee benefit plans,
programs or arrangements of the Company and its Affiliates in which the
Executive is entitled to participate. Payments of Base Salary to the Executive
shall not

 

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in any way limit or reduce any other obligation of the Company hereunder, and no
other compensation, benefit or payment to the Executive hereunder shall in any
way limit or reduce the obligation of the Company regarding the Executive’s Base
Salary hereunder.

(b)    Annual Bonus. For each 12-month period ending December 31 (the
“Performance Period”), the Executive shall be eligible for an annual bonus (the
“Annual Bonus”) in accordance with the Company’s normal bonus practices or under
any Annual Bonus Plan adopted by the Company after the Effective Date. Any such
Annual Bonus shall be paid in a single lump-sum payment not later than March 15
next following the close of such Performance Period; provided, however, that if
March 15 is not a Business Day, such payment shall be made on the Business Day
immediately preceding March 15.

(c)    Employee Benefits.

(i)    Incentive, Savings and Retirement Plans. During the Employment Term, the
Executive shall be entitled to participate in all incentive, savings and
retirement plans, programs and arrangements provided by the Company and its
Affiliates, as amended from time to time, on the same basis as those benefits
are generally made available to other senior executives of the Company.

(ii)    Welfare Benefit Plans. During the Employment Term, the Executive and the
Executive’s dependents, as the case may be, shall be eligible to participate in
and shall receive all benefits under the welfare benefit plans, programs and
arrangements provided by the Company and its Affiliates (including medical,
prescription, dental, disability, employee life, group life, accidental death
and travel accident insurance plans, programs and arrangements), as amended from
time to time, on the same basis as those benefits are generally made available
to other senior executives of the Company.

(d)    Expenses. During the Employment Term, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the
Executive in performing the Executive’s duties and responsibilities hereunder in
accordance with the policies, practices and procedures of the Company.

(e)    Vacation. During the Employment Term, the Executive shall be entitled to
20 days of paid vacation subject to the policies, practices and procedures of
the Company as in effect on and after the Effective Date.

(f)    Initial Equity Grant and Sign-On Bonus. The Executive shall be entitled
to a cash sign-on bonus of $200,000.00, less withholding for taxes, payable on
the tenth Business Day next following the Effective Date. As of the Effective
Date, pursuant to the 2004 Incentive Plan of the Company (the “Plan”), the
Executive shall be granted an equity award with a grant date fair market value
of $1,500,000.00 (“Initial Equity Grant”) with (i) 50% of the Initial Equity
Grant granted in the form of restricted stock that vests in one-third tranches
on October 28th of each of 2017, 2018 and 2019, subject to continuous employment
with the Company on such vesting dates, and (ii) the remaining 50% of the
Initial Equity Grant in the form of performance-based stock units that vest on
October 28, 2019, subject to continuous employment

 

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with the Company on such vesting date, in each case subject to the terms and
conditions set forth in the Plan and the applicable award agreements in use by
the Company as of the Effective Date; provided, however, that if the Executive’s
employment is terminated prior to the Renewal Date either by the Company without
Cause or by the Executive for Good Reason, then with respect to the Initial
Equity Grant (i) all unvested shares of restricted stock shall fully vest as of
such Termination Date and (ii) the performance-based stock units shall fully
vest as of such Termination Date and be paid based on the actual attainment of
the performance goals for such units at the end of the award’s three-year
performance period (as if the Executive was employed by the Company on such
date).

5.    Termination of Employment.

(a)    Death. The Executive’s employment shall terminate automatically upon the
Executive’s death during the Employment Term.

(b)    Disability. If the Company determines in good faith that the Disability
(as defined below) of the Executive has occurred during the Employment Term, the
Company may give the Executive notice of its intention to terminate the
Executive’s employment. In such event, the Executive’s employment hereunder
shall terminate effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”); provided, however, that within the
30-day period after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive from the Executive’s duties
with the Company or an Affiliate on a full-time basis for either (i) 180
consecutive Business Days or (ii) in any two-year period, 270 nonconsecutive
Business Days, as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and acceptable to the Executive or the Executive’s legal
representative (such agreement as to acceptability not to be withheld
unreasonably).

(c)    Termination by Company. The Company may terminate the Executive’s
employment hereunder for Cause (as defined below) or without Cause at any time
during the Employment Term. For purposes of this Agreement, “Cause” shall mean
the Company’s termination of the Executive’s employment by reason of:

(i)    the commission of a felony or any other crime by the Executive involving
intentional and actual fraud, dishonesty or breach of trust;

(ii)    willful misconduct or gross negligence with respect to the Executive’s
performance of his employment duties for the Company, including the duties as
contemplated by Paragraph 3 above (other than such failure resulting from
incapacity due to physical or mental illness or injury);

(iii)    conduct by the Executive bringing the Company or its Affiliates into
material public disgrace; or

(iv)    substantial failure to perform duties of the office held by the
Executive as reasonably directed in writing by the Board (other than such
failure resulting from incapacity due to physical or mental illness or injury);

 

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provided, however, that Cause shall not exist in the case of clause (iv) unless
and until the Board has given written notice to the Executive detailing the
alleged grounds for Cause and such grounds remain uncured for 30 days
thereafter.

(d)    Termination by Executive. The Executive may terminate the Executive’s
employment hereunder at any time during the Employment Term for Good Reason (as
defined below) or voluntarily without Good Reason. For purposes of this
Agreement, “Good Reason” shall mean any of the following (without the
Executive’s written consent):

(i)    the assignment to the Executive of any duties materially inconsistent in
any respect with the Executive’s position (including offices, titles and
reporting requirements), authority, duties or responsibilities as contemplated
by Paragraph 3 or any other action by the Company which results in a material
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;

(ii)    any material failure by the Company to comply with any of the provisions
of this Agreement, other than an isolated, insubstantial and inadvertent failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;

(iii)    the Company’s requiring the Executive to be based at any office located
more than 50 miles from 6401 N. Eldridge Pkwy., Houston, Texas 77041; or

(iv)    any failure by the Company to comply with and satisfy the requirements
of Paragraph 20(c), provided that (a) the successor described in Paragraph 20(c)
has received, at least ten days prior to the Termination Date, written notice
from the Company or the Executive of the requirements of such provision and
(b) such failure to be in compliance and satisfy the requirements of Paragraph
20(c) shall continue as of the Termination Date.

Notwithstanding the foregoing, the Executive shall not have the right to
terminate the Executive’s employment hereunder for Good Reason unless (i) within
60 days of the initial existence of the condition or conditions giving rise to
such right the Executive provides written notice to the Company of the existence
of such condition or conditions, and (ii) the Company fails to remedy such
condition or conditions within 30 days following the receipt of such written
notice. If any such condition is not remedied within such 30-day period, the
Executive may provide a Notice of Termination (as defined below) for Good Reason
in accordance with the provisions of Paragraph 5(e).

(e)    Notice of Termination. Any termination of the Executive’s employment
hereunder by the Company or by the Executive, other than a termination pursuant
to Paragraph 5(a), shall be communicated by a Notice of Termination to the other
party hereto. For purposes of this Agreement, a “Notice of Termination” shall
mean a notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) in the case of a termination for Disability, Cause
or Good Reason, sets forth in reasonable detail the facts and circumstances

 

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claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated, and (iii) specifies the Termination Date; provided,
however, that notwithstanding any provision in this Agreement to the contrary, a
Notice of Termination given in connection with a termination for Good Reason
shall be given by the Executive within a reasonable period of time, not to
exceed 150 days, following the initial existence of one or more of the
conditions giving rise to such right of termination. The failure by the Company
or the Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Disability, Cause or Good Reason
shall not waive any right of the Company or the Executive hereunder or preclude
the Company or the Executive from asserting such fact or circumstance in
enforcing the Company’s or the Executive’s rights hereunder.

(f)    Termination Date. For purposes of this Agreement, the Executive’s
employment Termination Date will be (i) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death, (ii) if
the Executive’s employment is terminated because of the Executive’s Disability,
the Disability Effective Date, (iii) if the Executive’s employment is terminated
by the Company (or applicable Affiliate) for Cause or by the Executive for Good
Reason, the date on which the Notice of Termination is given, and (iv) if the
Executive’s employment is terminated for any other reason, the date specified in
the Notice of Termination, which date shall in no event be earlier than the date
such notice is given.

6.    Obligations of the Company upon Termination of the Executive.

(a)    By the Company Without Cause and Prior to Change of Control Period.
Subject to the provisions of Paragraph 6(d) of this Agreement, if prior to the
end of the Employment Term and not during a Change of Control Period, the
Company terminates the Executive’s employment hereunder without Cause, the
Company shall pay or provide to or in respect of the Executive, on the tenth
Business Day next following the Executive’s Termination Date, all of the
following amounts and benefits set forth in this Paragraph 6(a):

(i)    The Executive shall receive a lump-sum cash payment in an amount equal to
the sum of (a) the Executive’s Base Salary through the Termination Date and
(b) compensation for all of the Executive’s accrued vacation time based upon the
Executive’s current Base Salary (notwithstanding any limitation on payment for
accrued vacation then set forth in the Company’s policies or practices), in each
case to the extent not theretofore paid (the sum of the amounts described in
clauses (a) and (b) shall be hereinafter referred to as the “Accrued
Obligation”).

(ii)    The Executive shall receive a lump-sum cash payment in an amount equal
to one times his Base Salary.

(iii)    Until the earlier of (a) his receipt of equivalent coverage and
benefits under the plans and programs of a subsequent employer (such coverage
and benefits to be determined on a coverage-by-coverage or benefit-by-benefit
basis) or (b) one year after the Executive’s Termination Date, the Executive and
his eligible dependents to continue to be covered by all medical, vision, dental
benefit and life plans maintained by the Company under which the Executive was
covered immediately prior to Executive’s Termination Date at the same active
employee premium cost as a similarly

 

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situated active employee; provided, however, that such coverage shall not
continue in the event the Company would be subject to any excise tax under
Section 4980D of the Code or other penalty or liability pursuant to the
provisions of the Patient Protection and Affordable Care Act of 2010 (as amended
from time to time), and in lieu of providing the coverage described above, the
Company shall instead pay to the Executive a fully taxable monthly cash payment
in an amount such that, after payment by the Executive of all taxes on such
payment, the Executive retains an amount equal to the Company’s portion of the
applicable premiums for such month, with such monthly payment being made on the
last day of each month for the remainder of such one-year period; provided,
further, that such benefits provided during the one-year period shall run
concurrent with the health continuation coverage period mandated by Section
4980B of the Code.

(b)    By the Company Without Cause or By the Executive for Good Reason and
During the Change of Control Period. Subject to the provisions of Paragraph 6(d)
of this Agreement, if prior to the end of the Employment Term and during a
Change of Control Period the Executive’s employment is terminated (i) by the
Company without Cause or (ii) by the Executive for Good Reason, then the Company
shall pay or provide to or in respect of the Executive, on the tenth Business
Day next following the Executive’s Termination Date, all of the following
amounts and benefits set forth in this Paragraph 6(b); provided, however, that
any amounts to be paid pursuant to Paragraph 6(b)(iii) shall be paid in
accordance with Paragraph 4(b).

(i)    The Executive shall receive a lump-sum cash payment in an amount equal to
the Accrued Obligation.

(ii)    The Executive shall receive a lump-sum cash payment in an amount equal
to two times his Base Salary.

(iii)    The Executive shall receive a lump-sum cash payment in an amount equal
to the product of (a) the greater of (x) the target amount for the Annual Bonus
for the Performance Period during which the Termination Date occurs, if any, or
(y) the average amount paid pursuant to Paragraph 4(b) in respect of the three
most recent applicable Performance Periods prior to the Termination Date and
(b) a fraction, the numerator of which shall be the number of Business Days from
the beginning of such Performance Period to the Termination Date, inclusive, and
the denominator of which shall be 260.

(iv)    The Executive shall receive a lump-sum cash payment in an amount equal
to two times the greater of (a) the target amount for the Annual Bonus for the
Performance Period during which the Termination Date occurs, if any, or (b) the
average amount paid pursuant to Paragraph 4(b) in respect of the three most
recent applicable Performance Periods prior to the Termination Date.

(v)    Effective as of the Termination Date and unless otherwise provided in the
terms of the award agreement under which a Compensatory Award (as defined below)
was granted, the Company shall provide for (a) the immediate vesting, settlement
and exercisability of, and termination of any restrictions on sale or transfer

 

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(other than any such restriction arising by operation of law) with respect to,
each and every stock option, restricted stock award, restricted stock unit award
and other equity-based award and performance award (with such performance awards
vesting at target level) (each, a “Compensatory Award”) that is outstanding as
of a time immediately prior to the Termination Date and (b) the extension of the
term during which each and every Compensatory Award may be exercised by the
Executive until the earlier of (x) the first anniversary of the Termination Date
or (y) the date upon which the right to exercise any Compensatory Award would
have expired if the Executive had continued to be employed by the Company under
the terms of this Agreement until the date the Employment Term would have ended
if the Executive’s employment had not terminated and no further extensions of
the Employment Term had occurred.

(vi)    Until the earlier of (a) his receipt of equivalent coverage and benefits
under the plans and programs of a subsequent employer (such coverage and
benefits to be determined on a coverage-by-coverage or benefit-by-benefit basis)
or (b) two years after the Executive’s Termination Date, the Executive and his
eligible dependents to continue to be covered by all medical, vision and dental
benefit plans maintained by the Company under which the Executive was covered
immediately prior to Executive’s Termination Date at the same active employee
premium cost as a similarly situated active employee; provided, however, that
such coverage shall not continue in the event the Company would be subject to
any excise tax under Section 4980D of the Code or other penalty or liability
pursuant to the provisions of the Patient Protection and Affordable Care Act of
2010 (as amended from time to time), and in lieu of providing the coverage
described above, the Company shall instead pay to the Executive a fully taxable
monthly cash payment in an amount such that, after payment by the Executive of
all taxes on such payment, the Executive retains an amount equal to the
Company’s portion of the applicable premiums for such month, with such monthly
payment being made on the last day of each month for the remainder of such
two-year period; provided, further, that such benefits provided during the
two-year period shall run concurrent with the health continuation coverage
period mandated by Section 4980B of the Code.

(c)    With Cause; Other than for Good Reason; Due to Death or Disability. If
prior to the end of the Employment Term the Executive’s employment is terminated
by reason of (i) the Company’s termination of Executive’s employment with Cause
or (ii) the Executive’s (a) voluntary termination of his employment other than
for Good Reason during a Change of Control Period or (b) death or Disability,
then this Agreement shall terminate without further obligations to the Executive
hereunder other than for (x) the payment of the Accrued Obligation, which,
subject to Paragraph 6(d) of this Agreement, shall be paid to the Executive in a
lump-sum in cash within 30 days after the Executive’s Termination Date, and
(y) the timely payment or provision of deferred compensation and other employee
benefits if and when otherwise due.

(d)    Payment Delay for Specified Employee. Any provision of this Agreement to
the contrary notwithstanding, if the Executive is a “specified employee” within
the meaning of that term under Section 409A(a)(2)(B) of the Code, as determined
by the Company, on the Executive’s Termination Date, all amounts due under this
Agreement that constitute a “deferral of compensation” within the meaning of
Section 409A of the Code, that are provided as a result of a “separation from
service” within the meaning of Section 409A of the Code, and that would

 

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otherwise be paid or provided during the first six months following the
Executive’s Termination Date, shall be accumulated through and paid or provided
on the first Business Day that is more than six months after the Executive’s
date Termination Date (or, if Executive dies during such six month period,
within 30 days after Executive’s death).

(e)    Clawback. Any compensation paid or provided by the Company under this
Agreement or otherwise shall be subject to recovery by the Company pursuant to
any Company policy regarding clawbacks or recovery of erroneously awarded
compensation, but only to the extent such policy is in effect prior to a Change
of Control.

7.    Certain Excise Taxes. Notwithstanding anything to the contrary in this
Agreement, if the Executive is a “disqualified individual” (as defined in
Section 280G(c) of the Code), and the payments and benefits provided for under
this Agreement, together with any other payments and benefits which the
Executive has the right to receive from the Company or any of its Affiliates,
would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the
Code), then the payments and benefits provided for under this Agreement shall be
either (a) reduced (but not below zero) so that the present value of such total
amounts and benefits received by the Executive from the Company and its
Affiliates will be one dollar ($1.00) less than three times the Executive’s
“base amount”(as defined in Section 280G(b)(3) of the Code) and so that no
portion of such amounts and benefits received by the Executive shall be subject
to the excise tax imposed by Section 4999 of the Code or (b) paid in full,
whichever produces the better net after-tax position to the Executive (taking
into account any applicable excise tax under Section 4999 of the Code and any
other applicable taxes). The reduction of payments and benefits hereunder, if
applicable, shall be made by reducing, first, payments or benefits to be paid in
cash hereunder in the order in which such payment or benefit would be paid or
provided (beginning with such payment or benefit that would be made last in time
and continuing, to the extent necessary, through to such payment or benefit that
would be made first in time) and, then, reducing any benefit to be provided in
kind hereunder in a similar order. The determination as to whether any such
reduction in the amount of the payments and benefits provided hereunder is
necessary shall be made by the Company in good faith. If a reduced payment or
benefit is made or provided and through error or otherwise that payment or
benefit, when aggregated with other payments and benefits from the Company (or
its Affiliates) used in determining if a parachute payment exists, exceeds one
dollar ($1.00) less than three times the Executive’s base amount, then the
Executive shall immediately repay such excess to the Company upon notification
that an overpayment has been made. Nothing in this Paragraph 7 shall require the
Company (or any of its Affiliates) to be responsible for, or have any liability
or obligation with respect to, the Executive’s excise tax liabilities under
Section 4999 of the Code.

8.    Representations and Warranties.

(a)    The Company represents and warrants to the Executive that the execution,
delivery and performance by the Company of this Agreement have been duly
authorized by all necessary corporate action of the Company and do not and will
not conflict with or result in a violation of any provision of, or constitute a
default under, any contract, agreement, instrument or obligation to which the
Company is a party or by which it is bound.

 

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(b)    The Executive represents and warrants to the Company that the execution,
delivery and performance by the Executive of this Agreement do not and will not
conflict with or result in a violation of any provision of, or constitute a
default under, any contract, agreement, instrument or obligation to which the
Executive is a party or by which the Executive is bound.

9.    Confidential Information. The Executive recognizes and acknowledges that
the Company’s and its Affiliates’ trade secrets and other confidential or
proprietary information, as they may exist from time to time including all
scientific or technical information regarding drilling technologies and subsea
wellheads and other products or services provided by the Company and its
Affiliates; information about design, process, procedure, formula or improvement
with respect to the Company’s products and services that is secret and of value;
technical or non-technical data, formula, patterns, compilations, programs,
devices, methods, techniques, drawings, processes, financial data, customers,
pricing information and strategies, financial performance and strategies,
financial projections, operating and capital budgets, loan and other debt
agreements, joint venture and similar agreements, environmental reports and
information, tax and asset schedules, leases, studies, interpretations, and
related information; and information about legal disputes, settlements, and
employment and administrative matters arising from the affairs of the Company
(“Confidential Information”), are valuable, special and unique assets of the
Company’s and/or such Affiliates’ business, access to and knowledge of which are
essential to the performance of the Executive’s duties hereunder. The Executive
confirms that all such Confidential Information constitutes the exclusive
property of the Company and/or such Affiliates. During the Employment Term and
thereafter without limitation of time, the Executive shall hold in strict
confidence and shall not, directly or indirectly, disclose or reveal to any
person, or use for the Executive’s own personal benefit or for the benefit of
anyone else, any Confidential Information (whether or not acquired, learned,
obtained or developed by the Executive alone or in conjunction with others)
belonging to or concerning the Company or any of its Affiliates, except (i) with
the prior written consent of the Company duly authorized by the Board, (ii) in
the course of the proper performance of the Executive’s duties hereunder,
(iii) for Confidential Information (x) that becomes generally available to the
public other than as a result of unauthorized disclosure by the Executive or the
Executive’s affiliates or (y) that becomes available to the Executive on a
nonconfidential basis from a source other than the Company or its Affiliates who
is not bound by a duty of confidentiality, or other contractual, legal or
fiduciary obligation, to the Company, or (iv) as required by applicable law or
legal process provided that prior to the disclosure or use by the Executive of
any Confidential Information under this clause (iv), the Executive will give
prior written notice thereof to the Company and provide the Company with the
opportunity to contest that disclosure or use. Nothing in this Paragraph 9
prohibits the Executive from reporting possible violations of law or regulation
to any governmental agency or entity (or of making any other protected
disclosures) without prior notice to the Company. Pursuant to the Defend Trade
Secrets Act of 2016, the Executive shall not be held criminally or civilly
liable under any Federal or state trade secret law for the disclosure of any
Confidential Information that (i) is made (A) in confidence to a Federal, state
or local government official, either directly or indirectly, or to an attorney
and (B) solely for the purpose of reporting or investigating a suspected
violation of law or (ii) is made in a complaint or other document filed in a
lawsuit or other proceeding, if such filing is made under seal. The provisions
of this Paragraph 9 shall continue in effect notwithstanding termination of the
Executive’s employment hereunder for any reason.

 

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10.    Restrictive Covenants.

(a)    Definitions. As used in this Paragraph 10, the following terms shall have
the following meanings:

(i)    “Business” shall mean any endeavor in which the Company, including its
Affiliates, is engaged in during the most recent twenty-four months of the
Executive’s employment, and shall include the provision of products or services
that are substantially similar to the products or services provided by any
business, partnership, firm, corporation or other entity which the Company or
one of its Affiliates has made substantial progress toward acquiring during the
most recent twenty-four months of the Executive’s employment. For the purposes
of this definition, the execution by the Company or one of its Affiliates of a
binding or non-binding letter of intent, term sheet, or similar agreement or a
confidentiality agreement or similar agreement with respect to the acquisition
of a business, partnership, firm, corporation or other entity on or before the
Executive’s Termination Date shall constitute sufficient evidence of the Company
or such Affiliate having made substantial progress towards acquiring such
business, partnership, firm, corporation or other entity.

(ii)    “Competing Business” shall mean any business, individual, partnership,
firm, corporation or other entity which wholly or in any significant part
engages in any business competing with the Business in the Restricted Area. In
no event will the Company or any of its Affiliates be deemed a Competing
Business.

(iii)    “Governmental Authority” shall mean any governmental,
quasi-governmental, state, county, city or other political subdivision of the
United States or any other country, or any agency, court or instrumentality,
foreign or domestic, or statutory or regulatory body thereof.

(iv)    “Legal Requirement” shall mean any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, authorization, or other directional requirement (including any of the
foregoing that relates to environmental standards or controls, energy
regulations and occupational, safety and health standards or controls including
those arising under environmental laws) of any Governmental Authority.

(v)    “Prohibited Period” shall mean the period during which the Executive is
employed by the Company hereunder and a period of 12 months following the
Executive’s Termination Date, which period is extended by the amount of time, if
any, during which the Executive is not in compliance with Section 10(b).

(vi)    “Restricted Area” shall mean any country or subdivision thereof in which
the Executive works or about which the Executive develops or receives
Confidential Information, in either case during the most recent twenty-four
months of the Executive’s employment and in which the Company or its Affiliates
engages in the Business.

 

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(b)    Non-Competition; Non-Solicitation. The Executive and the Company agree to
the non-competition and non-solicitation provisions of this Paragraph 10 (i) in
consideration for the Confidential Information provided by the Company to the
Executive pursuant to Paragraph 9; (ii) as part of the consideration for the
benefits to be provided to the Executive hereunder; (iii) to protect the trade
secrets and confidential information of the Company or its Affiliates disclosed
or entrusted to the Executive by the Company or its Affiliates or created or
developed by the Executive for the Company or its Affiliates, the business
goodwill of the Company or its Affiliates developed through the efforts of the
Executive and/or the business opportunities disclosed or entrusted to the
Executive by the Company or its Affiliates; and (iv) as an additional incentive
for the Company to enter into this Agreement.

(i)    Subject to the exceptions set forth in Paragraph 10(b)(ii), the Executive
covenants and agrees that during the Prohibited Period (a) the Executive will
refrain from carrying on or engaging in, directly or indirectly, any Competing
Business in the Restricted Area and (b) the Executive will not, and the
Executive will cause the Executive’s affiliates not to, directly or indirectly,
own, manage, operate, join, become an employee, partner, owner or member of (or
an independent contractor to), control or participate in or loan money to, sell
or lease equipment to or sell or lease real property to any business,
individual, partnership, firm, corporation or other entity which engages in a
Competing Business in the Restricted Area.

(ii)    Notwithstanding the restrictions contained in Paragraph 10(b)(i), the
Executive or any of the Executive’s affiliates may own an aggregate of not more
than 1% of the outstanding voting securities of any class of an entity engaged
in a Competing Business, if such securities are listed on a national securities
exchange or regularly traded in the over-the-counter market by a member of a
national securities exchange, without violating the provisions of Paragraph
10(b), provided that neither the Executive nor any of the Executive’s affiliates
(A) has the power, directly or indirectly, to control or direct the management
or affairs of such entity and (B) is involved in the management of such entity.

(iii)    The Executive further covenants and agrees that during the Prohibited
Period, the Executive will not, and the Executive will cause the Executive’s
affiliates not to (A) engage or employ, or solicit or contact with a view to the
engagement or employment of, any person who is then currently an officer or
employee of the Company or any of its Affiliates or was an officer or employee
of the Company or any of its Affiliates within the prior six months or
(B) canvass, solicit, approach or entice away or cause to be canvassed,
solicited, approached or enticed away from the Company or any of its Affiliates
any person who or which is or was (1) a customer of the Company or any of its
Affiliates during the most recent twenty-four months of the Executive’s
employment with the Company and (2) with who or which the Executive either had
contact or a relationship with or about who or which the Executive developed or
acquired Confidential Information during the most recent twenty-four months of
the Executive’s employment with the Company.

 

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(iv)    The Executive may seek the written consent of the Company, which may be
withheld for any or no reason, to waive the provisions of this Paragraph 10 on a
case-by-case basis.

(v)    The Executive recognizes that the Executive is a high-level, executive
employee who will develop and/or be provided with access to trade secrets as
part of the Executive’s employment and that the restrictive covenants set forth
in this Paragraph 10(b) are reasonable and necessary in light of the Executive’s
position and access to the Company’s trade secrets.

The foregoing notwithstanding, the Executive and the Company agree and
acknowledge that the Executive shall not be subject to, and the Company shall
not have any right to enforce, this Paragraph 10 unless the Executive’s
Termination Date is after the first anniversary of the Effective Date of this
Agreement.

(c)    Reasonableness; Enforcement. The Executive and the Company agree and
acknowledge that the limitations as to time, geographical area and scope of
activity to be restrained as set forth in Paragraph 10(b) are reasonable and do
not impose any greater restraint than is necessary to protect the legitimate
business interests of the Company. The Executive hereby represents to the
Company that the Executive has read and understands, and agrees to be bound by,
the terms of this Paragraph 10. The Executive acknowledges that the geographic
scope and duration of the covenants contained in this Paragraph 10 are the
result of arm’s-length bargaining and are fair and reasonable in light of
(i) the nature and wide geographic scope of the operations of the Business,
(ii) the Executive’s level of control over and contact with the Business in all
jurisdictions in which it is conducted, (iii) the fact that the Business is
conducted throughout the Restricted Area and (iv) the amount of compensation,
trade secrets and Confidential Information that the Executive is receiving in
connection with the performance of the Executive’s duties hereunder. It is the
desire and intent of the parties that the provisions of this Paragraph 10 be
enforced to the fullest extent permitted under applicable Legal Requirements,
whether now or hereafter in effect and therefore, to the extent permitted by
applicable Legal Requirements, the Executive and the Company hereby waive any
provision of applicable Legal Requirements that would render any provision of
this Paragraph 10 invalid or unenforceable.

(d)    Reformation. The Company and the Executive agree that the foregoing
restrictions are reasonable under the circumstances and that any breach of the
covenants contained in this Paragraph 10 would cause irreparable injury to the
Company. The Executive represents that enforcement of the restrictive covenants
set forth in this Paragraph 10 will not impose an undue hardship upon the
Executive or any person or entity affiliated with the Executive. The Executive
understands that the foregoing restrictions may limit the Executive’s ability to
engage in certain businesses anywhere in the Restricted Area during the
Prohibited Period, but acknowledges that the Executive will receive sufficiently
high remuneration and other benefits from the Company to justify such
restriction. Further, the Executive acknowledges that the Executive’s skills are
such that the Executive can be gainfully employed in non-competitive employment,
and that the agreement not to compete will not prevent the Executive from
earning a living. Nevertheless, if any of the aforesaid restrictions are found
by a court of competent jurisdiction to be unreasonable, or overly broad as to
geographic area or time,

 

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or otherwise unenforceable, the parties intend for the restrictions herein set
forth to be modified by the court making such determination so as to be
reasonable and enforceable and, as so modified, to be fully enforced. By
agreeing to this contractual modification prospectively at this time, the
Company and the Executive intend to make this provision enforceable under the
Legal Requirements of all applicable jurisdictions so that the entire agreement
not to compete and this Agreement as prospectively modified shall remain in full
force and effect and shall not be rendered void or illegal.

11.    Responsibilities with Respect to Confidential Information of Prior
Employers. The Company requires the Executive to protect and secure the
Company’s Confidential Information and intellectual property. Likewise, the
Company requires the Executive to protect the confidential information and
intellectual property of the Executive’s former employers. Accordingly, as a
condition of employment with the Company:

(a)    The Executive agrees not to use, have in the Executive’s possession, or
refer to any information, data, process, or method which is or was claimed to be
confidential or proprietary by any former employer or any customer, supplier or
consultant of a former employer.

(b)    The Executive will not, during the Employment Term, breach any other
agreement obligating the Executive to keep in confidence confidential or
proprietary information, knowledge, or data acquired by the Executive in
confidence or in trust in connection with prior employment before beginning
employment with the Company. The Executive will not disclose to the Company or
any employee of the Company, or induce the Company or any employee of the
Company to use in any unauthorized manner any confidential or proprietary
information or material belonging to a former employer of the Executive.

(c)    To the extent that the Executive has participated in conversations,
meetings or other sharing of information and ideas with attorneys representing
the Executive’s previous employers, the Executive agrees not to disclose the
substance or content of such communications to anyone at the Company.

12.    Certain Definitions. Capitalized terms used in the Agreement and not
otherwise defined herein shall have the following respective meanings:

(a)    “Affiliate” shall mean any company or other entity controlled by,
controlling or under common control with the Company.

(b)    “Annual Bonus Plan” shall mean any annual bonus or short-term incentive
plan or program established by the Company (other than the 2004 Incentive Plan
of Dril-Quip, Inc. or any successor long-term incentive plan).

(c)    “Business Day” shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.

 

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(d)    “Change of Control” shall mean:

(i)    there shall have occurred an event required to be reported with respect
to the Company in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item or any similar schedule or form) promulgated under
the Exchange Act, whether or not the Company is then subject to such reporting
requirement;

(ii)    any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) shall have become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company’s then
outstanding voting securities;

(iii)    the Company is a party to a merger, consolidation, sale of assets or
other reorganization, or a proxy contest, as a consequence of which members of
the Board in office immediately prior to such transaction or event constitute
less than a majority of the Board thereafter; or

(iv)    during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board (including, for this purpose, any
new director whose election or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such period) cease for
any reason to constitute at least a majority of the Board.

(e)    “Change of Control Period” shall mean the period commencing on the
occurrence of a Change of Control and ending on the third anniversary of such
date.

(f)    “Code” shall mean the Internal Revenue Code of 1986, as amended.

(g)    “Exchange Act” shall mean the Securities Exchange Act of 1934.

(h)    “Termination Date” shall mean the date of the Executive’s “separation
from service” within the meaning of Section 409A of the Code and the regulations
and other guidance promulgated thereunder with the Company and all of its
Affiliates, as described in Paragraph 5(f).

13.    Full Settlement.

(a)    There shall be no right of set off or counterclaim against, or delay in,
any payments to the Executive, or to the Executive’s heirs or legal
representatives, provided for in this Agreement, in respect of any claim against
or debt or other obligation of the Executive or others, whether arising
hereunder or otherwise.

(b)    In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment.

 

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(c)    If the Executive prevails in any material respect, the Company agrees to
pay, all costs and expenses (including attorneys’ fees) that the Executive, or
the Executive’s heirs or legal representatives, may reasonably incur as a result
of any contest by the Company, the Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement, or any
guarantee of performance thereof (including as a result of any contest by the
Executive, or the Executive’s heirs or legal representatives, about the amount
of any payment pursuant to this Agreement). The amounts payable by the Company
pursuant to this Paragraph 13(c) shall be paid no later than the end of the
taxable year of the Executive that immediately follows the taxable year of the
Executive in which such costs and expenses were incurred.

14.    No Effect on Other Contractual Rights. The provisions of this Agreement,
and any payment provided for hereunder, shall not reduce any amounts otherwise
payable to the Executive, or in any way diminish the Executive’s rights as an
employee of the Company or any of its Affiliates, whether existing on the date
of this Agreement or hereafter, under any employee benefit plan, program or
arrangement or other contract or agreement of the Company or any of its
Affiliates providing benefits to the Executive.

15.    Directors and Officers Insurance. The Company shall ensure that during
the Employment Term, the Company acquires and maintains directors and officers
liability insurance covering the Executive to the extent it is available at
commercially reasonable rates as determined by the Board. The provisions of this
Paragraph 15 shall continue in effect notwithstanding termination of the
Executive’s employment hereunder for any reason.

16.    Injunctive Relief. In recognition of the fact that a breach by the
Executive of any of the provisions of Paragraph 9 or Paragraph 10 will cause
irreparable damage to the Company and/or its Affiliates for which monetary
damages alone will not constitute an adequate remedy, the Company shall be
entitled as a matter of right (without being required to prove damages or
furnish any bond or other security) to obtain a restraining order, an
injunction, an order of specific performance, or other equitable or
extraordinary relief from any court of competent jurisdiction restraining any
further violation of such provisions by the Executive or requiring the Executive
to perform the Executive’s obligations hereunder. Such right to equitable or
extraordinary relief shall not be exclusive but shall be in addition to all
other rights and remedies to which the Company or any of its Affiliates may be
entitled at law or in equity, including the right to recover monetary damages
for the breach by the Executive of any of the provisions of this Agreement.

17.    Section 409A.

(a)    This Agreement is intended to be exempt from or comply with the
requirements of Section 409A of the Code (“Section 409A”) and shall be construed
and interpreted in accordance with such intent. To the extent any payment or
benefit provided under this Agreement is subject to Section 409A, such benefit
shall be provided in a manner that complies with Section 409A, including any IRS
guidance promulgated with respect to Section 409A.

(b)    All reimbursements or provision of in-kind benefits pursuant to this
Agreement shall be made in accordance with Treasury Regulation §
1.409A-3(i)(1)(iv) such that

 

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the reimbursement or provision will be deemed payable at a specified time or on
a fixed schedule relative to a permissible payment event. Specifically, the
amount reimbursed or in-kind benefits provided under this Agreement during
Executive’s taxable year may not affect the amounts reimbursed or provided in
any other taxable year (except that total reimbursements may be limited by a
lifetime maximum under a group health plan), the reimbursement of an eligible
expense shall be made on or before the last day of the Executive’s taxable year
following the taxable year in which the expense was incurred, and the right to
reimbursement or provision of in-kind benefit is not subject to liquidation or
exchange for another benefit.

18.    Governing Law and Venue. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Texas,
without regard to the principles of conflicts of laws thereof. Venue for any
action or proceeding relating to this Agreement and/or the employment
relationship hereunder shall lie exclusively in courts in Harris County, Texas.

19.    Notices. All notices, requests, demands and other communications required
or permitted to be given or made hereunder by either party hereto shall be in
writing and shall be deemed to have been duly given or made (i) when delivered
personally, (ii) when sent by facsimile transmission, or (iii) five days after
being deposited in the United States mail, first class registered or certified
mail, postage prepaid, return receipt requested, to the party for which intended
at the following addresses (or at such other addresses as shall be specified by
the parties by like notice, except that notices of change of address shall be
effective only upon receipt):

 

 

If to the Company, at

  Dril-Quip, Inc.     Attention: General Counsel     6401 N. Eldridge Pkwy.    
Houston, TX 77041     Fax No.: (713) 939-5329

If to the Executive, at the current address in the Company’s personnel files.

20.    Binding Effect; Assignment; No Third Party Benefit.

(a)    This Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and shall be enforceable by the Executive’s legal
representatives.

(b)    This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

(c)    The Company shall require any successor or assign (whether direct or
indirect, by purchase, merger, consolidation, amalgamation or otherwise) to all
or substantially all the business and/or assets of the Company, by agreement in
writing in form and substance reasonably satisfactory to the Executive,
absolutely and unconditionally to 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 or assignment had taken place. As used in this

 

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Agreement, the “Company” shall mean the Company as hereinbefore defined and any
successor or assign to the business and/or assets of the Company as aforesaid
which executes and delivers the agreement provided for in this Paragraph 20(c)
or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.

(d)    Nothing in this Agreement, express or implied, is intended to or shall
confer upon any person other than the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns, any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.

21.    Miscellaneous.

(a)    Amendment. This Agreement may not be modified or amended in any respect
except by an instrument in writing signed by the party against whom such
modification or amendment is sought to be enforced. No person, other than
pursuant to a resolution of the Board or a committee thereof, shall have
authority on behalf of the Company to agree to modify, amend or waive any
provision of this Agreement or anything in reference thereto.

(b)    Waiver. Any term or condition of this Agreement may be waived at any time
by the party hereto which is entitled to have the benefit thereof, but such
waiver shall only be effective if evidenced by a writing signed by such party,
and a waiver on one occasion shall not be deemed to be a waiver of the same or
any other type of breach on a future occasion. No failure or delay by a party
hereto in exercising any right or power hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right or power.

(c)    Withholding Taxes. The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

(d)    Nonalienation of Benefits. The Executive shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien upon any payments or
other benefits provided under this Agreement; and no benefits payable hereunder
shall be assignable in anticipation of payment either by voluntary or
involuntary acts, or by operation of law, except by will or pursuant to the laws
of descent and distribution.

(e)    Severability. If any provision of this Agreement is held to be invalid or
unenforceable, (i) this Agreement shall be considered divisible, (ii) such
provision shall be deemed inoperative to the extent it is deemed invalid or
unenforceable, and (iii) in all other respects this Agreement shall remain in
full force and effect; provided, however, that if any such provision may be made
valid or enforceable by limitation thereof, then such provision shall be deemed
to be so limited and shall be valid and/or enforceable to the maximum extent
permitted by applicable law.

(f)    Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto concerning the subject matter hereof, and from and after the
date of this Agreement, this Agreement shall supersede any other prior agreement
or understanding, both written and oral, between the parties with respect to
such subject matter.

 

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(g)    Captions. The captions herein are inserted for convenience of reference
only, do not constitute a part of this Agreement, and shall not affect in any
manner the meaning or interpretation of this Agreement.

(h)    References. All references in this Agreement to Paragraphs, subparagraphs
and other subdivisions refer to the Paragraphs, subparagraphs and other
subdivisions of this Agreement unless provided otherwise. The words “this
Agreement”, “herein”, “hereof”, “hereby”, “hereunder” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision
unless so limited. Whenever the words “include”, “includes” and “including” are
used in this Agreement, such words shall be deemed to be followed by the words
“without limitation”. Words in the singular form shall be construed to include
the plural and vice versa, unless the context otherwise requires.

[Execution Page Follows]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by its duly authorized officer, and the Executive has executed this
Agreement, as of the date first above set forth.

 

DRIL-QUIP, INC.

/s/ Blake T. DeBerry

Name: Blake T. DeBerry Title: President and Chief Executive Officer EXECUTIVE

/s/ Jeffrey Bird

Jeffrey Bird

 

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