Exhibit 10.54
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“ Agreement ”) is entered into by and
between TV Guide Magazine Group, Inc. (the “
Company ”) and J. Scott Crystal having a
residential address
at
[address]
(“ Employee ”), as of the 4
th
day of October, 2005.
This Agreement, when executed by both parties, will be binding and
supersede any and all prior agreements, understandings,
arrangements and/or communications, whether express or implied oral
or written, between Employee and the Company and/or its affiliates
relative to the Company’s employment of Employee including,
but not limited to, that certain letter agreement dated
April 9, 2003 between Employee and the Company (the “
Prior Agreement ”).
I. EMPLOYMENT .
A. The Company hereby employs
Employee and Employee hereby accepts such employment, upon the
terms and conditions hereinafter set forth, commencing
October 17, 2005 (the “ Effective Date
”) through October 16, 2008, unless earlier terminated
as provided herein (the “ Term ”). This
Agreement may be renewed by mutual written agreement of the
parties, but only by an express written agreement signed by both
parties. Employee acknowledges and agrees that the Company has no
obligation to renew this Agreement or to continue Employee’s
employment after any termination of, or the expiration of, this
Agreement, and expressly acknowledges that no promises or
understandings to the contrary have been made or
reached.
B. In the event that Employee
continues in the employ of the Company after the expiration of the
Term, Employee’s employment shall be solely on an “at
will” basis and this Agreement shall no longer be in effect
for any purpose except for those provisions that are expressly
stated herein to survive the expiration or earlier termination of
this Agreement.
C. Notwithstanding any other
provision in this Agreement, the Company may terminate
Employee’s employment or determine that Employee’s
services are no longer needed or desired, at any time, for any or
no reason, without prior written notice; provided, however, that if
such termination or determination occurs during the Term, such
termination or determination shall be subject to the provisions of
Section IV below, and the continuing rights and obligations of the
parties shall be as provided for therein.
II. DUTIES .
A. On the Effective Date and during
the Term, Employee shall serve as President of TV Guide Publishing
Group (“Publishing Group”) and in that position oversee
the business and financial operations of that group, and have such
other duties and responsibilities as the Company shall determine
from time to time. Employee will not be responsible for overseeing
the editorial functions of the Publishing Group;
provided,
however, that the editorial functions of the
Publishing Group will report to Employee on a “dotted
line” basis for operational and financial (e.g., budget,
financial planning and forecasting) purposes.
B. Employee shall render exclusive
and full-time services to the Company and shall devote
substantially all of Employee’s time, energy and ability
necessary to fulfill the duties and responsibilities referenced
above. Nothing herein shall prevent Employee, upon prior written
approval of the governing body of the Company, from serving as a
director or trustee of other corporations or businesses which are
not in competition with the business of the Company or in
competition with any affiliate of the Company. Nothing herein shall
prevent Employee from (1) investing in real estate for
Employee’s own account, (2) owning less than two percent
(2%) of any publicly traded corporation whether or not in
competition with the business of the Company or in competition with
any affiliate of the Company, (3) owning less than ten percent
(10%) of any privately held company not in competition with
the business of the Company or in competition with any affiliate of
the Company.
C. During the Term, Employee’s
principal place of employment shall be at the principal offices of
the Company in New York, NY, or such other greater New York, NY
metropolitan area location as determined by the Company, subject to
such travel as the rendering of Employee’s services may
reasonably require.
III. COMPENSATION
.
A. During the Term, Employee shall
receive on regular pay dates as then in effect under applicable
Company policy a base salary at the annualized rate of:
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1.
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$700,000 from
October 17, 2005 through October 16, 2006;
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2.
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$740,000 from
October 17, 2006 through October 16, 2007; and
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3.
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$780,000 from
October 17, 2007 through October 16, 2008.
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Any adjustments to Employee’s
compensation, including but not limited to Employee’s base
salary, following the Term of this Agreement shall be made at the
Company’s sole discretion.
B. Bonuses/Stock Options .
During the Term, Employee shall be eligible to earn a bonus under
the Company’s bonus plan then in effect. Bonuses, if any,
will be paid at the Company’s sole discretion and, to the
extent paid, shall be based upon such factors or criteria as the
Company and/or its parent determines in its or their sole
discretion which may include, but are not limited to, the
performance of the Company, its parent, the Publishing Group, and
the Employee’s performance. The targeted amount of the bonus
for Employee is fifty percent (50%) of Employee’s
annualized base salary; provided, however, notwithstanding the
foregoing, the payment of any bonus and the amount of any such
payment shall be entirely at the discretion of the Company and/or
its parent and provided further that the targeted bonus percentage
shall be commensurate with the bonus percentages paid to other
comparable executives of the Company. Notwithstanding the
foregoing, Employee’s annual bonus in respect of calendar
year 2005, shall be in an amount which is not less than the annual
bonus that Employee received in respect of calendar year
2004.
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Also during the Term, Employee shall
also be eligible to be considered for grants of non-qualified stock
options under the Gemstar-TV Guide International, Inc. 1994 Stock
Incentive Plan, as amended and/or restated from time to time, or
under any successor plan as may thereafter be in effect and
applicable to Employee (the “ Plan ”).
Employee’s eligibility for participation in such plans shall
be commensurate with other comparable executives of the
Company.
Additionally, on the Effective Date,
Employee shall receive a one-time grant of nonqualified stock
options (the “Options”) under the Plan to acquire one
hundred thousand (100,000) shares of Common Stock
(“Common Shares”) of the Company’s parent,
Gemstar-TV Guide International, Inc. (“Gemstar”). Each
Option shall represent the right to acquire one (1) Common
Share. Subject to earlier termination of the Options as described
below, the Options shall vest in equal installments of twenty
percent (20%) on each anniversary of the Effective Date over a
five (5) year period. The Options shall expire on the first to
occur of (i) the close of business on the last business day of
Gemstar coinciding with or immediately preceding the day before the
tenth anniversary of the Grant Date, (ii) the termination of
the Options pursuant to Section 4.2 and/or other provisions of
the Plan, or (iii) the termination of the Options in
connection with a termination of Employee’s employment with
the Company as contemplated by the “Option Agreement”
(as defined below). The exercise price per Common Share under each
Option shall equal the closing price for a Common Share on the
NASDAQ National Market Reporting System (or successor system) on
the Effective Date. Any grant of Options shall be subject to
Employee’s execution and delivery of Gemstar’s written
stock option agreement (the “Option Agreement”) and
shall be subject to the terms and conditions set forth in the Plan
and the Option Agreement.
C. Welfare Benefit Plans .
During the Term, Employee shall be eligible for all employee
benefits applicable to the Company’s comparable executives
from time to time, which may include but are not limited to, paid
holidays, medical and dental health insurance, 401(k) plan, life
insurance, and long-term disability insurance.
D. Expenses . The Company
shall pay or reimburse Employee for all reasonable business
expenses actually incurred or paid by Employee in the scope of
employment in connection with the performance of Employee’s
services hereunder upon the presentation of such supporting
documentation as the Company requires. Payment or reimbursement of
such expenses shall be subject to all Company policies regarding
the reporting of and payment of business expenses as in effect
generally from time to time with respect to other comparable
executives of the Company.
E. Car Allowance . During the
Term, the Company shall provide Employee with a car allowance of
eight hundred dollars ($800.00) per month to be used for the
purchase, lease and maintenance of an appropriate automobile for
Employee’s use during the Term of the Agreement.
F. Club Dues . During the
Term, subject to applicable law and policies as may from time to
time be established by or in effect for the Company, the Company
(or a designated affiliate) will pay or reimburse you for all
reasonable business expenses actually
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incurred or paid by you while you are employed
by the Company in connection with your membership in no more than
two (2) country, dining or social clubs, including the
business portion of the monthly dues for such clubs, up to an
aggregate amount of $800.00 per month. Payment of such expenses
shall be subject to all Company and /or its parent’s policies
regarding the reporting of and payment of business
expenses.
G. Vacation . During the
Term, Employee shall be entitled to four (4) weeks paid
vacation per calendar year in accordance with the plans, practices,
programs and policies then in effect for the Company with respect
to other comparable executives of the Company; provided, however,
since vacation time for Employee is not accrued, Employee shall not
be eligible to receive payment, or be paid, for any unused vacation
time and no unused vacation time shall be carried over from one
year to the next or otherwise accumulated.
H. Sign-on Bonus . The
Company shall pay Employee a one-time special bonus in the amount
of $100,000, to be paid to Employee within thirty (30) days
following the execution of this Agreement by Employee and the
Company; provided, that in the event Employee’s employment by
the Company is terminated prior to the first anniversary of the
Effective Date by the Company pursuant to Section IV(B) hereof,
Employee shall repay such amount to the Company not later than five
business days following the effective date of such
termination.
I. Company Right to Modify
Plans . The Company and/or its parent reserves the right to
modify, suspend or discontinue any and all of the above plans,
practices, policies and programs at any time without advance notice
(except as mandated by applicable law) or recourse by Employee so
long as such action is taken with respect to other comparable
executives of the Company and does not single out
Employee.
IV. TERMINATION .
A. Death or Disability .
Employee’s employment shall terminate automatically upon
Employee’s death. If a “Disability” of Employee
has occurred (pursuant to the definition of Disability set forth
below), the Company may give to Employee written notice of its
intention to terminate Employee’s employment. In such event,
Employee’s employment with the Company shall terminate
effective on the 120th day after receipt of such notice by
Employee, provided that, within the one hundred twenty
(120) days after such receipt, Employee shall not have
returned to full-time performance of Employee’s duties. For
purposes of this Agreement, “Disability” shall mean the
earlier to occur of either (i) a physical or mental impairment
which substantially limits a major life activity of Employee and
which renders Employee unable to perform the essential functions of
Employee’s position, even with reasonable accommodation which
does not impose an undue hardship on the Company for an aggregate
of one hundred twenty (120) days in any twelve-month period or
(ii) Employee becomes eligible to receive benefits under any
long term disability insurance provided by the Company or its
parent. The determination of Disability under subsection
(i) of the preceding sentence shall be based upon information
supplied by Employee and/or Employee’s medical personnel, as
well as information from medical personnel (or others) selected by
the Company or its insurers. In the event
Employee’s
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health care provider and the Company do not
agree as to whether Employee has a Disability, Employee and the
Company shall appoint a third-party qualified physician who shall
evaluate Employee and provide a determination of whether Employee
has a Disability.
B. Cause . The Company may
terminate Employee’s employment for Cause. For purposes of
this Agreement, “Cause” shall mean that Employee has
engaged in or committed: willful misconduct; gross negligence;
theft or fraud; any illegal conduct involving financial matters or
any felony;; any willful act that is likely to and/or which does in
fact have the effect of injuring the reputation, business or a
business relationship of the Company; or breach of any material
term of this Agreement. In the event the Company determines that
Cause for termination exists based upon any of the foregoing
grounds and such ground is curable, Employee shall be given thirty
(30) days to cure such ground for Cause. After the expiration
of any such cure period, the Company shall make a determination as
to whether Employee has cured such ground for termination for
Cause.
C. Good Reason . Employee may
terminate employment for Good Reason. For purposes of this
Agreement, “ Good Reason ” shall mean any
of the following: (i) the Company requires Employee to
relocate his principal office more than fifty (50) miles of
New York, New York without Employee’s consent; (ii) the
Company substantially diminishes Employee’s duties or
responsibilities as relates to the print publications operations
(which shall not, for purposes of this Agreement, include the
business and operations of TV Guide Online, TV Guide Data Solutions
and SkyMall) within the Publishing Group, or the Company eliminates
the word “President” from Employee’s title, in
either case without Employee’s consent; or (iii) the
regularly scheduled frequency of publication for TV Guide
magazine is reduced without Employee’s consent. Before
terminating his employment for Good Reason under subsections (i),
(ii) or (iii), Employee shall give the Company written notice
of his intent to terminate for Good Reason and the basis therefor,
and the Company shall have thirty (30) days to cure (the
“ Cure Period ”). If the Company fails to
cure the Good Reason within the Cure Period, Employee may terminate
his employment and this Agreement upon an additional ten
(10) days’ written notice. For all purposes under this
Agreement, any termination by Employee with Good Reason shall be
treated as if a determination had been made by the Company that
Employee’s services are no longer needed or desired under
Section IV-D-3 of this Agreement, and Employee shall be entitled to
the payments and benefits set forth in Section IV-D-3 pursuant to
its terms; provided, however, if the Employee properly terminates
this Agreement for Good Reason under IV(C), then (except as
provided in the proviso set forth below) Employee shall also be
entitled to receive a payment in respect of his target bonus for
the year in which the termination for Good Reason becomes effective
as follows: (a) if such termination for Good Reason becomes
effective in 2005, Employee shall be entitled to the full bonus for
2005 as provided for in Section III(B) hereof, and (b) if such
termination for Good Reason becomes effective in any year after
2005, Employee shall be entitled to a pro rata bonus (based on the
number of days elapsed) for the calendar year during which such
termination for Good Reason becomes effective; provided further,
however, if the Employee properly terminates this Agreement for
Good Reason under subsection IV(C)(iii) hereof and Employee elects
within ten (10) days of the effective date of such termination
to settle with the Company under “Option #2 – Lump-Sum
Payment/Settlement” of the Contract Payout Status Policy,
then the lump sum payment contemplated thereby shall be
in
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an amount equal to the balance of base salary
payments remaining to be paid through October 16, 2008 and
Employee shall not be entitled to receive any bonus in respect of
the year in which the termination for Good Reason becomes effective
notwithstanding any other provision of this Agreement to the
contrary.
D. Obligations of the Company
Upon Certain Events .
1. Death or Disability . If
Employee’s employment is terminated by reason of
Employee’s death or Disability, this Agreement shall
terminate without further obligations to Employee or
Employee’s legal representatives under this Agreement, other
than for (a) payment of the sum of (i) Employee’s
annual base salary through the date of termination to the extent
not theretofore paid and (ii) Employee’s pro rata bonus
(based on the number of days elapsed) for the calendar year during
which Employee’s death or Disability occurs (the sum of the
amounts described in clauses (i) and (ii) shall be
hereinafter referred to as the “ Accrued
Obligations ”), which shall be paid to Employee or
Employee’s estate or beneficiary, as applicable, in a lump
sum in cash within thirty (30) days of the date of
termination; and (b) payment to Employee or Employee’s
estate or beneficiary, as applicable, any amounts due pursuant to
the terms of any applicable welfare benefit plans.
2. Cause . If
Employee’s employment is terminated by the Company for Cause,
this Agreement shall terminate without further obligations to
Employee other than for the timely payment of Accrued Obligations.
If it is subsequently determined that the Company did not have
Cause for termination under this Section IV-D-2, then the
Company’s decision to terminate shall be deemed instead to
have been a determination that Employee’s services are no
longer needed or desired under Section IV-D-3 and the amounts
payable thereunder shall be the only amounts Employee may
receive.
3. Other than Cause or Death or
Disability . If the Company determines that it no longer needs
or desires the services of Employee during the Term for other than
Cause or Employee’s death or Disability, Employee’s
employment shall be subject to, and the Company shall have no
further obligations to Employee except as provided in, the Contract
Payout Status Policy attached hereto as Exhibit
A.
4. Exclusive Remedy . In
consideration of the making of this Agreement, as well as of the
other consideration stated herein, Employee expressly agrees that
any contract, agreement or understanding between Employee and the
Company and/or its affiliates with respect to severance or
termination pay, notice of severance or termination, or pay in lieu
of notice of severance or termination previously extended to
Employee, whether by way of contract, letter, or any termination or
severance policy, program , practice or arrangement, is hereby
rescinded and waived. Employee agrees that the payments
contemplated by this Agreement shall constitute the exclusive
and
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sole remedy for any termination of
Employee’s employment and Employee covenants not to assert or
pursue any other remedies, at law or in equity, with respect to any
termination of employment. If Employee violates this Agreement by
bringing or maintaining any charges, claims, grievances, or
lawsuits contrary to this provision, Employee shall pay all costs
and expenses of the Company and/or related persons or affiliated
entities in defending against such charges, claims or actions
brought by Employee or on Employee’s behalf, including but
not limited to reasonable attorneys’ fees, in addition to all
damages suffered or incurred by the Company and/or its
affiliates.
V. ARBITRATION .
Any Dispute between Employee and
Company shall be resolved exclusively and finally by arbitration
administered by the National Arbitration Forum (NAF) and conducted
under its rules, except as otherwise provided below. Employee and
Company will agree on another arbitration forum if NAF ceases
operations. The term “Dispute”, for purposes of this
provision, shall mean any dispute, controversy, or claim arising
out of or relating to (i) this Agreement, its enforcement,
interpretation, termination, applicability or validity thereof,
(ii) an alleged breach, default, or misrepresentation in
connection with any of its provisions, or
(iii) Employee’s employment, including, but not limited
to, any state or federal statutory claims. The arbitration shall be
conducted before a single arbitrator and will be limited solely to
the Dispute between Employee and the Company. The arbitration, or
any portion of it, shall not be consolidated with any other
arbitration and shall not be conducted on a class-wide or class
action basis. The arbitration shall be held in New York, New York
and shall be conducted in accordance with the NAF rules for the
resolution of Employment Disputes as the exclusive forum for the
resolution of such Dispute; provided, however, that provisional
injunctive relief may, but need not, be sought by either party to
this Agreement in a court of law while arbitration proceedings are
pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined
by the arbitrator. This arbitration agreement shall be enforceable
pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-14
et seq., and final resolution of any dispute through arbitration
may include any remedy or relief that the Arbitrator deems just and
equitable, including any and all remedies provided by applicable
state or federal statutes. At the conclusion of the arbitration,
the Arbitrator shall issue a written decision that sets forth the
essential findings and conclusions upon which the
Arbitrator’s award or decision is based. Any award or relief
granted by the Arbitrator hereunder shall be final and binding on
the parties hereto and may be enforced by any court of competent
jurisdiction. Except as specifically provided for herein, should
either party bring a Dispute in a forum other than the NAF, the
arbitrator may award the other party its reasonable costs and
expenses, including attorneys fees, incurred in staying or
dismissing such other proceedings or in otherwise enforcing
compliance with this dispute resolution provision. The parties
acknowledge, agree and understand that they are hereby
unequivocally waiving any rights to litigate disputes through a
court, including the right to litigate claims on a class-wide or
class action basis, and that they have expressly and knowingly
waived those rights and agree to resolve any Disputes through
binding arbitration in accordance with the provisions of this
paragraph. Employee and Company further agree that in any
proceeding to enforce the terms
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of this Agreement, the prevailing party shall be
entitled to its or her reasonable attorneys’ fees and costs
(including forum costs associated with the arbitration) incurred by
it or her in connection with resolution of the dispute in addition
to any other relief granted. Information may be obtained from the
NAF on line at www.arb-forum.org, by calling 800-474-2371, or
writing to P.O. Box 50191, Minneapolis, MN, 55405.
VI. NON-SOLICITATION/EMPLOYER
INTERESTS .
Employee promises and agrees that
during Employee’s employment and for twelve (12) months
following the termination of Employee’s employment, for any
reason whatsoever, Employee will not (1) influence or attempt
to influence customers of the Company or any of its affiliates,
either directly or indirectly, to divert their business to any
individual, partnership, firm, corporation or other entity then in
competition with the business of the Company, or any affiliate of
the Company; or (2) take any action which is intended, or
would reasonably be expected to, adversely affect the Company
and/or its affiliates, or adversely affect the businesses,
reputation, or relationship the Company and/or its affiliates with
its or their customers, business partners, or vendors.
VII. SOLICITING EMPLOYEES
.
Employee promises and agrees that
during Employee’s employment and for twelve (12) months
following the termination of Employee’s employment, for any
reason whatsoever, Employee will not directly or indirectly solicit
any employees of the Company or its affiliates to work for any
business, individual, partnership, firm, corporation, or other
entity; provided, however, that this provision shall not prohibit
Employee from employing personnel from the Company or its
affiliates who respond (without other solicitation of any kind
whatsoever) to general solicitations of employment directed to the
public at large.
VIII. CONFIDENTIAL
INFORMATION .
A. Employee, in the performance of
Employee’s duties on behalf of the Company, shall have access
to, receive and be entrusted with confidential information,
including but in no way limited to development, marketing,
organizational, financial, management, administrative, production,
distribution and sales information, data, specifications and
processes presently owned or at any time in the future developed,
by the Company or its affiliates, or its or their agents or
consultants, or used presently or at any time in the future in the
course of its business that is not otherwise part of the public
domain (collectively, the “Confidential Material”). All
such Confidential Material is considered secret and will be
available to Employee in confidence. Except in the performance of
duties on behalf of the Company, Employee shall not, directly or
indirectly for any reason whatsoever, disclose or use any such
Confidential Material, unless such Confidential Material ceases
(through no fault of Employee’s) to be confidential because
it has become part of the public domain. All records, files,
drawings, documents, equipment and other tangible items, wherever
located, relating in any way to the Confidential Material or
otherwise to the Company’s business, which Employee prepares,
uses or encounters, shall be and remain the Company’s sole
and exclusive property and shall be included in the Confidential
Material. Upon termination of this Agreement by any means, or
whenever
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requested by the Company, Employee shall
promptly deliver to the Company any and all of the Confidential
Material, not previously delivered to the Company, that may be or
at any previous time has been in Employee’s possession or
under Employee’s control; provided, however, that Employee
may retain in his possession any Confidential Material that
reflects the terms of his employment with the Company or the terms
or amount of his compensation and benefits.
B. Employee hereby acknowledges that
the sale or unauthorized use or disclosure of any of the
Company’s Confidential Material by any means whatsoever and
any time before, during or after Employee’s employment with
the Company shall constitute unfair competition. Employee agrees
that Employee shall not engage in unfair competition either during
the time employed by the Company or any time thereafter. The
parties acknowledge and agree that a disclosure by Employee of the
continuing obligations he is subject to under this Agreement to a
new employer, or prospective new employer, in connection with
Employee’s acceptance of, or application for, a position of
employment shall not constitute a breach of this
Agreement.
C. Until this Agreement ceases
(through no fault of Employee’s) to be confidential because
it has become part of the public domain, Employee further agrees to
keep the terms and contents of this Agreement completely
confidential, except to consult with Employee’s legal, tax or
other financial advisors or immediate family members, or as
otherwise required by law.
IX. ASSIGNMENT OF RIGHTS
.
Employee hereby assigns to the
Company, to the extent not previously assigned to the Company
and/or its affiliates, all of Employee’s rights, title and
interest in and to any and all inventions (and all proprietary
rights with respect thereto) whether or not patentable or
registrable under copyright or similar statutes, made or conceived
or reduced to practice or learned by Employee, either alone or
jointly with others, during the period of Employee’s
employment with the Company or its affiliates. Employee recognizes
that this Agreement does not require assignment of any invention
demonstrated by Employee to qualify fully for protection under
Section 2870 of the California Labor Code, the text of which
is substantially set forth below:
2870. Employment agreements;
assignment of rights
i Any provision in an employment
agreement which provides that an employee shall assign, or offer to
assign, any of his or her rights in an invention to his or her
employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the
employer’s equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(a) relate at the time of conception
or reduction to practice of the invention to the employer’s
business, or actual or demonstrably anticipated research or
development of the employer; or
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(b) result from any work performed
by the employe