SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)1
RONSON CORPORATION
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(Name of issuer)
COMMON STOCK
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(Title of class of securities)
776338 20 4
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(CUSIP number)
STEVEN WOLOSKY, ESQ.
OLSHAN GRUNDMAN FROME & ROSENZWEIG LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
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(Name, address and telephone number of person
authorized to receive notices and communications)
May 27, 1998
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
Note. six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
(Continued on following pages)
(Page 1 of 7 Pages)
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(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
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CUSIP No. 776338 20 4 13D Page 2 of 7 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
STEEL PARTNERS II, L.P.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 241,799
OWNED BY
EACH
REPORTING
PERSON WITH
----------------------------------------------------------------
8 SHARED VOTING POWER
-0-
----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
241,799
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
241,799
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.6%
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14 TYPE OF REPORTING PERSON
PN
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<PAGE>
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CUSIP No. 776338 20 4 13D Page 3 of 7 Pages
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================================================================================
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
WARREN LICHTENSTEIN
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OR ORGANIZATION
USA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 241,799
OWNED BY
EACH
REPORTING
PERSON WITH
----------------------------------------------------------------
8 SHARED VOTING POWER
- 0 -
----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
241,799
----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
241,799
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.6%
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14 TYPE OF REPORTING PERSON
IN
================================================================================
<PAGE>
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CUSIP No. 776338 20 4 13D Page 4 of 7 Pages
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The following constitutes Amendment No. 2 to the Schedule 13D filed by
the undersigned (the "Schedule 13D"). Except as specifically amended by this
Amendment No. 2, the Schedule 13D remains in full force and effect.
Item 3 is amended in its entirety to read as follows:
Item 3. Source and Amount of Funds or Other Consideration.
The aggregate purchase price of the 241,799 Shares of Common
Stock owned by Steel Partners II is $697,085. The Shares of Common Stock owned
by Steel Partners II were acquired with partnership funds.
Item 4 is amended to add the following paragraph:
Item 4. Purpose of Transaction.
On May 27, 1998, Steel Partners II sent to the Issuer a notice of
nomination to reserve its right to nominate two individuals for election as
directors of the Issuer at the Issuer's next Annual Meeting of Stockholders.
This letter is attached as Exhibit 2.
On May 28, 1998, Steel Partners II sent to the Issuer a letter
setting forth certain of its concerns in respect of the management of the Issuer
and the underperformance of the Issuer's Common Stock. Such concerns, include
but are not limited to, the need to create a more independent Board of
Directors, the elimination of related party transactions, the need to reduce
corporate overhead, the benefits of selling the Aviation Division and
reinvesting in the core Consumer Products Division. In such letter, Steel
Partners II withdrew its notice of nomination for the Board of Directors at the
Issuer's upcoming Annual Meeting. Reference is made to the full text of the
letter which is attached as Exhibit 3.
Item 5 is amended in its entirety to read as follows:
Item 5. Interest in Securities of the Issuer.
As reported in its Quarterly Report on Form 10-Q for the period
ended March 31, 1998, the Issuer had 3,177,175 Shares of Common Stock
outstanding on March 31, 1998. Steel Partners II beneficially owns an aggregate
of 241,799 Shares, representing approximately 7.6% of the Shares outstanding,
all of such Shares were acquired in open-market transactions. Steel Partners II
and Warren Lichtenstein have sole voting and dispositive power with respect to
the Shares beneficially owned by it or him.
(a) As of the close of business on May 27, 1998, Steel Partners
II beneficially owns 241,799 Shares of Common Stock, constituting approximately
7.6% of the Shares outstanding. Mr. Lichtenstein has sole voting and dispositive
power with respect to all of the Shares of Common Stock owned by Steel Partners
II by virtue of his authority to vote and dispose of such Shares. Accordingly,
Mr. Lichtenstein beneficially owns 241,799 Shares of Common Stock, representing
approximately 7.6% of the Shares outstanding. All of such Shares of Common Stock
were acquired in open-market transactions.
<PAGE>
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CUSIP No. 776338 20 4 13D Page 5 of 7 Pages
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(b) By virtue of his positions with Steel Partners II, Mr.
Lichtenstein has the sole power to vote and dispose of the Shares reported in
this Schedule 13D.
(c) Schedule A annexed hereto lists all transactions in the
Issuer's Common Stock since the filing of Amendment No. 1 on May 15, 1998 by the
Reporting Persons.
(d) No person other than the Reporting Persons is known to have
the right to receive, or the power to direct the receipt of dividends from, or
proceeds from the sale of, such Shares of the Common Stock.
(e) Not applicable.
Item 7. is amended to add the following:
Item 7. Material to be Filed as Exhibits.
2. Notice of Nomination dated May 27, 1998.
3. Letter to the Board of Directors of the Issuer from
Steel Partners II dated May 29, 1998.
<PAGE>
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CUSIP No. 776338 20 4 13D Page 6 of 7 Pages
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SIGNATURES
After reasonable inquiry and to the best of his knowledge and
belief, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 3, 1998 STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.
General Partner
By:/s/ Warren G. Lichtenstein
--------------------------
Warren G. Lichtenstein
Chief Executive Officer
/s/ Warren G. Lichtenstein
--------------------------
WARREN G. LICHTENSTEIN
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CUSIP No. 776338 20 4 13D Page 7 of 7 Pages
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SCHEDULE A
Transactions in the Shares Since the Filing of Amendment No. 1
Shares of Common Price Per Date of
Stock Purchased Share Purchase
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STEEL PARTNERS II, L.P.
3,000 3.79000 5/14/98
2,600 3.66500 5/19/98
2,700 3.67658 5/20/98
WARREN LICHTENSTEIN
None.
Steel Partners II, L.P.
150 East 52nd Street, 21st Floor
New York, New York 10022
May 27, 1998
Ronson Corporation
Campus Drive, P.O. Box 6707
Somerset, New Jersey 08875
Attention: Corporate Secretary
Gentlemen:
Steel Partners II, L.P. ("Steel") beneficially owns on the
date hereof 241,799 shares (the "Shares") of common stock, $1.00 par value per
share (the "Common Stock"), of Ronson Corporation (the "Company"), representing
approximately 7.6% of the outstanding shares of Common Stock of the Company.
Steel hereby gives notice pursuant to Article I, Section 9 of
the By-Laws of the Company of its nomination for election as directors of the
Company at the Company's next Annual Meeting of Stockholders (the "Meeting") the
two individuals whose names are set forth under paragraph "5" below:
1. Steel is the true party in interest and intends to
make the nominations of the individuals whose names
are set forth in paragraph "5" below. The address of
Steel is 150 East 52nd Street, 21st Floor, New York,
New York 10022.
2. Steel represents that it is the true party in
interest and is the beneficial owner of the Shares
and is entitled to direct the vote of the Shares at
the next Annual Meeting of Stockholders.
3. Steel beneficially owns 241,799 shares of Common
Stock that are held of record by Cede & Co, the
nominee of The Depository Trust Company.
4. Steel represents that it (a) will continue to hold
the Shares through the date on which the Meeting is
held and (b) intends to appear in person or by proxy
at the Meeting to nominate the two individuals whose
names are set forth in paragraph "5" below.
<PAGE>
5. The two individuals being nominated hereby are:
(a) Name: Robert Frankfurt
Age: 33
Business Address:
Steel Partners
150 East 52th Street, 21st Floor
New York, New York 10022
Residence Address:
82 Shrub Hollow Road
Roslyn, New York 11576
Principal Occupation: Investor
(b) Name: Gary Ullman
Age: 56
Business Address:
420 Woodland Acres Crescent
Maple, Ontario 6GA1G2 Canada
Residence Address:
Same as above
Principal Occupation: Consultant
6. Mr. Frankfurt is a member of Steel Partners, L.L.C.,
the general partner of Steel.
7. (a) Robert Frankfurt:
Business Experience (last five years):
1995-1998 - President, MDM Technologies,
Inc. (direct mail marketing company)
Member - Steel Partners L.L.C. (general
partner of limited partnership that invests
in microcap companies)
1993-1995 - UCLA Business School
Directorships:
MDM Technologies, Inc. (private company)
(b) Gary Ullman:
Business Experience (last five years):
1998 - Consultant, Mayo Clinic
6/96-12/97 - President and CEO, Fluid
Packaging Company, Inc. (custom product
manufacturer in cosmetics and personal care
industry)
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<PAGE>
1/95-6/97 - Bankers Trust (consecutively ran
two high-tech printing companies that were
divisions of Bankers Trust)
1967-1994 - CCL Industries, Inc. (container,
label and custom product manufacturer) (last
position was CEO of CCL Custom
Manufacturing)
Directorships: None presently (member of 8
Boards of public and private companies in
last 25 years)
Enclosed with this notice are supporting documents required by the
By-Laws of the Company.
Very truly yours,
STEEL PARTNERS II, L.P.
By: Steel Partners, L.L.C.,
General Partner
By:/s/ Warren Lichtenstein
-------------------------------
Warren Lichtenstein
Chief Executive Officer
-3-
Steel Partners II, L.P.
150 East 52nd Street
21st Floor
New York, New York 10022
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Tel (212) 813-1500
Fax (212) 813-2198
June 3, 1998
Board of Directors
Ronson Corporation
Corporate Park III, Campus Drive
P.O. Box 6707
Somerset, NJ 08875-6707
Dear Sirs:
Steel Partners II, L.P. ("Steel Partners" or "Steel") has been a long-term
shareowner of Ronson Corporation ("Ronson") and currently owns 241,799 shares or
7.64% of the primary shares outstanding.
As an investor that seeks out opportunities in undervalued microcap securities,
Steel Partners has sought, with some success, to find investments and assist
companies and their shareholders in realizing significant value over a long term
time horizon. Steel believes it can help Ronson to realize the significant value
inherent in its assets and to reverse the course of the recent past which
includes revenues and earnings decline and a poorly performing stock.
Ronson shareowners have not been rewarded for their investment in Ronson
Corporation over the past 2-1/2 years. Since reaching a high of $5.00 per share
in September 1995, Ronson's share price has drifted downward to its current
price of $3.75. This represents an absolute return of -25.0% to shareowners of
Ronson Corporation despite the fact that Steel Partners has been a buyer during
this time period and has supported the stock price by purchasing a 7.64%
ownership position in Ronson. In comparison, the NASDAQ Composite returned
71.4%, the Russell 2000 Index returned 47.3% and the S&P 500 returned 88.0%
during the same time period.
Steel Partners believes that Ronson's board should immediately implement the
following actions to set the Company on the right course towards increased
profitability and shareowner value:
Create a more Independent Board of Directors
We believe the Company should follow the Corporate Governance Core Principles &
Guidelines as set forth by CalPERS in April
<PAGE>
1998 (a copy of which we have enclosed for you to review). We believe much of
the Company's problems lie in the fact that Ronson falls short of a number of
their principles and guidelines including:
- - A substantial majority of the board should consist of
directors who are independent. (Only 2 of 7 of Ronson's
directors are independent directors.)
- - Every director should be elected annually and staggered
boards should be avoided. (Ronson has a staggered board.)
- - Certain board committees should consist entirely of independent
directors including audit, director nomination, board evaluation and
governance, CEO Evaluation and Management Compensation and Compliance
and Ethics. (Of these committees, Ronson only has an Audit and
Nominating Committee, and neither of these is represented entirely of
independent directors.)
- - A Company should consider the wisdom of an independent chairperson who
is responsible for coordinating the activities of the Board of
Directors allowing the CEO to focus on providing management of the
day-to-day operations of the Company and recommending policy and
strategic direction of the Company. (Ronson's CEO and Chairman is the
same person.)
- - No director may serve as a consultant or service provider to the
Company. (3 of 7 Ronson directors fail this test as detailed later in
this letter.)
- - Director compensation should be a combination of cash and stock with
the stock component being a significant portion of the total
compensation. (Ronson's board compensation is all cash.)
- - Independent directors should establish performance criteria and
compensation incentives for the CEO, and regularly review the CEO's
performance against those criteria. Minimally, the criteria ensure that
the CEO's interests are aligned with the long-term interests of
shareowners, that the CEO is evaluated against comparable peer groups,
and that a significant portion of the CEO's total compensation is at
risk. (We know of no independently established performance criteria for
Ronson's CEO, the CEO's compensation is significantly higher than his
peer group of CEO's of similarly performing public companies and most
of his compensation is salary based and thus not at risk if Ronson
performs poorly.)
-2-
<PAGE>
- - The board should have in place an effective CEO succession plan. (We
know of no such CEO succession plan at Ronson Corporation.)
Eliminate related party transactions
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Erwin Ganz, former VP-Industrial Operations and Chief Financial Officer has a
$77,500 per year consulting contract, participates in Ronson's health and life
insurance, and is given free use of an automobile.
Gerard Quinnan, former VP-General Manager of Consumer Products received $14,000
for consulting services and free use of an automobile in 1997.
Michael Graphics, Inc., Louis Aronson's son-in-law is a greater than 10%
shareholder. This Company provided $88,190 of printing services to Ronson.
Justin Walder, a director and officer of Ronson, is a principal in the firm,
Walder, Sondak & Brogan, P.A., Attorneys at Law, which received payment of
$103,880 in return for legal services performed in 1997.
Reduce corporate overhead
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Louis Aronson II received annual compensation of $528,431 in 1997 consisting of
$432,154 in salary, $53,229 in bonus, $10,024 in other compensation, and options
potentially valued at $33,044 to purchase 22,500 shares at an exercise price
$3.1625 per share.
This compensation level is equivalent to 2.3% of 1997 sales, 96.3% of 1997 pre
tax earnings and 360% of the Chief Financial Officer's 1997 compensation. The
benchmarks indicate that Mr.
Aronson's compensation is exorbitant.
Overall, general corporate overhead needs to reduced - $1.44 million represents
6.2% of 1997 net sales, 122% of 1997 earnings from continuing operations, and
262% of 1997 pre tax earnings.
Sell the Aviation Division
- --------------------------
Steel Partners believes that much of Ronson's problems stem from a lack of focus
on its core Consumer Products Division and its continued investment in the
Aviation Division despite an abysmal return on capital over the prior eight
years.
To illustrate our point, Ronson's Aviation Division earned $272,000 in 1997,
$5,000 less than the $277,000 earned in 1990 and therefore produced negative
earnings growth in the 1990's. Additionally, Ronson invested $3.1 million in the
Aviation Division during the 1990's only to see annual revenues drop $2
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<PAGE>
million, operating margins stagnate at around 2.6% of revenues, and return on
identifiable assets drop to 4.7% - leaving investors to wonder if the Company
might have been better off putting its money in a risk free savings account.
Reinvest in core Consumer Products Division
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Ronson's Consumer Products Division fared only modestly better than the Aviation
Division though it clearly represents a better growth opportunity. 1997
Operating Margins in Consumer Products of 15.3% fall far short of the 18.6%
experienced in 1995 and significantly below acceptable Operating Margins a
strong brand name such as Ronson should maintain in its market niche.
Due to a lack of focus on the Consumer Products sector, dollar earnings and
margins in this division have steadily deteriorated from 1995 through the first
quarter of 1998.
A renewed focus in Ronson's core Consumer Products Division and further
development of the well known and respected Ronson brand name should thwart the
downward earnings spiral and lead to considerable growth in revenues, earnings
and return on capital setting the stage for significant appreciation in Ronson's
share price. Additionally, analysts and investors will have an easier time
understanding the true value of a pure play consumer products company.
These results all point to the fact that shareowners have gotten the short end
of the stick while the Board has continued to enter into less than arms length
transactions with former managers in the way of consulting contracts and with
family members and directors in the form of outside service deals.
Steel Partners believes Ronson's stock market performance over the past two and
a half years is a clear message from the market the current management's
decision to continue to invest in the underperforming Aviation division has been
a mistake.
To summarize, Steel Partners urges the Board of Directors of
Ronson Corporation to
i) Create a more Independent Board;
ii) Eliminate the Related Party Transactions;
iii) Reduce Wasteful Corporate Overhead;
iv) Sell off the Aviation Division and to instead focus on the
Consumer Products Sector.
Steel believes that the Ronson brand name in the Consumer Products sector holds
great value and should be the focus of management's attention and the Company's
capital.
We would welcome an opportunity to discuss these and other ideas in more detail
and to take you through i) what we think Ronson's
-4-
<PAGE>
strategic plan should be for the future and ii) examples of other investments we
have made where our ideas helped in creating significant long term value for all
shareholders.
All of our information is based upon publicly available information. If we are
mistaken in any respect with regard to such information, please notify us
accordingly.
We expect the board will fulfill its fiduciary obligations to Ronson's
shareowners and begin to implement our strategy. Accordingly, we hereby withdraw
all our nominees for directors pursuant to our letter dated May 28, 1998.
Sincerely,
/s/ Warren G. Lichtenstein
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Warren G. Lichtenstein
Chairman
Encl.
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