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This paper considers the asymptotic stability problem for a class of neural networks with discrete and distributed delays. Based on a new augmented Lyapunov functional and integral inequalities, the new asymptotic stability condition is established in terms of linear matrix inequality. Meanwhile, the importance of some augmented terms in the Lyapunov functional are discussed. Compared with previous methods to deal with the distributed delay, our method is less conservative due to the use of the new Lyapunov functional. Finally, numerical examples illustrate the relaxation of obtained results and our claims.