PEOPLES BANCORP INC. CHANGE IN CONTROL AGREEMENT
EXHIBIT
10
THIS
CHANGE IN CONTROL (the “Agreement”) is adopted this 21st of May, 2008, by and
between PEOPLES BANCORP INC., a financial holding company, located in Marietta,
Ohio (the "Company"), and Xxxxxx X. Xxxxxx (the
"Executive"), an Executive of the Company or any of its
subsidiaries.
The Board
of Directors of the Company (the “Board”) has determined that it is in the best
interests of the Company to retain the Executive’s services and to reinforce and
encourage the continued attention and dedication of the Executive to his
assigned duties, without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company or the
assertion of claims and actions against Executives.
The
Company and the Executive agree as provided herein.
Article
1
Definitions
Whenever
used in this Agreement, the following words and phrases shall have the meanings
specified:
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1.1
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“Base Annual
Compensation" means the Executive’s average annualized compensation
paid by the Company which was includible in the Executive’s gross income
during the most recent five taxable years ending before the date of the
Change of Control. The definition covers amounts includible in
compensation, prior to any deferred arrangements, and defined as the
individual’s “base amount” under Section 280G of the
Code.
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1.2
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“Cause”
means
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(a)
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Gross
negligence or gross neglect of duties;
or
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(b)
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Commission
of a felony or of a gross misdemeanor involving moral turpitude in
connection with the Executive’s employment with the Company;
or
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(c)
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Fraud,
disloyalty, dishonesty or willful violation of any law or significant
Company policy committed in connection with the Executive's employment;
or
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(d)
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Issuance
of an order for removal of the Executive by the Company’s banks
regulators.
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1.3
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“Change in
Control” shall mean:
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1
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(a)
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Any
person or entity or group of affiliated persons or entities (other than
the Company) becomes a beneficial owner, directly or indirectly, of 25% or
more of the Company’s voting securities or all or substantially all of the
assets of the Company;
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(b)
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The
Company enters into a definitive agreement which contemplates the merger,
consolidation or combination of the Company with an unaffiliated entity in
which either or both of the following is to occur: (i) the
Board of Directors of the Company, as applicable, immediately prior to
such merger, consolidation or combination will constitute less than a
majority of the board of directors of the surviving, new or combined
entity; or (ii) less than 75% of the outstanding voting securities of the
surviving, new or combined entity will be beneficially owned by the stock
holders of the Company immediately prior to such merger, consolidation or
combination; provided, however, that if any definitive agreement to merge,
consolidate or combine is terminated without consummation of the
transaction, then no Change in Control shall be deemed to have occurred
pursuant to this paragraph;
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(c)
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The
Company enters into a definitive agreement which contemplates the transfer
of all or substantially all of the Company’s assets, other than to a
wholly-owned Subsidiary of the Company; provided, however, that if any
definitive agreement to transfer assets is terminated without consummation
of the transfer, then no Change in Control shall be deemed to have
occurred pursuant to this paragraph;
or
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(d)
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A
majority of the members of the Board of Directors of the Company shall be
persons who: (i) were not members of such Board on the date of this
Agreement (“current members”); and (ii) were not nominated by a vote of
such Board which included the affirmative vote of a majority of the
current members on such Board at the time of their nomination (“future
designees”) and (iii) were not nominated by a vote of such Board which
included the affirmative vote of a majority of the current members and
future designees, taken as a group, on such Board at the time of their
nomination.
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1.4
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“Code” means the
Internal Revenue Code of 1986, as
amended.
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1.5
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“Disability” means the
Executive’s suffering a sickness, accident or injury which has been
determined by the insurance carrier of any individual or group disability
insurance policy covering the Executive, or by the Social Security
Administration, to be a disability rendering the Executive totally and
permanently disabled. The Executive must submit proof to the
Plan Administrator of the insurance carrier’s or Social Security
Administration’s determination upon the request of the Plan
Administrator.
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2
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1.6
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“Good Reason”
means, without the Executive’s express written consent, after written
notice to the Board, and after a thirty (30) day opportunity for the Board
to cure, the continuing occurrence of any of the following
events:
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(a)
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The
assignment to the Executive of any material duties or responsibilities
inconsistent with the Executive’s positions, or a change in the
Executive’s reporting responsibilities, titles, or offices, or any removal
of the Executive from or any failure to re-elect the Executive to any of
such positions, except in connection with the termination of the
Executive’s employment for Cause, Disability, retirement, or as a result
of the Executive’s death;
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(b)
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A
reduction by the Company in the Executive’s base
salary;
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(c)
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The
taking of any action by the Company which would adversely affect the
Executive’s participation in or materially reduce the Executive’s benefits
under any benefit plans, or the failure by the Company to provide the
Executive with the number of paid vacation days to which the Executive is
then entitled on the basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect on the date
hereof;
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(d)
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Any
failure of the Company to obtain the assumption of, or the agreement to
perform, this Agreement by any successor as contemplated in Section 3.9
hereof; or
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(e)
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The
Company directing the Executive to be reassigned to an office location 50
miles or more form the current office location of the Executive except for
required travel on Company business to an extent substantially consistent
with the Executive’s present business travel obligations or, in the event
the Executive consents to any relocation, the failure by the Company to
pay (or reimburse the Executive) for all reasonable moving expenses
incurred by the Executive relating to a change of the Executive’s
principal residence in connection with such relocation and to indemnify
the Executive against any loss realized on the sale of the Executive’s
principal residence in connection with any such change of
residence.
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1.7
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“Termination
Date” shall mean the date on which the Executive’s employment with
the Company is terminated.
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Article
2
Change
in Control Benefits
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2.1
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Change in Control
Benefit. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company, the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason, then
in any such events, the Company shall pay to the Executive a benefit under
this Article.
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3
2.1.1 Amount of
Benefit. The benefit under this Section 2.1 is: two (2) times the
Executive’s Base Annual Compensation at the date of the Change of
Control.
2.1.2 Payment of
Benefit. The Company shall pay the benefit to the Executive in
a lump sum within thirty (30) days following the Termination Date.
2.1.3 Insurance
Benefits. During the period of time specified in Section 3.2
of this Agreement, the Executive shall receive, in addition to the benefit
provided in
Section
2.1.1 of this Agreement, life, medical and dental insurance substantially in the
form and expense to the Executive as received by the Executive on the
Termination
Date. It is understood and agreed that any rights and privileges of
the Executive provided by the Consolidated Omnibus Budget Reconciliation Act of
1986,
amending the Employee Retirement Income Security Act, the Internal Revenue Code
and the Public Health Services Act, as amended, shall begin at the end of
the
period of time specified in Section 3.2 of this Agreement.
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2.2
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Excess Parachute
Payment. Notwithstanding anything to the contrary in
this Agreement, if there are payments to the Executive which constitute
“parachute payments,” as defined in Section 280G of the Code, then the
payments made to the Executive shall be the greater of (x) one dollar
($1.00) less than the amount which would cause the payments to the
Executive (including payments to the Executive which are not included in
this Agreement) to be subject to the excise tax imposed by Section 4999 of
the Code, and (y) any payments to the Executive contingent upon the
Company’s Change in Control (including payments to the Executive which are
not included in the Agreement) less any excise tax.
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Article
3
Miscellaneous
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3.1
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Confidential
Information. The
Executive recognizes and acknowledges that he will have access to certain
information of the Company and that such information is confidential and
constitutes valuable, special and unique property of the
Company. The Executive shall not at any time, either during or
subsequent to the term of this Agreement, disclose to others, use, copy or
permit to be copied, except as directed by law or in pursuance of the
Executive’s duties for or on behalf of the Company, its successors,
assigns or nominees, any Confidential Information of the Company
(regardless of whether developed by the Executive), without the prior
written consent of the Company. The
term “Confidential Information” with respect to any person means any
secret or confidential information or know-how and shall include, but
shall not be limited to, the plans, customers, costs, prices, uses, and
applications of products and services, results of investigations, studies
owned or used by such person, and all products, processes, compositions,
computer programs, and servicing, marketing or operational methods and
techniques at any time used, developed, investigated, made or sold by such
person, before or during the term of this Agreement, that are not readily
available to the public or that are maintained as confidential by such
person. The Executive shall maintain in confidence any Confidential
Information of third parties received as a result of the Executive's
employment with the Company in accordance with the Company's obligations
to such third parties and the policies established by the
Company.
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4
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3.2
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No
Competition. If within the six (6) months prior or
twenty-four (24) months following a Change in Control of the Company, the
Company shall terminate the Executive’s employment other than for Cause,
or if the Executive shall terminate his employment for Good Reason, then
and for a period of one (1) year immediately following the Termination
Date, the Executive shall not directly or indirectly engage in the
business of banking, or any other business in which the Company directly
or indirectly engages during the term of the Agreement; provided, however,
that this restriction shall apply only to the geographic market of the
Company as delineated on the Termination Date in the Community
Reinvestment Act Statement of Peoples Bank, National
Association. The Executive shall be deemed to engage in a
business if he directly or indirectly, engages or invests in, owns,
manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner
connected with, or renders services or advice to, any business engaged in
banking, provided, however, that the Executive may invest in the
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if two conditions are met: (a) such
securities are listed on any national or regional securities (exchange or
have been registered under Section 12(g) of the Securities Exchange Act of
1934) and (b) the Executive does not beneficially own (as defined Rule 1
3d-3 promulgated under the Securities Exchange Act of 1934) in excess of
1% of the outstanding capital stock of such
enterprise.
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3.3
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Delivery of Documents
Upon Termination. The Executive shall deliver to the
Company or its designee at the termination of the Executive’s employment
all correspondence, memoranda, notes, records, drawings, sketches, plans,
customer lists, product compositions, and other documents and all copies
thereof, made, composed or received by the Executive, solely or jointly
with others, that are in the Executive’s possession, custody, or control
at termination and that are related in any manner to the past, present, or
anticipated business or any member of the
Company.
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3.4
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Remedies. The
Executive acknowledges that a remedy at law for any breach or attempted
breach of the Executive’s obligations under Sections 3.1, 3.2 and 3.3 may
be inadequate, agrees that the Company may be entitled to specific
performance and injunctive and other equitable remedies in case of any
such breach or attempted breach and further agrees to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief. The
Company shall have the right to offset against amounts to be paid to the
Executive pursuant to the terms hereof any amounts from time to time owing
by the Executive to the Company. The termination of the
Agreement shall not be deemed to be a waiver by the Company of any breach
by the Executive of this Agreement or any other obligation owed the
Company, and notwithstanding such a termination the Executive shall be
liable for all damages attributable to such a
breach.
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5
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3.5
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Dispute
Resolution. Subject to the Company’s right to
seek injunctive relief in court as provided in Section 3.4 of this
Agreement, any dispute, controversy or claim arising out of or in relation
to or connection to this Agreement, including without limitation any
dispute as to the construction, validity, interpretation, enforceability
or breach of this Agreement, shall be settled by arbitration administered
by the American Arbitration Association under its National Rules for the
Resolution of Employment Disputes and judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction
thereof.
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3.6
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Acknowledgement of
Parties. The Company and Executive understand and
acknowledge that this Agreement means that neither can pursue an action
against the other in a court of law regarding any employment dispute,
except for claims involving workers’ compensation benefits or unemployment
benefits, and except as set forth elsewhere in this Agreement, in the
event that either party notifies the other of its demand for arbitration
under this Agreement. The Company and Executive understand and
agree that this Section 3.5, concerning arbitration, shall not include any
controversies or claims related to any agreements or provisions (including
provisions in this Agreement) respecting confidentiality, proprietary
information, non-competition, non-solicitation, trade secrets, or breaches
of fiduciary obligations by the Executive, which shall not be subject to
arbitration.
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3.7
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Right to Consult
Counsel. Executive has been advised of the Executive’s
right to consult with an attorney prior to entering into this
Agreement.
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3.8
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Successors of the
Company. The
Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Company, by agreement in form and
substance satisfactory to the Executive, expressly 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 had taken
place. Failure of the Company to obtain such agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company
in the same amount and on the same terms as the Executive would be
entitled hereunder if the Executive terminated the Executive’s employment
for Good Reason, except that for purposes of implementing the foregoing,
the date on which any such succession becomes effective shall be deemed
the Date of Termination. As used in this Agreement, “Company”
as hereinbefore defined shall include any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided for
in this Section 3 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of
law.
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3.9
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Executive’s Heirs,
etc. The
Executive may not assign the Executive’s rights or delegate the
Executive’s duties or obligations hereunder without the written consent of
the Company. This Agreement shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would
still be payable to the Executive hereunder as if he had continued to
live, all such amounts, unless other provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive’s designee
or, if there be no such designee, to the Executive’s
estate.
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6
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3.10
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Notices. Any
notice or communication required or permitted under the terms of this
Agreement shall be in writing and shall be delivered personally, or sent
by registered or certified mail, return receipt requested, postage
prepaid, or sent by nationally recognized overnight carrier, postage
prepaid, or sent by facsimile transmission to the Company at the Company’s
principal office and facsimile number in Marietta, Ohio, or to
the Executive at the address and facsimile number, if any, appearing
on the books and records of the Company. Such notice or
communication shall be deemed given (a) when delivered if personally
delivered; (b) five mailing days after having been placed in the mail, if
delivered by registered or certified mail; (c) the business day after
having been placed with a nationally recognized overnight carrier, if
delivered by nationally recognized overnight carrier, and (d) the business
day after transmittal when transmitted with electronic confirmation of
receipt, if transmitted by facsimile. Any party may change the
address or facsimile number to which notices or communications are to be
sent to it by giving notice of such change in the manner herein provided
for giving notice. Until changed by notice, the following shall
be the address and facsimile number to which notices shall be
sent:
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If to the Company,
to: Xxxxxx X. Xxxxx,
General Counsel
PEOPLES BANCORP, INC.
000
Xxxxxx Xxxxxx
Xxxxxxxx,
Xxxx 00000
Fax: (000)
000-0000
If to the Executive, to:
Xxxxxx X.
Xxxxxx
0
Xxxxxxx Xxxxx
Xxxxxxxx,
Xxxx Xxxxxxxx 00000
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3.11
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Amendment
or Waiver. No
provisions of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by
the Executive and such officer as may be specifically designated by the
Board (which shall not include the Executive). No waiver by
either party hereto at any time of any breach by the other party hereto of
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party, which are not set forth expressly in this
Agreement. This Agreement
constitutes the entire agreement between the Company and the Executive as
to the subject matter hereof. No rights are granted to the
Executive by virtue of this Agreement other than those specifically set
forth herein.
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3.12
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Invalid
Provisions. Should
any portion of this Agreement be adjudged or held to be invalid,
unenforceable or void, such holding shall not have the effect of
invalidating or voiding the remainder of this Agreement and the parties
hereby agree that the portion so held invalid, unenforceable or void shall
if possible, be deemed amended or reduced in scope, or otherwise be
stricken from this Agreement to the extent required for the purposes of
validity and enforcement thereof. In this regard, the parties
hereto hereby agree that any judicial authority construing this Agreement
shall be empowered to sever any
portion of the geographic area or any prohibited business activity from
the coverage of this Agreement, and to reduce the duration of the
non-compete period and to apply the provisions of this Agreement to the
remaining portion of the geographic area or the remaining business
activities not to be severed by such judicial authority and to the
duration of the non-compete period as reduced by judicial
determination
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3.13
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Survival of the
Executive’s Obligations. The Executive’s obligations
under this Agreement shall survive regardless of whether the Executive’s
employment by the Company is terminated, voluntarily or involuntarily, by
the Company or the Executive, with or without
Cause.
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3.14
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Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one
and the same instrument.
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3.15
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Governing
Law. This Agreement and any action or proceeding related
to it shall be governed by and construed under the laws of the State of
Ohio.
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3.16
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Captions and
Gender. The use of Captions and Section headings herein
is for purposes of convenience only and shall not effect the
interpretation or substance of any provisions contained
herein. Similarly, the use of the masculine gender with respect
to pronouns in this Agreement is for purposes of convenience and includes
either sex who may be a signatory.
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IN WITNESS WHEREOF, the Executive and a
duly authorized representative of the Company have signed this
Agreement.
EXECUTIVE: COMPANY:
By:
/s/ XXXXXX X.
SLOANE________________ By:
/s/ XXXXX X. XXXXXXXXXXXX
__________
Xxxxxx X.
Xxxxxx
Xxxxx X. Xxxxxxxxxxxx
Title: Executive Vice President,
Operations
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