exhibit10-6.htm


    Exhibit
10.6

    


    PEOPLES
BANCORP INC.

    138
Putnam Street, Post Office Box 738

    Marietta,
Ohio 45750-0738

    (740)
373-3155

    www.peoplesbancorp.com

    


    Joseph S.
Yazombek

    Executive
Vice President, Chief Lending Officer

    Peoples
Bancorp Inc.

    138
Putnam Street

    Post
Office Box 738

    Marietta,
Ohio 45750-0738

    


    Dear
Joe:

    


    Peoples
Bancorp Inc. (the “Company”) is a participant in the Capital Purchase Program
(the “CPP”).  The CPP is a component program of the Troubled Assets
Relief Program (the “TARP”) established by the United States Department of the
Treasury (the “Treasury”) pursuant to the Emergency Economic Stabilization Act
of 2008 (the “EESA”).

    


    Background

    


    The EESA
required that the Company establish and comply with certain standards for
executive compensation applicable to its Senior Executive
Officers.  As a Senior Executive Officer, you and the Company entered
into a letter agreement dated January 23, 2009 (the “Prior Agreement”) in order
to comply with these EESA standards.

    


    The
American Recovery and Reinvestment Act of 2009 (the “ARRA”) amended and replaced
the executive compensation provisions of the EESA in their entirety and directed
the Secretary of the Treasury to establish executive compensation and corporate
governance standards applicable to TARP Recipients, including the Company, and
makes these standards applicable to both Senior Executive Officers and certain
Most Highly-Compensated Employees.  On June 15, 2009, the Secretary of
the Treasury established these standards by promulgating an Interim Final Rule
under 31 C.F.R. Part 30 (the “Interim Final Rule”).  The EESA
executive compensation standards, as amended and replaced by the ARRA, and the
Interim Final Rule are collectively referred to as the “TARP Compensation
Standards”.

    


    Description
of TARP Compensation Standards

    


    Among
other requirements, the executive compensation and corporate governance
standards comprising the TARP Compensation Standards:

    


    
      	
              (1)

            	
              Require
      the Company to comply with the requirements of Internal Revenue Code
      Section 162(m)(5); and

            


    

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    
      	
              (2)

            	
              Prohibit
      the Company from making any Golden Parachute Payment to its Senior
      Executive Officers or any of the five next Most Highly-Compensated
      Employees; and

            


    

    


    
      	
              (3)

            	
              Prohibit
      the Company from paying or accruing any Bonus Payment to the five Most
      Highly-Compensated Employees; and

            


    

    


    
      	
              (4)

            	
              Require
      the Company to “clawback” any Bonus Payment to its Senior Executive
      Officers or any of the 20 next Most Highly-Compensated Employees if
      payment was based on materially inaccurate financial statements or
      performance metric criteria; and

            


    

    


    
      	
              (5)

            	
              Prohibit
      the Company from maintaining any Employee Compensation Plan that would
      encourage the manipulation of reported earnings to enhance the
      compensation of any employee; and

            


    

    


    
      	
              (6)

            	
              Prohibit
      the Company from maintaining any SEO Compensation Plan that encourages
      Senior Executive Officers to take unnecessary and excessive risks that
      threaten the value of the Company;
and

            


    

    


    
      	
              (7)

            	
              Prohibit
      the Company from providing Gross-Ups to its Senior Executive Officers or
      the 20 next Most Highly-Compensated Employees;
  and

            


    

    


    
      	
              (8)

            	
              Subjects
      any Bonus Payment paid prior to February 17, 2009 by the Company to its
      Senior Executive Officers or the 20 next Most Highly-Compensated Employees
      to recovery by the Treasury.

            


    

    


    Agreement

    


    As a
Senior Executive Officer, this letter evidences your and the Company’s intent to
comply with the TARP Compensation Standards.  In consideration of the
benefits that the Company received through its participation in the CPP, by
signing this letter, you agree to consent to such modifications or amendments to
the Company’s stock, compensation, bonus, incentive and other benefit plans,
arrangements and agreements (including golden parachute, severance and
employment agreements) in which you are a participant or to which you are a
party (collectively, the “Benefit Plans”) as are necessary to give effect to the
TARP Compensation Standards described above and, to the extent that specific
revisions to such Benefit Plans or reimbursement of prior payments to the
Treasury are required to give effect to the TARP Compensation Standards, you
agree to negotiate promptly and in good faith with respect to such revisions or
for such reimbursement.

    


    If during
any fiscal year of the Company that is a TARP Period, you are among the
Company’s five Most Highly-Compensated Employees, the aggregate amount to which
you are entitled under the Company’s annual and/or long-term incentive plans or,
if less, one-third of your Annual Compensation, for such fiscal year will be
granted in the form of Long-Term Restricted Stock granted pursuant to the
Company’s Amended and Restated 2006 Equity Plan (the “Plan”), subject to the
terms of the Plan.   Any Long-Term Restricted Stock granted in
accordance with the terms of this paragraph will be subject to the applicable
TARP Compensation Standards, valued for purposes of this paragraph in accordance
with the TARP Compensation Standards and subject to such other terms and
conditions as the Company may impose as set forth in the associated award
agreement that are not inconsistent with the TARP Compensation
Standards.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    Nothing
in this letter is intended to be construed as prohibiting the Company from
making any Bonus Payment to the extent not inconsistent with the TARP
Compensation Standards.

    


    This
letter supersedes and replaces the Prior Agreement between you and the
Company.

    


    This
letter shall remain in effect during the TARP Period and for so long as you
remain a Senior Executive Officer or a Most Highly-Compensated Employee subject
to the TARP Compensation Standards.

    


    Rules
of Interpretation

    


    For
purposes of this letter:

    


    
      	
              (1)

            	
              The
      TARP Compensation Standards are intended to, and will be interpreted,
      administered and construed to, comply with the requirements of the ARRA,
      the Interim Final Rule and any other guidance promulgated by the Treasury
      (and, to the maximum extent consistent with the foregoing, to permit
      operation of the Benefit Plans in accordance with their terms before
      giving effect to this letter); and

            


    

    


    
      	
               (2)

            	
              Capitalized
      terms not defined herein shall have the meanings ascribed to them in the
      Interim Final Rule and shall be interpreted and construed consistent with
      such Interim Final Rule; and

            


    

    


    
      	
              (3)

            	
              Any
      reference to the Company shall mean the Company and any entity that, along
      with the Company, would be considered to be the TARP Recipient determined
      pursuant to 31 C.F.R. §30.2 where appropriate – including, in particular,
      Peoples Bank, National Association, Peoples Investment Company, Peoples
      Capital Corporation, Peoples Insurance Agency, Inc. and PBNA, L.L.C.;
      and

            


    

    


    
      	
              (4)

            	
              The
      determination of whether you are or remain a Senior Executive Officer or a
      Most Highly-Compensated Employee shall be made pursuant to 31 C.F.R.
      §30.3.

            


    

    


    Miscellaneous

    


    To the
extent not subject to federal law, this letter will be governed by and construed
in accordance with the laws of Ohio.  This letter may be executed in
two or more counterparts, each of which will be deemed to be an original and all
of which will be deemed to be the same agreement. A signature transmitted by
facsimile will be deemed an original signature.

    


    The Board
of Directors of the Company appreciates the concessions you are making and looks
forward to your continued leadership during these financially turbulent
times.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Yours
sincerely,

    


    PEOPLES
BANCORP
INC.                                                                                                                                        PEOPLES
BANK,

                                                                          
NATIONAL ASSOCIATION

    


    By: /s/
CAROL A.
SCHNEEBERGER                                                                                                                      
By: /s/ CAROL A.
SCHNEEBERGER        

     

    Title:  Executive
Vice President,
Operations                                                                                                         
 Title:  Executive Vice President, Operations

    


    Date:  July
22,
2009                                                                                                                                                    
Date:  July 22, 2009

    


    *****

    Intending
to be legally bound, I agree with and accept the foregoing terms on the date set
forth below.

     

    /s/ JOSEPH S.
YAZOMBEK        

    Joseph S.
Yazombek

     

    Date:   July 22,
2009

     

     

    

      
        
           


        

        
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