Document:

cc-ex1036_830.htm

Exhibit 10.36

SEPARATION AGREEMENT AND RELEASE

 

This Separation Agreement and Release ("Agreement") is made and entered into by and between and The Chemours Company ("Employer") and Paul Kirsch ("Employee"), in connection with Employee's separation of employment with Employer, effective October 31, 2019 (the "Separation Date").

 

 

In consideration of the mutual promises and releases contained herein and other good and valuable consideration as set forth herein, it is hereby agreed as follows:

 

	
 
	
1.
	
Termination and Severance.

 

	
 
	
(a)
	
Employee shall remain employed until 5:00pm EDT on the Separation Date, at which time Employee's employment with Employer and all affiliates will terminate. Until the Separation Date, Employee agrees to perform work as requested including knowledge transfer to the new President Flouroproducts.
	
 

 

	
 
	
(b)
	
Subject to Employee's compliance with the terms of this Agreement, including Employee's timely execution and return of this Agreement and Employee not revoking this Agreement after its execution, Employer will provide to Employee the payments and benefits described in Exhibit "A," which is attached hereto and made a part hereof.
	
 

 

	
 
	
(c)
	
Employee agrees that payments and benefits described in Exhibit "A" are adequate to support the release and other terms in this Agreement. For the avoidance of doubt, if Employee revokes or does not timely return the executed Agreement, Employee shall not be entitled to the payments and benefits set forth in Exhibit A, other than the payment of any accrued but unpaid salary and accrued but unused vacation.
	
 

 

	
 
	
2.
	
Unless Employee first obtains Employer's written consent, Employee will not disclose or use at any time any trade secret, technical or nontechnical confidential information of Employer of which he became or becomes aware either before or after the Separation Date, except where such disclosure is required by law.
	
 

 

	
 
	
3.
	
For a period of two years following the Separation Date, Employee will not hire, recruit, solicit or induce any employee of Employer who possesses confidential information of Employer to terminate his or her employment with Employer and/or to seek employment with his or her new or prospective employer.
	
 

 

	
 
	
4.
	
Unless Employee first obtains Employer's written consent, for a period of thirteen (13) month's following the Separation Date, Employee will not engage in activities which are entirely or in part the same as, or similar to, activities in which he engaged as President with Employer for any person, company or entity in connection with products or services (existing or planned) that are entirely or in part the same as, similar to, or competitive with, any products or services (existing or planned) of Employer or its affiliates at any time during the thirteen (13) months preceding the Separation Date.
	
 

 

 

 

	
 
	
5.
	
Employee agrees that he will not disparage Employer or any of the other Released Parties (as that terms is defined in Section 11(a)) or in any way communicate information to third parties for the purpose of damaging Employer's or any of the other Released Parties' business standing or reputation. Employer agrees that it will not disparage Employee or in any way communicate information to third parties for the purpose of damaging Employee's business standing or reputation.
	
 

 

	
 
	
6.
	
No Additional Benefits. Other than those payments and benefits described in this Agreement, Employee acknowledges and agrees that Employee is not entitled to any additional payments or benefits in connection with termination of Employee's employment with Employer, including without limitation, the accrual of any additional benefits.
	
 

 

	
 
	
7.
	
Tax Liability. Employee, on behalf of himself and his heirs, agrees that, in the event he incurs any tax liability resulting from any payments described herein, he shall be solely responsible for such taxes and shall indemnify and hold Employer harmless from such taxes, interest and penalties.
	
 

 

	
 
	
8.
	
Duty of Cooperation. Employee agrees to cooperate with Employer and to provide all information and sign any corporate records and instruments that Employer may reasonably request with respect to any matter involving Employee's employment relationship with Employer, the work Employee has performed, or present or former Employees of Employer, including but not limited to any litigation with respect to such matters.
	
 

 

	
 
	
9.
	
Acknowledgement No Claim for Wages or Compensation or FMLA Leave. Except for any payment referenced in Section 1 above, Employee acknowledges that Employee has been paid in full all compensation and benefits due to Employee as of the date of Employee's signature on this Agreement including, but not limited to, having received all wages, overtime, meal and rest break pay, salary, expense reimbursement, penalty, bonus or other compensation of any kind which Employee is due or to which Employee believes Employee may be entitled. To the extent permitted by law, Employee waives any claim for wages, salary, reimbursement, penalty, bonus or other compensation earned or accrued through the date Employee signs this Agreement. Employee further warrants that, if applicable, Employee has exercised without interference all leave rights available to Employee under the Family and Medical Leave Act.
	
 

 

	
 
	
10.
	
Age Discrimination Release Notification. This Agreement includes a release of all charges and claims under the Age Discrimination in Employment Act ("ADEA'') and, therefore, pursuant to 29 U.S.C. § 626(f), Employee acknowledges that:
	
 

 

	
 
	
(a)
	
Employee is releasing claims Employee may have under the ADEA;

 

	
 
	
(b)
	
Employee has read and fully understands the terms of this Agreement;

 

	
 
	
(c)
	
Employee has agreed to execute this Agreement knowingly and voluntarily;

 

	
 
	
(d)
	
As with any legal document, Employee is advised to consult with an attorney of Employee's own choosing and to discuss all aspects of this Agreement with an attorney of Employee's own choosing before signing this Agreement;
	
 

Page 2 of 9

 
 

 

	
 
	
(e)
	
Employee is releasing only those claims arising prior to the date of the effectiveness of this release;
	
 

 

	
 
	
(f)
	
Employee may sign at any time, but acknowledges that Employee has twenty­ one (21) days in which to consider this release of claims under the ADEA, which Employee acknowledges to be a reasonable and sufficient period of time for review, deliberation, and negotiation;
	
 

 

	
 
	
(g)
	
Employee has full knowledge of the implications of such settlement and release of claims; and
	
 

 

	
 
	
(h)
	
Employee may revoke Employee's release of claims under the ADEA for a period of seven (7) days from the date of Employee's execution of the Agreement by delivering a written notice of revocation to Employer, to David C. Shelton, Senior Vice President and General Counsel, 1007 Market Street, Wilmington DE 19898 or [email redacted].
	
 

 

	
 
	
(i)
	
No payment will be made until the revocation period has passed.

 

	
 
	
11.
	
Unconditional General Release.

 

	
 
	
(a)
	
Except as specifically provided elsewhere in this Agreement, in consideration of the benefits to Employee in this Agreement, the adequacy of which is hereby acknowledged, and as a material inducement to Employee to enter into this Agreement, Employee agrees for Employee's heirs and personal or legal representatives, that by Employee's signature, Employee is forever giving up and waiving any claims, whether known or unknown, Employee ever has had or may have against Employer, its affiliates, and their respective assigns, successors, employees, directors, officers, agents, advisors and representatives (the "Released Parties"), for any personal or monetary relief that is based, in whole or in part, on conduct that occurred by Employer on or before the date Employee signs this Agreement. Employee represents and warrants that Employee has no suits, claims, charges, complaints except as specifically provided elsewhere in this Agreement, in consideration of the benefits to Employee in this Agreement, the adequacy of which is hereby acknowledged, and as a material inducement to Employee to enter into this Agreement, Employee agrees for Employee's heirs and personal or legal representatives, that by Employee's signature, Employee is forever giving up and waiving any claims, whether known or unknown, Employee ever has had or may have against the Released Parties, for any personal or monetary relief that is based, in whole or in part, on conduct that occurred on or before the date Employee signs this Agreement.
	
 

 

	
 
	
(b)
	
By waiving such claims Employee understands that Employee is releasing the Released Parties from any liability or obligation for any expense, damage, or loss Employee did or might claim based on, among other things, the following: (a) Employee's employment with Employer and/or any affiliate, or the termination of that employment; (b) any Employer or affiliate policy, practice, contract, agreement, promise, publication, or other communication; (c) any tort
	
 

 

 

Page 3 of 9

 
 

 

or personal injury; (d) any policies, practices, laws or agreements governing the payment of wages, commissions or other compensation; (e) any laws governing employment discrimination, including, but not limited to, Title VII of the Civil Rights Act of 1964; Sections 1981 through 1988 of Title 42 of the United States Code; The Employee Retirement Income Security Act of 1974 ("ERISA") (except for any vested benefits under any tax qualified benefit plan); The Immigration Reform and Control Act; The Americans with Disabilities Act of 1990; The Age Discrimination in Employment Act of 1967 ("ADEA''); The Worker Adjustment and Retraining Notification Act; The Fair Credit Reporting Act; The Family and Medical Leave Act; The Genetic Information Nondiscrimination Act; The Equal Pay Act; The Sarbanes-Oxley Act retaliation provisions; The False Claims Act retaliation provisions; The Dodd-Frank Wall Street Reform and Consumer Protection Act retaliation provisions; The Older Worker Benefit Protection Act; and any similar federal, state, or local law or ordinance; (f) any claim of retaliation based on any federal, state, or local law or ordinance; (g) any laws or agreements that provide for punitive, exemplary or statutory damages; (h) any implied contract, covenant of good faith and fair dealing, or violation of public policy or claims that Employee was fraudulently induced to enter into this Agreement; interference with business opportunity or contracts, negligence, misrepresentation, fraud, detrimental reliance, personal injury, assault, battery, defamation, false light, invasion of privacy, infliction of emotional distress, retaliation, constructive discharge, or wrongful discharge; (i) any other federal, state or local law or ordinance relating to employment or benefits associated with employment; and (j) any laws or agreements that provide for payment of attorneys' fees, costs or expenses.

 

	
 
	
12.
	
Claims Not Waived and Cooperation with Governmental Entities. This Agreement does not waive any claim for breach of this Agreement or claims that Employee may have that by law cannot be waived or released. Employee is not waiving any rights he may have to: (a) his own vested or accrued employee benefits under Employer's health, welfare, or retirement plans as of the Separation Date; (b) benefits and/or the right to seek benefits under applicable workers' compensation and/or unemployment compensation statutes; (c) any bounty that may be recoverable as a result of participating in the Securities and Exchange Commission's whistleblower program, or any other bounty program for which recovery cannot be waived as a matter of law; (d) pursue claims which by law cannot be waived by signing this Agreement; (e) enforce this Agreement; and/or (f) challenge the validity of this Agreement. Further, notwithstanding any other provision of this Agreement (including the non­ disparagement provision and confidentiality provision), Employee may file a charge, or cooperate with any government agency (including but not limited to the Equal Employment Opportunity Commission ("EEOC")) for claims not covered in this release, although this Agreement does prohibit Employee from obtaining any personal or monetary relief for Employee based on such a charge or based on Employee's providing information to or cooperating with the EEOC or any other governmental agency or demands of any kind whatsoever currently pending against Employer with any local, state, or federal court or any governmental, administrative, investigative, civil rights or other agency or board.
	
 

 

 

 

 

Page 4 of 9

 
 

	
 
	
13.
	
Non-Admission. Employee understands and agrees that Employer expressly denies any liability in connection with Employee's separation from employment or in connection with any dispute Employee may have with or about Employer. Employee further understands and agrees that Employer expressly denies any responsibility for any injury or loss Employee has or may allege.
	
 

 

	
 
	
14.
	
Section 409A. It is intended that any amounts payable under this Agreement will either be exempt from or will comply with Section 409A of the Internal Revenue Code of 1986, as amended, and all regulations, guidance and other interpretive authority issued thereunder ("Section 409A") so as not to subject you to payment of any additional tax penalty or interest imposed under Section 409A, and this Agreement will be interpreted on a basis consistent with such intent. Any provision that would cause this Agreement  or any payment hereof to fail to satisfy Section 409A shall have no force or effect until amended in the least restrictive manner necessary to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A. Notwithstanding anything to the contrary in this Agreement, if (and only if) necessary to comply with Section 409A, (a) no amount payable under this Agreement that constitutes nonqualified deferred compensation under Section 409A payable due to Employee's termination of employment will be payable until Employee has a "separation from service" within the meaning of Section 409A, and (b) amounts payable under this Agreement due to Employee's termination of employment that constitute nonqualified deferred compensation under Section 409A that are otherwise payable during the six (6) month period immediately following Employee's separation from service shall instead  be paid on the first business day after the date that is six (6) months following Employee's separation from service (or, if earlier, Employee's date of death). For purposes of the application of Section 409A, each payment will be deemed a separate payment.  Employer makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. Employee understands and agrees that Employee shall be solely responsible for the payment of any taxes, penalties, interest or other expenses incurred by Employee on account of noncompliance with Section 409A, and Employer, Employer's affiliates, and their respective employees, officers, directors, agents, advisors and representatives will not have any liability to Employee with respect to any taxes, penalties,  interest  or other costs or expenses Employee or any related party may incur with respect to or as a result of Section 409A or for damages for failing to comply with Section 409A.
	
 

 

	
 
	
15.
	
Severability. If any portion or clause of this Agreement is void or deemed unenforceable for any reason, the unenforceable portion or clause shall be deemed severed from the remaining portions of this Agreement, which shall otherwise remain in full force.
	
 

 

	
 
	
16.
	
No Assignment of Claims Released. Employee represents that Employee has not assigned, given or sold any portion of any claim represented to be released in this Agreement to anyone else.
	
 

 

	
 
	
17.
	
Assignment; Successors. This Agreement shall inure to the benefit of and be enforceable by Employer's successors and assigns. Employee's rights and obligations under this Agreement are personal and shall not be subject in any manner to
	
 

 

Page 5 of 9

 
 

 

anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, levy, or charge.

 

	
 
	
18.
	
Governing Law and Venue. This Agreement shall be interpreted in accordance with the laws of the State of Delaware. Any dispute or controversy related to, or arising from, this Agreement shall be brought exclusively in the state or federal court located in New Castle County, Delaware. Employee submits to personal jurisdiction in these courts.
	
 

 

	
 
	
19.
	
DTSA Notification. Under the federal Defend Trade Secrets Act of 2016, Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; (b) is made to Employee's attorney in relation to a lawsuit for retaliation against Employee for reporting a suspected violation of law; or (c) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
	
 

 

	
 
	
20.
	
Effect of Agreement. Each of the Parties to this Agreement represents and warrants to the other that, except for the obligations contained in this Agreement and the Employee's Employment Agreement (which remains in effect), and the Certificate of Compliance, there are no other obligations of any kind between the parties. Employee agrees that in executing this Agreement Employee does not rely upon and has not relied upon any representation or statement not set forth in this Agreement with regard to the subject matter, basis or effect of this Agreement. Employee represents that Employee has carefully read the Agreement, that Employee has been fully and fairly advised as to its terms and that Employee executes this Agreement as Employee's own free act and deed.
	
 

 

Page 6 of 9

 
 

By signing and dating in the space provided below the parties are acknowledging their agreement to the foregoing:

 

 

 

 

 

 

/s/ Paul Kirsch

WitnessEMPLOYEE’S SIGNATURE

 

Date: 9/27/19

 

 

 

and the Chemours Company

 

 

Date: 10/3/19By: /s/ Mark Vergnano

Mark Vergnano

Chief Executive Officer, Chemours

 

 

 

Date: 9/27/19By: /s/ David Shelton

David Shelton

Senior Vice-President & General Counsel, Chemours

 

 

 

 

 

 

 

Page 7 of 9

 
 

 

 

 

EXHIBIT "A" PAUL KIRSCH

		
	
Separation Date:
	
October 31, 2019

	
Separation Benefit:
	
Under the Chemours Severance Pay Plan, a lump sum payment in the amount of Forty-Two Thousand Three Hundred Eight Dollars ($42,308), payable as a lump sum as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date.

	
Notice Period
	
Under the Chemours Severance Pay Plan, a lump sum payment equivalent to two weeks’  paid  notice  of  termination, in  the  amount  of Twenty-One Thousand One

Hundred Fifty-Four Dollars ($21,154), payable as a lump sum as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date.

	
2019 Annual

Incentive Program
	
A pro-rated 2019 Annual Incentive Plan award in the amount of Three Hundred Forty-Three Thousand Seven Hundred Fifty Dollars ($343,750), payable as a lump sum as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date. This amount is equal to the Employee's target Annual Incentive Award pro-rated by the number of days worked during the performance period as of the Separation Date.

	
COBRA Payment
	
A lump sum payment in the amount of Five Thousand One Hundred Seventy-Eight Dollars ($5,178), which is equal to 3 months of Consolidated Omnibus Reconciliation Act ("COBRA") premiums for medical and dental coverage, payable as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date. The lump sum payment was determined using 2019 COBRA rates based on the Employee's enrolled coverage. Employee is responsible for electing and paying for all COBRA coverage,

	
Agreement on Non-Competition, Non-Solicitation and Non- Disparagement
	
Under the terms of the Separation Agreement and Release, a lump sum payment in the amount of Five Hundred and Fifty-Nine Thousand Eight Hundred Thirty-Three Dollars ($595,833), payable as a lump sum as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 1 of 2

Initials__

 

 

 

 

 

 

		
	
Long-Term Incentives:
	
In accordance with the terms of applicable plan(s) and award agreements for separation related to lack of work, equity awards granted on June 1, 2016 will be treated as follows:

 

Stock Options:    Stock Options, to the extent vested, will be exercisable through the date that is one year after the Separation Date, at which time the Stock Options will expire.

 

In accordance with the terms of applicable plan(s) and award agreements for separation related to lack of work, equity awards granted on March 1, 2017, March 1, 2018 and March 1, 2019 will be treated as follows:

 

Stock Options:    Stock Options, to the extent vested, will be exercisable through the date that is 90 days after the Separation Date, at which time the Stock Options will expire. Any unvested Options as of the Separation Date will be forfeited on the Separation Date.

 

PSUs:All Performance Share Units are subject to the Restricted Period on the Separation Date and will be forfeited.

	
Earned but Unpaid Salary and Accrued but Unused Vacation:
	
All earned but unpaid salary and outstanding unused accrued but unused vacation in accordance with Employer's applicable vacation policy shall be payable as a lump sum as soon as administratively practical (and in all events within thirty (30) days) following the Separation Date.

	
Outplacement:
	
Executive outplacement and counseling services will be provided according to Employer's US policy. Estimated cost is $2,500, which is paid directly to the Company s outplacement partner.  The employee may elect to accept cash in lieu of

the service provided.

	
Taxes:
	
All amounts described in this Exhibit A shall be subject to applicable federal, state, or local withholding, taxes, or other deductions or withholdings required by law or applicable benefit plans, if any, and shall be payable in accordance with Employer's ordinary payroll practices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page 2 of 2

Initials__

 

 

 

 

 

EXHIBIT "B"

 

THE CHEMOURS COMPANY CERTIFICATE OF COMPLIANCE

 

This to certify that in connection with the termination of my employment with The Chemours Company, I do not have in my possession, nor have I have failed to return, any records, documents, laboratory notebooks, data, specifications, materials, drawings, blueprints, reproductions, sketches, notes, reports, proposals, customer lists, computer software (including source or object code listings therefor), documentation accompanying computer software, flow charts, data structures, data files, algorithms, programs structures and logic, prototypes and like items or copies of the foregoing or any other documents, materials or written or computerized information belonging to The Chemours Company or to any of its subsidiaries, joint ventures, or affiliated companies, or to their clients customers, or licensees.

 

I further state that I have been advised that I am obligated to preserve in confidence and not use for my own benefit or for the benefit of any third party (including any future employer or client) any and all confidential and proprietary company information that I learned about during my employment with the company, including any such information relating to trade secrets; research initiatives and projects; manufacturing and research  processes and methods; experimental and test results; computer software and code; data or information relating to company's products or services; mailing lists; cost and pricing information; lists of customers or prospective customers; marketing or strategy information; competitive intelligence; employee compensation information; and including any such confidential or proprietary information pertaining to any of company's subsidiaries, joint ventures, suppliers, customers, consultants or licensees. l understand that this Certificate of Compliance is not to be construed as a substitute for my Employment Agreement and that to the extent that I have obligations under such an agreement, I hereby state and affirm that I intend to comply with those obligations.

 

We also take this opportunity to remind you that under the Employee Agreement which you signed at the commencement of your employment with the company, you are obligated to preserve in confidence and not divulge or use for your own benefit or the benefit of any third party (including any future employer or client) any of the following: all confidential and proprietary information, knowledge, data, documents or other information relating to company's products, systems, manufacturing facilities, technology, research programs, know-how, designs, data, customer lists, shareholders or any other proprietary information pertaining to any business of The Chemours Company or any of its subsidiaries, parents, or affiliated companies, or information pertaining to any of company's suppliers, customers, consultants or licensees that you have learned during your term of employment.

 

 

/s/ Paul Kirsch

EMPLOYEE’S SIGNATURE

 

 

Paul Kirsch

PRINTED NAME of EMPLOYEE

 

 

10/2/19

DATE

 

 

 

 

 

Page 9 of 9Exhibit

Description of Securities 
Registered Under Section 12 of the 
Securities Exchange Act of 1934

The following description of the common stock, without par value (“Common Stock”), of The Timken Company, an Ohio corporation (the “Company”), is a summary and is qualified in its entirety by provisions of Ohio law and by reference to the terms and provisions of the Company’s articles of incorporation and regulations, which are incorporated herein by reference and attached as exhibits to the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The authorized capital stock of the Company consists of 200,000,000 shares of Common Stock, 10,000,000 shares of Class I Serial Preferred Stock, without par value (“Class I Serial Preferred Stock”), and 10,000,000 shares of Class II Serial Preferred Stock, without par value (“Class II Serial Preferred Stock”).

Common stock

Subject to the restriction described below, the holders of Common Stock are entitled to receive dividends from funds legally available when, as and if declared by the Company’s board of directors (the “Board”) and, upon the Company’s liquidation, dissolution or winding up, are entitled to receive pro rata the Company’s net assets after satisfaction in full of the prior rights of the Company’s creditors and holders of any preferred stock.

Except as otherwise provided by law or stated below, the holders of Common Stock are entitled to one vote for each share held on all matters as to which stockholders are entitled to vote, voting jointly as a single class with the holders of Class II Serial Preferred Stock.

No holder of any shares of Common Stock has any right to cumulate voting power in any election of directors.

The holders of Common Stock do not have any preferential, subscriptive or preemptive rights to subscribe to or purchase any new or additional issue of shares of any class of capital stock or of securities convertible into the Company’s capital stock. Common Stock is not subject to redemption and does not have any conversion rights. All of the issued and outstanding shares of Common Stock are fully paid and non-assessable. 

Preferred stock

The Company’s preferred stock is divided into two classes: Class I Serial Preferred Stock and Class II Serial Preferred Stock. Holders of Class I Serial Preferred Stock have preference rights superior to both the holders of Class II Serial Preferred Stock and the holders of Common Stock. Holders of Class II Serial Preferred Stock have preference rights superior to the holders of Common Stock. The following description of the Company’s preferred stock applies to both classes, unless otherwise specified.

The Company’s preferred stock may be issued from time to time in one or more series with such distinctive serial designations as are fixed by the Board and with such rights, preferences and limitations as are fixed by the Board or required by law. Satisfaction of dividend preferences of any outstanding preferred stock would reduce the amount of funds available for the payment of dividends on Common Stock. In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, 

holders of preferred stock would be entitled to receive a preferential payment before any payment is made to holders of shares of Common Stock. The Company may not purchase, retire or otherwise acquire any Common Stock unless all dividends and sinking fund installments with respect to any outstanding preferred stock due and payable have been paid. The Class I Serial Preferred Stock offers limited voting rights.

The holders of Class I Serial Preferred Stock and Class II Serial Preferred Stock do not have cumulative voting rights or any preferential, subscriptive or preemptive rights to subscribe to or purchase any new or additional issue of shares of any class of capital stock or securities convertible into the Company’s capital stock.

Anti-takeover provisions in the Company’s articles of incorporation and regulations

The Company’s regulations provide that the Board may fix the number of directors within a range of nine to eighteen directors, to the extent consistent with applicable law.

The provisions of the Company’s regulations may be amended, to the extent permitted by Chapter 1701 of the Ohio Revised Code, by the Board. In addition, the Company’s articles of incorporation and regulations may be amended by the affirmative vote of the holders of record entitled to exercise a majority of the voting power on such proposal, if such proposal has been recommended by a vote of the Board then in office as being in the best interests of the Company and its shareholders.

Although these provision are intended to encourage potential acquiring persons to negotiate with the Board and to provide for continuity and stability of management, these provision may have an anti-takeover effect. By making it more time consuming for a substantial shareholder to gain control of the Board, these provisions may render more difficult, and may discourage, a proxy contest or the assumption of control of the Company or the removal of the incumbent directors.

Certain anti-takeover provisions of Ohio law

Section 1701.831 of the Ohio Revised Code requires the prior authorization of the shareholders of an “issuing public corporation” in order for any person to acquire, either directly or indirectly, shares of that corporation that would entitle the acquiring person to exercise or direct the exercise of 20% or more of the voting power of that corporation in the election of directors or to exceed specified other percentages of voting power. In the event an acquiring person proposes to make such an acquisition, the person is required to deliver to the corporation a statement disclosing, among other things, the number of shares owned, directly or indirectly, by the person, the range of voting power that may result from the proposed acquisition and the identity of the acquiring person. Within ten days after receipt of this statement, the corporation must call a special meeting of shareholders to vote on the proposed acquisition. The acquiring person may complete the proposed acquisition only if the acquisition is approved by the affirmative vote of the holders of at least a majority of the voting power of all shares entitled to vote in the election of directors represented at the meeting excluding the voting power of all “interested shares.” Interested shares include any shares held by the acquiring person and those held by officers and directors of the corporation. Section 1701.831 does not apply to a corporation if its articles of incorporation or code of regulations state that the statute does not apply to that corporation. The Company is an “issuing public corporation” for purposes of the statute. The Company’s articles of incorporation and regulations do not contain a provision opting out of this statute.

Chapter 1704 of the Ohio Revised Code prohibits certain corporations from engaging in a “chapter 1704 transaction” with an “interested shareholder” for a period of three years after the date of the transaction in which the person became an interested shareholder, unless, among other things:
		
	•
	the articles of incorporation expressly provide that the corporation is not subject to the statute (the Company has not made this election); or

		
	•
	the board of directors of the corporation approves the chapter 1704 transaction or the acquisition of the shares before the date the shares were acquired.

After the three-year moratorium period, the corporation may not consummate a chapter 1704 transaction unless, among other things, it is approved by the affirmative vote of the holders of at least two-thirds of the voting power in the election of directors and the holders of a majority of the voting shares, excluding all shares beneficially owned by an interested shareholder or an affiliate or associate of an interested shareholder, or the shareholders receive certain minimum consideration for their shares. A chapter 1704 transaction includes certain mergers, sales of assets, consolidations, combinations and majority-share acquisitions involving an interested shareholder. An interested shareholder is defined to include, with limited exceptions, any person who, together with affiliates and associates, is the beneficial owner of a sufficient number of shares of the corporation to entitle the person, directly or indirectly, alone or with others, to exercise or direct the exercise of 10% or more of the voting power in the election of directors after taking into account all of the person’s beneficially owned shares that are not then outstanding. The application of Chapter 1704 and Section 1701.831 may have the effect of delaying, deferring or preventing a change of control involving the Company.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}]]