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EXHIBIT 10.9
LANCASTER COLONY CORPORATION
EXECUTIVE EMPLOYEE DEFERRED COMPENSATION PLAN
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ARTICLE I
ESTABLISHMENT AND PURPOSE
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1.1 ESTABLISHMENT. Lancaster Colony Corporation, an Ohio corporation
("Lancaster Colony") hereby establishes effective as of January 1, 2000, a
deferred compensation plan for certain of its executive and its Subsidiaries'
employees, which shall be known as the Lancaster Colony Corporation Executive
Employee Deferred Compensation Plan (the "Plan").
1.2 PURPOSE. The purpose of the Plan is to provide certain executive
employees of Lancaster Colony with the opportunity to voluntarily defer a
portion of their annual compensation they otherwise would receive for services
performed for Lancaster Colony or its Subsidiaries. The Plan is intended to be a
"top-hat" plan (i.e., an unfunded deferred compensation plan maintained for a
select group of management or highly compensated employees) under Sections
201(2), 301(a)(3), and 401(a)(1) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
ARTICLE II
DEFINITIONS
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Whenever the following initially capitalized words and phrases are used
in this Plan, they shall have the meanings specified below unless the context
clearly indicates otherwise:
2.1 "BENEFICIARY" shall mean such person or legal entity as may be
designated by a Participant under Section 7.1 to receive benefits hereunder
after such Participant's death.
2.2 "BOARD" and "BOARD OF DIRECTORS" shall mean the Board of Directors
of Lancaster Colony, as constituted from time to time.
2.3 "CHANGE IN CONTROL" shall mean a change in the control of Lancaster
Colony of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended ("Exchange Act"); provided that, without limitation,
such a Change in Control shall be deemed to have occurred if and at such times
as (i) any "person" (as such term is used in Sections 13(d)(3) and 14(d)(2) of
the Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of Lancaster Colony representing twenty-five percent (25%) or more of
the combined voting power of Lancaster Colony's then outstanding voting
securities; or (ii) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of Lancaster
Colony and any new director (other than a director designated by a person who
has entered into an agreement or arrangement with Lancaster Colony to effect a
transaction described in clause (i) or
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(iii) of this sentence) whose appointment, election, or nomination for election
by Lancaster Colony's shareholders, was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose appointment, election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors of Lancaster Colony; or (iii) there is
consummated a merger or consolidation of Lancaster Colony or a subsidiary
thereof with or into any other corporation, other than a merger or consolidation
which would result in the holders of the voting securities of Lancaster Colony
outstanding immediately prior thereto holding securities which represent
immediately after such merger or consolidation more than 50% of the combined
voting power of the voting securities of either Lancaster Colony or the other
entity which survives such merger or consolidation or the parent of the entity
which survives such merger or consolidation; or (iv) there is consummated the
sale or disposition by Lancaster Colony of all or substantially all Lancaster
Colony's assets.
2.4 "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.5 "COMMITTEE" shall mean a committee of one or more individuals
designated by the Board to administer the Plan pursuant to the terms hereof.
2.6 "COMPENSATION" shall mean the Employee's total W-2 compensation for
a calendar year.
2.7 "DEFERRED COMPENSATION" shall mean that portion, not in excess of
Fifty Thousand Dollars ($50,000), of the Participant's annual Compensation which
the Participant voluntarily and irrevocably elects to defer pursuant to Section
4.1 of this Plan in accordance with a Deferred Compensation Agreement.
2.8 "DEFERRED COMPENSATION ACCOUNT" shall mean the recordkeeping
account established by Lancaster Colony for each Participant to which a
Participant's Deferred Compensation is credited and from which distributions to
the Participant or to his or her Beneficiary are debited.
2.9 "DEFERRED COMPENSATION AGREEMENT" shall mean a document (or
documents) as provided from time to time by Lancaster Colony or the Committee
pursuant to which an Executive Employee voluntarily enrolls as a Participant and
irrevocably elects to defer a portion of his or her annual Compensation pursuant
to Section 4.1 of this Plan.
2.10 "DISABILITY" shall mean a physical or mental impairment which
results in the Participant's inability to perform the tasks of his or her
position with Lancaster Colony or a Subsidiary and which is expected to last for
at least twelve (12) months, as determined by medical authority selected by
Lancaster Colony.
2.11 "EXECUTIVE EMPLOYEE" shall mean an individual who is employed by
Lancaster Colony or its Subsidiaries, and who is a key senior management
employee.
2.12 "PARTICIPANT" shall mean an Executive Employee (i) who is selected
by the Committee to participate in the Plan, as evidenced by the Committee's
execution of a Deferred Compensation Agreement, (ii) who elects to participate
in the Plan and defer a portion of his or her
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Compensation pursuant to a signed Deferred Compensation Agreement, and/or (iii)
who has amounts credited under a Deferred Compensation Account.
2.13 "PLAN YEAR" shall mean the twelve consecutive month calendar year
beginning each January 1, and ending each December 31. The first Plan Year of
the Plan shall commence January 1, 2000.
2.14 "RETIREMENT" shall mean termination of employment with Lancaster
Colony on or after becoming age sixty-five (65).
2.15 "SUBSIDIARY" shall mean any entity in which Lancaster Colony has
more than fifty percent (50%) ownership interest that adopts this Plan pursuant
to the requirements of Section 11.9.
2.16 "VALUATION DATE" shall mean the last day of each Plan Year and any
other date that Lancaster Colony, in its sole discretion, designates from time
to time, including, without limitation, a Participant's last day of employment
by Lancaster Colony or a Subsidiary.
ARTICLE III
PARTICIPATION BY EXECUTIVE EMPLOYEES
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3.1 PARTICIPATION. Participation in this Plan is limited to Executive
Employees selected by the Committee. An Executive Employee shall become a
Participant in the Plan as of the first day of a Plan Year upon selection by the
Committee and upon the execution by the Committee and such Executive Employee of
a Deferred Compensation Agreement pursuant to Section 4.1 hereof.
3.2 CESSATION OF PARTICIPATION. A Participant who (i) separates from
service with Lancaster Colony, or (ii) ceases to be an Executive Employee, or
(iii) is determined by the Committee to be ineligible to participate in the
Plan, shall immediately thereupon cease active participation in this Plan.
3.3 CASH-OUT OF INELIGIBLE EMPLOYEE. This Plan is intended to be an
unfunded "top hat" plan, maintained primarily for purposes of providing deferred
compensation for a select group of management or highly compensated employees.
Accordingly, if the Committee determines that any Participant does not qualify
as a member of such select group, the Committee, in the Committee's sole
discretion, may terminate such Participant's participation in the Plan effective
as of the date such Participant ceased to be a member of such select group and
terminate the Participant's Deferred Compensation Agreement, and may either
immediately pay such Participant an amount of cash equal to one hundred percent
(100%) of the amount credited to such Participant's Deferred Compensation
Account, or retain the Participant's Deferred Compensation Account for future
distribution pursuant to Article VI.
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ARTICLE IV
ANNUAL COMPENSATION DEFERRALS
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4.1 ANNUAL COMPENSATION DEFERRAL ELECTION. No later than December 31 of
each calendar year, each Executive Employee who is selected by the Committee to
participate in the Plan may irrevocably elect, by completing and executing a
Deferred Compensation Agreement and delivering it to the Committee, to defer any
portion, up to Fifty Thousand Dollars ($50,000) or such other amount determined
by the Committee in its sole discretion, of his or her Compensation to be earned
for the following Plan Year. For the initial Plan Year commencing January 1,
2000, such Deferred Compensation Agreement must be completed, executed and
delivered no later than December 31, 1999.
4.2 EFFECTIVE PERIOD. A Participant's deferral election under Section
4.1 with respect to his or her Compensation shall be effective only for the Plan
Year specified in the Deferred Compensation Agreement. A Participant must file a
separate Deferred Compensation Agreement by December 31 of each Plan Year in
order to make Compensation deferrals for the Plan Year subsequent thereto.
ARTICLE V
ACCOUNTS
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5.1 DEFERRED COMPENSATION ACCOUNTS. Lancaster Colony shall establish
and maintain a separate Deferred Compensation Account for each Participant who
executes a Deferred Compensation Agreement pursuant to Section 4.1. Each such
Participant's Deferred Compensation shall be separately accounted for and
credited with earnings pursuant to Section 5.2 hereof, for recordkeeping
purposes only, to his or her Deferred Compensation Account. A Participant's
Deferred Compensation Account shall be solely for the purpose of measuring the
amounts to be paid under the Plan. Lancaster Colony and its Subsidiaries shall
not fund, and shall not be required to fund or secure the Deferred Compensation
Account in any way, and Lancaster Colony's and its Subsidiaries obligations to
Participants under this Plan shall be solely contractual.
5.2 CREDITING OF EARNINGS. Each Participant's Deferred Compensation
Account shall be credited semiannually (as of June 30 and December 31 of each
year) with hypothetical earnings computed and determined by the Committee using
an annual rate of interest equal to the prime rate of interest reported in the
Wall Street Journal as in effect on the first business day (i) in January of
each Plan Year for the period January 1 through June 30, and (ii) in July of
each Plan Year for the period July 1 through December 31. After the end of each
Plan Year, Lancaster Colony shall furnish each Participant with a statement of
the balance credited to the Participant's Deferred Compensation Account as of
the last day of the preceding Plan Year.
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ARTICLE VI
DISTRIBUTIONS
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6.1 IN GENERAL. Except as otherwise provided in this Article VI, the
amount credited to a Participant's Deferred Compensation Account shall be
payable to a Participant (or, in the case of Participant's death, the
Participant's Beneficiary) as soon as practicable after the earlier of the
Participant's Retirement, death, Disability, or other termination of employment
with Lancaster Colony for any reason.
6.2 DISTRIBUTIONS TO INCOMPETENTS. If the Committee determines in its
discretion that a payment under this Plan is to be made to a minor, a person
declared incompetent or to a person incapable of handling his or her property,
the Committee may direct such payment to the guardian, legal representative or
person having the care and custody of such minor, incompetent or incapable
person. The Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to making such payment. Any such
payment shall be a payment for the account of the Participant and the
Participant's Beneficiary, as the case may be, and shall be a complete discharge
of any liability under the Plan for such payment amount.
6.3 COURT ORDERED DISTRIBUTIONS. The Committee is authorized to make
any payments directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court determines that a
spouse or former spouse of a Participant has an interest in the Participant's
Deferred Compensation Account under the Plan in connection with a property
settlement or otherwise, the Committee, in its sole discretion, shall have the
right, notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the Participant's
Deferred Compensation Account under the Plan to that spouse or former spouse.
6.4 CHANGE IN CONTROL DISTRIBUTIONS. At the time a Participant
completes his Deferred Compensation Agreement, the Participant may elect that,
if a Change in Control occurs, the Participant (or, in the event of the
Participant's death, his or her Beneficiary) shall receive a lump sum payment of
the amount credited to the Participant's Deferred Compensation Account within
thirty (30) days after the Change in Control. In the event such a distribution
is so elected, such amount credited to the Participant's Deferred Compensation
Account shall be determined as of the end of the calendar month immediately
preceding the month in which the Change in Control occurs, such end of the
calendar month being the Valuation Date for purposes of such distribution.
6.5 METHOD OF PAYMENT. Unless otherwise elected by a Participant in a
Deferred Compensation Agreement, distributions shall, as determined by the
Committee, be paid in cash in the form of either a single lump sum or
installments not in excess of ten (10) years.
6.6 VALUATION OF DISTRIBUTIONS. All distributions under this Plan shall
be based upon the amount credited to a Participant's Deferred Compensation
Account as of the Valuation Date immediately preceding the date of distribution.
The amount of any installments payable to a Participant under Section 6.5 shall
be determined by dividing the amount credited to the Participant's Deferred
Compensation Account by the number of installment payments to be made.
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6.7 NO HARDSHIP OR LOAN DISTRIBUTIONS. There shall be no distributions
of Participants' Deferred Compensation Accounts due to hardship, and
Participants may not borrow from their Deferred Compensation Accounts.
ARTICLE VII
BENEFICIARIES
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7.1 BENEFICIARY DESIGNATION. Each Participant from time to time may
designate any person or persons (who may be named contingently or successively)
to receive such benefits as may be payable under the Plan upon or after the
Participant's death, and such designation may be changed from time to time by
the Participant by filing a new designation. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by
Lancaster Colony, and will be effective only when filed in writing with
Lancaster Colony during the Participant's lifetime.
7.2 NO BENEFICIARY DESIGNATION. In the absence of a valid Beneficiary
designation, or if, at the time any Plan payment is due to a Beneficiary, there
is no living Beneficiary validly named by the Participant, Lancaster Colony, or
its Subsidiary, shall pay any such Plan payment to the Participant's spouse, if
then living, but otherwise to the Participant's estate. In determining the
existence or identity of anyone entitled to receive a Plan payment as aforesaid,
or if a dispute arises with respect to any such payment, then, notwithstanding
the foregoing, Lancaster Colony, in its sole discretion, may distribute (or
cause its Subsidiary to distribute) such payment to the Participant's estate
without liability for any taxes or other consequences which might flow
therefrom, or may take such other action as Lancaster Colony deems to be
appropriate.
ARTICLE VIII
FUNDING AND PARTICIPANT'S INTEREST
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8.1. PLAN UNFUNDED. This Plan shall be unfunded and no trust or special
deposit shall be created, or deemed to be created, by the Plan or Lancaster
Colony or a Subsidiary. The crediting of amounts to each Participant's Deferred
Compensation Account, as the case may be, shall be made through recordkeeping
entries. No actual funds shall be segregated, reserved, or otherwise set aside;
provided, however, that nothing herein shall prevent Lancaster Colony from
establishing one or more grantor trusts from which distributions due under this
Plan may be paid in certain instances. All distributions shall be paid by
Lancaster Colony or a Subsidiary from its general assets and a Participant or
his or her Beneficiary shall have the rights of a general, unsecured creditor
against Lancaster Colony for any distributions due hereunder. The Plan
constitutes a mere promise by Lancaster Colony or a Subsidiary to make payments
in the future.
8.2 PARTICIPANT'S INTEREST IN PLAN. A Participant has an interest only
in the cash value of the amount credited to his Deferred Compensation Account. A
Participant has no rights or interests in any specific funds, stock or
securities.
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ARTICLE IX
ADMINISTRATION AND INTERPRETATION
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9.1 ADMINISTRATION. The Plan shall be administered by the Committee
which may delegate its duties to one or more employees of Lancaster Colony. The
Committee has, to the extent appropriate and in addition to the powers described
elsewhere in this Plan, full discretionary authority to construe and interpret
the terms and provision of the Plan; to adopt, alter and repeal administrative
rules, guidelines and practices governing the Plan; to perform all acts,
including the delegation of its administrative responsibilities to advisors or
other persons who may or may not be employees of Lancaster Colony; and to rely
upon the information or opinions of legal counsel or experts selected to render
advice with respect to the Plan, as it shall deem advisable, with respect to the
administration of the Plan.
9.2 INTERPRETATION. The Committee may take any action, correct any
defect, supply any omission or reconcile any inconsistency in the Plan, or in
any election hereunder, in the manner and to the extent it shall deem necessary
to carry the Plan into effect or to carry out the Board's purposes in adopting
the Plan. Any decision, interpretation or other action made or taken by the
Committee arising out of or in connection with the Plan, shall be within the
absolute discretion of the Committee, and shall be final, binding and conclusive
on Lancaster Colony, and all Participants and Beneficiaries and their respective
heirs, executors, administrators, successors and assigns. The Committee's
determinations hereunder need not be uniform, and may be made selectively among
Executive Employees, whether or not they are similarly situated.
9.3 RECORDS AND REPORTS. The Committee shall keep a record of
proceedings and actions and shall maintain or cause to be maintained all such
books of account, records, and other data as shall be necessary for the proper
administration of the Plan. Such records shall contain all relevant data
pertaining to individual Participants and their rights under the Plan.
9.4 PAYMENT OF EXPENSES. Lancaster Colony shall bear all expenses
incurred by it and by the Committee in administering this Plan.
9.5 INDEMNIFICATION FOR LIABILITY. Lancaster Colony shall indemnify the
Committee, and the employees of Lancaster Colony to whom the Committee delegates
duties under this Plan against any and all claims, losses, damages, expenses and
liabilities arising from their responsibilities in connection with the Plan.
9.6 CLAIMS PROCEDURE. If a claim for benefits or for participation
under this Plan is denied in whole or in part, a Participant will receive
written notification. The notification will include specific reasons for the
denial, specific reference to pertinent provisions of this Plan, a description
of any additional material or information necessary to process the claim and why
such material or information is necessary, and an explanation of the claims
review procedure. If the Committee fails to respond within 90 days, the claim is
treated as denied.
9.7 REVIEW PROCEDURE. Within 60 days after the claim is denied or, if
the claim is deemed denied, within 150 days after the claim is filed, a
Participant (or his duly authorized
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representative) may file a written request with the Committee for a review of
his denied claim. The Participant may review pertinent documents that were used
in processing his claim, submit pertinent documents, and address issues and
comments in writing to the Committee. The Committee will notify the Participant
of its final decision in writing. In its response, the Committee will explain
the reason for the decision, with specific references to pertinent Plan
provision on which the decision was based. If the Committee fails to respond to
the request for review within 60 days, the claim is treated as denied.
ARTICLE X
AMENDMENT AND TERMINATION
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10.1 IN GENERAL. Subject to Section 10.2 hereof, Lancaster Colony may
at any time amend or terminate any or all of the provisions of the Plan, subject
to the following limitations:
(a) The amendment will not be effective unless the Plan will
continue to operate for the exclusive benefit of employees.
(b) The amendment or termination will not adversely affect the
right of any Participant or Beneficiary to a payment under
the Plan on the basis of amounts allocated to the
Participant's Deferred Compensation Account.
If the Plan is discontinued with respect to future deferrals, amounts
credited to Participants' Deferred Compensation Accounts shall be distributed in
accordance with Article VI. If the Plan is completely terminated, each
Participant shall receive distribution of amounts credited to his or her entire
Deferred Compensation Account in a single lump sum cash payment as of the date
of the Plan termination designated by the Board.
10.2 TERMINATION AFTER CHANGE IN CONTROL. Notwithstanding the
foregoing, Lancaster Colony shall not amend or terminate the Plan without the
prior written consent of all Participants for a period of two (2) calendar years
following a Change in Control.
ARTICLE XI
MISCELLANEOUS PROVISIONS
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11.1 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES AND
INABILITY TO LOCATE. Any communication, statement or notice addressed to a
Participant or to a Beneficiary at his last post office address as shown on
Lancaster Colony's or the Committee's records shall be binding on the
Participant or Beneficiary for all purposes of the Plan. Neither Lancaster
Colony nor the Committee shall be obliged to search for any Participant or
Beneficiary beyond the sending of a certified or registered mail letter to such
last known address. If Lancaster Colony or the Committee notifies any
Participant or Beneficiary that he is entitled to an amount under the Plan and
the Participant or Beneficiary fails to claim such amount or make his location
known to Lancaster Colony or the Committee within three (3) years thereafter,
then, except as
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otherwise required by law, if the location of one or more of the next of kin of
the Participant is known to Lancaster Colony or the Committee, Lancaster Colony
or the Committee may direct distribution of such amount to any one or more or
all of such next of kin, and in such proportions as Lancaster Colony or the
Committee, in its sole discretion, determines. If the location of none of the
foregoing persons can be determined, Lancaster Colony or the Committee shall
have the right to direct that the amount payable shall be deemed to be a
forfeiture, except that the dollar amount of the forfeiture, unadjusted for
deemed earnings in the interim, shall be paid by Lancaster Colony if a claim for
the payment subsequently is made by the Participant or the Beneficiary to whom
it was payable. If a distribution payable to a Participant or Beneficiary that
cannot be located is subject to escheat pursuant to applicable state law,
neither Lancaster Colony nor the Committee shall be liable to any person for any
payment made in accordance with such law.
11.2 RIGHT OF LANCASTER COLONY TO TAKE EMPLOYMENT ACTIONS. The adoption
and maintenance of this Plan shall not be deemed to constitute a contract
between Lancaster Colony (or any Subsidiary) and any Executive Employee, or to
be a consideration for, or an inducement or condition of, the employment of any
Executive Employee. Nothing herein contained, or any action taken hereunder,
shall be deemed to give an Executive Employee the right to be retained in the
employ of Lancaster Colony (or any Subsidiary) or to interfere with the right of
Lancaster Colony (or any Subsidiary) to discipline or discharge an Executive
Employee at any time, nor shall it be deemed to give to Lancaster Colony (or any
Subsidiary) the right to require the Executive Employee to remain in its employ,
nor shall it interfere with any rights of the Executive Employee's to terminate
his or her employment at any time.
11.3 NO ALIENATION OF ASSIGNMENT OF BENEFITS. A Participant's rights
and interest under the Plan shall not be assigned or transferred, either
voluntarily or by operation of law or otherwise, except as otherwise provided
herein, and the Participant's rights to payments under the Plan shall not be
subject to alienation, attachment, execution, levy, pledge or garnishment by or
on behalf of creditors (including heirs, beneficiaries, or dependents) of the
Participant or of a Beneficiary.
11.4 RIGHT TO WITHHOLD. To the extent required by law in effect at the
time a distribution is made from the Plan, Lancaster Colony (or a Subsidiary) or
its agents shall have the right to withhold or deduct from any distributions or
payments any taxes required to be withheld by federal, state or local
governments.
11.5 CONSTRUCTION. All legal questions pertaining to the Plan shall be
determined in accordance with the laws of the State of Ohio, to the extent such
laws are not superseded by ERISA, or any other federal law.
11.6 HEADINGS. The headings of the Articles and Sections of this Plan
are for reference only. In the event of a conflict between a heading and the
contents of an Article or Section, the contents of the Article or Section shall
control.
11.7 NUMBER AND GENDER. Whenever any words used herein are in the
singular form, they shall be construed as though they were also used in the
plural form in all cases where
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they would so apply, and references to the male gender shall be construed as
applicable to the female gender where applicable, and vice versa.
11.8 AGENT FOR LEGAL PROCESS. Lancaster Colony shall be the agent for
service of legal process with respect to any matter concerning the Plan, unless
and until Lancaster Colony designates some other person as such agent.
11.9 PARTICIPATION BY SUBSIDIARIES. Any entity in which Lancaster
Colony has more than a fifty percent (50%) ownership interest may adopt the Plan
as a participating Subsidiary and thereby enable its Executive Employees who are
selected by the Committee to participate in the Plan.
IN WITNESS WHEREOF, Lancaster Colony has caused this Plan to be
executed this 2nd day of December, 1999, effective as of January 1, 2000.
LANCASTER COLONY CORPORATION
37 West Broad Street
Columbus, Ohio 43215-4177
By: /s/ John L. Boylan
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Title: Treasurer
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