PARK NATIONAL CORPORATION
50 North Third Street
Post Office Box 3500
Newark, Ohio 43058-3500
(740) 349-8451
www.parknationalcorp.com
John W. Kozak
Chief Financial Officer
Park National Corporation
50 North Third Street
Newark, Ohio 43055
Dear John,
Park National Corporation (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 December 19, 2008 (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

(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, except as permitted by the TARP Compensation
Standards; and

 

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(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.
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.
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

 

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  (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, The
Park National Bank, Vision Bank, Guardian Financial Services Company and Scope
Leasing, Inc.; and

(4)  
The determination of whether you are or remain a Senior Executive Officer 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.
Yours sincerely,

          PARK NATIONAL CORPORATION    
 
       
By:
  /s/ C. Daniel DeLawder    
 
       
 
  C. Daniel DeLawder    
 
  Title: Chairman of the Board and Chief Executive Officer    
 
        Date: July 20, 2009    

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

     
/s/ John W. Kozak
   
 
 John W. Kozak
   

Date: July 20, 2009

 

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