Exhibit 10.3
LNB BANCORP, INC.
STOCK APPRECIATION RIGHTS PLAN
ARTICLE 1
General Purpose of Plan; Definitions
     1.1 Name and Purposes. The name of this Plan is the LNB Bancorp, Inc. Stock
Appreciation Rights Plan. The purpose of this Plan is to enable LNB Bancorp,
Inc. and its Affiliates to: (i) attract and retain skilled and qualified
officers and key employees who are expected to contribute to the Company’s
success by providing long-term incentive compensation opportunities;
(ii) motivate participants to achieve the long-term success and growth of the
Company; and (iii) align the interests of the participants with those of the
Company’s shareholders. In order to achieve this purpose, this Plan provides for
the grant of stock appreciation rights related to the Company’s Common Shares.
     1.2 Certain Definitions. Unless the context otherwise indicates, the
following words used herein shall have the following meanings whenever used in
this instrument:
          (a) “Affiliate” means any corporation, partnership, joint venture or
other entity, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company, as
determined by the Board of Directors in its discretion.
          (b) “Board of Directors” mean the Board of Directors of the Company,
as constituted from time to time.
          (c) “Code” means the Internal Revenue Code of 1986, as amended, and
any lawful regulations or guidance promulgated thereunder. Whenever reference is
made to a specific Internal Revenue Code section, such reference shall be deemed
to be a reference to any successor Internal Revenue Code section or sections
with the same or similar purpose.
          (d) “Committee” means the committee administering this Plan as
provided in Section 2.1.
          (e) “Common Shares” mean the common shares, $1.00 par value per share,
of the Company.
          (f) “Company” means LNB Bancorp, Inc., a corporation organized under
the laws of the State of Ohio and, except for purposes of determining whether a
Change in Control has occurred, any corporation or entity that is a successor to
LNB Bancorp, Inc. or substantially all of the assets of LNB Bancorp, Inc. and
that assumes the obligations of LNB Bancorp, Inc. under this Plan by operation
of law or otherwise.
          (g) “Date of Grant” means the date on which the Committee grants an
SAR.
          (h) “Director” means a member of the Board of Directors.

 

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          (i) “Eligible Employee” is defined in Article 4.
          (j) “Exchange Act” means the Securities Exchange Act of 1934, as
amended, and any lawful regulations or guidance promulgated thereunder.
          (k) “Exercise Price” means the exercise price per Share related to a
Stock Appreciation Right.
          (l) “Fair Market Value” means the closing price of a Share as reported
on The Nasdaq Stock Market, or, if applicable, on any national securities
exchange or automated quotation system on which the Common Shares are
principally traded, on the date for which the determination of Fair Market Value
is made, or, if there are no sales of Common Shares on such date, then on the
most recent immediately preceding date on which there were any sales of Common
Shares. If the Common Shares are not, or cease to be, traded on The Nasdaq Stock
Market or any national securities exchange or automated quotation system, the
“Fair Market Value” of Common Shares shall be determined pursuant to a
reasonable valuation method prescribed by the Committee. Notwithstanding the
foregoing, as of any date, the “Fair Market Value” of Common Shares shall be
determined in a manner consistent with Code Section 409A and the guidance
then-existing thereunder.
          (m) “Independent Director” means a Director who meets the definitions
of the terms “independent director” set forth in The Nasdaq Stock Market, Inc.
rules and “non-employee director” set forth in Rule 16b-3, or any successor
definitions adopted by The Nasdaq Stock Market, Inc. and Securities and Exchange
Commission, respectively, and similar requirements under any other applicable
laws and regulations.
          (n) “Plan” means this LNB Bancorp, Inc. Stock Appreciation Rights
Plan, as amended from time to time.
          (o) “Rule 16b-3” is defined in Article 11.
          (p) “Share” or “Shares” mean one or more of the Common Shares.
          (q) “Stock Appreciation Rights” and “SARs” mean any right to receive
the appreciation in Fair Market Value of a specified number of Shares over a
specified Exercise Price pursuant to an award granted under this Plan.
          (r) “Vested” means when the Stock Appreciation Right first becomes
exercisable for payment. The words “Vest” and “Vesting” have meanings
correlative to the foregoing.

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ARTICLE 2
Administration
     2.1 Authority and Duties of the Committee.
          (a) The Plan shall be administered by a Committee of at least three
Directors who are appointed by the Board of Directors. Unless otherwise
determined by the Board of Directors, the Compensation and Governance Committee
shall serve as the Committee, and all of the members of the Committee shall be
Independent Directors. Notwithstanding the requirement that the Committee
consist exclusively of Independent Directors, no action or determination by the
Committee or an individual then considered to be an Independent Director shall
be deemed void because a member of the Committee or such individual fails to
satisfy the requirements for being an Independent Director, except to the extent
required by applicable law.
          (b) The Committee has the power and authority to grant SARs pursuant
to the terms of this Plan to Eligible Employees.
          (c) The Committee has the sole and exclusive authority, subject to any
limitations specifically set forth in this Plan, to:

  (i)   select the Eligible Employees to whom SARs are granted;     (ii)  
determine the timing of SARs granted;     (iii)   determine the number of Shares
relating to each SAR granted hereunder;     (iv)   determine the other terms and
conditions, not inconsistent with the terms of this Plan, of any SAR granted
hereunder; such terms and conditions include, but are not limited to, the
Exercise Price, the time or times when Stock Appreciation Rights may be
exercised (which may be based on performance objectives), any Vesting,
acceleration or waiver of forfeiture restrictions, any performance criteria
applicable to an SAR, and any restriction or limitation regarding any Stock
Appreciation Right, based in each case on such factors as the Committee, in its
sole discretion, shall determine;     (v)   determine whether any conditions or
objectives related to SARs have been met;     (vi)   subsequently modify or
waive any terms and conditions of SARs, not inconsistent with the terms of this
Plan;     (vii)   adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan as it deems advisable from time to time;

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  (viii)   promulgate such administrative forms as it from time to time deems
necessary or appropriate for administration of the Plan;     (ix)   construe,
interpret, administer and implement the terms and provisions of this Plan, any
SAR and any related agreements;     (x)   correct any defect, supply any
omission and reconcile any inconsistency in or between the Plan, any SAR and any
related agreements; and     (xi)   otherwise supervise the administration of
this Plan.

          (d) Notwithstanding the foregoing, all decisions made by the Committee
pursuant to the provisions of this Plan are final and binding on all persons,
including the Company, its shareholders and participants, but may be made by
their terms subject to ratification or approval by, the Board of Directors,
another committee of the Board of Directors or shareholders.
          (e) The Company shall furnish the Committee with such clerical and
other assistance as is necessary for the performance of the Committee’s duties
under the Plan.
     2.2 Delegation of Duties. The Committee may delegate ministerial duties to
any other person or persons, and it may employ attorneys, consultants,
accountants or other professional advisers for purposes of plan administration
at the expense of the Company.
     2.3 Limitation of Liability. Members of the Board of Directors, members of
the Committee and Company employees who are their designees acting under this
Plan shall be fully protected in relying in good faith upon the advice of
counsel and shall incur no liability except for gross or willful misconduct in
the performance of their duties hereunder.
ARTICLE 3
Limitations on Total SARs Granted Under the Plan
     3.1 Total Stock Appreciation Rights Limit. Subject to the provisions of
this Article, SARs may not be granted for more than an aggregate of 50,000
Shares under this Plan.
     3.2 Participant Limit. SARs may not be granted to any participant in any
fiscal year for more than a maximum of 10,000 Shares under this Plan.
     3.3 SARs Not Exercised. If any outstanding SAR, or portion thereof,
expires, or is terminated, canceled or forfeited without being exercised, the
number of Shares related to such expired, terminated, canceled or forfeited SAR,
or portion thereof, shall no longer count toward the limit expressed in
Section 3.1 and shall again be available for the grant of SARs under this Plan.
     3.4 Dilution and Other Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other

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property), recapitalization, stock split, reverse stock split, reorganization,
redesignation, reclassification, merger, consolidation, liquidation, split-up,
reverse split, spin-off, combination, repurchase or exchange of Shares or other
securities of the Company, issuance of warrants or other rights to purchase
Shares or other securities of the Company or other similar corporate transaction
or event affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under this Plan,
then the Committee may, in such manner as it deems equitable, adjust any or all
of (i) the number and type of Shares (or other securities or other property)
which thereafter may be made the subject of SARs, (ii) the number and type of
Shares (or other securities or other property) subject to outstanding SARs,
(iii) the limitations set forth above and (iv) the purchase or exercise price or
any performance objective with respect to any SAR; provided, however, that the
number of Shares or other securities covered by any SAR or to which such SAR
relates is always a whole number. Notwithstanding the foregoing, the foregoing
adjustments shall be made in compliance with Section 409A of the Code, to the
extent necessary to avoid its application or avoid adverse tax consequences
thereunder.
ARTICLE 4
Participants
     4.1 Eligibility. Officers and all other key employees of the Company or any
of its Affiliates (each an “Eligible Employee”) who are selected by the
Committee in its sole discretion are eligible to participate in this Plan.
     4.2 Plan Agreements. SARs are contingent upon the participant’s execution
of a written agreement in a form prescribed by the Committee. Execution of a
plan agreement shall constitute the participant’s irrevocable agreement to, and
acceptance of, the terms and conditions of the SAR set forth in such agreement
and of the terms and conditions of the Plan applicable to such SAR. Plan
agreements may differ from time to time and from participant to participant.
ARTICLE 5
Grant of Stock Appreciation Rights
     5.1 SAR Grant and Agreement. Each SAR granted under this Plan will be
evidenced by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by a written agreement dated as of the Date of
Grant and executed by the Company and by the appropriate participant.
     5.2 Terms and Conditions of SARs. Stock Appreciation Rights will be subject
to the following terms and conditions:
          (a) Term. Any unexercised portion of a Stock Appreciation Right
granted hereunder shall expire at the end of the stated term of the Stock
Appreciation Right. The Committee shall determine the term of each Stock
Appreciation Right at the time of grant, which term shall not exceed ten years
from the Date of Grant. The Committee may extend the term of a Stock
Appreciation Right, in its discretion, but not beyond the date immediately prior
to the tenth

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anniversary of the original Date of Grant. If a definite term is not specified
by the Committee at the time of grant, then the term is deemed to be ten years.
          (b) Exercisability. A Stock Appreciation Right is exercisable, in
whole or in part, at such time or times as determined by the Committee at or
after the time of grant.
          (c) Exercise Price. Subject to Section 3.4, the Exercise Price of a
Stock Appreciation Right will never be less than 100% of the Fair Market Value
of the related Shares on the Date of Grant. If a variable Exercise Price is
specified at the time of grant, the Exercise Price may vary pursuant to a
formula or other method established by the Committee; provided, however, that
such formula or method will provide for a minimum Exercise Price equal to the
Fair Market Value of the Shares on the Date of Grant. Except as otherwise
provided in Section 3.4, no subsequent amendment of an outstanding Stock
Appreciation Right may reduce the Exercise Price to less than 100% of the Fair
Market Value of the Shares on the Date of Grant. Nothing in this Section 5.2(c)
shall be construed as limiting the Committee’s authority to grant premium price
Stock Appreciation Rights which do not become exercisable until the Fair Market
Value of the related Shares exceeds a specified percentage (e.g., 110%) of the
Exercise Price; provided, however, that such percentage will never be less than
100%.
          (d) Method of Exercise. A Stock Appreciation Right may be exercised in
whole or in part during the term by giving written notice of exercise to the
Company specifying the number of Shares in respect of which the Stock
Appreciation Right is being exercised. The notice must be given by or on behalf
of a person entitled to exercise the Stock Appreciation Right. Upon the exercise
of a Stock Appreciation Right, subject to satisfaction of projected tax
withholding requirements pursuant to Article 10, the holder of the Stock
Appreciation Right is entitled to receive payment in cash equal in value to the
excess of the Fair Market Value of a Share on the exercise date over the
Exercise Price of the SAR multiplied by the number of Stock Appreciation Rights
being exercised. At any time the Fair Market Value of a Share on a proposed
exercise date does not exceed the Exercise Price of the SAR, the holder of the
Stock Appreciation Right shall not be permitted to exercise such right.
          (e) SAR Payable Solely in Cash. All Stock Appreciation Rights granted
under this Plan shall be settled solely in cash, subject to the withholding
requirements of this Plan. No Shares shall be issued, paid or delivered under
this Plan or any SAR, and no Shares shall be reserved by the Company for such
purpose.
          (f) Early Termination Prior to Expiration. If the employment of an
optionee with the Company or its Affiliates terminates for any reason, all
unexercised Stock Appreciation Rights may be exercised only in accordance with
rules established by the Committee or as specified in the relevant agreement
evidencing such Stock Appreciation Rights. Such rules may provide, as the
Committee deems appropriate, for the expiration, continuation, or acceleration
of the vesting of all or part of such Stock Appreciation Rights.
     5.3 Other Terms and Conditions of SAR Grants. Stock Appreciation Rights are
subject to such other terms and conditions, not inconsistent with the provisions
of this Plan, as are determined from time to time by the Committee.

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     5.4 Special Limitations. Unless an SAR agreement approved by the Committee
provides otherwise, Stock Appreciation Rights awarded under this Plan are
intended to meet the requirements for exclusion from coverage under Code
Section 409A and all Stock Appreciation Right awards shall be construed and
administered accordingly.
ARTICLE 6
Transfers and Leaves of Absence
     6.1 Transfer of Participant. For purposes of this Plan, the transfer of a
participant among the Company and its Affiliates is deemed not to be a
termination of employment.
     6.2 Effect of Leaves of Absence. For purposes of this Plan, the following
leaves of absence are deemed not to be a termination of employment:
          (a) a leave of absence, approved in writing by the Company, for
military service, sickness or any other purpose approved by the Company, if the
period of such leave does not exceed 90 days;
          (b) a leave of absence in excess of 90 days, approved in writing by
the Company, but only if the employee’s right to reemployment is guaranteed
either by a statute or by contract, and provided that, in the case of any such
leave of absence, the employee returns to work within 30 days after the end of
such leave; and
          (c) any other absence determined by the Committee in its discretion
not to constitute a termination of employment.
ARTICLE 7
Effect of Change in Control
     7.1 Change in Control Defined. “Change in Control” means the occurrence of
any of the following:
          (a) If individuals who, on the effective date of this Plan, constitute
the Board of Directors (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board of Directors; provided, however,
that:

  (i)   any person becoming a director subsequent to the effective date of this
Plan, whose election or nomination for election was approved by a vote of at
least two-thirds (2/3) of the Incumbent Directors then on the Board of Directors
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without written
objection by such Incumbent Directors to such nomination), shall be deemed to be
an Incumbent Director, and

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  (ii)   no individual elected or nominated as a director of the Company
initially as a result of an actual or threatened election contest with respect
to directors or any other actual or threatened solicitation of proxies by or on
behalf of any person other than the Board of Directors shall be deemed to be an
Incumbent Director;

          (b) If any “person” (as such term is defined in Section 3(a)(9) of the
Exchange Act, and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act)
is or becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing twenty
percent (20%) or more of the combined voting power of the Company’s
then-outstanding securities eligible to vote for the election of the Board of
Directors (the “Company Voting Securities”); provided, however, that the events
described in this paragraph (b) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions of Company Voting Securities:

  (i)   by the Company or any Subsidiary,     (ii)   by any employee benefit
plan sponsored or maintained by the Company or any Subsidiary or by any employee
stock benefit trust created by the Company or any Subsidiary,     (iii)   by any
underwriter temporarily holding securities pursuant to an offering of such
securities,     (iv)   pursuant to a Non-Qualifying Transaction (as defined in
paragraph (c), below), or     (v)   a transaction (other than one described in
paragraph (c), below) in which Company Voting Securities are acquired from the
Company, if a majority of the Incumbent Directors approves a resolution
providing expressly that the acquisition pursuant to this subparagraph (v) does
not constitute a Change in Control under this paragraph (b);

          (c) The consummation of a merger, consolidation, share exchange or
similar form of corporate transaction involving the Company or any of its
Subsidiaries that requires the approval of the Company’s shareholders, whether
for such transaction or the issuance of securities in the transaction (a
“Business Combination”), unless immediately following such Business Combination:

  (i)   more than fifty percent (50%) of the total voting power of either
(x) the corporation resulting from the consummation of such Business Combination
(the “Surviving Corporation”) or, if applicable, (y) the ultimate parent
corporation that directly or indirectly has beneficial ownership of one hundred
percent (100%) of the voting securities eligible to elect directors of the
Surviving Corporation (the “Parent Corporation”) is represented by Company
Voting Securities that were outstanding immediately prior to such

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      Business Combination (or, if applicable, represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting
Securities among the holders thereof immediately prior to the Business
Combination,

  (ii)   no person (other than any employee benefit plan sponsored or maintained
by the Surviving Corporation or the Parent Corporation or any employee stock
benefit trust created by the Surviving Corporation or the Parent Corporation) is
or becomes the beneficial owner, directly or indirectly, of twenty percent (20%)
or more of the total voting power of the outstanding voting securities eligible
to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation), and     (iii)   at least a majority of
the members of the board of directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) were Incumbent Directors at
the time of the Board of Director’s approval of the execution of the initial
agreement providing for such Business Combination (any Business Combination
which satisfies all of the criteria specified in (i), (ii) and (iii) of this
Section 9.1(c) shall be deemed to be a “Non-Qualifying Transaction”); or

          (d) If the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or substantially all
of the Company’s assets but only if, pursuant to such liquidation or sale, the
assets of the Company are transferred to an entity not owned (directly or
indirectly) by the Company’s shareholders.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any person acquires beneficial ownership of more than twenty
percent (20%) of Company Voting Securities as a result of the acquisition of
Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, however, that if (after such
acquisition by the Company) such person becomes the beneficial owner of
additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control shall then occur.
     7.2 Effect of Change in Control. In the event of a Change in Control of the
Company, the Committee shall have the right, in its sole discretion, to:
          (a) accelerate the exercisability of any or all SARs, notwithstanding
any limitations set forth in the Plan or SAR agreement;
          (b) cancel any or all outstanding SARs in exchange for the value of
the shares of the surviving or new corporation, cash, securities, evidences of
indebtedness, other property or any combination thereof receivable in respect of
Shares related to the SARs upon consummation

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of the transaction in question (the “Acquisition Consideration”), less the
applicable exercise price therefor;
          (c) cause the holders of any or all SARs to have the right thereafter
and during the term of the SAR to receive upon exercise thereof the Acquisition
Consideration receivable upon the consummation of such transaction by a holder
of the number of Common Shares to which the SAR relates, less the applicable
exercise price therefor, or to convert such SAR into an appreciation right
relating to the surviving or new corporation in the transaction; or
          (d) take such other action as it deems appropriate to preserve the
value of the SAR to the Participant.
The Committee may provide for any of the foreoing in an SAR agreement in
advance, may provide for any of the forgoing in connection with a Change in
Control, or do both. Alternatively, the Committee shall also have the right to
require any purchaser of the Company’s assets or stock, as the case may be, to
take any of the actions set forth in the preceding sentence as such purchaser
may determine to be appropriate or desirable.
          The manner of application and interpretation of the foregoing
provisions of this Section 7.2 shall be determined by the Committee in its sole
and absolute discretion.
ARTICLE 8
Transferability of SARs
     8.1 SARs Are Non-Transferable. Except as provided in Section 8.2, SARs are
non-transferable and any attempts to assign, pledge, hypothecate or otherwise
alienate or encumber (whether by operation of law or otherwise) any SAR shall be
null and void.
     8.2 Inter-Vivos Exercise of SARs; Limited Transferability of Certain SARs.
During a participant’s lifetime, SARs are exercisable only by the participant
or, as permitted by applicable law and notwithstanding Section 8.1 to the
contrary, the participant’s guardian or other legal representative.
Notwithstanding Section 8.1 to the contrary, SARs may be transferred by will and
by the laws of descent and distribution and to the extent required by a court
order.
ARTICLE 9
Amendment and Discontinuation
     9.1 Amendment or Discontinuation of this Plan. The Board of Directors may
amend, alter, or discontinue this Plan at any time, provided that no amendment,
alteration, or discontinuance may be made:
          (a) which would materially and adversely affect the rights of a
participant under any SAR granted prior to the date such action is adopted by
the Board of Directors without the participant’s written consent thereto; and

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          (b) without shareholder approval, if shareholder approval is required
under applicable laws, regulations or exchange requirements.
Notwithstanding the foregoing, this Plan may be amended without affecting
participants’ consent to: (i) comply with any law; (ii) preserve any intended
favorable tax effects for the Company, the Plan or participants; or (iii) avoid
any unintended unfavorable tax effects for the Company, the Plan or
participants.
     9.2 Amendment of Grants. The Committee may amend, prospectively or
retroactively, the terms of any outstanding SAR, provided that no such amendment
may be inconsistent with the terms of this Plan (specifically including the
prohibition on granting SARs with an Exercise Price less than 100% of the Fair
Market Value of the related Common Shares on the Date of Grant) or would
materially and adversely affect the rights of any holder without his or her
written consent.
ARTICLE 10
Satisfaction of Projected Tax Liabilities
     10.1 In General. The Committee shall cause the Company to withhold any
taxes which it determines it is required by law or required by the terms of this
Plan to withhold in connection with any payments incident to this Plan. The
participant or other recipient shall provide the Committee with such additional
information or documentation as may be necessary for the Committee to discharge
its obligations under this Section. The Company may withhold cash in an amount
equal to the amount which the Committee determines is necessary to satisfy the
obligation of the Company to withhold federal, state and local income taxes or
other amounts incurred by reason of the grant or exercise of an SAR or its
disposition. Alternatively, the Company may require the holder to pay to the
Company such amounts, in cash, promptly upon demand.
ARTICLE 11
General Provisions
     11.1 No Implied Rights to SARs or Employment. No potential participant has
any claim or right to be granted an SAR under this Plan, and there is no
obligation of uniformity of treatment of participants under this Plan. Neither
this Plan nor any SAR thereunder shall be construed as giving any individual any
right to continued employment with the Company or any Affiliate. The Plan does
not constitute a contract of employment, and the Company and each Affiliate
expressly reserve the right at any time to terminate employees free from
liability, or any claim, under this Plan, except as may be specifically provided
in this Plan or in an SAR agreement.
     11.2 Other Compensation Plans. Nothing contained in this Plan prevents the
Board of Directors from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases.

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     11.3 Rule 16b-3 Compliance. The Plan is intended to comply with all
applicable conditions of Rule 16b-3 of the Exchange Act, as such rule may be
amended from time to time (“Rule 16b-3”). All transactions involving any
participant subject to Section 16(a) of the Exchange Act shall be subject to the
conditions set forth in Rule 16b-3, regardless of whether such conditions are
expressly set forth in this Plan. Any provision of this Plan that is contrary to
Rule 16b-3 does not apply to such participants.
     11.4 Successors. All obligations of the Company with respect to SARs
granted under this Plan are binding on any successor to the Company, whether as
a result of a direct or indirect purchase, merger, consolidation or otherwise of
all or substantially all of the business and/or assets of the Company.
     11.5 Severability. In the event any provision of this Plan, or the
application thereof to any person or circumstances, is held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of this Plan, or other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been included.
     11.6 Governing Law. To the extent not preempted by Federal law, this Plan
and all SAR agreements pursuant thereto are construed in accordance with and
governed by the laws of the State of Ohio. This Plan is not intended to be
governed by the Employee Retirement Income Security Act and shall be so
construed and administered.
ARTICLE 12
Effective Date
     12.1 Effective Date. The effective date of this LNB Bancorp, Inc. Stock
Appreciation Rights Plan is the date on which the Board of Directors approves
it.

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