EX-10.7(B)



 





Exhibit 10.7(b)




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT




     This Agreement, made and entered into by and between Park National Corporation or a wholly
owned subsidiary of Park National Corporation, Corporations organized and existing under the laws
of the State of Ohio, hereinafter referred to as “the Bank” and                     , a key employee and
an Executive of the Bank, hereinafter referred to as “the Executive”.



     Due to recent government-mandated changes in the Bank’s Pension Plan, a qualified plan under
the federal tax code, selected officers’ projected pension benefits have been reduced. The Board
of Directors of the Bank (the Board) has agreed to adopt a Supplemental Executive Retirement Plan
(SERP) designed to restore these pension benefits. In reaching their decision to adopt such a
plan, the Board considered:




	 	*	 	All applicable regulatory, government and tax rules
	 
	 	*	 	The reasonableness of the SERP considering all other compensation and
fringe benefit plans
	 
	 	*	 	The risks involved in investing in insurance contracts to accomplish
the SERP’s objectives





     It is understood by the Board, the Bank and the Executive that the SERP is a non-qualified,
defined contribution plan designed to achieve a level of supplemental pension payment at
retirement. However, that level of supplemental pension payment is not assured and is subject to
the investment performance of the insurance contracts vis a vis the Bank’s return, the safety and
soundness of the insurance company(ies) and other provisions outlined in this Agreement. The
payment of any supplemental pension is not guaranteed by any government agency.



     Accordingly, it is the desire of the Bank and the Executive to enter into this Agreement under
which the Bank will agree to make certain payments to the Executive upon his retirement and,
alternatively, to his beneficiary(ies) in the event of his premature death while employed by the
Bank.



     It is the intent of the parties hereto that this Agreement be considered an arrangement
maintained primarily to provide supplemental retirement benefits for the Executive, as a member of
a select group of management or highly-compensated employees of the Bank for purposes of the
Employee Retirement Security Act of 1974 (ERISA). The Executive is fully advised of the Bank’s
financial status.



     Therefore, in consideration of the Executive’s services performed in the past and those to be
performed in the future and based upon the mutual promises and covenants herein contained, the Bank
and the Executive, agree as follows:



 









 






	I.	 	DEFINITIONS






	 	A.	 	Effective Date:
	 
	 	 	 	The Effective Date of this Agreement shall be December 27, 1996.
	 
	 	B.	 	Plan Year:
	 
	 	 	 	Any reference to “Plan Year” shall mean a calendar year from January 1 to December
31. In the year of implementation, the term “Plan Year” shall mean the period from
the effective date to December 31 of the year of the effective date.
	 
	 	C.	 	Retirement Date:
	 
	 	 	 	Retirement Date shall mean retirement from service with the Bank which becomes
effective on the first day of the calendar month following the month in which the
Executive reaches his sixty-second (62nd) birthday or such later date as the
Executive may actually retire.
	 
	 	D.	 	Termination of Service:
	 
	 	 	 	Termination of Service shall mean voluntary resignation of service by the Executive
or the Bank’s discharge of the Executive without cause, prior to the Normal
Retirement Age [described in subparagraph I (J) hereinafter].
	 
	 	E.	 	Pre-Retirement Account:
	 
	 	 	 	A Pre-Retirement Account shall be established as a liability reserve account on the
books of the Bank for the benefit of the Executive. Prior to termination of service
or the Executive’s retirement, such liability reserve account shall be increased or
decreased each Plan Year (including the Plan Year in which the Executive ceases to
be employed by the Bank) by an amount equal to the annual earnings or loss for that
Plan Year determined by the Index [described in subparagraph I (G) hereinafter],
less the Opportunity Cost for that Plan Year [described in subparagraph I (H)
hereinafter].
	 
	 	F.	 	Index Retirement Benefit:
	 
	 	 	 	The Index Retirement Benefit for the Executive for any year shall be equal to the
excess of the annual earnings (if any) determined by the Index [subparagraph I (G)]
for that Plan Year over the Opportunity Cost [subparagraph I (H)] for that Plan
Year.




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	 	G.	 	Index:
	 
	 	 	 	The Index for any Plan Year shall be the aggregate annual after-tax income from the
life insurance contracts described hereinafter as defined by FASB Technical Bulletin
85-4. This Index shall be applied as if such insurance contracts were purchased on
the effective date hereof.
	 
	 	 	 	  Insurance Company:

  Policy Form:

  Policy Name:

  Insured’s Age and Sex:

  Riders:

  Ratings:

  Face Amount:

  Premiums Paid:

  Number of Premium Payments:

  Assumed Purchase Date:
	 
	 	 	 	If such contracts of life insurance are actually purchased by the Bank, then the
actual policies as of the dates they were purchased shall be used in calculations
under this Agreement. If such contracts of life insurance are not purchased or are
subsequently surrendered or lapsed, then the Bank shall receive annual policy
illustrations that assume the above described policies were purchased from the above
named insurance company(ies) on the Effective Date from which the increase in policy
value will be used to calculate the amount of the Index.
	 
	 	 	 	In either case, references to the life insurance contract are merely for purposes of
calculating a benefit. The Bank has no obligation to purchase such life insurance
and, if purchased, the Executive and his beneficiary(ies) shall have no ownership
interest in such policy and shall always have no greater interest in the benefits
under this Agreement than that of an unsecured, general creditor of the Bank.
	 
	 	H.	 	Opportunity Cost:
	 
	 	 	 	The Opportunity Cost for any Plan Year shall be calculated by taking the sum of the
amount of premiums set forth in the Indexed policies described above plus the amount
of any after-tax benefits paid to the Executive pursuant to this Agreement
(Paragraph III hereinafter) plus the amount of all previous years after-tax
Opportunity Cost, and multiplying that sum by the average after-tax yield of a
90-day Treasury bill for the Plan Year.
	 
	 	I.	 	Change of Control:
	 
	 	 	 	Change of control shall be deemed to be the cumulative transfer of more than fifty
percent (50%) of the voting stock of the Bank from the Effective Date of this
Agreement. For the purposes of this Agreement, transfers on account of deaths or




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	 	 	 	gifts, transfers between family members or transfers to a qualified retirement plan
maintained by the Bank shall not be considered in determining whether there has been
a change in control.
	 
	 	J.	 	Normal Retirement Age:
	 
	 	 	 	Normal Retirement Age shall mean the date on which the Executive attains age
sixty-two (62).






	II.	 	EMPLOYMENT
	 
	 	 	No provision of this Agreement shall be deemed to restrict or limit any existing employment
agreement by and between the Bank and the Executive, nor shall any conditions herein create
specific employment rights to the Executive nor limit the right of the Employer to discharge
the Executive with or without cause. In a similar fashion, no provision shall limit the
Executive’s rights to voluntarily sever his employment at any time.
	 
	III.	 	INDEX BENEFITS
	 
	 	 	The following benefits provided by the Bank to the Executive are in the nature of a fringe
benefit and shall in no event be construed to effect nor limit the Executive’s current or
prospective salary increases, cash bonuses or profit-sharing distributions or credits.






	 	A.	 	Retirement Benefits:
	 
	 	 	 	Should the Executive continue to be employed by the Bank until his “Normal
Retirement Age” defined in [subparagraph I (J)], he shall be entitled to receive the
balance in his Pre-Retirement Account [as defined in subparagraph I (E)] in fifteen
(15) equal annual installments commencing thirty (30) days following the Executive’s
Normal Retirement Date. In addition to these payments, commencing with the Plan
Year in which the Executive attains his Retirement Date, the Index Retirement
Benefit [as defined in sub-paragraph I (F) above] for each year shall be paid to the
Executive until his death.
	 
	 	 	 	The Executive may elect to receive the balance in his Pre-Retirement Account in any
number of years that is less than fifteen (15) years provided the election is made
in writing to the Bank, no less than one (1) year prior to his Retirement Date.
	 
	 	B.	 	Termination of Service:
	 
	 	 	 	Should the Executive experience a Termination of Service [as defined in subparagraph
I (D)]; all benefits under this Agreement are forfeited. Should the Executive be
discharged for cause [as defined in subparagraph III (E)], all benefits under this
Agreement are forfeited.




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	 	C.	 	Disability:
	 
	 	 	 	Should the Executive begin to draw benefits from the Bank’s Long Term Disability
Plan, for as long as he shall remain disabled, the Executive may elect to be paid
the balance of his Pre-Retirement Account in equal annual installments from the time
he began to draw benefits until his Normal Retirement Age [subparagraph I (J)].
From and after his Normal Retirement Age, the Executive shall be paid the Index
Retirement Benefit [as described in subparagraph 1 (F)] for each year until his
death.
	 
	 	D.	 	Death:
	 
	 	 	 	Should the Executive die prior to having received the full balance of the
Pre-Retirement Account, the unpaid balance of the Pre-Retirement Account shall be
paid in a lump sum to the beneficiary selected by the Executive and filed with the
Bank. In the absence of or a failure to designate a beneficiary, the unpaid balance
shall be paid in a lump sum to the personal representative of the Executive’s
estate.
	 
	 	E.	 	Discharge for Cause:
	 
	 	 	 	Should the Executive be discharged for cause at any time prior to his Retirement
Date, all Index Benefits under this Agreement [subparagraphs III (A), (B) (C) or
(D)] shall be forfeited. The term “for cause” shall mean gross negligence or gross
neglect or the conviction of a felony or gross misdemeanor involving moral
turpitude, fraud, dishonesty or willful violation of any law that results in any
adverse effect on the Bank. If a dispute arises as to discharge “for cause”, such
dispute shall be resolved by arbitration as set forth in this Agreement.
	 
	 	F.	 	Death Benefit:
	 
	 	 	 	Except as set forth above, there is no death benefit provided under this Agreement.






	IV.	 	RESTRICTIONS UPON FUNDING
	 
	 	 	The Bank shall have no obligation to set aside, earmark or entrust any fund or money with
which to pay its obligations under this Agreement. The Executive, his beneficiary(ies) or
any successor in interest to him shall be and remain simply a general creditor of the Bank
in the same manner as any other creditor having a general claim for matured and unpaid
compensation.
	 
	 	 	The Bank reserves the absolute right at its sole discretion to either fund the obligations
undertaken by this Agreement or to refrain from funding the same and to determine the exact
nature and method of such funding. Should the Bank elect to fund this Agreement,




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	 	 	in whole or in part, through the purchase of life insurance, mutual funds, disability
policies or annuities, the Bank reserves the absolute right, in its sole discretion, to
terminate such funding at any time, in whole or in part. At no time shall the Executive be
deemed to have any lien or right, title or interest in or to any specific funding investment
or to any assets of the Bank.
	 
	 	 	If the Bank elects to invest in a life insurance, disability or annuity policy upon the life
of the executive, then the Executive shall assist the Bank by freely submitting to a
physical exam and supplying such additional information necessary to obtain such insurance
or annuities.
	 
	V.	 	CHANGE OF CONTROL
	 
	 	 	Upon a Change of Control [as defined in subparagraph I (I) herein], if the Executive’s
employment is subsequently terminated then he shall receive the benefits promised in this
Agreement upon attaining Normal Retirement Age, as if he had been continuously employed by
the Bank until his Normal Retirement Age. The Executive will also remain eligible for all
promised death benefits in this Agreement. In addition, no sale, merger or consolidation of
the Bank shall take place unless the new or surviving entity expressly acknowledges the
obligations under this Agreement and agrees to abide by its terms.
	 
	VI.	 	MISCELLANEOUS






	 	A.	 	Alienability and Assignment Prohibition:
	 
	 	 	 	Neither the Executive, his/her surviving spouse nor any other beneficiary under this
Agreement shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify or otherwise encumber in advance any of the
benefits payable hereunder nor shall any of said benefits be subject to seizure for
the payment of any debts, judgments, alimony or separate maintenance [o]wed by the
Executive or his beneficiary, nor be transferable by operation of law in the event
of bankruptcy, insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation, transfer or disposal of
the benefits hereunder, the Bank’s liabilities shall forthwith cease and terminate.
	 
	 	B.	 	Binding Obligation of Bank and any Successor in Interest:
	 
	 	 	 	The Bank expressly agrees that it shall not merge or consolidate into or with
another bank or sell substantially all of its assets to another bank, firm or person
until such bank, firm or person expressly agrees, in writing, to assume and
discharge the duties and obligations of the Bank under this Agreement. This
Agreement shall be binding upon the parties hereto, their successors,
beneficiary(ies), heirs and personal representatives.




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	 	C.	 	Revocation:
	 
	 	 	 	It is agreed by and between the parties hereto that, during the lifetime of the
Executive, this Agreement may be amended or revoked at any time or times, in whole
or in part, by the mutual written assent of the Executive and the Bank.
	 
	 	D.	 	Gender:
	 
	 	 	 	Whenever in this Agreement words are used in the masculine or neuter gender, they
shall be read and construed as in the masculine, feminine or neuter gender, whenever
they should so apply.
	 
	 	E.	 	Effect on Other Bank Benefit Plans:
	 
	 	 	 	Nothing contained in this Agreement shall affect the right of the Executive to
participate in or be covered by any qualified or non-qualified pension,
profit-sharing, group, bonus or other supplemental compensation or fringe benefit
plan constituting a part of the Bank’s existing or future compensation structure.
	 
	 	F.	 	Headings:
	 
	 	 	 	Headings and subheadings in this Agreement are inserted for reference and
convenience only and shall not be deemed a part of this Agreement.
	 
	 	G.	 	Applicable Law:
	 
	 	 	 	The validity and interpretation of this Agreement shall be governed by the laws of
the State of Ohio.






	VII.	 	ERISA PROVISION






	 	A.	 	Named Fiduciary and Plan Administrator:
	 
	 	 	 	The “Named Fiduciary and Plan Administrator” of this plan shall be the Bank until
its removal by the Board. As Named Fiduciary and Administrator, the Bank shall be
responsible for the management, control and administration of the Salary
Continuation Agreement as established herein. The Named Fiduciary may delegate to
others certain aspects of the management and operation responsibilities of the plan
including the employment of advisors and the delegation of ministerial duties to
qualified individuals.
	 
	 	B.	 	Claims Procedure and Arbitration:
	 
	 	 	 	In the event a dispute arises over benefits under this Agreement and benefits are
not paid to the Executive (or to his beneficiary in the case of the Executive’s
death) and such claimants feel they are entitled to receive such benefits, then a




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	 	 	 	written claim must be made to the Plan Administrator named above within ninety (90)
days from the date payments are refused. The Plan Administrator shall review the
written claim and if the claim is denied, in whole or in part, they shall provide in
writing within ninety (90) days of receipt of such claim their specific reasons for
such denial, reference to the provisions of this Agreement upon which the denial is
based and any additional material or information necessary to perfect the claim.
Such written notice shall further indicate the additional steps to be taken by
claimants if a further review of the claim denial is desired. A claim shall be
deemed denied if the Plan Administrator fails to take any action within the
aforesaid ninety-day period.
	 
	 	 	 	If claimants desire a second review they shall notify the Plan Administrator in
writing within ninety (90) days of the first claim denial. Claimants may review
this Agreement or any documents relating thereto and submit any written issues and
comments they may feel appropriate. In its sole discretion, the Plan Administrator
shall then review the second claim and provide a written decision within ninety (90)
days of receipt of such claim. This decision shall likewise state the specific
reasons for the decision and shall include reference to specific provisions of this
Agreement upon which the decision is based.
	 
	 	 	 	If claimants continue to dispute the benefit denial based upon completed performance
of this Agreement or the meaning and effect of the terms and conditions thereof,
then claimants may submit the dispute to a Board of Arbitration for final
arbitration. Said Board shall consist of one member selected by the claimant, one
member selected by the Bank, and the third member selected by the first two members.
The Board shall operate under any generally recognized set of arbitration rules.
The parties hereto agree that they and their heirs, personal representatives,
successors and assigns shall be bound by the decision of such Board with respect to
any controversy properly submitted to it for determination.
	 
	 	 	 	Where a dispute arises as to the Bank’s discharge of the Executive “for cause” as it
relates to this Agreement, such dispute shall likewise be submitted to arbitration
as above described and the parties hereto agree to be bound by the decision
thereunder.
	 
	 	 	 	The finding of any arbitration hearing shall be limited solely to the issue of
compensation, if any, to be paid. The result of the arbitration shall have no other
binding effect, no collateral effect, and no evidentiary effect in any other forum.




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     IN WITNESS WHEREOF, the parties hereto acknowledge that each has carefully read this Agreement
and executed the original thereof on the 27th day of December, 1996 and that, upon execution, each
has received a conforming copy.



	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	PARK NATIONAL CORPORATION	 	 
	 

	 	 	 	 	 	or it’s wholly owned subsidiary	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Witness
	 	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(Please print)	 	 
	 
	 	 	 	 	 	 	 	 
	 

Witness (Please Print)

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	EXECUTIVE
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Witness

	 	 	 	 	 	[Name]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Affiliate:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

Witness (Please Print)

	 	 	 	 	 	 	 	 






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SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT




BENEFICIARY DESIGNATION FORM




EXHIBIT A




EMPLOYEE’S BENEFICIARY




	 	 	 	 	 	 	 	 	 	 
	 	Primary Beneficiary, Relationship: 

	 	 	 	 	 	 	 	 
	 	 


	 	Contingent Beneficiary(s), Relationship:

	 	 	 	 	 	 	 
	 	 


	 
	This Exhibit A is that one referred to in the Supplemental Executive Retirement Plan Agreement
dated December 27, 1996.







	 	 	 	 	 	 	 	 	 	 
	 
	Dated:

	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 
	Witness

	 	 	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	 
	Employee Signature

	 	 	 	 	 	 	 






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