Exhibit 10.5



 







Exhibit 10.5




THE OHIO STATE BANK

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN




Effective as of September 30, 2005





 









 








THE OHIO STATE BANK

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN




 






ARTICLE 1




ESTABLISHMENT AND PURPOSE




     1.1 Establishment of Plan.



     The Ohio State Bank (the “Bank”) is establishing The Ohio State Bank Supplemental Executive
Savings Plan as of September 30, 2005.



     1.2 Purpose.



     The Bank desires to retain the services of a select group of executives who contribute to the
profitability and success of the Bank. The Bank is adopting the Plan to provide the executives who
participate in the Plan with the opportunity to defer a portion of their Compensation and have
additional retirement income.



     1.3 Status of Plan under ERISA.



     The Plan is intended to be “unfunded” and maintained “primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated employees” for
purposes of ERISA. Accordingly, the Plan is not intended to be covered by Parts 2 through 4 of
Subtitle B of Title I of ERISA. The existence of any Trust Fund is not intended to change this
characterization of the Plan.



ARTICLE 2




DEFINITIONS




     The following terms shall have the meanings described in this Article unless the context
clearly indicates another meaning. All references in the Plan to specific articles or sections
shall refer to Articles or Sections of the Plan unless otherwise stated.



     2.1 Account.



     “Account” means the bookkeeping record of the Participant’s benefits under the terms of the
Plan.



     2.2 Beneficiary.



     “Beneficiary” means the beneficiary designated in writing by the Participant to receive



 









 







benefits from the Plan in the event of his death. The Beneficiary shall be designated on a form
provided by the Bank, and the Participant may change the Beneficiary designation at any time by
signing and filing a new form with the Bank. However, if the Participant is married at the time of
his death, the Beneficiary of any death benefits shall be the Participant’s spouse, despite any
designation to the contrary, unless the spouse has consented to a different or additional
Beneficiary. The spouse’s consent shall be in writing and shall be witnessed by a Plan
representative or by a notary public.



     If the Participant designates a trust as Beneficiary, the Bank shall determine the rights of
the trustee without responsibility for determining the validity, existence, or provisions of the
trust. Further, the Bank shall not have responsibility for the application of sums paid to the
trustee or for the discharge of the trust.



     The rules of this paragraph apply unless provided otherwise in the Participant’s Beneficiary
designation form. If the Participant designates one primary Beneficiary and the Beneficiary dies
after the Participant but before benefit payments are completed, any remaining benefits shall be
payable to the secondary Beneficiary. If the Participant fails to designate a secondary
Beneficiary or if no secondary Beneficiary survives the primary Beneficiary, any remaining
benefits shall be payable to the deceased primary Beneficiary’s heirs in the manner described in
the next paragraph. If the Participant designates more than one primary Beneficiary or more than
one secondary Beneficiary and a Beneficiary dies before benefit payments are completed, the share
payable to the deceased Beneficiary shall be paid to the deceased Beneficiary’s heirs in the
manner described in the next paragraph as if the Beneficiary was the Participant.



     If the Participant fails to designate a Beneficiary or if no designated Beneficiary survives
the Participant, distribution shall be made in equal shares to the members of the first of the
classes listed below having a living member on the date the distribution is payable. The classes,
in order of priority, are as follows:




     (a) The Participant’s Spouse;




     (b) The Participant’s children or their then-living issue, by right of representation;
and




     (c) The legal heirs of the Participant under the laws of the Participant’s state of
residence on the date of the Participant’s death.



     The facts as shown by the records of the Plan Administrator at the time of death shall be
conclusive as to the identity of the proper payee, and the records of Trustee shall be conclusive
as to the amount properly payable. The distribution made in accordance with such state of facts
shall constitute a complete discharge of all obligations under the provisions of the Plan.



2









 





     2.3 Board of Directors.



     “Board of Directors” means the Bank’s governing body.



     2.4 Change In Control.



     “Change in Control” shall have the meaning set forth on Exhibit B.:



     2.5 Code.



     “Code” means the internal Revenue Code of 1986, as amended.



     2.6 Bank.



     “Bank” means The Ohio State Bank. However, solely for purposes of determining whether a
Participant has terminated employment with the Bank, “Bank” means The Ohio State Bank and all
Related Employers.



     2.7 Distributable Event.



     “Distributable Event” mans an event described in Section 5.1.



     2.8 Effective Date.



     “Effective Date” means September 30, 2005, the date the Plan first became effective.



     2.9 Elective Deferrals.



     “Elective Deferrals” are the amounts by which a Participant agrees to reduce his Base Salary
and/or Bonus in order to have amounts credited to his Account.



     2.10 Employee.



     “Employee” means any individual who, for tax purposes, is considered to be a common-law
employee of the Bank or any Related Employer who has adopted the Plan. An individual who is
treated by the Bank or a Related Employer as an independent contractor for tax purposes is not an
Employee.



     2.11 ERISA.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     2.12 Ohio State Bancshares, Inc.



     “Ohio State Bancshares, Inc.” means Ohio State Bancshares, Inc., an Ohio



3









 







corporation and sole shareholder of the Bank.



     2.13 401(k) Plan.



     “401(k) Plan” means The Ohio State Bank Profit Sharing Plan.



     2.14 Investment Results.



     “Investment Results” means the earnings, gains and losses achieved by an investment fund
elected by a Participant under Section 4.5. The Investment Results for a Participant shall be
determined as if the portion of his Account which was deemed to be invested in the investment fund
had actually been invested in the investment fund during the relevant time period.



     2.15 Matching Contributions.



     “Matching Contributions” means the amounts credited to a Participant’s Account under Section
4.3 hereof.



     2.16 Participant.



     “Participant” means an Employee or former Employee of the Bank who has met the requirements
for participation under Article 3, and who is or may become eligible to receive a retirement
benefit from the Plan.



     2.17 Plan.



     “Plan” means The Ohio State Bank Supplemental Executive Savings Plan.



     2.18 Plan Administrator.



     “Plan Administrator” means the Bank or the committee designated by the Bank as the Plan
Administrator under Article 7.



     2.19 Plan Year.



     “Plan Year” means the calendar year which is the Bank’s taxable year. However, the initial
Plan Year shall be the period beginning on September 30, 2005, and ending on December 31, 2005.



     2.20 Related Employer.



     “Related Employer” means (a) any member of a controlled group of corporations in which the
Bank is a member, as defined in Section 414(b) of the Code; (b) any other trade or business under
common control of or with the Bank, as defined in Section 414(c) of the Code; (c) any member of an
affiliated service group with the Bank, as defined in Section 414(m)



4









 




of the Code; and (d) any other entity required to be aggregated with the Bank pursuant to
regulations issued under Section 414(o) of the Code. An entity shall be a Related Employer with
the Bank only with regard to a time period in which the requirements of this Section are
satisfied.




     2.21 Supplementary Contribution.



     “Supplementary Contribution” means the amount credited to a Participant’s Account under
Section 4.3 hereof.



     2.22 Total Disability.



     “Total Disability” shall have the meaning set forth on Exhibit B.



     2.23 Trust Agreement.



     “Trust Agreement” means the Trust under The Ohio State Bank Supplemental Executive Savings
Plan. If a Trust Agreement is established, it shall conform with the model rabbi trust contained
in IRS Revenue Procedure 92-64.



     2.24 Trust Fund.



     “Trust Fund” means the assets held under the Trust Agreement.



     2.25 Trustee.



     “Trustee” means the financial institution designated as trustee by the Bank pursuant to
Article 6.



ARTICLE 3




PARTICIPATION




     3.1 Eligibility for Participation.



     The Board of Directors may periodically designate, in writing, one or more Employees to
participate in the Plan. An Employee shall begin to participate in the Plan on the date selected
by the Board of Directors. It is intended that participation be limited to Employees who qualify
as members of a “select group of management or other highly compensated employees” under Title I
of ERISA.



     As a condition for participation in the Plan, the Employee must sign an application form
provided by the Plan Administrator. In the application form, the Employee shall acknowledge that
he is an unsecured creditor of the Bank and its Related Employers with regard to any benefits
under the Plan and waive any right to a priority claim with regard to the



5









 







benefits.



     3.2 Termination of Active Participation.



     A Participant who ceases to be an Employee of the Bank shall cease further active
participation in the Plan. In addition, the Board of Directors may remove an Employee from further
active participation in the Plan. If this occurs, the Employee shall not have any additional
amounts credited to his Account under Sections 4.2, or 4.3, after completion of the Plan Year in
which such termination of participation in the Plan occurs.



ARTICLE 4




AMOUNTS CREDITED TO ACCOUNTS




     4.1 Participants’ Accounts.



     The Plan Administrator shall maintain an Account for each Participant to record the
Participant’s benefits under the terms of the Plan. Amounts shall be credited to a Participant’s
Account as provided in this Article. A Participant shall always be 100% vested in amounts credited
to his Account pursuant to Elective Deferrals under Section 4.2 hereof.



     The Account is for bookkeeping purposes only. The Bank is not required to make contributions
to the Trust Fund to fund the amount credited to a Participant’s Account.



     4.2 Amounts Credited Based Upon Elective Deferrals.



     The Bank shall credit a Participant’s Account with the amount of a Participant’s Elective
Deferrals as follows:



          (a) Time of Election.




               (1) A Participant’s election to make Elective Deferrals from Base Salary must be made
prior to the start of the Plan Year in which such compensation is earned and such election
shall be irrevocable as provided for in Section 4.2(e) hereof. A Participant’s election to
defer a portion of his or her Base Salary shall continue in effect until changed by the
Participant, in accordance with the provisions and limitations of the Plan, provided
however, that as of December 31, of each Plan Year such election shall be deemed
irrevocable with respect to Salary payable with respect to services preformed in the
immediately following Plan Year.



               (2) A Participant election to make Elective Deferrals from Bonuses must be made prior
to the start of the Plan Year in which such compensation is earned and such election shall
be irrevocable as provided for in Section 4.2(e) hereof. A Participant’s election to defer
a portion of his or her Bonus shall continue in effect until changed by the Participant, in
accordance with the provisions and limitations of the



6









 







Plan, provided however, that as of December 31, of each Plan Year such election shall
be deemed irrevocable with respect to a Bonus payable with respect to services preformed in
the immediately following Plan Year. Notwithstanding the forgoing subject to approval by
the Plan Administrator, a Participant may make Elective Deferrals of “Performance Based
Compensation” earned over a period of at least twelve (12) months as late as six months
prior to the end of the performance period provided such election is in accordance with all
of the requirements of Section 1.409A-2(a)(7) of the IRS Temporary Regulations, as now in
effect and hereinafter amended.



               (3) Notwithstanding the forgoing, a Participant may make an Elective Deferral with
respect to Base Salary and Bonuses earned during the first Plan Year that such Participant
is eligible for participation, provided that, such election must be made within the first
thirty (30) days after such Participant’s eligibility and shall only apply to compensation
earned after the date of such election. For purposes hereof, the amount of Bonuses that
are earned after the date of election is the sum that equals the product of the
Participant’s total compensation for the performance period for which the Bonuses are paid,
times the quotient resulting from dividing the number of days remaining in the performance
period after the election over the total number of days in the performance period.



          (b) Definition.




               (1) Base Salary. “Base Salary” means a Participant’s regular compensation from
the Bank.



               (2) Bonus. “Bonus” means a payment of cash compensation to a Participant
other than Base Salary. The Plan Administrator shall periodically determine which types of
payments shall be considered a separate Bonus for purposes of the Plan.



          (c) Separate Elections Permitted. A Participant may make separate elections
with regard to Elective Deferrals from Base Salary and Bonuses.




          (d) Maximum Amount of Elective Deferrals. A Participant may defer up to the
following amounts:




               (1) so much of a Participant’s Base Salary as the Board of Directors may from time to
permit (reduced by any amount required to be withheld as FICA taxes) which amount shall be
limited to a maximum of 15% of Participant’s Base Salary until otherwise determined by the
Board of Directors; and



               (2) so much of a Participant’s Bonus as the Board of Directors may from time to time
permit (reduced by any amount required to be withheld as FICA taxes) which amount shall be
limited to a maximum of 40% of Participant’s Bonus



7









 





until otherwise determined by the Board of Directors; and




               (3) an amount, (from either Base Salary, Bonus or a combination thereof) equal to the
difference between (a) the maximum elective deferral contribution a Participant would have
been able to make to the 401(k) Plan without giving effect to: (i) any Elective Deferrals
under the Plan, and (ii) any reductions required by the Code; and (b) the amounts actually
contributed to the 401(k) Plan by the Participant.



     (e) Irrevocability of Election. A Participant’s election to make Elective
Deferrals shall be deemed irrevocable as of December 31 of a Plan Year with respect to
amounts payable with respect to services preformed in the immediately following Plan Year.



     (f) Crediting of Elective Deferrals to Accounts. A Participant’s Elective
Deferrals shall be credited to his Account as soon as administratively feasible after the
amounts otherwise would have been paid to the Participant.



     (g) Limitation on Elective Deferrals. Notwithstanding any other provision, if
a Participant receives a hardship withdrawal under the 401(k) Plan, the Participant shall
be ineligible to make any Elective Deferrals for the Plan Year after the Plan year in which
such hardship withdrawal under the 401(k) Plan occurred. Any then existing Elective
Deferrals for the current Plan Year in which such hardship withdrawal under the 401(k) Plan
occurred are irrevocable as provided by Section 4.2(e) hereof.



     (h) Elections Relating to Distributions. A Participant may elect to receive
their benefit distribution in annual or monthly installments. A Participant may change a
prior election a subject to the following:



               (1) The election shall become valid only upon the expiration of 12 months from
submission to the Bank.



               (2) The new election must apply to the Participant’s entire Account.



               (3) If the Participant elects installment payments, the election must specify the
frequency of the payments (e.g., annual or monthly) and the time period (not to exceed ten
years).



               (4) The new election must delay the first payment (whether installment or lump sum)
for a period of at least five years from the date the first payment otherwise would have
been made.



               (5) The Bank must consent to the new election.



8









 





          4.3 Supplemental Contributions.




          (a) Mandatory Supplementary Contributions. If a Participant is eligible to
receive a nonelective employer contribution under the 401(k) Plan for a Plan Year, the Bank
will credit to the Participant’s Account the difference between the amount of the
nonelective employer contribution actually contributed to his account in the 401(k) Plan
and the amount of nonelective employer contribution that would have been contributed to the
Participant’s account in the 401(k) Plan if: (i) the Participant did not elect to defer any
of his Base Salary or Bonus under this Plan, and (ii) without giving effect to any
reductions required by the limitations imposed by the Code. This supplemental contribution
shall be credited to the Participant’s Account as of the first day of the month following
the date the nonelective employer contribution is actually made to the 401(k) Plan, or as
soon thereafter as practicable.




          (b) Additional Supplementary Contributions. The Bank may also elect to credit
to the Participant’s Account an amount determined by the Board of Directors for any year in
its sole discretion.




     4.4 Vesting of Supplemental Contributions.



          Amounts contributed to a Participant Account, (including the associated earnings
thereon credited pursuant to Section 4.5 thereon), pursuant to Section 4.3 (Supplementary
Contributions) shall vest as follows:




          (a) Pursuant to such vesting schedule as is determined by the Board of Directors at
the time of the contribution; or




          (b) One-fifth (1/5) at the time of the contribution and one-fifth (1/5) on each
December 31 thereafter until fully vested.




          (c) Notwithstanding (a) and (b) of this subsection, a Participant’s Account shall
become fully vested upon termination of employment as a result of death, Total Disability,
Change in Control, or voluntarily on or after Participant’s Targeted Retirement Age (as
defined by and set forth in Participant’s Notice of Plan Eligibility by the Board of
Directors).





If the Participant’s employment with the Company is terminated voluntarily by the
Participant before normal retirement age, or if the Company terminates the Participant for
just cause, any unvested Supplementary Contributions and any earnings thereon shall be
forfeited.



     4.5 Amounts Credited Based Upon Investment Results.



     A Participant may choose among different investment funds periodically made available by the
Plan Administrator for purposes of determining the Investment Results



9









 







credited to his Account. The Plan Administrator shall periodically establish administrative rules
for a Participant to make his investment elections and rules regarding the crediting of Investment
Results. Investment Results shall continue to be credited (or debited) to a Participant’s Account
until the entire amount credited to the Account is distributed to the Participant.



     The Bank shall be under no obligation to make investments that correspond to the
Participants’ investment elections, even though the Participants’ elections are used to determine
the Investment Results on the Participant’s Account under the Plan.



ARTICLE 5




DISTRIBUTION OF BENEFITS




     5.1 Distributable Events.



     A Participant or his Beneficiary shall be eligible for benefits under the Plan if a
Distributable Event occurs. A Distributable Event occurs if:




     (a) The Participant dies.




     (b) The Participant terminates employment with the Bank (including all Related
Employers) as a result of a Total Disability.




     (c) The Participant terminates employment with the Bank (including all Related
Employers) for any reason.



     5.2 Amount of Benefit.



     A Participant’s benefits from the Plan shall be the vested amount credited to his Account as
of the date or dates the Participant’s benefit payments are made under Section 5.3.



     5.3 Form and Time of Payment-General Rule.



     Except as provided in Section 5.4, the benefits described in Section 5.2 shall be paid in a
single lump sum payment within 30 days after the end of the calendar quarter in which the
Distributable Event occurs.



     5.4 Form of Payment-Participant Election.



     If an Employee made a written election under Section 4.2(h) regarding the form of payment,
that election shall apply notwithstanding Section 5.3 hereof. However, the remaining amount in the
Participant’s Account shall be paid in a single lump sum payment in the following situations:




     (a) If the Participant dies after terminating employment but before his benefit



10









 







payments are completed, payment shall be made within 30 days after the Participant’s
death.




     (b) At any time that the Participant’s Account shall have an economic value of less
than $10,000 the Administrator may, in its sole discretion, cause the remaining balance of
Participant’s account to be distributed in a single lump sum.



     5.5 Delay of Payment



     With respect to any payment owing to a Participant who is a “key employee” as defined by
Section 416(i) of Code, such payment shall not be made during the six (6) month period following
the termination of employment of such Participant, except a termination resulting from the death of
the Participant.



     5.6 Tax Withholding.



     Any applicable federal, state, or local income taxes shall be withheld from the payment of
benefits.



     5.7 Spendthrift Provision.



     No benefit or interest under the Plan is subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of a
Participant or his Beneficiary.



     5.8 Termination of Employment for Just Cause.



     For purposes of Section 4.5, a Participant is terminated for “just cause” if his employment
with the Company is terminated for any of the following reasons:




     (a) Gross negligence, fraud, dishonesty or willful violation of any law or significant
Company policy, committed in connection with his employment and resulting in a material
adverse effect on the Company; or




     (b) Failure to substantially perform (for reasons other than disability) the duties
reasonably assigned to him in a manner consistent with prior practice.



     The definition of “just cause” in this Section is relevant only for purposes of eligibility
for certain benefits under this Plan, and is not intended to change the
status of a Participant as an “at will” Employee of the Company.



     If the Company determines that a Participant is ineligible for certain benefits because the
Participant’s employment was terminated for just cause and the Participant disputes that
determination, the Participant’s sole remedy after exhausting the claims procedure of
Section 7.5 shall be arbitration. The arbitration procedure is attached to the Plan as Exhibit A.



11









 





ARTICLE 6




FUNDING




     6.1 Funding of Benefits.



     If a Change In Control occurs, the Bank shall establish a grantor trust of the type referred
to as a “rabbi trust” and make a contribution to the rabbi trust in an amount sufficient to fully
fund all Participants’ Accounts under the Plan. The contributions shall be made no later than the
date of the Change In Control. The benefits that become payable under the Plan to a Participant or
his Beneficiary shall be paid from the assets of the Trust Fund to the extent they are not paid
directly by the Bank.



     The Bank may establish a rabbi trust prior to a Change In Control. If a Trust Fund
is established prior to a Change In Control, the Bank may, but is not required to, make
contributions to the Trust Fund.



     6.2 Status as Grantor Trust.



     The Trust Fund shall be a grantor trust under Sections 671 through 678 of the Code. The Trust
Agreement shall provide that the assets of the Trust Fund are subject to the claims of the Bank’s
general creditors if the Bank becomes insolvent. If any assets of the Trust Fund are seized by
general creditors of the Bank, a Participant’s right to receive benefits under the Plan shall not
be changed.



     6.3 Status of Participants as Unsecured Creditors.



     The obligation of the Bank to pay benefits under the Plan shall be unsecured. Each
Participant is an unsecured creditor of the Bank. Although the Bank may make corporate investments
to fund its potential liability under the Plan, the Plan constitutes a mere promise by the Bank to
make benefit payments in the future.



     The establishment of an Account for a Participant and the Bank’s payment of contributions to
the Trust Fund are not intended to create any security for payment of benefits under the Plan or
change the status of the Plan as an unfunded plan for tax purposes or Title I of ERISA.



ARTICLE 7




ADMINISTRATION




     7.1 Plan Administrator.



     The Bank shall have the sole responsibility for the administration of the Plan and is
designated as named fiduciary and Plan Administrator.



12









 





     7.2 Delegation of Duties.



     The Bank may delegate its duties as Plan Administrator to a committee appointed by the Board
of Directors. The committee shall have the power and duties of the Plan Administrator which are
described in this Article. If a member of the committee is a Participant, he shall abstain from
voting on any matter relating to his benefits under the Plan.



     7.3 Powers of Plan Administrator.



     The Plan Administrator shall have all discretionary powers necessary to administer and
satisfy its obligations under the Plan, including, but not limited to, the following:




     (a) Maintain records pertaining to the Plan.




     (b) Interpret the terms and provisions of the Plan.




     (c) Establish procedures by which Participants may apply for benefits under the Plan
and appeal a denial of benefits.




     (d) Determine the rights under the Plan of any Participant applying for or receiving
benefits.




     (e) Administer the appeal procedure provided in this Article.




     (f) Perform all acts necessary to meet the reporting and disclosure obligations
imposed by Sections 101 through 111 of ERISA (if any are applicable).




     (g) Delegate specific responsibilities for the operation and administration of the
Plan to such Employees or agents as it deems advisable and necessary.



     7.4 Standard of Care.



     The Plan Administrator shall administer the Plan solely in the interest of Participants and
for the exclusive purposes of providing benefits to the Participants and their Beneficiaries. The
Plan Administrator shall administer the Plan with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person, acting in a like capacity and familiar
with such matters, would use in the conduct of an enterprise of a like character and with like
aims.



     The Plan Administrator shall not be liable for any act or omission relating to its duties
under the Plan unless the act or omission violates the standard of care described in this Section.



13









 





     7.5 Appeal Procedure.



     Any Participant whose application for benefits under the Plan has been denied, in whole or in
part, shall be given written notice of the denial of benefits by the Plan Administrator. The
notice shall be in easily understood language and shall indicate the reasons for denial and the
specific provisions of the Plan on which the denial is based. The notice shall explain that the
Participant may request a review of the denial and the procedure for requesting review. The notice
shall describe any additional information necessary to approve the Participant’s claim and explain
why such information is necessary.



     A Participant may make a written request to the Plan Administrator for a review of any denial
of benefits under the Plan. The request for review must be in writing and must be made within 60
days after the mailing date of the notice of denial. The request shall refer to the provisions of
the Plan on which it is based and shall set forth the facts relied upon as justifying a reversal
or modification of the determination being appealed.



     A Participant who requests a review of a denial of benefits in accordance with this appeal
procedure may examine pertinent documents and submit pertinent issues and comments in writing. A
Participant may have a duly authorized representative act on his behalf in exercising his right to
request a review and any other rights granted by this appeal procedure. The Plan Administrator
shall provide a review of the decision denying the claim for benefit within 60 days after
receiving the written request for review.



     A Participant shall not be permitted to commence any legal action against the Bank regarding
his benefits under the Plan before exhausting the appeal procedure contained in this Section.



ARTICLE 8




MISCELLANEOUS




     8.1 Employment Rights.



     The existence of the Plan shall not grant a Participant any legal right to continue as an
Employee nor affect the right of the Bank to discharge a Participant.



     8.2 Amendment.



     The Bank shall have the right to amend the Plan at any time. However, no amendment or
termination shall reduce the amount credited to a Participant’s Account.



     8.3 Suspension of Deferrals.



     The Board of Directors shall have the right to suspend contributions to the Plan at any



14









 







time, which suspension shall become effective as of the January 1 of the Plan Year following such
suspension.



     8.4 Termination of the Plan



     The Board of Directors may terminate the Plan as provided by and subject to the limitations
and requirements of IRC 409A and Section 1.409A-3(h)(2)(viii) of the IRS Temporary Regulations, as
now in effect an hereinafter amended.



     8.5 Severability.



     The unenforceability of any provision of the Plan shall not affect the enforceability of the
remaining provisions of the Plan.



     8.6 Construction.



     Words used in the masculine shall apply to the feminine where applicable. Wherever the
context of the Plan dictates, the plural shall be read as the singular and the singular as the
plural.



     8.7 Governing Law.



     To the extent that Ohio law is not preempted by ERISA, the provisions of the Plan shall be
governed by the laws of the state of Ohio.



     8.8 IRC 409A Savings Clause.



     The Plan is intended to comply with all of the provisions and requirements applicable to
deferred compensation arrangements under IRC Section 409 and any regulations issued thereunder. Any
provision of the Plan determined to be inconsistent with the requirements of IRC 409A shall be
disregarded so as to cause the Plan to comply in all respects with the applicable provisions
thereof. The Plan Administrator shall cause the Plan to be interpreted and administered in a manner
consistent with the requirements of Code section 409A, together with any regulations or other
guidance which may be published by the Treasury Department or Internal Revenue Service interpreting
such Code section 409A.



     IN WITNESS OF WHICH, the Bank has adopted The Ohio State Bank Supplemental Executive Savings
Plan this 30th day of September, 2005.



	 	 	 	 	 
	 	 	THE OHIO STATE BANK
	 
	 

	 	By	 	 
	 

	 	 	 	 
	 

	 	Its	 	 
	 

	 	 	 	 





15









 






EXHIBIT A




THE OHIO STATE BANK

SUPPLEMENTAL EXECUTIVE SAVINGS PLAN




Arbitration Procedure




     1. Before requesting arbitration, the Participant must exhaust the claims procedure in
Section 7.5.



     2. Notice of intent to arbitrate a claim must be made, in writing, within 90 days after the
mailing date of the Plan Administrator’s review of the decision denying the claim for benefit.



     3. The arbitrator will be selected by the mutual agreement of the Participant and the Plan
Administrator. If the arbitrator is not selected by other means, then the arbitrator will be
selected from a panel of experienced labor and employment arbitrators supplied by the American
Arbitration Association (AAA), utilizing AAA procedures regarding selection of the arbitrator.



     4. The arbitrator will decide the time and place of a hearing, which will be conducted
according to AAA Rules. At the arbitration hearing, the Participant will have the opportunity to
rebut the evidence presented by the Plan Administrator and the Participant may present witnesses
and evidence to support his case.



     5. The arbitrator shall have no authority to change, add to, or delete any of the provisions
of the Plan.



     6. The Participant and the Plan Administrator shall each pay up to one-.half of the
arbitrator’s fees and expenses, except that the Participant’s total payment shall not exceed $500.
If the arbitrator decides in favor of the Participant, the Participant’s payment shall be waived.



     7. The Participant and the Plan Administrator will each be responsible for their own costs,
including attorney’s fees. If either party decides to be represented by an attorney, that party
will notify the other at least 30 days before the arbitration hearing,



     8. This review procedure, including an appeal to arbitration and the decision of the
arbitrator, is the Participant’s exclusive remedy, is final and binding on all parties, and is
fully enforceable in court. Judgement on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof.



 









 





EXHIBIT B




Disability Definition.



For purposes of this Agreement, the Employee’s Disability shall mean that the Employee (a) is
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (b) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health plan covering
employees of the participant’s employer.




Change in Control Definition 



A “Change in Control” shall mean with respect to Ohio State Bancshares, Inc. (hereinafter referred
to as the “Company”) shall mean a “Change in Ownership” as defined in (a) hereof; a “Change in
Effective Control” as defined in (b), hereof; or a “Change in Ownership of a Substantial Portion of
Assets” as defined in (c) hereof.





	 	(a)	 	Change in Ownership. For purposes of this Agreement, a change in the
ownership of the Company occurs on the date that any one person, or more than one
person acting as a group (as defined in subsection (d) hereof), acquires ownership of
stock of the Company that, together with stock held by such person or group,
constitutes more than 50 percent of the total fair market value or total voting power
of the stock of the Company. However, if any one person, or more than one person acting
as a group, is considered to own more than 50 percent of the total fair market value or
total voting power of the stock of the Company, the acquisition of additional stock by
the same person or persons is not considered to cause a change in the ownership of the
Company (or to cause a change in the effective control of the Company within the
meaning of subsection (b) hereof). An increase in the percentage of stock owned by any
one person, or persons acting as a group, as a result of a transaction in which the
Company acquires its stock in exchange for property will be treated as an acquisition
of stock for purposes of this section.
	 
	 	(b)	 	Change in the Effective Control. For purposes of this Agreement, a
change in the effective control of the Company occurs on the date that either –






	 	(i)	 	Any one person, or more than one person acting as a
group (as determined under subsection (d) hereof), acquires (or has
acquired during the 12-month period ending on the date of the most
recent acquisition by such person or persons) ownership of stock of the
Company possessing 35 percent or more of the total voting power of the
stock of the Company; or
	 
	 	(ii)	 	a majority of members of the Company’s board of
directors is replaced during any 12-month period by directors whose
appointment or election is not endorsed by a majority of the members of
the Company’s board of directors prior to the date of the appointment
or election.






In the absence of an event described in subsection (b)(i) or (ii) above, a change in
the effective control of a Company will not have occurred.




	 	(c)	 	Change in the Ownership of a Substantial Portion of the Company’s
Assets. For purposes of this Agreement, a change in the ownership of a substantial
portion of the Company’s assets occurs on the date that any one person, or more than
one person acting as a group (as determined in subsection(d) hereof), acquires (or has
acquired during the 12-month period




 









 






	 	 	 	ending on the date of the most recent acquisition by such person or persons) assets
from the Company that have a total gross fair market value equal to or more than 40
percent of the total gross fair market value of all of the assets of the Company
immediately prior to such acquisition or acquisitions. For this purpose, gross fair
market value means the value of the assets of the Company, or the value of the
assets being disposed of, determined without regard to any liabilities associated
with such assets.
	 	 	 	There is no Change in Control Event under this subsection (c) when there is a
transfer to an entity that is controlled by the shareholders of the Company
immediately after the transfer, as provided in this paragraph. A transfer of assets
by the Company is not treated as a change in the ownership of such assets if the
assets are transferred to —






	 	(i)	 	A shareholder of the Company (immediately before the
asset transfer) in exchange for or with respect to its stock;
	 
	 	(ii)	 	An entity, 50 percent or more of the total value or
voting power of which is owned, directly or indirectly, by the Company;
	 
	 	(iii)	 	A person, or more than one person acting as a group,
that owns, directly or indirectly, 50 percent or more of the total
value or voting power of all the outstanding stock of the Company; or
	 
	 	(iv)	 	An entity, at least 50 percent of the total value or
voting power of which is owned, directly or indirectly, by a person
described in section (c)(iii) hereof.






For purposes of this subsection(c) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets. For example, a
transfer to a corporation in which the transferor corporation has no ownership
interest before the transaction, but which is a majority-owned subsidiary of the
transferor corporation after the transaction is not treated as a change in the
ownership of the assets of the transferor corporation.




	 	(d)	 	Persons Acting as a Group. Persons will not be considered to be
acting as a group solely because they purchase assets or purchase or own stock of the
same corporation at the same time, or as a result of the same public offering.
However, persons will be considered to be acting as a group if they are owners of a
corporation that enters into a merger, consolidation, purchase or acquisition of
stock, purchase or acquisition of assets, or similar business transaction with the
Company. If a person, including an entity shareholder, owns stock in both corporations
that enter into a merger, consolidation, purchase or acquisition of stock, or similar
transaction, such shareholder is considered to be acting as a group with other
shareholders in a corporation only to the extent of the ownership in that corporation
prior to the transaction giving rise to the change and not with the ownership interest
in the other corporation.




Notwithstanding the foregoing: (i) no trust department or designated fiduciary or other trustee of
such trust department of Ohio State Bancshares, Inc. or a subsidiary of Ohio State Bancshares,
Inc., or other similar fiduciary capacity of Ohio State Bancshares, Inc. with direct voting control
of the stock shall be treated as a person or group within the meaning of subsection (d) hereof.
Further, no profit-sharing, employee stock ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of Ohio State Bancshares, Inc. or any of its subsidiaries,
and no trustee of any such plan in its capacity as such trustee, shall be treated as a person or
group within the meaning of subsection (d) hereof, and (ii) no Change in Control shall be deemed to
have occurred regardless of the forgoing provisions, if such Change in Control does not constitute
a permitted distribution event for deferred compensation arrangements, as defined by Treasury
Regulations issued pursuant to the American Jobs Creations Act of 2004.