##### 



Western Reserve Bancorp, Inc. and
Western Reserve Bank
Incentive Compensation Plan
  
    
    Allow the Company to attract and retain talented employees;
    
    Align the interests of the Companys employees with those of the Companys shareholders;
    
    Recognize that there are several components to the Companys financial success,
including profitability, growth and asset quality; and
    
    Provide a quantitative way to measure each of the components of the Companys financial
success and to allocate rewards equitably among all of the Companys employees.
    
    
    CEO;
    
    Senior Vice Presidents;
    
    Loan Department Officers;
    
    Other Officers; and
    
    Staff.




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##### 



Western Reserve Bancorp, Inc. and
Western Reserve Bank
Incentive Compensation Plan
  °
    
    Return on Average Consolidated Equity°
    
    Net Interest Margin°
    
    Earnings Per Share Growth
  °
    
    Loan Growth°
    
    Local Deposit Growth
  °
    
    Nonperforming Assets as a Percentage of Total Assets°
    
    Net Charge-offs as a Percentage of Average Net Loans
    
    
    The Company must have Net Income (after payment of any Incentive Compensation) of at
least 50% of budget in order for any payments to be made under the Plan. (Obviously, at
this level of performance, the Profitability targets would not have been met.)
    
    If the Company earns between 50% and 99% of budgeted net income, any payments otherwise
earned under the Plan will be pro-rated to that percentage.
    
    If the Company earns at least 100% of budgeted net income, the payments will be computed
as per the Plan.




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##### 



Western Reserve Bancorp, Inc. and Western Reserve Bank  Incentive Compensation Plan
 Exhibit 1
 A. Potential Bonuses as Percent of Base Compensation
 GroupsPerformance
    
    
    
    
    
    
    
    
    
    Loan Dept.
    
    OtherLevel
    
    CEO
    
    Senior VPs
    
    Officers
    
    Officers
    
    Staff1
    
    
    10
    %
    
    
    10
    %
    
    
    5
    %
    
    
    5
    %
    
    
    3.0
    %2
    
    
    20
    %
    
    
    15
    %
    
    
    8
    %
    
    
    8
    %
    
    
    3.5
    %3
    
    
    30
    %
    
    
    20
    %
    
    
    11
    %
    
    
    11
    %
    
    
    4.0
    %4
    
    
    40
    %
    
    
    25
    %
    
    
    14
    %
    
    
    14
    %
    
    
    4.5
    %5
    
    
    50
    %
    
    
    30
    %
    
    
    17
    %
    
    
    17
    %
    
    
    5.0
    %6
    
    
    60
    %
    
    
    35
    %
    
    
    20
    %
    
    
    20
    %
    
    
    5.5
    %7
    
    
    70
    %
    
    
    40
    %
    
    
    23
    %
    
    
    23
    %
    
    
    6.0
    %




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##### 



Western Reserve Bancorp, Inc. and Western Reserve Bank  Incentive Compensation Plan
 Exhibit 1
 B. Performance Factors and Weightings
 LoanDept.
    
    OtherCEO
    
    Senior VPs
    
    Officers
    
    Officers
    
    StaffOverall Profitability
    
    
    45
    %
    
    
    45
    %
    
    
    30
    %
    
    
    45
    %
    
    
    30
    %Return on Avg. Equity
    
    
    15
    %
    
    
    15
    %
    
    
    10
    %
    
    
    15
    %
    
    
    10
    %Net Interest Margin
    
    
    15
    %
    
    
    15
    %
    
    
    10
    %
    
    
    15
    %
    
    
    10
    %Core EPS Growth
    
    
    15
    %
    
    
    15
    %
    
    
    10
    %
    
    
    15
    %
    
    
    10
    %Growth Rates
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %
    
    
    30
    %Loan Growth
    
    
    15
    %
    
    
    15
    %
    
    
    20
    %
    
    
    10
    %
    
    
    15
    %Local Deposit Growth
    
    
    15
    %
    
    
    15
    %
    
    
    10
    %
    
    
    20
    %
    
    
    15
    %Asset Quality
    
    
    16
    %
    
    
    16
    %
    
    
    16
    %
    
    
    0
    %
    
    
    0
    %Non-PerformingAssets/Total Assets
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %Net Charge-Offs/AvgLoans
    
    
    8
    %
    
    
    8
    %
    
    
    8
    %Discretionary
    
    
    9
    %
    
    
    9
    %
    
    
    24
    %
    
    
    25
    %
    
    
    40
    %Total Weighting
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %




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##### 



Western Reserve Bancorp, Inc. and Western Reserve Bank  Incentive Compensation Plan
 Exhibit 1
 C. Performance Targets
 Non-Local
    
    
    Performing
    
    Net Charge-Performance
    
    Return on
    
    Net Interest
    
    EPS
    
    
    Loan
    
    Deposit
    
    
    Assets/
    
    Offs/Level
    
    Avg. Equity
    
    Margin
    
    Growth
    
    
    Growth
    
    Growth
    
    
    Total Assets
    
    Avg. Loans1
    
    
    8.00
    %
    
    
    3.90
    %
    
    
    6.0
    %
    
    
    
    6.0
    %
    
    
    12.0
    %
    
    
    
    0.60
    %
    
    
    0.15
    %2
    
    
    10.00
    %
    
    
    4.15
    %
    
    
    9.0
    %
    
    
    
    9.0
    %
    
    
    15.0
    %
    
    
    
    0.50
    %
    
    
    0.13
    %3
    
    
    12.00
    %
    
    
    4.40
    %
    
    
    12.0
    %
    
    
    
    12.0
    %
    
    
    18.0
    %
    
    
    
    0.40
    %
    
    
    0.10
    %4
    
    
    14.00
    %
    
    
    4.65
    %
    
    
    15.0
    %
    
    
    
    15.0
    %
    
    
    21.0
    %
    
    
    
    0.30
    %
    
    
    0.07
    %5
    
    
    16.00
    %
    
    
    4.90
    %
    
    
    18.0
    %
    
    
    
    18.0
    %
    
    
    24.0
    %
    
    
    
    0.20
    %
    
    
    0.04
    %6
    
    
    18.00
    %
    
    
    5.15
    %
    
    
    21.0
    %
    
    
    
    21.0
    %
    
    
    27.0
    %
    
    
    
    0.10
    %
    
    
    0.02
    %7
    
    
    20.00
    %
    
    
    5.40
    %
    
    
    24.0
    %
    
    
    
    24.0
    %
    
    
    30.0
    %
    
    
    
    0.00
    %
    
    
    0.00
    %