Document:

EX-10.1

 

Exhibit 10.1

Summary of Base Salaries

for

Executive Officers of Park National Corporation

     On January 16, 2008, the Compensation Committee of the Board of Directors of Park National
Corporation (“Park”) approved the base salaries for the fiscal year ending December 31, 2008, for
each of the executive officers of Park: (a) C. Daniel DeLawder, Chairman of the Board and Chief
Executive Officer of Park and The Park National Bank, a subsidiary of Park; (b) David L. Trautman,
President and Secretary of Park and President of The Park National Bank; and (c) John W. Kozak,
Chief Financial Officer of Park and Senior Vice President and Chief Financial Officer of The Park
National Bank.

     Those base salaries, which will be the same as the base salaries paid to each of the executive
officers of Park for the fiscal year ended December 31, 2007, will be:

     * C. Daniel DeLawder — $473,525

     * David L. Trautman — $313,250

     * John W. Kozak — $214,455EX-10.2

 

Exhibit 10.2

Summary of Incentive Compensation Plan of Park National

 Corporation for the Twelve-Month Period Ending September 30, 2007

     The Compensation Committee of the Board of Directors of Park National Corporation (“Park”)
administers Park’s incentive compensation plan which may enable the officers of The Park National
Bank (the Park National Division, the Fairfield National Division, the Consolidated Computer Center
Division and The Park National Bank of Southwest Ohio & Northern Kentucky division), The Richland
Trust Company, Century National Bank, The First-Knox National Bank of Mount Vernon (the First-Knox
National Division and the Farmers and Savings Division), Second National Bank, United Bank, N.A.,
The Security National Bank and Trust Co. (the Security National Division and the Unity National
Division), The Citizens National Bank of Urbana, Vision Bank (the Vision Bank headquartered in
Panama City, Florida and the Vision Bank Division of Gulf Shores, Alabama), Scope Leasing, Inc. and
Guardian Financial Services Company (collectively, “Park’s Principal Subsidiaries”) to share in any
above-average return on equity (as defined below) which Park and Park’s subsidiaries on a
consolidated basis may generate during each twelve-month period ending September 30. During the
fiscal year ended December 31, 2007 (the “2007 fiscal year”), all officers of Park’s Principal
Subsidiaries other than Vision Bank, including C. Daniel DeLawder (who served as Chairman of the
Board and Chief Executive Officer of Park and The Park National Bank during the 2007 fiscal year
and continues to so serve), David L. Trautman (who served as President and Secretary of Park and as
President of The Park National Bank during the 2007 fiscal year and continues to so serve) and John W. Kozak (who served as Chief Financial
Officer of Park and as Senior Vice President and Chief Financial Officer of The Park National Bank
during the 2007 fiscal year and continues to so serve) were eligible to participate in the
incentive compensation plan. For the fiscal year ending December 31, 2008, all officers of Park’s
Principal Subsidiaries (including Vision Bank) may be eligible to participate.

     Above-average return on equity is defined as the amount by which the net income to average
shareholders’ equity ratio of Park and Park’s subsidiaries on a consolidated basis for a
twelve-month period ended September 30 exceeds the median net income to average shareholders’
equity ratio of all U.S. bank holding companies of similar asset size ($3 billion to $10 billion).
A historically applied formula determines the amount, if any, by which Park’s return on equity
ratio exceeds the median return on equity ratio of these peer bank holding companies.
Approximately twenty percent (20%) of any such excess amount on a before-tax equivalent basis may
then be available for incentive compensation. If Park’s return on equity ratio is equal to or less
than that of the peer group, no incentive compensation will be available with respect to that
twelve-month period.

     For the 2007 incentive compensation paid in 2008, the Compensation Committee met on January
16, 2008 and reviewed management’s computation of the incentive compensation pool for the twelve
months ended September 30, 2007 (the “2007 Incentive Compensation Period”). Management’s
computation of the incentive compensation pool was determined by using 20% of the amount by which
Park’s return on equity ratio for the 2007 Incentive Compensation Period exceeded the median return
on equity ratio of the peer bank holding companies (the “computed return on equity advantage”) and
decreasing this amount based upon the decrease in Park’s

 

 

diluted earnings per share for the 2007 Incentive Compensation Period compared to the twelve months ended September 30, 2006 (the “2006
Incentive Compensation Period”).

     The following table indicates by how much the computed return on equity advantage was to be
increased or decreased based on the relative change in diluted earnings per share.

	 	 	 	 	 
	Increase or Decrease in 

Diluted EPS
	 	
Increase or Decrease in
Incentive Compensation
Pool

	0 to 1.99%

	 	 	0	%
	2 to 2.99%

	 	 	.5	%
	3 to 3.99%

	 	 	1.5	%
	4 to 4.99%

	 	 	2.4	%
	5 to 5.99%

	 	 	3.5	%
	6 to 6.99%

	 	 	4.8	%
	7 to 7.99%

	 	 	6.3	%
	8% and over

	 	Equivalent to actual
percentage (or portion
thereof) increase or
decrease

Diluted earnings per share decreased by 7.1% for the 2007 Incentive Compensation Period compared to
the 2006 Incentive Compensation Period. As a result, the incentive pool was decreased by 6.3%, as
indicated in the table, to take into account the reduction in diluted earnings per share.

     Management’s computation of the incentive compensation pool was $8,959,000 for the 2007
Incentive Compensation Period. The computed 20% of return on equity advantage was $9,561,000 and
the reduction based on the percentage decrease in diluted earnings per share was $602,000 or 6.3%.

     Management’s computation of the incentive compensation pool of $8,959,000 for the 2007
Incentive Compensation Period represented a $833,000 or 8.5% reduction from the incentive
compensation pool of $9,792,000 for the 2006 Incentive Compensation Period. The Compensation
Committee reviewed management’s computation of the incentive compensation pool and concluded that
the recommended reduction in the amount of the incentive compensation pool was reasonable.

     The following schedule sets forth the incentive compensation paid on February 8, 2008 to each
of Messrs. DeLawder, Trautman and Kozak for the 2007 Incentive Compensation Period as compared to
each of their incentive compensation payments for the 2006 Incentive Compensation Period:

-2-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2006 Incentive	 	Amount	 	Percentage	 	2007 Incentive
	Name	 	Compensation	 	Change	 	Change	 	Compensation
	C. Daniel DeLawder
	 	$	473,525	 	 	$	(173,525	)	 	 	(36.6	%)	 	$	300,000	 
	David L. Trautman
	 	$	313,250	 	 	$	(63,250	)	 	 	(20.2	%)	 	$	250,000	 
	John W. Kozak
	 	$	214,455	 	 	$	(14,455	)	 	 	(6.7	%)	 	$	200,000	 

     The Compensation Committee determined that the incentive compensation awards paid to Messrs.
DeLawder, Trautman and Kozak for the 2007 Incentive Compensation Period should be reduced based on
the negative impact on Park’s results of the performance of Vision Bank following the merger of
Vision Bancshares, Inc., an Alabama bank holding company, with and into Park on March 9, 2007, and
the reduction in aggregate net income generated by Park’s Ohio-based bank subsidiaries. The
Compensation Committee also concluded that Park’s Chairman of the Board and Chief Executive Officer
(Mr. DeLawder) and Park’s President and Secretary (Mr. Trautman) should have a larger decrease in
the amount of their incentive compensation award than the overall decrease in the incentive
compensation pool of 8.5%. The Compensation Committee concluded that the executive officers should
receive different percentage reductions based on their differing levels of responsibility as
reflected in the table above.

-3-EX-10.6(a)

 

Exhibit 10.6(a)

Description of Park National Corporation Supplemental Executive Retirement Benefits as in effect

during fiscal year ended December 31, 2007 and until February 18, 2008

     Park National Corporation (“Park”) adopted the Park National Corporation Supplemental
Executive Retirement Plan (the “SERP”) in December 1996. During the fiscal year ended December 31,
2007 (the “2007 fiscal year”), the SERP benefited 30 current and former officers of Park and Park’s
subsidiaries, including: (a) William T. McConnell, who serves as Chairman of the Executive
Committee of the Board of Directors of each of Park and The Park National Bank, a subsidiary of
Park (“PNB”); (b) C. Daniel DeLawder, who serves as Chairman of the Board and Chief Executive
Officer of each of Park and PNB; and (c) John W. Kozak, who serves as Chief Financial Officer of
Park and Senior Vice President and Chief Financial Officer of PNB. David L. Trautman, who serves
as President and Secretary of Park and as President of PNB, did not participate in the SERP during
the 2007 fiscal year. Each of the SERP participants, including Messrs. McConnell, DeLawder and
Kozak, was a party to a Supplemental Executive Retirement Plan Agreement effective December 27,
1996 (the “SERP Agreement”) with Park.

     The SERP Agreements represented unfunded, non-qualified benefit arrangements designed to
restore benefits lost due to limitations under the Internal Revenue Code of 1986, as amended, on
the amount of compensation covered by and the benefits payable under a defined benefit plan such as
the Park National Corporation Defined Benefit Pension Plan. Park and Park’s subsidiaries had no
obligation to set aside any funds with which to pay their respective obligations under the SERP
Agreements. The participants, their beneficiaries and any successors in interest were to be
general creditors of Park and Park’s subsidiaries in the same manner as any other creditor having a
general claim for matured and unpaid compensation.

     Pursuant to each SERP Agreement, if a participant continued to be employed by Park or one of
Park’s subsidiaries until age 62, the participant was entitled to receive a payment equal to the
balance of his “pre-retirement account” (as defined below) in 15 annual installments. These
payments were to commence 30 days following the date on which the participant attained age 62. A
participant could elect to receive the balance of his or her pre-retirement account in any number
of years that was less than 15 years, provided that the election was made in writing to Park or one
of Park’s subsidiaries no less than one year prior to the participant’s retirement date.

     For purposes of the SERP, the “pre-retirement account” was a liability reserve account
established on the books of Park or one of Park’s subsidiaries for the benefit of the participant.
The pre-retirement account was increased or decreased each year by an amount equal to the aggregate
annual after-tax income, calculated in accordance with FASB Technical Bulletin 85-4, from the life
insurance policy (described below) until: (i) the participant’s voluntary resignation from, or
termination without cause by, Park and Park’s subsidiaries prior to age 62 or (ii) the
participant’s retirement.

     In addition to the payment of the pre-retirement account (discussed above), a participant was
also entitled to receive a payment equal to the “index retirement benefit” (as defined below).
Payment of the index retirement benefit was to commence in the first year that a participant

 

 

retired from Park and Park’s subsidiaries after age 62 and was to be paid each year thereafter
until the participant’s death.

     For purposes of the SERP, the “index retirement benefit” for a participant for any year was to
be equal to the aggregate annual after-tax income, calculated in accordance with FASB Technical
Bulletin 85-4, from the life insurance policy (described below).

     If a participant were to voluntarily resign or was terminated, with or without cause (as
defined in the SERP Agreement), prior to age 62, all benefits under the SERP Agreement were
forfeited. If a participant began to draw benefits from Park’s Long Term Disability Plan, for as
long as the participant remained disabled, the participant could elect to be paid the balance of
his pre-retirement account in equal annual installments from the time the participant began to draw
benefits under the Long Term Disability Plan until age 62. From and after the age of 62, the
participant was to be paid the index retirement benefit annually until the participant’s death.
If a participant died prior to having received the full balance of the participant’s pre-retirement
account, such unpaid balance was to be paid in a lump sum to the beneficiary selected by the
participant and filed with Park or one of Park’s subsidiaries. In the absence of or a failure to
designate a beneficiary, the unpaid balance was to be paid in a lump sum to the personal
representative of the participant’s estate.

     Park purchased split-dollar life insurance policies with respect to 26 of the participants in
the SERP, including Messrs. McConnell, DeLawder and Kozak, in order to fund Park’s obligations
under the SERP Agreement to which each such participant was a party. The SERP was designed to
provide an annual targeted retirement benefit of approximately $53,200, $127,900 and $3,900 for
Messrs. McConnell, DeLawder and Kozak, respectively. These additional benefits were not guaranteed
and were dependent upon the earnings from the related life insurance policies compared to the
average yield on three-month Treasury bills. Each life insurance policy also provides a life
insurance benefit for the participants in the SERP to whom the policies relate, who die before age
84. The amount of this life insurance benefit is equal to the present value of the stream of
future benefits which would have been paid to the individual until age 84 but had not been paid at
the time of the individual’s death. If the amount of this life insurance benefit were computed as
of December 31, 2007, the life insurance benefit for Mr. McConnell would have been approximately
$848,300, the life insurance benefit for Mr. DeLawder would have been approximately $1,996,600 and
the life insurance benefit for Mr. Kozak would have been approximately $33,500.

     The life insurance policies described in the preceding paragraph remained in effect following
the February 18, 2008 approval by the Compensation Committee of Park’s Board of Directors of
Amended and Restated Supplemental Executive Retirement Benefits Agreements (the “Amended SERP
Agreements”). The Amended SERP Agreements amended and restated the SERP Agreements by changing the
calculation of benefits payable to a participant in the SERP from a defined contribution (indexed)
formula to a defined benefit formula.

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