Document:

EX-10(F)

Exhibit 10(f)

DANIEL E. KLIMAS

AMENDMENT TO EMPLOYMENT AGREEMENT

          This Amendment to Employment Agreement (this “Amendment”), is made at Lorain, Ohio, as of
December 12, 2008, by and among DANIEL E. KLIMAS, herein referenced as “Employee,” and LNB BANCORP,
INC. (an Ohio corporation) and THE LORAIN NATIONAL BANK (a banking organization organized and
existing under the laws of the United States of America), which together with their respective
successors and assigns are collectively herein referenced as “Employer.”

          WHEREAS Employer and Employee entered into an Employment Agreement, dated as of January 28,
2005, as amended as of July 16, 2008 (the “Employment Agreement”).

          WHEREAS, pursuant to Section 1.4 of the Employment Agreement, Employer and Employee desire to
amend the Employment Agreement as set forth herein.

          NOW, THEREFORE, in consideration of the mutual covenants and promises herein, Employer and
Employee (collectively the “Parties” and individually a “Party”) agree as follows:

          The Employment Agreement is amended as follows:

          1. The following is hereby inserted as new Section 11.6 to the Employment Agreement:

“11.6 Notwithstanding any provision in this Agreement to the contrary, in the event
that a payment or payments that would otherwise be payable to Employee pursuant to
this Agreement would constitute a “golden parachute payment” in connection with
Employee’s “applicable severance from employment” (in each case, as those terms are
defined in accordance with Section 111(b) of the Emergency Economic Stabilization
Act of 2008 (“EESA”)), such payment or payments shall be modified to the extent
necessary in order to permit Employer to make such payment or payments to Employee
in accordance with and in a manner that complies with the requirements of Section
111(b)(2)(C) of EESA.”

          2. Except as specifically amended by this Amendment, all of the terms, covenants, conditions
and provisions of the Employment Agreement shall remain in full force and effect.

* * * * *

 

 

          IN WITNESS WHEREOF, the Parties have executed this Amendment as of the day and year first
above written.

In the Presence of:

	 	 	 	 	 
	/s/ Kristofer K. Spreen

	 	 	 	/s/ Daniel E. Klimas
	 

	 	 	 	 
	(Signature of First Witness)

	 	 	 	Daniel E. Klimas
	 
	 	 	 	 
	/s/ Daniel C. Urban
 

(Signature of Second Witness)

	 	 	 	“Employee”  
	 	 	LNB BANCORP, INC.
	 
	 	 	 	 
	/s/ Kristofer K. Spreen

	 	By:
	 	/s/ James R. Herrick
	 

	 	 	 	 
	(Signature of First Witness)

	 	 	 	James R. Herrick, Chairman of the Board
	 
	 	 	 	 
	/s/ Daniel C. Urban
 

	 	 	 	  
	(Signature of Second Witness)

	 	 	 	 
	 
	 	 	 	 
	 	 	THE LORAIN NATIONAL BANK
	 
	 	 	 	 
	/s/ Kristofer K. Spreen

	 	By
	 	/s/ James R. Herrick
	 

	 	 	 	 
	(Signature of First Witness)

	 	 	 	James R. Herrick, Chairman of the Board
	 
	 	 	 	 
	/s/ Daniel C. Urban
 

	 	 	 	“Employer” 
	(Signature of Second Witness)

	 	 	 	 

-2-EX-10(U)

Exhibit 10(u)

LNB BANCORP, INC.

2006 STOCK INCENTIVE PLAN

(Restated as of December 12, 2008)

ARTICLE 1

General Purpose of Plan; Definitions

     1.1 Name and Purposes. The name of this Plan is the LNB Bancorp, Inc. 2006 Stock Incentive
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 competitive with
those made available by other companies; (ii) motivate participants to achieve the long-term
success and growth of the Company; (iii) facilitate ownership of shares of the Company; and (iv)
align the interests of the participants with those of the Company’s shareholders.

     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) “Award” means any grant under this Plan of a Stock Option, Stock Appreciation Right,
Restricted Share, Restricted Share Unit or Performance Share to any Plan participant.

          (c) “Board of Directors” mean the Board of Directors of the Company, as constituted from time
to time.

          (d) “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.

          (e) “Committee” means the committee administering this Plan as provided in Section 2.1.

          (f) “Common Shares” mean the common shares, $1.00 par value per share, of the Company.

          (g) “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.

          (h) “Date of Grant” means the date on which the Committee grants an Award.

          (i) “Director” means a member of the Board of Directors.

          (j) “Eligible Employee” is defined in Article 4.

          (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any lawful
regulations or guidance promulgated thereunder.

          (l) “Exercise Price” means the purchase price of a Share pursuant to a Stock Option, or the
exercise price per Share related to a Stock Appreciation Right.

          (m) “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. In addition,
“Fair Market Value” with respect to ISOs and related SARs shall be determined in accordance with
Section 6.2(f).

          (n) “Incentive Stock Option” and “ISO” mean a Stock Option that is identified as such and
which meets the requirements of Section 422 of the Code.

          (o) “Non-Qualified Stock Option” and “NQSO” mean a Stock Option that: (i) is governed by
Section 83 of the Code; and (ii) does not meet the requirements of Section 422 of the Code.

          (p) “Outside Director” means a Director who meets the definitions of the terms “outside
director” set forth in Section 162(m) of the Code, “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 Internal Revenue Service, The Nasdaq Stock Market, Inc. and Securities
and Exchange Commission, respectively, and similar requirements under any other applicable laws and
regulations.

          (q) “Parent” means any corporation which qualifies as a “parent corporation” of the Company
under Section 424(e) of the Code.

          (r) “Performance Shares” is defined in Article 9.

          (s) “Performance Period” is defined in Section 9.2.

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          (t) “Plan” means this LNB Bancorp, Inc. 2006 Stock Incentive Plan, as amended from time to
time.

          (u) “Restricted Share Units” is defined in Article 8.

          (v) “Restricted Shares” is defined in Article 8.

          (w) “Rule 16b-3” is defined in Article 16.

          (x) “Section 162(m) Person” means, for any taxable year, a person who is a “covered employee”
within the meaning of Section 162(m)(3) of the Code.

          (y) “Share” or “Shares” mean one or more of the Common Shares.

          (z) “Shareholder” means an individual or entity that owns one or more Shares.

          (aa) “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 Article 7.

          (bb) “Stock Option” means any right to purchase a specified number of Shares at a specified
price which is granted pursuant to Article 5 and may be an Incentive Stock Option or a
Non-Qualified Stock Option.

          (cc) “Stock Power” means a power of attorney executed by a participant and delivered to the
Company which authorizes the Company to transfer ownership of Restricted Shares, Performance Shares
or Common Shares from the participant to the Company or a third party.

          (dd) “Subsidiary” means any corporation which qualifies as a “subsidiary corporation” of the
Company under Section 424(f) of the Code.

          (ee) “Vested” means, with respect to a Stock Option, that the time has been reached when the
option to purchase Shares first becomes exercisable; and with respect to a Stock Appreciation
Right, when the Stock Appreciation Right first becomes exercisable for payment; with respect to
Restricted Shares, when the Shares are no longer subject to forfeiture and restrictions on
transferability; with respect to Restricted Share Units and Performance Shares, when the units or
Shares are no longer subject to forfeiture and are convertible to Shares. The words “Vest” and
“Vesting” have meanings correlative to the foregoing.

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

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Compensation Committee of the Board of Directors (or any subcommittee thereof) shall serve as the
Committee, and all of the members of the Committee shall be Outside Directors. Notwithstanding the
requirement that the Committee consist exclusively of Outside Directors, no action or determination
by the Committee or an individual then considered to be an Outside Director shall be deemed void
because a member of the Committee or such individual fails to satisfy the requirements for being an
Outside Director, except to the extent required by applicable law.

          (b) The Committee has the power and authority to grant Awards 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 Awards are granted;
	 
	 	(ii)	 	determine the types of Awards granted and the timing of such Awards;
	 
	 	(iii)	 	determine the number of Shares to be covered by each Award granted hereunder;
	 
	 	(iv)	 	determine whether an Award is, or is intended to be, “performance-based compensation” within the meaning of
Section 162(m) of the Code;
	 
	 	(v)	 	determine the other terms and conditions, not inconsistent with the terms of this Plan, of any Award granted
hereunder; such terms and conditions include, but are not limited to, the Exercise Price, the time or times
when Options or Stock Appreciation Rights may be exercised (which may be based on performance objectives),
any Vesting, acceleration or waiver of forfeiture restrictions, any performance criteria (including any
performance criteria as described in Section 162(m)(4)(C) of the Code) applicable to an Award, and any
restriction or limitation regarding any Option or Stock Appreciation Right or the Common Shares relating
thereto, based in each case on such factors as the Committee, in its sole discretion, shall determine;
	 
	 	(vi)	 	determine whether any conditions or objectives related to Awards have been met,
including any such determination required for compliance with Section 162(m) of the
Code;
	 
	 	(vii)	 	subsequently modify or waive any terms and conditions of Awards, not inconsistent
with the terms of this Plan;
	 
	 	(viii)	 	adopt, alter and repeal
such administrative
rules, guidelines and
practices governing this
Plan as it deems
advisable from time to
time;
	 
	 	(ix)	 	promulgate such administrative forms as it from time to
time deems necessary or appropriate for administration of
the Plan;
	 
	 	(x)	 	construe, interpret, administer and implement the terms and provisions of this Plan, 

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	 	 	 	any Award and any related agreements;
	 
	 	(xi)	 	correct any defect, supply any omission and reconcile any inconsistency in or between the Plan, any Award and
any related agreements;
	 
	 	(xii)	 	prescribe any legends to be affixed to certificates
representing Shares or other interests granted or issued
under the Plan; and
	 
	 	(xiii)	 	otherwise supervise the administration of this Plan.

          (d) 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

Stock Subject to Plan

     3.1 Total Shares Limitation. Subject to the provisions of this Article, the maximum number of
Shares that may be issued or transferred (a) upon the exercise of Stock Options or Stock
Appreciation Rights, (b) as Restricted Shares and released from a substantial risk of forfeiture
thereof, (c) in payment of Restricted Share Units, (d) in payment of Performance Shares that have
been earned, or (e) in payment of any other Award granted under this Plan, shall not exceed
in the aggregate 600,000 Common Shares, which may be treasury or authorized but unissued Shares.

     3.2 Other Limitations.

          (a) Stock Option Limitations. The maximum number of Shares that may be issued with respect to
all Stock Options (whether Incentive Stock Options or Non-Qualified Stock Options) granted in the
aggregate under this Plan is 400,000 Shares.

          (b) Restricted Share, Restricted Share Unit and Performance Share Limitations. The maximum
number of Shares that may be issued (i) as Restricted Shares and released from a

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substantial risk
of forfeiture thereof and (ii) in payment of Restricted Share Units or Performance Shares that have
been earned under this Plan, shall not exceed in the aggregate 200,000 Shares.

          (c) Participant Limitation. The aggregate number of Shares underlying Awards granted under
this Plan to any participant in any fiscal year (including but not limited to Awards of Stock
Options and SARs), regardless of whether such Awards are thereafter canceled, forfeited or
terminated, shall not exceed 60,000 Shares. The foregoing annual limitation is intended to include
the grant of all Awards, including but not limited to, Awards representing “performance-based
compensation” as described in Section 162(m)(4)(C) of the Code.

     3.3 Awards Not Exercised; Effect of Receipt of Shares. If any outstanding Award, or portion
thereof, expires, or is terminated, canceled or forfeited, the Shares that would otherwise be
issuable or released from restrictions with respect to the unexercised or non-Vested portion of
such expired, terminated, canceled or forfeited Award shall be available for subsequent Awards
under this Plan. If the Exercise Price of an Award is paid in Shares, the Shares received by the
Company in connection therewith shall not be added to the maximum aggregate number of Shares which
may be issued under Section 3.1.

     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
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 Awards, (ii) the number
and type of Shares (or other securities or other property) subject to outstanding Awards, (iii) the
limitations set forth above and (iv) the purchase or exercise price or any performance objective
with respect to any Award; provided, however, that the number of Shares or other securities covered
by any Award or to which such Award relates is always a whole number. Notwithstanding the
foregoing, the foregoing adjustments shall be made in compliance with: (i) Sections 422 and 424 of
the Code with respect to ISOs; (ii) Treasury Department Regulation Section 1.424-1 (and any
successor) with respect to NQSOs, applied as if the NQSOs were ISOs; (iii) Section 409A of the
Code, to the extent necessary to avoid its application or avoid adverse tax consequences
thereunder; and (iv) Section 162(m) of the Code with respect to Awards granted to Section 162(m)
Persons that are intended to be “performance-based compensation,” unless specifically determined
otherwise by the Committee.

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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. Awards 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 Award
set forth in such agreement and of the terms and conditions of the Plan applicable to such Award.
Plan agreements may differ from time to time and from participant to participant.

ARTICLE 5

Stock Option Awards

     5.1 Option Grant. Each Stock Option 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 Grants. Stock Options granted under this Plan are subject to the
following terms and conditions and may contain such additional terms, conditions, restrictions and
contingencies with respect to exercisability and/or with respect to the Shares acquired upon
exercise as may be provided in the relevant agreement evidencing the Stock Options, so long as such
terms and conditions are not inconsistent with the terms of this Plan, as the Committee deems
desirable:

          (a) Exercise Price. Subject to Section 3.4, the Exercise Price will never be less than 100% of
the Fair Market Value of the 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 Option 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(a) shall be construed as limiting the Committee’s authority to
grant premium price Stock Options which do not become exercisable until the Fair Market Value of
the underlying Shares exceeds a specified percentage (e.g., 110%) of the Exercise Price; provided,
however, that such percentage will never be less than 100%.

          (b) Option Term. Any unexercised portion of a Stock Option granted hereunder shall expire at
the end of the stated term of the Stock Option. The Committee shall determine the term of each
Stock Option at the time of grant, which term shall not exceed 10 years from the Date of Grant. The
Committee may extend the term of a Stock Option, in its discretion, but not beyond the date
immediately prior to the tenth anniversary of the original Date of Grant. If a definite

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term is not specified by the Committee at the time of grant, then the term is deemed to be 10 years. Nothing in
this Section 5.2(b) shall be construed as limiting the Committee’s authority to grant Stock Options
with a term shorter than 10 years.

          (c) Vesting. Stock Options, or portions thereof, are exercisable at such time or times as
determined by the Committee in its discretion at or after grant. The Committee may provide that a
vesting schedule shall be specified in a plan agreement. If the Committee provides that any Stock
Option becomes Vested over a period of time, in full or in installments, the Committee may waive or
accelerate such Vesting provisions at any time.

          (d) Method of Exercise. Vested portions of any Stock Option may be exercised in whole or in
part at any time during the option term by giving written notice of exercise to the Company
specifying the number of Shares to be purchased. The notice must be given by or on behalf of a
person entitled to exercise the Stock Option, accompanied by payment in full of the Exercise Price,
along with any tax withholding pursuant to Article 15. Subject to the approval of the Committee,
the Exercise Price may be paid:

	 	(i)	 	in cash in any manner satisfactory to the Committee;
	 
	 	(ii)	 	by tendering (by either actual delivery of Shares or by
attestation) unrestricted Shares that are owned on the date
of exercise by the person entitled to exercise the Stock
Option having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price applicable to such
Stock Option exercise, and, with respect to the exercise of
NQSOs, including restricted Shares;
	 
	 	(iii)	 	by a combination of cash and
unrestricted Shares that are
owned on the date of
exercise by the person
entitled to exercise the
Stock Option; and
	 
	 	(iv)	 	by another method permitted
by law and affirmatively
approved by the Committee
which assures full and
immediate payment or
satisfaction of the Exercise
Price.

     The Committee may withhold its approval for any method of payment for any reason, in its sole
discretion, including but not limited to concerns that the proposed method of payment will result
in adverse financial accounting treatment, adverse tax treatment for the Company or a participant
or a violation of the Sarbanes-Oxley Act of 2002, as amended from time to time, and related
regulations and guidance.

     If the Exercise Price of an NQSO is paid by tendering Restricted Shares, then the Shares
received upon the exercise will contain identical restrictions as the Restricted Shares so
tendered.

          (e) Limitation on Gain. Nothing in this Article 5 shall be construed as prohibiting the
Committee from granting Stock Options subject to a limit on the gain that may be realized upon
exercise of such Stock Options. Any such limit shall be explicitly provided for in the relevant
plan agreement.

          (f) Form. Unless the grant of a Stock Option is designated at the time of grant as an ISO, it
is deemed to be an NQSO. ISOs are subject to the additional terms and conditions in Article 6.

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          (g) Special Limitations on Stock Option Awards. Unless an Award agreement approved by the
Committee provides otherwise, Stock Options awarded under this Plan are intended to meet the
requirements for exclusion from coverage under Code Section 409A and all Stock Option Awards shall
be construed and administered accordingly.

     5.3 Termination of Grants Prior to Expiration. Subject to Article 6 with respect to ISOs, if
the employment of an optionee with the Company or its Affiliates terminates for any reason, all
unexercised Stock Options may be exercised only in accordance with rules established by the
Committee or as specified in the relevant agreement evidencing the Stock Options. Such rules may
provide, as the Committee deems appropriate, for the expiration, continuation, or acceleration of
the vesting of all or part of the Stock Options.

ARTICLE 6

Special Rules Applicable to Incentive Stock Options

     6.1 Eligibility. Notwithstanding any other provision of this Plan to the contrary, an ISO may
only be granted to full or part-time employees (including officers) of the Company or of an
Affiliate, provided that the Affiliate is a Parent or Subsidiary.

     6.2 Special ISO Rules.

          (a) Term. No ISO may be exercisable on or after the tenth anniversary of the Date of Grant,
and no ISO may be granted under this Plan on or after the tenth anniversary of the effective date
of this Plan.

          (b) Ten Percent Shareholder. No grantee may receive an ISO under this Plan if such grantee, at
the time the Award is granted, owns (after application of the rules contained in Section 424(d) of
the Code) equity securities possessing more than 10% of the total combined voting power of all
classes of equity securities of the Company, its Parent or any Subsidiary, unless (i) the option
price for such ISO is at least 110% of the Fair Market Value of the Shares as of the Date of Grant,
and (ii) such ISO is not exercisable on or after the fifth anniversary of the Date of Grant.

          (c) Limitation on Grants. The aggregate Fair Market Value (determined with respect to each ISO
at the time of grant) of the Shares with respect to which ISOs are exercisable for the first time
by a grantee during any calendar year (under this Plan or any other plan adopted by the Company or
its Parent or its Subsidiary) shall not exceed $100,000. If such aggregate Fair Market Value shall exceed $100,000, such number of ISOs as shall have an aggregate Fair Market
Value equal to the amount in excess of $100,000 shall be treated as NQSOs.

          (d) Non-Transferability. Notwithstanding any other provision herein to the contrary, no ISO
granted hereunder (and, if applicable, related Stock Appreciation Right) may be transferred except
by will or by the laws of descent and distribution, nor may such ISO (or related Stock Appreciation
Right) be exercisable during a grantee’s lifetime other than by him (or his guardian or legal
representative to the extent permitted by applicable law).

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          (e) Termination of Employment. No ISO may be exercised more than three months following
termination of employment for any reason (including retirement) other than death or disability, nor
more than one year following termination of employment for the reason of death or disability (as
defined in Section 422 of the Code), or such option will no longer qualify as an ISO and shall
thereafter be, and receive the tax treatment applicable to, an NQSO. For this purpose, a
termination of employment is cessation of employment such that no employment relationship exists
between the participant and the Company, a Parent or a Subsidiary.

          (f) Fair Market Value. For purposes of any ISO granted hereunder (or, if applicable, related
Stock Appreciation Right), the Fair Market Value of Shares shall be determined in the manner
required by Section 422 of the Code.

     6.3 Subject to Code Amendments. The foregoing limitations are designed to comply with the
requirements of Section 422 of the Code and shall be automatically amended or modified to comply
with amendments or modifications to Section 422 of the Code. Any ISO which fails to comply with
Section 422 of the Code is automatically treated as an NQSO appropriately granted under this Plan
provided it otherwise meets the Plan’s requirements for NQSOs.

ARTICLE 7

Stock Appreciation Rights

     7.1 SAR Grant and Agreement. Stock Appreciation Rights may be granted under this Plan, either
independently or in conjunction with the grant of a Stock Option. 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.

     7.2 SARs Granted in Conjunction with Option. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under this Plan, either at the same time
or after the grant of the Stock Option, and will be subject to the following terms and conditions:

          (a) Term. Each Stock Appreciation Right, or applicable portion thereof, granted with respect
to a given Stock Option or portion thereof terminates and is no longer exercisable upon the
termination or exercise of the related Stock Option, or applicable portion thereof.

          (b) Exercisability. A Stock Appreciation Right is exercisable only at such time or times and
to the extent that the Stock Option to which it relates is Vested and exercisable in accordance
with the provisions of Article 5 or otherwise as the Committee may determine at or after the time
of grant.

          (c) Method of Exercise. A Stock Appreciation Right may be exercised by the surrender of the
applicable portion of the related Stock Option. Stock Options which have been so surrendered, in
whole or in part, are no longer exercisable to the extent the related Stock Appreciation Rights
have been exercised and are deemed to have been exercised for the purpose of the limitation set
forth in Article 3 on the number of Shares to be issued under this Plan, but

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only to the extent of the number of Shares actually issued under the Stock Appreciation Right at the time of exercise.
Upon the exercise of a Stock Appreciation Right, subject to satisfaction of the tax withholding
requirements pursuant to Article 15, the holder of the Stock Appreciation Right is entitled to
receive Shares or cash (as determined in the Award agreement) equal in value to the excess of the
Fair Market Value of a Share on the exercise date over the Exercise Price per Share specified in
the related Stock Option, multiplied by the number of Shares in respect of which the Stock
Appreciation Right is exercised. At any time the Exercise Price per Share of the related Stock
Option exceeds the Fair Market Value of one Share, the holder of the Stock Appreciation Right shall
not be permitted to exercise such right.

     7.3 Independent SARs. Stock Appreciation Rights may be granted without related Stock Options,
and independent Stock Appreciation Rights will be subject to the following terms and conditions:

          (a) Term. Any unexercised portion of an independent 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 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 an independent 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
7.3(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 the tax withholding requirements pursuant to Article
15, the holder of the Stock Appreciation Right is entitled to receive Shares or cash (as determined
in the Award agreement) 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

11

 

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) Early Termination Prior to Expiration. If the employment of an optionee with the Company
or its Affiliates terminates for any reason, all unexercised independent 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.

     7.4 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.

     7.5 Special Limitations on SAR Awards. Unless an Award 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 Rights
Awards shall be construed and administered accordingly.

ARTICLE 8

Restricted Share and Restricted Share Unit Awards

     8.1 Restricted Share Grants and Agreements. Restricted Share Awards consist of Shares which
are issued by the Company to a participant at no cost or at a purchase price determined by the
Committee which may be below their Fair Market Value but which are subject to forfeiture and
restrictions on their sale or other transfer by the participant. Each Restricted Share Award
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 participant. The timing of Restricted Share Awards and
the number of Shares to be issued (subject to Section 3.2) are to be determined by the Committee in
its discretion. By accepting a grant of Restricted Shares, the participant consents to any tax
withholding as provided in Article 15.

     8.2 Terms and Conditions of Restricted Share Grants. Restricted Shares granted under this Plan
are subject to the following terms and conditions, which, except as otherwise provided herein, need
not be the same for each participant, and may contain such additional terms,
conditions, restrictions and contingencies not inconsistent with the terms of this Plan and any
operative employment or other agreement, as the Committee deems desirable:

          (a) Purchase Price. The Committee shall determine the prices, if any, at which Restricted
Shares are to be issued to a participant, which may vary from time to time and from participant to
participant and which may be below the Fair Market Value of such Restricted Shares at the Date of
Grant.

12

 

          (b) Restrictions. All Restricted Shares issued under this Plan will be subject to such
restrictions as the Committee may determine, which may include, without limitation, the following:

	 	(i)	 	a prohibition against the sale, transfer,
pledge or other encumbrance of the Restricted
Shares, such prohibition to lapse at such
time or times as the Committee determines
(whether in installments or otherwise, but
subject to the Change in Control provisions
in Article 11);
	 
	 	(ii)	 	a requirement that the participant forfeit
such Restricted Shares in the event of
termination of the participant’s employment
with the Company or its Affiliates prior to
Vesting;
	 
	 	(iii)	 	a prohibition against employment or retention
of the participant by any competitor of the
Company or its Affiliates, or against
dissemination by the participant of any
secret or confidential information belonging
to the Company or an Affiliate;
	 
	 	(iv)	 	any applicable requirements arising under the
Securities Act of 1933, as amended, other
securities laws, the rules and regulations of
The Nasdaq Stock Market or any other stock
exchange or
	 
	 	 	 	transaction reporting system upon which such
Restricted Shares are then listed or quoted
and any state laws, rules and regulations,
including “blue sky” laws; and
	 
	 	(v)	 	such additional restrictions as are required to avoid adverse
tax consequences under Code Section 409A.

The Committee may at any time waive such restrictions or accelerate the date or dates on which the
restrictions will lapse. However, if the Committee determines that restrictions lapse upon the
attainment of specified performance objectives, then the provisions of Sections 9.2 and 9.3 will
apply. If the written agreement governing an Award to a Section 162(m) Person provides that such
Award is intended to be “performance-based compensation,” the provisions of Section 9.4(d) will
also apply.

          (c) Delivery of Shares. Restricted Shares will be registered in the name of the participant
and deposited, together with a Stock Power, with the Company. Each such certificate will bear a
legend in substantially the following form:

“The transferability of this certificate and the Common Shares represented by it are subject to the
terms and conditions (including conditions of forfeiture) contained in the LNB Bancorp, Inc. 2006
Stock Incentive Plan and an agreement entered into between the registered owner and the Company. A
copy of this Plan and agreement are on file in the office of the Secretary of the Company.”

At the end of any time period during which the Restricted Shares are subject to forfeiture and
restrictions on transfer, and after any tax withholding, such Shares will be delivered free of all
restrictions (except for any pursuant to Article 14) to the participant or other appropriate person
and with the foregoing legend removed.

13

 

          (d) Forfeiture of Shares. If a participant who holds Restricted Shares fails to satisfy the
restrictions, vesting requirements and other conditions relating to the Restricted Shares prior to
the lapse, satisfaction or waiver of such restrictions and conditions, except as may otherwise be
determined by the Committee, the participant shall forfeit the Shares and transfer them back to the
Company in exchange for a refund of any consideration paid by the participant or such other amount
which may be specifically set forth in the Award agreement. A participant shall execute and deliver
to the Company one or more Stock Powers with respect to Restricted Shares granted to such
participant.

          (e) Voting and Other Rights. Except as otherwise required for compliance with Section 162(m)
of the Code and the terms of the applicable Restricted Share Agreement, during any period in which
Restricted Shares are subject to forfeiture and restrictions on transfer, the participant holding
such Restricted Shares shall have all the rights of a Shareholder with respect to such Shares,
including, without limitation, the right to vote such Shares and the right to receive any dividends
paid with respect to such Shares.

     8.3 Restricted Share Unit Awards and Agreements. Restricted Share Unit Awards consist of
Shares that will be issued to a participant at a future time or times at no cost or at a purchase
price determined by the Committee which may be below their Fair Market Value if continued
employment and/or other terms and conditions specified by the Committee are satisfied. Each
Restricted Share Unit Award 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 the Plan participant. The timing of
Restricted Share Unit Awards and the number of Restricted Share Units to be awarded (subject to
Section 3.2) are to be determined by the Committee in its sole discretion. By accepting a
Restricted Share Unit Award, the participant agrees to remit to the Company when due any tax
withholding as provided in Article 15.

     8.4 Terms and Conditions of Restricted Share Unit Awards. Restricted Share Unit Awards are
subject to the following terms and conditions, which, except as otherwise provided herein, need not
be the same for each participant, and may contain such additional terms, conditions,
restrictions and contingencies not inconsistent with the terms of this Plan and any operative
employment or other agreement, as the Committee deems desirable:

          (a) Purchase Price. The Committee shall determine the prices, if any, at which Shares are to
be issued to a participant after Vesting of Restricted Share Units, which may vary from time to
time and among participants and which may be below the Fair Market Value of Shares at the Date of
Grant.

          (b) Restrictions. All Restricted Share Units awarded under this Plan will be subject to such
restrictions as the Committee may determine, which may include, without limitation, the following:

	 	(i)	 	a prohibition against the sale, transfer, pledge or other
encumbrance of the Restricted Share Unit;
	 
	 	(ii)	 	a requirement that the participant forfeit such Restricted
Share Unit in the event of 

14

 

	 	 	 	termination of the participant’s
employment with the Company or its Affiliates prior to
Vesting;
	 
	 	(iii)	 	a prohibition against employment of the
participant by, or provision of services by
the participant to, any competitor of the
Company or its Affiliates, or against
dissemination by the participant of any
secret or confidential information belonging
to the Company or an Affiliate;
	 
	 	(iv)	 	any applicable requirements arising under
the Securities Act of 1933, as amended,
other securities laws, the rules and
regulations of The Nasdaq Stock Market or
any other stock exchange or transaction
reporting system upon which the Common
Shares are then listed or quoted and any
state laws, rules and interpretations,
including “blue sky” laws; and
	 
	 	(v)	 	such additional restrictions as are required to avoid
adverse tax consequences under Code Section 409A.

The Committee may at any time waive such restrictions or accelerate the date or dates on which the
restrictions will lapse.

          (c) Performance-Based Restrictions. The Committee may, in its sole discretion, provide
restrictions that lapse upon the attainment of specified performance objectives. In such case, the
provisions of Sections 9.2 and 9.3 will apply (including, but not limited to, the enumerated
performance objectives). If the written agreement governing an Award to a Section 162(m) Person
provides that such Award is intended to be “performance-based compensation,” the provisions of
Section 9.4(d) will also apply.

          (d) Voting and Other Rights. A participant holding Restricted Share Units shall not be deemed
to be a Shareholder solely because of such units. Such participant shall have no rights of a
Shareholder with respect to such units; provided, however, that an Award agreement may provide for
payment of an amount of money (or Shares with a Fair Market Value equivalent to such amount) equal
to the dividends paid from time to time on the number of Common Shares that would become payable
upon vesting of a Restricted Share Unit Award.

          (e) Lapse of Restrictions. If a participant who holds Restricted Share Units satisfies the
restrictions and other conditions relating to the Restricted Share Units prior to the lapse or
waiver of such restrictions and conditions, the Restricted Share Units shall be converted to, or
replaced with, Shares which are free of all restrictions except for any restrictions pursuant to
Article 14.

          (f) Forfeiture of Restricted Share Units. If a participant who holds Restricted Share Units
fails to satisfy the restrictions, Vesting requirements and other conditions relating to the
Restricted Share Units prior to the lapse, satisfaction or waiver of such restrictions and
conditions, except as may otherwise be determined by the Committee, the participant shall forfeit
the Restricted Share Units.

          (g) Termination. A Restricted Share Unit Award or unearned portion thereof will terminate
without the issuance of Shares on the termination date specified on the Date of Grant or upon the
termination of employment of the participant during the time period or periods specified by the

15

 

Committee during which any performance objectives must be met (the “Performance Period”). If a
participant’s employment with the Company or its Affiliates terminates by reason of his or her
death, disability or retirement, the Committee in its discretion at or after the Date of Grant may
determine that the participant (or the heir, legatee or legal representative of the participant’s
estate) will receive a distribution of Shares in an amount which is not more than the number of
Shares which would have been earned by the participant if 100% of the performance objectives for
the current Performance Period had been achieved prorated based on the ratio of the number of
months of active employment in the Performance Period to the total number of months in the
Performance Period. However, with respect to Awards intended to be performance-based compensation
(as described in Section 9.4(d)), distribution of the Shares shall not be made prior to attainment
of the relevant performance objectives.

          (h) Special Limitations on Restricted Share Unit Awards. Unless an Award agreement approved by
the Committee provides otherwise, Restricted Share Units awarded under this Plan are intended to
meet the requirements for exclusion from coverage under Code Section 409A and all Restricted Share
Unit Awards shall be construed and administered accordingly.

     8.5 Time Vesting of Restricted Share and Restricted Share Unit Awards. Restricted Shares or
Restricted Share Units, or portions thereof, are exercisable at such time or times as determined by
the Committee in its discretion at or after grant, subject to the restrictions on time Vesting set
forth in this Section. If the Committee provides that any Restricted Shares or Restricted Share
Unit Awards become Vested over time (with or without a performance component), the Committee may
waive or accelerate such Vesting provisions at any time, subject to the restrictions on time
Vesting set forth in this Section.

ARTICLE 9

Performance Share Awards

     9.1 Performance Share Awards and Agreements. A Performance Share Award is a right to receive
Shares in the future conditioned upon the attainment of specified performance objectives and such
other conditions, restrictions and contingencies as the Committee may determine. Each Performance
Share Award 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 Plan participant. The timing of Performance Share
Awards and the number of Shares covered by each Award (subject to Section 3.2) are to be determined
by the Committee in its discretion. By accepting a grant of Performance Shares, the participant
agrees to remit to the Company when due any tax withholding as provided in Article 15.

     9.2 Performance Objectives. At the time of grant of a Performance Share Award, the Committee
will specify the performance objectives which, depending on the extent to which they are met, will
determine the number of Shares that will be distributed to the participant. The Committee will also
specify the time period or periods (the “Performance Period”) during which the performance
objectives must be met. With respect to awards to Section 162(m) Persons intended to be
“performance based compensation,” the Committee may use performance

16

 

objectives based on one or more
of the following: earnings per share, total revenue, net interest income, non-interest income, net
income, net income before tax, non-interest expense, efficiency ratio, return on equity, return on
assets, economic profit added, loans, deposits, tangible equity, assets, net charge-offs, new
market growth, product line developments, and nonperforming assets. The Committee may designate a
single goal criterion or multiple goal criteria for performance measurement purposes. Performance
measurement may be described in terms of objectives that are related to the performance by the
Company, by any Subsidiary, or by any employee or group of employees in connection with services
performed by that employee or those employees for the Company, a Subsidiary, or one or more
subunits of the Company or of any Subsidiary. The performance objectives may be made relative to
the performance of other companies. The performance objectives and periods need not be the same for
each participant nor for each Award.

     9.3 Adjustment of Performance Objectives. The Committee may modify, amend or otherwise adjust
the performance objectives specified for outstanding Performance Share Awards if it determines that
an adjustment would be consistent with the objectives of this Plan and taking into account the
interests of the participants and the public Shareholders of the Company and such adjustment
complies with the requirements of Section 162(m) of the Code for Section 162(m) Persons, to the
extent applicable, unless the Committee indicates a contrary intention. The types of events which
could cause an adjustment in the performance objectives include, without limitation, accounting
changes which substantially affect the determination of performance objectives, changes in
applicable laws or regulations which affect the performance objectives, and divisive corporate
reorganizations, including spin-offs and other distributions of property or stock.

     9.4 Other Terms and Conditions. Performance Share Awards granted under this Plan are subject
to the following terms and conditions and may contain such additional terms, conditions,
restrictions and contingencies not inconsistent with the terms of this Plan and any operative
employment or other agreement as the Committee deems desirable:

          (a) Delivery of Shares. As soon as practicable after the applicable Performance Period has
ended, the participant will receive a distribution of the number of Shares earned during the
Performance Period, depending upon the extent to which the applicable performance objectives were
achieved. Such Shares will be registered in the name of the participant and will be free of all
restrictions except for any restrictions pursuant to Article 14.

          (b) Termination. A Performance Share Award or unearned portion thereof will terminate without
the issuance of Shares on the termination date specified at the time of grant or upon the
termination of employment of the participant during the Performance Period. If a participant’s
employment with the Company or its Affiliates terminates by reason of his or her death, disability
or retirement (except with respect to Section 162(m) Persons), the Committee in its discretion at
or after the time of grant may determine, notwithstanding any Vesting requirements, that the
participant (or the heir, legatee or legal representative of the participant’s estate) will receive
a distribution of a portion of the participant’s then-outstanding Performance Share Awards in an
amount which is not more than the number of shares which would have been earned by the participant
if 100% of the performance objectives for the current Performance Period had been achieved prorated
based on the ratio of the number of months of active

17

 

employment in the Performance Period to the
total number of months in the Performance Period. However, with respect to Awards intended to be
“performance-based compensation” (as described in Section 9.4(d)), distribution of the Shares shall
not be made prior to attainment of the relevant performance objective.

          (c) Voting and Other Rights. Awards of Performance Shares do not provide the participant with
voting rights or rights to dividends prior to the participant becoming the holder of record of
Shares issued pursuant to an Award; provided, however, that an Award agreement may provide for
payment of an amount of money (or Shares with a Fair Market Value equivalent to such amount) equal
to the dividends paid from time to time on the number of Common Shares that would become payable
upon vesting of a Performance Share Award. Prior to the issuance of Shares, Performance Share
Awards may not be sold, transferred, pledged, assigned or otherwise encumbered.

          (d) Performance-Based Compensation. The Committee may designate Performance Share Awards as
being “remuneration payable solely on account of the attainment of one or more performance goals”
as described in Section 162(m)(4)(C) of the Code. Such Awards shall be automatically amended or
modified to comply with amendments to Section 162 of the Code to the extent applicable, unless the
Committee indicates a contrary intention.

     9.5 Time Vesting of Performance Share Awards. Performance Share Awards, or portions thereof,
are exercisable at such time or times as determined by the Committee in its discretion at or after
grant, subject to the restrictions on time Vesting set forth in this Section. If the Committee
provides that any Performance Shares become Vested over time (accelerated by a
performance component), the Committee may waive or accelerate such Vesting provisions at any time,
subject to the restrictions on time Vesting set forth in this Section.

     9.6 Special Limitations on Performance Share Awards. Unless an Award agreement approved by the
Committee provides otherwise, Performance Shares awarded under this Plan are intended to meet the
requirements for exclusion from coverage under Code Section 409A and all Performance Share Awards
shall be construed and administered accordingly.

ARTICLE 10

Transfers and Leaves of Absence

     10.1 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.

     10.2 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;

18

 

          (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 11

Effect of Change in Control

     11.1 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
	 
	 	(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,

19

 

	 	(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 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 11.1(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

20

 

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.

     11.2 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 Stock Options or SARs, notwithstanding any
limitations set forth in the Plan or Award agreement;

          (b) accelerate the Vesting of Restricted Shares, notwithstanding any limitations set forth in
the Plan or Award agreement;

          (c) accelerate the Vesting of Restricted Share Units and Performance Shares, notwithstanding
any limitations set forth in the Plan or Award agreement;

          (d) cancel any or all outstanding Stock Options, SARs, Restricted Share Units and Performance
Shares in exchange for the kind and amount of shares of the surviving or new corporation, cash,
securities, evidences of indebtedness, other property or any combination thereof receivable in
respect of one Share upon consummation of the transaction in question (the “Acquisition
Consideration”) that the holder of the Stock Option, SAR, Restricted Share Unit or Performance
Share would have received had the Stock Option, SAR, Restricted Share Unit or Performance Share
been exercised or converted into Shares, as applicable, prior to such transaction, less the
applicable exercise or purchase price therefor;

          (e) cause the holders of any or all Stock Options, SARs, Restricted Share Units and
Performance Shares to have the right thereafter and during the term of the Stock Option, SAR,
Restricted Share Unit or Performance Share to receive upon exercise thereof the Acquisition
Consideration receivable upon the consummation of such transaction by a holder of the number of
Common Shares which might have been obtained upon exercise or conversion of all or any portion
thereof, less the applicable exercise or purchase price therefor, or to convert such Stock Option,
SAR, Restricted Share Unit or Performance Share into a stock option, appreciation right, restricted
share unit or performance share relating to the surviving or new corporation in the transaction; or

          (f) take such other action as it deems appropriate to preserve the value of the Award to the
Participant.

The Committee may provide for any of the foregoing in an Award agreement governing an Award in
advance, may provide for any of the foregoing in connection with a Change in Control, or do both.
Alternatively, the Committee shall also have the right to require any purchaser of the

21

 

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 11.2
shall be determined by the Committee in its sole and absolute discretion.

     11.3 Code Section 409A. Unless an Award agreement approved by the Committee provides
otherwise, each Award granted under this Plan is intended to meet the requirements for exclusion
from coverage under Code Section 409A. If the Committee provides that an Award shall be subject to
Code Section 409A, then, notwithstanding the other provisions of this Article 11, the Committee may
provide in the Award agreement for such changes to the definition of Change in Control from the
definition set forth in this Article 11, and for such changes to the Committee’s rights upon a
Change in Control, as the Committee may deem necessary in order for such Award to comply with Code
Section 409A.

ARTICLE 12

Transferability of Awards

     12.1 Awards Are Non-Transferable. Except as provided in Sections 12.2 and 12.3, Awards are
non-transferable and any attempts to assign, pledge, hypothecate or otherwise alienate or encumber
(whether by operation of law or otherwise) any Award shall be null and void.

     12.2 Inter-Vivos Exercise of Awards. During a participant’s lifetime, Awards are exercisable
only by the participant or, as permitted by applicable law and notwithstanding Section 12.1 to the
contrary, the participant’s guardian or other legal representative.

     12.3 Limited Transferability of Certain Awards. Notwithstanding Section 12.1 to the contrary,
Awards may be transferred by will and by the laws of descent and distribution. Moreover, the
Committee, in its discretion, may allow at or after the time of grant the transferability of Awards
which are Vested, provided that the permitted transfer is made (a) if the Award is an Incentive
Stock Option, the transfer is consistent with Section 422 of the Code; (b) to the Company (for
example in the case of forfeiture of Restricted Shares), an Affiliate or a person acting as the
agent of the foregoing or which is otherwise determined by the Committee to be in the interests of
the Company; or (c) by the participant for no consideration to Immediate Family Members or to a
bona fide trust, partnership or other entity controlled by and for the benefit of one or more
Immediate Family Members. “Immediate Family Members” means the participant’s spouse, children,
stepchildren, parents, stepparents, siblings (including half brothers and sisters), in-laws and
other individuals who have a relationship to the participant arising because of a legal adoption.
No transfer may be made to the extent that transferability would cause Form S-8 or any successor
form thereto not to be available to register Shares related to an Award. The Committee in its
discretion may impose additional terms and conditions upon transferability.

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ARTICLE 13

Amendment and Discontinuation

     13.1 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 Award
granted prior to the date such action is adopted by the Board of Directors without the
participant’s written consent thereto; and

          (b) without shareholder approval, if shareholder approval is required under applicable laws,
regulations or exchange requirements (including Section 422 of the Code with respect to ISOs, and
for the purpose of qualification as “performance-based compensation” under Section 162(m) of the
Code).

     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.

     13.2 Amendment of Grants. The Committee may amend, prospectively or retroactively, the terms
of any outstanding Award, provided that no such amendment may be inconsistent with the terms of
this Plan (specifically including the prohibition on granting Stock Options or SARs with an
Exercise Price less than 100% of the Fair Market Value of the 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 14

Issuance of Shares and Share Certificates

     14.1 Issuance of Shares. The Company will issue or cause to be issued Shares as soon as
practicable upon exercise or conversion of an Award that is payable in Shares. No Shares will be
issued until full payment has been made, to the extent payment is required. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such Shares, no right to vote or receive
dividends or any other rights as a shareholder will exist with respect to the Shares,
notwithstanding the exercise or conversion of the Award payable in shares.

     14.2 Delivery of Share Certificates. The Company is not required to issue or deliver any
certificates for Shares issuable with respect to Awards under this Plan prior to the fulfillment of
all of the following conditions:

          (a) payment in full for the Shares and for any tax withholding (See Article 15);

23

 

          (b) completion of any registration or other qualification of such Shares under any Federal or
state laws or under the rulings or regulations of the Securities and Exchange Commission or any
other regulating body which the Committee in its discretion deems necessary or advisable;

          (c) admission of such Shares to listing on The Nasdaq Stock Market or any stock exchange on
which the Shares are listed;

          (d) in the event the Shares are not registered under the Securities Act of 1933, qualification
as a private placement under said Act;

          (e) obtaining of any approval or other clearance from any Federal or state governmental agency
which the Committee in its discretion determines to be necessary or advisable; and

          (f) the Committee is fully satisfied that the issuance and delivery of Shares under this Plan
is in compliance with applicable Federal, state or local law, rule, regulation or ordinance or any
rule or regulation of any other regulating body, for which the Committee may seek approval of
counsel for the Company.

     14.3 Applicable Restrictions on Shares. Shares issued with respect to Awards may be subject to
such stock transfer orders and other restrictions as the Committee may determine necessary or
advisable under any applicable Federal or state securities law rules, regulations and other
requirements, the rules, regulations and other requirements of The Nasdaq Stock Market or any stock
exchange upon which the Shares are then-listed, and any other applicable Federal or state law and
will include any restrictive legends the Committee may deem appropriate to include.

     14.4 Book Entry. In lieu of the issuance of stock certificates evidencing Shares, the Company
may use a “book entry” system in which a computerized or manual entry is made in the records of the
Company to evidence the issuance of such Shares. Such Company records are, absent manifest error,
binding on all parties.

ARTICLE 15

Satisfaction of Tax Liabilities

     15.1 In General. The Company shall withhold any taxes which the Committee determines the
Company 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 Company to discharge its
obligations under this Section. The Company may withhold: (a) cash, (b) subject to any limitations
under Rule 16b-3, Common Shares to be issued, or (c) any combination thereof, in an amount equal to
the amount which the Committee determines is necessary to satisfy the obligation of the Company, a
Subsidiary or a Parent to withhold federal, state and local income taxes or other amounts incurred
by reason of the grant or exercise of an Award, its disposition, or the disposition of the
underlying Common Shares. Alternatively, the Company may require the holder to pay to the Company
such amounts, in cash, promptly upon demand.

24

 

     15.2 Withholding from Share Distributions. With respect to a distribution in Shares pursuant
to Restricted Share, Restricted Share Unit or Performance Share Award under the Plan, the Committee
may cause the Company to sell the fewest number of such Shares for the proceeds of such sale to
equal (or exceed by not more than that actual sale price of a single Share) the Company’s required
tax withholding relating to such distribution. The Committee may withhold the proceeds of such sale
for purposes of satisfying such tax withholding obligation.

ARTICLE 16

General Provisions

     16.1 No Implied Rights to Awards or Employment. No potential participant has any claim or
right to be granted an Award under this Plan, and there is no obligation of uniformity of treatment
of participants under this Plan. Neither this Plan nor any Award 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 Award agreement.

     16.2 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.

     16.3 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.

     16.4 Code Section 162(m) Compliance. The Plan is intended to comply with all applicable
requirements of Section 162(m) of the Code with respect to “performance-based compensation” for
Section 162(m) Persons. Unless the Committee expressly determines otherwise, any provision of this
Plan that is contrary to such requirements does not apply to such “performance-based compensation.”

     16.5 Successors. All obligations of the Company with respect to Awards 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.

     16.6 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.

25

 

     16.7 Governing Law. To the extent not preempted by Federal law, this Plan and all Award
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.

     16.8 Legal Requirements. No Awards shall be granted and the Company shall have no obligation
to make any payment under the Plan, whether in Shares, cash, or a combination thereof, unless such
payment is, without further action by the Committee, in compliance with all applicable Federal and
state laws and regulations, including, without limitation, the Code and Federal and state
securities laws.

ARTICLE 17

Effective Date and Term

     17.1 Effective Date. The effective date of this LNB Bancorp, Inc. 2006 Stock Incentive Plan is
the date on which the shareholders of the Company approve it at a duly held shareholders’ meeting.

     17.2 Termination Date. This Plan will continue in effect until midnight on the day before the
tenth anniversary of the effective date specified in Section 17.1; provided, however, that Awards
granted on or before that date may extend beyond that date.

ARTICLE 18

Clawback of Plan Payments

     Notwithstanding any provision in the Plan to the contrary, in the event that a grant or
grants, or payment or payments, are made to “senior executive officer(s)” (as that term is defined
in accordance with Section 111(b)(3) of the Emergency Economic Stabilization Act of 2008 (“EESA”))
and it is later determined that the grant or grants, or payment or payments, were based on
materially inaccurate financial statements or on any other materially inaccurate performance metric
criteria, then in such event, to the extent necessary to comply with Section 111(b)(2)(B) of EESA,
shall the full amount of any and all payment(s) that have been made to such senior executive
officer(s) become immediately due and owing to the Company, and the senior executive officer(s) who
received such grant(s) or payment(s) shall forfeit or repay, as applicable, the full amount of such
grant(s) or payment(s) to the Company, in accordance with and in a manner that complies with the
requirements of Section 111(b)(2)(B) of EESA.

26

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