2008 Management Incentive
Plan
For Key Executives
(Restated as of December 12,
2008)
The LNB
Bancorp, Inc. 2008 Management Incentive Plan for Key Executives is
designed to reward Key Executives with incentive compensation
payments for achieving profitability goals and subjective
goals.
The following
terms, as used in this Plan, shall mean:
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A.
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Committee
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The Compensation
Committee of the Board of Directors of LNB Bancorp, Inc., or such
other committee as such Board may designate.
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B.
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Employer or Lorain National Bank
. LNB Bancorp, Inc., its subsidiaries and
affiliates.
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C.
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Plan year
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January 1, 2008
through December 31, 2008.
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D.
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Employee/Key
Executive . The participants selected to
participate in this Plan as described in Section III
below.
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E.
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Plan . The LNB Bancorp, Inc. 2008
Management Incentive Plan for Key Executives.
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F.
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Incentive Payment
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Cash payment earned by
Employee on the Incentive Payment Date, as determined in accordance
with Section IV and the other terms of this Plan.
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G.
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Incentive Payment
Date . The date on which an Incentive
Payment to Employee is paid, which shall be as soon as reasonably
practicable after such payment is calculated and authorized by the
Committee but not later than two and one-half months following the
end of the Plan year.
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H.
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Profitability
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Profitability is
defined as net income after tax of LNB Bancorp, Inc. and its
consolidated subsidiaries for the Plan year, as determined by the
Committee. The Committee has the discretion to adjust for any
unforeseen occurrences which may affect the profitability
number.
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I.
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Profitability Goal
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An amount of
Profitability established as a goal by the Committee in its
discretion and solely for purposes of this Plan, based on the
Employer’s annual budget as determined by its Audit and
Finance Committee. This goal will be communicated to each Key
Executive when the Key Executive is selected to participate in this
Plan.
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Employees of
Lorain National Bank, other than the CEO, are eligible to
participate in this Plan. Based upon CEO recommendations, the
Committee has the authority, in its discretion, to designate the
Employees who will participate in this Plan during the Plan
year.
Section IV. AMOUNT OF INCENTIVE
PAYMENT
Subject to the
other terms of this Plan, the amount of the Incentive Payment
earned by an Employee under this Plan will be determined, based on
Employer’s actual Profitability achievement for the Plan year
relative to the percentage of the Profitability Goal, a percentage
of Employee’s base salary, and on other terms as determined,
interpreted and established in the sole discretion of the
Committee.
Section V. OTHER INCENTIVE PAYMENT
TERMS
A.
Payments and Deductions/Withholding Taxes .
Employer will
pay an Employee the Incentive Payment on the Incentive Payment Date
provided the Employee is an active employee of Employer on that
date. The amount of the Incentive Payment, if any, shall be
calculated as provided in Section IV of this Plan. Deductions
may also be made at the discretion of Employer and in accordance
with applicable law for any amounts the employee owes to
Employer.
Employer may
withhold from any amounts payable under or in connection with this
Plan all federal, state, local and other taxes as may be required
to be withheld by Employer under applicable law or governmental
regulation or ruling.
B.
Incentive Payment Calculation .
The Committee
will have the sole authority and discretion to evaluate all aspects
of the Employer’s incentive compensation awards and to
determine performance and the total pool money available to all
Employees in the aggregate. Generally, subject in all cases to
terms as determined, interpreted and established in the sole
discretion of the Committee, the total pool of money available to
all Employees will be based upon whether the Employer achieves
actual Profitability for the Plan year that falls within a range of
specified minimum, target and maximum percentages of the
Profitability Goal, and will be zero if the Employer does not
achieve actual Profitability for the Plan year that is equal to at
least the specified minimum percentage of the Profitability Goal.
The CEO will determine the distribution to the Key Executives,
subject to Committee approval in its sole discretion.
The Committee
retains the right and authority (in addition to any other rights or
remedies of Employer) not to pay all or any part of an Incentive
Payment to any Employee based on operational wrongdoing or
misconduct of the Employee, as determined by the Committee in its
sole discretion. The Employer must document all such exceptions to
this Plan, including but not limited to, forfeiture of
payments.
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D.
Special Circumstances .
1. Conflicts
with Law . If any provision of this Plan violates local, state
or federal law, the applicable law shall control.
2. Voluntary
or Involuntary Termination . If Employee’s employment is
voluntarily or involuntarily terminated before the Incentive
Payment Date, Employee is not entitled to receive and will forfeit
the Incentive Payment. Employee must be employed on the Incentive
Payment Date to be entitled to the Incentive Payment.
3.
Transfer . If an Employee transfers to another position
within Employer that does not participate under this Plan before
the Incentive Payment Date, the E
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