INDEXED EXECUTIVE SALARY CONTINUATION PLAN AGREEMENT

 

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                                                                    EXHIBIT 10.3

 

                   INDEXED EXECUTIVE SALARY CONTINUATION PLAN

 

                                    AGREEMENT

 

      This Agreement, made and entered into this 28th day of March, 1995, by and

between The Commercial Savings Bank, a Bank organized and existing under the

laws of the State of Ohio, hereinafter referred to as "the Bank", and Philip

William Kinley, a Key Employee and the Executive of the Bank, hereinafter

referred to as "the Executive".

 

      The Executive has been in the employ of the Bank for several years and has

now and for years past faithfully served the Bank. It is the consensus of the

Board of Directors of the bank (the Board) that the Executive's services have

been of exceptional merit, in excess of the compensation paid and an invaluable

contribution to the profits and position of the Bank in its field of activity.

The Board further believes that the Executive's experience, knowledge of

corporate affairs, reputation and industry contacts are of such value and his

continued services are so essential to the Bank's future growth and profits that

it would suffer severe financial loss should the Executive terminate his

services.

 

      Accordingly, it is the desire of the Bank and the Executive to enter into

this Agreement under which the Bank will agree to make certain payments to the

Executive upon his retirement and, alternatively, to his beneficiary(ies) in the

event of his premature death while employed by the Bank.

 

      It is the intent of the parties hereto that this Agreement be considered

an arrangement maintained primarily to provide supplemental retirement benefits

for the Executive, as a member of a select group of management or

highly-compensated employees of the Bank for purposes of the Employee Retirement

Security Act of 1974 (ERISA). The Executive is fully advised of the Bank's

financial status and has had substantial input in the design and operation of

this benefit plan.

 

      Therefore, in consideration of the Executive's services performed in the

past and those to be performed in the future and based upon the mutual promises

and covenants herein contained, the Bank and the Executive, agree as follows:

 

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I.    DEFINITIONS

 

      A.    Effective Date:

 

            The Effective Date of this Agreement shall be March 28, 1995.

 

      B.    Plan Year:

 

            Any reference to "Plan Year" shall mean a calendar year from January

            1 to December 31. In the year of implementation, the term "Plan

            Year" shall mean the period from the effective date to December 31

            of the year of the effective date.

 

      C.    Retirement Date:

 

            Retirement Date shall mean retirement from service with the Bank

            which becomes effective on the first day of the calendar month

            following the month in which the Executive reaches his sixty-fifth

            (65th) birthday or such later date as the Executive may actually

            retire.

 

      D.    Termination of Service:

 

            Termination of Service shall mean voluntary resignation of service

            by the Executive or the Bank's discharge of the Executive without

            cause [as defined in subparagraph III (D) hereinafter], prior to the

            Normal Retirement Age [described in subparagraph I (J) hereinafter].

 

      E.    Pre-Retirement Account:

 

            A Pre-Retirement Account shall be established as a liability reserve

            account on the books of the Bank for the benefit of the Executive.

            Prior to termination of service or the Executive's retirement, such

            liability reserve account shall be increased or decreased each Plan

            Year (including the Plan Year in which the Executive ceases to serve

            on the Board) by an amount equal to the annual earnings or loss for

            that Plan Year determined by the Index [described in subparagraph I

            (G) hereinafter], less the Opportunity Cost for that Plan Year

            [described in subparagraph I (H) hereinafter].

 

      F.    Index Retirement Benefit:

 

            The Index Retirement Benefit for the Executive for any year shall be

            equal to the excess of the annual earnings (if any) determined by

            the Index [subparagraph I (G)] for that Plan Year over the

            Opportunity Cost [subparagraph I (H)] for that Plan Year.

 

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      G.    Index:

 

            The Index for any Plan Year shall be the aggregate annual after-tax

            income from the life insurance contracts described hereinafter as

            defined by FASB Technical Bulletin 85-4. This Index shall be applied

            as if such insurance contracts were purchased on the effective date

            hereof.

 

            Insurance Company:        Alexander Hamilton Life Insurance Company

            Policy Form:              Flexible Premium Adjustable Life Insurance

            Policy Name:              Universal Life

            Insured's Age, Sex:       35, Male

            Riders:                   None

            Ratings:                  None

            Option:                   Option A

            Face Amount:              $369,000

            Premiums Paid:            $95,000

            No. of Premium Payments:  One

            Assumed Purchase Date:    March 28, 1995

 

            If such contracts of life insurance are actually purchased by the

            Bank then the actual policies as of the dates they were purchased

            shall be used in calculations under this Agreement. If such

            contracts of life insurance are not purchased or are subsequently

            surrendered or lapsed, then the Bank shall receive annual policy

            illustrations that assume the above described policies were

            purchased from the above named insurance company(ies) on the

            Effective Date from which the increase in policy value will be used

            to calculate the amount of the Index.

 

            In either case, references to the life insurance contract are merely

            for purposes of calculating a benefit. The Bank has no obligation to

            purchase such life insurance and, if purchased, the Executive and

            his beneficiary(ies) shall have no ownership interest in such policy

            and shall always have no greater interest in the benefits under this

            Agreement than that of an unsecured general creditor of the Bank.

 

      H.    Opportunity Cost:

 

            The Opportunity Cost for any Plan Year shall be calculated by taking

            the sum of the amount of premiums set forth in the Indexed policies

            described above plus the amount of any benefits paid to the

            Executive pursuant to this Agreement (Paragraph III hereinafter)

            plus the amount of all previous years after-tax Opportunity Cost,

            and multiplying that sum by the average after-tax yield on a 90-day

            Treasury bill for the Plan Year.

 

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      I.    Change Of Control:

 

            Change of control shall be deemed to be the cumulative transfer of

            more than fifty percent (50%) of the voting stock of the Bank

            holding company from the Effective Date of this Agreement. For the

            purposes of this Agreement, transfers on account of deaths or gifts,

            transfers between family members or transfers to a qualified

            retirement plan maintained by the Bank shall not be considered in

            determining whether there has been a change in control.

 

      J.    Normal Retirement Age:

 

            Normal Retirement Age shall mean the date on which the Executive

            attains age sixty-five (65).

 

II.   EMPLOYMENT

 

      No provision of this Agreement shall be deemed to restrict or limit any

      existing employment agreement by and between the Bank and the Executive,

      nor shall any conditions herein create specific employment rights to the

      Executive nor limit the right of the Employer to discharge the Executive

      with or without cause. In a similar fashion, no provision shall limit the

      Executive's rights to voluntarily sever his employment at any time.

 

III.  INDEX BENEFITS

 

      The following benefits provided b