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LNB Bancorp, Inc.
Exhibit to Form 10-Q
(For the six months ended June 30, 1996)
S - K Reference Number (10c)
Supplemental Retirement Agreement by and between
Gregory D. Friedman and The Lorain National Bank
dated July 30, 1996.
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DPB/cf
7/19/96
SUPPLEMENTAL RETIREMENT AGREEMENT
FOR GREGORY D. FRIEDMAN
THIS AGREEMENT, made and entered into this 30th day of July, 1996, by
and between LORAIN NATIONAL BANK (hereinafter referred to as the "Bank"), a
national banking association organized and existing under the laws of the United
States, whose principal place of business is Lorain, Ohio, and GREGORY D.
FRIEDMAN (hereinafter referred to as the "Executive").
WHEREAS, the Executive has rendered valuable services to the Bank for
many years and it is the desire of the Bank to provide him with certain
Supplemental Retirement Benefits in addition to the retirement benefits provided
to him under the Lorain National Bank Retirement Pension Plan; and
WHEREAS, the Executive has performed his duties in a capable and
efficient manner, resulting in substantial growth and progress to the Bank;
and
WHEREAS, the Bank desires to retain the services of the Executive, and
realizes that if the Executive were to leave the Bank it could suffer a
substantial financial loss; and
WHEREAS, the Executive is willing to continue in the employ of the Bank
if the Bank will agree to pay certain benefits in accordance with the provisions
and conditions hereinafter set forth; and
WHEREAS, it is understood and agreed that this Agreement is to be
effective as of June 4, 1996; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. Employment of the Executive
---------------------------
The Executive shall continue to perform duties for the Bank in such
senior executive capacity as its Board of Directors may designate from time to
time. The Executive shall devote his best efforts to the performance of his
duties for the Bank.
2. Compensation
------------
The Executive shall be compensated for the performance of his duties as
is determined by Bank's Board of Directors.
3. Supplemental Retirement Benefit
-------------------------------
(a) Normal Retirement
-----------------
If the Executive remains in the continuous employ of the Bank and
retires from active employment with the Bank on or after August 1, 2015,
the Executive and/or his beneficiary will be entitled to receive a
Supplemental Retirement Benefit which when added to the Executive's
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pension benefits and social security benefits would equal seventy
percent (70%) of the Executive's Lorain National Bank compensation for
the full calendar year of employment preceding Executive's retirement as
reflected on the Executive's W-2 Federal Income Tax Statement for such
year and payable each year for a ten (10) year period commencing one (1)
month after Executive's retirement date. The Supplemental Retirement
Benefit shall be paid annually or ratably in twelve (12) equal monthly
installments each year during the ten (10) year period as the Executive
or his beneficiary may elect.
(b) Early Retirement
----------------
In the event the Executive retires prior to August 1, 2015, the
Executive and/or his beneficiary shall be entitled to receive an
applicable percentage of the aforementioned Supplemental Retirement
Benefit. The applicable percentage for the corresponding early
retirement ages are as follows:
Early
Retirement Applicable
Ages Percentage
---------- ----------
46-61 0%
62 25% of the full benefit (70%)
63 50% of the full benefit (70%)
64 75% of the full benefit (70%)
The corresponding benefits will be paid on a per year basis payable over
a ten (10) year period.
(c) Death Benefit
-------------
In the event the Executive should die after having established
eligibility for benefits (based on meeting either the early or normal
retirement age requirements) set forth under this Agreement, any amounts
due or remaining to be paid shall be paid to such beneficiary or
beneficiaries as the Executive may have designated by filing with the
Bank a notice in writing in a form acceptable to the Bank. In the
absence of any such designation, such unpaid amounts shall be paid to
the Executive's surviving spouse, or, if the Executive should die
without a spouse surviving, to the Executive's estate.
(d) Disability Benefit
------------------
If the Executive should become disabled while employed by the Bank and
prior to reaching age sixty-five (65), the Executive will be eligible to
receive his Supplemental Retirement Benefit commencing at age 65, as if
he had retired on or after August 1, 2015.
For the purposes of this Agreement, the term "permanent disability"
shall mean physical or mental impairment which prevents the Executive from
engaging in further employment by the Bank as a senior executive on a full time
basis and which, on the basis of medical evidence satisfactory to the Board of
Directors, is expected to continue for a period of six (6) months.
It is intended that the events which shall give rise to an entitlement
on the part of the Executive or his beneficiary to receive the Supplemental
Retirement Benefit or a form thereof shall include:
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(i) The normal retirement of the Executive on or after August 1,
2015.
(ii) The early retirement of the Executive on or after August 1, 2012.
(iii) The permanent disability of the Executive.
(iv) The death of the Executive after reaching early retirement age.
4. Non-alienation of Benefits
--------------------------
The right of the Executive, or any other person, to the payment of
benefits under this Agreement shall not be assigned, transferred, pledged or
encumbered, any attempt to do so shall be void.
5. Executive's Rights Under This Agreement to be Those of an Unsecured
-------------------------------------------------------------------
Creditor of the Bank
- --------------------
The rights of the Executive under this Agreement, and of any beneficiary
of the Executive, shall be solely those of an unsecured creditor of the Bank.
Nothing contained in this Agreement and no action taken pursuant to the
provisions of this Agreement shall create or be construed to create a trust of
any kind or a fiduciary relationship between the Bank and the Executive or his
beneficiaries. Any funds, insurance contracts or other assets of the Bank,
whether designated by the Bank to provide the benefits contemplated herein or
not, shall at all times continue to be a part of the general funds of the Bank
and no person other than the Bank shall, by virtue of this Agreement, have any
interest in such funds or assets.
6. General Provisions
------------------
This Agreement shall not be deemed to constitute a contract of
employment between the parties, nor shall any provisions hereof restrict the
right of the Bank to terminate the Executive's services or restrict the right of
the Executive to terminate his services.
The Board of Directors shall have the full power and authority to
interpret, construe and administer this Agreement, and all actions taken by the
Board of Directors in good faith shall be binding and conclusive on all persons
concerned. No member of the Board of Directors shall be liable to any person or
any action taken or omitted in connection with the interpretation or
administration of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
This Agreement shall be binding upon and inure to the benefit of the
Bank, its successors and assigns, and the Executive, his heirs, executors,
administrators and legal representatives.
This Agreement shall be construed in accordance with and governed by
the laws of the State of Ohio.
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IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed
by its duly authorized officer, and the Executive has hereunto set his hand as
of the date first above written.
IN THE PRESENCE OF:
BANK
LORAIN NATIONAL BANK:
/s/ Paulette Mager BY: /s/ J. F. Kidd
- ------------------------------ --------------------
/s/ Denise DeVito President
- ------------------------------
EXECUTIVE
/s/ Paulette Mager /s/ Gregory D. Friedman
- ------------------------------ ------------------------
/s/ Denise DeVito Gregory D. Friedman
- ------------------------------