EXHIBIT 10.3
BELMONT NATIONAL BANK
EXECUTIVE INCENTIVE CASH AGREEMENT
THIS AGREEMENT is made this 2nd day of January, 1998, by and between the
BELMONT NATIONAL BANK, a national banking association located in St.
Xxxxxxxxxxx, Ohio (the "Company"), and ______________________________ (the
"Executive").
INTRODUCTION
To encourage the Executive to remain an employee of the Company, the
Company is willing to provide to the Executive a cash bonus opportunity.
AGREEMENT
The Executive and the Company agree as follows:
Article I
Definitions
1.1 Definitions. Whenever used in this Agreement, the following words and
phrases shall have the meanings specified:
1.1.1 "Disability" means, if the Executive is covered by a
Company-sponsored disability insurance policy, total disability as defined
in such policy without regard to any waiting period. If the Executive is
not covered by such a policy, Disability means the Executive suffering a
sickness, accident or injury which, in the judgment of a physician
satisfactory to the Company, prevents the Executive from performing
substantially all of the Executive's normal duties for the Company. As a
condition to any benefits, the Company
may require the Executive to submit to such physical or mental evaluations
and tests as the Company's Board of Directors deems appropriate.
1.1.2 "Normal Retirement Age" means the Executive's 65 birthday.
1.1.3 "Normal Retirement Date" means the later of the Executive's
Termination of Employment or the Executive's Normal Retirement Age.
1.1.4 "Peer Group XXX" means the XXX of a peer group of banks as
defined in the SNL Executive Compensation Review (published by SNL
Securities LC). The peer group to be the national XXX based on asset size
category.
1.1.5 "Return On Equity or XXX" means the Company's after tax net
income at the end of the most recent fiscal year, adjusted for
Extraordinary Items, divided by the Company's average equity for the fiscal
year.
1.1.6 "Termination of Employment" means the Executive ceasing to be
employed by the Company for any reason whatsoever, voluntary or
involuntary, other than by reason of an approved leave of absence.
1.1.7 "Change of Control" means the Executive's Termination of
Employment for reasons other than death, disability, retirement, or
substantially diminished duties of the Executive, within twelve (12) months
of the acquisition, directly or indirectly, by any "person" (as such term
is defined for purposes of Section 13(d) and 14(d) of the Securities
Exchange Act of 1934 ("Exchange Act")) of the beneficial ownership (as such
term is defined for purposes of Section 13(d)(1) of the Exchange Act) of
the shares of the Company which, when added to the other shares the
beneficial ownership of which is held by such acquiror, shall result in
such acquiror owning more than forty percent (40%) of the combined
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voting power of the Company's then outstanding voting securities. Not
included in the foregoing is an acquisition of such shares by:
(a) the Company or any subsidiary or affiliate of the Company; or
(b) any person (as defined above) who on the date of this Agreement
is a director of the Company or whose share or stock therein are
treated as beneficially owned (as defined in Rule 13d-3 of the
Exchange Act) by any such director.
Article 2
Cash Bonus
2.1 Incentive Award. The Return On Equity ('XXX-) determined as of December
31 of each Plan Year shall determine the Executive's Cash Bonus Award
Percentage, in accordance with the following chart:
If the Company's XXX
is greater or equal to
the Peer Grout) XXX by: and less than Cash Bonus Award Percentage
----------------------- ------------- ---------------------------
0% 10% 0%
10% 20% 7.50%
20% 30% 10.00%
30% 40% 12.50%
40% 50% 15.00%
50% 60% 17.50%
60% 70% 20.00%
70% 80% 25.00%
80% 90% 30.00%
90% 100% 35.00%
100% -- 40.00%
* Average Peer Group XXX as reported by SNL Securities.
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The above chart is specifically subject to change at the sole discretion of
the Company's Board of Directors. The Cash Award is calculated annually by
taking the Executive's base salary for the year in which the XXX was determined
and multiplying it by the Cash Bonus Award Percentage.
Article 3
Payment of Benefits
3.1 Cash Bonus Award. If the Executive is employed by the Company on
December 31 of the Plan Year, the Company will pay the Executive 90% of his Cash
Bonus Award based on third quarter Peer Group XXX as reported by SNL Securities.
Such payment will be made within 30 days after December 31 of the Plan Year. The
remaining portion of the Executive's Cash Bonus Award based on year end Peer
Group XXX results for the Plan Year will be paid to the Executive within 30 days
of the Company's receipt of said information.
3.2 Disability Benefit. Only for purposes of this Agreement, upon the
Executive's Termination of Employment during the Plan Year due to Disability,
the Executive shall be treated as if he was employed on December 31st of the
Plan Year and the Company shall pay to the Executive his Cash Bonus Award.
3.3 Change of Control Benefit. Only for purposes of this Agreement, upon a
Change of Control during the Plan Year, the Executive shall be treated as if he
was employed on December 31st of the Plan Year and the Company shall pay to the
Executive his Cash Bonus Award.
3.4 Death During Active Employment. If the Executive dies during the Plan
Year while in the active Employment of the Company, the Company shall pay to the
Executive's beneficiary the benefit described in this Section 3.4.
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3.4.1 Amount of Benefit. The benefit under Section 3.4 is the Cash
Bonus Award calculated as if the Executive were employed on December 31st
of the Plan Year in which death occurred and as if the Executive was paid
his entire salary for the Plan Year in which death occurred.
3.4.2 Payment of Benefit. The Company shall pay the benefit to the
Executive's beneficiary in the form of a lump sum payable within 90 days of
the end of the Plan Year.
Article 4
Beneficiaries
4.1 Beneficiary Designations. The Executive shall designate a beneficiary
by filing a written designation with the Company. The Executive may revoke or
modify the designation at any time by filing a new designation. However,
designations will only be effective if signed by the Executive and accepted by
the Company during the Executive's lifetime. The Executive's beneficiary
designation shall be deemed automatically revoked if the beneficiary predeceases
the Executive, or if the Executive names a spouse as beneficiary and the
marriage is subsequently dissolved. If the Executive dies without a valid
beneficiary designation, all payments shall be made to the Executive's estate.
4.2 Facility of Payment. If a benefit is payable to a minor, to a person
declared incompetent, or to a person incapable of handling the disposition of
his or her property, the Company may pay such benefit to the guardian, legal
representative or person having the care or custody of such minor, incompetent
person or incapable person. The Company may require proof of incompetence,
minority or guardianship as it may deem appropriate prior to distribution of the
benefit. Such distribution shall completely discharge the Company from all
liability with respect to such benefit.
Article 5
General Limitations
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Notwithstanding any provision of this Agreement to the contrary, the
Company shall not pay any benefit under this Agreement:
5.1 Excess Parachute Payment. To the extent the benefit would create an
excise under the parachute payment rules under Section 280G of the Code.
5.2 Termination for Cause. If the Company terminates the Executive's
Employment for:
5.2.1 Gross negligence or gross neglect of duties;
5.2.2 Commission of a felony or of a gross misdemeanor involving moral
turpitude; or
5.2.3 Fraud, disloyalty, dishonesty or willful violation of any law or
significant Company policy committed in connection with the Executive's
Employment.
Article 6
Claims and Review Procedures
6.1 Claims Procedure. The Company shall notify the Executive, the
Executive's beneficiary, or any other party who claims a right to an interest
under the Agreement (the "Claimant") in writing, within ninety (90) days of his
or her written application for benefits, of his or her eligibility or
ineligibility for benefits under the Agreement. If the Company determines that
the Claimant is not eligible for benefits or full benefits, the notice shall set
forth (1) the specific reasons for such denial, (2) a specific reference to the
provisions of the Agreement on which the denial is based, (3) a description of
any additional information or material necessary for the Claimant to perfect his
or her claim, and a description of why it is needed, and (4) an explanation of
the Agreement's claims review procedure and other appropriate information as to
the steps to be taken
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if the Claimant wishes to have the claim reviewed. If the Company determines
that there are special circumstances requiring additional time to make a
decision, the Company shall notify the Claimant of the special circumstances and
the date by which a decision is expected to be made, and may extend the time for
up to an additional ninety-day period.
Article 7
Amendments and Termination
This Agreement may be amended or terminated at the sole discretion of the
Board of Directors of the Company. The Board of Directors must give the
Executive written notice prior to the date the Cash Bonus Award is payable under
this Agreement.
Article 8
Miscellaneous
8.1 Binding Effect. This Agreement shall bind the Executive and the
Company, and their beneficiaries, survivors, executors, administrators and
transferees.
8.2 No Guarantee of Employment. This Agreement is not an employment policy
or contract. It does not give the Executive the right to remain an employee of
the Company, nor does it interfere with the Company's right to discharge the
Executive. It also does not require the Executive to remain an employee nor
interfere with the Executive's right to terminate employment at any time.
8.3 Non-Transferability. Benefits under this Agreement cannot be sold,
transferred, assigned, pledged, attached or encumbered in any manner.
8.4 Tax Withholding. The Company shall withhold any taxes that are required
to be withheld from the benefits provided under this Agreement.
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8.5 Applicable Law. The Agreement and all rights hereunder shall be
governed by the laws of the State of Ohio, except to the extent preempted by the
laws of the United States of America.
8.6 Entire Agreement. This Agreement is the entire agreement between the
parties and it contains all of the covenants and agreements between the
Executive and the Company.
8.7 Administration. The Company shall have powers which are necessary to
administer this Agreement, including but not limited to:
8.7.1 Interpreting the provisions of the Agreement;
8.7.2 Establishing and revising the method of accounting for the
Agreement;
8.7.3 Maintaining a record of benefit payments;
8.7.4 Establishing rules and prescribing any forms necessary or
desirable to administer the Agreement.
IN WITNESS WHEREOF, the Executive and a duly authorized Company officer
have signed this Agreement.
EXECUTIVE: COMPANY:
Belmont National Bank
By:
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Title:
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BELMONT NATIONAL BANK
EXECUTIVE INCENTIVE CASH AGREEMENT
BENEFICIARY DESIGNATION
I designate the following as beneficiary of any death benefits under Belmont
National Bank Executive incentive Cash Agreement:
Primary:
Contingent:
Note: To name a trust as beneficiary, please provide the name of the
trustee(s) and the exact name and date of the trust agreement.
I understand that I may change these beneficiary designations by filing a new
written designation with the Company. I further understand that the designations
will be automatically revoked if the beneficiary predeceases me, or, if I have
named my spouse as beneficiary, in the event of the dissolution of our marriage.
Signature:__________________
Date:
Accepted by the Company this ____ day of ________________, 19__.
By:_________________________
Title:
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