PARK NATIONAL CORP /OH/
EX-10.6
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>2
<FILENAME>l25996aexv10w6.htm
<DESCRIPTION>EX-10.6
<TEXT>
<HTML>
<HEAD>
<TITLE>EX-10.6</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>EXHIBIT 10.6</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Summary of Incentive Compensation Plan<BR>
of</B><BR>
<U><B>Park National Corporation</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee of the Board of Directors of Park National Corporation (&#147;Park&#148;)
administers Park&#146;s incentive compensation plan which enables the officers of Park&#146;s subsidiaries to
share in any above-average return on equity (as defined below) which Park and Park&#146;s subsidiaries
on a consolidated basis may generate during each twelve-month period ending September&nbsp;30. During
the fiscal year ended December&nbsp;31, 2006 (the &#147;2006 fiscal year&#148;), all officers of Park&#146;s
subsidiaries (including each of Park&#146;s executive officers) were eligible to participate in the
incentive compensation plan. For the fiscal year ending December&nbsp;31, 2007 (the &#147;2007 fiscal
year&#148;), all officers of Park&#146;s subsidiaries (including each of Park&#146;s executive officers) will also
be eligible to participate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Above-average return on equity is defined as the amount by which the net income to average
shareholders&#146; equity ratio of Park and Park&#146;s subsidiaries on a consolidated basis for a
twelve-month period ended September&nbsp;30 exceeds the median net income to average shareholders&#146;
equity ratio of all U.S. bank holding companies of similar asset size ($3&nbsp;billion to $10&nbsp;billion).
A historically applied formula determines the amount, if any, by which Park&#146;s return on equity
ratio exceeds the median return on equity ratio of these peer bank holding companies.
Approximately twenty percent (20%) of any such excess amount on a before-tax equivalent basis is
then available for incentive compensation. If Park&#146;s return on equity ratio is equal to or less
than that of the peer group, no incentive compensation will be available with respect to that
twelve-month period. The Chairman of the Board and Chief Executive Officer and the President of
Park and Park National Bank historically received a fixed percentage of the total amount available
for incentive compensation as determined by the Board of Directors and, more recently, the
Compensation Committee of the Board of Directors (the &#147;Compensation Committee&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Park&#146;s accumulation of capital over the recent several years, while enhancing the safety and
soundness of Park, has put increasing pressure on Park&#146;s ability to generate superior levels of
return on equity ratio. The Compensation Committee has monitored this development and carefully
considered the impact of increasing levels of capital relative to Park&#146;s peer group, and the
attendant negative impact on Park&#146;s return on equity ratio. As a result, Park&#146;s management
provided alternatives for the Compensation Committee&#146;s consideration, including an adjusted capital
formula that caused Park&#146;s capital level to be equal to the median of Park&#146;s peer group&#146;s capital
level. This adjusted formula then reduced Park&#146;s net income and Park&#146;s adjusted return on equity
ratio was then compared to the median return on equity ratio of its peer group.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The incentive compensation amounts in recent years, computed by using both the original 20%
historic ratio formula as well as the adjusted capital formula, have fluctuated significantly.
These fluctuations may have been caused largely by changing levels of capital at peer companies as
well as at Park. As a result, the Compensation Committee has attempted to utilize both the
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">historic 20% ratio formula as well as the adjusted capital formula and exercised its discretion in
order to arrive at a total pool amount that it determined to be fair and appropriate in recent
years, including the 2006 fiscal year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee met on December&nbsp;27, 2006 to determine the amount of incentive
compensation to be paid to each of Messrs.&nbsp;C. Daniel DeLawder (who served as Chairman of the Board
and Chief Executive Officer of Park and The Park National Bank during the 2006 fiscal year and
continues to so serve during the 2007 fiscal year), David L. Trautman (who served as President and
Secretary of Park and as President of The Park National Bank during the 2006 fiscal year and
continues to so serve during the 2007 fiscal year) and John W. Kozak (who served as Chief Financial
Officer of Park and as Senior Vice President and Chief Financial Officer of The Park National Bank
during the 2006 fiscal year and continues to so serve during the 2007 fiscal year) in respect of
the twelve-month period ended September&nbsp;30, 2006 (the &#147;2006 Incentive Compensation Period&#148;). The
Compensation Committee computed 17.5% of Park&#146;s computed return on equity advantage to arrive at a
total incentive compensation pool of $9,792,000. The following schedule sets forth the incentive
compensation paid on January&nbsp;26, 2007 to them for the 2006 Incentive Compensation Period:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>C. Daniel DeLawder &#151; $473,525</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>David L. Trautman &#151; $313,250</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>John W. Kozak &#151; $214,455</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After deducting the incentive compensation to be paid to Messrs.&nbsp;DeLawder, Trautman and Kozak,
the remaining amount available for incentive compensation pay was distributed to the officers of
Park&#146;s subsidiaries on the basis of their respective contributions to Park&#146;s achieving its
short-term and long-term financial goals during the 2006 Incentive Compensation Period, which
contributions were subjectively determined by the Chairman of the Board and Chief Executive Officer
and the President and Secretary of Park and approved by Park&#146;s Board of Directors, upon
recommendation of the Compensation Committee. Recommendations of the presidents of Park&#146;s
subsidiaries were considered when determining incentive compensation amounts for officers (other
than the internal audit staff) of those subsidiaries. The incentive compensation paid to the
internal audit staff of Park&#146;s subsidiaries was determined by the Audit Committee of Park&#146;s Board
of Directors. The incentive compensation paid to staff employees who perform independent loan
review functions was determined by the Executive Committee of Park&#146;s Board of Directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will determine the 2007 fiscal year incentive compensation for each
of Messrs.&nbsp;DeLawder, Trautman and Kozak and the total incentive compensation pool for the officers
of Park and Park&#146;s subsidiaries. The determination will be made during the fourth quarter of
2007. The Compensation Committee will review the comparison of Park&#146;s return on equity ratio for
the twelve-month period ending September&nbsp;30, 2007 compared to the return on equity of Park&#146;s peer
group for the same period of time. The Compensation Committee will not award incentive
compensation to any officer if Park&#146;s return on equity ratio for the 12-month period ending
September&nbsp;30, 2007 does not exceed that of Park&#146;s peer groups.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the five years ended December&nbsp;31, 2006, Park&#146;s return on equity has averaged 17.11%
compared to 13.41% for its peer group, defined as all U.S. Bank holding companies between $3
billion and $10&nbsp;billion in assets. The Compensation Committee anticipates that the 2007 officer
incentive compensation pool will be determined by computing 17.5% of Park&#146;s computed return on
equity advantage and further increasing this pool based upon the increase in Park&#146;s fully diluted
earnings per share for twelve-month period ended September&nbsp;30, 2007 compared to the twelve-month
period ended September&nbsp;30, 2006. The following table indicates by how much the computed return on
equity advantage would be increased for an increase in fully diluted earnings per share.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center">Increase in Fully</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">Increase in Incentive</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Diluted EPS</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000">Compensation Pool</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">0 to 1.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">0%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">2 to 2.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">.5%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">3 to 3.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">1.5%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">4 to 4.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">2.4%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">5 to 5.99%<BR>
6 to 6.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">3.5%<BR>
4.8%</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top">7 to 7.99%
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">6.3%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD align="center" valign="top">8% and over
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Equivalent to actual<BR>
percentage (or portion thereof) increase</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compensation Committee will determine the 2007 incentive compensation for Messrs.
DeLawder, Trautman and Kozak based on the Compensation Committee&#146;s determination of how well Park
performed in 2007 and the Compensation Committee&#146;s evaluation of the performance of each of Messrs.
DeLawder, Trautman and Kozak.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
