Form 11-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
| |
|
|
| þ |
|
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the fiscal year ended December 31, 2008
OR
| |
|
|
| o |
|
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 333-91178
A. Full title of the plan and the address of the plan, if different from that of the issuer
named below:
Park National Corporation
Employees Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal
executive office:
Park National Corporation
50 North Third Street
Newark, Ohio 43055
REQUIRED INFORMATION
The following financial statements and supplemental schedules for the Park National
Corporation Employees Stock Ownership Plan are being filed herewith:
Audited Financial Statements:
Report of Independent Registered Public Accounting Firm -
Crowe Horwath LLP
Statements of Net Assets Available
for Benefits at December 31, 2008 and 2007
Statements of Changes in Net Assets Available
for Benefits for the Years Ended December 31, 2008 and 2007
Notes to Financial Statements — December 31, 2008 and 2007
Supplemental Schedules:
Schedule of Delinquent Participant Contributions, Schedule H, Line 4(a) — December 31, 2008
Schedule
of Assets (Held at End of Year), Schedule H, Line 4(i) — December 31, 2008
Schedule of Reportable Transactions,
Schedule H, Line 4(j) — December 31, 2008
The following exhibit is being filed herewith:
| |
|
|
|
|
| Exhibit No. |
|
Description |
| |
|
|
|
|
| |
23.1 |
|
|
Consent of Independent Registered Public Accounting Firm —
Crowe Horwath LLP |
-2-
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
|
|
|
|
| |
PARK NATIONAL CORPORATION
EMPLOYEES STOCK OWNERSHIP PLAN
By THE PARK NATIONAL BANK, Trustee
|
|
| Date: June 19, 2009 |
By: |
/s/ John W. Kozak |
|
| |
|
Printed Name: |
John W. Kozak |
|
| |
|
Title: |
Chief Financial Officer |
|
-3-
Financial Statements and Supplemental Schedules
Park National Corporation
Employees Stock Ownership Plan
Years Ended December 31, 2008 and 2007
With Report of Independent Registered Public Accounting Firm
Park National Corporation
Employees Stock Ownership Plan
Financial Statements and Supplemental Schedules
Years Ended December 31, 2008 and 2007
Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Executive Committee of the Board of Directors
Plan Oversight Committee
Park National Corporation Employees Stock Ownership Plan
We have audited the accompanying statements of net assets available for benefits of the Park
National Corporation Employees Stock Ownership Plan (the Plan) as of December 31, 2008 and 2007,
and the related statements of changes in net assets available for benefits for the years then
ended. These financial statements are the responsibility of the Plan’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31, 2008 and 2007, and
the changes in net assets available for benefits for the years then ended in conformity with U.S.
generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
taken as a whole. The accompanying supplemental schedules of delinquent participant contributions,
assets (held at end of year) and reportable transactions are presented for purposes of additional
analysis and are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor’s Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules
are the responsibility of the Plan’s management. The supplemental schedules have been subjected to
the auditing procedures applied in the audit of the basic 2008 financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic 2008 financial
statements taken as a whole.
/s/ Crowe Horwath LLP
Crowe Horwath LLP
Columbus, Ohio
June 19, 2009
Park National Corporation
Employees Stock Ownership Plan
Statements of Net Assets Available for Benefits
December 31, 2008 and 2007
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
— |
|
|
$ |
26,924 |
|
|
|
|
|
|
|
|
|
|
Investments, at fair value: |
|
|
|
|
|
|
|
|
Park National Corporation Common Stock |
|
|
47,923,332 |
|
|
|
38,339,896 |
|
Mutual Funds |
|
|
11,509,058 |
|
|
|
16,757,198 |
|
Money Market Funds |
|
|
— |
|
|
|
355,460 |
|
Interest-bearing account, issued by
Park National Bank |
|
|
187,603 |
|
|
|
— |
|
Savings accounts, issued by
Park National Corporation bank affiliates |
|
|
2,779,207 |
|
|
|
2,641,447 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments |
|
|
62,399,200 |
|
|
|
58,094,001 |
|
|
|
|
|
|
|
|
|
|
Contributions receivable: |
|
|
|
|
|
|
|
|
Employer |
|
|
31 |
|
|
|
— |
|
Employee |
|
|
62 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
93 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Accrued interest and dividends |
|
|
12,018 |
|
|
|
575,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
62,411,311 |
|
|
|
58,696,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS AVAILABLE FOR BENEFITS |
|
$ |
62,411,311 |
|
|
$ |
58,696,895 |
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
2
Park National Corporation
Employees Stock Ownership Plan
Statements of Changes in Net Assets Available for Benefits
For the years ended December 31, 2008 and 2007
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
Additions: |
|
|
|
|
|
|
|
|
Investment income (loss): |
|
|
|
|
|
|
|
|
Net realized and unrealized depreciation
in fair value of investments |
|
$ |
(991,434 |
) |
|
$ |
(19,742,768 |
) |
Interest and dividends |
|
|
2,837,693 |
|
|
|
2,707,464 |
|
|
|
|
|
|
|
|
Total investment income (loss) |
|
|
1,846,259 |
|
|
|
(17,035,304 |
) |
|
|
|
|
|
|
|
|
|
Contributions: |
|
|
|
|
|
|
|
|
Employer |
|
|
1,976,762 |
|
|
|
1,867,859 |
|
Employee |
|
|
4,365,262 |
|
|
|
4,186,816 |
|
Rollover |
|
|
36,284 |
|
|
|
1,179,486 |
|
|
|
|
|
|
|
|
Total contributions |
|
|
6,378,308 |
|
|
|
7,234,161 |
|
|
|
|
|
|
|
|
Net increase (decrease) before deductions |
|
|
8,224,567 |
|
|
|
(9,801,143 |
) |
|
|
|
|
|
|
|
|
|
Deductions: |
|
|
|
|
|
|
|
|
Benefit payments to participants |
|
|
4,510,151 |
|
|
|
6,026,638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets available for benefits |
|
|
3,714,416 |
|
|
|
(15,827,781 |
) |
|
|
|
|
|
|
|
|
|
Net assets available for benefits at beginning of year |
|
|
58,696,895 |
|
|
|
74,524,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits at end of year |
|
$ |
62,411,311 |
|
|
$ |
58,696,895 |
|
|
|
|
|
|
|
|
See accompanying notes to financial statements.
3
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements
December 31, 2008 and 2007
1. Description of the Plan
The following description of the Park National Corporation Employees Stock Ownership Plan (the
“Plan”) provides only general information. Participants should refer to the Plan agreement for a
more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering full-time or part-time employees of Park National
Corporation and subsidiaries (“Park”) who have completed one year of service, and are age eighteen
or older. It is subject to the provisions of the Employee Retirement Income Security Act of 1974
(“ERISA”).
Contributions
Each year, participants may contribute up to 25% of their pretax annual compensation, as defined in
the Plan. Participants may also contribute rollover amounts representing distributions from other
qualified defined contribution plans. The maximum salary deferral permitted by the Internal
Revenue Code (Code) was $15,500 for 2008 and 2007. The Plan also permits participants who are age
50 or older to make catch-up contributions in accordance with Code Section 414(v).
Park provides a matching contribution at a level established annually by Park. For 2008 and 2007,
Park matched 50% up to the first 12% of compensation contributed by the participant.
Participant Accounts
Each participant’s account is credited with the participant’s salary deferral, an allocation of
Park’s contribution and Plan earnings. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is entitled is the benefit that can be
provided from the participant’s account.
Vesting
Participants’ accounts are 100% vested at all times.
4
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
1. Description of the Plan (continued)
Payments of Benefits
Upon termination or after age 591/2, a participant may elect lump sum, rollover, or installments over
a period not to exceed the participant’s (and their designated beneficiary’s) life expectancy in an
amount equal to the value of his or her account. A participant can elect to take a distribution of
their account balance in cash or shares of Park National Corporation Common Stock.
ESOP
Effective January 1, 2002, the Plan was amended and restated to become an ESOP Plan that invests in
shares of Park National Corporation Common Stock. The Plan is not leveraged and all new
contributions (both employer and employee) will be used to purchase only Park National Corporation
Common Stock. Prior to January 1, 2007, participants had the ability to diversify their investments
upon reaching age 55. Effective January 1, 2007, the Plan was amended to allow all participants to
diversify their investments on a quarterly basis.
Bank Acquisitions
On March 9, 2007, Park acquired Vision Bancshares, Inc. (“Vision”). Vision terminated its 401(k)
plan on June 30, 2007, and all employees who have met the eligibility requirements of the Plan
became eligible to participate in the Plan on July 1, 2007.
5
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
2. Summary of Accounting Policies
Basis of Presentation
The financial statements of the Plan are prepared on the accrual basis and are prepared in
accordance with accounting principles generally accepted in the United States (GAAP).
Valuation of Investments
Investments are reported at fair value on a trade-date basis in the Statement of Net Assets
Available for Benefits. Park National Corporation Common Stock is valued at its quoted market
price. Shares of mutual funds are valued at quoted market prices which represent the net asset
value of shares held by the Plan at year end. Investments in the money market fund and savings
accounts are stated at cost, which approximates fair value. (Refer to Note 10 — Fair Values.)
Dividends and Interest Income
Dividends are recorded as of their ex-dividend date. Interest income is recorded on an accrual
basis when earned.
Administrative Expenses
All administrative expenses charged to the Plan are borne by Park. Park also provides other
accounting and administrative services to the Plan.
Payment of Benefits
Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect reported amounts of assets and liabilities at the date of the
financial statements, and the reported amounts of investment income and expenses during the
reporting period. Actual results could differ from those estimates.
6
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
2. Summary of Accounting Policies (continued)
Concentration of Credit Risk
At December 31, 2008 and 2007, approximately 77% and 66%, respectively, of the Plan’s assets were
invested in Park National Corporation Common Stock.
At December 31, 2008 and 2007, approximately 5% of the Plan’s assets were invested in deposit and
savings accounts issued by Park National Corporation bank affiliates. The investments in the
deposit and savings accounts may from time to time exceed the federally insured limits.
Adoption of New Accounting Standards
In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (FAS 157). This
Statement defines fair value, establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. This Standard is effective for financial statements
issued for fiscal years beginning after November 15, 2007. In October 2008, the FASB issued Staff
Position (FSP) 157-3, Determining the Fair Value of a Financial Asset when the Market for That
Asset Is Not Active. This FSP clarifies the application of FAS 157 in a market that is not active.
The impact of adoption of these standards as of January 1, 2008 was not material to the Plan’s net
assets available for benefits.
Recently Issued but not yet Effective Accounting Pronouncements
On April 9, 2009, the FASB issued FASB Staff Position (FSP) FAS 157-4, Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly. The FSP provides additional guidance for estimating
fair value in accordance with FASB Statement No. 157, “Fair Value Measurements”, when the volume
and level of activity for the asset or liability have significantly decreased. The FSP also
includes guidance on identifying circumstances that indicate a transaction is not orderly. Further,
the FSP emphasizes that even if there has been a significant decrease in the volume and level of
activity for the asset or liability and regardless of the valuation technique(s) used, the
objective of a fair value measurement remains the same. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a
forced liquidation or distressed sale) between market participants at the measurement date under
current market conditions. The FSP amends Statement 157 to require certain additional disclosures
in interim and annual periods to discuss the inputs and valuation technique(s) used to measure fair
value. This FSP is effective for interim and annual reporting periods ending after June 15, 2009,
with early adoption permitted for periods ending after March 15, 2009, and shall be applied
prospectively. Plan management is evaluating the impact of FSP
157-4.
7
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
3. Plan Termination
Although Park has not expressed any intent to do so, it has the right under the Plan to discontinue
its contributions at any time and to terminate the Plan subject to the provisions of ERISA.
4. Investments
The Plan’s investments are held in trust by The Park National Bank, a wholly owned subsidiary of
Park National Corporation. The Plan’s investments (including investments bought and sold as well
as held during the year) appreciated/(depreciated) in fair value during the years ended
December 31, 2008 and 2007 as follows:
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
Park National Corporation Common Stock |
|
$ |
4,727,909 |
|
|
$ |
(20,364,228 |
) |
Vanguard Institutional Index Fund |
|
|
(2,615,079 |
) |
|
|
230,724 |
|
Vanguard Short-Term Investment-Grade Bond Fund |
|
|
(128,907 |
) |
|
|
10,512 |
|
Vanguard Growth Index Fund |
|
|
(652,386 |
) |
|
|
131,995 |
|
Vanguard Institutional Extended Market Index Fund |
|
|
(711,078 |
) |
|
|
18,280 |
|
Vanguard Balanced Index Fund |
|
|
(584,351 |
) |
|
|
59,257 |
|
Vanguard Total International Stock Index Fund |
|
|
(1,027,246 |
) |
|
|
147,805 |
|
Vanguard Intermediate-Term Bond Index Fund |
|
|
(296 |
) |
|
|
22,887 |
|
|
|
|
|
|
|
|
|
|
$ |
(991,434 |
) |
|
$ |
(19,742,768 |
) |
|
|
|
|
|
|
|
The following table represents the fair value of those investments that represent 5 percent or more
of the Plan’s net assets available for benefits as of December 31:
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
*Park National Corporation Common Stock |
|
$ |
47,923,332 |
|
|
$ |
38,339,896 |
|
Vanguard Institutional Index Fund |
|
|
4,090,996 |
|
|
|
7,017,437 |
|
| |
|
|
| * |
|
Nonparticipant-directed |
8
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
5. Nonparticipant-Directed Investments
The following information represents the assets and the significant components of changes in assets
related to the nonparticipant-directed portion of the Park National Corporation Common Stock
investment. Initial contributions are deposited into the Plan in the form of cash with shares of
Park National Corporation Common Stock purchased on a delayed basis.
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
Investment, at fair value: |
|
|
|
|
|
|
|
|
Park National Corporation Common Stock |
|
$ |
47,923,332 |
|
|
$ |
38,339,896 |
|
Northern Institutional Government Portfolio |
|
|
— |
|
|
|
355,458 |
|
Park National Bank FDIC Account |
|
|
187,603 |
|
|
|
— |
|
Cash |
|
|
— |
|
|
|
26,924 |
|
|
|
|
|
|
|
|
|
|
$ |
48,110,935 |
|
|
$ |
38,722,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets: |
|
|
|
|
|
|
|
|
Contributions |
|
$ |
6,356,887 |
|
|
$ |
6,547,357 |
|
Interest and dividend income |
|
|
2,973,379 |
|
|
|
2,216,346 |
|
Distributions to participants |
|
|
(3,287,042 |
) |
|
|
(4,665,172 |
) |
Net transfers to participant directed investments |
|
|
(1,382,476 |
) |
|
|
(4,238,421 |
) |
Net appreciation/(depreciation) in fair value of
investments |
|
|
4,727,909 |
|
|
|
(20,364,228 |
) |
|
|
|
|
|
|
|
Increase/(decrease) in assets |
|
$ |
9,388,657 |
|
|
$ |
(20,504,118 |
) |
|
|
|
|
|
|
|
6. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service dated September 30,
2003, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the
“Code”) and, therefore, the related trust is exempt from taxation. Subsequent to this
determination by the Internal Revenue Service, the Plan was amended. Once qualified, the Plan is
required to operate in conformity with the Code to maintain its qualification. The Plan
administrator believes the Plan is being operated in compliance with the applicable requirements of
the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is
tax exempt.
9
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
7. Party-in-Interest
The Plan held the following party-in-interest investments (at fair value):
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
Park National Corporation Common Stock |
|
$ |
47,923,332 |
|
|
$ |
38,339,896 |
|
The Park National Bank Savings Accounts |
|
|
2,779,207 |
|
|
|
2,641,447 |
|
The Park National Bank FDIC Account |
|
|
187,603 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
50,890,142 |
|
|
$ |
40,981,343 |
|
|
|
|
|
|
|
|
At December 31, 2008, the Plan held 667,921 shares of Park National Corporation Common Stock, with
a fair value of $47,923,332. At December 31, 2007, the Plan held 594,417 shares of Park National
Corporation Common Stock, with a fair value of $38,339,896.
During 2008 and 2007, cash dividends of $2,966,318 and $2,196,119, respectively, were paid to the
Plan by Park National Corporation.
At December 31, 2008 and 2007, the Plan held participant-directed savings accounts issued by Park
National Corporation bank affiliates of $2,779,207 and $2,641,447, respectively. At December 31,
2008, the Plan held a nonparticipant-directed interest-bearing account issued by Park National Bank
of $187,603. During 2008 and 2007, interest of $57,944 and $125,602, respectively, was paid to the
Plan by the Park National Bank and its affiliates.
During 2008 and 2007, the Plan purchased 95,877 shares and 46,778 shares, respectively, of Park
National Corporation Common Stock.
Costs and expenses incurred in administering the Plan are paid by Park, which totaled $109,967 and
$127,640 for 2008 and 2007, respectively.
10
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
8. Form 5500 Reconciliation
The following is a reconciliation of net assets available for benefits per the financial statements
to the Form 5500.
| |
|
|
|
|
|
|
|
|
| |
|
December 31, |
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the financial statements |
|
$ |
62,411,311 |
|
|
$ |
58,696,895 |
|
Less: Employer contribution credit |
|
|
— |
|
|
|
(2,485 |
) |
Less: Accrued interest and dividends |
|
|
(12,018 |
) |
|
|
(575,970 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets available for benefits per the Form 5500 |
|
$ |
62,399,293 |
|
|
$ |
58,118,440 |
|
|
|
|
|
|
|
|
The following is a reconciliation of net change in net assets available for benefits per the
financial statements to the Form 5500:
| |
|
|
|
|
|
|
|
|
| |
|
2008 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in net assets available for benefits per the financial statements |
|
$ |
3,714,416 |
|
|
$ |
(15,827,781 |
) |
Plus/(Less): Employer contribution credit |
|
|
2,485 |
|
|
|
(2,485 |
) |
Less: Accrued interest and dividends |
|
|
(12,018 |
) |
|
|
(575,970 |
) |
Plus: Prior year accrued interest and dividends |
|
|
575,970 |
|
|
|
590,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in net assets available for benefits per the Form 5500 |
|
$ |
4,280,853 |
|
|
$ |
(15,816,115 |
) |
|
|
|
|
|
|
|
9. Risks and Uncertainties
The Plan invests in various investment securities including Park National Corporation Common Stock,
mutual funds, savings accounts and a money market fund. Investment securities are exposed to
various risks such as interest rate, market, liquidity and credit risks. Due to the level of risk
associated with certain investment securities and the level of uncertainty related to changes in
the value of investment securities, it is at least reasonably possible that changes in the values
of investment securities will occur in the near term and that such changes could materially affect
participants’ account balances and the amounts reported in the statements of net assets available
for benefits.
11
Park National Corporation
Employees Stock Ownership Plan
Notes to Financial Statements (continued)
December 31, 2008 and 2007
10. Fair Values
The Plan’s investments are reported at fair value. Purchases and sales of securities are recorded
on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
FAS 157 defines fair value as the price that would be received by the Plan for an asset or paid by
the Plan to transfer a liability (an exit price) in an orderly transaction between market
participants on the measurement date in the Plan’s principal or most advantageous market for the
asset or liability. FAS 157 establishes a fair value hierarchy which requires the Plan to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The hierarchy places the highest priority on unadjusted quoted market prices in active markets for
identical assets or liabilities (level 1 measurements) and gives the lowest priority to
unobservable inputs (level 3 measurements). The three levels of inputs within the fair value
hierarchy are defined as follows:
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets
that the Plan has the ability to access as of the measurement date.
Level 2: Significant other observable inputs other than level 1 prices such as quoted prices
for similar assets or liabilities; quoted prices in markets that are not active; or other
inputs that are observable or can be corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect the Plan’s own assumptions about the
assumptions that market participants would use in pricing an asset or liability.
In many cases, a valuation technique used to measure fair value includes inputs from multiple
levels of the fair value hierarchy. The lowest level of significant input determines the placement
of the entire fair value measurement in the hierarchy.
The fair values of mutual fund investments and common stock are determined by obtaining quoted
prices on nationally recognized securities exchanges (level 1 inputs). Additionally, due to their
short-term nature, the fair value of interest-bearing cash balances are determined by reference to
their face value (level 1 input). The fair value of all of the investments held by the Plan have
been determined using Level 1 inputs.
11. Subsequent Event
On
June 12, 2009, Park notified Plan participants of the following
change made to the Plan related to employer matching contributions. Effective July 24, 2009, Park will cease, for the remainder of the 2009 Plan year, employer
matching contributions on amounts contributed by Park officers. Prior to this date, Park matched
50% up to the first 12% of compensation contributed by the participant. The matching formula for
non-officer employees will not change.
12
Park National Corporation
Employees Stock Ownership Plan
Schedule H, Line 4a
Schedule of Delinquent Participant Contributions
For the year ended December 31, 2008
| |
|
|
|
|
|
|
Name of Plan Sponsor: |
|
|
|
|
|
Park National Corporation |
Employer identification number: |
|
|
|
|
|
31-1179518 |
Three digit plan number: |
|
|
|
|
|
002 |
| |
|
|
|
|
Participant Contributions of the Current Plan Year Not Deposited
Into the Plan within the Time Period Described in 29 CFR 2510.3-102 * |
|
$ |
29,547 |
|
|
|
|
|
|
Plus: Delinquent Deposits of Prior Year Participant Contributions
Not Corrected Prior to the Current Plan Year |
|
|
— |
|
|
|
|
|
Total Delinquent Participant Contributions (Line 4a of
Schedule H) |
|
|
29,547 |
|
|
|
|
|
|
Less: Amount Fully Corrected Under the DOL’s Voluntary Fiduciary
Correction Program (VFC Program) and PTE 2002-51 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Delinquent Deposits of Participant Contributions Constituting
Nonexempt Prohibited Transactions |
|
$ |
29,547 |
|
|
|
|
|
| |
|
|
| * |
|
Participant contributions were deposited into the Plan prior to December 31, 2008. Plan
management has deposited lost earnings due to the late contributions into participant accounts
during the 2009 Plan year. |
13
Park National Corporation
Employees Stock Ownership Plan
Schedule H, Line 4i
Schedule of Assets (Held at End of Year)
December 31, 2008
| |
|
|
|
|
|
|
Name of Plan Sponsor: |
|
|
|
|
|
Park National Corporation |
Employer identification number: |
|
|
|
|
|
31-1179518 |
Three digit plan number:
|
|
|
|
|
|
002 |
| |
|
|
|
|
|
|
|
|
|
|
| (b) |
|
(c) |
|
|
|
|
|
|
| Identity of Issue, |
|
Description of Investment Including |
|
|
|
|
(e) |
|
| Borrower, Lessor |
|
Maturity Date, Rate of Interest, |
|
(d) |
|
|
Current |
|
| or Similar Party |
|
Collateral, Par or Maturity Value |
|
Cost |
|
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing account |
|
|
|
|
|
|
|
|
|
|
* The Park National Bank FDIC Account |
|
Interest rate of 1.15% |
|
$ |
187,603 |
|
|
$ |
187,603 |
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock: |
|
|
|
|
|
|
|
|
|
|
* Park National Corporation Common Stock |
|
667,921 shares |
|
$ |
39,715,140 |
|
|
$ |
47,923,332 |
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds: |
|
|
|
|
|
|
|
|
|
|
Vanguard Institutional Index Fund |
|
49,564 shares |
|
|
** |
|
|
$ |
4,090,996 |
|
Vanguard
Short-Term Investment Grade Fund |
|
135,309 shares |
|
|
** |
|
|
|
1,308,436 |
|
Vanguard Growth Index Fund |
|
56,159 shares |
|
|
** |
|
|
|
1,055,793 |
|
Vanguard
Institutional Extended Market Index Fund |
|
52,860 shares |
|
|
** |
|
|
|
1,091,037 |
|
Vanguard
Intermediate-Term Bond Index Fund |
|
96,509 shares |
|
|
** |
|
|
|
1,013,348 |
|
Vanguard Balanced Index Fund |
|
102,812 shares |
|
|
** |
|
|
|
1,688,180 |
|
Vanguard
Total International Stock Index Fund |
|
116,892 shares |
|
|
** |
|
|
|
1,261,268 |
|
|
|
|
|
|
|
|
|
|
|
Total Mutual Funds |
|
|
|
|
** |
|
|
|
11,509,058 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings
accounts, issued by Park National Corporation bank affiliates: |
|
|
|
|
|
|
|
|
|
|
* The Park National Bank |
|
Interest rate of 0.465% |
|
|
** |
|
|
$ |
2,124,122 |
|
* The Richland Trust Company |
|
Interest rate of 0.465% |
|
|
** |
|
|
|
655,085 |
|
|
|
|
|
|
|
|
|
|
|
Total Savings Accounts, issued by Park National Corporation bank
affiliates |
|
|
|
|
|
|
|
|
2,779,207 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments Held at End of Year |
|
|
|
|
|
|
|
$ |
62,399,200 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| * |
|
Indicates party-in-interest to the Plan. |
| |
| ** |
|
Disclosure of historical cost is not required for participant-directed investments. |
14
Park National Corporation
Employees Stock Ownership Plan
Schedule H, Line 4j
Schedule of Reportable Transactions
For the year ended December 31, 2008
| |
|
|
|
|
|
|
Name of Plan Sponsor:
|
|
|
|
|
|
Park National Corporation |
Employer identification number: |
|
|
|
|
|
31-1179518 |
Three digit plan number: |
|
|
|
|
|
002 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
(b) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(h) |
|
|
|
|
| |
|
Description of Asset Including |
|
|
|
|
|
(d) |
|
|
(g) |
|
|
Current Value |
|
|
(i) |
|
| (a) |
|
Maturity Date, Rate of Interest, |
|
(c) |
|
|
Selling |
|
|
Cost of |
|
|
of Asset on |
|
|
Net Gain |
|
| Identity of Party Involved |
|
Collateral, Par or Maturity Value |
|
Cost |
|
|
Price |
|
|
Asset |
|
|
Transaction Date |
|
|
or (Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Category (iii) — A series of
transactions in excess of
5% of plan assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Northern Govt Portfolio |
|
Money Market Fund, 71 purchases |
|
$ |
6,886,594 |
|
|
$ |
— |
|
|
$ |
6,886,594 |
|
|
$ |
6,886,594 |
|
|
$ |
— |
|
Northern Govt Portfolio |
|
Money Market Fund, 69 sales |
|
|
— |
|
|
|
7,242,054 |
|
|
|
7,242,054 |
|
|
|
7,242,054 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park National Bank |
|
FDIC Account, 21 purchases |
|
|
2,633,683 |
|
|
|
— |
|
|
|
2,633,683 |
|
|
|
2,633,683 |
|
|
|
— |
|
Park National Bank |
|
FDIC Account, 27 sales |
|
|
— |
|
|
|
2,446,080 |
|
|
|
2,446,080 |
|
|
|
2,446,080 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Park National Corporation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
Common Stock, 20 purchases |
|
|
6,353,241 |
|
|
|
— |
|
|
|
6,353,241 |
|
|
|
6,353,241 |
|
|
|
— |
|
15
PARK NATIONAL CORPORATION
EMPLOYEES STOCK OWNERSHIP PLAN
ANNUAL REPORT ON FORM 11-K
FOR FISCAL YEAR ENDED DECEMBER 31, 2008
INDEX TO EXHIBITS
| |
|
|
|
|
| Exhibit No. |
|
Description |
| |
|
|
|
|
| |
23.1 |
|
|
Consent of Independent Registered Public Accounting Firm —
Crowe Horwath LLP |