American River Holdings 2000 Incentive Compensation Plan

Contract Categories: Human Resources › Bonus & Incentive Agreements
Summary

American River Holdings established this Incentive Compensation Plan for the year ending December 31, 2000, to reward employees of its companies for meeting specific financial performance standards. Eligibility for incentive payments depends on each company achieving minimum financial goals, such as growth rates and profitability. The Board of Directors can amend or terminate the plan at any time and may consider extraordinary circumstances when determining awards. The plan aims to encourage strong performance and enhance shareholder value, with compensation reflecting both company and individual achievements.

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EX-10.20 4 0004.txt EXHIBIT 10.20 AMERICAN RIVER HOLDINGS INCENTIVE COMPENSATION PLAN YEAR ENDED DECEMBER 31, 2000 INTRODUCTION The establishment of the American River Holdings (ARH) Incentive Compensation Plan (the "Plan") for the year ended December 31, 2000 by the Board of Directors is intended to provide the employees of the companies of American River Holdings with incentive compensation for achieving exemplary performance standards during the year. It is the intention of the Board of Directors to review the Plan for compliance with American River Holdings current operating objectives and to evaluate the corresponding cost-benefit relationship achieved by the Plan. At the sole and absolute discretion of the Board of Directors, the Plan may be amended, revised or terminated at any time. The policy of the Board of Directors will be to review the Plan annually. Eligibility for incentive compensation under the Plan is dependent upon achieving "MINIMUM FINANCIAL PERFORMANCE STANDARDS" SPECIFIED BY THE PLAN. Each company will have its own "minimum financial performance standards." If the "minimum financial performance standards" are not achieved, then no incentive compensation will be paid to employees of that company for that plan year. The Board of Directors retains the right to consider extraordinary circumstances that may have contributed to any company not meeting one or more of the minimum financial performance standards. While under no obligation to do so, the Board of Directors may elect in its sole and absolute discretion to subsequently award incentive compensation as a direct result of the extraordinary circumstances on such terms and conditions as the Board of Directors may determine. Examples of extraordinary circumstances would include but are not limited to: o Natural Disasters o Mergers and acquisitions o Discontinued operations o Organizational restructuring o Development of "new" business components o Acquisition or sale of capital assets While not intended to be all-inclusive, these examples are indicative of the types of "material" circumstances that may give rise to possible consideration by the Board of Directors. Further, the event or events that the Board of Directors may consider, both in the form of extraordinary income and expense, must have occurred after the beginning of the current plan 46 AMERICAN RIVER HOLDINGS INCENTIVE COMPENSATION PLAN YEAR ENDED DECEMBER 31, 2000 (CONTINUED) year and not have been included in the adopted Annual Business Plan for that year. Further, net income for purposes of measuring compliance with "minimum financial performance standards" shall only include income derived from recurring operations. Extraordinary income that would be excluded from net income for measurement purposes would include gains resulting from the sale of "material" capital assets, business components and branches, loans and investments. Once the Board of Directors has determined eligibility for incentive compensation for each company, the actual amount paid to any employee will result directly from the annual evaluation prepared for that employee. Therefore, incentive compensation paid will reflect attainment of both corporate goals and personal goals for the applicable employee. ARH will be able to reallocate unearned incentive compensation within or between companies subject to the maximum available under the plan. The Plan is designed to promote exemplary performance and the enhancement of shareholder value. 47 AMERICAN RIVER BANK (ARB) MINIMUM FINANCIAL PERFORMANCE STANDARDS (MFPS) - -------------------------------------------------------------------------------- Per Plan (1) MFPS (1) Target (1) ------------ --------- ---------- - -------------------------------------------------------------------------------- Deposit Growth Rate 8.7% 8.0% 10% - -------------------------------------------------------------------------------- Total Loan Growth Rate 10% 10% 15% - -------------------------------------------------------------------------------- Commercial Loan Growth Rate (2) 13.8% 15% 20% - -------------------------------------------------------------------------------- Interest Margin / Average Earning Assets 5.41% 5.4% 5.5% - -------------------------------------------------------------------------------- Return on Beginning Equity (FAS 115 Adjusted) 22.2% 21.5% 23% - -------------------------------------------------------------------------------- Return on Average Assets 1.77% 1.65% 1.80% - -------------------------------------------------------------------------------- Efficiency Ratio 45% 47% 45% - -------------------------------------------------------------------------------- Net Charge offs to Average Loans .25% .50% .25% - -------------------------------------------------------------------------------- Classified Assets to Equity 20% 40% 20% - -------------------------------------------------------------------------------- CAMELS Rating 1 2 1 - -------------------------------------------------------------------------------- (1) The metrics above are after tax and Pre Incentive (2) The loan growth minimums exclude participation's purchased by ARB 48 FIRST SOURCE CAPITAL (FSC) MINIMUM FINANCIAL PERFORMANCE STANDARDS (MFPS) PER PLAN (1) MFPS (1) TARGET (1) Net Income $335,000 $135,000 $285,000 Number of vendors averaging N/A 5 10 2 deals per month The incentive Pool for FIRST SOURCE CAPITAL will be per American River Holdings Plan adjusted as follows: PRE INCENTIVE NET INCOME Pool per American River Holdings Plan X100% $285,000 X 85% $235,000 X 70% $185,000 X 50% $135,000 (1) The above is after tax and Pre Incentive 49 NORTH COAST BANK (NCB) MINIMUM FINANCIAL PERFORMANCE STANDARDS (MFPS) - -------------------------------------------------------------------------------- Per Plan (1) MFPS (1) Target (1) ------------ --------- ---------- - -------------------------------------------------------------------------------- Core Deposit Growth Rate (Non-CD) 15% 16% 20% - -------------------------------------------------------------------------------- Total Loan Growth Rate 21% 21% 25% - -------------------------------------------------------------------------------- Commercial Loan Growth Rate 14.7% 15% 20% - -------------------------------------------------------------------------------- Interest Margin / Average Earning Assets 6.1% 6.0% 6.1% - -------------------------------------------------------------------------------- Return on Beginning Equity (FAS 115 Adjusted) 11.8% 11.84% 13.5% - -------------------------------------------------------------------------------- Return on Average Assets .90% .90% 1.0% - -------------------------------------------------------------------------------- Efficiency Ratio 69.3% 69% 65% - -------------------------------------------------------------------------------- Net Charge offs to Average Loans .25% .50% .25% - -------------------------------------------------------------------------------- Classified Assets to Equity 20% 40% 25% - -------------------------------------------------------------------------------- CAMELS Rating 2 2 2 - -------------------------------------------------------------------------------- (1) The metrics above are after tax Pre Incentive/Pre Merger Expense 50 AMERICAN RIVER HOLDINGS CONSOLIDATED MINIMUM FINANCIAL PERFORMANCE STANDARDS Per Plan (1) MFPS (1)(3) Target (1) ------------ ------------ ----------- Return on Average Equity 18.45% 17.46% 19.00% Basic Earnings Per Share (2) $1.86 $1.76 $1.90 Efficiency Ratio 51.5% 53.3% 51.5% BOPEC Rating 2 1 (1) The metrics above are after tax Pre Incentive/Pre Merger Expense (2) Future years we will target a 15% EPS growth rate. Due to the NCB deal 2000 will be dilutive to ARH (3) The MFPS of each of the other companies will be incorporated within the Performance Evaluation of the CEO of ARH. 51 INCENTIVE 2000 ALLOCATIONS
ARB FSC NCB ARH Consolidated S1 Net prior to incentive & Taxes $ 3,676,621 $ 335,342 $ 331,604 $ (279,732) $ 4,063,835 S Adjust fsc to reasonable 0 (200,000) 0 Adjusted net income $ 3,676,621 $ 135,342 $ 331,604 $ (279,732) $ 3,863,835 Incentive calculation 18% of consolidated $ 695,490 less 401k contribution $ (100,000) ---------------------------------------------------------------------------------------------------- Incentive Pool $ 595,490 ---------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------- ARB FSC NCB ARH Consolidated Potential Allocation Potential 58.0% 6.0% 11.3% 24.7% 100.0% Allocation Pool 345,384 35,729 67,290 147,086 595,490 CEO 29.0% 37.2% 85.2% CFO/COO 89.0% 0.0% 14.8% Other 71.0% 11.0% 62.8% 0.0% 100.0% 100.0% 100.0% 100.0% ---------------------------------------------------------------------------------------------------- E CEO $ 100,161 $ 25,032 $ 125,317 F CFO/COO -- $ 31,799 -- $ 21,769 Other $ 245,223 $ 3,930 $ 42,258 -- $ 345,384 $ 35,729 $ 67,290 $ 147,086 $ 595,490 ----------------------------------------------------------------------------------------------------
S1 S2 Income from Incentive 2000 Sheet Adjust fsc to more reasonable target E Incentive for ARB Assuming 2000 Budget is met 100,000 per executive comm. 100M Young 231,000 per 2000 budget others w/o Derenzo ($248M-$17M) $ 331,000 Targeted Incentive ARB F Incentives FSC, ARH FSC Per contract Christensen 10% of net if net is Greater than 80% of Strategic plan (393Mx80%=$314); $316>$314 10% of net $ 31,600 ARH Per executive committee Taber 125M $ 125,000 Per 2000 Budget Derenzo (83Mx 19.5%) $ 17,000 52
Impact of $100,000 additional net income Additional Net Income $ 100,000 Incentive calculation 18% 18% ---------------------------------------------------------------------------------------------------- Incentive Pool $ 18,000 ---------------------------------------------------------------------------------------------------- ARB FSC NCB ARH Consolidated ---------------------------------------------------------------------------------------------------- Potential Allocation 58.0% 6.0% 11.3% 24.7% 100.0% Potential Allocation Pool 10,440 1,080 2,034 4,446 18,000 CEO 29.0% 37.2% 85.2% CFO/COO 89.0% 0.0% 14.8% Other 71.0% 11.0% 62.8% 0.0% 100.0% 100.0% 100.0% 100.0% ---------------------------------------------------------------------------------------------------- CEO $ 3,028 $ -0- $ 757 $ 3,788 CFO/COO $ -0- $ 961 $ -0- $ 658 Other $ 7,412 $ 119 $ 1,277 $ -0- $ 10,440 $ 1,080 $ 2,034 $ 4,446 $ 18,000 ----------------------------------------------------------------------------------------------------
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