Description of Executive Officer Bonus Plan
DESCRIPTION OF HORIZON BANCORP
EXECUTIVE OFFICER BONUS PLAN
The Compensation Committee (the Committee) of the Board of Directors of Horizon Bancorp (the Company) adopted an Executive Officer Bonus Plan (the Plan) in 2003 after consultations with a nationally recognized executive compensation consulting firm. The Plan permits executive officers to earn as a bonus a percentage of their salary based on the achievement of corporate and individual goals in the relevant year. Participants in the Plan are not eligible to participate in the Companys annual discretionary bonus plan. To receive a bonus under the Plan, the executive officer must be employed by the Company or one of its subsidiaries on the date the annual bonus payment is made and must not be subject to a performance warning or suspension. The Committee may adjust and amend the Plan at any time in their sole discretion.
At the beginning of each year, the Committee establishes the minimum earnings target the Company must achieve before any bonuses will be paid out under the Plan for that year. For 2019, the minimum earnings target was $36.4 million. The Committee also approves a target bonus matrix for each executive officer to be used to calculate the executive officers bonus (if any) for the year (assuming that the minimum earnings target has been met). The matrix for each executive officer specifies the performance measures applicable to the executive officer, the targets for each performance measure and the weight to be assigned to each performance measure in calculating the bonus if the specified target levels are achieved.
Each executive officer has the opportunity to earn a bonus under the Plan of up to a specified percentage of his base salary. Each of the executive officers has as a performance goal the achievement of a specified level of corporate net income for the year. The matrix for each of the executive officers also specifies from three to five other performance measures, each of which is dependent upon the executive officers areas of responsibilities and varies from year to year to reflect changes in the primary responsibilities of the office that the executive officer holds.
The percentage of base salary that may be earned and the weighting of performance goals are disclosed each year in the Compensation Discussion and Analysis section of the Companys Proxy Statement. The amounts of the bonuses paid each year under the Plan are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table included in the Companys Proxy Statement.