Northwest Bank Annual Performance Award Plan
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Bonus & Incentive Agreements
Summary
This agreement outlines Northwest Bank's Annual Performance Award Plan, which aims to attract, retain, and motivate eligible employees. Employees in certain positions who meet service, performance, and employment status requirements may qualify for annual bonuses. Bonus amounts are determined by a board-approved matrix based on company and individual performance metrics, with specific payout percentages tied to job roles and performance levels. The plan includes conditions such as restrictive covenants and adherence to the company's clawback policy for senior executives. Bonuses are prorated for partial-year service or promotions during the year.
EX-10.4 2 exhibit104-annualperfo.htm EX-10.4 Document
EXHIBIT 10.4
Northwest Bank
Annual Performance Award Plan
Purpose:
–To attract, retain and motivate eligible employees
Eligibility Requirements:
–Certain positions at a specified level are eligible for consideration
–Employed by the company for a minimum of six months of the fiscal year
–Be actively employed by the company at the time of payment or retired between the last day of the fiscal year and the payment date. Retirees must meet the definition of normal retirement – sixty-five years old with a minimum of five years of service with the company
–Rated fully met expectations or higher on their last performance evaluation
–Recipients must have a restrictive covenant in place prior to payment
–Corporate Senior Vice Presidents and higher must agree to Northwest’s Claw Back Policy
Calculations:
–Bonus percentages are based on a Board approved matrix which consists of five company performance levels, seven categories of eligible participants and their performance rating
–Bonuses will be calculated on base salaries as of the last day of the fiscal year
–Bonuses will be prorated for those with six but less than 12 months of service in the fiscal year and those promoted to an eligible position during the fiscal year
| Target Bonus % of Salary & Payout Range | |||||
| Target Bonus % Salary | 100% | ||||
| Threshold % Target | 50% | ||||
| Maximum % Target | 150% | ||||
| Gate* (Minimum Performance Necessary for Possibility of Payout) - both metrics must be achieved | ||||||||||||||
| Metric | Threshold | Actual | ||||||||||||
| Net Charge-offs | 0.50% | 0.25% | ||||||||||||
| Total Delinquency | 3.00% | 1.50% | ||||||||||||
| Payout Metrics* (Performance Range for Annual Performance Award Payout, Assuming Gates are Satisfied) | |||||||||||||||||||||||||||||
| Metric | Weighting | Threshold | Target | Maximum | |||||||||||||||||||||||||
| ROAA | 15% | 1.10% | 1.15% | 1.20% | |||||||||||||||||||||||||
| ROAE | 15% | 8.0% | 9.0% | 10.0% | |||||||||||||||||||||||||
| EPS Growth | 15% | 6.0% | 8.0% | 10.0% | |||||||||||||||||||||||||
| Efficiency Ratio | 15% | 64.0% | 62.0% | 60.0% | |||||||||||||||||||||||||
| Deposit Growth | 20% | 2.0% | 3.0% | 4.0% | |||||||||||||||||||||||||
| Strategic / Individual Performance | 20% | 3 | 4 | 5 | |||||||||||||||||||||||||
| Total Weighting | 100% | ||||||||||||||||||||||||||||
*Compensation Committee of the Board of Directors has discretion regarding both the gate and metrics
| Annual Performance Award Payout % of Salary | ||||||||||||||||||||||||||
| Job Role | Below Threshold - 0% | Threshold - 50% | Target - 100% | Maximum - 150% | ||||||||||||||||||||||
| CEO/President | 0.0% | 35.0% | 70.0% | 105.0% | ||||||||||||||||||||||
| CFO | 0.0% | 25.0% | 50.0% | 75.0% | ||||||||||||||||||||||
| Production SEVPs & EVPs | 0.0% | 20.0% | 40.0% | 60.0% | ||||||||||||||||||||||
| Infrastructure SEVPs & EVPs | 0.0% | 17.5% | 35.0% | 52.5% | ||||||||||||||||||||||
