Provident Bank 2006 Executive Vice-President Incentive Plan

Summary

This agreement outlines Provident Bank's 2006 incentive plan for Executive Vice Presidents. The plan links executive compensation to both the bank's financial performance, measured by Earnings Per Share (EPS), and individual performance ratings. Eligible executives must be in good standing and employed for at least part of the year, with awards pro-rated for partial-year service. Incentive payments are calculated as a percentage of base salary and are paid within two months after year-end financials are certified. Participants may defer payments under certain conditions, and only those rated "On Target" or "Above Target" are eligible for awards.

EX-10.2 3 provident8kmarch06ex10-2.txt PROVIDENT BANK 2006 EXECUTIVE VICE-PRESIDENT INCENTIVE PLAN OBJECTIVE - --------- The purpose of this plan is to closely align management total compensation to the short and long-term financial goals of the organization. PARTICIPANTS - ------------ This plan shall apply to the levels of management defined below: Executive Vice Presidents ELIGIBILITY - ----------- To be eligible for benefits under this plan each participant must be employed in one of the above categories and in good standing. For those employed in one of the above categories less than one full year, the amount will be pro-rated based on the actual number of full calendar months employed in one of the above categories. INCENTIVE OBJECTIVES - -------------------- A. CORPORATE The criteria to be used for the corporate performance measure shall be Earnings Per Share (EPS) as determined annually by the Board of Directors. B. INDIVIDUAL The criteria to be used for the individual performance measure shall be the employee's overall performance rating for calendar year 2006. PERFORMANCE MEASURES - -------------------- For 2006, as determined by the Compensation Committee of the Board of Directors are: A. CORPORATE EARNINGS PER SHARE (EPS) Threshold Target Maximum B. INDIVIDUAL The individual performance measure will be based upon an overall performance rating for calendar year 2006 of "On Target" or "Above Target". An employee with a "Below Target" overall performance rating will not be eligible for any award under this plan. PROVIDENT BANK 2006 EXECUTIVE VICE-PRESIDENT INCENTIVE PLAN PAGE 2 INCENTIVE COMPENSATION COMPUTATION - ---------------------------------- A. CORPORATE PERFORMANCE For incentive compensation to be awarded at least the Threshold must be achieved. B. INDIVIDUAL PERFORMANCE The individual performance measure will be based upon an overall performance rating for calendar year 2006 of "On Target" or "Above Target". An employee with a "Below Target" overall performance rating will not be eligible for any award under this plan. PAYMENT OF INCENTIVE AWARDS - --------------------------- A. TIMING Incentive compensation payable under this plan will be paid to participants within two months after the year-end financials have been certified. B. DEFERRAL Participants may defer all or part of the compensation payable under this plan under separate agreement with the corporation. Any decision to defer incentive compensation must be made at the inception of the current year's plan. Access to deferred moneys is guided by IRS regulations applicable to Section 401(k) of the Internal Revenue Code. C. INCENTIVE AWARD SCHEDULE Each year a schedule will be attached to this plan showing threshold, target and maximum levels of incentive compensation set by the Board of Directors. PROVIDENT BANK 2006 EXECUTIVE-VICE PRESIDENT INCENTIVE PLAN INCENTIVE AWARD SCHEDULE PERFORMANCE MEASURES - -------------------- THRESHOLD TARGET MAXIMUM --------- ------ ------- Earnings Per Share INCENTIVE AWARD CALCULATION - --------------------------- The incentive award will be determined as a percentage of year-end base salary. - -------------------------------------------------------------------------------- BANK PERFORMANCE - -------------------------------------------------------------------------------- TRESHOLD TARGET MAXIMUM - -------------------------- ----------------------------- ----------------------- EMPLOYEE PERFORMANCE EMPLOYEE PERFORMANCE EMPLOYEE PERFORMANCE - -------------------------- ----------------------------- ----------------------- ON ABOVE ON ABOVE ON ABOVE TARGET TARGET TARGET TARGET TARGET TARGET - -------------------------- ----------------------------- ----------------------- 13% - 17% 18% - 22% 23% - 27% 28% - 32% 33% - 37% 38% - 42% - -------------------------- ----------------------------- ----------------------- PARTICIPANTS ------------ R. Wayne Hall Russell Johnson John King R. Hugh Newton H. Les Patrick Dennis Starliper Jeanne Uphouse