REPUBLIC BANCORP, INC. CASH BONUS PLAN FOR ACQUISITIONS

 

1.           Purpose. The purpose of this Republic Bancorp, Inc. Cash Bonus Plan For Acquisitions (the “Bonus Plan”) is to set forth the terms and conditions of financial rewards for the job performance of associates of Republic Bancorp, Inc. (the “Company”) who materially participate in the negotiation, consummation, transition and long-term profitability of acquisitions, whether through an asset purchase, stock purchase, merger or other corporate transaction. The Company may engage in a number of acquisitions from time-to-time, and each acquisition may have a Bonus Pool, as defined, subject to the Bonus Plan.

 

2.           Definitions. In addition to the terms defined in Section 1 above and elsewhere in the Bonus Plan, the following capitalized terms used in the Bonus Plan have the following meanings:

 

(a)           “Affiliate” means a corporation or other entity that directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the Company. For purposes of the Bonus Plan, an ownership interest of more than fifty percent (50%) shall be deemed to be a controlling interest.

 

(b)           “Board” means the Company’s Board of Directors.

 

(c)           “Bonus Award” means, with respect to any Participant, for any Performance Period, the amount of the Target Award Opportunity for that Participant for the Performance Period that has been earned and that is payable with respect to the Participant in accordance with the terms of the Bonus Plan.

 

(d)           “Bonus Pool” means, with respect to each acquisition, an amount not to exceed $2,000,000, with the maximum amount of each such pool up to the cap of $2,000,000 to be determined by the Company’s chief executive officer within 60 days of the closing of each acquisition.

 

(e)           “Committee” means the Compensation Committee of the Board; provided, however, the “Committee” shall also mean for all purposes in the Bonus Plan those officers and employees of the Company with authority to grant and determine cash bonuses as delegated by the Compensation Committee of the Board; provided, however, that in no event shall any individual have the authority to grant or determine an award under the Bonus Plan with respect to himself or herself.

 

(f)            “Participant” means a person who has been granted a Target Award Opportunity or Bonus Award under the Bonus Plan which remains outstanding.

 

(g)           “Performance Criteria” means such criteria as determined by the Committee and may include one or more of the following criteria:  (a) successful branch consolidations and core system conversions; (b) a limitation of any losses resulting from operational errors to less than a discretionary dollar amount as determined by the chief executive officer; (c) operating profit (gross or net); (d) earnings including operating income, net operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items, or book value per share (which may exclude nonrecurring items) or net earnings; (e) pre-tax income or after-tax income or pre-tax profits or after-tax profits; (f) revenue, revenue growth or rate of revenue growth; (g) return on assets (gross or net), return on investment (including cash flow return on investment), return on capital (including return on total capital or return on invested capital), or return on equity; (h) returns on sales or revenues; (i) operating expenses; (j) cash flow (before or after dividends), free cash flow, cash flow return on investment (discounted or otherwise), net cash provided by operations, cash flow in excess of cost of capital or cash flow per share (before or after dividends); (k) implementation or completion of critical projects or processes; (l) operating margin or profit margin; (m) cost targets, reductions and savings, productivity and efficiencies; (n) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion, customer satisfaction, employee satisfaction, human resources management, supervision of litigation and other legal matters, information technology, and goals relating to budget comparisons; (o) personal professional objectives, including any of the foregoing performance targets, the implementation of policies and plans, the negotiation of transactions, and the development of long-term business goals; (p) improvement in or attainment of expense levels or working capital levels; (q) operating portfolio metrics, or (r) any combination of, or a specified increase in, any of the foregoing.  Where applicable, the performance targets may be expressed in terms of attaining a specified level of the particular criteria or the attainment of a percentage increase or decrease in the particular criteria, all as determined by the Committee.  The performance targets may include a threshold level of performance below which no payment will be made, levels of performance at which specified payments will be made, and a maximum level of performance above which no additional payment will be made.  Each performance target shall be determined in accordance with generally accepted accounting principles, if applicable, and shall be subject to certification by the Committee; provided that the Committee shall have the authority to adjust such targets in recognition of extraordinary items or other items that may not be infrequent or unusual but which may have inconsistent effects on performance.