Tower Bancorp, Inc. 2011 Executive Incentive Plan for General Counsel, CFO, and Chief Risk Officer

Summary

Tower Bancorp, Inc. established an Executive Incentive Plan for 2011 covering its General Counsel, CFO, and Chief Risk Officer. The plan offers incentive bonuses based on company performance, including earnings per share, return on tangible equity, and achievement of strategic objectives. Bonus amounts range from 17.5% to 52.5% of base pay, depending on performance levels. To qualify, executives must meet regulatory, employment, and performance requirements. The company reserves the right to change or end the plan at any time without notice.

EX-10.3 3 dex103.htm TOWER BANCORP, INC. EXECUTIVE INCENTIVE PLAN Tower Bancorp, Inc. Executive Incentive Plan

Exhibit 10.3

Tower Bancorp, Inc.

EXECUTIVE INCENTIVE PLAN

2011

Eligible Executives: General Counsel – Carl Lundblad; CFO – Mark Merrill; Chief Risk Officer – Jane Tompkins

Plan Features: 100% Holding Company Performance for the year ending December 31, 2011

Award Date: March, 2012

Total incentive bonus opportunity is 17.5% of base pay earnings at threshold, 35% of base pay earnings at target and 52.5% of base pay earnings at optimum.

Holding Company Adjusted Core Operating Earnings Per Share (40%)

 

   

Adjusted Core Operating Earnings are defined as GAAP net income less merger expense and other non-recurring items as publicly reported, and further excluding all additional losses and restructuring charges incurred in connection with the wind down and restructuring of the American Home Bank Division in 2011.

 

Target = $1.86

   Bonus % (of base
pay)

Threshold ³80% ($1.49)

   Up to 7%

Target ³100% ($1.86)

   Up to 14%

Optimum ³110% ($2.04)

   Up to 21%

Adjusted Core Operating Return on Tangible Equity (30%)

 

   

Calculated based on Adjusted Core Operating Earnings, defined as GAAP net income less merger expense and other non-recurring items as publicly reported, and further excluding all additional losses and restructuring charges incurred in connection with the wind down and restructuring of the American Home Bank Division in 2011.

 

Target = 9.7%

   Bonus % (of base
pay)

Threshold: ³80% (7.8%)

   Up to 5.25%

Target: ³100% (9.7%)

   Up to 10.5%

Optimum: ³110% (10.7%)

   Up to 15.75%


Achievement of Strategic Objectives (30%)

 

•        Enhance brand profile of TOBC Stock

 

•        Successfully negotiate and execute on key strategic opportunities

 

•        Recruit and develop talent for key leadership positions

 

•        Effectively manage balance sheet to ensure strong capital profile

 

•        Achieve Best Place to Work recognition

   Bonus % (of base
pay)

Threshold = Satisfactory

   Up to 5.25%

Target = Meets Expectations

   Up to 10.5%

Optimum = Exceeds Expectations

   Up to 15.75%

Qualifiers:

 

 

Must achieve satisfactory rating on all regulatory exams.

 

 

Executive must be employed on the date of payout.

 

 

Executive must achieve a rating of “Good” (3) or higher performance level.

* This plan may be altered, modified, or terminated at any time and without notice.