Tower Bancorp, Inc. Presidents' Incentive Plan 2011
This agreement outlines the 2011 incentive plan for the Presidents of Tower Bancorp, Inc. and Graystone Tower Bank. The plan provides bonus opportunities based on company performance, including earnings per share, return on tangible equity, and achievement of strategic objectives. Bonuses range from 20% to 60% of base pay, depending on performance levels. To qualify, executives must meet regulatory standards, be employed at payout, and achieve a satisfactory performance rating. The company may change or end the plan at any time without notice.
Exhibit 10.2
Tower Bancorp, Inc.
PRESIDENTS’ INCENTIVE PLAN
2011
Eligible Executives: Tower Bancorp Inc. President – Jeff Renninger; Graystone Tower Bank President – Janak Amin
Plan Features: 100% Holding Company Performance for the year ending December 31, 2011
Award Date: March, 2012
Total incentive bonus opportunity is 20% of base pay earnings at threshold, 40% of base pay earnings at target and 60% 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 10% | |
| Target ³100% ($1.86) | Up to 20% | |
| Optimum ³110% ($2.04) | Up to 30% |
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 7.5% | |
| Target: ³100% (9.7%) | Up to 15% | |
| Optimum: ³110% (10.7%) | Up to 22.5% |
| * | This plan may be altered, modified, or terminated at any time and without notice. |
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 7.5% | |
| Target = Meets Expectations | Up to 15% | |
| Optimum = Exceeds Expectations | Up to 22.5% |
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. |
