2009 Executive Incentive Plan for Executive Team Members
This agreement outlines the 2009 Executive Incentive Plan for executive team members of the holding company. Eligible executives can earn a bonus of up to 35% of their base pay, based on company income, asset quality, and stock performance. Bonuses are determined by specific financial targets and performance metrics, and are subject to conditions such as satisfactory audit ratings, continued employment at payout, and a minimum performance rating. The company reserves the right to change or end the plan at any time without notice.
EXHIBIT 10.4
EXECUTIVE INCENTIVE PLAN
2009
| Eligibility: | Executive Team Members | |
| Plan Features: | 100% Holding Company Performance |
Total incentive bonus at target is 25% of Base Pay with a maximum of 35%.
Holding Company Income [pre-provision] (35%)
For the nine months ending 12/31/09
| Goal $6,650,000 | Bonus % (of base pay) | |
| <100% | 0% | |
| >100% | 8.75% | |
| >110% | 12.25% |
| • | Holding company income pre-provision net of tax ($5,000,000 + 1,650,000 = $6,650,000) – related to growth, not as a result of higher charge-offs |
| • | Adjusted for non-recurring expenses and gains (i.e. gains/losses on securities, merger expense, etc.) |
Asset Quality (20%)
| Non-Performing Assets/Total Assets (at 12/31/09) | Bonus % (of base pay) | |
| > 150 bp | 0% | |
| 149 bp – 101 bp | 5.00% | |
| < 100 bp | 7.00% |
Asset Quality (15%)
| Charge offs/Average Loans (9 months ending 12/31/09 annualized) | Bonus % (of base pay) | |
| >60 bp | 0% | |
| 30 bp – 60 bp | 3.75% | |
| <30 bp | 5.25% |
Holding Company Stock Performance and Capital (30%)
| Bonus % (of base pay) | ||
| Below Expectations | 0% | |
| Meets Expectations | 7.50% | |
| Exceeds Expectations | 10.50% |
| • | Stock trading multiple(Price/Tangible Book Value) versus Peer |
| • | Improvement in average volume traded |
| • | Increase institutional ownership to >10% |
| • | Successful sub-debt raise |
| • | Identifying favorable merger opportunities |
Qualifiers:
| • | Must achieve satisfactory rating on all regulatory, external and internal audits. |
| • | Employee must be employed on the date of payout. |
| • | Employee 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.
