EXECUTIVE MANAGEMENT INCENTIVE PLAN FOR 1999
1. BUSINESS DEVELOPMENT (20 Points) The following
objectives are weighted 50%.
A. Gross disbursements (except multiple advances
under lines of credit), originations, and off
balance sheet fundings of $900 million.
B. $40 million of combined net interest income and
non-interest income with a minimum of $12 million
of non-interest income. For each 2% of non-
interest income in excess of 30% of the total one
point will be added to this goal up to a maximum
of 5 points.
2. CREDIT QUALITY (25 Points) The following objectives are
weighted 35%, 35% and 30% respectively:
A. As of year end the percentage of the total loan
and LC portfolio that is non-performing (non-
accruing and OREO) will not exceed 1.5% of total
loans and LC's. If non-performing assets are 1%
or less of total loans at year-end then the credit
quality component of the Incentive Plan is
weighted 30 points.
B. As of year-end the dollar percentage of classified
(substandard and doubtful) assets will not exceed
6% of total loans and LC's. If classified assets
are 5% or less of total loans and LC's this
objective is weighted 50%.
C. Overall loan administration objectives shall be
achieved as reported by Credit Review and measured
by the outside auditors, FCA and OTS.
3. NET INCOME (25 Points) The following objectives are
weighted 75% and 25% respectively:
A. Meet net income budget.
B. Efficiency ratio of 60% or less (excluding NCBDC
contribution)
In addition, an "Add-on" award may be earned by
exceeding the net income goal. The maximum additional
award is 7.5% of salary. For each 1% that net income
exceeds goal, 1% of salary is added to the award earned
for achievement of the other goals, up to a maximum
total award of 42.5% of salary.
Executive Management Incentive Plan for 1999
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4. LOW INCOME/ AFFORDABLE HOUSING (15 Points) The
following objectives are weighted 65% and 35%
respectively and include NCBDC activity:
Each $2 million in excess of the total of goal A
increases the weight of the low-income goal by one
point to a maximum of 20 points.
A. Originations and arranged transactions
(Loans, Leases, Letters of Credit, and
Investments) $150,000,000
B. "Best efforts" evaluation of progress promoting,
developing, and conducting low-income business
activities that impact business results
5. TRAINING AND PEOPLE DEVELOPMENT (5 points) The
following objectives are weighted equally.
A. Meet work and family objectives in the strategic plan
for employee retention, diversity, and internal promotions.
B. Implement of HR redesign objectives for selection,
training, and people development to have skilled
human resources that can create new business
solutions for our business and our customers.
6. INNOVATION & CUSTOMER FOCUS (10 Points) The following
objectives are weighted equally.
A. Develop new ideas, new markets, strategic
alliances, new products, and new cooperative
development and review at least two annually with
board.
B. Meet customer member positioning and business
focus objectives in strategic plan.
7. AWARD LEVELS
Points Incentive Award as
Percent of Base Salary
50 - 64.9 Up to 15%
65 - 79.9 Up to 25%
80 - 89.9 Up to 30%
90 and over Up to 35%
The maximum award may reach 42.5 % if the "Add-on"
objective in the budget is met. The CEO determines
incentive awards for each participant based upon the
results of this plan and the achievement of individual
performance objectives.
8. PARTICIPANTS
C. Blakely
C. H. Hackman
M. Hiltz
R. L. Reed
T. W. Simonette