SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): March 15, 2006
PROVIDENT BANKSHARES CORPORATION
(Exact name of registrant as specified in charter)
MARYLAND 0-16421 52-1518642
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
114 EAST LEXINGTON STREET, BALTIMORE, MARYLAND 21202
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (410) 277-7000
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On March 15, 2006, the Board of Directors of Provident Bankshares
Corporation ("Provident") approved the recommendations of Provident's
Compensation Committee with respect to the adoption of the Provident Bank 2006
Executive Incentive Plan (the "EIP") and the Provident Bank 2006 Executive
Vice-President Incentive Plan (the "EVIP").
Under the EIP and EVIP, an annual incentive bonus may be paid to eligible
executives in part based upon the financial performance of Provident and in part
based upon the individual performance of the executive. In the case of the EIP,
the corporate performance-based goals are dependent upon the achievement of
earnings per share (EPS) and return on equity (ROE) targets established by the
Compensation Committee, each of which represents 50% of the available corporate
performance-based award. For the corporate performance-based portion of an
annual incentive bonus award, after-tax EPS and ROE targets for the upcoming
year are established: threshold, budget and maximum.
The Compensation Committee sets or approves a percentage of base salary
eligible to be received as annual incentive compensation at each of the
threshold, budget and maximum targets. The percentage of base salary eligible to
be received by an individual under the EIP ranges from 30% to 90% of the
individual's salary at the end of the fiscal year for which the annual incentive
compensation is to be paid. If EPS and ROE reach the threshold, budget or
maximum targets, participants will automatically receive 75% of the designated
percentage of base salary as corporate performance-based annual incentive
compensation. In the event that EPS and ROE are less than the threshold, no
corporate performance-based annual incentive compensation is payable. If only
after-tax EPS or after-tax ROE reaches its respective threshold, budget or
maximum target, then participants will automatically receive 37.5% of the
designated percentage of base salary as corporate performance-based annual
incentive compensation. The remaining 25% of the annual incentive bonus award is
discretionary based on individual performance as compared to established goals,
namely: management of Provident with emphasis on development and retention of
key personnel; implementation of new initiatives; financial progress in addition
to net earnings; and risk management.
The EIVP operates in a similar fashion to the EIP; however, the
corporate-based performance goal is solely dependent upon the achievement of
EPS. The percentage of base salary eligible to be received by an individual
under the EVIP ranges from 13% to 42% of the individual's salary at the end of
the fiscal year for which the annual compensation is to be paid. The EVIP
contains the same individual-based performance award as the EIP. The
Compensation Committee reviews the terms of the EIP and EVIP each year to assure
that, in operation, they are furthering the Committee's compensation policy
objectives. Payment of all or any part of the annual incentive compensation
earned under the EIP and the EVIP may be deferred.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit 10.1 Form of Provident Bank 2006 Executive Incentive Plan
Exhibit 10.2 Form of Provident Bank 2006 Executive Vice-President
Incentive Plan
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROVIDENT BANKSHARES CORPORATION
/s/ Robert L. Davis
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Robert L. Davis
General Counsel and Corporate Secretary
Date: March 15, 2006
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EXHIBIT LIST
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Exhibit No. Description
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10.1 Form of Provident Bank 2006 Executive Incentive Plan
10.2 Form of Provident Bank 2006 Executive Vice-President
Incentive Plan
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