FORM OF
PROVIDENT BANK
2007 EXECUTIVE INCENTIVE PLAN
I. OBJECTIVE
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The purpose of this plan is to closely align executive management
compensation to the short and long-term financial goals of the
organization.
II. PARTICIPANTS
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This plan shall apply to the levels of management defined below:
Chairman/Chief Executive Officer
President/Chief Operating Officer
To be eligible for benefits under this plan each participant must be
employed in one of the above categories and in good standing. For those
employed in one of the above categories less than one full year, the
amount will be pro-rated based on the actual number of full calendar
months employed in one of the above categories.
III. PLAN DESCRIPTION
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A. PERFORMANCE MEASURES
1. CORPORATE (75%)
The criteria to be used for the corporate performance
measure shall be Earnings Per Share (EPS) and Return on
Equity (ROE) as outlined below. The payment of the
corporate portion of the bonus is automatic.
EPS ROE
--- ---
Threshold
Target
Maximum
2. INDIVIDUAL (25%)
The individual portion is discretionary. In making the
determination, the Board will consider the individual
objectives for the Chairman/CEO and President/COO as
attached, as well as oversight of the Investment/ALCO
function. The Committee will also consider decisions that
may have been made in the best interest of the Bank and
their effect on performance.
B. INCENTIVE COMPENSATION COMPUTATION
1. CORPORATE PERFORMANCE
In making the determination of the corporate (automatic) portion
of the bonus, the EPS and ROE goals will be considered
independent from one another, i.e. each represents 50% of the
available bonus, or 37.5% of the total. If the thresholds are met
in either EPS or ROE and the bonus is available, then separate
calculations will be made for each portion of the award based
upon a sliding scale between the threshold and the maximum.
Examples are attached.
2007 EXECUTIVE INCENTIVE PLAN
PAGE 2
2. INDIVIDUAL PERFORMANCE
The individual portion of the bonus will be awarded as outlined
above.
After final determination of the incentive compensation due to
the participants, all amounts shall be rounded upward to the
nearest $100.
C. PAYMENT OF INCENTIVE AWARDS
1. Timing
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Generally, incentive compensation payable under this plan
will be paid to participants within two months after the
end of the corporation's fiscal year.
2. Deferral
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Participants may defer all or part of the compensation
payable under this plan under separate agreement with the
corporation. Any decision to defer incentive compensation
must be made at the inception of the current year's plan.
Access to deferred moneys is guided by IRS regulations
applicable to Section 401(k) of the Internal Revenue Code.
PROVIDENT BANK
2007 EXECUTIVE INCENTIVE PLAN
INCENTIVE AWARD SCHEDULE EXAMPLE
PERFORMANCE MEASURE:
--------------------
THRESHOLD TARGET MAXIMUM
--------- ------ -------
Earnings Per Share
Return on Equity
INCENTIVE AWARD CALCULATION:
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THRESHOLD TARGET MAXIMUM
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30% 60% 90%
Paid Automatically* 22.5% 45% 67.5%
Determined by Individual 7.5% 15% 22.5%
PARTICIPANTS:
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Chairman/CEO Gary Geisel
President/COO Kevin Byrnes
* In making the determination of the corporate (automatic) portion of
the bonus, the EPS and ROE goals will be considered independent from
one another, i.e. each represents 50% of the available bonus, or 37.5%
of the total. The corporate portion of the total bonus award will be
paid if the threshold goal is attained in either, or both, EPS and ROE.
If the thresholds are met in either EPS or ROE and the bonus is
available, then separate calculations will be made for each portion of
the award based upon a sliding scale between the threshold and the
maximum.