EXHIBIT 10.8
(FORM 10-K)
CITIZENS BANKING CORPORATION
MANAGEMENT INCENTIVE PLAN
I. PURPOSE:
1. Ensure achievement of strategic goals.
2. Strengthen links between pay and performance.
3. Align management more closely with shareholder.
II. ELIGIBILITY:
Senior Vice Presidents and above and certain other officers based upon
corporate responsibility who are not participants in another
established incentive plan with payment amounts determined by
performance in relation to goal. Awards will be pro-rated based on
months served for staff members with less than 12 months of service in
a Plan Year. Staff members become eligible to participate in the plan
by virtue of promotion or new hire. A staff member who terminates
employment before the Plan Year is not eligible to receive an award.
III. PERFORMANCE MEASUREMENT FACTORS:
Individual bonus awards will be based on corporate and individual
performance.
- *Providing the stock buy back program continues-
- Upon reaching 96.5% of EPS, the factor will pay out at 50%.
- Upon reaching 98.25% of EPS, the factor will pay out at 75%.
- Upon reaching 100% of EPS, the factor will pay out at 100%.
- Achievement over 100% of plan will result in a factor pay out
multiplier prorated at 10% for every 1% by which Earnings Per
Share exceeds the Plan Goal with a maximum pay out percent of 150%
For example:
-
PERCENT OF TARGET PAYOUT PERCENT EPS FACTOR*
----------------- -------------- -----------
100% 100% 60%
101% 110% X 60%
102% 120% 60%
- Should the buy back program be discontinued-
- Net income will be recalculated on a comparable basis and paid out
at either 50%, 75%, 100% or more accordingly.
- Direct Contribution, Key Success Factors and Special Initiatives
should be achieved at 100% for pay out and may be multiplied by a
performance factor of 100% to 150% at the discretion of the CEO.
- Special initiatives are defined as producing revenue enhancement
or expense reduction.
IV. PARTICIPATION RATE:
The participation rate for individual positions is benchmarked from
market data research provided by various surveys and consultants.
V. AWARD DETERMINATION:
EXECUTIVE MANAGEMENT
-- -----
| 60% 25% |
| --- -- |
Salary Midpoint x | EPS | Direct Contribution and Performance | |
Participation Rate x X | Payout + | or Key Success Factor X Factor | |
Service Factor | Percent | + Special Initiatives (100% TO 150%) | |
| | | |
| --- -- |
| (96.50% 15% |
| TO 150%) |
-- -----
CBC SENIOR MANAGEMENT
-- -----
| 60% 40% |
| --- -- |
Salary Midpoint x | EPS | Performance | |
Participation Rate x X | Payout + | Key Success Factor X Factor | |
Service Factor | Percent | (100% TO 150%) | |
| --- -- |
| (96.50% |
| TO 150%) |
-- -----
The incentive award for the Chairman, President and CEO will be
determined by the Compensation and Human Resources Committee of
Citizens Banking Corporation Board of Directors.
A special award fund (Discretionary) equal to 15% of the aggregate
incentive award will be available for individual awards as determined
by the Chairman, President and CEO. Awards from this fund are made to
staff members who are not participants in the Management Incentive
Plan.
Awards for the Discretionary Fund will be made only in recognition of
exemplary achievements. Distribution of all available amounts in this
fund is not mandatory.
VI. AWARD LIMITATIONS:
No awards will be made unless the corporation meets or exceeds 96.5% of
the Earnings Per Share Goal (EPS).
VII. AWARD PAYMENTS:
All awards earned under Management Incentive Plan will be paid as soon
as practical following approval by the Compensation and Human Resources
Committee.
VIII. ADDITIONAL PROVISIONS:
The Management Incentive Plan shall be administered by the Compensation
and Human Resources Committee of the Corporation.
Participation in the Management Incentive Plan shall not be construed
as giving any employee the right to continued employment with the
corporation for the full or for any subsequent period.
IX. DISCRETIONARY GUIDELINES:
OBJECTIVES: Recognize and promote exemplary individual performance or
initiative.
ELIGIBLE PARTICIPANTS: All staff members are eligible except staff
members who are in established incentive plans with payment amounts
determined by performance in relation to established goals.
NOMINATION PROCESS: Managers would nominate staff member(s) according
to established guidelines. They would also obtain concurrence and
approval from their respective Direct Report to the CEO.
MONETARY GUIDELINES: Range of $500 to $3000. Larger amounts could be
given in exceptional circumstances.
GUIDELINES: Discretionary awards should be given in recognition for one
or more of the following performance criteria:
Earnings:
- Expense reduction
- Revenue enhancement
Innovation:
- Continuous improvement efforts
- Innovative delivery alternatives
- Foresight and planning to prevent crises
Achievement:
- Unique/specialized skills or knowledge of value to the
company, i.e., Key Performers
- Sustained high performance
- Exemplary performance during unusual circumstances or
specific events
- Special projects completed in an exceptional manner or
ahead of schedule
- Superior client service