EXHIBIT 10.19
CITIZENS BANKING CORPORATION
MANAGEMENT INCENTIVE PLAN
2005
I. PURPOSE:
1. Ensure achievement of strategic goals.
2. Align management more closely with shareholder
3. Strengthen links between pay and performance.
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. INCENTIVE COMPONENTS:
The Management Incentive Plan components consist of:
Net Interest Income, Fee Income, Net Charge-Offs, Non-Performing Assets
and Expenses. EPS AND ROE WILL BE USED FOR FINAL CALCULATION IN
DETERMINING THE AWARD AMOUNT
IV. PARTICIPATION RATE:
The participation rate for individual positions is benchmarked from
market data research provided by various surveys and consultants.
V. AWARD DETERMINATION:
SALARY X PARTICIPATION RATE X SERVICE FACTOR = POOL
Pool is broken down for the Leadership Group Members as follows:
<Table>
<Caption>
75% 25%
CORPORATE COMPONENTS PERCENTAGE COMPONENT PERCENTAGE
Net Interest Income 35% Discretionary 100%
Fee Income 25%
Net Charge-Offs 12.5%
Non Performing Assets 12.5%
Expense 15%
x All independent components
</Table>
Each corporate component will be further calculated against an EPS
factor at a weighting of 60% and an ROE factor at a weighting of 40%.
VI. PERFORMANCE FACTOR:
For the discretionary component, a performance indicator of 0% to 150%
will be applied. Goals should be set at levels that are challenging to
reach at 100% - Achievement should be based on meeting all expectations
in every way. It is possible to exceed 100% performance but this type
of evaluation should be reserved for truly extraordinary performance
VII. SERVICE FACTOR:
The service factor is equal to the number of months the participant is
employed with the corporation during the plan year. Example: 1.0 is
equal to 12 months, .5 is equal to 6 months.
VIII. 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.
IX. ADDITIONAL PROVISIONS:
The Management Incentive Plan shall be administered by the Compensation
and Human Resources Committee of the Corporation.
While all attempts will be made to follow the incentive formulas and
metrics, subjective adjustments occasionally can and will be made both
upwards and downwards based on management discretion which will require
CEO approval. Adjustments will be considered based on value of an
individual's contribution to performance during the year and not based
on comparison to prior year awards, comparison to peer's incentive
levels, attitude, effort, etc. In general, subjective adjustments will
be the exception and not the rule. Management will however reserve the
right to make these subjective adjustments if necessary to be equally
fair to shareholders and plan participants.
The incentive award for the Chairman and 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 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.
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.
X. PERFORMANCE PLAN GUIDELINES:
If participant is on corrective action on the last day of the
quarter/year they are not eligible for incentive payment
Minimum annual performance rating of Learning required in most recent
Annual Performance Review in both Key Performance Activities and
Competencies
This plan does not represent a contract with any individual plan
participant
The plan may be changed, modified or terminated at any time throughout
the plan year
XI. 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.
RECOGNITION GUIDELINES: Discretionary awards should be given in
recognition for one or more of the following performance criteria:
Earnings:
o Expense reduction
o Revenue enhancement
Innovation:
o Continuous improvement efforts
o Innovative delivery alternatives
o Foresight and planning to prevent crises
Achievement:
o Unique/specialized skills or knowledge of value to
the company, i.e., Key Performers
o Sustained high performance
o Exemplary performance during unusual circumstances or
specific events
o Special projects completed in an exceptional manner
or ahead of schedule
o Superior client service
2005 - MIP - PAYOUT TIER STRUCTURE DESIGN
<Table>
<Caption>
Budget
35% NET INTEREST INCOME Target < * * * * * * *
2004 Actual = 275.3 % to Actual (Actual/Budget) < 98.77% 98.77% 99.01% 99.26% 99.51% 99.75% 100.0%
2005 Budget = * Payout Factor 0% 50% 60% 70% 80% 90% 100%
Budget
25% FEE INCOME Target < * * * * * * *
2004 Actual = 93.4 % to Actual (Actual/Budget) < 94.24% 94.24% 95.39% 96.54% 97.69% 98.85% 100.0%
2005 Budget = * Payout Factor 0% 50% 60% 70% 80% 90% 100%
Budget
12.5% NET CHARGE-OFFS Target > * * * * * * *
2004 Actual = 20.8 % to Actual (Actual/Budget) > 119.05% 119.05% 115.24% 111.43% 107.62% 103.81% 100.0%
2005 Budget = * Payout Factor 0% 50% 60% 70% 80% 90% 100%
Budget
12.5% NON PERFORMING ASSETS Target > * * * * * * *
2004 Actual = 50.8 % to Actual (Actual/Budget) > 111.11% 111.11% 108.89% 106.67% 104.44% 102.22% 100.0%
2005 Budget = * Payout Factor 0% 50% 60% 70% 80% 90% 100%
Budget
15% EXPENSE Target > * * * * * * *
2004 Actual = 244.8 % to Actual (Actual/Budget) > 102.95% 102.95% 102.36% 101.77% 101.18% 100.59% 100.0%
2005 Budget = * Payout Factor 0% 50% 60% 70% 80% 90% 100%
100%
MIP WILL BE CALCULATED BASED ON THE ABOVE TIER STRUCTURE. THOSE RESULTS WILL BE FURTHER CALCULATED AGAINST THE ITEMS BELOW TO
DETERMINE THE FINAL PAYOUT.:
Budget
60% EPS FACTOR Target < * * * * * * *
2004 Actual = 1.74 % to Actual (Actual/Budget) < 96.34% 96.34% 97.07% 97.80% 98.53% 99.27% 100.0%
2005 Budget = * Payout Factor 0% 85% 88% 91% 94% 97% 100%
Budget
40% ROE FACTOR Target < * * * * * * *
2004 Actual = 11.90 % to Actual (Actual/Budget) < 94.44% 94.44% 95.55% 96.66% 97.77% 98.89% 100.0%
2005 Budget = * Payout Factor 0% 85% 88% 91% 94% 97% 100%
100%
</Table>
<Table>
<Caption>
35% NET INTEREST INCOME Target * * * * * Each x% over budget
2004 Actual = 275.3 % to Actual (Actual/Budget) 100.25% 100.49% 100.74% 100.99% 101.23% earns an additional
2005 Budget = * Payout Factor 110% 120% 130% 140% 150% x% payout
No Cap
25% FEE INCOME Target * * * * * Each x% over budget
2004 Actual = 93.4 % to Actual (Actual/Budget) 101.06% 102.13% 103.19% 104.26% 105.32% earns an additional
2005 Budget = * Payout Factor 110% 120% 130% 140% 150% x% payout
No Cap
12.5% NET CHARGE-OFFS Target * * * * * Each x% under budget
2004 Actual = 20.8 % to Actual (Actual/Budget) 94.29% 88.57% 82.86% 77.14% 71.43% earns an additional
2005 Budget = * Payout Factor 110% 120% 130% 140% 150% x% payout
Capped
12.5% NON PERFORMING ASSETS Target * * * * * Each x% under budget
2004 Actual = 50.8 % to Actual (Actual/Budget) 97.78% 95.56% 93.33% 91.11% 88.89% earns an additional
2005 Budget = * Payout Factor 110% 120% 130% 140% 150% x% payout
Capped
15% EXPENSE Target * * * * * Each x% under budget
2004 Actual = 244.8 % to Actual (Actual/Budget) 99.41% 98.82% 98.23% 97.64% 97.05% earns an additional
2005 Budget = * Payout Factor 110% 120% 130% 140% 150% x% payout
100%
MIP WILL BE CALCULATED BASED ON THE ABOVE TIER STRUCTURE. THOSE RESULTS WILL BE FURTHER CALCULATED AGAINST THE ITEMS BELOW TO
DETERMINE THE FINAL PAYOUT.:
60% EPS FACTOR Target * * * * * Each x% over budget
2004 Actual = 1.74 % to Actual (Actual/Budget) 100.73% 101.47% 102.20% 102.93% 103.66% earns an additional
2005 Budget = * Payout Factor 103% 106% 109% 112% 115% x% payout
No Cap
40% ROE FACTOR Target * * * * * Each x% over budget
2004 Actual = 11.90 % to Actual (Actual/Budget) 101.08% 102.16% 103.24% 104.33% 105.41% earns an additional
2005 Budget = * Payout Factor 103% 106% 109% 112% 115% x% payout
No Cap
100%
</Table>
1 Discretion may be used by the compensation committee to over-ride the
formula under appropriate circumstances
2 Any adjustments for unusual items (such as acquisitions, divestitures,
etc. ...) will require compensation committee approval
3 The above numbers will not include the impact of extra-ordinary items
4 The above numbers will be adjusted to neutralize the impact of equity
compensation
5 The above numbers will be adjusted to normalize the impact of equity
adjustments due to interest rate movements
Payout % is incremental between tiers (ex. Each % over budget earns x%
additional incentive)
Less than 50% to actual will result in a 0% payout for that component
* Indicates that material has been omitted and confidential treatment has been
requested therefor. All such omitted material has been filed separately with
the Securities and Exchange Commission pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934, as amended.
FINAL 02/22/2005