Attached files
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| 10-K/A - FIRST KEYSTONE CORP | v186026_10ka.htm |
| EX-32.2 - FIRST KEYSTONE CORP | v186026_ex32-2.htm |
| EX-32.1 - FIRST KEYSTONE CORP | v186026_ex32-1.htm |
EXHIBIT
10.2
FIRST
KEYSTONE NATIONAL BANK
MANAGEMENT
INCENTIVE COMPENSATION PLAN
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CONTENTS
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I.
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PURPOSE
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1
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II.
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GENERAL
DESCRIPTION
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2
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III.
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PLAN
ADMINISTRATION
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3
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IV.
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PLAN
PARTICIPANTS
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5
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V.
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OPERATING
RULES
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6
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VI.
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SUMMARY
OF SUPPLEMENTARY PLAN DOCUMENTS
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9
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I. PURPOSE
The
purpose of the Management Incentive Compensation Plan is to provide incentives
and awards to top management employees who, through high levels of performance,
contribute to the success and profitability of First Keystone National
Bank. The Plan is designed to support organizational objectives and
financial goals, as defined by the Bank's Strategic and Financial Plans, by
making available additional, variable, and contingent incentive compensation.
II. GENERAL
DESCRIPTION
The
Management Incentive Compensation Plan is based upon the achievement of a
required budget net income figure before any incentive award "pool" is
formed. The Plan specifies annual goals that are consistent with
those contained in the Strategic Business Plan and the annual Profit
Plan.
The
calculation of share of profits to be distributed to the Plan participants,
and the incentive formulas, are constructed to provide awards that are
consistent with achieved profitability levels. The incentive formulas
insure a level of incentive award that will enable First Keystone National Bank
to attract, retain, and motivate high-quality management personnel and support
continued growth and profitability.
The
Management Incentive Compensation Plan is established to augment regular salary
and benefits programs already in existence. The Plan is not meant to
be a substitute for salary increases, but as a supplement to salary, and, as
stated earlier, as an incentive for performance that contributes to outstanding
levels of achievement.
III. PLAN ADMINISTRATION
Throughout
this Plan document, reference to the actions and authority of the Human Resource
Committee of the Board of Directors also presumes that the Committee will
recommend, and the Board of Directors will approve or disapprove, final
disposition of all matters pertaining to the administration of the
Plan. The Committee, with Board approval, has the responsibility to
interpret, administer, amend, or recommend suspension or termination of the Plan
as necessary. The recommendations of the Committee, as approved by
the Board, affecting the construction, interpretation, and administration of the
Plan shall be final and binding on all parties, including the Bank and its
employees.
Matters
before the Committee shall be decided upon a majority vote of the Committee and
recommended to the Board for final action. Plan participants who are
members of the Committee shall not be entitled to vote on matters relating to
the eligibility for and/or determination of their own incentive compensation
awards.
During
the first quarter of each Plan Year, the Committee may review and revise the
operating rules. Performance measures and awards based upon those
measures, may be changed in order to emphasize specific goals and objectives of
the Plan. However, it is expected that the Plan will require
modification only when significant changes in organization, goals, personnel, or
performance occur. The Chief Executive Officer shall inform the
Committee of any proposed changes to the operating rules.
Computation
of incentive awards will be made by the Chief Executive Officer in consultation
with the Chairman of the Board. Maintenance of participant payments
and other related records shall be the responsibility of the Bank's Human
Resource Manager. Such computations and records may be audited
annually by the independent auditors of the Bank prior to submission to the
Committee and the Board for review and approval.
Finally,
the Committee, in the exercise of its discretion with respect to the
determination of the amount of the incentive plan pool for any given Plan Year,
may take into account the presence or absence of nonrecurring or
extraordinary items of income, gain, expense, or loss, and any and all
factors that, in its sole discretion, may deem relevant.
Extraordinary
occurrences may be excluded when calculating performance results to insure that
the best interests of the Bank are protected and are not brought into conflict
with the best interest of plan participants.
IV. PLAN
PARTICIPANTS
Participation
in the Management Incentive Plan at First Keystone National Bank is limited to
the executive management team. This management team includes the
following functional job titles:
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A.
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Chief
Executive Officer
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B.
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Executive
Vice President
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C.
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Senior
Vice President and Chief Financial Officer
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D.
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Senior
Vice President and Operations Manager
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E.
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Senior
Vice President and IT
Manager
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Plan
participation by these five (5) individuals recognizes the importance of
this group to the Bank and the potential these officers have to influence
the achievement of financial and strategic objectives.
The only
additional eligibility requirement is that the manager named to one of the five
(5) positions noted above must have served in the position the full twelve (12)
months of the plan year in order to be eligible.
V. OPERATING
RULES
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The
Plan shall be effective as of April 1, 1988.
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A.
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The
Board of Directors of First Keystone National Bank may amend, suspend, or
terminate the Plan at any time.
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B.
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The
Plan shall be administered by the Human Resource Committee with assistance
from Executive Management.
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C.
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The
Human Resource Committee shall adopt such rules and regulations and shall
make determinations and interpretations of the Plan thereunder as it shall
deem appropriate. All such rules, regulations, and
determinations, as approved by the Board of Directors, shall be conclusive
and binding upon all parties.
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D.
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Eligibility
for participation in the Plan is based upon the eligibility
requirements as stated herein.
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E.
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Supplementary
Plan Documents relating to participants, the targeted incentive plan pool,
and other pertinent matters will be prepared by the Committee, and
approved by the Board of Directors, during the first quarter of each Plan
Year.
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F.
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The
incentive plan pool may be funded, within the discretion of the Board of
Directors, with the following to be used as a general
guideline:
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Fund
as a
% of Budget
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%
of Budget
Beyond Goal
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Greater
than 90% of budget
up
to 95% of budget
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5%
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Greater
than 95% of budget
up
to 100% of budget
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10%
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In
excess of budget
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15%
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G.
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Allocation
of the plan pool will be made in accordance with the guidelines shown in
Section VI of this Plan document. As noted in these guidelines,
individual performance standards must be met before an eligible
participant will receive all or part of his/her eligible portion of the
pool.
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H.
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Within
thirty (30) days following the end of the Plan Year, or as soon as
financial and operating results are known, eligible participants will
receive their appropriate incentive plan payment. Unless
otherwise determined and approved by the Board of Directors, this payment
will be made in cash.
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I.
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Basic
Incentive Plan guidelines for any Plan Year shall be reviewed with the
participants at the beginning of each Plan Year.
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J.
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Partial
payments under the Plan shall be administered as follows:
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1.
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Retirement: In
the event of termination of employment through retirement, the employee
may, at the discretion of the Committee, be considered to have earned
one-twelfth (1/12) of the annual incentive compensation award of a
particular year for each month of employment in the Plan Year of his/her
retirement.
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2.
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Death: If
a participant dies, the amount of the award may be prorated for each month
of employment during the Plan Year at the discretion of the Committee, and
paid to the estate or designated beneficiary.
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3.
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Termination
for Reasons Other Than Death or Retirement: In the event of
termination of employment for reasons other than death or retirement, the
participant, at the discretion of the Committee, will forfeit
all unpaid incentive awards.
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K.
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No
right or interest of any participant in the plan shall be assignable
or transferable, or subject to any lien, directly, by operation of law, or
otherwise, including levy, garnishment, attachment, pledge, or
bankruptcy, except to a beneficiary upon the death of a participant as
herein provided.
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L.
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An
award under the Plan shall not confer any right on the participant to
continue in the employ of the bank, or limit in any way the right of the
bank to terminate the participant's employment at any time. The
receipt of an award for any one year shall not guarantee an employee the
right to receive an award for any subsequent year.\
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M.
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The
Bank shall have the right to deduct from all payments under this Plan any
federal or state taxes required by law to be withheld with respect to such
payments.
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N.
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The
Committee, with concurrence of the Board of Directors, may terminate,
amend, or modify this Plan at any
time.
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VI. SUMMARY
OF SUPPLEMENTARY PLAN DOCUMENTS
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A.
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Allocation
of Incentive Plan Pool
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Job
Title
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Maximum
% of Pool
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1. Chief
Executive Officer
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45%
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2. Executive
Vice President
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25%
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3. Senior
Vice President and Chief Financial Officer
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10%
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4. Senior
Vice President and Operations Manager
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10%
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5. Senior
Vice President and IT Manager
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10%
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