Exhibit (10)(xvi)
Bank of Oak Ridge
Management Incentive
Plan
Administrative
Rules
Bank of Oak Ridge
Management Incentive
Plan
1. Purpose
The purpose of the Bank of Oak Ridge
Management Incentive Plan (the “Plan”) is to provide
key employees of Bank of Oak Ridge (the “Bank”) with
the opportunity to receive payments of additional compensation
distributed based upon the earnings of the Bank, and on the
achievement of a broad set of corporate and/or individual
objectives (the “Objectives”). The Plan provides an
incentive to employees to enhance the size and earnings of the
Bank, within the constraints of safe, sound banking
practices.
At the same time it must be
emphasized that the Plan in no way contravenes the importance of
either long-term goal achievement or the proper exercise of
appropriate management accountability. These goals and areas of
accountability include, but are not limited to, the following
items:
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1.
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Collection,
recovery, charge-off, and bankruptcy activity.
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2.
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Maintenance and
increase in market share through salesmanship and customer
service.
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3.
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Continued
salesmanship (call programs) and improved customer
service.
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4.
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Employee
management and development (staff supervision, tracking and
cross-training, employee turnover, etc.)
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5.
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Development of
new and better ways of doing business.
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6.
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Appropriate
audit and documentation procedures.
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7.
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Responsible
management of fixed assets/resources.
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8.
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Adherence to
all Bank policy and philosophy.
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9.
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Maintenance of
the highest ethical standards.
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It is anticipated that the limited
amount of incentive potential available through the Plan, as
compared to the size of salaries and incentives paid for
performance of these long term management accountabilities, in
conjunction with the controls built into the performance measures
in the Plan, will create the appropriate focus. The Board of
Directors, through the Corporate Governance Compensation and
Nominating Committee (the” Compensation Committee” or
“Committee”), and the Chief Executive Officer
administers the plan.
At the Committee’s discretion
funds may be used to pay discretionary bonuses. As an example an
employee with outstanding overall performance could receive a
discretionary bonus in recognition of performance unaccounted for
through the plan. It is understood that discretionary bonuses will
be an exception as opposed to the rule.
2. Effective Date and Plan
Period
The Effective Date of the Plan shall
be January 1, 2009. The Plan Period shall be divided into two
segments; (i) January through June and (ii) July through
December of each calendar year.
3.
Eligibility
An individual shall be eligible to
become a Participant in the Plan who satisfied the following
requirements:
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a.
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The individual
is an employee of the Bank. For this purpose, an individual shall
be considered to be an “employee” if there exists
between the individual and the Bank the legal and bona fide
relationship of employer and employee. An individual shall be
considered an employee if he/she is regularly scheduled to work at
least 20 hours per week.
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b.
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The individual
employees’ position is considered by the Committee to be
“key” and to have a direct impact on the size and
earnings of the Bank.
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c.
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The individual
is approved by the Compensation Committee as a Participant in the
Plan.
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4.
Participation
Prior to the beginning of each Plan
Period, the Chief Executive Officer shall recommend to the
Compensation Committee each individual or position eligible to
become a Participant in the Plan (a “Participant”) with
respect to such Plan Period. The Compensation Committee in its
discretion shall approve participants. In the event of the
promotion of an employee or the hiring of a new employee during the
Plan Period, the Compensation Committee, upon the recommendation of
the Chief Executive Officer, may approve the entry of a Participant
into the Plan Period. However, if the position has been previously
approved, no such approval shall be required. In such case, the
Incentive Award determined under Section 5 with respect to
such Participant shall be the percentage as determined by the
Compensation Committee for the position multiplied by the
individual’s job salary grade range mid-point during the
period of time he or she was eligible to participate. However, in
no event shall an employee be a Participant for less than the full
final three months of the Plan Period. Participation in the Plan
shall be subject to the provisions of the Plan and such other terms
and conditions, as the Compensation Committee shall
provide.
5. Incentive
Award
5.1 Subject to Section 5.2,
each Participant for a Plan Period shall receive an Incentive Award
determined by multiplying the percentage achieved of each of the
individual’s objectives (“key drivers”) by a
weighting factor (positive or negative). A Potential Award is then
multiplied by the sum of the weights derived. When no individual
objectives related to a Plan Period have been determined for a
Participant, then the Participant’s objectives for the
purpose of this Plan shall be the Corporate Objectives approved by
the Committee at the beginning of such Plan Period.
For purposes of this section 5, the
following definitions shall apply:
“Potential Award” means
with respect to each Participant for the Plan Period a dollar
amount determined by multiplying the individual’s salary by a
percentage designed by the Compensation Committee. The Potential
Award represents the Incentive Award payable to the Participant in
the event that Corporate and Participant’s personal
objectives are achieved for the Plan Period. In the event that no
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