FIRST BANCORP MANAGEMENT ANNUAL INCENTIVE PLAN

 

 

 

                                                                   Exhibit 10(a)

 

                                  FIRST BANCORP

 

                        MANAGEMENT ANNUAL INCENTIVE PLAN

 

                 Based On Performance Against Annual Profit Plan

 

 

 

INTRODUCTION

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Annual Incentive bonus awards will be determined under First Bancorp's

Management Incentive Plan ("MIP") and paid in cash. The MIP links compensation

to "performance" of First Bancorp and to an evaluation of a participant's

personal contribution to that performance. Performance objectives and individual

goals are defined with all participants annually to ensure that their efforts

and the efforts of their business units are focused on improving both short-term

and long-term performance, enhancing First Bancorp's strengths in its

businesses, and contributing to shareholder value. Under this program, First

Bancorp and its business units must produce a threshold level of earnings before

any bonus awards are generated.

 

Following a review with management, an Earnings Target is set annually by the

Board of Directors, upon recommendations by the Compensation Committee, for the

Bank and each individual business unit. These targets are designed to require a

high level of performance in order to be achieved. Awards to participants under

the MIP are variable and are based upon:

 

(1)  the participant's responsibilities and ability to effect corporate and

     business unit performance;

 

(2)  the extent to which Earnings Targets are achieved or surpassed by the Bank

     and its business units; and

 

(3)  the Participant's personal performance will be measured by the specific

     annual goals established for the business unit as defined by management.

 

The importance of First Bancorp's earnings to the determination of a

participant's MIP awards and the amount of that award as a percentage of a

participant's annual base salary, increases directly with that individual's

responsibilities and ability to impact First Bancorp performance. It is First

Bancorp's intent that its Management and key employees will, through performance

based cash bonuses paid under the MIP, receive total current compensation which

is substantially determined by the achievement of operating results that meet or

exceed set targets.

 

 

 

 

 

 

 

 

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                           MIP PRINCIPAL PLAN FEATURES

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Measurement

Period         Calendar Year

 

Eligible

Employees      Management Employees, with approval of the Compensation Committee

 

Basis of

Measurement    Actual fiscal performance, compared against approved Annual

               Profit Plan. To include overall (i) corporate performance, (ii)

               individual unit performance, or (iii) a combination of (i) and

               (ii) for different categories of participation, and (iv)

               individual personal performance as measured by the achievement of

               specific annual goals for the business unit.

 

 

 

Participation

Categories               A. Corporate - includes individuals whose job

                    performance has an impact on the entire corporation.

 

                         B. Unit - includes individuals in roles directly

                    assigned to a profit center (branches and specific

                    departments).

 

                         C. Corporate/Unit - includes individuals in corporate

                    staff roles who manage unit budgets and operating objectives

                    (Regional Managers).

 

Determination

of Awards                A. Corporate Plan Participants - 100% on the basis of

                    First Bancorp corporate performance.

 

                         B. Unit Plan Participants - 25% on the basis of First

                    Bancorp corporate performance, and 75% on the basis of

                    fiscal performance of the respective profit center(s)

                    managed by the respective participant.

 

                         C. Corporate/Unit Plan Participants - 25 % on the basis

                    of First Bancorp corporate performance, and 75% on the basis

                    of fiscal performance of the respective profit center(s)

                    managed by the Regional Manager.

 

 

Calculation

of Awards      A target award is established for each participant, which will be

 

 

 

 

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               paid if Annual Profit Plan goals are met.

 

 

 

 

               A threshold level for both business and corporate unit(s) is

               established, below which no bonuses will be paid.

 

               A maximum level is also established at which point the maximum

               allowable bonus will be earned (e.g. 125% or more of