Exhibit 10.7
MASSBANK
Officer Incentive Compensation Bonus Plan
1.
Purpose of the Plan
The purpose of the Plan is to
encourage greater initiative, resourcefulness, cooperation and
effectiveness on the part of the officers of the Company, by
providing a means whereby such participants may be rewarded for
their efforts as reflected by the attainment of goals and
objectives.
2.
Eligibility
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Part A.
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Junior officers (grades 10-12)
hired prior to August 1 of the year in which a bonus is declared.
Distribution up to 10%. |
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Part B.
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Officers (grades 13-17) hired
prior to August 1 of the year in which a bonus is declared.
Distribution up to 15%. |
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Part C.
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Senior officers (grades 18-22).
Distribution up to 25%. |
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Part D.
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Executive officers (grades 23-29)
. Distribution up to 35%. |
All participants who are not employed
by the Company at the beginning of the plan year are eligible on a
pro-rata salary basis. All participants must be still employed by
the Company on December 31 of the plan year to be eligible for
any distribution.
3. Goal
(For cash bonus distributions)
To provide annual increases in
shareholder value by increasing net income, earnings per share,
book value per share and dividends paid shareholders. To establish
additional objectives to increase franchise value and improve
efficiency levels throughout the company.
3a.
Goal (For option plan distributions)
To exceed the 5-year comparative
returns on the NASDAQ Bank Index and the S&P 500 Index, in
addition to increasing total assets, book value per share, net
income, earnings per share, return on average assets, return on
average equity, non-interest income, improving efficiency and the
non-interest expense ratio.
4.
Minimum Requirement for Distribution
The Board of Directors shall meet
with Management each fiscal year to establish a minimum net
earnings “NE” which must be attained before any
distribution can be made under the program.
When NE is less than the minimum
requirement, there will be no distribution made. Each incentive
plan year will stand a
