Exhibit 10.11

 

 

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Annual Incentive Plan
 
2009 Plan Summary
 

 

 
February 2009
 

 

 

 
 

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2009 Annual Incentive Plan
 

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Introduction and Objective
 
United Bank’s Annual Incentive Plan is designed to recognize and reward
employees for their collective contribution to the Bank’s success.  The Plan
focuses on the financial measures that are critical the Bank’s growth and
profitability. Individually and collectively, we all have the ability to
influence and drive our success.  Employees who exhibit superior performance and
contribute most to our success will receive additional rewards.  This document
summarizes the elements and features of the Plan.
 
In short, the objectives of the Incentive Plan are to:
 
 
·
Align all of the Bank’s employees with critical bank goals and objectives

 
 
·
Encourage teamwork and collaboration across all areas of the Bank – our
collective contributions will drive improved business results

 
 
·
Motivate and reward the achievement of specific, measurable  performance
objectives

 
 
·
Establish performance goals on a bank and division level that align the interest
of employees’ with the enhancement of shareholder value.  These goals will be
established by senior leadership based on the Bank's strategic plan.

 
 
·
Provide competitive total compensation opportunities.

 
 
·
Enable the Bank to attract, motivate and reward talented staff.

 
Eligibility
 
 
·
All Bank employees will be eligible to participate in the Incentive

 
 
·
New employees will receive pro-rated awards based on date of hire.

 
 
·
Part-time staff and employees who work a partial year will receive pro-rated
awards based on hours worked.

 
 
·
Participants must maintain a performance level of “meets most requirements” to
be eligible for a full incentive award.   Participants who have a performance
level of “meets some requirements” will be eligible for up to a 50% incentive
award.

 
 
·
Participants must be an active employee as of the award payout date to receive
an award, unless they have retired from United Bank or are out on a
disability.  Individuals who retire during the plan year will receive a
pro-rated award.

 
Performance Period
 
The performance period and plan operates on a calendar year basis (January 1 –
December 31st).   Actual payout awards are made in cash following year-end after
Bank financial results and performance is known.
 

 

 
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Incentive Payout Opportunity
 
Each participant will have a target incentive opportunity that is expressed as a
percentage of base salary.   Incentive targets reflect competitive awards and
are funded and paid based on our performance.  In order to fund the target
incentives, the Bank needs to achieve certain levels of net income.  In effect,
the Bank is sharing a portion of its profits with employees based on our
individual and collective performance.
 
Actual payouts will reflect our net income and performance relative to goals and
may be above or below these target awards.  Performance below expectations will
result in lower awards while performance above expectations will result in
higher awards.
 
 The table below shows incentive targets by role/level.  Actual awards may range
from 0% - 150% of these targets depending on our performance.
 
Grade Level
Normal Target
% of base salary
2009 Target
at budget- 70%
of normal target
27
30%
21%
25-26
25%
17.5%
22-24
20%
14%
18-21
15%
10.5%
11-17, FNSV Reps
& Personal Bankers
7%
4.9%

 
Incentive Plan Measures
 
For 2009, the incentive plan will reflect a combination of Bank and/or division
performance goals.  Each role will have defined performance measures that are
weighted to reflect the focus and contribution for each role/level in the Bank.
 
Senior Managers’ awards will be based on a combination of Bank and/or division
performance.  For 2009, Bank performance will reflect a combination of net
income, deposit growth, loan growth and/or expense control.  Each member of
senior management will have goals defined and weighted to reflect their
contribution to Bank success.  The objective is to align all our senior managers
with the success of the overall Bank.
 
The overall Bank performance goals for 2009 are defined below.  Actual goals may
be sub-defined by division.
 
Bank Performance Measures
2009 Bank Performance Goals
Threshold
 
Budget
 
Stretch Budget
 
Net Income
$ 6,726 million
$ 8,408  million
$10,090  million
Deposit Growth
4.90%
7.00%
9.10%
Loan Growth
3.31%
4.73%
6.15%
Expense Control / Other
TBD by division
TBD by division
TBD by division

 
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All Other Participants will have 50% of their incentive based on Bank net income
and 50% based on two additional division performance goals.
 
Division performance goals will consist of two performance measures that reflect
the goals for each of the Bank’s core divisions.  Division performance goals
will be set by the division head and approved by Senior Management and the
Compensation Committee.
 
Similar to the Bank goals, performance targets and ranges for each measure will
be set at the beginning of the plan year.  A minimum achievement of threshold
level performance is required for the plan to pay for each component.
 
Individual Performance
 
Individual performance will be a modifier to the incentive award.  All
employees, with the exception of Personal Bankers will be eligible for an
adjustment to the incentive payout (+/- 10%) to recognize other performance
factors and contributions to Bank success.  The individual performance modifier
will be based on the discretionary recommendation of the individual’s manager.
 
Incentive Awards
 
Each participant will have a scorecard that defines the Bank and/or Division
performance goals and weights for their role.  At the end of the performance
period, actual performance will be determined and entered into the scorecard to
calculate an award payout.  Actual awards will be interpolated to reflect
incremental performance.
 
Once the incentive award is calculated for Bank and/or Division performance, an
individual multiplier will modify the award as appropriate.
 
A sample scorecard is shown in Exhibit A.

 
Terms and Conditions

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Participation
 
All employees are eligible to participate in the Plan.  New employees are
eligible for a prorated award.
 
Effective Date
 
This Program is effective January 1, 2009 to reflect plan year January 1, 2009
to December 31, 2009.  The Plan will be reviewed annually by the Bank’s Board
and Executive Management to ensure proper alignment with business
objectives.  The Board of Directors of United Bank retains the rights as
described below to amend, modify or discontinue the Plan at any time during the
specified period. The Incentive Plan will remain in effect until December 31,
2009.
 
Program Administration
 
The Plan is authorized by the Board of Directors.  The Board of Directors has
the sole authority to interpret the Plan and to make or nullify any rules and
procedures, as necessary, for proper administration.  Any determination by the
Board of Directors will be final and binding on all participants.
 
Program Changes or Discontinuance
 
United Bank has developed the plan based on existing business, market and
economic conditions.  If substantial changes occur that affect these conditions,
United Bank may add to, amend, modify or discontinue any of the terms or
conditions of the plan at any time.
 

 
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The Board of Directors may, at its sole discretion, waive, change or amend the
Plan as it deems appropriate.
 
Incentive Award Payments
 
Awards will be paid as a cash bonus before the end of the first quarter
following the Plan year.   Awards will be paid out as a percentage of a
participant’s effective base salary as of December 31 for a given calendar year.
Incentive awards will be considered taxable income to participants in the year
paid and will be subject to withholding for required income and other applicable
taxes.
 
Any rights accruing to a participant or his/her beneficiary under the Plan shall
be solely those of an unsecured general creditor of United Bank. Nothing
contained in the Plan, and no action taken pursuant to the provisions hereof,
will create or be construed to create a trust of any kind, or a pledge, or a
fiduciary relationship between the Board of Directors of United Bank or the CEO
and the participant or any other person. Nothing herein will be construed to
require The Board of Directors of United Bank or the CEO to maintain any fund or
to segregate any amount for a participant’s benefit.
 
Program Funding
 
The Plan is funded and accrued based on Bank performance results for a given
year.  Achieving higher levels of performance will increase the Plan payouts to
participants.  Similarly, achieving less than target performance will reduce the
Plan payouts.  If the Bank does not achieve its threshold bank performance goal,
the Plan will not be paid.
 
New Hires, Reduced Work Schedules, Promotions, and Transfers
 
Participants who are not employed by United Bank at the beginning of the Plan
year will receive a pro rata incentive award based on their length of employment
during a given year.
 
Part time employees are eligible to participate.  Their award percentage will
reflect their earned compensation based on actual hours worked.  A participant
whose work schedule changes during the year will be eligible for prorated
treatment that reflects his/her time in the different schedules.
 
If a participant changes his/her role or is promoted during the Plan year,
he/she will be eligible for the new role’s target incentive award on a pro rata
basis (i.e. the award will be prorated based on the number of months employed in
the respective positions.)
 
Termination of Employment
 
If the Bank terminates a Plan participant, no incentive award will be paid.  To
encourage employees to remain in the employment of United Bank, a participant
must be an active employee of the Bank on the date the incentive is paid to
receive an award. (See exceptions for death, disability and retirement below.)
 
Disability, Death or Retirement
 
If a participant is disabled by an accident or illness, and is disabled long
enough to be placed on long-term disability, his/her bonus award for the Plan
period shall be prorated so that no award will be earned during the period of
long-term disability.
 
In the event of death, United Bank will pay to the participant’s estate the pro
rata portion of the award that had been earned by the participant.
 
Individuals who retire during the plan year will receive a pro-rata portion of
the award based on the retirement date.
 
Ethics and Interpretation
 
If there is any ambiguity as to the meaning of any terms or provisions of this
plan or any questions as to the correct interpretation of any information
contained therein, the Bank’s interpretation expressed by Board of Directors
will be final and binding.
 

 
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The altering, inflating, and/or inappropriate manipulation of
performance/financial results or any other infraction of recognized ethical
business standards, will subject the employee to disciplinary action up to and
including termination of employment.  In addition, any incentive compensation as
provided by the plan to which the employee would otherwise be entitled will be
revoked.
 
Participants who have willfully engaged in any activity, injurious to the Bank,
will upon termination of employment, death, or retirement, forfeit any incentive
award earned during the award period in which the termination occurred.
 
Miscellaneous
 
The Plan will not be deemed to give any participant the right to be retained in
the employ of United Bank, nor will the Plan interfere with the right of United
Bank to discharge any participant at any time.
 
In the absence of an authorized, written employment contract, the relationship
between employees and United Bank is one of at-will employment. The Plan does
not alter the relationship.
 
This incentive plan and the transactions and payments hereunder shall, in all
respect, be governed by, and construed and enforced in accordance with the laws
of the Commonwealth of Massachusetts.
 
Each provision in this Plan is severable, and if any provision is held to be
invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not, in any way, be affected or impaired thereby.
 
This plan is proprietary and confidential to United Bank and its employees and
should not be shared outside the organization.
 
 
 
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