Exhibit 10.12

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Strategic Operating Committee Incentive Plan
 

 

 

 

 

 

 
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HomeTrust Strategic Operating Committee Incentive Plan

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Introduction
 
HomeTrust Bancshares, Inc. (“HomeTrust” or the “Bank”) is committed to rewarding
senior executives for their contributions to the Bank’s success.  The HomeTrust
Bancshares, Inc. Strategic Operating Committee Incentive Plan (the “Plan”) is
part of a total compensation package which includes base salary, annual
incentives and benefits.  The Plan is designed to:
 

 
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Focus executives on building a strong foundation for success and sustainability
over the long term.

 
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Recognize and reward achievement of the Bank’s annual business goals.

 
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Focus executives’ attention on key business metrics.

 
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Motivate and reward superior performance.

 
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Attract and retain talent needed for the Bank’s success.

 
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Be competitive with the market.

 
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Encourage teamwork and collaboration.

 
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Ensure incentives are appropriately risk-balanced.

 
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Recognize the accomplishment of key business goals that are critical to
long-term success of the organization that are less quantifiable and/or more
subjective in nature by utilizing a discretionary component.

 
Participation and Eligibility
 
Each year, employees are selected for Plan participation:

 
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CEO and COO participation is determined by the Compensation Committee.

 
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The CEO and COO recommend the other named executive officers for approval by the
Compensation Committee.

 
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Other participants are added by CEO and COO.

Participants are subject to meeting the following requirements:

 
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New hires must be employed prior to April 1st of the Plan year to be eligible to
participate in the Plan for the performance period.  Employees hired after that
date must wait until the next fiscal year to be eligible for an award under the
Plan.  Eligibility begins the first full month worked.  Participants receive a
pro-rated award using full months worked during the Plan year.

 
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Awards under the Plan shall be limited to individuals employed on a full-time
basis by HomeTrust on the date of payment, except in the case of disability,
death, or retirement.

 
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Participants on a performance improvement plan or with an unsatisfactory
performance rating at the time of payment or who have given notice of
resignation at the time of payment are not eligible to receive an award.

 
Performance Period
 
The Plan operates on a fiscal year schedule — July 1st through June 30th.

 
Incentive Award Opportunities
 
Each participant will have a specified target annual incentive award
opportunity, expressed as a percentage of the participant’s base
salary.  Incentive award opportunities are based on the participant’s job duties
and responsibilities and competitive practices.

 
Performance Goals and Award Levels
 
Plan goals will be established using three performance levels:

 
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Threshold – is the minimum level of performance in which the Bank would consider
it reasonable to provide a reward.  If performance is below Threshold, the
payout for that goal is zero. Performance at Threshold results in a payment
equal to 50% of the participant’s targeted annual incentive award opportunity.

 
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Target – is the level of performance that the Bank considers “good”
performance.  Goals at this level are challenging but considered reasonably
obtainable.  Performance at Target results in a payment equal to 100% of the
participant’s targeted annual incentive award opportunity.

 
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Stretch – is the level of performance the Bank considers outstanding
performance.  Goals at this level are challenging and considered a best case
scenario.  Performance at Stretch results in a payment equal to 150% of the
participant’s targeted annual incentive award opportunity, which is the highest
amount to be paid under the Plan.

Performance between Threshold and Target and Target and Stretch are interpolated
to provide for a range of payouts between 50% to 150% of a participant’s
targeted annual incentive, based on incremental results between Threshold and
Stretch performance.

 
Incentive Plan Performance Measures and Weights
 
The Plan uses a balanced scorecard with performance measures weighted between
Corporate and Team/Individual goals.  All Corporate goals, weightings and
Team/Individual goals for the CEO and Named Executive Officers are presented to
the Compensation Committee for review and approval.  Team/Individual goals for
other Plan participants are approved by the CEO and/or COO.
 
The following schedules are attached to this Plan document.  Schedules A and B
are approved by the Compensation Committee prior to the beginning of each
performance period:

 
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Schedule A:  Award Percentages and Performance Measures Weightings
Schedule B:  Bank Goals, Weightings and Definitions
Schedule C:  Example Payout Calculation

 
Plan Discretion
 
The Plan has a portion of the Corporate and Team/Individual and goals based on
discretion that allows the Compensation Committee, CEO and/or COO, as
appropriate, to modify the final award based on a subjective assessment of
performance and contributions to the Bank’s success.
 
 
Award Distributions
 
At the end of the fiscal year, performance is measured and awards amounts are
calculated.  Awards are paid in cash (generally) within two and one half months
following the end of the fiscal year or as soon as practical after approval of
the award payout by the Board of Directors.
 
Awards are paid out as a percentage of a participant’s annual base earnings as
of June 30th.  Base earnings are defined as the base salary in effect on June
30th and excludes referral fees, commissions and any other previously-paid
performance compensation.
 
Payments under this Plan are considered taxable income to participants in the
year paid and will be subject to tax withholding.

 
Risk Mitigation
 
HomeTrust seeks to appropriately balance risk with financial rewards in the Plan
design and implementation. The compensation arrangements in this Plan are
designed to be sufficient to incent participants to achieve approved strategic
and tactical goals while at the same time not be excessive or lead to material
financial loss to the Bank.
 
Awards may be reduced or eliminated for credit quality and/or regulatory action.
Unless the Compensation Committee deems otherwise, awards will not be paid,
regardless of Corporate or Team/Individual performance, if 1) any regulatory
agency issues a formal, written enforcement action, memorandum of understanding
or other negative directive action where the Committee considers it imprudent to
provide awards under this Plan, and/or 2) after a review of the Company’s credit
quality measures the Committee considers it imprudent to provide awards under
this Plan.

 
Coordination with Other Incentives
 
The Plan does not inhibit the Bank from approving Plan participants for
inclusion in other Bank plans, bonuses, commissions and/or incentive
compensation arrangements.  The Board of Directors may make discretionary
bonuses to participants regardless of their participation in this Plan.

Please see “Terms and Conditions” for further details on the Plan provisions.

 
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Terms and Conditions

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The information represented below is subject to change and does not constitute a
binding agreement.

 
 
Definition of “Plan”
 
“Plan” refers to the HomeTrust Bancshares, Inc. Strategic Operating Committee
Incentive Plan.

 
 
Definition of the “Bank”
 
For the purposes of this Plan, the “Bank” refers to HomeTrust Bancshares, Inc.

 
 
Effective Date
 
This Plan is effective July 1, 2012, and may be amended from time to time with
the approval of the Board of Directors.
 
 
Performance Period/Plan Year
 
The performance period is July 1st through June 30th and may be referred to in
this document as the Plan year.

 
 
Plan Administration
 
The Plan is authorized by the Board of Directors.  The Board has the sole
authority to interpret the Plan and to make or nullify any rules and procedures,
as necessary, for proper administration of the Plan based on recommendations by
the Compensation Committee.
 
The Plan will be reviewed annually by the Compensation Committee to ensure
proper alignment with the Bank’s business objectives.
 
The Compensation Committee will recommend to the Board of Directors for approval
all final award distributions paid to Plan participants.  Any determination by
the Board of Directors will be final and binding.

 
 
Program Changes or Discontinuance
 
The Bank has developed the Plan on the basis of existing business, market and
economic conditions; current services; and staff assignments. If substantial
changes occur that affect these conditions, services, assignments, or forecasts,
the Bank may add to, amend, modify or discontinue any of the terms or conditions
of the Plan at any time.  Examples of substantial changes may include mergers,
dispositions or other corporate transactions, changes in laws or accounting
principles or other events that would in the absence of some adjustment,
frustrate the intended operation of this arrangement.
 
The Board of Directors may, at its sole discretion, waive, change or amend any
of the Plan as it deems appropriate. 
 
 

 

 
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Plan 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 the Board of Directors
will be final and binding.

 
Participation
 
CEO and COO participation is determined by the Compensation Committee.  Named
executive officers are recommended by CEO and approved by the Compensation
Committee for final approval by the Board of Directors.  Other executives may
participate upon approval of the CEO and/or COO.
 
New employees must be employed by April 1st of the performance period (July 1 –
June 30) to be considered for participation in a given Plan year.

 
 
Award Determinations
 
Plan participants are eligible for a distribution under the Plan only upon
attainment of certain performance objectives defined under the Plan and after
the approval of the award by the Board of Directors.
 
Performance at Threshold, Target and Stretch are interpolated to encourage and
reward incremental performance improvement.

 
 
Award Distributions
 
Awards are paid in cash (generally) within two and one half months following the
end of the fiscal year or as soon as practical after approval of the award
payout by the Board of Directors.
 
Awards are paid out as a percentage of a participant’s annual base earnings as
of June 30th.  Base earnings are defined as base salary in effect as of June
30th and excludes referral fees, commissions and any other previously-paid
performance compensation.
 
Incentive awards are considered taxable income to participants in the year paid
and will be subject to tax withholding.

 
 
New Hires, Reduced Work Schedules, Promotions, and Transfers
 
New hires that meet the eligibility criteria and are hired prior to April 1st of
the Plan year receive a pro-rated award based on the number of full months
worked during the Plan year.  New hires employed by the Bank on or after April
1st are not eligible to receive an award for the current Plan year.
 
Participants that are promoted or change roles where the participant becomes
eligible or ineligible for an award or experience a change in incentive
opportunity will receive a pro-rated award based on their status and the
effective date of the promotion or role change.  Award amounts will be
calculated using the participant’s base earnings and the incentive target for
the applicable period.  Base earnings refers to the base salary in effect of
June 30thand excludes referral fees, commissions and any other previously-paid
performance compensation.
 

 
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Participants that have an approved leave of absence are eligible to receive a
pro-rated award calculated using their time in active status as permitted by the
Family Medical Leave Act or other applicable state and federal laws and
regulations.
 
Termination of Employment
 
To encourage employee retention, a participant must be an active employee of the
Bank on the date the incentive award is paid to receive an award (please see
exceptions for death, disability and retirement below.)  Participants who
terminate employment during the Plan year will not be eligible to receive an
award.  Participants who have given notice of resignation during the Plan year
and before payout are not eligible to receive an award.

 
 
Death, Disability or Retirement
 
If a participant ceases to be employed by the Bank due to disability, his/her
cash incentive award for the Plan year will be pro-rated to the date of
termination.
 
In the event of death, the Bank will pay to the participant’s estate the pro
rata portion of the cash award that had been earned by the participant during
his/her period of employment.
 
Individuals who retire are eligible to receive a cash incentive payout if they
are actively employed through March 31st of the performance period.

 
 
Clawback
 
In the event that the Bank is required to prepare an accounting restatement due
to the material noncompliance of the Bank with any financial reporting
requirement under the securities laws, the Participants shall, unless otherwise
determined in the sole discretion of the Committee, reimburse the Bank upon
receipt of written notification for any excess incentive payment amounts paid
under the Plan calculation(s) which were based on financial results required to
be restated.  In calculating the excess amount, the Committee shall compare the
calculation of the incentive payment based on the relevant results reflected in
the restated financials compared to the same results reflected in the original
financials that were required to be restated.  Participants may write a check
payable to the Bank for amounts equal to the written notification.  In its
discretion, the Compensation Committee has the right to adjust compensation
and/or modify a Participant’s future incentive payments as it deems necessary.
 
Ethics Statement
 
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 this Plan to which the employee would otherwise be entitled will be
revoked or if paid, be obligated to repay any incentive award earned during the
award period in which the wrongful conduct occurred regardless of employment
status.

 
 
Miscellaneous
 
Any participant awards shall not be subject to assignment, pledge or other
disposition, nor shall such amounts be subject to garnishment, attachment,
transfer by operation of law, or any legal process.
 

 
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Participation in the Plan does not confer rights to participation in other Bank
programs or plans, including annual or long-term incentive plans, non-qualified
retirement or deferred compensation plans or other executive perquisite
programs.
 
The Plan will not be deemed to give any participant the right to be retained in
the employ of the Bank, nor will the Plan interfere with the right of the Bank
to discharge any participant at any time for any reason.
 
In the absence of an authorized, written employment contract, the relationship
between employees and the Bank is one of at-will employment. The Plan does not
alter the relationship.
 
This 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 state
in which the participant is employed.
 
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 HomeTrust Bancshares, Inc. and its
employees and should not be shared outside the organization other than as
required by executive compensation reporting and disclosure requirements.
 
 
 
 
 

 
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Schedule A: 2013 Proposed Award Percentages and Performance Measures Weightings

       
Management Incentive Plan
       
Target
 
Weighting
Participant
 
Title
 
%
 
Corporate
 
Team/Indiv.
                                   
Ed Brodwell
 
COB/CEO
 
55%
 
100%
 
0%
Dana Stonestreet
 
COO/President
 
55%
 
100%
 
0%
Tony VunCannon
 
SVP/Chief Financial Officer
 
30%
 
60%
 
40%
Hunter Westbrook
 
Chief Banking Officer
 
30%
 
60%
 
40%
Charles Abbitt
 
SVP/Chief Credit Officer
 
30%
 
60%
 
40%
Howard Sellinger
 
SVP/Chief Information Officer
 
30%
 
60%
 
40%
Teresa White
 
SVP/Chief Administration Officer
 
30%
 
60%
 
40%

 
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Schedule B: Bank Goals, Weightings and Definitions

   
Weight
Performance Measures
 
CEO/
COO
 
Other
SOC
         
Net Income
 
40%
 
24%
         
Peer ROA
 
40%
 
24%
         
Discretionary Component
 
20%
 
12%
         
Team/Individual
 
0%
 
 40%
             
100%
 
100%

Note:
Payouts for performance between Threshold and Target and Target and Stretch will
be calculated using straight line interpolation.

 
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Schedule C: Example Payout Calculation

Name
         
Base Salary
$184,860
 
STI Opportunity
30%
$55,458.00
     
Corporate Weighting
60%
$33,274.80
Team/Individual Weighting
40%
$22,183.20

Performance Measures
Incentive
at Target
Weight
Actual
Performance
Payout
Calculation
Payout
           
Corporate
         
Net Income
$13,310
24%
Target
$13,310 x100%
$13,310
Peer ROA
$13,310
24%
Exactly Btw. Threshold and Target
$13,310 x 75%
$9,982
Discretionary Component
$6,655
12%
Exactly Btw. Target and Stretch
$6,655 x 125%
$8,319
           
Corporate Goal Achievement
$33,275
60%
   
$31,611
           
Team/Individual
                     
Goal 1
$11,092
20%
Below Threshold
$11,092 x 0%
$      -
           
Goal 2
$11,092
20%
Over Stretch
$11,092 x 150%
$16,637
           
Team/Individual Achievement
$22,183
40%
   
$16,637
                       
Grand Total
$55,458
100%
   
$48,248

 
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