exv10w20



 





Exhibit 10.20




PANHANDLE STATE BANK




EXECUTIVE INCENTIVE PLAN

PLAN DOCUMENT




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	Section	 	Page	 
	 
	Purpose
	 	 	1	 
	Administration
	 	 	1	 
	Eligibility
	 	 	1	 
	Size of Award Opportunities
	 	 	1	 
	Performance Components
	 	 	2	 
	Performance Goals
	 	 	2	 
	Annual Incentive Schedule
	 	 	3	 
	Withholding
	 	 	3	 
	Payment
	 	 	3	 
	Sale of Bank
	 	 	3	 
	No Guarantee of Employment
	 	 	4	 
	Modification and Termination
	 	 	4	 
	Extraordinary Items
	 	 	4	 
	Termination
	 	 	4	 






 









 





PANHANDLE STATE BANK

EXECUTIVE INCENTIVE PLAN





	 	 	This document describes the Executive Incentive Plan (the “Plan”) for Panhandle State Bank (the
“Bank”).
	 
	 	 	1. Purpose
	 
	 	 	The purpose of the Plan is to be an effective management tool to help improve performance by
providing variable reward opportunities in return for achieving Bank goals. Specific
objectives of the Plan include:






	 	•	 	Support the Bank’s new strategic direction.
	 
	 	•	 	Provide motivation to achieve Bank goals.
	 
	 	•	 	Support and reinforce a sense of teamwork among management.
	 
	 	•	 	Provide financial rewards directly related to measured performance.
	 
	 	•	 	Attract and retain high quality management.






	 	 	2. Administration
	 
	 	 	The Plan will be administered by the Compensation Committee of the Board of Directors (the
“Committee”). The Committee will assure that the Plan is implemented and maintained
according to Plan provisions.
	 
	 	 	3. Eligibility
	 
	 	 	Participation in the Plan will include key members of the executive team. The CEO of the
Bank will recommend who participates in the Plan for Committee approval. The CEO will
communicate such participation to each participant at the beginning of each Plan year.
Participants must be employed at the Bank on December 31 to qualify for incentive payouts
earned during that year.
	 
	 	 	The CEO will review Plan eligibility at the beginning of each year and, if appropriate,
recommend additional participants for Committee approval.
	 
	 	 	4. Size of Award Opportunities
	 
	 	 	To be most effective, incentive opportunities must be meaningful and competitive. To
accomplish this, participants are assigned target incentive opportunities based on each
position’s relative level of impact on the Bank’s overall performance.
	 
	 	 	Target incentive levels represent the size of earned incentive awards if all established
performance goals are achieved. Actual earned incentives will likely be higher or lower,
depending on actual performance measured against predetermined goals.





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	 	 	The CEO will communicate the appropriate target incentive percent to each participant at the
beginning of each Plan year. The Committee has the authority to revise the target incentive
opportunities as deemed appropriate.
	 
	 	 	5. Performance Components
	 
	 	 	Annual incentive awards will be based on the Bank’s actual performance results relative to
performance criteria consistent with the Bank’s strategic goals, through the following
process:






	 	•	 	Prior to the beginning of each Plan year, Bank management will select
appropriate performance criteria and develop annual performance goals for the Bank for
Committee approval.
	 
	 	•	 	Each performance goal will be weighted to reflect relative importance.
	 
	 	•	 	During the year, performance relative to the Plan is monitored and, if
necessary, action steps are taken to improve performance.
	 
	 	•	 	At the end of each Plan year, actual annual performance is measured against
the goal to determine the extent, if any, to which incentive awards are generated for
each participant.






	 	 	The following performance criteria will be used to establish annual performance goals as a
basis for annual incentive awards:
	 
	 	 	Performance Criteria






	 	•	 	Net income after tax (Weighted @ 60%)
	 
	 	•	 	Average Asset Growth (Weighted @ 40%)






	 	 	At the beginning of each Plan year, the CEO will review and, as appropriate, revise the
performance criteria, and recommend appropriate weighting for Committee approval.
	 
	 	 	6. Performance Goals
	 
	 	 	The key to the success of the annual incentive plan is establishing appropriate performance
goals that must be achieved to generate incentive awards. To be most effective, performance
goals must be reasonable in terms of being achievable, but must require a significant stretch
to justify additional compensation opportunities.
	 
	 	 	At the beginning of each year, at least three specific performance measurements will be
established for each performance criterion.






	 	•	 	Threshold Performance Level — The minimum acceptable level of performance
below which no incentives will be paid.
	 
	 	•	 	Targeted Performance Level — The expected level of performance that will
generate target incentive awards.





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	 	•	 	Outstanding Performance Level — The exceptional level of performance that
will generate outstanding incentive awards.






	 	 	All established incentive goals must be approved by the Committee.
	 
	 	 	7. Annual Incentive Schedule 






	 	•	 	Once the annual performance goals are established and approved by the Committee, an
annual incentive schedule is prepared for each participant that relates actual Bank
performance to earned incentive awards.






	 	 	The Committee has the authority to adjust any participant’s earned incentives upward or
downward to reflect the individual performance of the participant during the Plan year.
	 
	 	 	8. Withholding
	 
	 	 	The Bank shall deduct the regulatory tax withholding amounts from any earned incentive awards
that are paid.
	 
	 	 	9. Payment
	 
	 	 	Earned incentive awards, if any, will be paid in one lump sum on or before 45 days after the
end of the Plan year.
	 
	 	 	10. Sale of Bank
	 
	 	 	In the event more than 50% of the stock of the Bank is sold, all participants will be paid in
one lump sum on a pro-rata basis for performance level goals reached for the most current
quarter ended no later than one day prior to the sale event.
	 
	 	 	11. No Guarantee of Employment
	 
	 	 	Nothing in the Plan or any Plan materials guarantees employment at the Bank. Further, this
Plan should not be implied as any contract agreement.
	 
	 	 	12. Modification and Termination
	 
	 	 	The Committee has the right to amend or terminate the Plan at any time. However, termination
or modification of the Plan during the year will not negatively affect performance goals and
incentive opportunities up until the point of termination.
	 
	 	 	13. Extraordinary Items
	 
	 	 	The Committee has the authority but no obligation to exclude any extraordinary accounting
items such as changes in generally accepted accounting procedures, sales of major assets or
regulatory changes.





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	 	 	14. Termination
	 
	 	 	Participants must be employed by the Bank on the last day of the Plan year to receive earned
incentives for that Plan year. Participants who retire or are disabled during the Plan year
will receive earned incentives on a pro-rata basis for time actually worked, based on the
appropriate performance results. If a participant dies, the estate will receive a pro-rata
earned incentive award. Participants who voluntarily or involuntarily terminate during the
year forfeit their rights to any earned incentive for that year. No incentive earnings will
be calculated until the end of the current Plan year.






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