Exhibit 10.3


 


PIONEER BANK


TARGET INCENTIVE PLAN


 


ARTICLE I


Establishment, Purpose and Duration


 


1.1       Establishment.
This Target Incentive Plan (the “Plan”) is adopted by Pioneer Bank (the “Bank”), effective
as of January 1, 2018 (the “Effective Date”).


 


1.2       Purpose.
The Plan seeks to provide participating personnel with incentives and motivation to stimulate the Bank’s profitability and
growth while maintaining its safety and soundness. The plan also seeks to improve the ability of the Bank to attract and retain
quality personnel, critical to its continued success.


 


1.3       Duration
of this Plan. This Plan shall commence on the Effective Date, and shall remain in effect until terminated, modified or
amended in accordance with Section 4.1 of the Plan.


 


ARTICLE II


Definitions


 


For the purposes of
this Plan, the following words and phrases shall have the meanings indicated, unless the context clearly indicates otherwise:


 


2.1       “Base
Salary” means the Participant’s annual rate of base salary paid during each calendar year, excluding bonuses
and other forms of variable income, fringe benefits, reimbursements, etc.


 


2.2       “Bonus
Award” means an annual bonus paid as a cash lump sum under the Plan.


 


2.3       “Committee”
means the Compensation Committee of the Board of Directors of the Bank or disinterred members of the Board of Directors of the
Bank, as applicable.


 


2.4       “Eligible
Employee” means executives of the Bank who are selected by the Committee, in its sole discretion, to participate
in this Plan. Being selected to participate in this Plan for one Plan Year does not guarantee selection for participation in the
Plan for any other Plan Year.


 


2.5       “Plan
Year” means the Bank’s fiscal year, which is the calendar year.


 


2.6       “Participant”
means an Eligible Employee who has been notified by the Committee in writing that he or she has been selected to participate in
this Plan for the current Plan Year.


 


ARTICLE III


Annual Cash Bonuses


 


3.1       Bonus
Award.


 


(a)       Each
Plan Year, the Committee shall set performance objectives pursuant to Section 3.2 for each Participant in writing in an Award Agreement,
which shall be provided to each Participant and included as an exhibit to the Plan. If the performance objectives for the Participant
are accomplished, the Participant shall receive a Bonus Award under the Plan equal to a designated percentage of the Participant’s
Base Salary, as determined by the Committee in its sole discretion and set forth in the Participant’s Award Agreement.


 




     


     


    

 


(b)       In
addition to the attainment of the performance objectives set forth by the Committee for the Participant in the Award Agreement,
payment of the Bonus Award is also contingent on the Participant’s and the Bank’s overall performance level being satisfactory,
as determined by the Committee. The Committee shall have the final authority to determine whether the Bank and/or any Participant
has satisfied these requirements.


 


3.2       Performance
Objectives.


 


(a)       Payment
of Bonus Awards in any Plan Year is contingent upon the performance objectives specified by the Committee for any Participant being
met by the Bank and/or Participant. The specific performance objectives are determined annually by the Committee, with input from
the President and Chief Executive Officer, and are subject to change by the Committee, but generally include objective performance
targets focused on financial performance, growth, asset quality, and risk management, including, but not limited to, return on
average assets, net income margin, return on equity, loan production, asset quality, core deposit growth and subjective, discretionary
performance targets, such as particular qualitative factors for each Participant, based on his or her duties for the Bank.


 


(b)       Each
performance objective shall specify levels of achievement of goals ranging from a minimum level of performance to a maximum level
of performance, which can be satisfied incrementally between such achievement levels. Minimum level of performance is a level of
performance deemed worthy of a Bonus Award. Maximum level of performance is a level of performance deemed outstanding performance.


 


(c)       Each
objective will be weighted based on priority as a percentage of the total Bonus Award payable to the Participant. The weight of
each performance objective attributable to a Participant will be set forth in his or her Award Agreement.


 


3.3       Termination
of Employment. Unless otherwise determined by the Committee, a Participant who is not employed as of the payout date for
his or her Bonus Award shall forfeit the Bonus Award.


 


3.4       Time
of Payout. Except as provided in Article IV, no later than two and one half (2 1⁄2) months after the close of the
Plan Year (i.e., by the March 15 that immediately follows the end of the Plan Year for which the performance is measured), the
Bonus Award will be paid to the Participant in a cash lump sum, through regular payroll practices, including all applicable withholdings.
Bonus Awards under the Plan are intended to be exempt from Section 409A of the Internal Revenue Code under the “short term
deferral rule” set forth in Treasury Regulations Section 1.409A-1(b)(4). The Chief Financial Officer of the Bank shall calculate
the Bonus Awards for the Participants, which shall be certified by the Committee.


 


ARTICLE IV


Amendments and Termination


 


4.1       Right
to Amend or Terminate. The Committee may amend or terminate this Plan at any time without the consent of any Participants,
provided, however, that the Committee may not reduce the amount of the Bonus Award already earned by any Participant in any Plan
Year without the Participant’s consent.


 




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ARTICLE V


Miscellaneous


 


5.1       No
Guarantee of Employment. This Plan is not an employment policy or contract. It does not give any Participant the right
to remain an employee of the Bank, nor does it interfere with the Bank’s right to discharge the Participant. It also does
not interfere with the Participant’s right to terminate employment at any time.


 


5.2       Non-Transferability.
Bonus Awards under this Plan cannot be sold, transferred, assigned, pledged, attached, or encumbered in any manner.


 


5.3       Applicable
Law. The Plan and all rights hereunder will be governed by the laws of the State of New York, except to the extent preempted
by the laws of the United States of America.


 


5.4       Entire
Agreement. This Plan constitutes the entire agreement between the Bank and each Participant as to the subject matter
hereof. No rights are granted to the Participant by virtue of this Plan other than those specifically set forth herein.


 


5.5       Administration.
The Committee shall have powers which are necessary to administer this Plan, including but not limited to:


 


(a)        Interpreting
the provisions of the Plan;


 


(b)        Determine
the persons eligible to participate in the Plan;


 


(c)        Maintaining
a record of benefit payments; and


 


(d)        Establishing
rules and prescribing any forms necessary or desirable to administer the Plan.


 


[Signature Page to Follow]


 




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IN WITNESS WHEREOF,
the Bank has executed this Plan on the date set forth below.


 


	 	 	PIONEER BANK
	 	 	 
	_____________	By:	 
	Date	 	 


 




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PIONEER BANK


TARGET INCENTIVE PLAN


 


AWARD AGREEMENT


 


Name: __________________________________________________________________________________


 


Plan Year: _______________________________________________________________________________


 


Bonus Award Opportunity: __________________________________________________________________


 


	 	 	(a)	 	 	As a % of Base Salary	 	 	(b)	 	 	(a) x (b) x bonus
 opportunity
	 
	Performance Objective	 	Weight	 	 	Below
 Minimum
	 	 	Minimum	 	 	Maximum & 
 Above
	 	 	% Results for 
 the Plan Year
	 	 	Total Amount of 
 Bonus
	 
		 	 		 	 	 	0	%	 	 		 	 	 		 	 	 		 	 	 		 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	0	%	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Totals	 	 	100	%	 	 	N/A	 	 	 	n/a	 	 	 	n/a	 	 	 	N/A	 	 	$