Document:

Second Amendment to Employment Agreement - Michael L. Boguski

 Exhibit 10.2 

SECOND AMENDMENT 

TO EMPLOYMENT AGREEMENT 

AGREEMENT made this 23rd day of August, 2010, by and between EASTERN SERVICES CORPORATION (“ESC”), a business corporation
having its principal place of business at 25 Race Avenue, Lancaster, Pennsylvania, and MICHAEL L. BOGUSKI (the “Executive”), an individual residing in Lebanon County, Pennsylvania. 

WITNESSETH: 

WHEREAS, the parties entered into an agreement effective September 21, 2004, relating, among other things, to the Executive’s
employment by ESC (the “Employment Agreement”); and 
 WHEREAS, the parties entered into an Amendment to Employment
Agreement effective December 17, 2008 to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), by executing this document (the “First Amendment”). 

NOW, THEREFORE, the parties, intending to be legally bound hereby, further agree as follows: 

1. By mutual agreement of ESC and Executive, Executive’s job title and duties as set forth in Exhibit A to the Employment Agreement
shall change effective January 1, 2011 as set forth on the attached Amended Exhibit A. 
 2. Executive agrees that the
changes in his job title and duties (Essential Functions) as set forth in Amended Exhibit A is occurring by mutual agreement and does not satisfy the definition of “Good Reason” as set forth in Section 5(a) of the Employment Agreement
and therefore should Executive choose to resign within ninety days of January 1, 2011 because of the changes to his job title and duties as set forth in Amended Exhibit A, Executive agrees that he shall not be entitled to receive the benefits
provided under Section 6 of the Employment Agreement by reason of the changes in his job title and duties (Essential Functions) as set forth in Amended Exhibit A. 

3. ESC, in its discretion, may assign other individuals to serve as president or chief executive officer of any wholly-owned subsidiaries
of ESC acquired or formed after January 1, 2011 and such assignment shall not satisfy the definition of “Good Reason” as set forth in Section 5(a) of the Employment Agreement and therefore should Executive choose to resign within
ninety days of any such assignment, Executive agrees that he shall not be entitled to receive the benefits provided under Section 6 of the Employment Agreement by reason of such assignment. 

4. In all other respects, the terms of the Employment Agreement and First Amendment are hereby affirmed. 

IN WITNESS WHEREOF, the parties have executed this Amendment, or caused it to be executed, on August 23, 2010. 

 

 1 

					
		 	EASTERN SERVICES CORPORATION
			
		 	By:	 	 /s/ Kevin M. Shook

			
		 	Date:	 	August 23, 2010
			
	[CORPORATE SEAL]	 	Attest	 	 /s/ Wendy Stauffer

			
		 	Date:	 	August 23, 2010
		
		 	 /s/ Michael L. Boguski

		 	Michael L. Boguski
			
		 	Date:	 	August 23, 2010

  

 2 

 AMENDED EXHIBIT A 

 

			
	Job Title:	  	President and Chief Executive Officer
	FLSA Class:	  	Exempt
	Department:	  	Executive
	Reports To:	  	Board of Directors
	Issued/Date Revised:	  	January 1, 2011

  

Expectations For All Employees: 

Supports the organization’s mission, vision, and values by exhibiting the following behaviors: excellence and competence, collaboration, innovation,
respect personalization, commitment to our community, and accountability and ownership. 
 Job Summary: 

The President and Chief Executive Officer is responsible for providing strategic leadership for the company by working with the Board and other executive
management to establish long range goals, strategies, plans, policies and initiatives. 
 Essential Functions: 

 

	 	•	 	 Plan, develop, organize, implement, direct and evaluate the Company’s revenue and profitability objectives and overall business plan with the
assistance of the management team. 

  

	 	•	 	 Provide technical advice and knowledge to others within the company; effectively develop solutions to business challenges.

  

	 	•	 	 Build and maintain active interaction and dialogue with key agency partners, stakeholders and others to assess and discuss strategic business issues.

  

	 	•	 	 Stay current with market (internal and external) challenges, opportunities and trends that may affect the Company and ensure that appropriate
strategies are implemented. 

  

	 	•	 	 Analyze operating performance and results of the Company and initiates corrective actions as necessary. 

 

	 	•	 	 Manages and directs the organization toward its primary objectives, based on profit and return on capital, by performing the duties personally or
through subordinate managers. 

  

	 	•	 	 Dispenses advice, guidance, direction, and authorization to carry out major plans and procedures, consistent with established policies and Board
approval. 

  

 3 

	 	•	 	 Oversees the adequacy and soundness of the organization’s financial structure. 

 

	 	•	 	 Reviews operating results of the organization, compares them to established objectives, and takes steps to ensure that appropriate measures are taken
to correct unsatisfactory results. 

  

	 	•	 	 Plans and directs all investigations and negotiations pertaining to mergers, joint ventures, the acquisition of businesses, or the sale of major assets
with approval of the Board of Directors. 

  

	 	•	 	 Establishes and maintains an effective system of communications throughout the organization. 

 

	 	•	 	 Plans, develops, and establishes policies and objectives of business organization in accordance with Board directives and corporation charter by
performing required duties personally or through subordinate managers. 

  

	 	•	 	 Confers with company officials to plan business objectives, to develop organizational policies, to coordinate functions and operations between
divisions and departments, and to establish responsibilities and procedures for attaining objectives. 

  

	 	•	 	 Directs and coordinates development of and appropriate modifications to the company’s risk preparation and crisis planning activities.

  

	 	•	 	 Reviews activity reports and financial statements to determine progress and status in attaining objectives and revises objectives and plans in
accordance with current conditions. 

  

	 	•	 	 Directs and coordinates formulation of financial programs to provide funding for new or continuing operations to maximize returns on investments and to
increase productivity. 

  

	 	•	 	 Serves as president and chief executive officer of wholly-owned subsidiaries existing as of January 1, 2011. 

 

	 	•	 	 Accountable for complying with all laws and regulations that are associated with duties and responsibilities. 

 

	 	•	 	 Responsible for driving the company to achieve and surpass profitability, cash flow and business goals and objectives. 

 

	 	•	 	 Provide timely, accurate and complete reports on the operating conditions of the company. 

 

	 	•	 	 Foster a success-oriented, accountable business environment within the company; motivate and lead high-performance management teams, provide mentoring
as guidance as appropriate. 

  

 4 

	 	•	 	 Provide day-today leadership and management that mirrors the adopted mission and values of the company. 

Secondary Functions: 
  

	 	•	 	 Presides at Board meetings in absence of Chairman (and Vice Chairman, if any), presents and assists in proposing strategies, initiatives and policies
for Board review/approval. 

  

	 	•	 	 Direct supervision of Executive staff, provide guidance, support and growth opportunities as appropriate. Provide timely feedback on a regular basis
and complete formal reviews according to company policies. 

 Knowledge, Skills and Abilities Required: 

 

	 	•	 	 Experienced leader and executive in the insurance industry, energetic forward thinking, entrepreneurial individual with high ethical standards and an
appropriate professional image. 

  

	 	•	 	 Strategic visionary with sound technical skills, analytical ability, good judgment and strong operational focus. 

 

	 	•	 	 Ability to make effective and persuasive presentation on complex topics to the Board, outside investors, agency partners and others.

  

	 	•	 	 Ability to communicate effectively and professionally both verbally and in writing with various constituencies and at all levels; both in and outside
of the organization. 

  

	 	•	 	 Ability to read, analyze, and interpret complex documents; ability to anticipate and solve practical problems or resolve issues.

  

	 	•	 	 Ability to attend insurance and industry/business functions to promote and present a positive image of the Company; ability to participate in
presentations; ability to travel as necessitated by business needs. 

  

	 	•	 	 Ability to represent the organization with major customers/clients, the financial community, the public and others. 

 

	 	•	 	 Highly developed organizational, planning and management skills and the ability to lead people and get results through others.

  

	 	•	 	 Substantial number of years of progressive executive management experience in the insurance industry; Bachelor’s Degree required in Insurance,
Business or relate field; CPCU required. 

  

 5 

 The above are not intended to be an all-inclusive list of the duties, responsibilities and requirements of
the job described. Rather, they are intended only to describe the general nature of the job. 
  

					
	  
	 		 	  

	Supervisor Signature	 		 	Employee Signature

  

 6Management Annual Incentive Plan

 Exhibit 10.3 

EASTERN INSURANCE HOLDINGS, INC. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

Approved – August 19, 2010 

Board of Directors Meeting 

Plan Document 

Effective January 1, 2011 

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

I. Introduction 
 A vital component
of Eastern Insurance’s success is the ability of the management team and all employees to meet and achieve performance objectives consistent with the strategic objectives of the company and the best interests of the shareholders. The ability to
grow and manage the company in a positive manner is critical to Eastern’s future success. 
 This Management Annual Incentive Plan has been
designed with the fundamental objective of supporting the company’s core values and strategic mission and vision. The basis of the company’s compensation philosophy is to align the interest of management with those of the company’s
shareholders. 
 The major purposes of the plan are: 
  

	 	•	 	 To motivate and reward management for positive performance on an annual basis 

 

	 	•	 	 To provide a form of variable compensation to management which is directly linked to their individual and collective performance

  

	 	•	 	 To emphasize the growth and profitability of the company 

The focus of this plan is to have the management team achieve annual performance objectives, which are coordinated with the long-term objectives of the
company. 
 II. Plan Year 

The plan year for this program will be the calendar year. The effective date of the plan is January 1, 2011. The performance measures for this plan
will be determined, calculated, and approved annually beginning with 2011 fiscal year. 
  

  

			
	8-1-10	  	Page 2

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 III. Participation 

Participation in the plan will be recommended at the beginning of each plan year by the President and CEO, and approved by the Compensation Committee and
subsequently the Board of Directors. To participate, an individual must be a regular employee of the company in a senior management position and under the review of the Compensation Committee unless otherwise approved by the Compensation Committee.
The President and CEO’s participation will be approved annually by the Compensation Committee and subsequently by the Board of Directors. 

Exhibit A will list participants each year and may include multiple levels of participation. These levels will generally be based upon position
responsibility. 
 An employee may become a new participant during the plan year if newly hired or promoted into an eligible position by
July 1 of that year. Any awards are pro-rated for the portion of the year in which participation occurs. Plan participation for any participant being demoted during the year will be determined on a case by case basis. 

A participant’s eligibility ceases at termination of employment (other than retirement, death, or disability) and the executive will not receive any
awards under the plan for the year of termination. Termination as a result of retirement (as defined in the company’s pension plans and currently at age 65), death or disability with a minimum of six months of service during the year of
occurrence, will provide pro-rated awards in the plan through the last working date for the year in which termination occurred. 
 IV.
Performance Factors 
 The plan is based upon annual company financial performance factors, which may change from year to year. In
general, these factors may be measures such as return on average equity, net income, earnings per share or similar indicators. The factors and weighing of the factors are determined at the beginning of each plan year. Each factor

  

  

			
	8-1-10	  	Page 3

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 
has quantifiable objectives consisting of threshold, target, and optimum goals. Additionally, a portion of each participant’s award may be based on individual performance objectives, which
are determined by management, subject to approval of the Compensation Committee, at the beginning of each year. Generally, the President and CEO will have most or all of his or her performance based on company performance and other executives will
have a proportionately greater level of their award based on individual performance. Individual performance factors will be based primarily on quantitative measures. 

The company performance factors for each year’s annual portion of the plan are found in Exhibit B. Individual objectives are established and
recorded between the participant and the participant’s manager. 
 V. Award Calculation and Distribution 

Awards under the plan are calculated according to determination of the established performance factors at year-end. Company performance between the
threshold and target, and target and optimum is interpolated. Individual performance is determined by each participant’s manager according to the achievement of objectives and will be approved by successive levels of management before submittal
to the Compensation Committee. Individual employee performance which is not meeting the position’s requirements (an annual performance evaluation which is less than satisfactory) will result in no award granted to that individual for that year
even though company performance is above threshold. 
 Company performance below threshold will result in no award under the plan for the
company portion of the award. Awards for individual performance may still be paid, with Compensation Committee approval, at a reduced level and according to each participant’s individual performance. 

 

  

			
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 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Annual awards are paid in cash less normal payroll tax withholding. Payment will be after completion and
approval of the Company’s annual audit report and within 75 days after year-end. Any participant terminating employment (except retirement, death, or disability) prior to actual payment of award will forfeit that award. The award schedule for
each year is found with the performance factors in Exhibit B. 
 VI. Administration 

The Board of Directors of the company may amend the plan at any time. 

Once established, performance factors will remain in place for the respective fiscal year. 

Participation, performance factors, thresholds, targets, and any other participation features are established each plan year and may change from year to
year according to the strategic objectives of the company. 
 The plan does not constitute a contract of employment, and participation in the
plan does not give any employee the right to be retained in the service of the company or any right or claim to an award under the plan unless specifically accrued under the terms of this plan. 

Any right of a participant or his or her beneficiary to the payment of an award under this plan may not be assigned, transferred, pledged, or encumbered.

 Any adjustments to the financial performance results utilized in this plan because of extraordinary gains or losses, in or outside the normal
course of business, or other items must be approved by the Board of Directors. 
  

  

			
	8-1-10	  	Page 5

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 VII. Plan Approval 

This plan has been approved by the Board of Directors of Eastern Insurance Holdings, Inc. on August 19, 2010. 

 

			
	By	 	  

		 	Board of Directors
		 	Eastern Insurance Holdings, Inc.

  

  

			
	8-1-10	  	Page 6

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit A – Participation 

Plan Year 2011 
 (Participating employees
and their participant categories should be listed at the beginning of each year and adjusted for changes in participation throughout the year.) 
  

					
	Category 1	  	–	  	Michael Boguski – President and Chief Executive Officer
			
	Category 2	  	–	  	Kevin Shook – EVP - Chief Financial Officer
			
	Category 3	  	–	  	Robert Gilpin – SVP – Field Operations/Marketing
		  		  	Suzanne Emmet – SVP – Claims/TPA
		  		  	Cynthia Sklar – VP – Underwriting/Risk Management
		  		  	Harry Talbert – Chief Information Officer
			
	Category 4	  	–	  	Bob Enderlein – Regional Business Executive
		  		  	Lucia Tompkins – Regional Business Executive
		  		  	Mike Michael – Regional Business Executive
		  		  	Noreen Dishart – Director – Human Resources
			
	Category 5	  	–	  	Brent Shirk – VP – Finance
		  		  	Curt Melville – Director – Alternative Markets

  

  

			
	8-1-10	  	Page 7

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit B – Performance Factors and Award Schedule 

Plan Year 2011 (performance numbers are examples only) 

Category 1 – President and CEO Position 

COMPANY GOALS 

Performance Measures 

Net Income - 30% 
  

								
	Threshold	 	Target	 	Optimum
	$	7,000,000	 	$	10,000,000	 	$	15,000,000

 Return on
Average Equity - 30% 
  

					
	Threshold	 	Target	 	Optimum
	4.2%	 	6.0%	 	9.0%

 Earnings Per Share
- 30% 
  

					
	Threshold	 	Target	 	Optimum
	$.70	 	$1.00	 	$1.50

 Strategic
Objective or Specific Operational Objective - 10% 
 One or more measures will be determined annually and each will have
quantitative 
 measurements with threshold, target and optimum levels. 

COMPANY GOAL AWARD – 90% 

(% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	12%	 	30%	 	42%

 INDIVIDUAL GOAL
AWARD – 10% 
 (% of Base Pay) 
  

					
	Meets Minimum Performance	 	Meets Expected Performance	 	Exceeds Expected
Performance
	1%	 	3%	 	5%

 TOTAL AWARDS 

 (% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	13%	 	33%	 	47%

 Parameters for 2011 

  

	 	1.	Company financial measures will be 30% Net Income, 30% ROAE, 30% EPS, and 10% Strategic Objectives. Strategic Objectives will be quantifiable goals within the strategic
plan which apply to 2011 and performance will be rated against number, timeliness, and quality of goals achieved. 

  

	 	2.	Any Financial Measure must meet threshold to initiate an award in the plan. 

 

	 	3.	Will interpolate awards between threshold, target, and optimum. 

  

	 	4.	Will pay for performance above optimum at a scale of one-half the increase between target and optimum. 

 

	 	5.	Pay is defined as total base pay for the applicable plan year. 

  

	 	6.	Individual goal for each participant will include corporate core values as the first individual goal. 

 

  

			
	8-1-10	  	Page 8

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit B – Performance Factors and Award Schedule 

Plan Year 2011 (performance numbers are examples only) 

Category 2 – Executive Vice President/CFO Position 

COMPANY GOALS 

Performance Measures 

Net Income - 30% 
  

								
	Threshold	 	Target	 	Optimum
	$	7,000,000	 	$	10,000,000	 	$	15,000,000

 Return on
Average Equity - 30% 
  

					
	Threshold	 	Target	 	Optimum
	4.2%	 	6.0%	 	9.0%

 Earnings Per Share
- 30% 
  

					
	Threshold	 	Target	 	Optimum
	$.70	 	$1.00	 	$1.50

 Strategic
Objective or Specific Operational Objective - 10% 
 One or more measures will be determined annually and each will have
quantitative 
 measurements with threshold, target and optimum levels. 

COMPANY GOAL AWARD – 90% 

(% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	9%	 	22%	 	36%

 INDIVIDUAL GOAL
AWARD – 10% 
 (% of Base Pay) 
  

					
	Meets Minimum Performance	 	Meets Expected Performance	 	Exceeds Expected
Performance
	1%	 	3%	 	5%

 TOTAL AWARDS 

 (% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	10%	 	25%	 	41%

 Parameters for 2011 

  

	 	1.	Company financial measures will be 30% Net Income, 30% ROAE, 30% EPS, and 10% Strategic Objectives. Strategic Objectives will be quantifiable goals within the strategic
plan which apply to 2011 and performance will be rated against number, timeliness, and quality of goals achieved. 

  

	 	2.	Any Financial Measure must meet threshold to initiate an award in the plan. 

 

	 	3.	Will interpolate awards between threshold, target, and optimum. 

  

	 	4.	Will pay for performance above optimum at a scale of one-half the increase between target and optimum. 

 

	 	5.	Pay is defined as total base pay for the applicable plan year. 

  

	 	6.	Individual goal for each participant will include corporate core values as the first individual goal. 

 

  

			
	8-1-10	  	Page 9

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit B – Performance Factors and Award Schedule 

Plan Year 2011 (performance numbers are examples only) 

Category 3 

COMPANY GOALS 

Performance Measures 

Net Income - 30% 
  

								
	Threshold	 	Target	 	Optimum
	$	7,000,000	 	$	10,000,000	 	$	15,000,000

 Return on
Average Equity - 30% 
  

					
	Threshold	 	Target	 	Optimum
	4.2%	 	6.0%	 	9.0%

 Earnings Per Share
- 30% 
  

					
	Threshold	 	Target	 	Optimum
	$.70	 	$1.00	 	$1.50

 Strategic
Objectives - 10% 
 One or more measures will be determined annually and each will have quantitative 

measurements with threshold, target and optimum levels. 

COMPANY GOAL AWARD – 80% 

(% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	4%	 	14%	 	22%

 INDIVIDUAL GOAL
AWARD – 20% 
 (% of Base Pay) 
  

					
	Meets Minimum Performance	 	Meets Expected Performance	 	Exceeds Expected
Performance
	2%	 	4%	 	6%

 TOTAL AWARDS 

 (% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	6%	 	18%	 	28%

 Parameters for 2011 

  

	 	1.	Company financial measures will be 30% Net Income, 30% ROAE, 30% EPS, and 10% Strategic Objectives. Strategic Objectives will be quantifiable goals within the strategic
plan which apply to 2011 and performance will be rated against number, timeliness, and quality of goals achieved. 

  

	 	2.	Any Financial Measure must meet threshold to initiate an award in the plan. 

 

	 	3.	Will interpolate awards between threshold, target, and optimum. 

  

	 	4.	Will pay for performance above optimum at a scale of one-half the increase between target and optimum. 

 

	 	5.	Pay is defined as total base pay for the applicable plan year. 

  

	 	6.	Individual goal for each participant will include corporate core values as the first individual goal. 

 

  

			
	8-1-10	  	Page 10

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit B – Performance Factors and Award Schedule 

Plan Year 2011 (performance numbers are examples only) 

Category 4 

COMPANY GOALS 

Performance Measures 

Net Income - 30% 
  

								
	Threshold	 	Target	 	Optimum
	$	7,000,000	 	$	10,000,000	 	$	15,000,000

 Return on
Average Equity - 30% 
  

					
	Threshold	 	Target	 	Optimum
	4.2%	 	6.0%	 	9.0%

 Earnings Per Share
- 30% 
  

					
	Threshold	 	Target	 	Optimum
	$.70	 	$1.00	 	$1.50

 Strategic
Objectives - 10% 
 One or more measures will be determined annually and each will have quantitative 

measurements with threshold, target and optimum levels. 

COMPANY GOAL AWARD – 70% 

(% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	3%	 	8%	 	12%

 INDIVIDUAL GOAL
AWARD – 30% 
 (% of Base Pay) 
  

					
	Meets Minimum Performance	 	Meets Expected Performance	 	Exceeds Expected
Performance
	1%	 	4%	 	6%

 TOTAL AWARDS 

 (% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	4%	 	12%	 	18%

 Parameters for 2011 

  

	 	1.	Company financial measures will be 30% Net Income, 30% ROAE, 30% EPS, and 10% Strategic Objectives. Strategic Objectives will be quantifiable goals within the strategic
plan which apply to 2011 and performance will be rated against number, timeliness, and quality of goals achieved. 

  

	 	2.	Any Financial Measure must meet threshold to initiate an award in the plan. 

 

	 	3.	Will interpolate awards between threshold, target, and optimum. 

  

	 	4.	Will pay for performance above optimum at a scale of one-half the increase between target and optimum. 

 

	 	5.	Pay is defined as total base pay for the applicable plan year. 

  

	 	6.	Individual goal for each participant will include corporate core values as the first individual goal. 

 

  

			
	8-1-10	  	Page 11

 Eastern Insurance Holdings, Inc. 

MANAGEMENT ANNUAL INCENTIVE PLAN 

 
  

 Exhibit B – Performance Factors and Award Schedule 

Plan Year 2011 (performance numbers are examples only) 

Category 5 

COMPANY GOALS 

Performance Measures 

Net Income - 30% 
  

								
	Threshold	 	Target	 	Optimum
	$	7,000,000	 	$	10,000,000	 	$	15,000,000

 Return on
Average Equity - 30% 
  

					
	Threshold	 	Target	 	Optimum
	4.2%	 	6.0%	 	9.0%

 Earnings Per Share
- 30% 
  

					
	Threshold	 	Target	 	Optimum
	$.70	 	$1.00	 	$1.50

 Strategic
Objectives - 10% 
 One or more measures will be determined annually and each will have quantitative 

measurements with threshold, target and optimum levels. 

COMPANY GOAL AWARD – 60% 

(% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	2%	 	5%	 	7%

 INDIVIDUAL GOAL AWARD
– 40% 
 (% of Base Pay) 
  

					
	Meets Minimum Performance	 	Meets Expected Performance	 	Exceeds Expected
Performance
	1%	 	3%	 	5%

 TOTAL AWARDS 

 (% of Base Pay) 
  

					
	Threshold	 	Target	 	Optimum
	3%	 	8%	 	12%

 Parameters for 2011 

  

	 	1.	Company financial measures will be 30% Net Income, 30% ROAE, 30% EPS, and 10% Strategic Objectives. Strategic Objectives will be quantifiable goals within the strategic
plan which apply to 2011 and performance will be rated against number, timeliness, and quality of goals achieved. 

  

	 	2.	Any Financial Measure must meet threshold to initiate an award in the plan. 

 

	 	3.	Will interpolate awards between threshold, target, and optimum. 

  

	 	4.	Will pay for performance above optimum at a scale of one-half the increase between target and optimum. 

 

	 	5.	Pay is defined as total base pay for the applicable plan year. 

  

	 	6.	Individual goal for each participant will include corporate core values as the first individual goal. 

 

  

			
	8-1-10	  	Page 12

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