Attached files
EXHIBIT
10.9
SUMMARY
OF BONUS PROGRAM
OF
OHIO VALLEY BANC CORP.
The following is a description of the
Bonus Program (the "Bonus Program") of Ohio Valley Banc Corp. ("Ohio Valley")
provided pursuant to Item 601(b)(10)(iii) of Regulation S-K promulgated by the
Securities and Exchange Commission, which requires a written description of a
compensatory plan when no formal document contains the compensation
information.
The objectives of the bonus component
of the Company's compensation program are to: (a) motivate executive officers
and other employees and reward such persons for the accomplishment of
both annual and long range goals of the Company and its subsidiaries,
(b) reinforce a strong performance orientation with differentiation and
variability in individual awards based on contribution to long-range business
results and (c) provide a fully competitive compensation package which will
attract, reward, and retain individuals of the highest quality. All
employees of the Company's subsidiaries holding positions with a pay grade of 9
or above are eligible to participate in the Bonus Program, including all
subsidiaries' executive officers.
Bonuses payable to participants in the
Bonus Program are based on (a) the performance of the Company and its
subsidiaries as measured against specific performance targets; (b) each
employee's individual performance; and (c) the marketplace range of compensation
for employees holding comparable positions. At the beginning of
each fiscal year, the Compensation Committee sets specific performance targets
for the Company and its subsidiaries based on a combination of some or all of a
number of performance criteria set forth in the Company’s strategic
plan. The Compensation Committee may establish two sets of targets,
one set of which is higher and less likely to be achieved, referred to as the
“annual bonus targets”. A second set, referred to as the “long range
bonus targets” is more likely to be achieved. The targets are based
on one or more of the following performance criteria: net income, net income per
share, return on assets, return on equity, asset quality (as measured by the
ratio of non-performing loans to total loans and non-performing assets to total
assets), and efficiency ratio. It is the objective of the
Compensation Committee to establish goals that are “reaching” but
“reachable”. The Committee may not consider the goals to be of equal
weight, but, in the aggregate, it considers them to be fundamental metrics which
are important to the long-term performance of the Company and which, at the same
time, do not expose the Company, nor incent the employees to undertake,
excessive risks which would threaten the Company’s long-term
value. At the end of the fiscal year, the aggregate amount available
for the payment of a bonus, if any at all, is determined by the Company’s Board
of Directors upon recommendation of its Compensation Committee based on an
evaluation of the accomplishment of the performance targets. A bonus
may be paid at the end of the year without targets having been established or
achieved. No officer or employee has any right to the payment of a
bonus until the Board of Directors has exercised its discretion to award one and
the amount to be paid to each person has been determined and
announced.
Once the aggregate amount of the bonus
pool is determined, individual bonus awards are determined through a formula
that applies each employee's performance evaluation score to a “bonus grid”,
reflecting the individual employee's job grade, the market place range of
compensation for that job grade, and individual job performance using the
Evaluation Criteria referenced above. Employees are evaluated by
their supervisors, except for the executive officers, who are evaluated by the
Compensation Committee of the Company’s Board of Directors. The
Company’s Board of Directors approves the bonuses payable to the executive
officers under the Bonus Program based upon the recommendation of the
Compensation Committee.
Bonuses are normally paid in December
in cash in a single lump sum, subject to payroll taxes and tax
withholdings.