Common use of Payouts Clause in Contracts

Payouts. Payouts will be made in cash as soon as reasonably possible after the closing of BHB’s financials each year. Participants must be an active employee as of the reward payout date to receive an award. Awards are calculated based on actual performance relative to target. Achieving threshold performance will pay out at 50% of target incentive, target performance will pay out 100% of target, and stretch performance will pay out at 150% of target incentive. Performance payouts below threshold will be zero. Payouts are assessed by component such that one goal may achieve stretch and another may achieve only threshold. Actual payouts for each performance goal will be pro-rated between threshold, target and stretch levels to reward incremental improvement. Below is an illustration of a simple program design for a SVP (Tier 5) with a base salary of $100,000 and an incentive target of 20% of base salary ($20,000). Goals are for illustration purposes only. Performance Measure Performance Goal threshold/ target/stretch Weight At Target Actual Performance Payout Allocation (0% - 150%) Payout ($) Net Income TBD 30 % $ 6,000 Target 100 % $ 6,000 Efficiency Ratio TBD 30 % $ 6,000 Threshold 50 % $ 3,000 Individual performance goal #1 TBD 20 % $ 4,000 Stretch 150 % $ 6,000 Individual performance goal #2 TBD 10 % $ 2,000 Below Threshold 0 % $ 0 Individual performance goal #3 TBD 10 % $ 2,000 Threshold-Target 75 % $ 1,000 This participant’s payout of $16,000 is 80% of target. The payout reflects BHB’s Net Income performance at “Target”, Efficiency Ratio at Threshold, one Individual goal at stretch, another that was not achieved, and another at halfway between Threshold and Target.