ADDENDUM TO EMPLOYMENT AGREEMENT
EXHIBIT 10.2
ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM (“Addendum”) is made this 29th day of December, 2005, by and between FIRST BANK OF XXXXX COUNTY, a bank organized under the laws of the State of Georgia (the “Bank”), and J. XXXXXXX XXXXX, a resident of the State of Georgia (the “Executive”).
WHEREAS, the parties entered into an Employment Agreement dated April 30, 2004, (the “Employment Agreement”);
WHEREAS, the Employment Agreement at Section 19 concerning “Entire Agreement” provides that the Employment Agreement between the parties may not be amended or modified in any way except by mutual agreement of the parties in a written instrument; and
WHEREAS, the Employment Agreement did not reflect the true intent of the parties with respect to incentive compensation and stock options; and
WHEREAS, the parties now desire and have agreed to amend and modify the Employment Agreement by way of this written Addendum thereto in order to reflect and correct this intent;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties, and for the grant of an option to purchase the number of shares described, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree to amend and modify the Employment Agreement as follows:
1. Amendment to Paragraph 4.2. Paragraph 4.2 of the Employment Agreement is hereby modified and amended to read as follows:
“4.2 Incentive Compensation.
(a) Annual Profitability Bonus. The Executive shall be eligible to receive annual bonus compensation based upon fiscal year-end net income of the Bank, as customarily determined by the Bank’s independent auditors, without giving effect to extraordinary items, but in any event reducing net income to reflect the payment of annual bonuses for such fiscal year, and the grant of stock options under this Section 4.2(a) and under any similar provisions of other employment agreements to which the Bank is a party, as follows:
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Stock Options |
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Fiscal
Year-End |
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10% of annual salary plus |
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2,000 option |
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At least $200,000 but less than $500,000 |
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20% of annual salary plus |
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4,000 option |
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At least $500,000 but less than $800,000 |
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30% of annual salary plus |
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6,000 option |
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At least $800,000 but less than $1,200,000 |
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40% of annual salary plus |
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8,000 option |
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At least $1,200,000 but less than $1,500,000 |
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50% of annual salary plus |
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10,000 option |
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At least $1,500,000 but less than $2,000,000 |
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60% of annual salary plus |
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12,000 option |
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At least $2,000,000 but less than $2,600,000 |
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70% of annual salary plus |
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14,000 option |
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Equal to or more than $2,600,000 |
The stock options will have an exercise price equal to the fair market value of the FirstBank Financial Services, Inc.’s (the “Company”) common stock on the date of grant and will be granted under the FirstBank Financial Services, Inc. 2005 Stock Incentive Plan. The stock options will be subject to the terms of a separate stock option agreement and shall be classified as incentive stock options and/or non-qualified stock options as agreed by the parties and subject to the limitations of applicable law..
(b) Discretionary Bonus. The Executive shall be eligible for additional bonus payments at the discretion of the Board of Directors of the Company and/or the Bank based on its/their evaluation of the Executive’s performance. The factors that the Board of Directors will consider in determining the amount of any additional bonus amounts may include, but are not limited to, the Bank’s profitability, earnings growth and quality of assets (measured by the results of regulatory examinations).
No bonuses will be paid to the Executive under this Section 4.2 if the Bank does not have a CAMELS rating of 1 or 2 for the period to which the bonus relates or if the Bank is subject to any active regulatory investigation for the time period to which the bonus relates, excluding routine regulatory exams.”
2. Amendment to Paragraph 4.3. Paragraph 4.3 of the Employment Agreement is hereby modified and amended to read as follows:
“4.3 Stock Options.
(a) One Time Grant. FirstBank Financial Services, Inc. (the “Company”) shall grant an incentive option to the Executive to purchase 2,030 shares of the Company’s common stock on or before December 31, 2005, which shall be immediately vested and a non-qualified stock option to the Executive to purchase 7,244 shares of the Company’s common stock on or before December 31, 2005. The Company shall grant a second option to the Executive to purchase 20,576 shares of the Company’s common stock no earlier than 2006, which shall contain a vesting schedule and shall be classified as incentive stock options and/or non-qualified stock options as agreed by the parties and subject to the limitations of applicable law. The options described in this Section 4.3 shall be granted pursuant to the Company’s 2005 Stock Incentive Plan with an exercise price equal to the
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fair market value of the Company’s common stock on the date of grant. The stock option will be subject to the terms of a separate stock option agreement.
(b) Annual Grant. For each year during the Term, the Executive will be entitled to receive an option to purchase 2,500 shares of the Company’s common stock at a per share price equal to the fair market value of the Company’s common stock on the date of grant which shall be granted under the Company’s 2005 Stock Incentive Plan and shall be classified as incentive stock options and/or non-qualified stock options as agreed by the parties and subject to the limitations of applicable law. For 2005, the option shall be granted on or before December 31, 2005. For years subsequent to 2005, the option shall be granted on each anniversary of the Effective Date. The stock options will be subject to the terms of a separate stock option agreement. Notwithstanding the foregoing, the options described in this Subsection (b) shall only be granted if sufficient shares are reserved for issuance pursuant to the Company’s Stock Incentive Plan as of the date the options are to be granted.”
3. Remainder in Full Force and Effect. The remainder of the Employment Agreement shall remain unchanged and shall remain in full force and effect in accordance with all of its terms and conditions.
IN WITNESS WHEREOF, the parties have executed this Addendum to the Employment Agreement, as of the date first written above.
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FIRST BANK OF XXXXX COUNTY |
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By: |
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Print Name: |
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Title: |
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THE EXECUTIVE: |
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J. XXXXXXX XXXXX |
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