Exhibit 10.5


 


FIRST AMENDMENT TO THE


ATLANTIC SOUTHERN BANK


EXECUTIVE BONUS AGREEMENT


 


THIS FIRST AMENDMENT is made
as of the        day of December, 2008, by and
between Atlantic Southern Bank, a commercial state-chartered bank located in
Macon, Georgia (the “Company”) (formerly known as “New Southern Bank”) and
Brandon L. Mercer (the “Executive”).


 


The
Atlantic Southern Bank Executive Bonus Agreement (the “Agreement”), originally
entered into on January 1, 2005 by the Company and the Executive, is an
unfunded obligation providing the Executive with a bonus opportunity.


 


The
Company now desires to amend the Agreement, effective as of January 1,
2009, to conform the provisions of the Agreement to the requirements under Section 409A
of the Internal Revenue Code and the regulations and rulings promulgated
thereunder since the addition of Section 409A to the Internal Revenue
Code.


 


NOW,
THEREFORE, the Company does hereby amend the Agreement, effective as of January 1,
2009, to read as follows:


 


1.                                       By deleting Section 1.5 in its entirety
and by substituting therefor the following:


 


“1.5                          ‘Change
of Control’  means  any
one of the following events occurring on or after January 1, 2009:


 


(a)                                  the
acquisition by any one person, or more than one person acting as a group (other
than any person or more than one person acting as a group who is considered to
own more than fifty percent (50%) of the total voting power of Atlantic
Southern Financial Group, Inc. or the Company prior to such acquisition)
of stock of Atlantic Southern Financial Group, Inc. or the Company that,
together with stock held by such person or group, constitutes forty percent
(40%) or more of the total voting power of the stock of Atlantic Southern
Financial Group, Inc. or the Company (as applicable);


 


(b)                                 within any twelve-month period (beginning on
or after January 1, 2009) the persons who were directors of Atlantic
Southern Financial Group, Inc. immediately before the beginning of such
twelve-month period (the ‘Incumbent Directors’) shall cease to constitute at
least a majority of members of such board of directors; provided that any
director who was not a director as of January 1, 2009 Date shall be deemed
to be an Incumbent Director if that director were elected to such board of
directors by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors; or


 


(c)                                  within any twelve-month period (beginning on
or after January 1, 2009) the acquisition by any one person, or more than
one person acting as a group, of the assets of Atlantic Southern Financial
Group, Inc. and the Company that have a total gross fair market value of
eighty-five percent (85%) or more of the total gross fair market value of all
of the assets of Atlantic Southern Financial Group, Inc. and the Company
immediately before such acquisition or acquisitions; provided, however, that
transfers to the following entities or person(s) shall not be deemed to
result in a Change in Control under this subsection (c):


 

















 


(i)                                     an entity that is controlled by the
shareholders of Atlantic Southern Financial Group, Inc. and the Company,
as applicable, immediately after the transfer;


 


(ii)                                  a shareholder (determined immediately before
the asset transfer) of Atlantic Southern Financial Group, Inc. and the
Company, as applicable, in exchange for or with respect to its stock;


 


(iii)                               an entity, fifty percent (50%) or more of the total value or voting
power of which is owned, directly or indirectly, by Atlantic Southern Financial
Group, Inc. and the Company, as applicable;


 


(iv)                              a person, or more than one person acting as a group, that owns,
directly or indirectly, fifty percent (50%) or more of the total value or
voting power of all the outstanding stock of Atlantic Southern Financial Group, Inc.
and the Company, as applicable; or


 


(v)                                 an entity, at least fifty percent (50%) of
the total value or voting power of which is owned, directly or indirectly, by a
person described in the above subsection (c)(iv).


 


Notwithstanding
the foregoing, no Change of Control shall be deemed to have occurred for
purposes of this Section 1.5 by reason of a merger, consolidation,
reorganization or other transaction as to which the holders of the capital
stock of Atlantic Southern Financial Group, Inc. before the transaction
continue after the transaction to hold, directly or indirectly through a
holding company or otherwise, shares of capital stock of Atlantic Southern
Financial Group, Inc. (or other surviving company) representing more than
fifty percent (50%) of the value or ordinary voting power to elect directors of
the capital stock of Atlantic Southern Financial Group, Inc. (or other
surviving company).  For purposes of this
Section 1.5, persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase
or acquisition of stock, or similar business transaction with Atlantic Southern
Financial Group, Inc.”


 


2.                                       By deleting Section 1.13 in its entirety
and by substituting therefor the following:


 


“1.13                    ‘Years of Participation’ means the
12-month period beginning on the Effective Date and each consecutive 12-month
period thereafter during the entirety of which time the Executive does not
incur a Separation from Service.”


 


3.                                       By deleting the existing Section 2.4 and
substituting therefor the following:


 


“2.4                          Restriction on Timing of Distribution: 
Notwithstanding any provision of the Agreement to the contrary, the
portion of any benefit distributions to an Executive that would result in a tax
under Code Section 409A if paid during the first six (6) months after
Separation from Service shall be withheld, starting with the payments latest in
time during such six (6) month period if, pursuant to Code Section 409A,
the Executive is considered a ‘specified employee’ under Section 409A of
the Code at Separation from Service. In the event a distribution is delayed
pursuant to this Section 2.4, the originally scheduled distribution(s) shall
be delayed and shall be paid to the Executive in a lump sum within thirty (30)
days following the six-month anniversary of the Separation from Service.”


 


2
















 


4.                                       By deleting the existing Section 2.5 and
substituting therefor the following:


 


“2.5                           Accelerated Payouts in the Event of 409A
Violations.  Notwithstanding any other provision of the
Agreement to the contrary, the Plan Administrator shall make payments hereunder
before such payments are otherwise due if it determines that the provisions of
the Agreement fail to meet the requirements of Code Section 409A and the rules and
regulations promulgated thereunder; provided, however, that such payment(s) may
not exceed the amount required to be included in income as a result of such
failure to comply with the requirements of Code Section 409A and the rules and
regulations promulgated thereunder and, to the extent permissible therein, any
taxes, penalties, interest and costs attributable thereto.”


 


5.                                       By deleting from Sections 3.1.2 and 3.2 the
clause “receipt by the Company of the Executive’s death certificate” as the
same appears in each Section and substituting therefor the following
clause: “the Executive’s date of death”.


 


6.                                       By deleting the existing Section 9.4 in
its entirety and by substituting therefor the following:


 


“9.4                           Withholding.


 


(a)                                  The Executive is responsible for payment of
all taxes applicable to compensation and benefits paid or provided to the Executive
under the Agreement, including federal and state income tax withholding, except
the Company shall withhold any taxes that, in its reasonable judgment, are
required to be withheld, including but not limited to taxes owed under Section 409A
of the Code and regulations thereunder and all employment taxes due to be paid
by the Company pursuant to Section 3121(v) of the Code and
regulations promulgated thereunder (i.e., Federal Insurance Contributions Act (‘FICA’)
taxes on the present value of payments hereunder which are no longer subject to
vesting).  The Company’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing
authority(ies).  By participating in the
Agreement, each Executive consents to the deduction of all tax withholdings
attributable to participation in the Agreement from the benefits due under the
Agreement or other payments due to the Executive by the Company to satisfy the
employee-portion of such obligations.  If
insufficient cash wages are available or if an Executive so desires, an
Executive may remit payment in cash for the withholding amounts.


 


(b)                                 Notwithstanding any
other provision in the Agreement to the contrary, payments due under the
Agreement may be accelerated to pay, where applicable, the FICA tax imposed
under Sections 3101, 3121(a), and 3121(v)(2) of the Code and any state,
local, and foreign tax obligations (the ‘Tax Obligations’) that may be imposed
on amounts deferred pursuant to the Agreement prior to the time such amounts
are paid or made available and to pay the income tax at source on wages imposed
under Section 3401 of the Code or the corresponding withholding provisions
of applicable state, local, or foreign tax laws as a result of an accelerated
payment of the Tax Obligations (the ‘Income Tax Obligations’).  Accelerated payments pursuant to this Section 9.4(b) shall
not exceed the amount of the Tax Obligations and Income Tax Obligations and
shall be made as a payment directly to taxing authorities pursuant to the
applicable withholding provisions.  Any
accelerated payments pursuant to this Section 9.4(b) shall reduce the
benefit otherwise payable to an Executive pursuant to the Agreement.”


 


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Except as specifically amended herein, the Agreement
shall remain in full force and effect as prior to this First Amendment.


 


IN WITNESS WHEREOF, the Company and the Executive
have caused this indenture to be executed as of the date first above written.


 


 


	
  BRANDON L. MERCER

  	
  ATLANTIC SOUTHERN BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
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