Document:

Form of Warrant issued in March 2005

 EXHIBIT 4.6 
  

			
	Information Analysis Incorporated	 	First Quarter 2005 Report on Form 10-QSB

  
 FORM OF WARRANT 
  
 THIS WARRANT AND THE SHARES OF CAPITAL STOCK ISSUED UPON ANY EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING A PLEDGEE, UNLESS (1) EITHER (A) A
REGISTRATION WITH RESPECT TO THERETO SHALL BE EFFECTIVE UNDER THE SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT IS AVAILABLE, AND
(2) THERE SHALL HAVE BEEN COMPLIANCE WITH ALL APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. 
  

			
	 	  	For the Purchase of
	 March     , 2004
	  	                     shares
	 	  	of Common Stock

  
 WARRANT TO PURCHASE
STOCK 
  
 OF 
  
 INFORMATION ANALYSIS INCORPORATED 
 (A VIRGINIA CORPORATION) 
  
 Information Analysis Incorporated, a Virginia corporation (the “Company”), for value received, hereby certifies that
                                       
                                        
                                  (the “Holder”) is entitled,
subject to the terms set forth below, to purchase from the Company, at any time or from time to time at or before the expiration of five (5) years following the date hereof (the “Expiration Date”), twelve thousand (12,000) shares of
Common Stock, par value $.01 per share, of the Company (the “Common Stock”), at a purchase price per share equal to
                     ($      ) per share (the “Base Price”), as adjusted upon the
occurrence of certain events as set forth in Section 3 of this Warrant. The shares of stock issuable upon exercise of this Warrant, and the purchase price per share, are hereinafter referred to as the “Warrant Stock” and the “Purchase
Price,” respectively. 
  
 1. Exercise. 
  
 1.1 Manner of Exercise; Payment in Cash. This Warrant
may be exercised by the Holder, in whole or in part, by surrendering this Warrant, with the purchase form appended hereto as Exhibit A duly executed by the Holder, at the principal office of the Company, or at such other place as the Company
may designate, accompanied by payment in full of the Purchase Price payable in respect of the number of shares of Warrant Stock purchased upon such exercise. Payment of the Purchase Price shall be in cash or by certified or official bank check
payable to the order of the Company. 
  
 1.2
Effectiveness. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which this Warrant shall have been surrendered to the Company as provided in Section 1.1 above. At
such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 1.3 below shall be deemed to have become the holder or holders of record of the Warrant Stock
represented by such certificates. 
  
 1.3.
Delivery of Certificates. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within ten (10) business days thereafter, the Company at its sole expense will cause to be issued in the name of, and
delivered to, the Holder, or, subject to the terms and conditions hereof, as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct: 
  
 (a) A certificate or certificates for the number of full shares of Warrant Stock to which such Holder shall
be entitled upon such exercise plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash in an amount determined pursuant to Section 2 hereof, and 
  

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 (b) In case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock (without giving effect to any adjustment therein) equal to the number of such shares called for on the face of this Warrant minus
the number of such shares purchased by the Holder upon such exercise as provided in Section 1.1 above. 
  
 1.4 Right to Convert Warrant into Stock: Net Issuance. 
  
 (a) Right to Convert. In addition to and without limiting the rights of the Holder under the terms of
this Warrant, the Holder shall have the right to convert this Warrant or any portion thereof (the “Conversion Right”) into shares of Common Stock as provided in this Section 1.4 at any time or from time to time during the term of this
Warrant. Upon exercise of the Conversion Right with respect to a particular number of shares subject to this Warrant (the “Converted Warrant Shares”), the Company shall deliver to the Holder (without payment by the Holder of any Purchase
Price or any cash or other consideration) that number of shares of fully paid and nonassessable Common Stock equal to the quotient obtained by dividing (X) the value of this Warrant (or the specified portion hereof) on the Conversion Date (as
defined in subsection (b) hereof), which value shall be determined by subtracting (A) the aggregate Purchase Price of the Converted Warrant Shares immediately prior to the exercise of the Conversion Right from (B) the aggregate fair market value of
the Converted Warrant Shares issuable upon exercise of this Warrant (or the specified portion hereof) on the Conversion Date (as herein defined) by (Y) the fair market value of one share of Common Stock on the Conversion Date (as herein defined).

  
 Expressed as a formula, such conversion shall be computed as
follows: 
  

					
	 X
	  	=	  	B-A
	 	  	 	  	  Y

  
 where:    X =
the number of shares of Common Stock that may be issued to Holder 
  

			
	 Y =
	  	the fair market value (FMV) of one share of Common Stock
		
	 A =
	  	the aggregate Warrant Price (Converted Warrant Shares x Purchase Price)
		
	 B =
	  	the aggregate FMV (i.e., FMV x Converted Warrant Shares)

  
 No fractional shares
shall be issuable upon exercise of the Conversion Right, and, if the number of shares to be issued determined in accordance with the foregoing formula is other than a whole number, the Company shall pay to the Holder an amount in cash equal to the
fair market value of the resulting fractional share of the Conversation Date (as herein defined). 
  
 (b) Method of Exercise. The Conversion Right may be exercised by the Holder by the surrender of this Warrant at the principal
office of the Company together with the Purchase Form in the form attached hereto duly completed and executed and indicating the number of shares subject to this Warrant which are being surrendered (referred to in Section 1.4(a) hereof as the
Converted Warrant Shares) in exercise of the Conversion Right. Such conversion shall be effective upon receipt by the Company of this Warrant together with the aforesaid written statement, or on such later date as is specified therein (the
“Conversion Date”), and, at the election of the Holder hereof, may be made contingent upon the occurrence of any of the events specified in such written statement. Certificates for the shares issuable upon exercise of the Conversion Right
and, if applicable, a new Warrant evidencing the balance of the shares remaining subject to this Warrant, shall be issued as of the Conversion Date and shall be delivered to the Holder within thirty (30) days following the Conversion Date.

  

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 (c) Determination of Fair Market Value. For purposes of this Section 1.4(c),
“fair market value” of a share of Common Stock as of a particular date (the “Determination Date”) shall mean: 
  
 (i) If traded on a securities exchange, the fair market value of the Common Stock shall be deemed to be the average of the closing prices
of the Common Stock on such exchange over the five-day period ending one business day prior to the Determination Date or, if less, such number of days as the Common Stock has been traded on such exchange; 
  
 (ii) If traded over-the-counter, the fair market value of
the Common Stock shall be deemed to be the average of the closing bid prices of the Common Stock over the five-day period ending one business day prior to the Determination Date or, if less, such number of days as the Common Stock has been traded
over-the-counter; and 
  
 (iii) If there is no
public market for the Common Stock, then fair market value shall be determined in good faith by the Board of Directors of the Company. 
  
 2. Fractional Shares. The Company shall not be required upon the exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the fair market value of the Warrant Stock reasonably determined by the Board of Directors of the Company. 
  
 3. Certain Adjustments. 
  
 3.1 Changes in Common Stock. If the Company shall (i) combine the outstanding shares of Common Stock into a lesser number of
shares, (ii) subdivide the outstanding shares of Common Stock into a greater number of shares, or (iii) issue additional shares of Common Stock as a dividend or other distribution with respect to the Common Stock, the number of shares of Warrant
Stock shall be equal to the number of shares which the Holder would have been entitled to receive after the happening of any of the events described above if such shares had been issued immediately prior to the happening of such event, such
adjustment to become effective concurrently with the effectiveness of such event. The Purchase Price in effect immediately prior to any such combination of Common Stock shall, upon the effectiveness of such combination, be proportionately increased.
The Purchase Price in effect immediately prior to any such subdivision of Common Stock or at the record date of such dividend shall upon the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately
reduced. 
  
 3.2 Reorganizations and
Reclassifications. If there shall occur any capital reorganization or reclassification of the Common Stock (other than a change in par value or a subdivision or combination as provided for in Section 3.1), then, as part of any such
reorganization or reclassification, lawful provision shall be made so that the Holder shall have the right thereafter to receive upon the exercise hereof the kind and amount of shares of stock or other securities or property which such Holder would
have been entitled to receive if, immediately prior to any such reorganization or reclassification, such Holder had held the number of shares of Common Stock which were then purchasable upon the exercise of this Warrant. In any such case,
appropriate adjustment (as reasonably determined by the Board of Directors of the Company) shall be made in the application of the provisions set forth herein with respect to the rights and interests thereafter of the Holder such that the provisions
set forth in this Section 3 (including provisions with respect to adjustment of the Purchase Price) shall thereafter be applicable, as nearly as is reasonably practicable, in relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant. 
  
 3.3 Merger, Consolidation or Sale of Assets. If there shall be a merger or consolidation of the Company with or into another corporation (other than a merger or reorganization involving only a change in the state of incorporation of
the Company or the acquisition by the Company of other businesses where the Company survives as a going concern), or the sale of all or substantially all of the Company’s capital stock or assets to any other person, then as a part of such
transaction, provision shall be made so that the Holder shall 
  

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 thereafter be entitled to receive the number of shares of stock or other securities or property of the
Company, or of the successor corporation resulting from the merger, consolidation or sale, to which the Holder would have been entitled if the Holder had exercised its rights pursuant to the Warrant immediately prior thereto. In any such case,
appropriate adjustment shall be made in the application of the provisions of this Section 3 to the end that the provisions of this Section 3 shall be applicable after that event in as nearly equivalent a manner as may be practicable. 
  
 3.4 Certificate of Adjustment. When any adjustment is
required to be made in the Purchase Price, the Company shall promptly mail to the Holder a certificate setting forth the Purchase Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Delivery of
such certificate shall be deemed to be a final and binding determination with respect to such adjustment unless challenged by the Holder within ten (10) days of receipt thereof. Such certificate shall also set forth the kind and amount of stock or
other securities or property into which this Warrant shall be exercisable following the occurrence of any of the events specified in this Section 3. 
  
 4. Compliance with Securities Act. 
  
 4.1 Unregistered Securities. The Holder acknowledges that this Warrant and the Warrant Stock have not been registered under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or any successor legislation (the “Securities Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant or any Warrant Stock in the absence of (i) an effective registration statement under the Securities Act covering this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock under any applicable
“blue sky” or state securities law then in effect, or (ii) an opinion of counsel, satisfactory to the Company, that such registration and qualification are not required. 
  
 4.2 Investment Letter. Without limiting the generality of Section 4.1, unless the offer and sale of
any shares of Warrant Stock shall have been effectively registered under the Securities Act, the Company shall be under no obligation to issue the Warrant Stock unless and until the Holder shall have executed an investment letter in form and
substance satisfactory to the Company, including a warranty at the time of such exercise that the Holder is acquiring such shares for its own account, for investment and not with a view to, or for sale in connection with, the distribution of any
such shares. 
  
 4.3 Legend. Certificates
delivered to the Holder pursuant to Section 1.3 shall bear the following legend or a legend in substantially similar form: 
  
 “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN TAKEN FOR INVESTMENT AND THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED BY ANY PERSON, INCLUDING
A PLEDGEE, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT AN EXEMPTION FROM REGISTRATION IS THEN AVAILABLE.” 
  
 5. Reservation of Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant. The Company
covenants that all shares of Warrant Stock so issuable will, when issued, be duly and validly issued, fully paid and nonassessable. 
  
 6. Registration Rights. 
  
 6.1. “Piggy Back” Registration. If at any time the Company shall determine to register under the Securities Act, any of
its Common Stock, other than on Form S-8 or its then equivalent, it shall send to the 
  

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 Holder written notice of such determination and, if within thirty (30) days after receipt of such notice,
the Holder shall so request in writing, the Company shall use its best efforts to include in such registration statement all or any part of the Warrant Stock except that if, in connection with any offering involving an underwriting of Common Stock
to be issued by the Company, the managing underwriter shall impose a limitation on the number of shares of such Common Stock which may be included in any such registration statement because, in its judgment, such limitation is necessary to effect an
orderly public distribution, and such limitation is imposed pro rata among the holders of such Common Stock having an incidental (“piggy back”) right to include such Common Stock in the registration statement according to the
amount of such Common Stock which each Holder had requested to be included pursuant to such right, then the Company shall be obligated to include in such registration statement only such limited portion of the Warrant Stock with respect to which the
Holder has requested inclusion hereunder. 
  
 6.2. Effectiveness. The Company will use its best efforts to maintain the effectiveness for up to nine (9) months of any registration statement pursuant to which any of the Warrant Stock is being offered, and from time to time will
amend or supplement such registration statement and the prospectus contained therein as and to the extent necessary to comply with the Securities Act and any applicable state securities statute or regulation. The Company will also provide the Holder
with as many copies of the prospectus contained in any such registration statement as it may reasonably request. 
  
 6.3. Expenses of Registration. All costs and expenses incurred by the Company in connection with any registration pursuant to this
Article 6, including, without limitation, all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company, the reasonable fees and disbursements of one counsel selected by the Holder, and
expenses in connection with any special audits of the Company’s financial statements incidental to or required by such registration shall be paid by the Company; provided, however, that the Company shall have no obligation to pay,
and the Holder shall pay, any stock transfer taxes, underwriters’ fees, discounts or commissions attributable to such Registrable Shares being sold and any other fees and disbursements of special counsel to the Holder. The Company will pay all
expenses in connection with any registration initiated pursuant to this Article 6 which is withdrawn, delayed or abandoned at the request of the Company, unless such registration is withdrawn, delayed or abandoned solely because of any actions of
the Holder other than an abandonment or withdrawal resulting from any material adverse change pertaining to the Company. 
  
 6.4. Indemnification of Holder. In the event that the Company registers any of the Warrant Stock under the Securities Act, the
Company will indemnify and hold harmless the Holder, it officers, directors, employees, shareholders, agents, controlling persons and underwriters, from and against any and all losses, claims, damages, expenses or liabilities, to which it becomes
subject under the Securities Act or under any other statute or at common law or otherwise, and, except as hereinafter provided, will reimburse the Holder for any legal or other expenses reasonably incurred by it in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained
in the registration statement, in any preliminary or amended preliminary prospectus or in the prospectus (or the registration statement or prospectus as from time to time amended or supplemented by the Company) or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading or any violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to action or inaction required of the Company in connection with such registration, unless such untrue statement or omission was made in such registration statement, preliminary or amended,
preliminary prospectus or prospectus in reliance upon and in conformity with information furnished in writing to the Company in connection therewith by the Holder expressly for use therein. Promptly after receipt by the Holder of notice of the
commencement of any action in respect of which indemnity may be sought against the Company, the Holder will notify the Company in writing of the commencement thereof, and, subject to the provisions hereinafter stated, the Company shall assume the
defense of such action (including the employment of counsel, who shall be counsel reasonably satisfactory to the Holder), and the payment of expenses insofar as such action shall relate to any alleged liability in respect of which indemnity

  

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 may be sought against the Company. The Holder shall have the right to employ separate counsel in any such
action and to participate in the defense thereof but the fees and expenses of such counsel shall not be at the expense of the Company unless the employment of such counsel has been specifically authorized by the Company. The Company shall not be
liable to indemnify any person for any settlement of any such action effected without the Company’s consent. 
  
 6.5. Indemnification of Company. In the event that the Company registers any of the Warrant Stock under the Securities Act, the
Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who have signed the registration statement, each underwriter of the shares so registered (including any broker or dealer through whom such of the shares
may be sold) and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act from and against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them may
become subject under the Securities Act or under any other statute or at common law or otherwise, and, except as hereinafter provided, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the registration statement, in any preliminary or amended preliminary prospectus or in the prospectus (or in the registration statement or prospectus as from time to time
amended or supplemented) or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, but only insofar as any
such statement or omission was made in reliance upon and in conformity with information furnished in writing to the Company in connection therewith by the Holder expressly for use therein. In no event shall the Holder’s obligations hereunder
exceed the net proceeds obtained by the Holder from the sale of the Warrant Stock. Promptly after receipt of notice of the commencement of any action in respect of which indemnity may be sought against the Holder, the Company will notify the Holder
in writing of the commencement thereof, and the Holder shall, subject to the provisions hereinafter stated, assume the defense of such action (including the employment of counsel, who shall be counsel reasonably satisfactory to the Company) and the
payment of expenses insofar as such action shall relate to the alleged liability in respect of which indemnity may be sought against the Holder. The Company and each such director, officer, underwriter or controlling person shall have the right to
employ separate counsel in any such action and to participate in the defense thereof but the fees and expenses of such counsel shall not be at the expense of the Holder unless employment of such counsel has been specifically authorized by the
Holder. The Holder shall not be liable to indemnify any person for any settlement of any such action effected without the Holder’s consent. 
  
 7. Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this
Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation
of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor. 
  
 8. No Rights as Stockholder. Until the exercise of this Warrant, the Holder shall not have or exercise any rights by virtue hereof as a stockholder of the Company. 
  
 9. Notices. All notices, requests and other communications hereunder
shall be in writing, shall be either (i) delivered by hand, (ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight courier, or (iv) sent by registered mail, postage prepaid, return receipt requested. In the case of notices
from the Company to the Holder, they shall be sent to the address furnished to the Company in writing by the last Holder who shall have furnished an address to the Company in writing. All notices from the Holder to the Company shall be delivered to
the Company at its offices at 11240 Waples Mill Road, Suite 201, Fairfax, Virginia 22030 or such other address as the Company shall so notify the Holder. All notices, requests and other communications hereunder shall be deemed to have been given (i)
by hand, at the time of the delivery thereof to the receiving party at the address of such party described above, (ii) if made by telex, telecopy or facsimile transmission, at the time that receipt thereof has been acknowledged by electronic
confirmation or otherwise, (iii) if sent by overnight courier, on the next business day following the day such notices is delivered to the courier service, or (iv) if sent by registered mail, on the fifth business day following the day such mailing
is made. 
  

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 11. Waivers and Modifications. Any term or provision of this Warrant may be waived only by written
document executed by the party entitled to the benefits of such terms or provisions. 
  
 12. Headings. The headings in this Warrant are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions of this Warrant. 

 
 13. Governing Law. This Warrant will be governed by and construed
in accordance with and governed by the laws of the Commonwealth of Virginia without giving effect to the conflict of law principles thereof. 
  

			
	 INFORMATION ANALYSIS INCORPORATED

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 18 

			
	Information Analysis Incorporated	 	2004 Report on Form 10-KSB

  
 EXHIBIT A

  
 PURCHASE FORM 
  
 To:    INFORMATION ANALYSIS INCORPORATED 
  
 The undersigned pursuant to the provisions set forth in the attached Warrant
(No. W-        ), hereby irrevocably elects to (check one): 
  

			
	  ̈
	  	(A)    purchase              shares of the Common Stock, par value $.01 per share, of Information Analysis
Incorporated (the “Common Stock”), covered by such Warrant and herewith makes payment of $        , representing the full purchase price for such shares at the price per share provided
for in such Warrant; or
		
	  ̈
	  	(B)    convert as of the date this Purchase Form is delivered to the Company (or such later date as the Holder specifies)
             Converted Warrant Shares into that number of shares of fully paid and nonassessable shares of Common Stock, determined pursuant to the provisions of Section 1.4 of the
Warrant.

  
 The Common Stock for which the Warrant
may be exercised or converted shall be known herein as the “Warrant Stock”. 
  
 The undersigned is aware that the Warrant Stock has not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws. The
undersigned understands that reliance by the Company on exemptions under the Securities Act is predicated in part upon the truth and accuracy of the statements of the undersigned in this Purchase Form. 
  
 The undersigned represents and warrants that (1) it has been furnished with
all information which it deems necessary to evaluate the merits and risks of the purchase of the Warrant Stock, (2) it has had the opportunity to ask questions concerning the Warrant Stock and the Company and all questions posed have been answered
to its satisfaction, (3) it has been given the opportunity to obtain any additional information it deems necessary to verify the accuracy of any information obtained concerning the Warrant Stock and the Company and (4) it has such knowledge and
experience in financial and business matters that it is able to evaluate the merits and risks of purchasing the Warrant Stock and to make an informed investment decision relating thereto. 
  
 The undersigned hereby represents and warrant that it is purchasing the Warrant Stock for its own account for investment and
not with a view to the sale or distribution of all or any part of the Warrant Stock. 
  
 The undersigned understands that because the Warrant Stock has not been registered under the Securities Act, it must continue to bear the economic risk of the investment for an indefinite period of time and the
Warrant Stock cannot be sold unless it is subsequently registered under applicable federal and state securities laws or an exemption from such registration is available. 
  
 The undersigned agrees that it will in no event sell or distribute or otherwise dispose of all or any part of the Warrant
Stock unless (1) there is an effective registration statement under the Securities 

  

 19 

 
Act and applicable state securities laws covering any such transaction involving the Warrant Stock, or (2) the Company receives an opinion satisfactory to
the Company of the undersigned’s legal counsel stating that such transaction is exempt from registration. The undersigned consents to the placing of a legend on its certificate for the Warrant Stock stating that the Warrant Stock has not been
registered and setting forth the restriction on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents against the Warrant Stock until the Warrant Stock may be legally resold
or distributed without restriction. 
  
 The undersigned has
considered the federal and state income tax implications of the exercise of the Warrant and the purchase and subsequent sale of the Warrant Stock. 
  

			
	

		
	 Dated:
	 	  

  

 20Employment Agreement of Kenneth P. Cherven

 Exhibit 10.5 
  
 AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
 BY AND AMONG 
 FIRST COMMUNITY BANK CORPORATION OF AMERICA 
 AND 
 FIRST COMMUNITY BANK OF AMERICA 
 AND

 KENNETH P. CHERVEN 
  
 THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into this 29th day of November, 2004, by and among First
Community Bank Corporation of America (“Corporation”), First Community Bank of America (“Bank”) and Kenneth P. Cherven (“Employee”). The Corporation and the Bank are collectively referred to herein as
“Employer.” Employer and Employee are collectively referred to herein as the “Parties.” 
  
 RECITALS 
  
 WHEREAS, Employer wishes to retain Employee as Chief Executive Officer and President of the Corporation and the Bank to perform the duties and responsibilities as are described in this Agreement and as the Boards of Directors
(“Boards”) may assign to Employee from time to time; and 
  
 WHEREAS, Employee desires to become employed by Employer and to serve as the Chief Executive Officer and President of the Corporation and the Bank in accordance with the terms and provisions of this Agreement. 
  
 NOW, THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto represent, warrant, undertake, covenant and agree as follows: 
  
 OPERATIVE TERMS 
  
 1. Employment and Term. Employer shall employ Employee pursuant
to the terms of this Agreement to perform the services specified in Section 2 herein. The initial term of employment shall be for a period of three years, commencing on November 1, 2004 (“Effective Date”). On each subsequent day, this
Agreement shall be automatically renewed for one additional day until Employee’s 65th birthday. However, either
Party may terminate such renewals of this Agreement at any time by giving the other Party written notice of its intent not to renew. 
  
 The Board of both the Corporation and the Bank, or their respective Compensation Committees, shall on at least an annual basis, review Employee’s
performance and this Agreement to determine if the Agreement’s renewals should be continued. The Boards’ or their respective Compensation Committees’ decision shall be included in their meeting minutes. 

 2. Position, Responsibilities and Duties. During the term of this Agreement, Employee shall
devote all of his working time, attention, skill and best efforts to accomplish and faithfully perform all of the duties assigned to Employee on a full-time basis. Employee shall, at all times, conduct himself in a manner that will reflect
positively upon Employer. Employee shall obtain and maintain such licenses, certificates, accreditations and professional memberships and designations as Employer may reasonably require. Employee shall notify Employer prior to any significant
participation by him in any trade association or similar organization. Employee shall also have the specific duties prescribed in Schedule A, and any amendments thereto as mutually agreed to by the Parties. 
  
 3. Compensation. During the term of this Agreement, Employee
shall be compensated as described in Schedule B, and any amendments thereto as mutually agreed to by the Parties. 
  
 4. Payment of Business Expenses. Employee is authorized to incur reasonable expenses in performing his duties hereunder. Employer will
reimburse Employee for authorized expenses, according to Employer’s established policies, promptly after Employee’s presentation of an itemized account of such expenditures. 
  
 5. Illness or Incapacity. 
  
 (a) Duration: Employee shall be paid his full Base Salary for any period of his illness or
incapacity; provided that such illness or incapacity does not render Employee unable to perform his duties under this Agreement for a period longer than three consecutive months. At the end of such three-month period, Employer may terminate
Employee’s employment and this Agreement, as provided as provided by Section 6(b). 
  
 (b) Continuation of Coverages: Notwithstanding any contrary provision herein, following any termination of Employee’s
employment and this Agreement pursuant to Section 5(a), Employer will continue any other life, health and disability coverages for Employee substantially identical to the coverages maintained prior to Employee’s termination until the earlier
of: 
  

	 	(i)	Employee’s full time employment by another Person; 

  

	 	(ii)	one year after the date of such termination (with the exception of any disability insurance coverage in place, which shall be governed by the terms of such policy); or

  

	 	(iii)	the date of Employee’s death. 

 6. Termination. 
  
 (a) Death: This Agreement shall immediately terminate upon Employee’s death, in which
instance Employer shall pay to Employee’s estate any compensation accrued, but not yet paid. 
  
 (b) Termination for Cause: Employer shall have the right, at any time, upon written notice of termination satisfying the
requirements of Section 8 herein, to terminate Employee’s employment hereunder, including termination for Cause as determined in the discretion of the Board of Directors. A termination for Cause shall be effective immediately upon effectiveness
of a notice of termination. 
  
 For the purpose
of this Agreement, termination for “Cause” shall mean termination for personal dishonesty; insubordination; misconduct or conduct: which could have a material negative reflection on Employer; breach of fiduciary duty; materially failing to
perform the duties stated in this Agreement and Schedule A of this Agreement; violation of any significant law, rule or regulation (other than minor traffic violations or similar offenses); violation of a final cease-and-desist order; illness
or incapacity for a period of longer than three months (as contemplated by Section 5); or personal default on indebtedness which is not corrected within 30 days from the date of default. In the event Employee is terminated for Cause, Employee shall
have no right to compensation or other benefits for any period after such date of termination, other than compensation which was accrued, but not yet paid and (in the case of termination pursuant to Section 5[a]) the continuation of coverages
describe in Section 5(b). 
  
 (c)
Termination by Employer Other than For Cause: If Employee is terminated by Employer for any reason other than for Cause, Employee’s right to severance benefits under this Agreement shall be as set forth in Sections 6(g) and (h)
herein. 
  
 (d) Change-in-Control:
A “Change-in-Control” of Employer shall mean the first to occur of any one or more of the following: 
  

	 	(i)	any transaction, whether by merger, consolidation, asset sale, recapitalization, reorganization, combination, stock purchase, tender offer, reverse stock split, or otherwise, which
results in the acquisition of, or beneficial ownership (as such term is defined under rules and regulations promulgated under the Securities Exchange Act of 1934, as amended) by any person or entity or any group of persons or entities acting in
concert of 50% or more of the outstanding shares of common stock of the Corporation or the Bank; or 

  

	 	(ii)	the sale of all or substantially all of the assets of the Corporation or the Bank; or 

  

	 	(iii)	the liquidation of the Corporation or the Bank of a material amount of either’s assets; or 

  

	 	(iv)	the takeover or control of all or substantially all of the operations of the Corporation or the Bank, through any of the means specified above. 

 If Employee has actual knowledge of an anticipated “Change-in-Control” at least
30 days prior to the event which causes a Change-in-Control, Employee shall be entitled at any time up to 30 days prior to the event which will effect such Change-in-Control (the “Change-in-Control Date”), to give a notice of termination
(as defined in Section 8) as of the Change-in-Control Date, and Employee shall be paid, in addition to all accrued but unpaid compensation, a lump sum cash payment (the “Change-in-Control Payment”). The Change-in-Control Payment shall be
equal to two-and-nine-tenths (2.9) years Employee’s then Base Salary (as defined in Schedule B) to be paid without setoff of any kind and in cash, not later than ten days after the Change-in-Control Date. Additionally, prior to the
Change-in-Control Date, Employer shall notify representatives of the acquiring or successor entity, as the case may be, of Employee’s rights and Employer’s obligations under this Agreement, and without affecting Employer’s obligations
to pay Employee hereunder, any such acquiring or successor entity shall become obligated to forthwith pay to Employee for such part of the Change-in-Control Payment as has not been paid by Employer as of the Change-in-Control Date. 
  
 In the event a Change-in-Control occurs without Employee
having the actual prior knowledge described above, Employee shall have the right to give a notice of termination (as defined in Section 8) to Employer no later than ten (10) business days following a Change-in-Control during the term of this
Agreement. In such instance, Employer, its successor or acquirer shall pay the Change-in-Control payment to Employee within ten (10) business days of receipt of Employee’s notice of termination. 
  
 (e) Termination for Good Reason: Employee may
terminate his employment hereunder for Good Reason by delivering a notice of termination (as defined in Section 8). For purposes of this Agreement, “Good Reason” shall mean: (i) a failure by Employer to comply with any material provision
of this Agreement, which failure has not been cured within 15 business days after a notice of such noncompliance has been given by Employee to Employer; or (ii) subsequent to a Change-in-Control. In the event Employee terminates his employment for
Good Reason, he shall be entitled to severance benefits as set forth in Sections 6(g) and (h). 
  
 (f) Termination by Employee: Employee may terminate his employment hereunder and this Agreement for any reason, by providing
a notice of termination (as defined in Section 8). In such event, Employee shall have no right to compensation or other benefits after the date of termination, except for accrued but unpaid compensation. 
  
 (g) Severance Payment: If Employee is entitled
to severance benefits under Sections 6(c) or (e), Employee shall be paid, as severance, the total Base Salary (as defined in Schedule B) due for the longer of the remaining term of this Agreement or six months (which is the maximum duration
of the agreement not to compete imposed on Employee by Section 12[b]). Any such payment shall be made in substantially equal semi-monthly installments on the 15th and last days of each month until paid in full and shall only be paid subject to
Employee’s execution of a full release in favor of Employer for any potential claims related to this Agreement or to Employee’s employment with Employer. 

 (h) Additional Severance Benefits: If Employee is entitled to severance
benefits under Sections 6(c) or (e), Employer shall maintain in full force and effect, for the continued benefit of Employee any Employee benefit plans and programs in which Employee was entitled to participate immediately prior to the date of
termination for the shorter of: 
  

	 	(i)	one year after the date of termination; or 

  

	 	(ii)	the period of time ending on the date Employee becomes eligible for participation in a comparable plan provided by another employer; provided, however, that Employee’s
continued participation is possible under the general terms and provisions of such plans and programs. 

  
 7. Regulatory Provisions. Employer and Employee acknowledge that the laws and regulations governing the Parties require that the employment
of Employee be governed by certain standards contained in those laws and regulations. To that end, the Parties agree to be bound by the following provisions: 
  

(a) Suspension/Temporary Prohibition: If Employee is suspended and/or temporarily prohibited from participating in the
conduct and affairs of the Bank by a notice served under Sections 8(e) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818[e][3] and [g][1]) Employer’s obligations under this Agreement shall be suspended as of the date of such
service unless stayed by appropriate proceedings. If the charges and the notice are dismissed, Employer may in its discretion: 
  

	 	(i)	pay Employee all or part of his compensation withheld while the obligations under this Agreement are suspended; and 

  

	 	(ii)	reinstate (in whole or part) any of Employer’s obligations which were suspended. 

  
 (b) Permanent Prohibition: If Employee is removed and/or permanently prohibited from
participating in the conduct and affairs of the Bank by an order issued under Sections 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (12 U.S.C. §1818[e][4] or [g][1]), all of Employer’s obligations under this Agreement shall
terminate as of the effective date of the order, but Employee’s vested rights, if any shall not be affected. 
  
 (c) Default Under FDIA: If the Bank is in default (as defined in Section 3[x][1] of the Federal Deposit Insurance Act) all
obligations under this Agreement shall terminate as of the date of default, but this subsection of this Agreement shall not affect Employee’s vested rights if any. 
  
 (d) Regulatory Termination: All obligations under this Agreement shall be terminated, except
to the extent that a determination has been made that continuation of this Agreement is necessary for continued operation of the Bank: 
  

	 	(i)	by the Director or his or her designee, at the time the Office of Thrift Supervision (“OTS”) or Federal Deposit Insurance Corporation (“FDIC”) enters into an
agreement to provide assistant to or on behalf of the Bank under the authority to contained in Section 13(c) of the Federal Deposit Insurance Act; or 

	 	(ii)	by the OTS, FDIC or the Director, or his or her designee, at the time the OTS, FDIC or the Director, or his or her designee, approves a supervisory merger to resolve problems
related to operation of the Bank or when the Bank’s determined by the OTS, FDIC or the Director to be in unsafe or unsound condition. 

  
 Any of Employee’s rights that have already vested, however, shall not be affected by such action. For purposes of this subsection of this
Agreement, the term “Director” shall mean the Director of the OTS or the FDIC. 
  
 8. Notice of Termination. 
  
 (a) Specificity: Any termination of Employee’s employment by Employer or by Employee shall be communicated by written notice of termination to the other Party. For purposes of this Agreement, a
“notice of termination” shall mean a dated notice which shall: (i) indicate the specific relevant termination provision in the Agreement; (ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment under the provision; and (iii) set forth the date of termination, which shall be not less than 30 days nor more than 45 days after such notice of termination is given, unless another Section of the Agreement
requires or permits a different effective date. 
  
 (b) Delivery of Notices: All notices or resignations given or required to be given herein shall be in writing, sent by United States first-class certified or registered mail, postage prepaid, by way of overnight carrier, or by
hand delivery. If to Employee (or to Employee’s spouse or estate upon Employee’s death) notice shall be sent to Employee’s last-known address, and if to Employer, notice shall be sent to Employer’s corporate headquarters. All
such notices shall be effective five days after having been deposited in the mail if sent via first-class certified or registered mail, or upon delivery if by hand delivery or if sent via overnight carrier. Either Party, by notice in writing, may
change or designate the place for receipt of all such notices. 
  
 9. Post-Termination Obligations. Employer shall pay to Employee such payments and benefits as are required pursuant to this Agreement; provided, however, any such payments shall be subject to Employee’s post-termination
cooperation. Such cooperation shall include the following: 
  
 (a) Employee shall furnish such information and assistance as may be reasonably required by Employer in connection with any litigation or settlement of any dispute between Employer and a customer or other third
parties (including without limitation serving as a witness in court or other proceedings); 

 (b) Employee shall provide such information or assistance to Employer in connection with
any regulatory examination by any state or federal regulatory agency; 
  
 (c) Employee shall keep Employer’s trade secrets and other proprietary or confidential information secret to the fullest extent practicable, subject to compliance with all applicable laws; 
  
 (d) Employee shall return all Employer’s property,
including, but not limited to, keys, credit cards, manuals and other written materials. 
  
 (e) Employee shall execute a full release of all potential claims related to this Agreement or to Employee’s employment with Employer
in favor of Employer. 
  
 Upon submission of proper receipts,
Employer shall promptly reimburse Employee for any reasonable expenses incurred by Employee in complying with the provisions of this Section. 
  
 10. Indebtedness. If during the term of this Agreement, Employee becomes indebted to Employer or to one of Employer’s subsidiaries, for
any reason, Employer may, at its election, set off and collect any sums due Employee out of any amounts which Employer may owe Employee pursuant to the terms of this Agreement. Furthermore, upon the termination of this Agreement, all sums owed to
Employer by Employee shall become immediately due and payable. Employee shall pay all expenses and Attorneys’ Fees actually or necessarily incurred by Employer in connection with any collection proceeding for Employee’s indebtedness.
Notwithstanding any of the foregoing, any indebtedness to Employer or to one of Employer’s subsidiaries, secured by a mortgage on Employee’s residence shall not be subject to the foregoing provisions, but shall be governed by the loan
documents evidencing such indebtedness. 
  
 11. Maintenance
of Confidential Information. Employee shall use his best efforts and utmost diligence to guard and protect all of Employer’s (or any of Employer’s subsidiaries) confidential information. Employee shall not, either during the term,
or after termination, of this Agreement, for whatever reason, use in any capacity, or divulge or disclose in any manner, to any Person, the identity of Employer’s (or any of Employer’s subsidiaries) customers, methods of operation,
processes, systems and programs, or other confidential information relating to Employer’s (or any of Employer’s subsidiaries) business. Upon termination of this Agreement or Employee’s employment, for any reason, Employee shall
immediately return and deliver to Employer or any of Employer’s subsidiaries, all records and papers and all materials which bear confidential information. 

 12. Competitive Activities. 
  
 (a) Limitation on Outside Activities: Employee agrees that during the term of this Agreement,
except with the express consent of the Board, Employee will not, directly or indirectly, engage in, participate in, become a director of, render advisory or other services to, become employed by, or make any financial investment in any firm,
corporation, business entity or business enterprise competitive with or to any business of Employer. Notwithstanding the foregoing, Employee shall not be precluded or prohibited from owning passive investments (defined herein to mean up to 9.9% of
the beneficial ownership of the firm, corporation, business entity or business enterprise), including investments in the securities of other financial institutions. Employee, however, shall be prohibited from making any investments or commitments of
time, accepting any positions or participating in any activities which cause Employee to devote time to such investments, commitments, positions or activities which would interfere with Employee’s position with and obligations to Employer.

  
 (b) Agreement Not to Compete:
Employee acknowledges that by virtue of his employment with Employer, Employee will acquire an intimate knowledge of the activities and affairs of Employer, including trade secrets and other confidential matters. Employee, therefore, agrees that
during the term of this Agreement, and for a period of six months following the termination of Employee’s employment hereunder, Employee shall not become employed, directly or indirectly, whether as an employee, independent contractor,
consultant, or otherwise, with any federally-insured financial institution, financial holding company, bank holding company, or other financial services provider located in Charlotte, Hillsborough, Manatee, Pasco, Pinellas and Sarasota Counties,
Florida or in any County where Employer operates a full-service branch (“Covered Area”) with any Person whose intent it is to organize another such company or entity located in the Covered Area. Employee acknowledges that this is the same
duration of the minimum period that Employee would receive severance benefits under Section 6, if he is entitled to such benefits. 
  
 Employee further agrees that for a period of 12 months following the termination of Employee’s employment hereunder for any reason,
Employee shall not directly or indirectly: (i) solicit the business of any then current customer (“borrower or depositor”) of Employer or any of Employer’s subsidiaries, regardless of whether or not Employee was responsible for
generating such customer’s business for Employer or any of Employer’s subsidiaries; or (ii) solicit any employees of Employer or any Employer’s subsidiaries. 
  
 Employee hereby agrees that the duration of the anti-competitive covenant set forth herein is reasonable,
and that its geographic scope is not unduly restrictive. 

 13. Remedies for Breach. 
  
 (a) Arbitration: The Parties agree that, except for the specific remedies for Injunctive
Relief as contained in Section 13(b), herein, any controversy or claim arising out of or relating to this Agreement, or any breach thereof, including, without limitation, any claim that this Agreement or any portion thereof is invalid, illegal or
otherwise voidable, shall be submitted to binding arbitration before and in accordance with the Rules of the American Arbitration Association. Judgment upon the determination and/or award of such arbitrator may be entered in any court having
jurisdiction thereof; provided, however, that this clause shall not be construed to permit the award of punitive damages to either Party. The prevailing party to said arbitration shall be entitled to an award of reasonable Attorneys’ Fees. The
venue for arbitration shall be in Pinellas County, Florida. 
  
 (b) Injunctive Relief: The Parties acknowledge and agree that the services to be performed by Employee are special and unique and that money damages cannot fully compensate Employer in the event of
Employee’s violation of the provisions of Sections 11 and 12 of this Agreement. Thus, in the event of a breach of any of the provisions of such Section, Employee agrees that Employer, upon application to a court of competent jurisdiction, shall
be entitled to an injunction restraining Employee from any further breach of the terms and provision of such Section. Should Employer prevail in an action seeking such an injunction, Employee shall pay all costs and reasonable Attorneys’ Fees
incurred by Employer in and relating to obtaining such injunction. Employee’s sole remedy, in the event of the wrongful entry of such injunction, shall be the dissolution of such injunction and recovery of Attorneys’ Fees. Employee hereby
waives any and all claims for damages by reason of the wrongful issuance of any such injunction. 
  
 (c) Cumulative Remedies: Notwithstanding any other provision of this Agreement, the injunctive relief described in Section
13(b) herein and all other remedies provided for in this Agreement which are available to Employer as a result of Employee’s breach of this Agreement, are in addition to and shall not limit any and all remedies existing at law or in equity
which may also be available to Employer. 
  
 14.
Assignment. This Agreement shall inure to the benefit of and be binding upon Employee, and to the extent applicable, his heirs, assigns, executors, and personal representatives, and to Employer, and to the extent applicable, its
successors, and assigns, including, without limitation, any Person which may acquire all or substantially all of the assets and business of the Corporation or the Bank, or with or into which the Corporation or the Bank may be consolidated or merged,
and this provision shall apply in the event of any subsequent merger, consolidation, or transfer. 
  
 15. Attorneys’ Fees. In the event that any claim or controversy hereunder is the subject of any litigation or arbitration between the
Parties, the prevailing Party shall be entitled to an award of all reasonable costs, including Attorneys’ Fees. 

 16. Miscellaneous. 
  
 (a) Amendment of Agreement: Unless as otherwise provided herein, this Agreement may not be
modified or amended except in writing signed by the Parties. 
  
 (b) Certain Definitions: For purposes of this Agreement, the following terms whenever capitalized herein shall have the following meanings: 
  

	 	(i)	“Attorneys’ Fees” shall include the reasonable legal fees and disbursements charged by attorneys and their related travel and lodging expenses, court costs, paralegal
fees, etc. incurred in arbitration, mediation, settlement negotiations, discovery, trial, appeal or bankruptcy proceedings. 

  

	 	(ii)	“Material” shall mean substantial or significant as opposed to inconsequential. 

  

	 	(iii)	“Person” shall mean any natural person, corporation, partnership (general or limited), trust, association or any other business entity. 

  
 (c) Headings for Reference Only: The headings
of the Sections and the Subsections herein are included solely for convenient reference and shall not control the meaning of the interpretation of any of the provisions of this Agreement. 
  
 (d) Governing Law/Jurisdiction: This Agreement
shall be construed in accordance with and governed by the laws of the State of Florida. Any litigation involving the Parties and their rights and obligations hereunder shall be brought in the appropriate court in Pinellas County, Florida.

  
 (e) Severability: If any of the
provisions of this Agreement shall be held invalid for any reason, the remainder of this Agreement shall not be affected thereby and shall remain in full force and effect in accordance with the remainder of its terms. 
  
 (f) Entire Agreement: This Agreement and all
other documents incorporated or referred to herein, contain the entire agreement of the Parties and there are no representations, inducements or other provisions other than those expressed in writing herein. No modification, waiver or discharge of
any provision or any breach of this Agreement shall be effective unless it is in writing signed by both Parties. A Party’s waiver of the other Party’s breach of any provision of this Agreement, shall not operate, or be construed, as a
waiver of any subsequent breach of that provision or of any other provision of this Agreement. 

 (g) Waiver: No course of conduct by Employer or Employee and no delay or
omission of Employer or Employee to exercise any right or power given under this Agreement shall: (i) impair the subsequent exercise of any right or power, or (ii) be construed to be a waiver of any default or any acquiescence in, or consent to, the
curing of any default while any other default shall continue to exist, or be construed to be a waiver of such continuing default or of any other right or power that shall theretofore have arisen. Any power and/or remedy granted by law and by this
Agreement to any Party hereto may be exercised from time to time, and as often as may be deemed expedient. All such rights and powers shall be cumulative to the fullest extent permitted by law. 
  
 (h) Pronouns: As used herein, words in the
singular include the plural, and the masculine include the feminine and neuter gender, as appropriate. 
  
 (i) Recitals: The Recitals set forth at the beginning of this Agreement shall be deemed to be incorporated into this
Agreement by this reference as if fully set forth herein, and this Agreement shall be interpreted with reference to and in light of such Recitals. 
  
 (j) Amendment and Restatement: This Agreement amends and completely restates any other employment agreements by and between
Employee and Employer. By executing this Agreement, Employee completely releases Employer from any obligations under any such other agreements. 
  
 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above. 
  

			
	EMPLOYEE
	
	 /s/ Kenneth P. Cherven

	Kenneth P. Cherven

  
 FIRST COMMUNITY BANK CORPORATION OF
AMERICA 
  

			
	By:	 	 /s/ Robert M. Menke

	 	 	Robert M. Menke
	 	 	Chairman of the Board
	
	FIRST COMMUNITY BANK OF AMERICA
		
	By:	 	 /s/ Robert M. Menke

	 	 	Robert M. Menke
	 	 	Chairman of the Board

 SCHEDULE A 
  

Employee’s duties shall specifically include, but not be limited to: 
  

	 	1.	building and maintaining a high quality management team; 

  

	 	2.	building and managing the Bank’s branch network; 

  

	 	3.	managing personnel and minimizing employee turnover; 

  

	 	4.	serving on such committees as appointed by the Boards from time to time; 

  

	 	5.	monitoring Employer’s capital position and identifying and evaluating capital raising options; 

  

	 	6.	keeping the Boards informed of industry developments and regulatory initiatives affecting the Corporation and Bank; 

  

	 	7.	supervising all lending, servicing and resolution of problem assets; 

  

	 	8.	establishing and implementing marketing efforts to increase the Bank’s business; 

  

	 	9.	coordinating with Employer’s attorneys and accountants and other service providers to the extent necessary to further the business of Employer, keeping in compliance with
government laws and regulations and otherwise keeping the Corporation and the Bank in as good a financial and legal posture as possible; 

  

	 	10.	maintaining adequate expense records relating to Employee’s activities; 

  

	 	11.	keeping the Boards informed of financial results of operations and the status of Employer’s business; 

  

	 	12.	making recommendations to the Boards on a wide range of subjects, including: officer appointments and changes in organization, loans, new or redesigned services, annual operating
budget, salary and benefit administration, and physical plan renovation; 

  

	 	13.	meeting regularly with officers and other key staff; and delegate responsibility for daily operations and administration; 

  

	 	14.	maintaining relationships with other bankers to be aware of new services or opportunities to increase profit or decrease expenses; 

  

	 	15.	identifying and evaluating expansionary opportunities for Employer; and 

  

	 	16.	conducting and undertaking all other activities, responsibilities, and duties normally expected to be undertaken and accomplished by the Chief Executive Officer and President of a
financial institution holding company similar in size and operation to Employer’s business. 

 SCHEDULE B 
  

COMPENSATION 
  

	1.	Base Salary: Employee shall receive an annual salary of $170,140 (the “Base Salary”). 

  
 Employer may adjust the Base Salary from time to time based upon the
Board’s evaluation of Employee’s performance. In no event, however, will the Base Salary be reduced without Employee’s written concurrence. 
  

	2.	Performance Bonuses: Employee may receive an annual performance bonus at the discretion of the Board. The performance bonus shall be tied to Bancshares
achieving profitability on a consolidated basis. “Profitability” shall include, but not be limited to net profit, the financial strength of Bancshares, implementing strategies to increase shareholder value or such other measures as
determined by the Board. 

  

	3.	Vacation: Employee is entitled to four weeks paid vacation time per year on a non-cumulative basis. Employee will be entitled to receive a lump sum payment of
up to 80 hours of unused vacation time. 

  

	4.	Medical Benefits and Other Plans: Employee shall also be permitted to participate in all other benefit plans offered to Bank officers. 

 

	5.	Continuing Education: Employer will reimburse Employee for admission or attendance fees for pre-approved educational meetings or seminars offered by such
organizations as the Florida Bankers Association. 

  

	6.	Automobile Allowance: Employee shall be entitled to receive an automobile allowance of $600 per month in accordance with Employer’s policies.

  

	7.	Life Insurance: Employer shall maintain a $500,000 life insurance policy on Employee during the term of this Agreement for the benefit of employee’s
spouse. The policy shall be with a life insurance company with a B+ or better rating.

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