Document:

ex10_4.htm

    
      

    

    Exhibit
10.4

    

    FIRST
AMENDMENT TO

    EMPLOYMENT
AGREEMENT

    

    THIS
AMENDMENT (“Amendment”), made and entered into as of December 11, 2008 (the
“Effective Date”) by and among Daniel W. Brinks, a resident of the State of
Georgia (“Employee”), SouthCrest Financial Group, Inc. (f/k/a Upson Bankshares,
Inc.), a Georgia corporation (“SouthCrest”), and Bank of Upson, a financial
institution organized under the laws of the State of Georgia (“Bank”)
(collectively, SouthCrest and Polk are the “Employer”).

    

    W I T N E
S S E T H:

    

    WHEREAS,
Employer currently employs Employee as Chairman and Chief Operating Officer of
SouthCrest and the President and Chief Executive Officer of Bank pursuant to
that certain employment agreement between Employer and Employee dated September
29, 2004 (the “Employment Agreement”);

    

    WHEREAS,
Employer and Employee desire to continue such employment;

    

    WHEREAS,
Employer and Employee now desire to revise the Employment Agreement to reflect
the change in the name of “Upson Bankshares, Inc.” to “SouthCrest Financial
Group, Inc.”; and

    

    WHEREAS, Employer and Employee also
desire to amend the Employment Agreement primarily so that the payments and
benefits under the Employment Agreement comply with, or are exempt from, the
rules of Section 409A of the Internal Revenue Code of 1986, as
amended;

    

    NOW,
THEREFORE, in consideration of the continued employment of Employee by Employer,
of the premises and the mutual promises and covenants contained herein, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree to
modify the Employment Agreement as follows, effective as of January 1,
2009:

    

    1.       
     By substituting each reference to “Upson
Bankshares, Inc.” with a reference to “SouthCrest Financial Group, Inc.” and
each reference to “Upson” with a reference to “SouthCrest” wherever such
references appear in the Employment Agreement.

    

    2.     
       By adding the following to the end of
the existing Section 4:

    

    “All
reimbursements shall be paid as soon as administratively practicable, but in no
event shall any reimbursement be paid after the last day of the taxable year
following the taxable year in which the expense was incurred, nor shall the
amount of reimbursable expenses incurred or in-kind benefits provided in one
taxable year affect the expenses eligible for reimbursement or the in-kind
benefits provided, as applicable, in any other taxable year.  The
right to a reimbursement or an in-kind benefit under this Agreement will not be
subject to liquidation or exchange for another benefit.”

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.      
      By deleting the existing Section 12.5 and
substituting therefor the following:

    

    “12.5           If
this Agreement and Employee’s employment are terminated either (i) by the
Employer at any time for any reason other than for Cause or (ii) by Employee
upon the Employer’s breach of this Agreement; then Employer, as Employer’s sole
remaining obligation under this Agreement, shall: (i) pay Employee’s Base Salary
to Employee for the remaining months of the term of this Agreement in
substantially equal monthly installments beginning with the month following the
month of Employee’s termination of employment at the Base Salary rate then in
effect; and (ii) reimburse Employee for the cost of COBRA health continuation
coverage for Employee for the lesser of (a) the remaining term of this
Agreement, or (b) the period during which Employee is entitled to COBRA health
continuation coverage from the Employer, provided that, in either case, Employee
must elect such coverage and pay the applicable premium.”

    

    4.    
        By adding the following
immediately following the phrase “pursuant to Section 12.4” in Section 12.6: “,
or for any reason other than pursuant to Section 12.2,”.

    

    5.        
    By adding the following new Section 12.7:

    

    “12.7           Notwithstanding
anything in this Agreement to the contrary (i) Employee shall be treated as
having incurred a termination of employment hereunder, and shall be entitled to
payments and benefits under Section 12.5 or 15.3, as applicable, only if he has
incurred a ‘separation from service,’ within the meaning of Section 409A of the
Internal Revenue Code, as amended (the ‘Code’), from SouthCrest and the Bank and
all affiliated companies that, together with SouthCrest and the Bank, constitute
the ‘service recipient’ within the meaning of the regulations issued under Code
Section 409A; and (ii) if Employee is a ‘specified employee’ within the meaning
of Code Section 409A, at the date of his termination of employment, then any
payments made in connection with Employee’s termination of employment that would
result in a tax under Code Section 409A if paid during the first six (6) months
after termination of employment shall be withheld, starting with the payments
latest in time during such six (6) month period, and paid to Employee during the
seventh month following the date of his termination of employment.”

    

    6.      
      By deleting the existing Section 15.2 and
substituting therefor the following:

    

    “15.2           ‘Change
in Control’ shall be deemed to have occurred during the term of this Agreement
if:

    

    15.2.1           on
or after January 1, 2009 (the ‘Amendment Date’), 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 fair market value of the stock of SouthCrest or Bank prior to such
acquisition), acquires stock of SouthCrest or the Bank, as applicable, that,
together with stock held by such person or group, constitutes more than fifty
percent (50%) of the total fair market value or total voting power of the stock
of SouthCrest or the Bank, as applicable;

    
      
         

      

      
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    15.2.2       within
any twelve-month period (beginning on or after Amendment Date), a majority of
members of SouthCrest’s Board of Directors is replaced by directors whose
appointment or election is not endorsed by a majority of the members of
SouthCrest’s Board of Directors before the date of the appointment or
election;

    

    15.2.3      within
any twelve-month period (beginning on or after the Amendment Date), any one
person, or more than one person acting as a group, acquires ownership of stock
of SouthCrest possessing thirty percent (30%) or more of the total voting power
of the stock of SouthCrest; or

    

    15.2.4      within
any twelve-month period (beginning on or after the Amendment Date), any one
person, or more than one person acting as a group, acquires assets of SouthCrest
or the Bank, as applicable, 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 SouthCrest or the Bank, as
applicable, 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
15.2.4:

    

    (i)            a
shareholder (determined immediately before the asset transfer) of SouthCrest or
the Bank in exchange for or with respect to its stock;

    

    (ii)            an
entity, fifty percent (50%) or more of the total value or voting power of which
is owned, directly or indirectly, by SouthCrest or the Bank;

    

    (iii)           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 SouthCrest or the Bank; or

    

    (iv)           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
15.2.4(iii).

    

    For
purposes of this Section 15.2, 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 Employer, to the extent provided under Code Section 409A.”

    
      
         

      

      
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    7.        
    By deleting the first clause of Section 15.3 up through
and including the phrase “(‘Termination of Employment’)” and substituting
therefor the following:

    

    “In the
event of a Change in Control, if Bank terminates Employee without Cause
contemporaneously with or subsequent to the Change in Control, or if Bank takes
any action specified in Section 15.4 of this Agreement during the term of this
Agreement contemporaneously with or subsequent to a Change in Control and
Employee terminates his employment contemporaneously with or subsequent to such
action and, in either case, Employee’s termination of employment occurs within
two (2) years following the Change in Control (‘Termination of
Employment’)”.

    

    8.     
       By deleting the last sentence of
Section 15.3 and substituting therefor the following:

    

    “In the
event the Aggregate Severance is required to be reduced pursuant to this
Section, the portions of the Aggregate Severance paid or provided latest in time
will be reduced first and if portions of the Aggregate Severance to be paid or
provided at the same time must be reduced, noncash benefits will be reduced
before cash payments.”

    

    9.   
         By deleting the first
sentence of the existing Section 15.4 and substituting therefor the
following:

    

    “During
the remaining term of this Agreement following the effective date of a Change in
Control, if the Bank takes any of the following actions and Employee terminates
his employment contemporaneously with or subsequent to such action and such
termination occurs within two (2) years following the Change in Control, such
termination shall be deemed to be a termination of employment by Employer
without Cause.”

    

    10.           By
deleting the last sentence of the existing Section 15.4 and substituting
therefor the following:

    

    “In any
such event, if Employee terminates his employment contemporaneously with or
subsequent to such action and such termination occurs within two (2) years
following the Change in Control, Employee shall be entitled to all payments
provided for in Section 15.3 of this Agreement.”

    

    [SIGNATURES
ON THE NEXT PAGE]

    
      
         

      

      
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               IN
WITNESS WHEREOF, the parties have executed this Amendment as of the day and year
first written above.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	 
      	 
      	
                                                      “Employee”

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                      /s/
      J. Douglas Head

                                                    	 
      	/s/
      Daniel W. Brinks	
                                                      (SEAL)

                                                    
	

                                                      Witness

                                                    	 
      	
                                                      Daniel
      W. Brinks

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                      ATTEST

                                                    	 
      	
                                                      “SouthCrest”

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                      SouthCrest
      Financial Group, Inc.

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                      /s/
      Michael Hobbs

                                                    	 
      	
                                                      By:

                                                    	/s/
      Douglas J. Hertha	 
      
	
                                                       (CORPORATE
      SEAL)

                                                    	 
      	
                                                      Its:

                                                    	Senior
      Vice President	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                      “Bank”

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                                      ATTEST

                                                    	 
      	
                                                      Bank
      of Upson

                                                    	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                      By:

                                                    	/s/
      Imogene B. Johnson	 
      
	/s/
      J. Michael Jones	 
      	
                                                      Its:

                                                    	Assisstant
      Vice President	 
      
	
                                                      (CORPORATE
      SEAL)

                                                    	 
      	 
      	 
      	 
      

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

     

    5ex10_6.htm

    
      

    

    Exhibit
10.6

    

    FIRST
AMENDMENT TO THE

    BANK
OF UPSON

    EXECUTIVE
SALARY CONTINUATION AGREEMENT

    

    This
FIRST AMENDMENT is made and entered into on the 11th day of
December, 2008, by and between Bank of Upson (the “Bank”), a bank organized and
existing under the laws of the State of Georgia, and Daniel W. Brinks, an
executive of the Bank (the “Officer”).

    

    WITNESSETH:

    

    WHEREAS, the Bank and the Officer
previously entered into that certain Officer Salary Continuation Agreement,
dated January 24, 2007, (the “Agreement”); and

    

    WHEREAS,
the Bank and the Officer desire to amend the Agreement to comply with the final
regulations issued under Internal Revenue Code Section 409A.

    

    NOW, THEREFORE, in consideration of the
mutual covenants contained herein, the Bank and the Officer do hereby agree,
effective as of January 1, 2009, to amend the Agreement as follows:

    

    1.       
     By deleting Paragraph III(A) in its entirety and
substituting therefor the following:

    

    “A.           Retirement
Date:

    

    ‘Retirement
Date’ shall mean the date the Officer experiences a Separation from Service on
or after the Officer’s Normal Retirement Age.”

    

    2.             By
deleting from Paragraph III(D) the phrase “without cause” and substituting
therefor the phrase “other than for cause”.

    

    3.    
        By deleting Paragraph III(E) in
its entirety and substituting therefor the following:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “E.           Separation from
Service:

    

    ‘Separation
from Service’ shall mean a termination of the Officer’s employment where either
(1) the Officer has ceased to perform any services for the Bank and all
affiliated companies that, together with the Bank, constitute the ‘service
recipient’ within the meaning of Code Section 409A and the regulations
thereunder (collectively, the ‘Service Recipient’) or (2) the level of bona fide
services the Officer performs for the Service Recipient after a given date
(whether as an employee or as an independent contractor) permanently decreases
(excluding either a decrease as a result of military leave, sick leave, or other
bona fide leave of absence if the period of such leave does not exceed six (6)
months, or if longer, so long as the Officer retains a right to reemployment
with the Service Recipient under an applicable statute or by contract or any
other decrease permitted under Code Section 409A) to no more than twenty percent
(20%) of the average level of bona fide services performed for the Service
Recipient (whether as an employee or an independent contractor) over the
immediately preceding thirty-six-(36)-month period (or the full period of
service if the Officer has been providing services to the Service Recipient for
less than thirty-six (36) months).”

    

    4.        
    By deleting Paragraph III(G) in its entirety and
substituting therefor the following:

    

    “G.           Change of
Control:

    

    ‘Change
of Control’ means (1) with respect to the Bank or Southcrest Financial Group,
Inc. (the ‘Holding Company’) a ‘change in ownership of a corporation’ as defined
under Code Section 409A; (2) with respect to the Holding Company, a ‘change in
effective control of a corporation’ as defined under Code Section 409A; or (3)
with respect to the Bank or the Holding Company, a ‘change in ownership of a
substantial portion of a corporation’s assets’ as defined under Code Section
409A, but substituting ‘eighty-five percent (85%)’ for the phrase ‘40 percent’
in Treasury Regulation Section 1.409A-3(i)(5)(vii)(A), or any successor
thereto.”

     

    5.     
       By deleting Paragraph III(H) in its
entirety and substituting therefor the following:

    

    “H.           Restriction on Timing of
Distribution:

     

    Notwithstanding
any provision in the Agreement to the contrary, to the extent necessary to avoid
the imposition of tax on the Officer under Code Section 409A, any payments that
are otherwise payable to the Officer within the first six (6) months following
the effective date of his Separation from Service, shall be suspended and paid
as soon as practicable following the end of the six-month period following such
effective date if, immediately prior to the Officer’s Separation from Service,
the Officer is determined to be a “specified employee” (within the meaning of
Code Section 409A(a)(2)(B)(i)) of the Bank (or any related “service recipient”
within the meaning of Code Section 409A and the regulations
thereunder).  Any payments suspended by operation of the foregoing
sentence shall be paid as a lump sum to the Officer during the seventh month
following the date of his Separation from Service.  Payments (or
portions thereof) that would be paid latest in time during the six-month period
will be suspended first.”

     

    6.        
    By adding the following new Paragraph
III(J):

    

    “J.           Accrued Liability Retirement
Account:

    

    ‘Accrued
Liability Retirement Account’ means the bookkeeping account established and
maintained by the Bank to reflect the liability that should be accrued by the
Bank under generally accepted accounting principles (“GAAP”) for the Bank’s
obligation to the Officer under this Agreement.”

    
      
         

      

      
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    7.    
        By capitalizing the phrase
“accrued liability retirement account” wherever it appears in the
Agreement.

    

    8.     
       By deleting the last sentence of
Paragraph IV in its entirety and substituting therefor the
following:

    

    “Such
monthly installments shall be paid on the first business day of each month,
commencing with the month following the month in which such Separation from
Service occurs.”

    

    9.  
          By deleting from
Paragraph V(A) the phrase “Retirement Date” and substituting therefor the phrase
“Normal Retirement Age”.

    

    9.  
          By inserting into
the first sentence of Paragraph V(B) the phrase “following Normal Retirement
Age” after the word “Officer” and before the comma.

    

    10.           By
deleting Paragraph VI in its entirety and substituting therefor the
following:

    

    
      	
               
      

            	
              “VI.

            	
              [RESERVED]”

            

    

    

    11.           By
deleting the first paragraph of Paragraph VIII in its entirety and substituting
therefor the following:

    

    “In the
event that the employment of the Officer shall terminate prior to Normal
Retirement Age, by the Officer’s voluntary action, or by the Officer’s discharge
by the Bank other than for cause, then this Agreement shall terminate upon the
date of such Termination of Employment and the Bank shall pay to the Officer an
amount of money equal to the balance of the Officer’s Accrued liability
Retirement Account on the date of said termination, multiplied by the Officer’s
cumulative vested percentage.  This compensation shall be paid in one
(1) lump sum the first day of the second month following Separation from Service
on or after the date of the Termination of Employment.”

    

    12.           By
deleting the third paragraph of Paragraph VIII in its entirety and substituting
therefor the following:

    

    “In the
event the Officer’s employment is terminated by the Bank for cause at any time,
this Agreement shall terminate and all benefits provided herein shall be
forfeited.”

    

    13.           By
deleting Paragraph X in its entirety and substituting therefor the
following:

    

    “X.   
      CHANGE OF CONTROL

    

    If the
Officer experiences a Separation from Service on or after the date of the
Officer’s Termination of Employment (voluntarily or involuntarily), except a
termination for cause, within two (2) years after a Change of Control, then the
Officer shall receive one hundred percent (100%) of the benefits in Paragraph IV
herein upon attaining Normal Retirement Age.  Said benefit shall be
paid in equal monthly installments (1/12th of the
annual benefit) commencing on the first day of the month following the month in
which the Officer attains Normal Retirement Age.”

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    14.           By
deleting Paragraph XI(C) in its entirety and substituting therefor the
following:

    

    “C.           Amendment or
Termination:

    

    This
Agreement may be amended, at any time, by mutual written consent of the Officer
and the Bank, except that no amendment may reduce the Officer’s Accrued
Liability Retirement Account.  The Bank may unilaterally amend the
Agreement to conform with written directives to the Bank to comply with
legislative changes or tax law, including, without limitation, Section 409A of
the Code and any and all Treasury regulations and guidance promulgated
thereunder.  No amendment shall provide for or otherwise permit any
acceleration of the time or schedule of any payment under the Agreement in a
manner that would be prohibited under Section 409A(a)(3) of the
Code.

    

    The Bank
may, at any time, terminate the Agreement except that no termination may reduce
the Officer’s Accrued Liability Retirement Account.  Except as
provided in this Subparagraph XI(C), the termination of the Agreement shall not
cause a distribution of benefits.  Rather, after such termination,
benefit distributions will be made in accordance with the provisions of this
Agreement as if no such termination had occurred.  Notwithstanding the
preceding provisions of this Subparagraph XI(C), the Bank may elect to terminate
the Agreement under any circumstances permitted by Treasury Regulations Section
1.409A-3(j)(4)(ix).  In any such event, the Bank shall distribute the
Officer’s Accrued Liability Retirement Account, determined as of the date of the
termination of the Agreement, to the Officer in a lump sum at the earliest date
permitted under such Treasury guidance.”

    

    15.           By
deleting Paragraph XI(I) in its entirety and substituting therefor the
following:

    

    “I.           Tax
Withholding:

    

    The
Officer is responsible for payment of all taxes applicable to compensation and
benefits paid or provided to the Officer under the Agreement, including federal
and state income tax withholding, except the Bank 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 Bank 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 Bank’s sole liability
regarding taxes is to forward any amounts withheld to the appropriate taxing
authority(ies).  By participating in the Agreement, the Officer
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 Officer by the Bank to satisfy the employee-portion of such
obligations.  If insufficient cash wages are available or if the
Officer so desires, the Officer may remit payment in cash for the withholding
amounts.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    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 Subparagraph
XII(I) 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 Subparagraph XII(I) shall reduce the benefit otherwise
payable to the Officer pursuant to the Agreement.”

    

    16.           By
adding the following new Paragraph XI(L):

    

    “L.           Accelerated Payouts in the
Event of 409A Violations.

    

    Notwithstanding
any other provision of the Agreement to the contrary, the Bank 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 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.”

    

    17.           By
deleting the last sentence of Paragraph XIII in its entirety.

    

    

    [Signatures
on Next Page]

    
      
         

      

      
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    Except as
provided herein, the terms of the Agreement shall remain in full force and
effect.

    

    IN
WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed as of the date first above written.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	
                                  BANK
      OF UPSON

                                	 
	 
      	
                                  Thomaston,
      Georgia

                                	 
	 
      	 
      	 
      	 
	 
      	
                                  By:

                                	/s/
      Imogene B. Johnson	 
	 
      	
                                  Print
      Name:

                                	Imogene
      B. Johnson	 
	 
      	
                                  Title:

                                	Assisstant
      Vice President	 
	 
      	 
      	 
      	 
	 
      	 
      	 
      	 
	 
      	/s/
      Daniel W. Brinks	 
	 
      	
                                  [Officer]

                                	 
      	 

                        

                      

                    

                  

                

              

            

          

        

      

    

    

     

     6

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