Document:

EXHIBIT
10.26

 

Citizens Bancshares Corporation

Annual PEO and PFO Certification
For Fiscal Years Other than the First Year

 

 

I, Cynthia N. Day, President/Chief Executive
Officer and I, Samuel J. Cox, Executive Vice President/Chief Financial Officer, certify, based on my knowledge, that:

 

(i)   The
entity serving as the compensation committee (the “Committee”) of Citizens Bancshares Corporation (the “Company”)
has discussed, reviewed, and evaluated with senior risk officer at least every six months during any part of the most recently
completed fiscal year that was a TARP period, senior executive officer (SEO) compensation plans and employee compensation plans
and the risks these plans pose to the Company and each entity aggregated with the Company as the “TARP Recipient” as
defined in the regulations and guidance established under section 111 of EESA (collectively referred to as the “TARP Recipient”);

 

(ii)    The
Committee has identified and limited during any part of the most recently completed fiscal year that was a TARP period any features
of the SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value of the
TARP Recipient and has identified any features of the employee compensation plans that pose risks to the TARP Recipient and has
limited those features to ensure that the TARP Recipient is not unnecessarily exposed to risks;

 

(iii)    The
Committee has reviewed, at least every six months during any part of the most recently completed fiscal year that was a TARP period,
the terms of each employee compensation plan and identified any features of the plan that could encourage the manipulation of reported
earnings of the TARP Recipient to enhance the compensation of an employee, and has limited any such features;

 

(iv)    The
Committee will certify to the reviews of the SEO compensation plans and employee compensation plans required under (i) and (iii)
above;

 

(v)       The Committee will provide a narrative description of how it limited during any part of the most recently completed fiscal
year that was a TARP period the features in:

 

(A)      
SEO compensation plans that could lead SEOs to take unnecessary and excessive risks that could threaten the value
of the TARP Recipient;

 

(B)      
Employee compensation plans that unnecessarily expose the TARP Recipient to risks; and

 

(C)      
Employee compensation plans that could encourage the manipulation of reported earnings of the TARP Recipient to enhance
the compensation of an employee;

 

    	 

     

    

(vi)      The TARP Recipient has required that bonus payments, as defined in the regulations and guidance established under section
111 of EESA (bonus payments), to SEOs and any of the next twenty most highly compensated employees be subject to a recovery or
“clawback” provision during any part of the most recently completed fiscal year that was a TARP period if the bonus
payments were based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria;

 

(vii)    
The TARP Recipient has prohibited any golden parachute payment, as defined in the regulations and guidance established under
section 111 of EESA, to an SEO or any of the next five most highly compensated employees during any part of the most recently completed
fiscal year that was a TARP period.

 

(viii)   
The TARP Recipient has limited bonus payments to its applicable employees in accordance with section 111 of EESA and the
regulations and guidance established thereunder during any part of the most recently completed fiscal year that was a TARP period.

 

(ix)       
The TARP Recipient and its employees have complied with the excessive or luxury expenditures policy, as defined in the regulations
and guidance established under section 111 of EESA, during any part of the most recently completed fiscal year that was a TARP
period; and any expenses that, pursuant to the policy, required approval of the board of directors, a committee of the board of
directors, an SEO, or an executive officer with a similar level of responsibility, were properly approved;

 

(x)     
The TARP Recipient will permit a non-binding shareholder resolution in compliance with any applicable Federal securities rules
and regulations on the disclosures provided under the Federal securities laws related to SEO compensation paid or accrued during
any part of the most recently completed fiscal year that was a TARP period;

 

(xi)       
The TARP Recipient will disclose the amount, nature, and justification for the offering, during any part of the most recently
completed fiscal year that was a TARP period, of any perquisites, as defined in the regulations and guidance established under
section 111 of EESA, whose total value exceeds $25,000 for any employee who is subject to the bonus payment limitations identified
in paragraph (viii);

 

(xii)     
The TARP Recipient will disclose whether the TARP Recipient, the board of directors of the Company, or the Committee has
engaged during any part of the most recently completed fiscal year that was a TARP period a compensation consultant; and the services
the compensation consultant or any affiliate of the compensation consultant provided during this period;

 

(xiii)    
The TARP Recipient has prohibited the payment of any gross-ups, as defined in the regulations and guidance established under
section 111 of EESA, to the SEOs and the next twenty most highly compensated employees during any part of the most recently completed
fiscal year that was a TARP period.

 

(xiv)     
The TARP Recipient has substantially complied with all other requirements related to employee compensation that are provided
in the agreement between the TARP Recipient and Treasury, including any amendments;

 

    	 	2	 

     

    

(xv)      
The TARP Recipient has submitted to Treasury a complete and accurate list (see attached) of the SEOs and the twenty next
most highly compensated employees for the current fiscal year, with the non-SEOs ranked in descending order of level of annual
compensation, and with the name, title, and employer of each SEO and most highly compensated employee identified; and

 

(xvi)      
I understand that a knowing and willful false or fraudulent statement made in connection with this certification may be
punished by fine, imprisonment, or both. (See, for example 18 U.S.C. 1001.)

 

 

	Date:  March 30, 2016	/s/ Cynthia N. Day	 
	 	Cynthia N. Day	 
	 	President/Chief Executive Officer	 
	 	 	 
	 	 	 
	 	 	 
	Date:  March 30, 2016	/s/ Samuel J. Cox	 
	 	Samuel J. Cox	 
	 	Executive Vice President/	 
	 	Chief Financial Officer	 

 

    	 	3Exhibit 10(i)

  

 	 	 	 	
	 Exhibit 10(g)

	  

	  

	 1st FRANKLIN FINANCIAL CORPORATION

	 Director Compensation Summary Term Sheet

	  

	 Compensation to be paid to the following directors, whether or not executive officers of the Company, will be as follows:

	  

	  
	 Name of Director
	 Compensation

	  
	  
	  

	  
	 Ben F. Cheek,. III  (Vice Chairman)
	 $          -  *

	  
	 Ben F. Cheek, IV  (Chairman)
	 $ 30,000

	  
	 A. Roger Guimond
	 $ 30,000

	  
	 James H. Harris, III
	 $ 30,000

	  
	 John G. Sample, Jr. (Audit Committee Chairman)
	 $ 35,000

	  
	 C. Dean Scarborough
	 $ 30,000

	  
	 Keith D. Watson
	 $ 30,000

	  
	  
	  

	  
	 * Note:  Ben F, Cheek, III elected not to receive any Director fees.1st Franklin Financial Executive Bonus Plan:  2003

  

 	
	 Exhibit 10(h)

	  

	 1st Franklin Financial Corporation

	 Executive Bonus Plan:  2016

  

 	
	 Plan Overview:

	  

	 As we analyze the results from 2015, and review the budget set for 2016 and weigh in the economic forecast for the year, we recognize the need today, more than ever, to balance short-term results – growth and profit, with long-term positioning – new product development and improved systems.  This balance is expected to provide the foundation that remains critical for the future success of the Company.

	  

	 The short term bonus goals that are set for the Company each year, which are reflected in this Executive Bonus Plan, are the milestones which will drive the overall performance to achieve the long range goals and plans.

	  

	 The Executive Bonus Plan for 2016 will focus first on meeting a minimum income requirement threshold, and thereafter meeting five strategic goals.  The combination of these goals is expected to provide a balanced measurement of 1st Franklin’s performance and will also support the achievement of our long term goals.

	  

	 DISCLAIMERS:
 

 “The Company must be in compliance with all credit line debt covenants prior to the disbursement of any bonus.”
 

 Right to Alter Program
 

 The Company reserves the right, at any time, or from time to time during the year, with or without notice, to continue or discontinue this program, or to alter it as necessary in the best interest of the Company.

	 The goals that are set were identified and agreed upon by the Executive Management Team.  Below are the five strategic goals, as well as the minimum income requirement for the 2016 bonus to be paid.

  

 THRESHOLD:  The Company must achieve minimum pre-tax income based on the average pre-tax income for the three years ended December 31, 2015 plus the projected accrued incentive bonus for December 31, 2016 divided by 2.  The minimum pre-tax income threshold for 2016 is $21,343,589.
 

 	 	 	
	 STRATEGIC GOALS:

	  
	  
	  

	  
	 1.
	 Corporate Net Receivables Growth – a target of 4.00% annual growth;

	  
	 2.
	 Corporate Delinquency Control – 30 days or more delinquency (including bankrupt accounts) not to exceed 10.00% of receivables;

	  
	 3.
	 Corporate Expenses to Revenue – less than or equal to 89.5%;

	  
	 4.
	 Corporate Return on Assets (ROA) – greater than or equal to 3.50%;

	  
	 5.
	 Corporate Pre-tax Income (separate from the threshold goal) - $27.5 million.

  

 

 

 

 	
	 PROGRAM ELIGIBILITY:

	  

	 Company:  The threshold pre-tax income goal must be achieved for the Executive Bonus Plan to be activated.  After this requirement is achieved, the bonus will be paid based on the achievement of the strategic goals, and will be paid according to the following scale on an individual basis as a percentage of the participant’s annual salary.

  

 	 	
	 No. of Strategic Goals Met
	 % Bonus Paid Based on Annual Salary

	  
	 (in increments of 5 percentage points)

	 1
	 Up to 30% (0% - 30%)

	 2
	 Up to 40% (0% - 40%)

	 3
	 Up to 50% (0% - 50%)

	 4
	 Up to 60% (0% - 60%)

	 5
	 Up to 65% (0% - 65%)

 

 	
	 The percentage range is based on many factors, including but not limited to: achieving budget projections, achieving monthly / quarterly objectives, training (both individually and for the respective participant’s employees), performance management review (“PMR”) ratings and achievement of PMR goals, employee retention, managing human resource issues, audit and compliance guidelines, etc.

	  

	 Example:  if the Company achieves the threshold, which will then activate the bonus plan, and any two strategic goals, the range of bonus paid will be from 0% to 40% of participants’ annual salary depending on their performance.

	  

	 INDIVIDUAL EXCEPTIONS:
 

 If 1st Franklin fails to achieve the minimum requirement of pre-tax income – the Executive Bonus Plan, which is an incentive bonus plan based on performance, will not be paid.  However, the Executive Compensation Committee, which consists of;  Ben F. Cheek, III, Vice-Chairman; Ben F. Cheek, IV, Chairman; Ginger Herring, President and CEO; Roger Guimond, EVP/Chief Financial Officer; Mike Culpepper, EVP/Chief Operating Officer; Kay O'Shields, EVP/Strategic and Organizational Development; Mike Haynie, EVP/Human Resources; Dan Clevenger, II, EVP/Compliance; and Charles E. Vercelli, Jr., EVP/General Counsel, may chose to award individual bonuses to a select number of executives.  These exceptions will only be made if those said individuals have achieved an outstanding year by ALL standards.  In such a case, a bonus may be awarded but may be based on a lower scale than the above plan.

	 Executive Compensation Committee Review

	  

	 The Executive Compensation Committee will review all executive, performance ratings and bonus recommendations and determine the final bonus awarded.

  

 	 	 	
	 AREA
	 RECOMMENDATION
	 COMMITTEE MEMBERS

	 Home Office Supervisors, Home Office Vice Presidents
	 Direct Report
	 Ginger Herring, Ben F. Cheek, III, Roger Guimond, Mike Culpepper Mike Haynie, Kay O'Shields, Dan Clevenger and Chip Vercelli

	 Executive Vice Presidents, General Counsel
	 Ginger Herring
	 Ginger Herring, Ben F. Cheek, III, Ben. F. Cheek, IV

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