Document:

ex10-7.htm

EXHIBIT 10.7

Compensation Arrangements with Thomas J. Flournoy

Neither Georgia-Carolina Bancshares, Inc. (“Company”), nor First Bank of Georgia (“Bank”), has a written employment agreement with Thomas J. Flournoy, Chief Financial Officer of Georgia-Carolina Bancshares, Inc. and First Bank of Georgia.  Mr. Flournoy’s current (2013) salary is $183,750 and Mr. Flournoy is eligible for an annual incentive award under the Bank’s Annual Incentive Plan, pursuant to which he received $42,000 for his performance in 2012.  See Exhibit 10.9 for a description of Mr. Flournoy’s Annual Incentive Plan.  Mr. Flournoy is eligible for stock option, restricted stock and other awards under the Company’s incentive plans as determined from time to time by the Board of Directors of the Company.  In addition, Mr. Flournoy participates in the Bank’s medical, dental, life and disability insurance plans and he may participate in the Company’s 401(k) plan.

Mr. Flournoy entered into a Severance Protection Agreement with the Bank, which entitles him to certain payments following a change in control of the Company.  The Severance Protection Agreement was filed with the Company’s 8-K filing on June 26, 2009.ex10-8.htm

EXHIBIT 10.8

First Bank of Georgia Annual Incentive Plan

for

Remer Y. Brinson, III, President and Chief Executive Officer,

Georgia-Carolina Bancshares, Inc. and First Bank of Georgia

Pursuant to the First Bank of Georgia Annual Incentive Plan (the “Plan”), Mr. Brinson may earn an incentive award equal to a percentage of his annual base salary.  The cash incentive award is based upon meeting certain financial performance objectives established at the beginning of each calendar year.

The performance measures for Mr. Brinson are related to asset growth, net income (including accruals for incentive payments under the AIP), and a subjective assessment by the Board of Directors. The financial performance objectives of asset growth and net income are assigned a weighting factor of 40% each, and the subjective assessment of the Board of Directors is assigned a weighting factor of 20%.

The AIP includes a “threshold,” “target” and “stretch” or aspiration goal in each of the asset growth and net income categories.  Failure to meet the threshold goals results in no incentive payment in that category. Achievement of the threshold goals is designed to result in an incentive award of 15% of base salary. Achievement of the target goals is designed to result in an incentive award of 30% of base salary. Achievement of the stretch goals is designed to result in an incentive award of 60% of base salary.  The performance objectives are designed so that the achievement of the target goals would be considered to be reflective of superior performance, and the target goals are considered to be difficult to achieve.

Certain credit quality measures are also included in the AIP, which can have the effect of increasing or decreasing the incentive award amount by as much as 45%. The credit quality measures are designed to act as control measures to ensure that net income is not achieved at the expense of credit quality, and that balanced results are achieved. The credit quality measures include expectations related to: (i) classified assets as a percent of total assets, (ii) charge-offs as a percent of loans, and (iii) delinquencies as a percent of loans. If the credit quality results do not meet expectations for a particular credit quality measure, the incentive award will be reduced by 15%. If the credit quality results meet expectations, there is no impact on the incentive award. If the credit quality results exceed expectations, there will be a 15% increase in the incentive award. Adjustments under the credit quality measures will only be made if the threshold net income measure is exceeded.

The subjective assessment of the Board of Directors takes into account various circumstances, developments and occurrences during the year which may have had an impact on the performance measures, and the Board of Directors may act subjectively based upon those considerations and may make upward or downward adjustments to an incentive award based upon the 20% weighting factor.

Excluding the subjective assessment of the Board of Directors, and assuming that (i) the stretch goals were attained for each financial performance category, and (ii) the results of each of the credit quality measures exceeded expectations, the maximum annual incentive award which could be earned is 70.8% of base salary.

Pursuant to the actual results for the year ended December 31, 2012, Mr. Brinson’s incentive award included a provision for meeting the “stretch” goal for net income.  Asset growth for the year ended December 31, 2012 did not meet the threshold goal, so no incentive payment was earned with respect to that performance measure.  The three credit quality criteria did not increase or decrease Mr. Brinson’s incentive award for 2012.  One criteria met expectations, one criteria exceeded expectations, and one criteria did not meet expectations.   Mr. Brinson’s incentive award for 2012 also included a subjective assessment of the Board of Directors at the “stretch” level.  Therefore, pursuant to the 2012 AIP, Mr. Brinson’s incentive award was $106,200.

The financial performance objectives and credit quality measures may be adjusted annually by the Board of Directors or an appropriate committee of the Board of Directors.  In 2013, the subjective assessment portion of the Plan will be paid, if at all, in shares of Georgia-Carolina Bancshares, Inc. common stock.ex10-9.htm

EXHIBIT 10.9

First Bank of Georgia Annual Incentive Plan

for

Thomas J. Flournoy, Senior Vice President and Chief Financial Officer,

Georgia-Carolina Bancshares, Inc. and First Bank of Georgia

Pursuant to the First Bank of Georgia Annual Incentive Plan (the “Plan”), Mr. Flournoy may earn an incentive award equal to a percentage of his annual base salary.  The cash incentive award is based upon meeting certain financial performance objectives established at the beginning of each calendar year.

      The performance measures for Mr. Flournoy are also related to asset growth, net income (including accruals for incentive payments under the AIP), and a subjective assessment by the Board of Directors.  The financial performance objectives of asset growth and net income are assigned a weighting factor of 40% each, and the subjective assessment of the Board of Directors is assigned a weighting factor of 20%.

The AIP for Mr. Flournoy includes a “threshold,” “target” and “stretch” or aspiration goal in each of the asset growth and net income categories.  Failure to meet the threshold goals results in no incentive payment in that category.  Achievement of the threshold goals is designed to result in an incentive award of 10% of base salary.  Achievement of the target goals is designed to result in an incentive award of 20% of base salary.  Achievement of the stretch goals is designed to result in an incentive award of 40% of base salary.  The performance objectives are designed so that the achievement of the target goals would be considered to be reflective of superior performance, and the target goals are considered to be difficult to achieve.

Certain credit quality measures are also included in the AIP, which can have the effect of increasing or decreasing the incentive award based on net income by as much 45%.  The credit quality measures are designed to act as control measures to ensure that net income is not achieved at the expense of credit quality, and that balanced results are achieved. The credit quality measures include expectations related to: (i) classified assets as a percent of total assets, (ii) charge-offs as a percent of loans, and (iii) delinquencies as a percent of loans. If the credit quality results do not meet expectations for a particular credit quality measure, the incentive award will be reduced by 15%. If the credit quality results meet expectations, there is no impact on the incentive award. If the credit quality results exceed expectations, there will be a 15% increase in the incentive award. Adjustments under the credit quality measures will only be made if the threshold net income measure is exceeded.

The subjective assessment of the Board of Directors takes into account various circumstances, developments and occurrences during the year which may have had an impact on financial performance measures, and the Board of Directors may act subjectively based upon those considerations and may make upward or downward adjustments to an incentive award based upon the 20% weighting factor.

Excluding the subjective assessment of the Board of Directors, and assuming (i) the stretch goals were attained for each financial performance category, and (ii) the results of each of the quality measures exceeded expectations, the maximum annual incentive award which could be earned is 47.2% of base salary.

Pursuant to the actual results for the year ended December 31, 2012, Mr. Flournoy’s incentive award included a provision for meeting the “stretch” goal for net income.  Asset growth for the year ended December 31, 2012 did not meet the threshold goal, so no incentive payment was earned with respect to that performance measure.  The three credit quality criteria did not increase or decrease Mr. Flournoy’s incentive award for 2012.  One criteria met expectations, one criteria exceeded expectations, and one criteria did not meet expectations.  Mr. Flournoy’s incentive award also included a subjective assessment of the Board of Directors at the “stretch” level.  Therefore, pursuant to the 2012 AIP, Mr. Flournoy’s incentive award was $42,000.

The financial performance objectives and credit quality measures may be adjusted annually by the Board of Directors or an appropriate committee of the Board of Directors.  In 2013, the subjective assessment portion of the plan will be paid, if at all, in shares of Georgia-Carolina Bancshares, Inc. common stock.

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